In May 1900, she and Massachusetts were placed in reserve as the navy had an acute officer shortage and needed to put the new Kearsarge-class and Illinois-class battleship into commission.
She was recommissioned on 9 January 1906 and manned by the former crew of her sister ship Massachusetts, including Captain Edward D. Massachusetts had been decommissioned the day before to receive similar modernization.
Her new captain, Henry Clay Taylor, promptly ordered her back to port for fear the clamps would break again.
His squadron was ordered to the Spanish port of San Juan in an attempt to intercept and destroy Admiral Cervera's Spanish squadron, which was en route to the Caribbean from Spain.
Sampson reinforced Schley on 1 June This left the blockade weakened and unbalanced on the day of the battle, as three modern battleships (Indiana, Oregon and Iowa) and the armed yacht Gloucester guarded the east, while the west was only defended by the second-class battleship Texas, cruiser Brooklyn and armed yacht Vixen.
When the Spanish destroyers Plutón and Furor emerged, Indiana was near the harbor entrance and, together with Iowa, she supported the armed yacht Gloucester in the destruction of the lightly armored enemy ships.
Indiana served in the Spanish–American War (1898) as part of the North Atlantic Squadron.The harbor was empty, but Indiana and the rest of the squadron bombarded it for two hours on before realizing their mistake.The squadron returned to Key West, where news arrived three weeks later that Commodore Schley's Flying Squadron had found Cervera and was now blockading him in the port of Santiago de Cuba.In 1908, the 6-inch (152 mm)/40 caliber guns and most of the lighter guns were removed to compensate for the counterweights added to the main battery turrets and because the ammunition supply for the guns was considered problematic.A year later, twelve 3-inch (76 mm)/50 caliber single-purpose guns were added midships and in the fighting tops. After the United States entered World War I, Indiana was commissioned for the third time and served as a training ship for gun crews near Tompkinsville, Staten Island and in the York River, and placed under the command of George Landenberger.The original design was part of an ambitious naval construction plan to build 33 battleships and 167 smaller ships.