Assigned to the South Atlantic Blockading Squadron, the new tug arrived off the bar outside Charleston, South Carolina, on 17 June 1864 and immediately took station in the outer cordon of Union warships striving to seal off that major port which, as the birthplace of secession, held great symbolic significance for the Confederacy in addition to its substantial strategic value.
The highlight of this duty—which she performed until March 1865—came half an hour before midnight on 8 July 1864 when her boats joined those of the tug Sweet Brier in boarding and taking possession of the blockade-running ". . . schooner Pocahontas, of and from Charleston, South Carolina, bound to Nassau, New Providence . . ."with a cargo of cotton and tobacco.
From time to time during her ensuing months off Charleston, Azalea had brushes with blockade runners which were attempting to enter or leave port, but she did not score again before she retired to Port Royal, South Carolina, just before the arrival of spring. When this work had been completed, late in March 1865, she headed for waters near Savannah, Georgia, and was on duty in Ossabaw Sound by 1 April.
By this time, the Confederacy was collapsing. General Robert E. Lee's army evacuated Richmond, Virginia, and Confederate President Jefferson Davis and his cabinet retired into the Deep South in the hope of continuing the struggle. However, Lee surrendered the Army of Northern Virginia on the 9th and General Joseph E. Johnston realized that his army, the only significant body of Confederate troops left in the field, could not prevail.
On the 25th, Gen. William Tecumseh Sherman informed Rear Admiral John A. Dahlgren that he expected General Johnston to surrender the next day and asked the commander of the South Atlantic Blockading Squadron to ". . . watch the east coast and send word round to the west coast ..." lest Davis and his cabinet escape to Cuba.
Azalea was one of the nine steamers that Dahlgren promptly sent to sea to intercept the former Southern chief of state. However, Union cavalrymen captured Jefferson Davis at Irwinville, Georgia, on 10 May; and Azalea returned to Port Royal 15 May.
Nevertheless, the war was not yet quite over for the tug. On 23 May, she seized Sarah M. Newall while that British hermaphrodite brig was attempting to run through the blockade into Savannah, Georgia.