On May 2, 1942 Allied search planes spotted the Japanese support force and the Tulagi Invasion Force weaving through the Solomon Island chain. The use of "Magic" in breaking Japanese code was not fulproof, but it had given the U.S. fleet ample time to prepare for the Japanese attack. What "Magic" did not tell the Allies was that the MO Main Force, four heavy cruisers and the light carrier Shoho, along with the MO Striking Force, two big fleet carriers, were on their way to the Coral Sea from Truk.

For the Japanese, everything was going to plan until they tried to transfer nine Zeros to the 5th Air Attack force. Bad weather prevented the transfer of these planes and it also led to one of the Zeros being ditched into the ocean. The MO forces were forced to delay for two days because of the inability to transfer the Zeros and because of refueling problems. The Japanese MO forces were left with 37 Zeros, five under the authorized strength.

During this delay, the Tulagi Invasion force was approaching Tulagi without conflict as the Allied forces had wanted to keep a low profile. Admiral Fletcher, commander of Task Force 17, wanted to remain out of enemy search radius and allow the Japanese to make the first move before he mounted a counterattack. Also, Fletcher took this opportunity to top off his destroyers with fuel. On May 4, Fletcher was to meet up with Admiral Fitch and Task Force 11, who was also refueling. Task Force 11 had emptied the fleet oiler Tippecanoe, which left only the Neosho to fuel the Task Forces.

When Fletcher received reports that the Japanese were approaching Tulagi, he sent the Neosho and a destroyer escort, the Sims, south to join Task Force 11 and get away from the fighting. Fletcher then sped to a point 100 miles south of Tulagi, where at dawn on May 4, he launched an attack force of 40 bombers from the Yorktown. The strike caught Admiral Shima by surprise. There were ten ships in the area, but almost no air support. In total, Fletcher launched three attacks in the morning and the afternoon with only three planes lost. Originally the pilots had estimated Japanese losses to be two destroyers, one large transport, and a light cruiser forced aground. In reality, the Japanese had lost one destroyer and three small auxiliaries, while two other ships were lightly damaged. Despite these attacks, the Japanese sent a small garrison on shore to take the island.

On May 5, Fletcher rejoined Task Force 11 far south of Tulagi and combined the two Task Forces into a larger Task Force 17 on May 6. By May 6, Fletcher had completedrefueling and had again sent the Neosho and the Sims out of harms way far to the south. On May 7, Fitch launched an air search hoping to locate the enemy carriers and the invasion convoy. The plan was to hold back a large air striking group until the Japanese carriers were located.

Admiral Inoue re-evaluated the Port Moresby invasion and decided to continue as planned, even though the U.S. carriers were in the area. It was decided that the invasion would have to wait until the MO Striking Force had dealt with the Task Force. The Japanese had reason to be confident because the MO forces were shrouded in bad weather and they knew the approximate location of Task Force 17. The Task Force had been spotted by a flying boat stationed at Tulagi and had been tailed for four hours.

On May 7 the MO Main force, with the Shoho and 18 planes, lay on one flank of the U.S. forces while the MO Striking Force, with the 5th Carrier Division, lay 280 miles southwest of Tulagi on the other flank. The two MO forces had to separate because of the refueling difficulties and because the MO Striking force went to the aid of the Tulagi Invasion force during the U.S. attacks. However, Japanese search planes wrongly identified the Neosho and Sims as a carrier with a destroyer escort. The 78 Japanese planes quickly sunk the Sims and left the Neosho dead in the water, losing only one bomber.

At about the same time, U.S. pilots had spotted two old light cruisers and two gunboats north of the Louisiades, but wrongly identified them as two carriers and four heavy cruisers. By the time that the mistake was learned of, 93 aircraft were already on their way from the Yorktown. The Lexington strike group had been more successful, they had spotted the MO Main force and attacked the Shoho. The Yorktown air group was then rerouted and the combined air groups sunk the Shoho, losing only three planes.

By this time, the Japanese forces had completely lost track of Task Force 17. Inoue then ordered all ship not directly involved in fighting to withdraw to the north temporarily. The Japanese then launched 27 bombers from the Shokaku and Zuikaku with instructions to fly 280 miles to the west. In reality, Task Force 17 was in a patch of bad weather only about 170 miles away. Task Force 17 used its radar to track the bombers and set up an ambush with the U.S. fighters. The Japanese lost nine planes while two U.S. fighters were missing. As the remaining bombers fled, they knew the exact location of Task Force 17. Fletcher also knew that the Japanese forces were within striking range, less than 200 miles away.

On May 8 search planes for both sides found each other. Fletcher dispatched 75 planes to attack the Japanese MO Striking Force, while Admiral Hara dispatched 69 planes. Both forces attacked at almost the same time. Bad weather covered the MO force and U.S. pilots could only find the Shokaku. It was hit with three heavy bombs, damaging the flight deck enough that it could not launch or receive aircraft. The Yorktown and the Lexington groups hit the Shokaku separately while the Japanese made a coordinated strike on the Yorktown and Lexington. The Lexington had suffered two bomb hits and two torpedo hits while the Yorktown had took one bomb hit, but flight operations were not effected. The Japanese had lost 27 aircraft while the Americans had lost 19.

The Yorktown had relatively few operational aircraft, 39, left on board while the Lexington was burning out of control. Fletcher planned on attacking the Japanese fleet if they continued to advance on Port Moresby with a combined air group from the Yorktown. However, Fletcher's plans had to be cancelled when it became evident that the Lexington could not be saved. Fletcher then ordered a destroyer to sink her with two torpedos, taking 36 aircraft with her. The Japanese had not fared any better. The Shokaku was immediately sent to Truk for repairs. The Zuikaku was virtually untouched, but it had only 39 operational aircraft. Both sides suffered from a lack of fuel, so counterattacks were going to be nearly impossible.

Zuikaku
From Carrier Battles in the Pacific-1942

Inoue decided that the weakened air group aboard the Zuikaku was not enough to contend with the strong land based aircraft in Australia and could not support the invasion convoy. Thus, Inoue decided to call off the Port Moresby invasion. By May 9, Admiral Yamamoto had ordered Inoue to resume the pursuit of the American forces, but the lack of fuel prevented this. Both sides had broken off the battle, but were anticipating attack at any minute. There were to be no more attacks as the U.S. Navy had scored its first strategic victory in the Pacific by stopping the invasion on Port Moresby. This victory, however, came at a high price as the Navy had lost a quarter of its carrier fleet while another carrier was damaged.