On the morning of Saturday, November 4, 1922, the first Island Queen burned and sank at the Cincinnati Wharf after an overheated tar bucket spilled over and ignited on another boat docked nearby. The accident, which occurred on the Morning Star, spread quickly, igniting fires on the Island Queen, the Chris Greene and the Tacoma.

The Chris Greene was damaged, but salvageable; however, the other three boats were destroyed. All of Cincinnati mourned the loss, and a new Island Queen was immediately built to replace her. The calliope from the first Queen, which was the only thing above the water after it sunk, was salvaged, rebuilt and sold to the new Island Queen.