Unlike many shipyards, it remained active during the shipbuilding slump of the 1920s and early 1930s that followed the World War I boom years.

During World War II, it built merchant ships as part of the U.S. Government's Emergency Shipbuilding program, at the same time producing more destroyers for the United States Navy than any yard other than the Bath Iron Works.

Operated by a subsidiary of the United States Steel Corporation, the shipyard was located at Kearny Point where the mouth of the Hackensack River meets Newark Bay in the Port of New York and New Jersey.

Around 570 vessels were contracted for construction by Federal SB&DD Company with about 100 not delivered fully completed due to the end of the World War II.

Federal also had a yard at Port Newark during World War II that built destroyers and landing craft.

[3] The shipyard was to consist of everything needed to fully complete a ship from a facility power plant to a wood joining shop.

[6] On Sunday night, May 18, 1924, a fire destroyed the largest building at the Kearny yard causing an initially estimated $500,000 in damage.

Fireboats and numerous firemen from around the area were called in to fight the fire which spread rapidly through the wooden structures at the Kearny yard.

[9] The Federal yard at Kearny remained operational during the difficult interwar period and Great Depression when many shipyards across the country did not.

Work was stopped on $493 million ($10.2 billion today) in Navy and merchant shipbuilding contracts as the nation ramped up ship construction before entering World War II.

[10] The final sticking point in negotiations had been the refusal of management at Federal to accept demands to require a "maintenance of membership" clause which would effectively make the shipyard a closed shop.

Company president Lynn H. Korndorff offered the shipyard to the Navy rather than accept the demands to become a closed shop.

According to Rear Admiral Bowen in his autobiography, while he was cordial with labor, he refused to acknowledge any union's right to collectively bargain for the workers at Kearny.

Secretary of the Navy Frank Knox returned the shipyard and asked that the company and union work out the remaining issue.

In May 1942, Federal finally gave in to demands to require membership in the CIO Industrial Union of Marine and Shipbuilding Workers.

Two bulk carriers were built for National Gypsum and three Type C2 ships for Grace Line's "Santa" / South American passenger-freight service.

[25] On April 23, 1948, Lynn H. Korndorff, the President of Federal Shipbuilding and Drydock Company announced that the US Navy had agreed to purchase facilities at Kearny for around $2,375,000 ($30.1 million today), its depreciated book value.

[32][33] In November 2013, Federal's Building 77 completed its renovation and reopened as the USS Juneau Memorial Center, which now houses Hudson County's Office of Emergency Management.

In January 1942, Federal Shipbuilding and Drydock Company announced they were expanding their facilities to increase capacity and employ an additional 10,000 workers.