At 04.15 hours on 5 May 1942 the unescorted and unarmed Joseph M. Cudahy (Master Walter Edmund Reed) was torpedoed by U-507 about 125 miles west of Naples, Florida. Lookouts on the tanker had spotted the burning Munger T. Ball, which had been torpedoed by the same U-boat at 01.32 hours, 74 miles northwest of the Dry Tortugas Light and the master changed course for Tampa and steered a zigzag pattern at 11 knots. One torpedo struck at the waterline on the starboard side at the #4 main tank, just after the third officer had spotted the conning tower and saw the torpedo track about 20 feet from the tanker. The explosion blew a large hole in the side and started a fire in the midships house. The master steered into the wind to allow the crew of eight officers and 29 crewmen to abandon ship. The master and eight men on the forepart of the tanker left in one lifeboat and were sighted by PBY Catalina aircraft of the US Navy. A fishing schooner offered to help the men, but they declined. These men were picked up by a PBY about 12 hours after the attack and taken to Key West, Florida. One other survivor was picked up by another PBY the same morning and also taken to Key West. Three officers and 24 crewmen were lost.

On 7 May, the gutted and still burning Joseph M. Cudahy was sighted by the American patrol yacht USS Coral (PY 15) in 24°57N/84°10W and was sunk by gunfire, because she was beyond salvage and a menace to navigation.