Pawnee was laid down on 23 October 1941 by the United Engineering Company, Alameda, California; launched on 31 March 1942 and commissioned on 7 November 1942.

She stood out of Pearl Harbor in early January, steamed for the forward Pacific area with the floating drydock USS ARD–5 in tow, and reported to ComSoPac for duty the 29th at Espiritu Santo.

Pawnee operated in the Solomons from June through August 1943, providing towing services at New Georgia and Rendova.

On 14 October 1944, off the coast of Formosa, the Cleveland-class light cruiser USS Houston was hit by a torpedo amidships and taken under tow by Pawnee.

Pawnee was struck from the Navy List on 1 September 1962 and placed in the National Defense Reserve Fleet, Olympia, Washington, where she remained until 1971.