Kerwood was built as the merchant ship SS Budapest at Thornaby-on-Tees, England, by Richardson, Duck and Company.

The U.S. Navy acquired Kerwood for World War I service on 5 November 1918, assigned her the naval registry Identification Number (Id.

Assigned to the Naval Overseas Transportation Service, Kerwood commenced coaling runs from Cardiff, Wales, to French ports.

She continued these operations until 28 December 1918, when she arrived at Bordeaux, France with 1,000 tons of United States Army stores.

Kerwood was decommissioned on 19 March and transferred to the United States Shipping Board for simultaneous return to her owner.