Established in 1916, it was one of four combat squadrons of the Australian Flying Corps during World War I, and operated on the Western Front in France before being disbanded in 1919.

It was re-established as a permanent squadron of the RAAF in 1925, and during World War II operated in the Mediterranean Theatre.

Equipped with McDonnell Douglas F/A-18 Hornet multi-role fighters from 1986, the squadron deployed to Diego Garcia in 2002 to provide local air defence, and the following year contributed aircraft and crews to the invasion of Iraq as part of Operation Falconer.

3 Squadron was formed at Point Cook, Victoria, on 19 September 1916 under the command of Major David Blake.

Shortly afterwards, the unit embarked upon HMAT Ulysses and sailed to England for training, before becoming the first AFC squadron deployed to France, in September 1917, equipped with the R.E.8 two-seat reconnaissance/general purpose aircraft.

Its first air-to-air victory came on 6 December 1917; by the end of the war its aircrews had been credited with another 15 German aircraft,[4] and a total of 10,000 operational hours.

[8] In early 1918 the collapse of Russia allowed the Germans to concentrate their strength on the Western Front, and launched a major offensive.

[5] In April 1918 the squadron became responsible for the remains of the "Red Baron", Manfred von Richthofen, after he was shot down in its sector.

[10] Blake initially believed that one of the squadron's R.E.8s may have been responsible but later endorsed the theory that an Australian anti-aircraft machine gunner actually shot down the Red Baron.

[10] Following the end of hostilities the squadron was engaged briefly in mail transport duties before being withdrawn to the United Kingdom in early 1919.

[5][10] Casualties amounted to 32 killed and 23 wounded,[5] of which the majority were aircrew; the squadron lost 11 aircraft during the war.

Under the command of Squadron Leader Frank Lukis,[14] it was based initially at Point Cook and then at Richmond, operating a variety of aircraft including S.E.5As, DH.9s, Westland Wapitis and Hawker Demons.

[18] With the Tomahawk and its successor, the Kittyhawk (P-40D – P-40N), the squadron returned to the North African campaign, during which it often engaged in intense air battles with state of the art fighters operated by the Reggia Aeronautica (such as the Macchi C.202) and German Luftwaffe (Messerschmitt Bf 109E/F), during 1941–1943.

[18] There is evidence that 3 Sqn was the DAF Kittyhawk squadron that attacked German ground forces at Mezzouna, Tunisia, on 3 April 1943 and caused, in the process, severe injuries to Claus Von Stauffenberg (who would, the following year, attempt to assassinate Adolf Hitler, as part of a failed coup against the Nazi regime).

It re-equipped with P-51 Mustangs in November 1944 and continued to operate in Italy and Yugoslavia until the end of the European war in May 1945.

[24] During this period, the aircraft became known as "lizards", in reference to their camouflage paint scheme and low altitude operations.

3 Squadron deployed to the Middle East during Operation Okra as part of the military intervention against ISIL, taking over from No.

3 Squadron was equipped with two Lockheed Martin F-35 Lightning IIs and was scheduled to have ten of the type by the end of the year.