She was struck and heavily damaged by an Exocet air-launched anti-ship missile from an Argentine Super Étendard aircraft on 4 May 1982 and foundered while under tow on 10 May 1982.

As this provided a prominent target for then-new infrared homing missiles, only Sheffield and the next two in the class, the Argentinian Hércules and Santísima Trinidad, had these 'ears'.

[9] Following a refit in the early 1980s, significant design issues with the ship's Type 909 radar (which was responsible for control and targeting of the Sea Dart missiles) were identified.

[3][11] In March 1982 the ship transited north through the Suez Canal to participate in Exercise Spring Train, which was held in the Atlantic Ocean.

To avoid her being mistaken for the Argentine Hércules and Santísima Trinidad, a vertical black marking was painted on the funnel and down to the side to her waterline to aid recognition.

[3] It was British policy that any Royal Navy vessel that suspected itself to be under missile attack turn toward the threat, accelerate to maximum speed and fire chaff to prevent the ship being caught defenceless.

Following the sinking of General Belgrano, Captain Salt had ordered the ship to change course every 90 seconds to counter any potential Argentine submarine threat.

[15] In the two weeks leading up to the attack, Argentinian pilots had been practising tactics against their own ships, including Type 42 destroyers of the same class as Sheffield, and therefore knew the radar horizon, detection distances, and reaction times of the ship radar, as well as the optimal procedure to programme the Exocet missile for a successful attack profile.

[18][19] Both pilots loaded the coordinates into their weapons systems, returned to low level, and after last minute checks, each launched an AM39 Exocet missile at 11:04 while 20 to 30 miles (32 to 48 km) away from their targets.

[citation needed] Supporting the mission were an Argentine Air Force Learjet 35 as a decoy and two IAI Daggers as the KC-130 escorts.

[23] The Glasgow immediately went to action stations, and communicated the warning codeword 'Handbrake' by UHF and HF to all task force ships.

Two Exocets had been launched, the second missile being sighted by Yarmouth and missing Sheffield, splashing into the sea 0.5 miles (0.43 nmi) off her port beam.

Contemporary accounts suggested that the missile failed to explode, despite disabling the ship's electrical distribution systems and breaching the pressurised sea water fire main.

[10] At the time of the hit, the captain was off duty in his cabin after having previously visited the operations room, while Sheffield's anti-air warfare officer (AAWO) was in the wardroom chatting to the stewards, and his assistant was in the heads.

The control of firefighting lacked cohesion and was uncoordinated with no emergency HQ being established, while crew members were unclear as to where Command was located.

[27] Of the 281 crew members, 20 (mainly on duty in the galley area and computer room) died in the attack with another 26–63[28][29] injured, mostly from burns, smoke inhalation or shock.

Admiral John Fieldhouse, the commander in chief of the navy, decided not to court-martial them, undertake any other disciplinary action or any form of formal administrative proceedings.

The Guardian explained the missing information as being due to the British Government's attempts to sell off the remaining Type 42 destroyers at the same time.

In the "uncensored" report, multiple issues that left the ship unprepared for the attack were identified, including findings of negligence against two officers, who according to The Guardian "escaped court martial and did not face disciplinary action, apparently in order to avoid undermining the euphoria that gripped much of the UK at the end of the war".

[11] The sinking of Sheffield is sometimes blamed on a superstructure made wholly or partially from magnesium-aluminium alloy, the melting point and ignition temperature of which are significantly lower than those of steel.