Assigned to the Navy Yard, Guantanamo Bay, Cuba, Montcalm departed New York on 2 March 1921, steaming via Norfolk, and arriving at Guantanamo on the 14th. The tug operated out of the Cuban base through 1923, making periodic voyages to Key West, Norfolk and ports in the Bahamas until sailing for Charleston, South Carolina, on 24 April 1923. Arriving on 1 May, Montcalm was repaired and served locally and at Philadelphia before returning to Guantanamo Bay on 19 June 1924. Annual voyages to Charleston for repairs and service missions to New York in late 1929 and 1931 alternated with active service in the Caribbean. Montcalm arrived at Philadelphia on 25 May 1932 and decommissioned there on 30 June.