On 1 March 1966, Sanctuary was reacquired by the Navy and reinstated on the Navy list.
Towed to Louisiana, she was modernized at the Avondale Shipyards, Westwego; and was re-commissioned at New Orleans on 15 November 1966, Captain John F. Collingwood, USN, commanding and Captain Gerald J. Duffner, MC, USN, commanding Naval Hospital in USS Sanctuary.
Modernization had given her a heliport, three x-ray units, a blood bank, an artificial kidney machine, ultrasonic diagnostic equipment, a recompression chamber and other modern equipment, medical, culinary, laundry, etc.,
to supplement her 20 wards and four operating rooms.
Three hundred and sixteen medical personnel were assigned to staff the Naval Hospital.
Her mission had shifted in emphasis: from that of an "ambulance" ship carrying wounded and sick to hospitals in rear areas, to that of a fully equipped hospital carrying medical facilities close to the combat area.

On 8 March 1967, Sanctuary departed San Francisco for the Far East.
On 2 April, she joined the 7th Fleet at Subic Bay.
On the 10th, she arrived at Da Nang, South Vietnam. "
SANCTUARY received WIA casualties directly from the field, sick and wounded who had received prior treatment at shore medical facilities, and sick and wounded that required special treatment not available ashore."
That afternoon she took on her first casualties – ten marines badly burned when their amphibious tank detonated a land mine, which, in turn, had exploded the gasoline tank.
By midnight, 136 patients had been received.
By the end of April, she had admitted 717 patients – 319 combat casualties, 72 non-combat injuries, 326 suffering from various diseases – and treated 682 outpatients.
Only two of her patients died.

Assigned to duty off South Vietnam on a non-rotating basis, Sanctuary began her extended overseas tour spending a minimum of 50 days operating on the line each quarter, followed by an availability and upkeep period at Subic Bay.
By April 1968, after a year on that schedule, she had admitted 5,354 patients and treated another 9,187 on an outpatient basis.
Helicopters, bringing patients from the battlefield, transferring them from and to other medical facilities, or carrying passengers to and from the ship, had made more than 2,500 landings on her deck.

The following month, Sanctuary's schedule was changed to 90-day on-the-line periods.
Her operating area and her itinerary on the line, however, remained the same.
She continued to operate off the I Corps Tactical area, the northern provinces of South Vietnam; and, for the most part, rotated between stations, such as Da Nang, Phu Bai, Chu Lai, and Dong Ha, every two to four days as needed by the Marines fighting ashore.

Occasionally granted brief rest and recreation out of the area (five days in Subic Bay plus travel time there and back), Sanctuary — the only Navy hospital off Vietnam after 16 March 1970 – maintained her busy schedule to that date and increased it thereafter through 1970 and into 1971 during which time she was scheduled for 120-day on-the-line schedules.
On 23 April 1971, she departed Da Nang for the last time.
During May, she visited Hong Kong and called at Sasebo; then sailed for Pearl Harbor and San Francisco, where she arrived on 10 June.
On 1 March 1966, Sanctuary was reacquired by the Navy and reinstated on the Navy list. Towed to Louisiana, she was modernized at the Avondale Shipyards, Westwego; and was re-commissioned at New Orleans on 15 November 1966, Captain John F. Collingwood, USN, commanding and Captain Gerald J. Duffner, MC, USN, commanding Naval Hospital in USS Sanctuary. Modernization had given her a heliport, three x-ray units, a blood bank, an artificial kidney machine, ultrasonic diagnostic equipment, a recompression chamber and other modern equipment, medical, culinary, laundry, etc., to supplement her 20 wards and four operating rooms. Three hundred and sixteen medical personnel were assigned to staff the Naval Hospital. Her mission had shifted in emphasis: from that of an "ambulance" ship carrying wounded and sick to hospitals in rear areas, to that of a fully equipped hospital carrying medical facilities close to the combat area.
On 8 March 1967, Sanctuary departed San Francisco for the Far East. On 2 April, she joined the 7th Fleet at Subic Bay. On the 10th, she arrived at Da Nang, South Vietnam. "SANCTUARY received WIA casualties directly from the field, sick and wounded who had received prior treatment at shore medical facilities, and sick and wounded that required special treatment not available ashore." That afternoon she took on her first casualties – ten marines badly burned when their amphibious tank detonated a land mine, which, in turn, had exploded the gasoline tank. By midnight, 136 patients had been received. By the end of April, she had admitted 717 patients – 319 combat casualties, 72 non-combat injuries, 326 suffering from various diseases – and treated 682 outpatients. Only two of her patients died.
Assigned to duty off South Vietnam on a non-rotating basis, Sanctuary began her extended overseas tour spending a minimum of 50 days operating on the line each quarter, followed by an availability and upkeep period at Subic Bay. By April 1968, after a year on that schedule, she had admitted 5,354 patients and treated another 9,187 on an outpatient basis. Helicopters, bringing patients from the battlefield, transferring them from and to other medical facilities, or carrying passengers to and from the ship, had made more than 2,500 landings on her deck.
The following month, Sanctuary's schedule was changed to 90-day on-the-line periods. Her operating area and her itinerary on the line, however, remained the same. She continued to operate off the I Corps Tactical area, the northern provinces of South Vietnam; and, for the most part, rotated between stations, such as Da Nang, Phu Bai, Chu Lai, and Dong Ha, every two to four days as needed by the Marines fighting ashore.
Occasionally granted brief rest and recreation out of the area (five days in Subic Bay plus travel time there and back), Sanctuary — the only Navy hospital off Vietnam after 16 March 1970 – maintained her busy schedule to that date and increased it thereafter through 1970 and into 1971 during which time she was scheduled for 120-day on-the-line schedules. On 23 April 1971, she departed Da Nang for the last time. During May, she visited Hong Kong and called at Sasebo; then sailed for Pearl Harbor and San Francisco, where she arrived on 10 June.
USS Sanctuary (AH-17)