Beacon was laid down on 15 July 1968 at Sturgeon Bay, Wisconsin by Peterson Builders, Inc.; launched on 17 May 1969; sponsored by Mrs. William F. Krantz; and commissioned at the Boston Naval Shipyard on 22 November 1969, Lt. Larry R. Seaquist in command.

The gunboat, designed for littoral operations such as those presented by the volatile Cuban situation of the early 1960s, was equipped with combination diesel and gas turbine engines.

The latter provided bursts of extremely high speed that, when combined with variable-pitch propellers, allowed Beacon and her sisters to perform blockade, surveillance, and patrol missions in confined, coastal waters.

Five days later, after stops at Newport, Rhode Island and her namesake city of Beacon, New York, she moored at the Naval Amphibious Base Little Creek.

These tactics, designed to counter the anti-ship missile threat from Soviet-made fast attack boats, were refined as Beacon conducted gunnery, replenishment, convoy protection, and special warfare exercises through the end of the year.

Other activities included a plane guard and refueling exercise with the aircraft carrier USS Kitty Hawk on 26 August and a port visit to Monterey, California on 22 October.

Reassigned to the newly formed River Squadron (RivRon) 2 at Little Creek, they commenced various littoral training exercises out of their new home port almost immediately.

These operations, including port visits to Ocho Rios, Jamaica and Cap-Haïtien, Haiti, lasted until mid-November when Beacon participated in Exercise "Escort Tiger XIII".

Returning to Little Creek in mid-January 1973, Beacon then moved to the Naval Ship Research and Development Center's facility at Annapolis, Maryland, on 21 February.

After planting and maintaining acoustic sensors around the beachhead, Beacon took part in several convoy protection patrols and, despite heavy weather, successfully intercepted a dawn PTF "attack" on the task force.

Severe damage to both propellers and the drive train required shipyard facilities, and so the gunboat was towed to the Norfolk Shipbuilding and Drydock Corporation, Brambleton Division, on 13 April.

High seas and gale-force winds battered the stranded gunboat for eight hours until USS Salinan arrived to tow her back to Mayport.

She continued her now familiar role as an enemy missile boat—conducting simulated raids, inserting marine reconnaissance teams ashore, and testing remote sonobuoys—until sailing north in early July.

After a brief drydocking in AFDL-6, to repair her port screw blades and to sandblast and paint her hull, the gunboat sailed north to Washington, D.C. for the official celebration of the Navy's 200th Birthday on 8 October 1975.

When not so engaged, she continued to carry out local operations out of Little Creek, which included participation in Exercise "Solid Shield 76" in May, and midshipmen training and orientation rides in June & October.

As part of these amphibious operations, Beacon put underwater demolition teams (UDT) ashore, simulated gunfire support, and planted recon pick-up buoys.