On 29 Apr 1943, the unescorted Peter Silvester was unsuccessfully attacked by an unknown Japanese submarine in 18°34S/176°21E, while en route from Espirito Santo, New Hebrides to San Francisco, California. Two torpedoes passed beneath the ship and exploded in some distance. 

At 16.40 hours on 6 Feb 1945 the unescorted Peter Silvester (Master Bernard C. Dennis) was hit by two torpedoes from U-862 southwest of Australia. Both torpedoes struck on the starboard side at the #3 hold, but it was reported that one went straight through the ship while the other detonated in the hold, rupturing the deck forward of the bridge, blew off the hatch cover and caused the flooding of the hold and the engine room. As the ship settled by the bow, she was hit at 17.10 hours by two more torpedoes on the starboard side at the traverse bulkhead between holds #2 and #3. The eight officers, 34 crewmen, 26 armed guards (the ship was armed with one 4in, one 3in and eight 20mm guns) and 107 US Army troops abandoned ship in four lifeboats and six rafts. Shortly thereafter, the vessel was hit by a coup de grâce at the #1 hold, causing her to break in two just forward of the superstructure. The forward section sank immediately, while the after section stayed afloat and was last seen deep in the water in the evening of 8 February.

15 survivors in a lifeboat were picked up after two days by the American steam merchant Cape Edmont and landed at Fremantle, Australia on 12 February. The 80 survivors on the six rafts and 12 survivors in a lifeboat were picked up on 13 February by USS Corpus Christi (PF 44) and brought to Fremantle after five days. 20 survivors in a third boat were picked up on 28 February by HMS Activity (D 94) and landed at Fremantle on 2 March. The last 15 survivors in another boat were rescued on 9 March by USS Rock (SS 274) and landed at Exmouth Gulf. One crewmen, seven armed guards and 25 troops (one of them died from injuries in a lifeboat) were lost.

The Peter Silvester was the last victim of German U-boats in the Indian Ocean.