At 06.08 hours on 21 March 1942 the unescorted and unarmed Esso Nashville (Master Edward V. Peters) was hit by one torpedo from U-124 about 16 miles northeast of the Frying Pan Lightship Buoy, while steering on a nonevasive course at 13 knots. The torpedo was fired from about 900 yards and struck the starboard side forward of the crew quarters and about five feet from the stem, but did not detonate. One minute later a second torpedo struck amidships about ten feet below the waterline. The explosion lifted the vessel out of the water, broke her back and showered the deck with hot oil. The crew of eight officers and 29 men abandoned ship in all four lifeboats. Eight survivors in two lifeboats were picked up by USS McKean (APD 5) and taken to Norfolk, Virginia, the next day. 21 survivors were picked up by the US Coast Guard cutter USCGC Tallapoosa (WPG 52) and landed in Savannah. The remaining eight survivors, including the master who had fallen into the water and climbed back on board the ship, were picked up by USCGC Agassiz (WPC 126) and landed at Southport, North Carolina.

For several hours the tanker was held together by deck plating and pipe lines only, then the ship completely broke in two. The bow section sank and the afterpart was towed to Morehead City by USS Umpqua (AT 25). On 1 June, the Esso Nashville was towed to Baltimore, Maryland, where a new bow section was fitted to the ship and returned to service on 16 March 1943.