As an element of the Citizen Air Force, 21 Squadron formed at Laverton in April 1936. In
September 1939, 21 Squadron mobilised for war and after re-equipping with Wirraways the
squadron began training in co-operation with the Army. The Squadron moved to Singapore in August 1940 and 12 months later were re-equipped with Brewster Buffalo fighters. With its new aircraft, 21 Squadron moved to the Malayan mainland where it became the only fighter squadron on the Malayan mainland when the Japanese attacked
The squadron's base at Sungai Pattani was repeatedly bombed by Japanese aircraft and several Buffaloes were destroyed or damaged. After unsuccessful attempts to intercept enemy bomber
and fighter formations, 21 Squadron vacated Sungai Pattani and withdrew along the Malay peninsula under constant Japanese attacks.
Reserves of Buffaloes were soon exhausted and by January 1942, the few remaining 21Squadron aircraft were transferred to 453 Squadron. Unit personnel were then evacuated through Sumatra and Java, finally arriving in Australia in March 1942.
Re-equipped with Vengeance dive bombers in September 1943, 21 Squadron was deployed to
New Guinea in January 1944. Combat operations began almost immediately and over succeeding days airfields, barges and Japanese infantry positions came under very accurate attack from the Squadron's dive bombers. Unfortunately, after just two weeks, the Vengeance's were withdrawn from combat operations and the Squadron was re-located to Camden, New South Wales.
In July 1944 the squadron converted to Liberator heavy bombers and resumed operations from its base in Northern Australia. Flying armed reconnaissance sorties, the squadron participated in a number of attacks on Japanese convoys in the last days of the War. Following Japan's surrender, 21 Squadron Liberators were used to ferry personnel to Australia. On 2 June 1960, 21 Squadron ceased operations as a flying squadron, however, the unit continues as a reserve squadron at Laverton providing RAAF Reserve support for the Melbourne region.