She joined the Gulf Blockading Squadron at Berwick Bay, Louisiana, on 24 June 1861 and then took station off Galveston, Texas.

On 11 September, she made a prize of Galveston steamer Anna Taylor, laden with coffee and masquerading as the Tampico ship, Solodad Cos. She captured schooners Ezilda and Joseph H. Toone off Southwest Pass on 4 October; and, on the 16th, took Edward Barnard, after that British schooner had run the blockade out of Mobile, Alabama, with 600 barrels of turpentine.

Magnolia's crew exploded one of her boilers, set her afire, and attempted to escape; but South Carolina captured the Southerner's boats, boarded the flaming steamer, and put out the fire.

In March, South Carolina received orders to return to Boston where she was decommissioned on 8 April for badly needed repairs.

Departing Charleston on 9 March 1865, South Carolina entered the Philadelphia Navy Yard on the 15th and was decommissioned there on the 25th to be fitted out as a store ship.