Based on the recent theoretical development for formation control of multiple fully actuated agents with an elliptical shape in Do (2012), this paper develops distributed controllers that force a group of N underactuated ships with limited communication ranges to perform a desired formation, and guarantee no collisions between any ships in the group. The ships are first fitted to elliptical disks for solving collision avoidance. A coordinate transformation is then proposed to introduce an additional control input, which overcomes difficulties caused by underactuation and off-diagonal terms in the system matrices. The control design relies on potential functions with the separation condition between elliptical disks and the smooth or p-times differentiable step functions embedded in. (C) 2012 Elsevier Ltd. All rights reserved.