The second Thresher was laid down on May 28, 1958 at the Portsmouth Naval Shipyard, Kittery, Maine; launched on July 9, 1960; sponsored by Mrs. Frederick B. Warder; and commissioned on August 3, 1961 with Commander Dean W. Axene in command. She conducted lengthy trials in the western Atlantic and Caribbean areas in 1961 and 1962, providing a thorough evaluation of her many new technological features and weapons. Following trials, she took part in Nuclear Submarine Exercise (NUSUBEX) 3-61 off the northeastern coast of the United States from September 18 to September 24.
On October 18 Thresher headed south along the east coast. After calling at San Juan, Puerto Rico, she conducted further trials and test-fired her torpedo system before returning to Portsmouth on November 29. The ship remained in port through the end of the year and spent the first two months of 1962 evaluating her sonar system and her Submarine Rocket (SUBROC) system. In March, the submarine participated in NUSUBEX 2-62, an exercise designed to improve the tactical capabilities of nuclear submarines, and in antisubmarine warfare training with Task Group ALPHA.
Off Charleston, the ship undertook operations observed by the Naval Antisubmarine Warfare Council, before she returned briefly to New England waters whence she proceeded to Florida for SUBROC tests. However, while mooring at Port Canaveral, Florida the submarine was accidentally struck by a tug which damaged one of her ballast tanks. After repairs at Groton, Connecticut, by the Electric Boat Company, the ship returned south for more tests and trials off Key West, Florida. Thresher then returned northward and remained in dockyard hands through the early spring of 1963.
On April 10, 1963, after the completion of this work, Thresher began post-overhaul trials. Accompanied by the submarine rescue ship USS Skylark (ASR-20), she transited to an area some 350km (220 miles) east of Cape Cod, Massachusetts, and started deep-diving tests. As these proceeded, garbled communications were received by Skylark, indicating trouble aboard the submarine. It gradually became apparent that she had sunk, taking the lives of 129 officers, crewmen and civilian technicians.
After an extensive underwater search utilizing the bathyscaphe Trieste, oceanographic ship Mizar, and other ships, Thresher's remains were located on the sea floor, some 2560 meters (8400 feet) below the surface, in six major sections. The majority of the debris is in an area of about 134,000m² (160,000 square yards). The major sections are the sail, sonar dome, bow section, engineering spaces section, operations spaces section, and the tail section. Deep sea photography, recovered artifacts and an evaluation of her design and operations permitted a Court of Inquiry to determine that she had probably sunk due to a piping failure, subsequent loss of power and inability to blow ballast tanks rapidly enough to avoid sinking. Over the next several years, a massive program was undertaken to correct design and construction problems on the Navy's existing nuclear submarines, and on those under construction and in planning. Following completion of this "SubSafe" effort, the US Navy has suffered no further losses of the kind that ended Thresher's brief service career.
The Navy has periodically monitored the environmental conditions of the site since the sinking and reported the results in an annual public report on environmental monitoring for U.S. Naval nuclear-powered ships. These reports provide specifics on the environmental sampling of sediment, water, and marine life which were taken to ascertain whether the submarine has had a significant effect on the deep ocean environment. The reports also explain the methodology for conducting deep sea monitoring from both surface vessels and submersibles. The monitoring data confirms that there has been no significant effect on the environment. Nuclear fuel in the submarine remains intact.