SIS was established on 28 November 1956 with the primary function of combating perceived increases in Soviet intelligence operations in Australia and New Zealand.

[7] It has also been criticised for its failures to anticipate or prevent incidents such as the 1985 bombing of the Rainbow Warrior,[8] the 2004 purchasing of New Zealand passports by Israeli "intelligence contract assets",[9] and the 2019 Christchurch mosque shootings by an Australian alt-right white supremacist terrorist.

Its goal was to counter increased Soviet intelligence operations in Australia and New Zealand in the wake of the Petrov Affair of 1954, which had damaged Soviet-Australian relations.

The NZSS was again modeled on the British domestic intelligence agency MI5 and its first Director of Security, Brigadier William Gilbert, was a former New Zealand Army officer.

[4][13] The NZ Intelligence Community (NZIC) developed further in the late 1950s due to growing concerns about political terrorism, improvements in weaponry, news media coverage, and frequent air travel.

[19] Following the attempted hijacking of an Air New Zealand flight and the bombing of the Rainbow Warrior in 1985, Parliament enacted the International Terrorism (Emergency Powers) Act 1987.

Cases of terrorism overseas promoted the NZ Intelligence Community to regularly exchange information and meet the growing demands of addressing non-state actors.

Its stated roles are: As a civilian organisation, the SIS's remit does not include enforcement (although it has limited powers to intercept communications and search residences).

[29] In 1981, the SIS was criticised for drawing up a list of 15 "subversives" who participated in protests against the 1981 Springbok Tour, a visit by South Africa's apartheid rugby team.

[8] In early June 2020, Radio New Zealand reported that the NZSIS had raided the Czechoslovakian embassy in Wellington in 1986 as part of a joint operation with the British Secret Intelligence Service (MI6) to steal Warsaw Pact codebooks in order to break into the encrypted communications of Soviet-aligned countries during the Cold War.

This revelation came to light as a result of an RNZ podcast series called The Service, produced by Wellington writer and documentary maker John Daniell, whose mother and step-father had both worked for the NZSIS.

[32][33] RNZ also reported that the SIS had spied upon Labour MP Richard Northey under the pretext of his support for racial equality and nuclear disarmament.

At the time of the spying, Northey was chair of the Justice and Law Reform Select Committee, which was responsible for financial oversight of the SIS, and of legislation altering its powers.

Choudry was an organiser with GATT Watchdog, which was holding a public forum and rally against an APEC (Asia-Pacific Economic Cooperation) Trade Ministers meeting hosted in Christchurch.

In December 2008, it was discovered that a Christchurch resident, Rob Gilchrist, had been spying on peace organisations and individuals including Greenpeace, Iraq war protesters, animal rights and climate change campaigners.

Gilchrist also said he was offered money by Thomson Clark Investigations to spy on the Save Happy Valley Coalition, an environmental group.

The Israelis were alleged to have been Mossad agents attempting to infiltrate the New Zealand government's computer databases and steal sensitive information.

[45] In March 2018, the SIS released a memo confirming that an assassination attempt was made on Queen Elizabeth II during her 1981 visit in Dunedin despite alleged efforts by the New Zealand Police to cover up the incident.

[49] Prime Minister Jacinda Ardern announced that there would be an inquiry into the circumstances that led to the mosque attacks and what the relevant agencies (SIS, Government Communications Security Bureau (GCSB), police, Customs and Immigration) knew about the individual and the accused's activities.

[50] The official Royal Commission into the attacks was made public on 8 December 2020,[51] and found that intelligence agencies including the NZSIS and GCSB had placed excessive focus on Islamist terrorism, at the expense of detecting far-right and White supremacist threats.

[57][58] On 16 September 2020, the NZSIS confirmed that it was evaluating the "potential risks and security concerns" of the Chinese intelligence firm Zhenhua Data's "Overseas Key Individuals Database."

Zhenhua's database had been leaked to the American academic and China expert Professor Chris Balding, who passed the information to Australian cyber security firm Internet 2.0.

The data leak was covered by several international media including the Australian Financial Review, the Washington Post, the Indian Express, the Globe and Mail, and Il Foglio.

The NZSIS asserted that the husband and wife had assisted Chinese intelligence services and deliberately concealed the amount of contact they had maintained with them.

The Inspector-General of Intelligence and Security found that the SIS had no lawful power to investigate, and had not showed the kind of caution expected in a free and democratic society.

[69] Following the report's release, the Public Service Association express concerns that job cuts at the Department of Internal Affairs could hurt New Zealand's response to online harm, foreign interference and digital espionage.

[68] In late March 2024, NZSIS Director-General Andrew Hampton confirmed that seven former New Zealand Defence personnel had been recruited by the Test Flying Academy of South Africa to train the People's Liberation Army over the past 18 months.