In one of her first voyages in 1909, she ran aground, and took several months to repair. When the First World War broke out, she was Admiral Maximilian von Spee`s flagship in the German East Asian Cruiser Squadron. This squadron consisted of Scharnhorst, her sister ship Gneisenau, Dresden, Emden, Nürnberg, and Leipzig. The squadron split with Emden breaking off to range the Indian Ocean, engaging in attacks on enemy commercial and troop transports with great success, with the remainder crossing the Pacific and on 1 November 1914, engaged and sank the two British cruisers Good Hope and Monmouth at the Battle of Coronel, off the coast of Chile.
On 8 December 1914, the five cruisers of the squadron attempted to attack Stanley in the Falkland Islands with the intention of obtaining coal. They were unaware of the presence of a force under Vice Admiral Sir Doveton Sturdee, including two British battlecruisers HMS Invincible and HMS Inflexible, and several light cruisers, which had arrived only the previous day. In the ensuing Battle of the Falkland Islands, SMS Scharnhorst was lost with her entire crew, together with all of her squadron except the SMS Dresden, which was sunk 3 months later off Valparaíso, Chile.