Seven Days campaign

Satellite remained up river and, on 26 June, entered the Appomattox River in a naval force led by Rodgers. The warships were impeded by musketry and obstructions. Finally, shallow water stopped them too far away from Petersburg to launch a boat attack against the railroad bridge. When efforts to refloat the grounded sidewheeler, Island Belle, proved futile, a party from Satellite stripped the tug and set her afire. Following their return to the James, the gunboats supported General McClellan's army which was then fighting General Robert E. Lee's troops in the bloody Seven Days campaign.

In this series of battles, the Northern soldiers beat their way across the peninsula from the York River to the James where Rodgers' floating firepower could prevent Lee from closing his pincers. After he learned of the disposition of the Federal ships, Lee reported: "As far as I can see there is no way to attack him (McClellan) to advantage; nor do I wish to expose the men to the destructive missiles of his gunboats ... I fear he is too secure under cover of his boats to be driven from his position . . ." During McClellan's retreat to Harrison's Landing, the Union Army's gunboat-protected haven on the James, Satellite and USS Delaware ascended the Chickahominy River to strengthen his right flank. In the ensuing weeks, Satellite protected Union troops ashore and transports afloat, often engaging Confederate forces on the riverbanks. On 27 July, boats from Satellite and USS Yankee ascended Chippoak Creek and captured schooner, J. W. Sturges, and a schooner-rigged lighter laden with wood. They also found two other schooners and a steamer which had been scuttled before they arrived.

In mid-August, after Union leaders had decided to abandon the peninsula, Satellite, USS Galena, and USS Port Royal covered the retirement as McClellan's rear guard withdrew across the Chickahominy toward Fort Monroe. At the end of August, as Lee and Jackson routed a Union army under General Pope in the second Battle of Bull Run, Satellite and a large portion of the James River Flotilla were transferred to the Potomac to help protect the threatened Federal capital and its line of communications by water, the Potomac River. In mid-September, at Antietam Creek, Maryland, Gen. McClellan relieved the pressure on Washington, D.C., when he stopped Lee's thrust into the North and forced the Confederate Army of Northern Virginia to retreat south of the Potomac. Nevertheless, the ships of the Potomac Flotilla were kept in the Potomac to try to stop communication and commerce across the river between Virginia and Southern sympathizers in Maryland. On 30 October, Satellite captured a canoe and five men off the Wicomico River; and, three days later, she took a yawl near Neal's Creek. On 21 November, the side-wheeler returned to the Washington Navy Yard with a number of prisoners who had been arrested for blockade violations.

Operations on the Rappahannock

On 29 November, as the Union's Army of the Potomac prepared to resume the offensive with a drive through Fredericksburg, Virginia, Satellite departed Washington and headed for the Rappahannock River to help assure the new Northern commander, Major General Ambrose Burnside, control of that river. She remained on the Rappahannock after Lee skillfully parried Burnside's thrust at Fredericksburg in mid-December. On 2 January 1863, Satellite and three other Union ships steamed to the Piankatank River seeking a schooner which had run through the blockade and entered that stream. However, the Confederates learned of the expedition and scuttled the schooner before the Northern gunboats could reach her. In mid-January, Satellite returned to the Washington Navy Yard for repairs. The following spring, the ship resumed activity on the Rappahannock hoping to support the Union Army's new offensive; but again Lee adroitly bested the Northern commander, now General Joseph Hooker, and won an all-but-decisive victory at Chancellorsville. Nevertheless, Satellite continued to operate on the Rappahannock. From 12 through 14 May, she participated in an expedition with captured schooners, Sarah Lavinia and Ladies Delight, and took a large quantity of goods from warehouses at Urbana. On the 21st, she joined USS Currituck and USS Anacostia in seizing schooner, Emily, at the mouth of the Rappahannock. A week later, she captured schooners, Sarah and Arctic, up the eastern branch of the Great Wicomico River, an estuary between the Rappahannock and the Potomac.

With USS Jacob Bell and USS Yankee, she took a canoe and a flatboat on 13 July near the Rappahannock's Union Wharf. Satellite's last score came on 17 August when she captured schooner, Two Brothers, near the Great Wicomico. On the night of 22 and 23 August 1863, a daring Confederate boat expedition commanded by Lt. John Taylor Wood, CSN—grandson of the former President of the United States, Zachary Taylor, and nephew of Jefferson Davis, the Confederate President—captured Union gunboats, Satellite and Reliance, off Windmill Point on the Rappahannock. Wood took the prizes up river to Urbana. Satellite, now under Lt. Wood, returned to the mouth of the Rappahannock on the 25th and seized schooner, Golden Rod, laden with coal, and schooners, Coquette and Two Brothers, with cargoes of anchors and chain. The Confederates stripped and burned Golden Rod because of her deep draft and took the other prizes up river to Port Royal, Virginia. There, together with Satellite and USS Reliance, they too were stripped of useful parts and destroyed on 28 August to prevent recapture.