HMS M2 was fitted with an aircraft hangar and catapult, and was equipped with a small reconnaissance aircraft, a Parnell PETO.

M2 (Lt Cdr J D DeM Leathes) sailed from Portland on 26 January 1932 for a routine exercise with units of the 6th Submarine Flotilla in West Bay, 15 miles West of Portland Bill. At 1011 Lt Cdr Leathes signalled the depot ship HMS TITANIA that they intended to dive at about 1030. This was the last communication from M2. The submarine is believed to have been flooded though the aircraft hangar, whilst in the act of surfacing to fly off the aircraft.

Information gained in the nearly year long salvage efforts showed M2 had her hangar doors and the main access hatch No 2 from hangar to accommodation spaces open. The bodies of 2 crew members were found in the hangar with the seaplane.

She was listed as lost with all hands in West Bay, Portland on 29 January 1932.