The second RMS Laconia was built by Swan, Hunter & Wigham Richardson as a successor to the Laconia of 1911. Like her predecessor (which was sunk during the First World War), this Laconia would also be destroyed by a German U-boat.

The ship was launched on 9 April 1921, and made her maiden voyage on 25 May 1922 from Southampton to New York.

She is notable for being the first Cunarder to undertake a World Cruise. In January 1923 Laconia began her first around-the-world cruise, which lasted 130 days and called at 22 ports.

On 24 September 1934 Laconia was involved in a collision off the US coast, while travelling from Boston to New York in dense fog. She collided with the port side of Pan Royal, a US freighter. Both ships suffered serious damage but were able to proceed under their own steam. Laconia returned to New York for repairs, and resumed cruising in 1935.

On 4 September 1939, Laconia was requisitioned by the Admiralty to be converted into an armed merchant cruiser. By January 1940 she was fitted with eight six-inch guns and two three-inch high-angle guns.

During her war service she suffered serious damage and was withdrawn from use to be repaired.

On 12 September 1942, at 8:10pm, 130 miles north-northeast of Ascension Island, Laconia was hit by a torpedo on the starboard side, fired by U-boat U-156. There was an explosion in the hold and most of the 450 Italian prisoners the ship was carrying were killed instantly. The vessel immediately took a list to starboard. Captain Sharp, who had also commanded Lancastria when she was torpedoed, was beginning to control the situation when a second torpedo hit Number Two hold.

At 9:11pm Laconia sank with many Italian prisoners still on board. The prospects for those who escaped the ship were only slightly better; sharks were common in the area and the lifeboats were adrift in the mid-Atlantic with little hope of being rescued. However, before Laconia went down, U-156 surfaced, and the U-boat's efforts to rescue survivors of its own attack began what came to be known as the Laconia incident.