One of eight gunboats built for service on the Yangtze River in China, Luzon was redesignated PR-7 on 15 June. From commissioning until December 1938, she served as the flagship of the Yangtze River Patrol, operating out of Hankow, between such ports as Nanking, Chunking, and Shanghai. In August 1937, after the Japanese had attacked Shanghai, Luzon evacuated the American Embassy staff to Chunking.