The squadron was established in June 1960 as No. 7 Light Bomber Squadron under the command of Squadron Leader Ayaz A. Khan.
It was based at PAF Base Mauripur, and assigned to airfield strike and deep interdiction roles.
They reequiped the Bandits with Dassault Mirage IIIO fighters procured from Australia in 1991 and experienced Mirage pilots, referred to in the squadron history book as "the magnificent 7", were brought to No. 7 Squadron.
The Bandits continued operating Mirages, as a multi-role fighter until 2021.
