S. P. Lee was laid down on 31 December 1918 by the Bethlehem Shipbuilding Corporation, San Francisco, California; launched by Mrs. Thomas J. Wyche; and commissioned on 30 October 1920.

Assigned to Reserve Destroyer Division, Pacific Fleet, S. P. Lee spent most of her first two years in the San Diego, California area with a reduced complement.

Arriving Balboa 20 days later following exercises en route, the destroyer engaged in tactical and strategic maneuvers through the end of March and returned to San Diego on 11 April.

Engaged in a high-speed engineering run down the Pacific Coast, the squadron changed course 95° at 2100 as inaccurate navigation indicated it appropriate to make the approach to Santa Barbara Channel.

At 2105, Delphy stranded on the rocks of Point Pedernales, known to sailors as Honda, or the Devil's Jaw; though warning signals were sent up by the flagship, the sheltering configuration of the coast line prevented their recognition by the remaining ships of DesRon 11; and, in the ensuing confusion, six other destroyers including S. P. Lee ran aground also in what is known as the Honda Point Disaster.