"Kaiser Friedrich III" followed the same routine of training exercises through 1906. During gunnery training that year, the ship won the "Schießpreis" for a second time. The summer cruise went to Norway, including stops in Molde from 20 to 26 July and Bergen from 27 July to 2 August. That year, the autumn fleet maneuvers lasted only a week, from 7 to 15 September. After the maneuvers ended, "Kaiser Wilhelm II" replaced "Kaiser Friedrich III" as the deputy commander's flagship, though she remained in I Squadron. In December, the fleet took its winter cruise into the North Sea instead of the Baltic. The year 1907 was similarly uneventful; the ship took part in three major training exercises, the first from 8 May to 7 June, the second from 13 July to 10 August, and the third, the annual fleet maneuvers, from 26 August to 14 September. Directly after the end of the fleet maneuvers, "Kaiser Friedrich III" was decommissioned in the "Kaiserliche Werft" in Kiel, being replaced by her sister . While she was decommissioned, the ship underwent an extensive modernization that lasted until 1909. Four of her 15 cm guns were removed, though two 8.8 cm guns were added. All twelve machine guns were removed, as was the ship's stern-mounted torpedo tube. "Kaiser Friedrich III"s superstructure was also cut down to reduce the ship's tendency to roll excessively, and her funnels were lengthened.