Islanders gathered at the foot of Leaca Mhor, a hill overlooking the harbour, where the three-foot monument has been placed.
They were joined by past and present members of the Baltimore RNLI Lifeboat, including some of those who participated in the Fastnet rescue missions 25 years ago.
The guest speakers included Kieran Cotter, from the 1979 lifeboat crew, and former Fastnet lighthouse keeper Gerry Butler.
The three-foot monument, fashioned from limestone, was designed by Bantry stone-cutter Eugene Murphy and bears the names of the 15 men who died in the yachting race.
The unveiling was the highlight of the island’s annual fundraising day for the local lifeboat service.
The day had a clear Fastnet theme because the 25th anniversary of the tragedy will be in August.
“Nothing has been done like this before and we felt it was important that the names of those who died were not forgotten,” explained one of the organisers, local businesswoman Mary O’Driscoll.
“It was an event that shook the whole community and we wanted to ensure that it is remembered by future generations of people from the village.”
On Saturday, August 11, 1979, 303 yachts set out on the 608-mile race from the Isle of Wight off England’s south coast.
Competitors had to travel to the Fastnet Rock (located three miles west of Cape Clear) and back again.
The race began in fine weather, but disaster struck later in the form of a Force 10 gale which swept across the North Atlantic at terrifying speed.
The vessels and the 2,500 men and women aboard were pounded by 40-foot breaking waves and rescue helicopters and lifeboats struggled to save them.
These conditions endured for 20 hours. Rescue crews pulled 136 sailors from their yachts or the sea, but 15 men died, two of whose bodies were never found.
Only 85 boats managed to finish the race, while five sunk and a further 24 were abandoned.
“Our proximity to the Fastnet lighthouse means that we will always have a very strong connection with the race,” said Ms O’Driscoll.
“The beam from the lighthouse is a constant reminder to us of the dangers of the sea.
“This memorial will also serve to remind future generations long after the events of 1979 have faded into distant memory.”