The unit was formed on 10 February 1942 by combining one division from Chitose Air Group that was previously stationed in the Central Pacific, and two divisions from Takao Air Group that participated in the conquest of the Philippines and Dutch East Indies. They operated the new Mitsubishi G4MRikko Navy Type 1 Attack Bomber aircraft. That same month, the group was deployed to Rabaul, New Britain to support Japanese operations during the early stages of the New Guinea Campaign. On first as part of the 24th Air Flotilla and from April as part of the 25th Air Flotilla. On 20 February, a flying boat from Yokohama Air Group spotted US carrier task force centered around Lexington 460 nautical miles from Rabaul. 4th Air Group medium bombers were order to attack the task force with bombs, since Type 91 aerial torpedoes have not yet arrived to the newly captured outpost at Rabaul. To make matter worse, external fuel tanks for Mitsubishi A6M Zero fighters stationed at Rabaul have not yet arrived either, which meant that they could not escort the bombers at such distance. The attack formation consisted of 17 G4M, each equipped with two 250 kg bombs, and was led by unit's HikōtaichōLieutenant Commander Shichiso Miyauchi, who flew as an observer in the lead aircraft. In the ensuing action off Bougainville, the unit lost 15 bombers to enemy F4F Wildcat fighters and anti-aircraft fire. Only a few bombers managed to come close enough to release the bombs at Lexington, however they all missed the carrier, where the closest bomb landed about 30 meters astern. The lead bomber attempted to crash into Lexington, but it was downed 1400 meters before the carrier. The 4th Air Group losses were soon replenished and then regularly conducted bombing raids against Port Moresby on New Guinea from March to August. On 7 May 1942, they had a minor involvement in the Battle of the Coral Sea, where they performed a torpedo attack on Allied cruisers around Jomard Passage. They scored no hit and lost five of 12 aircraft. on 8 August 1942. On 7 August 1942, the 4th Air Group prepared to strike a newly discovered enemy airfield near Milne Bay on New Guinea, when the shocking news of Allied landing on Guadalcanal came in. The commanders decided that there is no time to exchange bombs for torpedoes and send 27 G4M bombers to attack the beached near Lunga Point. The formation was Led by Lieutenant Rempei Egawa and reached Guadalcanal shortly after 13:00. They scored no hits on the ships, for the loss of four aircraft. The next morning, Lieutenant Shigeru Kotani led 17 bombers from 4th Air Group, this time properly equipped with torpedoes, for another strike against the ships near the beachhead. The ship-based anti-aircraft fire was decimated the formation and only a few managed to release their torpedoes, one damaging a destroyer. On top of that, the few surviving aircraft were then ambushed by F4F fighters on the way out. In total, only five severely damaged aircraft managed to return to Rabaul and 125 men perished in the attack, including all officers. The 4th Air Group participated in frequent attacks on Henderson Field during the initial stage of Guadalcanal Campaign. In late September 1942, after taking heavy losses, the unit was withdrawn from the area. In seven months of combat, the they lost two Hikotaichos, six Buntaichos, over 40 aircrews and more than 50 aircraft. On 1 November 1942 the unit was re-designated as the 702 Air Group.
