The airport is located in the suco of Madohi [de], which is part of the Dom Aleixo administrative post, in the western suburbs of Dili.

[1][3] North of the airport, between the runway and Ombai Strait, is a residential zone that includes houses, a small area of agricultural land, a school, a church, and a cemetery.

As compensation, Dai Nippon Airways of Japan was permitted to operate six trial flights from Palau to Dili between December 1940 and June 1941.

[11]: 176  In October 1941, the Japanese government announced plans to introduce regular air services between Tokyo and Dili, beginning the next month.

[11]: 175–177  A radio room was set up in the Dili post office to communicate with the flying boats, using equipment supplied by the Australian Department of Civil Aviation.

[12]: 133 Meanwhile, during 1940, TAT began flying a weekly land-based aircraft service between Dili and Kupang, using a de Havilland Dragon Rapide wet-leased from Koninklijke Nederlandsch-Indische Luchtvaart Maatschappij (KNILM), the airline of the then Dutch East Indies.

Those services continued, again for political reasons, even after April 1941, by which time TAT was six months behind in paying the lease fees and salaries of the pilot and mechanic.

[7] The radio equipment at the Dili post office was later smuggled out, to the 2nd Australian Independent Company, which by then had retreated to Timor's central mountains.

[12]: 135, 139  Subsequently, the Imperial Japanese Army Air Service (IJAAF) used the airport as a military airfield, and between June 1942 and August 1944, it was bombed by Allied aircraft.

The company was also flying between Dili and Kupang in West Timor, Indonesia, once a week, using a Douglas DC-3 chartered from Merpati Nusantara Airlines.

The work included the construction of a new passenger terminal building (without any custom, immigration and quarantine (CIQ) facilities), and the lengthening of the runway to accommodate Fokker F28s.

The airport was capable of handling passenger and Lockheed C-130 Hercules aircraft, and helicopters, but its apron was rated unsuitable for high-pressure type airframes.

[26] During the INTERFET operation, the United States Pacific Command (PACOM) and the US Army's Logistics Civil Augmentation Program (LOGCAP) arranged for two Mi-8 and two Mi-26 helicopters to be provided to East Timor together with air and maintenance crews.

[23] In March 2005, Timor-Leste's first post-independence commercial airline, Kakoak, launched its inaugural flight, a twice weekly service from Dili to Kupang.

From the latter year, however, following the cessation of the UN Integrated Mission in East Timor (UNMIT), and the closure of Merpati's Dili operations, the tonnage dropped to around 250 tons annually through to 2018.

In January 2008, however, the Portuguese charter airline EuroAtlantic Airways operated a direct flight from Lisbon using a Boeing 757-200, carrying 140 members of the Guarda Nacional Republicana.

However, a 2013 analysis indicated that the restricted length and width of the runway prevented narrow-body aircraft from operating at maximum takeoff weight, and that it had no safe area as required by international standards.

Further airside problems were that damage to the perimeter fencing caused a potential risk to aircraft from wildlife strike during takeoff and landing, the main apron had limited capacity and was in poor condition, and an absence of lighting prevented night operation.

The following day, the Prime Minister, Rui Maria de Araújo, visited the site and expressed the government's regret for the flooding and consequent disruption to passengers and staff.

[49] As of 2016[update], the airport's facilities included a passenger terminal building divided into three sections (arrival, departure and VIP), one 1,850 m (6,070 ft) runway, and four exit taxiways.

[50] Two years later, in 2015, the IFC revised the proposal, after studying the traffic forecast, possible runway developments, and the landside area, including the terminal building.

[2]: ES I-10 By contrast, a report on aviation in Timor-Leste published in 2017 by The Asia Foundation noted that the then-current airport facilities at Dili satisfied minimum standards for operating international flights.

[52] The same year, however, the governments of Timor-Leste and Japan began discussions over a planned redevelopment of the airport, including improvements to the passenger terminal, control tower and roadworks.

[53] In October 2019, the government of Timor-Leste approved a Dili Airport Master Plan presented by IFC,[54] and in October 2021 the two governments signed an exchange of notes confirming a grant of approximately US$44 million from Japan for the construction of a two-storey passenger terminal building of 11,653 m2 (125,430 sq ft) based on the projected number of airport passengers as of 2030, and an accompanying power station.

However, the report also noted that the government had already chosen one of the other two options, namely a 2,500 m-long runway involving an extension only to the west, and including reclamation from Ombai Strait.