The Hatteras was an 1126-ton side-wheel steamer that was constructed at Harland & Hollingsworth Company in Wilmington, Delaware in 1861 as a civilian merchant vessel named St. Mary's.
On 26 January 1862 she was transferred to Admiral David Farragut's West Gulf Blockading Squadron. On 27 January 1862 she attacked CSS Mobile off the coast from Berwick, Louisiana.
During the remainder of 1862 she was assigned to intercept blockade runners along the Gulf coast and successfully captured several Confederate steamers and sailing vessels including the Poody which was taken as a prize and renamed USS Hatteras Jr.
Command of USS Hatteras was transferred to Commander Homer C. Blake and assigned, on 06 January 1863 to patrol off of Galveston, Texas.
On 11 January 1863 USS Hatteras encountered the Confederate commerce raider CSS Alabama under Captain Raphael Semmes flying the British flag (an acceptable practice under the law of the sea at the time) and indicating that she was the HMS Spitfire.
As a boarding party approached the Alabama she broke out the Confederate ensign and commenced firing. A fierce 40-minute battle ensued until the Hatteras was overpowered and began to sink with 2 dead and 5 wounded.
The remaining crew was taken prisoner aboard the Alabama and paroled at Port Royal, Jamaica.
The hull of USS Hatteras rests in approximately 60 feet of water 20 miles off of Galveston, Texas and buried under about three feet of sand. Her steam engine and two iron paddle wheels remain on the ocean bottom. The wreck is monitored to insure that it is not damaged by oil and gas development in the area.
The wreck of USS Hatteras is the property of the United States Navy though the Texas Historical Commission and Texas A&M University at Galveston cooperate in preserving this important historical site.