It served as a bomber unit through World War II and was inactivated at Rio Hato Army Air Base, Panama on 1 November 1946.

In advancing its plans for the defense of the Atlantic and Gulf coasts of the United States, the joint Army-Navy board recommended the establishment of eight aeronautic stations which, with a strength of two dirigibles and six or eight seaplanes each, could immediately conduct patrol work.

Significantly, the only site definitely advanced as vital in the overall plan was that at the Coco Solo United States Navy submarine base near Colón in the Canal Zone.

With the end of World War I most of the 7th Aero Squadron's personnel were transferred back to the United States for demobilization.

Of the DH-4's, the first six postwar examples, all virtually stock DH-4B's, arrived for duty with the 7th in February 1920, replacing the well-worn Curtiss R-6's and other earlier DH-4's.

By 1 February 1940, the assignment to the 6th Bombardment Group was changed to an attachment, as the unit was reassigned to the 19th Composite Wing and placed under the control of the Caribbean Air Force staff as one of the dedicated reconnaissance elements reporting to that headquarters.

Obsolete as a bomber, the mission of the B-17B was long-range reconnaissance in the Canal Zone, although the aircraft retained its defensive machine guns for defense against any enemy aircraft it may encounter On 8 October 1941, it was once again assigned to the 6th Bombardment Group and, on 27 November, the unit moved from France Field to the newly constructed Howard Field on the Pacific side, where it received four additional B-17Bs.

The Squadron's B-17 Flying Fortress aircraft deployed elsewhere (mainly to Guatemala City Airport) to begin the Pacific patrols in early January 1942.

On 1 January 1944, the squadron received orders to deploy four of its LB-30s to France Field to participate in the search for several marauding German U-boats which were causing considerable alarm in the Caribbean.

It was reactivated at Naval Air Station Sigonella, Sicily, Italy on 15 May, where it replaced Detachment 1, 69th Reconnaissance Group.