They were intercepted by a pair of British light cruisers and Z27 was sunk during the ensuing Battle of the Bay of Biscay on 28 December, with the loss of approximately 300 of her crew.

The ship returned to Norway on May and took part in the preliminaries of Operation Rösselsprung, an attempt to intercept Convoy PQ 17 in early July.

While en route to the rendezvous at the Altafjord, Lützow and three destroyers of Tirpitz's escort ran aground, forcing the entire group to abandon the operation.

On 13–15 October, Z27, her sister Z30 and the destroyers Z4 Richard Beitzen, Z16 Friedrich Eckoldt laid a minefield off the Kanin Peninsula at the mouth of the White Sea that sank the Soviet icebreaker Mikoyan.

Three weeks later, the same four destroyers escorted Admiral Hipper as she attempted to intercept Allied merchant ships proceeding independently to Soviet ports in early November.

While searching for convoy traffic at the far end of the patrol line, Z27 was alerted to the presence of a tanker by the Admiral Hipper's float plane on 7 November and set off in pursuit.

During the voyage to Le Verdon-sur-Mer, both ships were slightly damaged by splinters from British coastal artillery as they passed through the English Channel.

[7] Another blockade runner, the 2,729 GRT refrigerated cargo ship MV Alsterufer, trailed Osorno by several days and four destroyers, including Z27, of the 8.

The Allies were aware of these blockade runners through their Ultra code-breaking efforts and positioned cruisers and aircraft in the Western Atlantic to intercept them in Operation Stonewall.

They had been spotted by an American Liberator bomber on the morning of the 28th and the British light cruisers Glasgow and Enterprise, which were assigned to Stonewall, maneuvered to intercept them.

By this time, the weather had gotten significantly worse and the German ships were steaming for home, hampered by the rough seas that threw spray over their forward guns that made them very hard to work.

Using her radar, Glasgow was the first to open fire at the closest German ships, Z27 and her sister Z23, at 13:46 at a range of 19,600 meters (21,400 yd) with Enterprise following a few minutes later.

While pursuing the scattered German forces several hours later, Glasgow spotted the drifting Z27 and closed to point-blank range before sinking her with gunfire at 16:41.

A total of 93 men were rescued by a German submarine, Spanish destroyers, and an Irish merchantman, MV Kerlogue, but about 300 crewmen were killed.