The ninth Gloucester was launched by the Duchess of Gloucester and completed in January 1939. The ship was made Flagship of the 4th Cruiser Squadron attached to the East Indies Company. At the outbreak of war the ship was stationed in Simonstown until May 1940 when she joined the 7th Cruiser Squadron in the Mediterranean fleet based at Alexandria.

In July 1940, soon after Italy declared war, Gloucester was damaged by an Italian air attack and her Commanding Officer, Captain F R Garside CBE, was killed. Between August 1940 and May 1941 the ship was involved in many actions and her battle honours bear witness to the achievements of the ship and explain the nickname, The Fighting 'G'.

In May 1941 the Royal Navy prevented any German sea-borne landing in force on the island of Crete. Immense losses were imposed upon the German transports which sailed from the overrun mainland of Greece itself, but the modern menace of the dive-bomber exacted a heavy toll from our ships, which in those days had little of the all-important air support. Dive-bombers destroyed both the Gloucester and the new cruiser Fiji on the same day – 22 May 1941. The RAF having been withdrawn, doubtless for good reasons, leaving our ships with only their own guns to defend themselves. Both fought fiercely until the end.

In less than a year's service in the Mediterranean, HMS Gloucester had won five battle honours and lost over 700 men, including two Commanding Officers. The Commander-in-Chief, Admiral Sir Andrew Cunningham observed, "Thus went the gallant Gloucester. She had endured all things, and no ship had worked harder or had had more risky tasks. She had been hit by bombs more times than any other vessel, and had always come up smiling."