On November 9, 1914, Australian & German forces faced off in the Battle of Cocos near the Cocos (Keeling) Islands. The German light cruiser SMS Emden had been operating in the area of Southeast Asia as a raider, disrupting & attacking shipping. On November 8-9, 1914, SMS Emden launched an attack on a communications station on Direction Island in a bid to disrupt Allied communications and the search for the ship. However, the station was able to call for help before being shut down and the HMAS Sydney, which had been escorting a nearby convoy, was sent to investigate. On the morning of November 9, both ships spotted each other near Direction Island & moved to engage. Emden opened fire first, surprising the Australian ship that had been lead to believe that the German ship couldn't not engage at the range. While Sydney suffered some damage, none of it was significant and the ship quickly returned fire, forcing the German vessel to beach itself. Sydney then broke off to pursue, capture, and sink the collier (coal-carrying ship) SS Buresk, a British vessel which had previously been captured by the Emden & taken as a war trophy & extra supply of fuel. After dealing with the collier, Sydney returned to Emden and, upon seeing the ship still flying its battle ensign & possibly still ready to fight, fired upon the vessel. Emden promptly lowered its ensign & flew a white banner to show that they surrender. The Australians sent medical supplies to the German survivors and returned the following day to pick them up after verifying the status of the communications station.

HMAS Sydney had suffered 4 killed and 16 wound while the German force had suffered 134 killed, 69 wounded, 157 captured, and the loss of the collier and one of only two warships in the Indian Ocean. The other, SMS Koenigsburg, was soon trapped and eventually destroyed in 1915, allowing ANZAC troop convoys to travel to the Middle East without escort and thus free resources for deployment elsewhere. The remains of SMS Emden were eventually broken up by a Japanese salvage company in the 1950s. HMAS Sydney continued in Australian service through World War I until being scrapped in 1929.