The naval battle was a result of Allied landings at Cape Torokina in the first action in the Bougainville campaign of World War II.

The battle was significant as part of a broader Allied strategy—known as Operation Cartwheel—aimed at isolating and surrounding the major Japanese base at Rabaul.

The naval battle took place at the end of the first day of the landings around Cape Torokina, as the Japanese sortied a large force from Rabaul in an effort to replicate the success they had achieved at Savo Island in August 1942, in response to Allied amphibious landings in the eastern Solomon Islands.

On 1 November 1943, the 3rd Marine Division landed at Cape Torokina in Empress Augusta Bay on Bougainville Island.

[6] The bay had been chosen because it was at the outer limit of Allied fighter plane range and because the numerically superior Japanese 17th Army was concentrated at other, more strategic sites in the north and the south.

[7] The Marines were backed by Task Force 39, composed of cruisers and destroyers, commanded by Rear Admiral Aaron S. Merrill.

Merrill subsequently shook his force out into three columns, sending Burke's destroyers to attack the Japanese northern flank, while the cruisers turned about to remain out of torpedo range,[20] with the remaining destroyers from Austin's group being tasked with launching a torpedo attack on the southern flank.

[21] From the leading position in the American formation, Burke sent the four destroyers of DesDiv 45 forward for a torpedo attack and at 02:46 fired a salvo toward the Japanese.

At around 02:50, when it became apparent that DesDiv 45's torpedo attack had failed to achieve complete surprise, the American cruisers opened fire, quickly disabling Sendai, whose rudder jammed.

CruDiv 12 repeatedly maneuvered to avoid starshells fired by the opposing ships but was finally successfully illuminated by brilliant flares dropped by Japanese snooper aircraft.

[28] Also, while closing with a group of Japanese destroyers in the center, Spence was hit at the waterline by a shell that failed to explode.

A later evaluation of the battle revealed that DesDiv 46 missed an opportunity to torpedo the center group of Japanese ships because of uncertain identification.

[33] By 03:37, Omori, believing that he had sunk a heavy cruiser and worried about being caught in daylight by US carrier aircraft, ordered a retreat.

[34] Merrill's cruisers closed to bombard the Japanese forces withdrawing to the west, engaging Hatsukaze at over 17,500 yards (16,000 m), but they were unable to score any hits.

[35] Around 04:00, DesDiv 45 and 46 engaged in a confused melee with retreating Japanese stragglers, sinking Sendai and driving off the remaining northern group ships.

This proved prescient, as a heavy Japanese air attack, consisting of over 100 aircraft, was launched from Rabaul early in the morning, directed on the US ships that had converged around Foote.

They were able to deflect the Japanese away from the vulnerable transport ships and landing craft around Cape Torokina,[20] and they had also inflicted significant damage on their opponents.

[20] On 5 November, however, two US aircraft carriers raided Rabaul, heavily damaging four heavy cruisers, which had to withdraw to Truk.

[41] By the start of February 1944, the US had built up a force of over 400 aircraft on Bougainville; before the month ended the Japanese air defenses around Rabaul had been defeated.