He participated as a volunteer on the Finnish side during the Winter War and was a soldier in the defence of Norway following the German invasion at Kongsvinger Fortress.

He had excellent leadership skills; one of the British officers at the Shetland base, David Howarth, described him as "one of the most remarkable personalities of the entire Second World War".

Larsen dramatically escaped Norway in February 1941 in the fishing boat MOTIG 1, a voyage he recounted in his autobiography.

He was the skipper of the fishing vessel Arthur during an attempt to sink the German battleship Tirpitz in the Trondheimsfjord in the fall of 1942 (Operation Title).

The Admiralty records the operation as "the achievement of penetrating to within 10 miles (16 km) of the berth occupied by the Tirpitz represents, on the part of the personnel and particularly that of the Norwegians, a fine example of cold-blooded courage."

They began to understand the true role of fishing-boats operating far from the coast and the fishing boats were phased out in favour of three American 'sub-chasers', which were much larger, faster and better-armed, altogether better suited to the changed circumstances.