Named for Gideon Welles, she was laid down on 13 November 1918 - two days after the signing of the armistice that ended World War I - by the Bethlehem Shipbuilding Corporation's Fore River plant.

After her final sea trials off the east coast, Welles joined Squadron 2, Destroyer Force, Pacific Fleet, based at San Diego, California.

She was fitted out at San Diego and then moved to the Mare Island Navy Yard, Vallejo, California, to undergo alterations and a drydocking that started a few days before Christmas and extended into the new year, 1940.

Following the yard work, Welles arrived back at San Diego in company with the destroyer Williams and later departed the area on 5 February, bound for Panama.

She joined the cruiser Omaha on the following morning, and the two ships sailed in company on Neutrality Patrol and conducted exercises until 17 April, when the destroyer returned to San Juan.

Proceeding to sea again on 8 June, Welles conducted exercises en route to Cuban waters and subsequently operated out of Guantanamo Bay over the next few days.

She performed target services and conducted exercises and maneuvers with Submarine Division 11 until 16 August, when the destroyer retransmitted the canal, east-bound, and arrived at Coco Solo that day.

Welles soon shifted to the Boston Navy Yard, where she was drydocked, before she sailed—in company with Russell and Herndon on 5 September for Halifax, Nova Scotia, the designated turnover point.

As such, she presented them with what John Alden, in his book, Flush Decks and Four Pipes, termed the most extreme case of hull damage seen by Americans until Cassin and Downes were blasted by Japanese bombs at Pearl Harbor on 7 December 1941.