About 50 people attended the 76th-anniversary service at HMNZS Toroa in Dunedin.
More than 760 men, 150 of whom were New Zealanders, died when the ship struck enemy mines off the coast of Libya on December 19, 1941. Chief Petty Officer Peter Gee said it was important to remember such a great loss of life.
"It helps you remember what you’ve got, and the sacrifices others have made."