In 1942, the corvette worked supporting convoys off the south eastern Australian coast, and was in Sydney Harbour during the Japanese midget submarine attack of 31 May 1942. 12 days later, "Whyalla" was escorting a southbound convoy when the freighter "Guatemala" was torpedoed and sunk by Japanese submarine "I-21", the only ship to be lost in a convoy escorted by "Whyalla".