Shortly after 7 a.m. on Tuesday morning a small crowd gathered near Squid Row in Menemsha as six fishing boats prepared to head out to sea.

Navy Lieut. Cmdr. John Jae Terry and his 12-year-old son Malcolm boarded the Island Girl, captained by Martha’s Vineyard Striped Bass and Bluefish Derby committee member Joe El-Deiry. Mr. El-Deiry’s son Luke and Jack Hobby of Chilmark, who’d volunteered to help crew the boat, were also on board.

Jae Terry reels in a bluefish. — Ivy Ashe

The Island Girl was after striped bass, hoping to help Mr. Terry get the first-ever grand slam in the history of the American Heroes Saltwater Challenge. The challenge is hosted by Bob and Sarah Nixon, owners of the Beach Plum Inn, and provides wounded veterans and their families with an all-expenses-paid fishing trip to the Vineyard during the derby.

In 2009, the Nixons’ son Jack, a junior participant in the derby, saw a photo essay about wounded veterans, and told his parents he wished the vets could fish the derby, too. The Nixons ran into Joe El-Deiry the next day. Mr. El-Deiry happened to have a derby committee meeting the next night. He brought up Jack’s idea.

“Everybody on the committee was like ‘Absolutely,’” Mr. El-Deiry recalled. “They were all over it.”

Since then the event, now in its sixth year, has become a derby staple. This year, 10 veterans and their families are participating, spending their mornings at sea with captains Jonathan Boyd, Jennifer Clarke, Scott McDowell, Buddy Vanderhoop, Chip Vanderhoop and Lev Wlodyka. Afternoons are for surfcasting with Cooper Gilkes and Janet Messineo, or golf, or casting lessons. And every night a small school bus leaves the Beach Plum Inn, headed to derby headquarters for weigh-in. On Monday, Malcolm Terry earned a fourth-place pin for his bonito.

Franz Walkup gets his gear on board Lev Wlodyka's boat. — Ivy Ashe

But on Tuesday, it was Mr. Terry who got the first bite. The rod bent as the fish thrashed beneath the surface. Not a striper, but a bluefish. And a keeper.

Being on the water was nothing new for Mr. Terry, who has served in the Navy for 15 years. He once spent eight months at sea while on board the U.S.S. John F. Kennedy after the 9/11 terrorist attacks, and has deployed a total of seven times. His time abroad included service in Africa, Iraq and Afghanistan.

Mr. Terry pointed to his right leg. “This is lucky number seven,” he said. The lower half of his leg is now a prosthetic. In 2011, Mr. Terry was hit by an improvised explosive device during an ambush in Afghanistan. Doctors spent two and a half years trying to save his foot before Mr. Terry chose to have a below-knee amputation.

“I wanted to be able to play with my kids,” he said. “It was a really good decision.” His leg is made of carbon fiber and titanium and has interchangeable parts. Mr. Terry recently ran his first mile on his running leg. He has four different types of feet he can use, including a swimming foot.

Mr. Terry met Sarah Nixon when she visited Walter Reed National Military Medical Center. Both Mrs. Nixon and his friend Capt. Ben Harrow, who participated in the Saltwater Challenge in 2012 and 2013, encouraged him to come. You won’t be disappointed, Mr. Harrow said. But the deciding factor was that Mr. Terry’s family was invited as well.

Signs welcoming soldiers at the Beach Plum Inn. — Ivy Ashe

“That was important,” Mr. Terry said. “You don’t get the [family] time back.” His wife Kim and daughter Lexi were spending Tuesday at the beach as Lexi had been a little seasick the day before.

It was a slow fishing day, and the bluefish proved to be the only catch. But there was still another day of fishing left.

Jack Hobby clapped Mr. Terry on the back as the two disembarked from the Island Girl. “Thank you for all you’ve done,” he said. Mr. Hobby’s brother was a Navy SEAL in Vietnam.

The veterans had arrived Sunday afternoon, greeted by town police and fire departments and a crowd of well-wishers holding handmade signs and cheering. Students at the West Tisbury and Chilmark schools also made signs to decorate the Beach Plum Inn, and wrote letters to the veterans, which were delivered to their rooms as part of turndown service.

The challenge is full of gestures both large and small from the Vineyard community. Local businesses donate gifts to accompany the kids’ letters. Volunteers make meals. Rebekah El-Deiry cooked a Thanksgiving spread on Tuesday. Charter captain Scott McDowell, who’s taken veterans out every year, had his boat fitted with a special door so that wheelchairs can roll right on.

The veterans arrived Sunday, greeted by police, fire departments, other veterans and well-wishers holding signs. — Peter Simon

Longtime derby weighmaster Charlie Smith comes out of retirement for three nights, so he can weigh in the veterans’ fish. Mr. Smith always sports his Marine Corps hat. He is a veteran, too, and wants to show his appreciation.

On Tuesday evening, Mr. Terry, Malcolm and Lexi arrived at the weigh station with the other veterans. Weigh station volunteer Amy Coffey handed a crisp white envelope to Malcolm with his fourth-place pin from the day before. Mr. Terry stood behind his son as he opened the envelope and looked inside at the small bonito pin. The two smiled.

The entire group posed for a photo outside of headquarters. Four veterans had earned daily pins after Tuesday’s outing. Spc. Jeramie Green brought in a first-place bluefish (12.23 pounds), Sgt. Franz Walkup and Capt. Kevin MacDevette were second and third on the bonito board and Spc. James Myren had a third place bluefish. Capt. Rahul Harpalani, who is both a veteran and a Saltwater Challenge veteran, pushed Mr. Walkup’s wheelchair up the ramp into the building.

On Sept. 29, 2012, while in Afghanistan, Mr. Walkup, then 24, was shot five times. He was in the hospital for a year, including nine months as an inpatient. In July 2013 he received a new hip. Mr. Walkup started walking in February of this year, but still uses his wheelchair.

“Hopefully by next summer I’ll be out of the hospital and out of the chair,” he said.

Longtime derby weighmaster Charlie Smith, also a veteran, comes out of retirement to weigh in the veterans' fish. — Ivy Ashe

When Mr. Walkup was an inpatient, he was visited by Mr. Harpalani, who did the Saltwater Challenge in 2010, five months after he’d lost his left leg in a roadside bombing in Afghanistan and two and a half months after he’d left the hospital. Mr. Harpalani served in Italy after he had recovered, and on returning to America decided to do the challenge again. Mr. Harpalani told Mr. Walkup he should, too.

“It’s been everything he said it would be,” Mr. Walkup said.

Mr. Harpalani stayed in touch with Mrs. Nixon after he first came to Menemsha, and since then has helped her recruit people who “are in that transition zone between actual injury and starting to make real recoveries and strides outside of the hospital.” His first time here, he was still in a wheelchair and “was out of the hospital, but I wasn’t going out. I was just doing appointments and things.”

“This is a very transformative experience,” Mr. Harpalani said. “It makes you get out of the hospital, kind of push the boundaries of what you’re comfortable with.”

Word of mouth, veterans looking out for veterans, is how most get involved with the challenge, Mrs. Nixon said. Mr. Harpalani is “my secret agent,” she said. “Every year he’s been an unbelievable resource for people.”

Some participants came recommended by CNN White House correspondent Jake Tapper, a friend of the Nixons, including Silver Star recipient retired First Sgt. Jonathan Hill. Mr. Hill and Mr. Harpalani were both part of the Army unit Mr. Tapper covered in his 2012 book The Outpost.

Mrs. Nixon was struck by the small-world scenario. “The crossroads of war have met in Menemsha,” she said. “It’s nice to be on the other side.”