Gipsy Moth IV set sail from Plymouth Sound on the first leg of the 2005-07 Blue Water Round the World Rally on 25 September 2005. She had a mixture of experienced crew and teams of disadvantaged youth on board, including:
- Skipper: Richard Bagget
- First mate: Dewi Thomas
- Crew Leader: Paul Gelder (Editor of Yachting Monthly)
- Crew: Matthew Pakes (Isle of Wight), Peter Heggie (Plymouth), Elaine Cadwell (Scotland)
The first leg took just over two weeks to reach Gibraltar, the official starting point for the Blue Water Round the World Rally. After crossing the Bay of Biscay to make landfall in Bayona, Spain, where Paul Gelder left to return to the UK, there was a crew change at Vilamoura, Portugal, and Tom Buggy joined the yacht as Crew Leader for the rest of the leg. Yachting Monthly’s Dick Durham sailed the next leg and crew leader to the Canary Islands, where James Jermain took over as Mate to Richard Baggett for the Atlantic crossing to Antigua. The yacht went through the Panama Canal in February 2006 and headed for the Galapagos islands and the Marquesas.
On April 29, 2006, after a navigational error, Gipsy Moth ran aground on a coral reef at Rangiroa, an atoll in the Tuamotus, known as The Dangerous Archipelago in the Pacific Ocean. She was just 200 miles (320 km) from her next landfall, Tahiti. The yacht was seriously damaged. After six days, a major salvage operation was undertaken with Smit, the Dutch big ship experts who were called in by the UKSA, with local help from Tahiti and Rangiroa. After a day-and-a-half spent patching up the holes in the hull with sheets of plywood, the yacht was successfully towed off the reef into deep water on a makeshift ‘sledge’. She was towed to Tahiti and put on a cargo ship to be taken to New Zealand. In Auckland, Grant Dalton’s America’s Cup team donated help and premises at their HQ in Viaduct Harbour, and the yacht underwent a second restoration. After two weeks or so she was sailing again on 23 June 2006.
Her return leg was via Cairns and Darwin, in Australia; Indonesia, Singapore, Phuket, Sri Lanka, the Red Sea, Suez Canal and the Mediterranean. She docked in Gibraltar for a crew change, with skipper John Jeffrey joined by British teenagers: Grant McCabe (Plymouth), Kerry Prideaux (Lynton, Devon), Glen Austin (Isle of Wight) – the last of 90 disadvantaged young people who had crewed the yacht on her 28,264-mile (45,486 km) voyage round the world. She was accompanied into Plymouth by a flotilla of small craft, Gipsy Moth IV docked at West Hoe Pier on 28 May 2007, as she did exactly 40 years earlier. She was welcomed home by Giles Chichester, son of Sir Francis.