The squadron was formed in 1917 as a training unit of the Australian Flying Corps in Britain, readying pilots for service on the Western Front.

5 Squadron was formed at Shawbury in England on 15 June 1917, as a unit of the Australian Flying Corps, under the command of Captain Andrew Lang, and was initially known as "29 (Australian) (Training) Squadron" of the Royal Flying Corps.

[2] Equipped with a variety of aircraft, including Maurice Farman Shorthorns, Airco DH.6, Avro 504s, Sopwith Pups, S.E.5as and Sopwith Camels, the squadron provided training to Australian pilots in Britain during World War I.

Equipped with the Supermarine Seagull V amphibian aircraft, the squadron's detached flights operated from Royal Australian Navy cruisers and the seaplane tender HMAS Albatross.

The squadron was partially re-equipped with Boomerangs in late 1943 and was assigned to several different stations in Australia.

84 (Army Co-operation) Wing, and operated with units of the Royal New Zealand Air Force, undertaking reconnaissance, artillery observation, ground attack, and aerial resupply missions in support of Australian ground troops fighting against the Japanese on the island.

[5] In September 1945, shortly after the end of the war, the squadron received three or four P-40 Kittyhawks, but retained Boomerangs and Wirraways.

[9] The squadron saw active service in support of anti-insurgent operations on the Thai-Malay border and then in the Indonesia-Malaysia Confrontation.

In the mid-1970s and mid-1980s, the squadron contributed Iroquois to peacekeeping missions in the Middle East Egypt, firstly to Ismailia with the United Nations Emergency Force and then later to the Sinai as part of the Multinational Force and Observers.

[10][11] The squadron acquired AS350B Squirrel utility helicopters in early 1984, and along with the Iroquois UH1-Hs, the squadron continued the training role and Army support, in addition to providing aid to the civil community in times of natural disaster.

5 Squadron was disbanded and absorbed into the Australian Defence Force Helicopter School (ADFHS) in 1990.