HMS Newcastle was a member of the Southampton subclass of the Town-class light cruiser of the Royal Navy.

The first two Town-class were ordered from Vickers Armstrong and John Brown & Company on 1 June 1934 as part of the 1933 Construction Programme for the Royal Navy. Vickers laid down its ship, originally to be called Minotaur, at their High Walker shipyard on the River Tyne on 4 October 1934. The ship was renamed Newcastle later that year. Newcastle was launched, in a low-key ceremony owing to the death of King George V three days earlier, on 23 January 1936 by the Duchess of Northumberland. Sea trials, which were disrupted by bad weather, began on 30 November 1936 and continued until 11 December, with a speed of 32.3 kn (37.2 mph; 59.8 km/h) being reached during the eight-hour full power trial. Newcastle was accepted by the Royal Navy and commissioned on 5 March 1937.

After commissioning, Newcastle joined the 2nd Cruiser Squadron, part of the Home Fleet. She took part in the Coronation Fleet Review at Spithead in 1937.

Newcastle was under refit on the outbreak of war of the Second World War, joining the newly established 18th Cruiser Squadron on the refit's completion. Duties included trade protection duties in the Western Approaches and operation with the Northern Patrol in the waters between Scotland, Iceland and Greenland, enforcing the blockade of Germany by intercepting merchant ships suspected of carrying contraband to Germany.

On 25–26 September 1939, Newcastle sailed with the Home Fleet as it sortied to cover the 2nd Cruiser Squadron which was escorting the submarine Spearfish, which had been damaged by German trawlers, back to Britain. The covering force came under attack by German bombers, with the battleship Hood hit by a bomb that failed to explode, while air attack against the cruisers of the 18th Cruiser Squadron proving ineffective. On 12 November 1939, Newcastle intercepted the German blockade runner Parana in the Denmark Strait. Parana's crew set the German merchant ship on fire before abandoning ship, and Newcastle scuttled Parana with gunfire the next day. On 23 November 1939, the German battleships Scharnhorst and Gneisenau, on a sortie into the North Atlantic, encountered and quickly sank the British armed merchant cruiser Rawalpindi of the Northern Patrol. Newcastle, the next ship to the west in the British patrol line, responded to Rawalpindi's contact report and attempted to come to Rawalpindi's aid, but when Newcastle was spotted by the two German battleships, they broke off attempts to rescue Rawalpindi's crew, and made off at high speed, behind a smoke screen, with Newcastle, not yet fitted with radar, soon losing sight of the German ships in a rain squall.

On 23 March 1940, Newcastle began a refit on the Tyne which continued until 3 June that year, thus missing the majority of the Norwegian campaign. From 7 July, she was detached to Plymouth to guard against a potential German invasion. On the night of 10/11 October 1940, Newcastle provided illumination with star shells while the battleship Revenge bombarded the French port of Cherbourg in an attempt to destroy shipping that could be used in a German invasion. On 17 October 1940, Newcastle set out from Plymouth with the cruiser Emerald and the destroyers Jackal, Jupiter, Kashmir, Kelvin and Kipling to investigate reports of German destroyers. Later that day, the British force encountered the German destroyers Hans Lody, Friedrich Ihn, Erich Steinbrinck and Karl Galster. The German destroyers turned back at full speed making for Brest, with the British force in pursuit. Newcastle launched her Walrus seaplane to direct the British force's fire, but while Hans Lody was hit twice and Erich Steinbrinck received splinter damage, the German force escaped to safety in Brest.

On 13 November 1940, Newcastle set out for the Mediterranean, carrying 200 RAF personnel and a cargo of aircraft spare parts for Malta, where she arrived on 19 November. Newcastle's next mission was Operation Collar, in which a convoy of merchant ships would be escorted westwards from Alexandria in Egypt to Malta, while more merchant ships would be escorted eastwards from Gibraltar to Malta and Egypt, with the opportunity taken to transfer warships, including Newcastle from the Mediterranean to the North Atlantic. On 27 November, the Italian Fleet attempted to intercept the British convoy, resulting in the inconclusive Battle of Cape Spartivento.

Newcastle was then ordered to the South Atlantic, taking part in an unsuccessful search for the German auxiliary cruiser Thor that month. Newcastle remained continually at sea from 10 December 1940 to 21 April 1941, a total of 133 days, with 109 days out of sight of land, a record for Royal Navy warships during the Second World War, before a brief refit at Simonstown, South Africa. In May that year, Newcastle returned to commerce protection duties in the South Atlantic, and on 18 May 1941, captured the Vichy French merchant ship Lieutenant Saint Loubert Bie south of Saint Helena. On 25 July, Newcastle intercepted the German blockade runner Erlangen off the mouth of the River Plate estuary, with Erlangen being scuttled by her crew. Newcastle continued duties in the South Atlantic until August, when she made passage to the United States for refit.