In 1937 the newly formed RNZAF had only 30 aircraft, many of them old and all of them obsolescent. The Service comprised a small regular nucleus and a slightly larger territorial force of four squadrons. These squadrons, however, had no aircraft, and the squadron personnel attending annual camps and training had to makeshift with what aircraft could be spared at Wigram and Hobsonville.

Under the leadership of the RNZAF's first Chief of Air Staff, Wing Commander the Hon. Ralph Cochrane (later Air Chief Marshal the Hon. Sir Ralph Cochrane, RAF Retired) an officer on loan from the RAF, it was planned to expand the RNZAF into an effective force of two regular bomber squadrons of modern aircraft and four territorial squadrons of older aircraft, supported by modern bases and an extensive training organisation. This programme of expansion was to be completed by 1941 and, on the outbreak of war in 1939, much had been done. Only six of the 30 Vickers Wellington bombers ordered for the two regular bomber squadrons had been delivered. The New Zealand Government offered these aircraft and crews to Britain and, from these, the famous No. 75 (NZ) Squadron was formed. New Zealand was thus without modern aircraft until the first Lockheed Hudsons arrived in 1941.

The war speeded up the expansion of the RNZAF. Private aircraft were requisitioned for training and the RAF supplied many older operational aircraft for this purpose. These were a valuable asset. Early in the war the RNZAF was mainly an organisation providing trained aircrew for service with the RAF and partly-trained aircrew to complete their training in Canada under the Empire Air Training Scheme. Many of these men became famous over Britain, Europe, the Near and Far East, and in the Battle of the Atlantic. When Japan entered the war in December 1941 New Zealand was threatened with invasion. There were few operational aircraft and these, until a steady trickle of lend-lease bombers and fighters began to arrive late in 1942, comprised New Zealand's sole aerial defence. Operational squadrons were formed, first for home defence and, later, for operations with allied forces in the Pacific. Operating first with Hudson bombers and Kittyhawk fighters and later with Venturas, Corsairs, Avengers, and Catalinas, New Zealand squadrons fought with marked success from bases in Fiji, the New Hebrides, the Solomon Islands, and the Admiralty Islands. The two transport squadrons No. 40 and 41, equipped with Dakotas, provided communications between New Zealand and the forward areas.