Ammonoosuc was laid down by the Boston Nav Yard sometime during the first half of 1863 and was launched, apparently without ceremony, on 21 July 1864.

From the outbreak of the Civil War, the Lincoln Administration seemed to feel that the British Government's sympathies lay with the Confederacy. The Trent Affair further strained American-British relations, and the terrible toll exacted from Union shipping by commerce-raiding Confederate cruisers built in England forced the Union Navy to make contingency plans for what appeared to be an increasingly likely war with England.

With the Royal Navy in many respects considerably more powerful than its American counterpart, the United States Navy decided that should open hositilities with Queen Victoria's empire break out it would adopt its traditional strategy of preying on British merchant shipping. To prepare for such an eventually the Federal Navy Department embarked upon a program of developing vert fast seagoing steamships capable of overtaking all ships they might pursue and of escaping from any they might wish to elude.

Ammonoosuc was one of these steamers. Her hull was designed by Benjamin Franklin Delano to hold a pair of extremely powerful engines to be built at New York by the Morgan Iron Works according to plans drawn by Benjamin Franklin Isherwood for the screw frigate Wampanoag. These engines were not ready when Ammonoosuc was launched and the collapse of the Confederacy prompted a significant slowdown on the work as that all but eliminated the Navy's need for fast, new warships. The engines were finally finished late in 1867, and Ammonoosuc's hull was towed to New York so that they might be installed.

By late in the spring of 1868, the ship was finally ready to go to sea under her own power -- and, under the command of Comdr. William D. Whititing -- departed New York on 15 June for a run to Boston at full speed. Dense fog over much of her course prevented her from proceeding at top velocity during most of the passage, but during one three-hour period she averaged 17.11kn ots while moving from Cape Cod to Fort Warren, the highest sustained speed ever attained by a ship up to that time. Nevertheless, since an unusually large proportion of the space within her hull was taken up by her powerful engines and related machinery, the ship was not commissioned. Instead, she was laid up in the Boston Navy Yard. While there, Ammonoosuc was renamed Iowa on 15 May 1869. She was sold at Boston on 27 September 1883 to the firm of Hubel and Porter, of Syracuse, N.Y.