On 5 December 1941, "I-66" departed Samah to begin what would become her first war patrol. When the Japanese invasion of Malaya began on 8 December 1941 — the first day of World War II in East Asia — "I-66" was in the South China Sea off Trengganu, British Malaya, operating on a patrol line with the submarines , , , and . On 15 December 1941, "I-66" and "I-65" were detached from this duty to conduct a reconnaissance of the approaches to Kuching in support of the invasion of Sarawak in British North Borneo, which began on 16 December 1941. The two submarines received a warning that Allied submarines were operating off Kuching. While preparing to surface to recharge her batteries northwest of Kuching on 24 December 1941, "I-66" sighted the Royal Netherlands Navy submarine on the surface on her starboard bow at a range of . After a submerged approach, "I-66" fired a single torpedo at 10:28. It struck "K XVI", which broke in two and sank at with the loss of her entire crew of 36. On 4 October 2011, Australian divers located the wreck of "K XVI", broken in half and at a depth of .