In modern History I would place Battle of Jutland as the largest one
Jutland, May 31–June 1, 1916. The largest battle in terms of tonnage of ships engaged and in terms of the total tonnage of ships involved in a single action. The largest surface action and the largest ship-to-ship action, in terms of the tonnage of the ships engaged. The Imperial German Navy's High Seas Fleet commanded by Vice-Admiral Reinhard Scheer, consisting of 16 dreadnought and 5 pre-dreadnought battleships, 5 battle cruisers, 11 light cruisers, and 61 fleet torpedo boats, was engaged by the numerically superior British Grand Fleet under Admiral Sir John Jellicoe, composed of 28 battleships, 9 battle cruisers, 8 armoured cruisers, 28 light cruisers and 78 destroyers. Material losses were heavier on the British side, but the High Seas Fleet only narrowly escaped destruction and never again risked a decisive encounter with the Grand Fleet.
You can compare it to others here @ http://en.wikipedia.org/wiki/Largest_naval_battle_in_history