In April 1943, Kennedy was assigned to Motor Torpedo Squadron TWO and took command of PT-109, (Patrol Torpedo boat) based at Tulagi Island in the Solomon Islands. On the night of August 1–2, PT-109 was performing nighttime patrols near New Georgia in the Solomon Islands with PT-162 and PT-169. Kennedy spotted a Japanese destroyer nearby and attempted to turn to attack, when PT-109 was rammed suddenly at an angle and cut in half by the destroyer Amagiri. Kennedy gathered around the wreckage his surviving ten crew members including those injured, to vote on whether to "fight or surrender". Shunning surrender, the men swam towards a small island three miles away. Despite re-injuring his back in the collision, Kennedy towed a badly burned crewman through the water to the island with a life jacket strap clenched between his teeth, and later to a second island, where his crew was subsequently rescued on August 8.

On September 1, 1943, Kennedy returned to duty and took command of the PT-59, a PT boat that had been converted into a gunboat. In October, Kennedy was promoted to lieutenant. On November 2, PT-59, which included three former PT-109 crew members, took part with another boat in the successful rescue of 87 marines stranded on two rescue landing craft on the Warrior River at Choiseul Island, which was held by the Japanese. Under doctor's orders, Kennedy was relieved of his command of PT-59 on November 18, and he returned to the United States in early January 1944.

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