The US Navy announced on Thursday that one of its nuclear-powered submarines collided with an unidentified object underwater.
The US Pacific Fleet, which reports to the US Navy, said the USS Connecticut collided with an unknown object while conducting routine operations in the South China Sea.
There were no life-threatening injuries, and the vessel is still functional.
"The submarine remains in a safe and stable condition. USS Connecticut's nuclear propulsion plant and spaces were not affected and remain fully operational," the statement said.
The extent of the damage is being assessed, and the incident is being investigated, according to the US Navy.
The submarine is a Seawolf-class nuclear-powered fast attack submarine assigned to the US Navy's Pacific Fleet. It is believed to be on its way to the US base on Guam for further examination.
The incident occurred as the United States and its allies conduct joint operations in a major display of force.
The exercises are intended to counter the threat posed by China's increasing military presence in the disputed territory.
The United States, the United Kingdom, and Australia announced an Asia-Pacific security pact in September to address regional security concerns. Beijing has harshly criticized the agreement.
China considers the majority of the waters along key shipping routes to be under its control. Countries in the region are contesting these territorial claims.
China has recently flown fighter planes towards Taiwan, escalating tensions significantly.
According to Reuters, which cited anonymous sources familiar with the situation, a small number of US special operations forces are in Taiwan training local forces. Neither the US nor Taiwan's defense chiefs could provide any additional information on the situation.
The United States has warned China that its increased military activity in the region is a destabilizing factor.
China has also been accused of intimidation by a number of countries.