In the mid 1930's the Turkish navy decided to modernize their submarine force with the addition of three German designed boats. The Ay class were basically a modified Type IXA U-boat, although they had the deck gun mounted on a raised platform immediately forward of the conning tower rather than on the forward casing like in the German boats. Given the names Atilay, Yildiray and Saldiray by Mustafa Atatürk himself the first boat in the class was to be the first submarine built in Turkey in decades while the others were built at Kiel, Germany. Of the three boats only one was lost during the war.

Atilay was built at Istanbul in 1938 and saw limited service during the war. She never made a war patrol, but was used along the Turkish coast. On July 14, 1942 Atilay and another ship were conducting exercises in the Dardanelles, Atilay submerged with the other vessel following. A storm blew in and the surface ship was unable to maintain contact with the Atilay. After some hours the distress buoy from the submarine was located on the surface and the phone was used to contact the crew, but there was no answer from the sunken boat. Apparently there was no ability to reach the boat since the depth off Canakklae is over 200', and the fact that there was no contact with the boat is was presumed that all thirty-eight men had already perished. The cause of the tragedy was unknown at the time.

In the 1990's the wreck was located and surveyed, it was reported that there was a large hole in the hull was found, evidence that Atilay was sunk by a mine, presumably left over from the Great War.