Deutsche Werft at Hamburg laid down U-516 on 12 May 1941 as yard number 312. She was a Type IXC - the long-range ocean variant that the Kriegsmarine sent to hunt where the Type VIIs could not reach. Korvettenkapitan Gerhard Wiebe commissioned her on 21 February 1942 and spent six months on training before taking her out for her first patrol on 15 August 1942. She passed through the gap between Iceland and the Faroes, ran south into the Atlantic, missed the British steamer Port Jackson with four torpedoes off Cape Clear, settled the matter with her deck gun (14 rounds, started a small fire, Port Jackson escaped into haze), then moved south to the rich waters off northern South America. There she found her targets. She entered Lorient on the French Atlantic coast on 14 November, scored on her sheet.

Her second patrol took her to South African waters, where she sank three ships near East London and a fourth off southern Namibia - merchantmen plying the long route from the Cape around to Britain or the Mediterranean. Her third sortie ranged between South America and the Cape Verde Islands. Her fourth, in autumn 1943, took her to the Caribbean. On 18 November she sank the Colombian sailing ship Ruby with her deck gun. Four of Ruby's 11 crew died; the seven survivors, all injured, were rescued the next day by a Honduran steamer and landed at Cristobal in Panama. Five days later U-516 torpedoed the American tanker Elizabeth Kellogg. With her engines unable to be stopped, the burning tanker continued underway and ran around her own survivors before her magazine exploded; she burned for 12 hours. Two gunners and eight crew were lost. The survivors were picked up by American naval and army vessels.

Her fifth patrol opened with the sinking of the American tanker Esso Harrisburg 200 nautical miles northwest of Aruba. Tankers were the prize targets for U-boats: they carried the fuel that ran the Allied war effort, and they burned spectacularly when hit. The Esso Harrisburg's crew abandoned ship. U-516 then made her way back to Germany via the Denmark Strait - the narrow gap between Greenland and Iceland - and docked at Flensburg on 4 October 1944. Her score by this point stood at sixteen merchant ships sunk and one damaged. Most of those vessels' crews had survived. Many had not. They had been engineers and stewards and able seamen, mostly civilians, mostly young, mostly poorly paid - the merchant marine of half a dozen nations whose work kept Britain alive.

She moved from Kiel to Horten Naval Base in occupied Norway, then to Kristiansand, and left the Norwegian port on her sixth and final patrol on 5 April 1945 - five weeks before the German surrender. She returned to Loch Eriboll in Scotland on 14 May, the white flag flying. The Royal Navy boarded her, processed her crew, and assigned her to the queue for Operation Deadlight. She was transferred to Lisahally in Northern Ireland - one of the principal Deadlight gathering points on the Foyle estuary - where she sat through the autumn of 1945, an empty hull awaiting disposal.

On 2 January 1946 the Royal Navy hauled U-516 out of Lisahally for the last time and sent her down in deep water northwest of Ireland - eight months after the war ended and one of the later Deadlight sinkings. She lies today at approximately 56.10 degrees north, 9.00 degrees west, in some of the deepest water of the Operation Deadlight area. Her hull is largely intact on the muddy floor. The crews who had fed her torpedoes for three years - electricians, stokers, helmsmen, the cook - went home to a Germany in ruins. Some of the merchant sailors she had killed had families in Norway, in Greece, in the Caribbean, in Liverpool, in Halifax. The Atlantic, indifferent, kept the boat and the dead together in roughly the same square mile of seabed.