Jersey was torpedoed off Haisborough Sands by the German destroyer Z12 Erich Giese, which was returning unseen from laying a minefield. Ten of the ship's company were killed and extensive damage caused. The ship's hull was repaired at the Henry Robb shipyard in Leith in around 25 days, but she had to return 24 hours after relaunch when the propeller became entangled in the defence nets around the harbour mouth. She was eventually relaunched safely on 30 December 1939.

Following further damage in 1940 Jersey was towed to the Humber for repairs and did not return to her flotilla until 28 October 1940.

Jersey struck an Italian aircraft-dropped mine off Malta's Grand Harbour and sank next to the Grand Harbour breakwater. Thirty-five crew members were killed.

When Jersey sank it blocked the entrance to Malta's Grand Harbour, meaning movements into and out of the harbour were impossible for several days. The destroyers Kelly, Kelvin and Jackal were left marooned in the harbour until the wreck was cleared. Some of the ships that rescued the surviving crew had to take passage to Gibraltar. On 5 May the wreck broke into two sections. It was only after 1946 that the after section was cleared from the entrance, in a series of controlled demolitions carried out between 1946 and 1949. Further salvage and clearance work was done in 1968 to make the harbour safe for large vessels.