Cayuga was launched 21 October 1861 by S. Gildersleeve and Sons, Portland, Connecticut and outfitted at New York Navy Yard.

She was commissioned 21 February 1862, Lieutenant N. B. Harrison in command, and reported to the West Gulf Blockading Squadron.

Cayuga also joined in the engagement with Forts Jackson and St. Philip below New Orleans, Louisiana in April 1862, which led to the fall of the city to Flag Officer David Farragut.

On 18 April 1863, at Sabine Pass, Texas, her commanding officer, Lieutenant Commander David McDermut, led a party of men ashore in a reconnaissance designed as the last step in a plan to cut out Confederate steamers lying at Sabine, then to establish control of the Sabine River, separating southern forces in Texas from those in Louisiana.

The party was surprised by Confederate soldiers; McDermut was mortally wounded and six men were taken prisoner.