34 Squadron RAAF was hurriedly formed at Darwin Civilian airfield at Parap in the Northern Territory on 23 February 1942, four days after the first Japanese air raids on Darwin on 19 February 1942. It initially comprised 2 officers, 4 airmen and two DH-84 Dragon aircraft. The Dragons were initially used to transport freight and Japanese prisoners. The small group were accommodated in the temporary hutted camp at Parap airfield.

On 1 March 1942, Flight Lieutenant F.H. Waters along with 10 airmen joined 34 Squadron. Waters became the Adjutant for 34 Squadron. Flight Lieutenant J.W. Warwick was the first acting Commanding Officer of the unit. This was decided at a meeting of the officers on 2 March 1942.

On 3 March 1942 one of the Dragons was destroyed by fire during a Japanese air raid on Wyndham airfield in Western Australia. The other Dragon had become unserviceable. The Air Board was requested to send them any spare aircraft that were available.

34 Squadron drove to Daly Waters airfield in the Northern Territory on 5 March 1942 where they established their Headquarters in a tent. They received another Dragon aircraft on 14 March 1942. They carried out freight flights to Batchelor, Birdum, Darwin and Millingimbi. This Dragon also proved to be very unreliable and the Squadron was allotted two Avro Ansons on 26 April 1942.

The Squadron then moved to Batchelor airfield in the Northern Territory on 13 May 1942. By then, they had  received the two Avro Ansons and two Tiger Moths.  By the end of May 1942, 34 Squadron comprised:-

•  6 Officers
• 13 NCO's
• 15 Airmen

On 18 May 1942, Avro Anson AX630 piloted by Sgt Milligan of 34 Squadron RAAF ran into a ditch whilst taxying at Batchelor Airfield in the Northern Territory damaging the aircraft and making it unserviceable.

On 25 May 1942, Tiger Moth A17-469, of 34 Squadron, piloted by Pilot Officer Roy Francis Goon (251686) crashed at Birdum in the Northern Territory.

In late June 1942, one of the two Tiger Moths made an emergency landing 10 miles south of Katherine. The Tiger Moth was left in the bush for a few days and unfortunately it was destroyed in a bush fire on 1 July 1942.

They were on the move again to Hughes airfield (32 Mile) in the Northern Territory on 15 July 1942. 

Just over a month later, they moved to Manbullo airfield in the Northern Territory on 27 August 1942. 

On 13 December 1942, the aircraft of 34 Squadron were allocated to 6 Communications Flight RAAF. 

34 Squadron reformed at Parafield in South Australia on 3 January 1943. By then it had 11 Officers, 85 Airmen and 8 aircraft.

By 1 February 1943 the Squadron's strength had reduced to 4 Officers and 66 Airmen, and only three DH-84 Dragons. The Squadron flew to the following locations from Parafield:-

• Alice Springs
• Batchelor
• Daly Waters
• Katherine
• Mt. Eba
• Oodnadatta
• Port Pirie
• Tennant Creek

On 11 March 1943, one of the Squadron's DH-84 Dragons crashed after taking off at Parafield airfield, killing the crew of two.

In April 1943, another DH-84 Dragon from 34 Squadron made a forced landing 30 miles from Tennant Creek and was destroyed by fire. 

Squadron Leader O.B. Hall took over as the Commanding Officer of 34 Squadron in May 1943. By June 1943, the Squadron had received three new C-47 Dakotas to supplement its two DH-84 Dragons. By now there were 12 Officers and 59 airmen on the Squadron's books. The C-47's now allowed the Squadron to fly to further away places like Exmouth, Geraldton, Kalgoorlie and Onslow.

By the end of July 1943 the squadron had five C-47 Dakotas. Its DH-84 Dragons had been reallocated to other units. By August 1943 they had 7 Dakotas and the unit strength had increased to 47 Officers and 106 Airmen. By the end of 1943 they had also been allocated  an Airspeed Oxford and a Douglas DC-2.

On 17 March 1944, Squadron Leader R.W. Shiel took over as the new Commanding Officer. By May 1944, the Squadron was so busy that they had to start a night shift for maintenance activities.

On 1 June 1944, 34 Squadron RAAF became the first RAAF Operational Squadron to have WAAAF's posted to it. It received 1 Officer and 20 Airwomen.

A detachment of three C-47 Dakotas was posted to Batchelor airfield in the Northern Territory in June 1944 to fly freight anywhere between Broome in Western Australia, Garbutt airfield in Townsville and Archerfield airfield in Brisbane. They carried out a daily courier service to Townsville. A similar daily service was operated between Parafield and Darwin.

In August 1944, the three C-47's from Batchelor airfield and two C-47's from Parafield relocated to Archerfield airfield in Brisbane to carryout special flights to New Guinea. On 16 September 1944, the three C-47's from Batchelor airfield returned to Parafield.

In early October 1944, 34 Squadron was allocated the courier run between Parafield and Archerfield and the Stores run between Parafield and Mascot airfield in Sydney. In mid October 1944, 34 Squadron took over the daily Courier service between Parafield and Darwin and any other allocated special operations. They positioned one C-47 Dakota in Darwin during this period.

Also in mid October 1944, three C-47's and four air crews were detached to Higgins Field in north Queensland for special operations to Hollandia, Noemfoor, Tadji and other locations. They relocated to Garbutt airfield in early November 1944. They relocated back to Parafield on 13 November 1944.

In late November 1944, three C-47's were detached to Coomalie airfield in the Northern Territory. In December 1944, the C-47 located in Darwin started to make flights to the Halmaheras.

34 Squadron started to move to Morotai on 15 February 1945. They became fully operational at Morotai on 12 April 1945.

34 Squadron was eventually disbanded at Richmond airfield in New South Wales on 6 June 1946.