As in World War I, German submarines (U-boats) tried to cut off Britain's shipping, thus severing that island nation's most important link to the rest of the world. The use of convoys, with large numbers of merchant vessels crossing the ocean together under the protection of warships, reduced the danger from German submarines. The Germans, however, devised the "wolf pack" method of attack to counter the convoy system. When a submarine spotted a convoy, it would not strike at once but would call other submarines to the area so they could launch a massed attack. This tactic was highly effective until new antisubmarine weapons and tactics were employed. Sonar was developed to detect underwater craft, depth charges were improved, and both land- and ship-based airplanes were used to search out and bomb the U-boats.

In the spring of 1941, the new and powerful German battleship Bismarck was sent into the Atlantic to raid merchant shipping. Aware of the Bismarck's movements through aircraft reconnaissance, the British dispatched a group of ships to pursue and sink it. On May 24, in the Denmark Strait (between Greenland and Iceland), the British battle cruiser Hood and battleship Prince of Wales engaged the Bismarck. The Prince of Wales was damaged, and the Hood, one of the largest naval vessels in the world and the pride of the British fleet, was destroyed when its ammunition blew up as the result of a direct hit. The Bismarck, itself seriously damaged, tried to reach the safety of a French port, but was sighted and immobilized by carrier planes on May 26. The King George V and the Rodney arrived the next day and severely damaged the Bismarck. The crippled ship sank after the Germans began to scuttle it and the British cruiser Dorsetshire attacked with torpedoes.

The workhorse of the defense against submarines was the destroyer. In the evacuation of Dunkirk 85 British destroyers had been put out of service—10 sunk and 75 severely damaged. To help make up for these losses, Great Britain in September, 1940, acquired from the United States 50 overage destroyers, veterans of World War I. In exchange, the British granted the United States 99-year leases for naval and air bases on British islands in the western Atlantic and the Caribbean.

Late in 1941, just as the crisis with Japan was developing in the Far East, the British suffered a series of disasters in the Mediterranean. The carrier Ark Royal was sunk by a submarine in November, and the battleship Barham later the same month. The cruiser Galatea met the same fate in mid-December, and a few days later Italian "human torpedoes" (torpedoes steered by skin divers) severely damaged the battleships Queen Elizabeth and Valiant in Alexandria harbor. On December 19 Force K, which operated from Malta, ran into a minefield with the loss of a cruiser and a destroyer and damage to two cruisers.