VMF-123 spent the majority of 1944 resting and refitting. On December 31, 1944, the squadron, along with VMF-112 boarded the USS Bennington (CV-20) for their third combat tour. During this cruise, which last until June 16, 1945, they participated in the Battle of Iwo Jima, took part in the first carrier strikes against Tokyo since the Doolittle Raid in 1942, and participated in the entire Okinawa Campaign. During their cruise on the USS Bennington the squadron had seven pilots killed in action and five permanently listed as missing in action.