The ship ran aground near the Greek island of Santorini 5 April 2007, and sank the next day leaving two passengers missing and presumed dead.

She was delivered in 1986 and operated for Birka Line in the Baltic Sea cruiseferry market, sailing on 24-hour cruises between Stockholm in Sweden and Åland in Finland.

[10] On 5 April 2007, at around 16:00 EEST (13:00 UTC)[11] the ship ran aground on a well-marked[12] volcanic reef east of Nea Kameni,[13][14] within the caldera of the Greek island of Santorini, began taking on water, and listed up to 12 degrees to starboard before her watertight doors were reportedly closed (a report which was later refuted when the wreck was examined).

[19] The large amount of water taken on board led to the ship sinking shortly before 7:00 EEST on 6 April 2007, only a few hundred metres from the shore.

[12] It has been speculated that the deep, almost vertical shore of the bathtub-like caldera made it impossible to beach the ship and save her from becoming a total loss.

[7] Divers examined the wreck on 6 April to gather information on the ship's current position and to seek the missing passengers, but the search of the cabin recovered nothing.

State television reported they were charged with causing a shipwreck through negligence, breaching international shipping safety regulations and polluting the environment.

[27] Investigations carried out by the defense team of the Master of the Vessel and Louis Cruise Lines, after a lawsuit had been filed against them, have included a new hydrographic survey of the area of the accident in Santorini.

[28] According to a branch reviewing source, the Hellenic Hydrographic Office initially rejected the new mapping,[29] but a later study confirmed the findings of Akti.

[30] A Greek scuba diver gathering evidence for a judicial investigation of the Sea Diamond shipwreck died in October 2007 from decompression sickness after ascending too quickly.

[31] In order to avoid an oil spill, plans were made to recover some 450 tonnes (500 short tons) of fuel from the ship's tanks.

[33] On 14 May 2007, it was announced that Louis Cruise Lines had bought M/S Silja Opera (renaming it M/S Cristal) to replace the Sea Diamond.

On 19 June 2007, the owners, operator and captain of the Sea Diamond cruise ship were fined €1.17 million for causing marine pollution.

[34] On 21 August 2007, a lawsuit was filed in United States federal court on behalf of the passengers who were aboard the ship when she sank.