Soldiers from 9 Regiment Army Air Corps in Dishforth held the ceremony to mark the merging of the unit with another regiment in Somerset.
Its closure means there will be no British Army helicopter units based in the north of England.
The regiment has served in Bosnia, Kosovo, Northern Ireland, Iraq and Afghanistan.
Its most recent operation was providing disaster relief in the Philippines following Typhoon Haiyan in 2013.
The ceremony was attended by the local mayor Kenny Fuller, who once served in the regiment as a helicopter pilot.
Mr Fuller described the event as "extremely emotional".
"I got a bit upset there when they were handing over the flag over to the regimental colonel," he said.
"It's quite moving."
A parade and flypast has marked the disbanding of a North Yorkshire army helicopter regiment.