The squadron was established at PAF Base Masroor on 30 August 1967, equipped with the F-86 Sabre, commanded by Wing Commander Rehmat Khan and assigned the role of operational training of pilots on the F-86. It was later moved to PAF Base Peshawar. Over the next 10 years over 300 PAF pilots and 150 foreign pilots were trained and graduated. During the 1971 Indo-Pak War the unit flew over 300 air defence, counter air and close air support missions under the command of Wing Commander S. A. Changazi. Counter air sorties were often targeted at the Indian Air Force bases in Srinagar and Awantipura. Close air support sorties were flown over Chamb and Shakargarh. The unit shot down 7 Indian aircraft and damaged 2 more. A Folland Gnat and Hawker Hunter were downed by Flight Lieutenant Salim Baig Mirza. After flying 15 sorties, Squadron Leader M. Aslam Chaudhary was shot down on 10 December 1971 during a close air support mission over Chamb when his section of two F-86 were bounced by six Indian Hawker Hunters. Flight Lieutenant Fazal Elahi was shot down by ground fire on 8 December 1971 during a close air support sortie. Mirza and Elahi were awarded the Sitara-i-Juraat posthumously. The obsolete F-86 was replaced in December 1980 by the Shenyang F-6 and the squadron role changed to Air Superiority. The F-6 was replaced in 1984 with the Nanchang A-5C and the unit became a Tactical Attack squadron. In 1985 the squadron was awarded with the Flight Safety, Command Armament and the Professionals Trophies. In April 1989 the squadron provided pilots to ferry A-5C fighters requiring overhaul to China. In 1991 the first four of the squadron's aircraft were fitted with new Martin-Baker ejection seats. During the 1996–2001 phase of the Afghan civil war A-5s of both the 16th and 26th Squadrons are reported to have flown strike missions against Northern Alliance positions as part of the Pakistani support to the Taliban.
1998 DACT camp – held from 14 to 30 December 1998, No. 26 was deployed with ten A-5C and all squadron pilots flew sorties during the deployment. Other squadrons deployed were No. 8 and No. 16 Squadrons.
1998 Armament cyclic training – ten pilots and eight A-5C deployed, 246 armament sorties flown in 19-day period from 5 October to 24 October 1998.
