After "Wasp" was sunk by a Japanese submarine on September 15, 1942, Sherman was awarded the Navy Cross for his extraordinary heroism in command of the carrier during the opening days of the South Pacific operations. Sherman then became Chief of Staff to Commander Air Force, Pacific Fleet. In November 1943, Rear Admiral Sherman was assigned as Deputy Chief of Staff to the Pacific Fleet commander, Admiral Chester W. Nimitz. He held that position for the remainder of World War II, playing a critical role in planning the offensives that brought victory in the Pacific, and was present when Japan surrendered on September 2, 1945. Following a short tour as a carrier division commander, in December 1945 Vice Admiral Sherman became Deputy Chief of Naval Operations.