With the Yangtze River Patrol from 1923 to 1931, she made annual deployments in Chinese waters protecting American interests from 1931 to the outbreak of World War II.

On the early afternoon of 10 December more than 50 two-engined high level bombers appeared over Cavite and, cruising leisurely above the range of anti-aircraft fire, destroyed practically the entire base.

Peary, tied up at a small pier, took one bomb forward which damaged the superstructure and stack and killed eight of her crew.

Her crew camouflaged her with green paint and palm fronds, hoping to elude Japanese patrol bombers.

Five passed overhead without spotting the ship that morning and when darkness fell she set out through the Celebes Sea for Makassar Strait.

On 15–16 February, Peary took part in a mission to transport reinforcements and supplies to Allied forces in Dutch Timor, but this was aborted after coming under intense air attack.

Catlett, who was ashore during Peary's final battle, was tasked with writing the official US Navy report on the sinking.

In July 2020 an announcement was made by the Northern Territory government that the propellers from the ship had been found some kilometres from the known wreck site, prompting further investigation into Peary's final battle.

In the words of Peter Grose, author of An Awkward Truth: The Bombing of Darwin, February 1942, "The doomed yet magnificent reply by the destroyer USS Peary in Darwin harbour as Japanese dive-bombers swarmed around her deserves a place in the legend books of American military history".