Nereus departed New York on 3 September 1864, escorting the steamer SS North Star to Aspinwall with cargo to be carried overland across the Isthmus of Panama en route to California.

Arriving Christmas morning, Nereus joined in the bombardment of the Confederate works and supported the abortive amphibious attack until the last Union troops had re-embarked.

In the three-day struggle, a classic example of Army—Navy coordination, Union soldiers, sailors, and marines, supported by the deadly effective fire from Porter's warships, overran Wilmington's defenses, closing the vital Confederate seaport.

On 17 January, Nereus got underway towing the monitor USS Mahopac to Charleston for final operations against the staunchly defended seaport which had witnessed the opening of hostilities almost four years before.

Nereus then steamed to Beaufort for stores and coal before heading for the Bahamas and the Caribbean seeking to capture the Confederate cruiser Shenandoah which was still preying on northern merchantmen.