The fort remained abandoned for several years, until 1935, it served as a state-operated fresh air camp for inner city children from Seattle.

The U.S. Navy found the fort to be attractive after tests had shown that it was an outstanding location to eavesdrop on radio communication transmitted from the Far East, chiefly Japan.

These sites were Winter Harbor, Maine; Amagansett, New York; Cheltenham, Maryland; Jupiter, Florida; and Fort Ward—Bainbridge Island, Washington.

In March 1941, a commercial teletype line between the installations at Winter Harbor, Maine, Amagansett, New York, and Fort Ward was inaugurated.

Messages and intercept logs, reports and professional correspondence, if classified, were painstakingly enciphered by the radio intelligence officer himself using special equipment and instructions.

The Fort Ward command also oversaw the construction of the Navy's largest radio transmitter at Battle Point, with a tower 300 feet taller than the Space Needle.

The first chapter of David Kahn's book tells about how "Station S" intercepted the communication from Tokyo to the Japanese Ambassador that instructed him to break off negotiations just before the attack on Pearl Harbor on December 7, 1941.

In November 1942, Fort Ward also assumed control of naval intelligence assignments previously tasked to the Royal Canadian Navy.

Over the years, some of the buildings have been converted into homes, and the area, the parade ground of the community of Fort Ward has been designated a National Historic Site.