The ship recommissioned briefly during the summer of 1858, but her next real active service came after yet another recommissioning on 17 September of that same year. She headed for the coast of South America as part of the Paraguay expedition under Flag Officer William B. Shubrick to exact an apology and an indemnity from Paraguay over the incident which had occurred in 1855. In January 1859, "Water Witch" and "Fulton" arrived in Asunción, the capital of Paraguay; and, backed by the warships, an American commissioner, James B. Bowlin, began negotiations with the Paraguayans. As a result of that expedition, Paraguay extended a satisfactory apology to the United States, indemnified the family of the slain "Water Witch" crewman, and granted the United States a new and highly advantageous commercial treaty.