It was formed in January 1939 at Air Force Base Waterkloof and was equipped with Hawker Hartbees I and Hurricane Mk II aircraft.

The squadron was moved to Port Elizabeth in September 1939 after which it was disbanded.

The squadron was involved in fighting in East Africa flying Hurricanes and Gladiator Mk IIs, In December 1942 the squadron was sent to the Middle East and flew fighter defence over the port of Aden with Hurricane Mk IIc and Spitfire V aircraft, coastal patrols were also flown from North Africa.

Three Squadron was again reformed at Baragwanath Airport on 6 September 1952 as a part-time citizen force unit flying Harvards, but disbanded once again in 1957.

The squadron continued to operate the Mirage F1CZ from Waterkloof AFB with frequent deployments to South-West Africa during the Namibian War of Independence.