With her work-ups completed, I-40 was reassigned to Submarine Division 1 in Submarine Squadron 2 in the 6th Fleet on 31 October 1943.[1] She departed Yokosuka on 13 November 1943 bound for Truk, which she reached on 19 November 1943.[1]
On 26 November 1943, the 6th Fleet ordered I-40 to join I-19, I-169 and Ro-38 in forming a picket line north of Makin,[1] and on 2 December 1943 it ordered I-19, I-20, and I-40 to report their positions.[1]I-40 did not respond to either message.[1]
The circumstances of I-40′s loss remain a mystery. The destroyerUSS Boyd (DD-544) sank a Japanese submarine southwest of Tarawa on 23 November 1943 which probably was I-39 but could have been I-40.[1] It also has been proposed that land-based United States Navy aircraft teamed with the destroyer USS Radford (DD-446) to sink her[1] and that Radford alone sank her.[1]
On 21 February 1944, the Imperial Japanese Navy declared I-40 to be presumed lost with her entire crew of 97 in the Gilbert Islands area.[1] She was stricken from the Navy list on 30 April 1944.[1]