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Italian battleship Vittorio Veneto, eight cruisers, and 13 destroyers under the command of Admiral Angelo Iachino set to sea to hunt for a detected British convoy. As soon as the Italian ships left port, British intelligence decoded the messages indicating their sortie. As a result, Admiral Andrew Cunningham was sent with fleet of three battleships, one carrier, and nine destroyers from Alexandria to face the Italian fleet. On the morning of 28 Mar 1941, forward cruisers supported by Albacore torpedo-bombers of carrier Formidable met the Italian warships off the Peloponnesian coast of Greece. Italian Battleship Vittorio Veneto was only lightly damaged in the initial engagement, but it made Iachino realize that without air cover his fleet was at a disadvantage, therefore he ordered his fleet to return to port. Two follow-up air strikes failed to damage Vittorio Veneto, though successful in disabling the cruiser Pola.

Iachino's biggest failure entering this battle was caused by failings of Axis Intelligence. When he launched the sortie, he had the wrongful impression that the British fleet only had one battleship and no carriers at its disposal, so when the battleships opened fire at the distance of less than 4,000 yards, he was caught in a surprise. His quick response to withdraw his forces at the face of superior surface and air power would have saved his fleet, but he did not realize Cunningham's persistence. After sundown, aided by radar, Cunningham's ships detected Italian destroyers guarding the disabled Pola. Within five minutes of bombardment from battleships Barham, Valiant, and Warspite from a short range, the cruisers Fiume and Zara were destroyed. Italian destroyers Vittorio Alfieri and Giosué Carducci fought back, but were intercepted and sank by British destroyers. Pola was sunk by torpedoes after her crew had been taken off. When day broke, German bombers mounted a retaliatory strike on the British fleet, though to little effect.

By the time the remaining Italian ships escaped to port, they had already lost 2,400 men, including Vice Admiral Carlo Cattaneo of the cruiser Zara. The Italian loss of three heavy cruisers and two destroyers was a stark contrast from the damage suffered by the British. The British had only lost one torpedo bomber during the entire battle.

The Battle of Matapan is still highly regarded in British naval history, often compared with the famous victory at Trafalgar. This battle marked British naval dominance in the Mediterranean Sea for the rest of the war. Without the Mediterranean Sea under Italian Control, Germany could no longer supply its war efforts in North Africa with ease.

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