At 19.39 hours on 3 Sep 1939 the unescorted and unarmed Athenia (Master James Cook) was torpedoed without warning by U-30 about 250 miles west of Inishtrahull. One torpedo struck on the port side in the engine room, causing the ship to sink at 10.00 hours on 4 September in 56°42N/14°05W.

Most of the 315 crew members and 1103 passengers (including 316 US citizens) abandoned ship in 26 lifeboats. 19 crew members and 93 passengers (28 of them US citizens) were lost. Many of them died when one lifeboat, carrying 52 female passengers and three sailors, came due to the darkness in contact with the propeller of the Norwegian motor merchant Knute Nelson (Master Carl Johan Anderssen) and capsized, only eight survived. The Norwegian vessel had been the first ship on the scene, picked up 449 survivors and landed them at Galway on 5 September. The Swedish motor yacht Southern Cross picked up 376 survivors and later transferred 236 of them to the City of Flint (Master Joseph A. Gainard) which landed them at Halifax. While HMS Fame (H 78) (Cdr P.N. Walter, RN) screened the rescue operations, HMS Electra (H 27) (LtCdr S.A. Buss, RN) and HMS Escort (H 66) (LtCdr J. Bostock, RN) picked up the remaining survivors and landed them at Greenock on 5 September.

The Athenia was the first ship sunk by a U-boat in the Second World War. This attack was carried out in contravention of standing orders, Lemp assumed the ship was an armed merchant cruiser, because she was darkened and zigzagging. The attack was denied by the Germans during the war and the KTB of U-30 was changed by higher order.

It is a common erroneous understanding that the Athenia was shelled. What some survivors saw was a torpedo exploding near the U-boat. A second torpedo had been stuck with running engines in its tube during the initial attack and the U-boat was in danger of being destroyed as the torpedo had timer detonator, but the crew managed to dislodge the stuck torpedo in time.