I-21 departed Yokosuka on 19 November and sailed to the rendezvous at Hitokappu Bay, Etorofu, arriving on the 22nd, and departing on the 26th for the Hawaiian Islands, acting as a lookout ahead of the Carrier Striking Force. On 2 December 1941 the coded signal "Climb Mount Niitaka" was received, signifying that hostilities would commence on 8 December. On 7 December 1941 I-21 was assigned to patrol north of Oahu, Hawaii. On 9 December I-6 reported sighting a and two cruisers. I-21 and the rest of SubRon 1 boats, were ordered to pursue and sink her. However I-21s pursuit was delayed by diesel engine breakdowns and electrical problems. She was also spotted by several Douglas SBD Dauntless dive-bombers and forced to dive each time. Finally, on 14 December, the chase was abandoned and I-21 and the other submarines were ordered to the West Coast of the United States to attack American shipping. I-21 was assigned to patrol off Point Arguello, California.
Sinking of SS ''Montebello''
On 23 December 1941, I-21 sighted the Union Oil Company's oil tanker. The vessel, built in 1921, was en route from Port San Luis, California, to Vancouver, British Columbia. At 05:30, I-21 fired two torpedoes at a range of. One was a dud, but the other struck forward in the pump room and dry storage cargo hold. The 38-man crew abandoned the tanker in four lifeboats, which were machine-gunned by I-21 with no casualties. Montebello sank in of water about south of Piedras Blancas Light at. In November 1996, a team of marine researchers surveyed and filmed the wreck in a two-person submarine. Montebello, apparently still loaded with of crude oil, was discovered to be resting on the sea floor in of water adjacent to the Monterey Bay National Marine Sanctuary. The wreck was reexamined in 2010 for the level of deterioration and to determine if the oil was still in the hold and if so, did it pose an environmental threat. The researchers reported in October 2011 that the cargo had dissipated into the vast ocean shortly after sinking.
On 8 June 1942, I-21 briefly shelled Newcastle, New South Wales. Among the areas hit within the city were dockyards and steel works. There were no casualties in the attack and damage was minimal.
Possible sinking of USS ''Porter''
On 26 October 1942, in the Battle of the Santa Cruz Islands, I-21 is credited in most sources with sinking of the destroyer. However, author Richard B. Frank states that Japanese records do not support this, and that, more likely, an errant torpedo from a ditching U.S. Grumman TBF Avenger hit Porter and caused the fatal damage.
Sinking of SS ''Kalingo''
On 17 January 1943, I-21 torpedoed and sank the Union Steam Ship Company's SS Kalingo about east of Sydney. Two firemen were killed when the torpedo hit, and 32 of her crew reached safety in a boat.
Sinking of SS ''Iron Knight''
The BHP Shippingiron ore carrier was part of a convoy of ten ships travelling up the east coast of New South Wales on 8 February 1943. At approximately 2:30 am, north of Twofold Bay, I-21 fired a torpedo at the naval ships flanking Iron Knight at the head of the flotilla under cover of darkness. The torpedo passed under the bow of the and struck Iron Knight, sinking her with the loss of 36 crewmen, including her commander, in less than two minutes. Most of the ship's crew were below decks and were unable to escape as the ship went down. Only 14 survived, clambering aboard a single lifeboat to be picked up by the., the other corvette guarding the convoy, pursued the I-21 for several days. On 4 June 2006, the wreck of Iron Knight was discovered in waters off the New South Wales town of Bermagui at a depth of approximately. Local fishermen had snagged their nets on the wreck over the years. Families and descendants of the crew traveled to the site and laid a wreath and poppies on the waters above the wreck. The sole remaining survivor of the sinking, John Stone, was unable to make the journey from his home in southern Victoria.
Sinking of ''Starr King''
On 11 February 1943, I-21 sank the 7,176 GRT U.S. Liberty Ship Starr King near Port Macquarie. There were no casualties, and the crew was picked up by.
Other ships damaged or sunk along the Australian east coast
On 18 January 1943, I-21 torpedoed the tanker Mobilube, off the coast of Sydney, with the loss of three lives. On 22 January 1943 I-21 also torpedoed the Liberty shipPeter H. Burnett, approximately north of Sydney, it was towed back to Sydney by the corvette HMAS Mildura.
Loss
I-21 was never sighted again following a final report made on 27 November 1943, off the Gilbert Islands. A Japanese Type B submarine, which was probably I-21, was torpedoed and sunk by TBF Avengers off Tarawa on 29 November 1943.