Her construction was ordered on 29 March 1912 and her keel was laid down on 8 November 1912 by Germaniawerft of Kiel.

On 9 January 1917, to the East of Malta, U-32 sank the British pre-dreadnought battleship HMS Cornwallis, with the loss of 15 lives.

[4] U-32 was fitted with two Germania 6-cylinder two-stroke diesel engines with a total of 1,850 metric horsepower (1,361 kW; 1,825 bhp) for use on the surface and two Siemens-Schuckert double-acting electric motors with a total of 1,200 PS (883 kW; 1,184 shp) for underwater use.

[4] On 8 May 1918 north-west of Malta she was shelled and then depth charged by HMS Wallflower and sunk with all hands, 41 dead.

The following is a verbatim transcription of the recorded activities of SM U-32 known to British Naval Intelligence, Room 40 O.B.

In December 1914 and January 1915, and February 1915, she was occasionally employed on patrol in the Bight, and was twice in dockyard hands with engine or other trouble.

= around Scotland; Sound, Belts, Kattegat = via North of Denmark to/from German Baltic ports; Bight = to/from German North Sea ports; success = sinking of ships