No. 25 Squadron was formed in January 1966 at PAF Base, Sargodha as a tactical fighter unit under the command of Wing Commander M G Tawab, who was later to become the Chief of Air Staff of the Bangladesh Air Force. Being one of the first two fighter squadrons to be equipped with F-6 aircraft the unit was assigned the additional task of converting pilots of other squadrons on the type as well. This task was accomplished speedily and safely and 25 Squadron can be justifiably proud of having converted a large number of the F-6 fighter pilots who later participated in the war of 1971.

In 1967, No. 25 Squadron pilots took part in the PAF's biggest ever fire power demonstration, staged in honour of the Shah of Iran. In 1968, the squadron presented a formation aerobatics demonstration for Marshal Grechko, defence minister of the USSR. Also in 1968 the unit, under the command of Squadron Leader Imtiaz A Bhatti, won the inter-squadron armament competition. In 1984 the squadron was awarded the best formation trophy in the Pakistan Day fly past.

In the 1971 war, the squadron operated from Sargodha as well as Mianwali, and flew 103 sorties in air defence and for close air support in the Shakargarh area. The squadron was credited with 2 enemy aircraft destroyed and 1 damaged. Flight Lieutenant Javed A Qazi was taking off when the airfield was attacked; he chased and shot down one of the attacking Hunters and was awarded Sitara-i-Juraat. During the operations, the squadron lost one aircraft due to enemy action and the pilot, Flight Lieutenant Shahid Raza was killed.

In April 1976, the squadron was again assigned the role of training pilots on F-6 aircraft up to operational status. So far the unit has converted over 500 such pilots. In 1980 some FT-6 aircraft were also allotted to the squadron to facilitate its training program.