The ship was purchased 14 March 1863 as James Thompson, a side wheel steamer; she was converted into a river gunboat by the addition of timber bulwarks and thin iron plate: a style of warship commonly referred to as a "tinclad".

The USS Fort Hindman was designed to patrol in shallow waters and small tributaries where heavier ironclads could not enter.

On 2 March 1864, during an engagement near Harrisonburg, Louisiana, Ordinary Seaman James K. L. Duncan threw a burning cartridge overboard after it was set afire by an exploding shell,[1][2] and Ordinary Seaman Hugh Molloy loaded one of the ships guns from an exposed position after a shipmate had been mortally wounded.

During the expedition, Fort Hindman transported troops and prisoners of war, over and over again engaged Confederate batteries, and took part in the passage of the falls off Alexandria, Louisiana, on 8 May.

Moving to a more southerly patrol area, Fort Hindman operated in the rivers and bayous of Louisiana, occasionally returning to Natchez, Mississippi.