The Great Labor Day Hurricane of 1935 was the second Atlantic hurricane to form during the season. This system was first detected east of the central Bahamas on August 29. Moving westward, it passed near Andros Island on September 1, at which time it reached hurricane strength and turned west-northwestward. Phenomenal strengthening then occurred, and when the storm reached the middle Florida Keys on September 2, it was a Category 5 hurricane.

After roaring through the Keys, the hurricane turned gradually northward almost parallel to the Florida west coast until it again made landfall near Cedar Key as a Category 2 hurricane on the 4th. A northeastward motion took the storm across the southeastern United States to the Atlantic coast near Norfolk, Virginia on September 6. It continued into the Atlantic, becoming extratropical on the 7th and last being detected on the 10th.

No wind measurements are available from the core of this small, but extremely powerful hurricane. However, a pressure of 26.35 inches (892 mb) measured at Long Key, Florida makes this the most intense hurricane to ever hit the United States, considerably outpacing Hurricane Camille (26.84 inches (909 mb)) in 1969 and Hurricane Andrew (27.23 inches (922 mb)) in 1992. Based on the recorded low pressure, maximum wind speeds of 200 to 250 mph (322 km/h to 402 km/h) would not be surprising.

A storm surge of 20 feet (6 m) inundated Matecumbe Key and Long Key and knocked portions of the FEC railroad tracks off the 30 foot (9.1 m) high trestles on which they rested. Like Hurricane Andrew, the storm was quite compact, resulting in a path of destruction less than 40 miles (64.4 km) in width.

The combination of winds and storm surge were responsible for 408 deaths in the Florida Keys, including 259 World War I veterans working for the Civilian Conservation Corps on the Overseas Highway. Damage in the United States was estimated at $6 million. It is thought that the same hurricane occurring today would cause approximately $2 billion in damage.