In late 1863 Cdr. James Cooke was sent to take over Porter's supervision duties. Cooke, who would later command the Albemarle in action, became known as the "ironmonger captain" for his relentless efforts to gather iron of all sorts that could be rolled into plating. But despite all attempts to accelerate the vessel's construction, there were delays. The keel of the new ship was damaged during launching, requiring extensive repairs, and railroad delivery of iron from the foundries was exceedingly slow.
Waiting for it were the USS Miami and Southfield, the most powerful of several wooden gunboats at Plymouth. Chains had been strung between the two ships in an attempt to ensnare the Albemarle and batter it with their combined fire. But Cooke recognized the trap and avoided it. He then made for the Southfield, plunging the ironclad's armored bow deep into the wooden vessel and sinking it so quickly that the ram almost followed the victim. The Miami, along with the other Union gunboats, soon withdrew after shot and shell from its 6.4-inch rifles and 9-inch smoothbore guns glanced harmlessly off the Albemarle's four inches of iron plating. With the opposing fleet dispersed, the Albemarle bombarded the last remaining strongholds in Plymouth, helping force a Federal surrender.
Hoke next focused his attention on New Bern. The ironclad Neuse had run aground en route to New Bern, and so the Albemarle was called upon to provide naval support for the operation. On 5 May it steamed out of Plymouth, but as the rebel ironclad reached Albemarle Sound, 7 Federal gunboats mounting a total of 55 guns attacked. The massed artillery of the fleet failed to penetrate the armor, but the Albemarle's smokestack was nearly destroyed and the muzzle of one gun was shot away. In the melee the Albemarle itself was rammed by one of the wooden gunboats. Its steering gear was damaged, and, because of the mangled smokestack, it was necessary to feed bacon, lard, and butter into the boilers to keep up steam pressure. Despite having damaged each of the Federal ships, Cooke had no choice but to limp back to Plymouth.
The Albemarle was repaired and remained at its mooring until 27 Oct. 1864, when it was sunk by a torpedo in a daring raid led by Lt. William Cushing. With their ironclad gone, the Confederate forces evacuated Plymouth on 31 October. In March 1865 the Union navy raised the ship and towed it to Norfolk, Va., the following month. The Albemarle remained an officially commissioned U.S. Navy ship until 15 Oct. 1867, when it was sold at auction to J. N. Leonard and Company for $3,200.