After deteriorating, the restoration of Niagara was started again in the 1930s, but was hampered by the lack of funds caused by the Great Depression and remained uncompleted until 1963.

In 1907, President Theodore Roosevelt issued an executive order standardizing the prefix of all vessels of the United States Navy to be "USS".

[6] A survey of documents contained in the National Archives and Records Administration that were sent to and from the Department of the Navy in that era found a number of inconsistencies.

[9] After several days of discussions with President James Madison and Secretary of the Navy Paul Hamilton, Dobbins convinced them that the safest place to build a fleet was in the sheltered bay formed by Presque Isle at Erie, Pennsylvania.

On 31 December, Captain Isaac Chauncey, the commander of naval forces on Lake Ontario, arrived in Erie for a day, made some alterations to Dobbins' ship design and authorized him to build, additionally, two brigs.

[11] Oliver Hazard Perry was named chief naval officer in February 1813 and was given orders to report to Erie from Newport, Rhode Island.

Perry arrived in Erie on 26 March, after being held up in Sackets Harbor, New York for two weeks by Chauncey in case of a possible attack by the British.

On 4 August, Niagara was pulled onto the sandbar using its anchor in a technique called kedging and was lightened by removing its cannons and ballast.

[19] On the day Lawrence crossed the sandbar, a pair of British warships, Queen Charlotte and Lady Prevost, observed for an hour but failed to notice Perry's actions.

[20] On 6 August, Perry ordered a shakedown cruise of the fleet, now totaling ten after the inclusion of three merchant vessels—Somers, Trippe and Ohio—that were converted into warships and Caledonia, which was captured from the British.

[16] Lieutenant Daniel Turner was placed in command of Niagara for the cruise, as the fleet was still seriously undermanned; Dobbins had even written a letter, directed to Secretary Hamilton, out of desperation back in December 1812.

[23] On 17 August, Perry's fleet anchored off of Sandusky, Ohio, and dispatched a boat to inform General William Henry Harrison of their presence.

Perry formed the fleet into a line, with the larger ships each being assigned a target: Lawrence to Detroit, Niagara to Queen Charlotte, and Caledonia to Hunter.

[25] Perry lowered his battle flag, emblazoned with the last words of Captain James Lawrence, "Don't Give Up The Ship", and transferred to the still-intact Niagara via a small rowboat.

After the battle, Niagara assisted in the transporting of Harrison's army to the mouth of the Detroit River in preparation for an invasion of southwest Ontario.

After the Treaty of Ghent was signed, ending the war, the majority of the surviving ships that participated in the Battle of Lake Erie were disposed of in 1815.

Queen Charlotte, Detroit, and Lawrence were sunk for preservation in Misery Bay on Presque Isle, whereas Niagara was kept afloat and operated as a receiving ship.

[33] The restored Niagara was launched on 7 June, complete with a new bowsprit, rigging and reproduction cannons supplied by the Boston Navy Yard.

[33][34] From mid-July to mid-September, Niagara was towed to various ports on the Great Lakes—including Milwaukee, Chicago, Detroit, Buffalo and Cleveland—by USS Wolverine, the Navy's first iron-hulled warship.

The Historical Commission contracted Howard I. Chapelle to draw up plans for another restoration of Niagara, based on other period ships that were built by Noah Brown, like Saratoga.

[39] Funds were appropriated by the Pennsylvania Historical and Museum Commission to make Niagara "presentable" for the sesquicentennial of the Battle of Lake Erie in 1963 with the addition of rigging and cannons.

Melbourne Smith, builder of the schooner Pride of Baltimore, was hired in 1986 by the Pennsylvania Historical and Museum Commission to head the reconstruction.

[53] In 2010, Niagara was used to depict the whaleship Essex in an episode of the Public Broadcasting Service documentary series American Experience.