Falcon was launched 7 September 1918 by Gas Engine and Power Co., and C. L. Seabury Co., Morris Heights, New York; sponsored by Mrs. W. J. Parslow; and commissioned 12 November 1918.

After towing targets and various craft along the U.S. East Coast, an occupation with salvage duty which was to be her major employment for many years, she sailed from New York on 8 August 1919 for Kirkwall, Orkney Islands, Scotland.

Falcon made a second voyage to European waters between March and August 1920, visiting Rosyth, Scotland, and Brest, France, and returning by way of the Azores with a captured German submarine in tow for the Panama Canal Zone.

She returned to home waters in September, and began her part in the salvage operations on USS S-51 under Lieutenant Henry Hartley in which she joined that fall and the next spring.

Acting as tender as well as salvage ship for submarines, Falcon accompanied them to fleet exercises in waters from Maine to the Panama Canal Zone, and conducted many operations to develop rescue techniques, as well as training divers.