In later traditions Lyonesse is said to have sunk beneath the waves some time after the Tristan stories take place, making it similar to Ys and other lost lands in medieval Celtic tales, and perhaps connecting it with the Isles of Scilly.

On 22 June 1900 she hit the rocks at Newford Island whilst departing from St Mary's pier on the Isles of Scilly.

The Sheffield Daily Telegraph for 3 February 1904 reports: About four a.m., about an hour before the tide was at its height, the inhabitants of St. Mary’s were aroused by the loud hooting of the syren of the mail steamer Lyonesse.

Men hurriedly rushed to discover the cause, and in doing so incurred considerable risk, as huge volumes of water were dashing over the quay, doing damage in every direction, and washing away everything not permanently secured.

The effects of the tidal wave were felt in Penzance, heavy seas dashing over the promenade, and deluging the streets and houses in the vicinity.