After returning to the West Coast on 12 March 1962, James E. Kyes assumed an "in-commission-in-reserve" status on 16 April and underwent Fleet Rehabilitation and Modernization (FRAM I) conversion at Puget Sound Naval Shipyard, Bremerton, Washington, to prepare for her role in the new Navy. Returning to full commission on 18 December, she participated in fleet exercises held off the California coast on 27 and 28 May 1963 in honor of President John F. Kennedy.