Takagi's carriers were to deliver nine Zero fighter aircraft to Rabaul. Bad weather during two attempts to make the delivery made the aircraft to return to the carriers. One of the Zeros crashed in the ocean.
To find out if any Allied naval forces were coming, the Japanese sent submarines to wait southwest of Guadalcanal. Fletcher's forces got into the Coral Sea area before the submarines arrived and the Japanese did not see them. Another sub was sent to explore around Nouméa. It was attacked by "Yorktown" aircraft on 2 May.
On the morning of 1 May, Fletcher sent TF11 to refuel. TF 17 completed refueling the next day. Fletcher took TF 17 northwest towards the Louisiades and ordered TF 11 to meet TF 44 on 4 May. TF 44 was a joint Australia–U.S. warship force under MacArthur's command. It was led by Australian Rear Admiral John Crace. It was made up of the cruisers , , and .
Early on 3 May, Shima's force arrived off Tulagi and the naval troops began to occupy the island. Tulagi was undefended. The small guard of Australian commandos and a Royal Australian Air Force group left before Shima's arrival. The Japanese forces built a seaplane and communications base.
At 17:00 on 3 May, Fletcher was told that the Japanese Tulagi invasion force had been seen. TF 17 went towards Guadalcanal to launch air attacks against the Japanese forces at Tulagi.
On 4 May, from a position south of Guadalcanal (), 60 aircraft from TF 17 launched three attacks against Shima's forces off Tulagi. "Yorktown"s aircraft sank the destroyer "Kikuzuki" () and three of the minesweepers, damaged four other ships, and destroyed four seaplanes. The Americans lost one dive bomber and two fighters. Even though the Japanese forces were harmed by the carrier strikes, they kept building the seaplane base. They began flying from Tulagi by 6 May.
Takagi's Carrier Striking Force was north of Tulagi when it learned of Fletcher's strike on 4 May. Takagi sent planes to search for the American carriers, but the planes found nothing.
At 08:16 on 5 May, TF 17 met up with TF 11 and TF 44 south of Guadalcanal. At the same time, four F4F Wildcat fighter aircraft from "Yorktown" shot down a Kawanishi Type 97 aircraft from the Yokohama Air Group.
A message from Pearl Harbor told Fletcher that Japanese planned to land their troops at Port Moresby on 10 May and their carriers would be close to the invasion group. Fletcher planned to take his forces north towards the Louisiades.
Takagi's carrier force entered the Coral Sea in the early morning hours of 6 May.
On 6 May, Fletcher joined TF 11 and TF 44 into TF 17. He thought the Japanese carriers were still well to the north. American planes did not find the Japanese naval forces, because they were located beyond the planes' range.
At 10:00, a Kawanishi flying boat from Tulagi saw TF 17 and sent a message to its headquarters. Takagi received the report at 10:50. At that time, Takagi's force was about north of Fletcher. Takagi's ships were still refueling, so he was not yet ready to battle. Takagi sent his two carriers with two destroyers under Hara's command to head towards TF 17 at so that they could attack the next day.
American B-17 bombers based in Australia attacked the Port Moresby invasion forces, including Gotō's warships, several timeson 6 May without success. MacArthur's headquarters told Fletcher about the locations of the Japanese invasion forces. MacArthur's planes saw a carrier ("Shōhō") about northwest of TF17.
At 18:00, TF 17 completed fueling and Fletcher sent "Neosho" with a destroyer, , to wait further south. TF 17 then turned to head northwest towards Rossel Island. At 20:00 (), Hara met Takagi who completed refueling.
Late on 6 May or early on 7 May, "Kamikawa Maru" set up a seaplane base in the Deboyne Islands to help the invasion forces as they approached Port Moresby. The rest of Marumo's Cover Force waited near the D'Entrecasteaux Islands.
At 06:25 on 7 May, TF 17 was south of Rossel Island (). At this time, Fletcher sent Crace's cruiser and destroyer force out. When Crace's warships left, this reduced the anti-aircraft defenses for Fletcher's carriers. Fletcher wanted to make sure the Japanese invasion forces could not sneak through to Port Moresby while he was fighting with the Japanese carriers.
Fletcher thought Takagi's carrier force was north of his location. Fletcher told "Yorktown" to send 10 SBD dive bombers to search that area. Takagi launched 12 Type 97 carrier bombers at 06:00 to search for TF 17. Hara thought that Fletcher's ships were to the south. Gotō's cruisers and launched four Kawanishi E7K2 Type 94 floatplanes to search for the Americans. Each side got its carrier attack aircraft ready to launch once the enemy was located.
At 07:22 one of Takagi's carrier planes, from "Shōkaku" located American ships. At 07:45, the Japanese pilot located "one carrier, one cruiser, and three destroyers". Hara thought that he had found the American carriers. Hara launched all of his available aircraft. A total of 78 aircraft—18 Zero fighters, 36 Type 99 dive bombers, and 24 torpedo aircraft—began flying from "Shōkaku" and "Zuikaku" at 08:00.
At 08:20, one aircraft found Fletcher's carriers. Takagi and Hara continued with the attack on the ships to their south. They also turned their carriers towards the northwest to get closer to the Americans. Takagi and Hara thought that the U.S. carrier forces might be operating in two groups.
At 08:15, a "Yorktown" plane saw Gotō's force. He reported two carriers and four heavy cruisers" at , northwest of TF17. Fletcher thought he had found the Japanese main carrier force. He ordered all available carrier aircraft to attack. By 10:13, the American force of 93 aircraft – 18 F4F Wildcats, 53 SBD dive bombers, and 22 TBD Devastator torpedo bombers were flying. At 10:12, however, Fletcher received a report from three United States Army B-17s of an aircraft carrier, ten transports, and 16 warships.
Believing that this was the main Japanese carrier force, Fletcher directed the airplanes towards this target.
At 09:15, Takagi's force sighted "Neosho" and "Sims". Takagi now realized the American carriers were between him and the invasion forces. Takagi ordered his aircraft to attack "Neosho" and "Sims". At 11:15, the 36 dive bombers attacked the two American ships.
Four dive bombers attacked "Sims" and the rest attacked "Neosho". The destroyer was hit by three bombs, broke in half, and sank, killing all but 14 of her 192-man crew. "Neosho" was hit by seven bombs. Heavily damaged and without power, "Neosho" was sinking. "Neosho" told Fletcher by radio that she was under attack.
The American aircraft sighted "Shōhō" at 10:40 and attacked. The Japanese carrier was protected by six Zeros and two Type 96 'Claude' fighters flying combat air patrol (CAP). Gotō's cruisers surrounded the carrier.
Attacking first, "Lexington"s air group hit "Shōhō" with two bombs and five torpedoes, causing severe damage. At 11:00, "Yorktown"s air group attacked the burning carrier with 11 more bombs and two torpedoes. Torn apart, "Shōhō" sank at 11:35 (). Gotō sent his warships to the north, but sent the destroyer to rescue survivors. Only 203 of the carrier's 834-man crew were rescued. Three American aircraft were lost in the attack. All of "Shōhō"s aircraft were lost. At 12:10, a pilot told TF 17 that the attack was successful.
The American aircraft returned and landed on their carriers by 13:38. By 14:20, the aircraft ready to launch against the Port Moresby Invasion Force or Gotō's cruisers. Fletcher was worried that he did not know where the other Japanese fleet carriers were. Allied forces thought that up to four Japanese carriers might be nearby. Fletcher turned TF17 southwest.