On 21 November 1922, Laconia began an around-the-world cruise, a charter by the American Express Company, which lasted 130 days and called at 22 ports, carrying 347 passengers, mostly leisure travelers.

[4] The Laconia primarily sailed on Cunard's Liverpool-Boston-New York transatlantic service from late Spring to early Winter while she was employed in extended cruises to warmer climes from January to April.

On 8 September 1925, Laconia collided with the British schooner Lucia P. Dow in the Atlantic Ocean 60 nautical miles (110 km) east of Nantucket, Massachusetts, United States.

After trials off the Isle of Wight, she embarked gold bullion and sailed for Portland, Maine and Halifax, Nova Scotia on 23 January.

On 9 June, she ran aground in the Bedford Basin at Halifax, suffering considerable damage, and repairs were not completed till the end of July.

In October her passenger accommodation was dismantled and some areas filled with oil drums to provide extra buoyancy so that she would stay afloat longer if torpedoed.

On 12 September 1942, at 8:10 pm, 130 miles (210 km) north-northeast of Ascension Island, Laconia was hit on the starboard side by a torpedo fired by U-boat U-156.

Captain Rudolph Sharp, who had also commanded another Cunard liner, RMS Lancastria when she was sunk by enemy action, was gaining control over the situation when a second torpedo hit Number Two hold.

At the time of the attack, the Laconia was carrying 268 British personnel (including many women and nurses), 160 Polish soldiers (who were on guard), more than 80 civilians, and roughly 1,800 Italian prisoners of war.

According to Italian survivors, many of the POWs were left locked in the holds, and some of those who escaped and tried to board lifeboats and liferafts were shot or bayoneted by their Polish captors.

The prospects for those who escaped the ship were only slightly better; sharks were common in the area and the lifeboats were adrift in the mid-Atlantic with little hope of rescue.

Captain Robert C. Richardson III, who later claimed to have been unaware of the Germans' radio message, recklessly ordered that the U-boats be attacked.