In both world wars, the Royal Navy both performed scattered recruitment from Britain's colonies, and supported subsidiary local naval units within them. Setting aside the Dominion navies of Australia, Canada, New Zealand and South Africa, the largest of these was the Royal Indian Navy (Royal Indian Marine until 1934), but local Royal Naval Reserve units were also founded across the British Empire, from the Caribbean to Fiji. Colonial seamen also formed roughly a third of the Merchant Navy's manpower.

The Royal Indian Navy had a long history, dating back to local naval units raised by the East India Company to protect coastal shipping. By World War One, the Royal Indian Marine, as it was called, had a small fleet of second-line ships, mainly troop carriers and survey vessels. It was a non-combatant force, but when war broke out, many of its ships were armed and subsumed into the Royal Navy. For the most part, its ships were employed in transporting troops around the Indian Ocean, the Persian Gulf and the Red Sea, or in patrolling for German raiders. One of its armed transports, the Hardinge, was in the Suez Canal at the time of the Ottoman raid on the canal in early 1915, where she served well, taking heavy fire from Ottoman shore batteries. Following the end of the war, the RIM returned to non-combatant duties, and underwent a sharp draw-down in numbers. However, in an era of cuts to the RN, Britain felt it would be less able to protect the Indian coast, leading to the RIM reforming into the RIN in 1934. The RIN was, at the outbreak of war in 1939, a relatively small force, with five sloops (anti-submarine escorts) and three auxiliaries. Following the start of the war, it grew quickly, requisitioning many ships to serve as patrol vessels and minesweepers, as well as obtaining several new-build sloops from Britain. By 1944, it had seven modern sloops, twenty modern minesweepers, 28 ASW trawlers, and just under 140 small patrol vessels. In the early part of the war, the RIN patrolled the Red Sea, escorting British convoys against Italian attack, and participated in the Anglo-Soviet invasion of Iran. Once war was declared with Japan, the RIN was mostly retained in the Indian Ocean to protect shipping there. Two ships, HMIS Sutlej and Jumna, provided escorts for the invasion of Sicily. Like most of the colonial navies established by Britain, the RIN ratings were entirely drawn from the indigenous people, but it was unusual in that it also included Indian officers. Most of the colonial naval forces were officered entirely by either local or British whites, but the RIN trained a considerable number of Indian officers. Even so, it was still dominated by white officers, to a greater extent than the British Indian Army. Following the war, the RIN paid off ships almost as fast as it had acquired them during the war, prompting a major mutiny in 1946. After Partition and the end of British control over India and Pakistan, the RIN formed the nucleus for the new Indian and Pakistani navies. There were two more smaller naval forces in the Indian area. The Ceylon Royal Naval Volunteer Reserve (RNVR) was formed on Sri Lanka in 1934 to patrol the coastal waters, growing to a maximum strength of 61 officers and 1127 men during the war. In Burma, a Burma section of the RNVR was formed in 1940. It operated motor launches along the Burmese coast during the campaign against Japan.

The next largest of the colonial navies was found in Malaysia and Singapore. Here, there were two units; the larger, and more professional RN (Malay Section) (or Malay Navy) and the smaller Straits Settlement Royal Naval Volunteer Reserve (SSRNVR), the former formed in 1939 and the latter in 1934. During WWI, a local unit, the Coastal Defence Volunteers, was formed, but this was drawn entirely from European manpower. The SSRNVR was originally formed in Singapore, drawing solely from the local Malay population due to prejudice against Malaysian Chinese people. By 1937, it had established a second unit in Penang, in Malaysia, the Malayan RNVR. At the outbreak of war, the SSRNVR and MRNVR began to requisition and convert small local merchant vessels to patrol vessels. The Malay Navy was also formed at this time. Malays aged 15-20, in possession of a good education, were recruited to free up English seamen for duties in Europe. It was a full-time service, but mostly limited to shore service. After the Japanese invasion of Malaysia, these units began to evacuate troops and civilians to Indonesia, but at a high price. Of the 61 vessels operated by the MRNVR, just nine survived to reach Sumatra and Java. For the remainder of the war, the surviving SSRNVR, MRNVR, and Malay Navy ratings served alongside the Ceylon RNVR, while their officers were integrated into the British RNVR.

During WWI, a small detachment of seamen and petty officers from Britain's Caribbean colonies joined the Royal Navy. In the interwar period, though, no indigenous naval unit was formed until 1939. The growing threat from Germany, and increasing local unrest, in the latter part of the 1930s threatened the strategically vital oil refineries of Trinidad, which provided ~38% of Britain's oil. Discussions on how to protect them began in 1937, but no plan formed until a visit from Captain Charles Woodhouse, aboard HMS Ajax in July 1939. This suggested the formation of a local naval reserve, the Trinidad RNVR; the beginning of the war accelerated these plans, and it was formed in October 1939. Initially, only four motor launches were available, with little armament. However, following the American entry to the war, the Germans began to make more moves against shipping in the Caribbean. An expansion of the TRNVR was inevitable, and swiftly followed. While it would always be called the Trinidad RNVR, it recruited from across the region, with significant contingents from the Bahamas and the Cayman Islands. The Caymans sent, from a population of ~6500, 800 to the Merchant Navy and 201 to the TRNVR, translating to some two-thirds of the adult male population serving. Some even served as part of the regular Royal Navy, with one serving aboard HMS Nigeria. The TRNVR was not especially successful at defending Trinidad from German attack, but it served as a way to release the tensions created by colonial rule and foster imperial patriotism.

The Royal Navy had often drawn small numbers of recruits from seagoing populations along the coasts of British Africa. While discriminatory policies forced an end to this in 1907, manpower shortages in the Indian Ocean during WWI caused a relaxation of these policies. The tensions of the 1930s again led to the formation of naval reserve units in these areas. The Kenyan RNVR, with recruitment driven by the major fleet base at Kilindini, was the largest, with a maximum strength of 45 officers and 724 men, but volunteer forces were also found in Gambia, Zanzibar, the Gold Coast, Nigeria, Sierra Leone and Tanganyika, as well as a coastal defence squadron on Mauritius. These forces provided minesweeping and light anti-submarine patrols around important harbours. They served well, but there was little for them to do. Over the course of the war, the KRNVR did not sweep a single mine, because no mines were laid in the areas they covered. Even so, as with the TRNVR, they helped to defuse colonial tensions.

The last major colonial naval units came from Hong Kong. In 1905, a Locally Enlisted Personnel Division was formed in the city. This had two petty officers, fifty seamen, seven stokers and nine mess boys, all drawn from the local populace to serve as full-time servicemen aboard Royal Navy vessels on the China Station. The 1922 Washington Naval Treaty forbade Britain from fortifying Hong Kong; suggestions were made that this might be compensated for by forming a local naval reserve unit. The idea continued, in fits and starts, but making little headway, until 1933, when the looming threat of Japan finally forced action, with the formation of the Hong Kong RNVR. It drew its men from the local Chinese population, and its officers from the amateurs of the Royal Hong Kong Yacht Club. The HKRNVR saw more combat than most of the other colonial RNVRs. Its officers and men fought bravely, if ultimately futilely, during the siege of Hong Kong in December 1941. They were hampered in this by low manning, and by dud ammunition and poor weaponry issued to them by the RN, which prioritised Singapore. Most of the HKRNVR would spend the remainder of the war in Japanese captivity, but several torpedo boats of the 2nd MTB Flotilla did escape the city, in order to help the Chinese Nationalist Admiral Chan Chak return to Chiang Kai-Shek.