Formed as an Army Co-operation unit at Trenton, Ontario on 1 April 1935 with Atlas aircraft, the squadron moved to Rockcliffe (Ottawa), Ontario in June 1937. It returned to Trenton on 1 April 1939 to absorb the School of Army Co-peration, thus becoming both a training and an operational unit. Alerted for hostilities on 26 August 1939, the squadron immediately moved to Halifax, Nova Scotia. Mobilized at Saint John, New Brunswick on 10 September and selected for overseas duty with the Canadian Active Service Force, it moved to Rockcliffe in September for training and re-equipping with Lysander aircraft. The need to bring two other army co-operation units (Nos. 110 and 112 Squadrons) up to full strength resulted in the squadron being disbanded on 16 December 1939.