On 5 Sep 1940, the Melbourne Star was bombed and damaged by a German aircraft west of Ireland in 53°27N/15°12W. She was repaired and returned to service after a month.

Melbourne Star made it twice to Malta and back without being damaged, first during Operation Substance in July 1941 and then during Operation Pedestal in August 1942.

At 08.23 hours on 2 April 1943 the unescorted Melbourne Star (Master James Bennett Hall) was hit by three of four torpedoes from U-129 about 480 miles southeast of Bermuda. The ship blew up and sank in less than 2 minutes. Only eleven survivors managed to rescue themselves on two Carley floats and were questioned by the Germans, who offered no assistance. The rafts later drifted apart and one of them with seven men aboard was never seen again. The master, 70 crew members, eleven gunners and 31 passengers were lost.

Four crewmen (Greaser William Best, Greaser William Burns, Ordinary Seaman Ronald Nunn and Able Seaman Leonard White) in the second raft drifted for 38 days until they were rescued by a Catalina aircraft (VP-63 USN/P-6, pilot 1stLt Rex Knorr) about 250 miles from its base on Bermuda. The survivors were later awarded the British Empire Medal (BEM) for their courage and fortitude.