A second conversion began at the Mare Island Naval Shipyard in November 1967. The conversion was originally estimated at US$15.2 million, but grew to over US$30 million. She was re-classified from a guided missile submarine to an amphibious transport submarine with hull classification symbol LPSS-574 on 30 August 1968. (The Naval Vessel Registry entry for "Grayback" shows that at one point she was classified as a "plain" transport submarine, an APSS. The term "APSS", for Auxiliary Personnel Submarine, appeared on the construction plans and documents during the conversion design and construction period (per Structural Naval Architect, Mare Island, 1966-1968). Crew memoirs indicated that they were never aware of it. Presumably, while this classification was "official," it may have lasted only days.)