The squadron was first formed at RAAF Station Laverton on 8 June 1942 as "No. 1 Photo Reconnaissance Unit" (1 PRU), with eight officers and thirty-five airmen under the command of Squadron Leader L. W. Law, operating six Brewster F2A Buffalos. Initial training in navigation and aerial photography was carried out at Laverton until 12 August 1942 when the unit began moving to Hughes Airfield, Northern Territory to prepare for operational service. A Japanese bombing raid on 23 August subsequently resulted in the loss of one Buffalo and a CAC Wirraway. Meanwhile, further training continued in September which resulted in one aircraft and its pilot being lost, while two P-38 Lightnings were received in October. The first operational flights occurred between 10 and 19 November over Tanimbar Island; however, on 20 November a Lightning was destroyed in a crash, killing the pilot. Two P-43 Lancers arrived in November as the unit continued to expand, moving to Coomalie Creek Airfield in December.