Housatonic was launched November 20, 1861, by the Boston Navy yard sponsored by Miss Jane Coffin Colby and Miss Susan Paters Hudson; and commissioned there August 29, 1862 with Commander William Rogers Taylor in command.
Housatonic departed Boston September 11 and arrived Charleston September 19 to join the South Atlantic Blockading Squadron. She took station outside the bar. On January 29, 1863, her boats, aided by those of Augusta, Blunt, and America, boarded and refloated iron steamer Princess Royal. Unadilla had driven the blockade runner ashore as she attempted to slip into Charleston from England with a cargo consisting of two marine engines destined for Confederate ironclads and a large quantity of ordnance and ammunition. These imports were of such great potential value to the South that they have been called "the war's most important single cargo of contraband."
It was possibly in the hope of recovering this invaluable prize that Confederate ironclad rams Chicora and Palmetto State slipped out of the main ship channel of Charleston Harbor to attack the Union blockading fleet in the early morning fog two days later. They rammed Mercedita forcing her to strike her colors "in a sinking and perfectly defenseless condition" and moved on to cripple Keystone State. Gunfire from the rams also damaged Quaker City and Augusta before the Confederate ships withdrew under fire from Housatonic to the protection of shore batteries.
Housatonic captured sloop Neptune April 19 as she attempted to run out of Charleston with a cargo of cotton and turpentine. She was credited with assisting in the capture of steamer Seesh May 15. Howitzers mounted in Housatonic's boats joined in the attack on Fort Wagner July 10, which began the continuing bombardment of the Southern works at Charleston. In ensuing months her crew repeatedly manned boats which shelled the shoreline, patrolled close ashore gathering valuable information, and landed troops for raids against the outer defenses of Charleston.
Meanwhile Housatonic vigilantly maintained her station in the blockade outside the bar until just before 9pm, February 17, 1864. Her officer of the deck sighted an object in the water 100 yards off, approaching the ship. "It had the appearance of a plank moving in the water," he later reported. Although the chain was slipped, the engine backed, and all hands were called to quarters, it was too late. Within two minutes of the first sighting, the Confederate submarine H.L. Hunley rammed her torpedo into Housatonic's starboard side, forward of the mizzenmast, in history's first successful submarine attack on a warship. Before the rapidly sinking ship went down the crew managed to lower two boats which took all the men they could hold; most others saved themselves by climbing into the rigging which remained above water after the stricken ship settled on the bottom. Two officers and three men in Housatonic died; H.L. Hunley was lost with all hands.