Established at RAAF Station Williamtown, New South Wales, in February 1941, it was the first Australian Article XV squadron formed under the Empire Air Training Scheme.

The squadron embarked for the Middle East in April 1941; its personnel initially consisted solely of ground crew, who joined the pilots of No.

Over the next 15 months, it fought in the North African and Tunisian campaigns in both fighter and fighter-bomber roles, claiming 49 German and Italian aircraft destroyed in the air and earning the nickname "The Desert Harassers".

450 Squadron took part in the Allied invasion of Sicily and the Italian campaign, primarily in the close support role.

At the conclusion of advanced training, personnel were posted as required to RAF-controlled squadrons in Britain or the Middle East.

260/450 Squadron operated for ten days only and flew 61 sorties against airfields, 20 on offensive patrols and six on bomber-escort duties during the Syrian campaign.

[13] A batch of 20 trainee Australian, British and Canadian pilots—the majority being Australian—were posted to the squadron in early October, and it began duties as an operational training unit.

On 20 October, the squadron moved to Burg El Arab, Egypt, and began operating as an advanced repair, salvage and service unit, taking part in the North African campaign.

[19][20] On 19 December, RAF Middle East Command issued an administrative instruction declaring that although manned primarily by Australians, Nos.

Three days later Sergeant Raymond Shaw became the first pilot from the squadron to claim an aerial victory, after he intercepted a Junkers Ju 88 near Gazala.

450 Squadron's main roles—escorting daylight raids by Douglas Boston bombers, and ground-attack missions in support of the Eighth Army—were hazardous and resulted in relatively heavy losses.

[23] From 26 May, as Rommel launched an assault on the Gazala–Bir Hacheim line, all Kittyhawk units began to focus on the fighter-bomber role rather than air-to-air combat, to support retreating Commonwealth forces.

450 Squadron claimed two Junkers Ju 87s and a Messerschmitt Bf 109, for the loss of three pilots killed, including Shaw.

[26][27] Flight Sergeant Don McBurnie, the squadron's highest-scoring pilot with five solo victories and one shared, claimed his final "kill" on 4 July 1942 when he shot a Messerschmitt Bf 110 into the sea following a bombing mission on airfields west of Daba.

450 Squadron took part in the decisive Second Battle of El Alamein, during October and November 1942, attacking enemy airfields and claiming three German and Italian fighters destroyed in the air.

[30] It suffered several losses during this time, including one of its leading scorers, Squadron Leader John Williams, who was shot down and taken prisoner on 31 October 1942, three days after he had been appointed commanding officer.

[31][32] The squadron was frequently on the move as the Allies advanced following Second El Alamein, changing locations six times during November.

[15][30] It often found itself using captured or hastily constructed airfields; one Kittyhawk was destroyed and several ground personnel killed or wounded by land mines at Marble Arch, Libya, in December 1942.

Throughout April and early May, 350 sorties were flown, including attacks on Axis shipping in Cape Bon and in the Gulf of Tunis.

[35] On the night of 11 August, the airfield was attacked by Ju 88 bombers, which dropped incendiary, anti-personnel and high-explosive bombs for more than an hour.

450 Squadron was transferred to Foggia, and then to Mileni, where it was briefly withdrawn from operations to convert to newer model Kittyhawk IVs before rejoining the campaign in late November.

450 Squadron, Flight Lieutenant Reginald Kierath, were incarcerated with other Allied POWs at Stalag Luft III, in eastern Germany.

In March, the squadron's attention returned to Italy, launching strikes against rolling stock; the following month saw it heavily tasked, flying a total of 430 sorties.

450 Squadron suffered no fatalities or aircraft destroyed but the pilot of a float plane belonging to an air-sea rescue unit was killed, some ground personnel were wounded, a Kittyhawk of No.

450 Squadron later operated from several airfields in central and northern Italy, under the "cab rank" system, whereby patrolling fighter-bombers would attack as requested by army air liaison officers.

[42] From November, after it had moved to Fano on the Italian north-east coast, the squadron also began attacking German forces in Yugoslavia.

[42] The attack resulted in the sinking of a merchant ship, a torpedo boat, and a coastal steamer, as well as the destruction of five warehouses and other harbour infrastructure.

The use of the "450" designation was the result of an administrative error, as the Canadian 400 series squadrons formed during World War II had been numbered between 400 and 449.