Teton was laid down under Maritime Commission contract (MC hull 1363) as Water Witch on 9 November 1943 by the North Carolina Shipbuilding Company in Wilmington, North Carolina; launched on 5 February 1944, sponsored by Mrs. C. E. Shimp; renamed Teton on 7 February 1944; acquired by the Navy on 18 October 1944; and commissioned the same day at Brooklyn, New York.

Following shakedown in the Chesapeake Bay, the amphibious force flagship, escorted by USS Barr (APD-39), steamed south; transited the Panama Canal;proceeded, via the Mare Island Navy Yard, to Hawaii; and arrived at Pearl Harbor on 19 January 1945.

When news of Japan's surrender arrived, Admiral Hall and his staff left the ship to transfer to USS Hansford (APA-106).

Teton embarked Army forces for the occupation of Japan and proceeded to Honshū, arriving in Tokyo Bay on 29 August.

Teton stood out of Tokyo Bay on 25 September and headed for Guam to embark approximately 750 passengers for transportation to the United States.