Calypso was used by the Navy as a gunboat, and was ordered to patrol navigable waterways of the Confederacy to prevent the South from trading with other countries.

Calypso, an armed streamer, was captured 11 June 1863 off Wilmington, North Carolina, by USS Florida; purchased from the prize court 12 October 1863; and commissioned 24 September 1863, Acting Master F. D. Stuart in command.

In June she joined with USS Nansemond in sailing to New River Inlet to support the Union Army in an expedition to cut the Wilmington and Weldon Railroad.

When Confederate opposition prevented the linkup of the landing party with a force moving overland, Calypso swiftly evacuated the soldiers.

Calypso was sent north with her prize 6 November, and after receiving repairs at New York City, returned late in spring 1865 to cruising from Chesapeake Bay to the coast of Florida.