In mid-February 1940, while proceeding into the North Sea to search for British fishing trawlers, one of her sisters, Z1 Leberecht Maass, was bombed and sunk by a patrolling German bomber, with loss of 280 of her crew.

While trying to rescue survivors, Z3 Max Schultz was either bombed by a patrolling German bomber, or struck a British mine and sunk, with the loss of all 308 of her crew.

Design work on the Type 34 destroyers began in 1932, around the time that Weimar Germany renounced the armament limitations of the Versailles Treaty that had ended World War I.

The design work appears to have been rushed and not well-thought out as the short forecastle and lack of flare at the bow compromised the ships' seakeeping ability[1] and their stability was inadequate.

[2] The only real innovative part of the design, the high-pressure water-tube boilers, were an over-complicated system that received almost no shipboard testing before being installed in the Type 34s and frequently broke down throughout the life of the ships.

Z3 Max Schultz was assigned to the 1st Destroyer Division on 26 October 1937,[11] and made a port visit to Ulvik, Norway in April 1938, together with her sisters Z2 Georg Thiele and Z4 Richard Beitzen.

[12] In December, Max Schultz, together with her sisters Z1 Leberecht Maass, Z2 Georg Thiele, and Z4 Richard Beitzen, sailed to the area of Iceland to evaluate their seaworthiness in a North Atlantic winter with their new bows.

[11] She participated in the spring fleet exercise in the western Mediterranean, as the flagship of Rear Admiral Günther Lütjens, and made several visits to Spanish and Moroccan ports in April and May.

[13] Days before the outbreak of World War II, in the early morning hours of 27 August 1939, the destroyer accidentally collided with and sank the torpedo boat Tiger near Bornholm.

[11] Max Schultz, Beitzen and Z16 Friedrich Eckoldt laid 110 magnetic mines in the Shipwash area, off Harwich, on 9/10 February 1940 that sank six ships of 28,496 gross register tons (GRT) and damaged another.

[15] On 22 February, Z3 Max Schultz and five other destroyers, Z1 Leberecht Maass, Z4 Richard Beitzen, Z6 Theodor Riedel, Z13 Erich Koellner and Z16 Friedrich Eckoldt, sailed for the Dogger Bank to intercept British fishing vessels in "Operation Wikinger".