She is best known for her achievements during the Battle of Midway when, under the command of Lieutenant Commander Yahachi Tanabe, she sank the only United States Navy warships lost in the battle: the already badly damaged aircraft carrier USS Yorktown (CV-5) and the destroyer USS Hammann (DD-412).

[3] That day, the 6th Fleet's commander, Vice Admiral Mitsumi Shimizu, held a meeting with the commanding officers of the submarines of the squadron aboard his flagship, the light cruiser Katori, and his chief of staff briefed them on plans for Operation Z, the upcoming surprise attack on Pearl Harbor in Hawaii.

[3] The attack would begin the Pacific campaign and bring Japan and the United States into World War II.

[2][3] Assigned to support Operation MI, the planned Japanese invasion of Midway Atoll in the Northwestern Hawaiian Islands, I-168 was one of 13 submarines that formed the Advance Expeditionary Force.

[3] On either 1[14] or 2[3] June 1942, according to different sources, she arrived off the northwest coast of Midway itself and spent three days observing Midway on the southern horizon through her periscope by day and through binoculars at a range of five nautical miles (9.3 km; 5.8 mi) at night,[14] reporting "unusually frequent patrol aircraft launches,"[3] an indication the forces on the atoll had been alerted to the impending Japanese attack.

[3] The American aircraft carriers deploying to oppose the Japanese invasion had passed through the area of the Japanese submarine patrol line before the submarines of the Advance Expeditionary Force arrived on their patrol stations, and — other than I-168, with her vantage point off Midway — none of them made contact with American forces[14] before the Battle of Midway began on 4 June 1942, when aircraft from the Japanese aircraft carriers Akagi, Kaga, Hiryū, and Sōryū attacked Midway.

[3][14] On the morning of 5 June 1942, Japanese floatplanes from the heavy cruiser Chikuma sighted the crippled Yorktown 150 nautical miles (280 km; 170 mi) north-northeast of Midway.

[3][15] Sources disagree on the subsequent sequence of events: One claims that a U.S. Navy PBY Catalina flying boat attacked I-168 while she was on the surface that day, forcing her to submerge, and that she received orders to intercept and sink Yorktown after resurfacing,[15] but another claims that she already was on her way to intercept Yorktown when the PBY attacked her.

[3] She closed the range from a distance of 11 nautical miles (20 km; 13 mi) at 6 knots (11 km/h; 6.9 mph), and at 05:30 sighted the destroyer USS Hammann (DD-412) tied up along Yorktown′s starboard side to provide firefighting and salvage assistance to the carrier, which was under tow by the fleet tug USS Vireo.

[3][15] Extensive damage to I-168′s battery cells prompted her crew to put on gas masks[3] because of the danger of chlorine gas poisoning, and all unoccupied crewmen grabbed sacks of rice from forward storage and moved them astern to trim the submarine because of the flooding forward.

[3][15] She sighted Gwin, Hughes, and Monaghan about 5 nautical miles (9.3 km; 5.8 mi) away but they did not detect her, so she ran west on the surface at 14 knots (26 km/h; 16 mph), the best speed she could make, to charge batteries and ventilate her interior spaces.

[3] One of only two Japanese submarines to make contact with enemy forces during the Battle of Midway and the only one to inflict damage,[16][note 1] I-168 sank the only two ships the U.S. Navy lost during the battle, and at the time Yorktown was the largest ship sunk by a submarine during the Pacific campaign of World War II.

[2][3] Sources do not describe her activities over the next two months,[2][3] but she arrived at Kure, Japan, on 18 November 1942 and was drydocked there for repairs.

[2][3] She arrived at Guadalcanal on 1 January 1943 and unloaded 60 percent of her cargo before two Allied patrol boats forced her to withdraw and head back to the Shortlands.

[3] On 13 March 1943, I-168 departed Paramushiro on her first Aleutians supply run, carrying ammunition bound for Attu and Kiska.

[3] She arrived at Holtz Bay on the northeast coast of Attu on 15 March, unloaded part of her cargo, and then got back underway to proceed to Kiska.

[3] S-32′s crew heard a muffled explosion and her sound operator reported that I-168′s propeller noises stopped, but in fact all three torpedoes missed, and S-32′s commanding officer continued to observe I-168 until 17:36, when he lost sight of her.

[3] Many accounts incorrectly identified S-32′s target as the submarine Ro-103, which was operating thousands of miles to the south in the Rabaul area at the time.

[3] After the Japanese torpedo passed overhead, Scamp rose to periscope depth and sighted I-168 on the surface.

[3] Scamp fired four torpedoes at I-168 at 18:12, sinking her in the Bismarck Sea 60 nautical miles (110 km; 69 mi) off New Hanover Island at 02°50′S 149°01′E / 2.833°S 149.017°E / -2.833; 149.017 (I-168) with the loss of all 97 men on board.

[2][3] On 10 September 1943, the Imperial Japanese Navy declared I-168 to be presumed lost with all hands in the area of north of Rabaul.