During the early 1930s, when the type was being replaced by the more successful Supermarine Walrus, a number of Seagulls were re-used for civilian purposes.

The two versions were similar, although an alternative powerplant in the form of a single more powerful Napier Lion III engine, a reduced wingspan, and a larger fin were used in the Mk II.

[5] In 1925, construction of the improved Mk III began for the Royal Australian Air Force (RAAF), following an order being placed in January of that year.

This type featured a more powerful Napier Lion V engine, and the radiators were redesigned so as to be able to operate in tropical regions.

This engine was mounted in a nacelle slung from the aircraft's upper wing and powered a four-blade propeller in a tractor configuration.

[9] The Seagull employed gravity feed to supply fuel for the engine, and was the first single-engined flyong boat to use this method.

[11][9] The pilot was seated in a relatively forward position, at a distance from the other crew members, being directly ahead of the fuel tanks; the cockpit was provisioned with a single retractable machine gun.

[11] During its career the type proved to be unpopular with crews—creating a prejudice against similar aircraft that continued for a decade after the Seagull was superseded by the Fairey III.

The length of runway required for takeoff was excessive, it handled poorly on the water, and was slow in comparison with land planes designed for a similar use.

[13] Following an agreement made in 1922, a single Seagull Mk II was exported to Imperial Japan, intended to demonstrate and promote the capabilities of British aircraft and encourage further sales.

[citation needed] In 1925, the UK Admiralty advised the Royal Australian Air Force (RAA) to acquire Seagulls to serve on the new seaplane carrier then being constructed, so enabling their ageing Fairey IIIDs to be retired.

[11][17] The first of six Seagulls for the Royal Australian Navy (RAN) arrived unassembled in April 1926 at RAAF Base Point Cook, near Melbourne.

[17] Having aircraft based on board RAN ships avoided the need to build land facilities, so that even prior to the type's delivery, the RAN had decided to use seaplanes to perform photographic survey flights, covering areas from the Great Barrier Reef to the Persian Gulf.