In 1989, after a brief stay at Kamra, No. 18 Squadron moved back to Rafiqui. The squadron was re-equipped with F-7P aircraft, and fifteen pilots were posted to the squadron. Later, during the same year, the squadron took part in exercise High Mark. Many dignitaries, including the Bangladesh Air Chief and COAS visited the squadron during the period 1990 to 1991. In 1993, the squadron's pilots visited Jordan to establish stronger ties with RJAF, a gesture which was reciprocated by a visit from pilots of 9 Squadron of the RJAF in 1994.

In 1994-95, the squadron participated in different exercises like Saffron Bandit, Twilight, Sky Guard-III, and High Mark-95 and performed extremely well.

The year 1997 brought new laurels to the squadron when it won the 'Air Superiority' and 'Top Gun' trophies. It was the first F-7P squadron to have won the highest honour of the PAF.

Buster-I was the last exercise in which the squadron participated from Rafiqui. The end of the year 1998 witnessed relocation of the squadron to PAF base Mianwali. The squadron became an Operational Conversion Unit by the start of year 1999.