For starters, we must establish that Austria (and its successor, Austria-Hungary) were not really known for their naval prowess, prestige, or power.

One of the great Austrian naval victories in the history of the Empire was the Battle of Lissa (20 June 1866) against the Kingdom of Italy during the Third War of Italian Independence (which took place at the same time as the Austro-Prussian War, which cemented Prussian hegemony over Germany and eventually led to the establishment of the German Empire in 1871). The Austrian fleet, commanded by Admiral Wilhelm von Tegetthoff, was victorious despite being heavily outnumbered by the Italians; it was notably the first major battle involving ironclads and one of the last which had deliberate ramming between ships.

Austria (and the Austro-Hungarian Empire after the 1867 Austro-Hungarian Compromise) maintained general control of the Adriatic Sea for the rest of the century. By the time of the commissioning of HMS Dreadnought in 1906 (a battleship with a revolutionary "all-big gun" turret design), the naval arms race between Germany and the United Kingdom was only heightened, but a sort of new naval race between Italy and Austria-Hungary began to occur. The Imperial Navy of Austria-Hungary was composed mostly of older cruisers, torpedo-boats, and coastal battleships; however, starting in 1912, a new class of dreadnoughts (the Tegetthoff-class, named after the victor at Lissa) was commissioned, and, for their time, were among some of the best battleships in the world. However, these four warships were Austria-Hungary's only modern capital ships by the outbreak of World War I, and when Italy joined the war on the side of the Allies, Grand Admiral Anton Haus, overall commander of the Navy, realized how futile it would be to engage the Royal Italian Navy or French Mediterranean Fleet in open battle, instead opting to be a proponent of the fleet-in-being strategy, in which ships are kept in port as a form of deterrence against a much larger/superior force.

However, the Austro-Hungarian submarine fleet was quite active during the war in comparison. In particular, Captain Georg Johannes von Trapp commanded the boat SM U-5, and commanded it from April to October of 1915, sinking the French cruiser Léon Gambetta, and followed this up throughout most of the rest of the war by sinking a whole host of steamers and transports throughout the Mediterranean.

Of course, with the dissolution of the Austro-Hungarian Empire in 1918, its naval power was dissolved as well.