The former 4th rate iron screw tug Palos was converted to a gunboat and commissioned on 11 June 1870, Lieutenant C. H. Rockwell in command. Departing Boston, Massachusetts, on 20 June for the Asiatic Station, Palos steamed across the Atlantic and through the Mediterranean, becoming the first American warship to transit the Suez Canal on 11–12 August. For the next 22 years the gunboat had an eventful career operating on the China and Japan coasts and inland waters protecting American interests.
In May 1871 the warship was operating off Korea as part of the Asiatic Squadron under Rear Admiral John Rodgers. While surveying the Salee River on 1 June, she was fired upon by a Korean fort, and two men from the squadron were wounded before return fire stopped the attack. Admiral Rodgers waited ten days for an official apology and then ordered Palos, the gunboat Monocacy, and a 650-man landing party into action, with the two warships supporting an assault and capture of the main Korean fort on 10 June and taking four others the next day. The squadron departed the Korean coast on 3 July without renewing negotiations, but the show of force was ultimately helpful in opening the country to Western trade.
While operating off China from June to September 1891, anti-foreign riots up the Yangtze River forced the warship to make an extended voyage as far as Hankow, 600 miles upriver, in protection of American lives and property. Stopping at each open treaty port, the gunboat cooperated with naval vessels of other nations in restoring order and repairing damage. She then operated along the north and central China coast and on the lower Yangtze easing anti-foreign tensions until June 1892 when she departed for Japan.
On 6 July Palos was condemned as unfit for further service there; she was decommissioned and sold at auction 25 January 1893, and was subsequently scrapped.