Late on 16 April, the CIA/Brigade 2506 invasion fleet converged on 'Rendezvous Point Zulu', about 65 kilometres (40 mi) south of Cuba, having sailed from Puerto Cabezas in Nicaragua where they had been loaded with troops and other materiel, after loading arms and supplies at New Orleans.
At about 06:50, south of Playa Larga, Houston was damaged by several bombs and rockets from a Sea Fury and a T-33, and about two hours later captain Luis Morse intentionally beached it on the western side of the bay. About 270 troops had been unloaded, but about 180 survivors who struggled ashore were incapable of taking part in further action because of the loss of most of their weapons and equipment. The loss of Houston was a great blow to the brigadistas as that ship was carrying much of the Brigade 2506's medical supplies, which meant that wounded brigadistas had to make do with inadequate medical care.
At about 07:00, two invading FAL B-26s attacked and sank the Cuban Navy Patrol Escort ship El Baire at Nueva Gerona on the Isle of Pines. They then proceeded to Girón to join two other B-26s to attack Cuban ground troops and provide distraction air cover for the paratroop C-46s and the CEF ships under air attack.
At about 07:30, five C-46 and one C-54 transport aircraft dropped 177 paratroops from the parachute battalion of Brigade 2506 in an action code-named Operation Falcon. About 30 men, plus heavy equipment, were dropped south of the Central Australia sugar mill on the road to Palpite and Playa Larga, but the equipment was lost in the swamps, and the troops failed to block the road. Other troops were dropped at San Blas, at Jocuma between Covadonga and San Blas, and at Horquitas between Yaguaramas and San Blas. Those positions to block the roads were maintained for two days, reinforced by ground troops from Playa Girón and tanks.
By 09:00, Cuban troops and militia from outside the area had started arriving at the Central Australia sugar mill, Covadonga and Yaguaramas. Throughout the day they were reinforced by more troops, heavy armour and T-34 tanks typically carried on flat-bed trucks.
At about 09:30, FAR Sea Furies and T-33s fired rockets at Rio Escondido, which then 'blew up' and sank about 3 kilometres (1.9 mi) south of Girón. Rio Escondido was loaded with aviation fuel and as the ship started to burn, the captain gave the order to abandon ship with the ship being destroyed in three explosions shortly afterwards. Rio Escondido carried not only fuel, but also enough ammunition, food and medical supplies to last ten days and the radio that allowed the Brigade to communicate with the Liberation Air Force. The loss of the communications ship Rio Escondido meant that San Román was only able to issue orders to the forces at Blue Beach, and he had no idea of what was happening at Red Beach or with the paratroopers.
A messenger from Red Beach arrived at about 10:00 am asking San Román to send tank and infantry to block the road from the Central Australia sugar mill, a request that he agreed to. It was not expected that government forces would be counter-attacking from this direction.
By about 11:00, the two remaining freighters Caribe and Atlántico, and the CIA LCIs and LCUs, started retreating south to international waters, but still pursued by FAR aircraft. At about noon, a FAR B-26 exploded due to heavy anti-aircraft fire from Blagar, and pilot Luis Silva Tablada (on his second sortie) and his crew of three were lost.
At 2:30 pm a group of militiamen from the 339th Battalion set up a position, which came under attack from the brigadista M41 Walker Bulldog tanks, who inflicted heavy losses on the defenders. This action is remembered in Cuba as the "Slaughter of the Lost Battalion" as most of the militiamen perished.
At about 21:00 on 17 April 1961, a night air strike by three FAL B-26s on San Antonio de Los Baños airfield failed, reportedly due to incompetence and bad weather. Two other B-26s had aborted the mission after take-off. Other sources allege that heavy anti-aircraft fire scared the aircrews As night fell, Atlantico and Caribe pulled away from Cuba to be followed by Blagar and Barbara J.