The RAN Fleet Air Arm was formed on JUly 3, 1947 by order of the Commonwealth Defence Council to operate aircraft for the RAN. The primary plan was for the purchase of two aircraft carriers and the aircraft for them, and for the construction of the necessary shore based support facilities. HMAS Albatross the former RAAF base at Nowra in New South Wales, was commissioned in August 1948 as the FAA's main airbase, while HMAS Sydney, was commissioned on december 16, 1948 . In her passage from the UK, Sydney also transported the RAN's first two squadrons of aircraft (805 Squadron with Sea Furies   and 816 Squadron with Fireflies), forming the 20th Carrier Air Group. A further group, 21st Carrier Air Group, was formed in 1950 through the raising of 808 Squadron with Sea Furies and 817 Squadron with Fireflies.

During 1951 and 1952, Sydney operated as part of the United Nations taskforce during the Korean War. In 1952, HMAS vengeance was commissioned as the RAN's second operational carrier, on loan from the Royal Navy.

Sydney continued in her operational role until 1955, when she was replaced by HMAS Melbourne. The delays in Melbourne being delivered were due to her being reconstructed with all modern advances (angled flight deck, steam catapault & mirror landing aid), enabling her to operate jets. At that time, Melbourne embarked the main carrier air wing, with Sydney, unable to operate jets due to being unmodified, becoming a training ship; Vengeance was returned to the UK.

Also, the FAA took delivery of its first jet aircraft, with Sea Venoms replacing the Sea Furies. Both ships saw service during the Vietnam War, with Sydney utilised as a fast troop transport.

Following the Vietnam War, cutbacks saw Sydney decommissioned in 1973. Melbourne continued in service, ultimately operating a mixture of Skyhawks, Trackers and helicopters before she too was paid off. The Liberal government had intended to replace her with HMS Invinceable (planned to be renamed HMAS Australia), which was due to be purchased from the UK in 1982, and would also have seen the purchase of either AV-8B Harriers or Sea Harriers; this sale was cancelled by the British government due to the Falklands War, with HMS Hernes offered instead. The defeat of the Liberals by Labor in the 1983 Federal election led to a decision not to purchase a replacement for Melbourne. With no aircraft carrier, fixed wing aviation in the RAN ended.

Today, the Fleet Air Arm is responsible for the operation and maintenance of the RAN's helicopter force. Helicopters are operated from the frigates of the Adelaide and Anzac classes, and from the RAN's amphibious ships.

RAN squadrons follow the same numbering system as those of the Royal Navy, with operational units numbered from 800 onwards, and training units numbered from 700 onwards:

723 Squadron - Aerospatiale AS 350BA Ecureuil (Squirrel): 723 Squadron is the Fleet Air Arm's primary helicopter training unit. It is employed as a conversion unit for newly qualified pilots to learn to fly helicopters, and also provides aircraft and crews for ship's flights on the RAN's hydrographic vessels. In addition, 723 Squadron provides the RAN's helicopter display team.

805 Squadron - Kaman SH-2G Super Seasprite: 805 Squadron provides Seasprite helicopters for use aboard Anzac class frigates.

816 Squadron - Sikorsky S-70B Seahawk: 816 Squadron provides Seahawk helicopters for use aboard Adelaide class guided missile frigates.

817 Squadron - Westland Sea King Mk 50: 817 Squadron is a land based squadron operating the Sea King helicopter in the medium lift role. 817 Squadron also has responsibility for maintaining and operating aircraft on the Kanimbla Class, HMAS Tobruk and HMAS Success.

The Kanimbla class vessels are also capable of operating S-70A Blackhawk, CH-47 Chinook and UH-1 Iroqouis helicopters from the Army's 5th Aviation Regiment and regularly train with these aircraft during amphibious exercises.

Since 2000, when the last pair of Hs748's were retired, the Fleet Air Arm has been an entirely rotary winged force. Air defence of the fleet is primarily the task of the Adelaide class guided missile frigates, armed with the SM-2 Standard SAM: these are supported when possible by the F/A-18 Hornets of the RAAF. The most numerous aircraft is the Sikorsky S-70B Seahawk, with sixteen operated by 816 Squadron; these operate primarily in the ASW role from the Adelaide class frigates, but have a supplementary role in search and rescue and troop transport. In 2001,  eleven SH-2G Super Seasprite helicopters were purchased to operate from the Anzac class frigates, which led to the reformation of 805 Squadron (which had been the FAA's last fast jet squadron). These operate primarily in the anti-surface warfare role.

The Sea King provides the fleet's medium lift capability, but also performs over the horizon targeting for anti-surface warfare, and search and rescue capability. Prior to 1982, the Sea King was also used in the ASW role from the aircraft carrier Melbourne. The Squirrel was used in an operational capability aboard the guided missile frigates prior to the purchase of the Seahawk. Now, they are used by 723 Squadron for conversion training, as well as deployment from the RAN's hydrographic vessels.

The Royal Australian Navy is likely to replace the aging Sea King helicopters with a new class of medium helicopters in the near future. While the Navy is yet to select an aircraft, it is probable that the MH-90 will be selected as part a joint Army-Navy helicopter purchase (the Army currently has 12 MH-90s on order).

Although there is nothing confirmed, a rumour exists that the Australian Government may increase its planned order of F-35's (CTOL) for the RAAF to include a small number of F-35Bs (STOVL) for the RAN to be used on the proposed large amphibious warfare ships.