As part of the Union blockade of the Texas coast, Commander William B. Renshaw led his squadron of eight ships into Galveston harbor to demand surrender of the most important Texas port on October 4, 1862. Brig. Gen. Paul O. Hébert, commanding the Confederate District of Texas, had removed most of the heavy artillery from Galveston Island, which he believed to be indefensible. The Fort Point garrison fired on the federal ships, which responded by dismounting the Confederate cannon with return shots. Col. Joseph J. Cook, in command on the island, arranged a four-day truce while he evacuated his men to the mainland. The Union ships held the harbor, but 264 men of the Forty-second Massachusetts Infantry, led by Col. I. S. Burrell, did not arrive until December 25 to occupy Kuhn's Wharf and patrol the town.
When Maj. Gen. John Bankhead Magruder replaced Hébert in the fall of 1862, the new district commander began to organize for the recapture of Galveston. For a naval attack he placed artillery and dismounted cavalry from Sibley's brigade, led by Col. Thomas Green, aboard two river steamers, the Bayou City and the Neptune, commanded by Capt. Leon Smith. Magruder gathered infantry and cavalry, led by Brig. Gen. William R. Scurry, and supported by twenty light and heavy cannons, to cross the railroad bridge onto the island to capture the federal forces ashore. To meet the attack Renshaw had six ships that mounted twenty-nine pieces of heavy artillery.
The Confederates entered Galveston on New Year's night, January 1, 1863, and opened fire before dawn. Cook failed to seize the wharf because of the short ladders provided for his men. Naval guns helped drive back the assault. Then the Confederate "cottonclads" struck from the rear of the Union squadron. The Harriet Lane sank the Neptune when it tried to ram the Union ship, but men from the Bayou City boarded and seized the federal vessel despite the explosion of their own heavy cannon. Renshaw's flagship, the Westfield, ran aground, and the commander died trying to blow up his ship rather than surrender it. The other Union ships sailed out to sea, ignoring Confederate surrender demands, which could be enforced only upon the abandoned federal infantry in town.
Magruder had retaken Galveston with a loss of twenty-six killed and 117 wounded. Union losses included the captured infantry and the Harriet Lane, about 150 casualties on the naval ships, as well as the destruction of the Westfield. The port remained under Confederate control for the rest of the war.