On October 31, 2003, Hamilton, aged 13 at the time, went for a morning surf along Tunnels Beach, Kauai, with her best friend Alana Blanchard, Alana's father and brothers, when a 14-foot-long (4.3 m) tiger shark attacked her, severing her left arm just below the shoulder. The Blanchards helped paddle her back to shore, then Alana's father fashioned a tourniquet out of a rash guard and wrapped it around the stump of her arm. She was rushed to Wilcox Memorial Hospital. By the time she arrived there she had lost over 60% of her blood and was in hypovolemic shock. A doctor living in a hotel nearby raced to the rescue. Her father, who was scheduled to have knee surgery that same morning, was already there, but she took his place in the operating room. During subsequent media interviews, she confirmed that she felt normal when she was bitten and did not feel much pain from the bite at the moment of the disaster, but felt numb on the way to the hospital.
Initially, she adopted a custom-made board that was longer and slightly thicker than standard and had a handle for her right arm, making it easier to paddle, and she learned to kick more to make up for the loss of her left arm. After teaching herself to surf with one arm, she returned to surfing on November 26, 2003, just 26 days after the attack and entered her first major competition on January 10, 2004. She now uses standard competitive performance short-boards. The shark-bitten surfboard that Hamilton was riding during the attack, as well as the bathing suit she was wearing at the time, a gift from ocean photographer Aaron Chang, are on display at the California Surf Museum in Oceanside, California.