Under the designation U137 it ran aground on 27 October 1981 on the south coast of Sweden, approximately 10 km (6.2 mi) from Karlskrona, one of the largest Swedish naval bases.

In October 1981, the Soviet submarine S-363 accidentally hit an underwater rock about 10 kilometres (6.2 mi) from the South Coast Naval Base at Karlskrona and surfaced within Swedish waters.

[4] The Swedish National Defence Research Institute also secretly measured for radioactive materials from outside the hull by using gamma ray spectroscopy from a specially configured Coast Guard boat.

Although the presence of nuclear weapons on board S-363 was never officially confirmed by the Soviet authorities,[5] the vessel's political officer, Vasily Besedin, later confirmed that there were nuclear warheads on some of the torpedoes and that the crew had been ordered to destroy the boat, including the warheads, if Swedish forces tried to take control of the vessel.

On 5 November, it was hauled off the rocks by Swedish tugs and escorted to international waters, where it was handed over to the Soviet fleet.

[12] The area in which the Soviet submarine ran aground was then a restricted military zone, in which no foreign nationals were allowed.

The exact location served as one of only two routes that could be used to move large ships from the naval base in Karlskrona to open water.