724 Squadron was recommissioned as an Australia unit on 1 June 1955 at the Royal Australian Navy's main air station HMAS Albatross. The squadron's role was to carry out fixed-wing conversion training and it was initially equipped with Wirraway, Sea Fury and Firefly propeller-driven aircraft and Vampire jets.
The squadron's role changed in October 1956 when it absorbed most of the decommissioned 723 Squadron's Sea Venom and Gannet aircraft and Sycamore helicopters. As part of this change 724 Squadron's Wirraways, Sea Furies and Fireflys were transferred to other units. In its new role the squadron provided Sea Venom and Gannet operational training on board the RAN's only aircraft carrier, HMAS Melbourne. Three 724 Squadron pilots were killed during separate flying accidents during 1956.
De Havilland Sea Venom FAW.53 preserved in 724 Squadron markings in an aircraft museum in Melbourne in 1973, 724 Squadron's make-up was changed in 1957 and again in 1958. The Sycamores were transferred back to the recommissioned 723 Squadron in early 1957, and the Gannets moved to 725 Squadron during 1958. This left 724 Squadron equipped with Sea Vampires and Sea Venoms.
In 1959 the squadron formed an aerobatic team called the Ramjets which was equipped with Sea Venoms, and which performed at air shows across Australia.
Between 1963 and 1968, 724 Squadron and 816 Squadron were the only Fleet Aia Arm squadrons operating fixed-wing aircraft. During this time the squadron's roles included all-weather fighter, anti-submarine warfare and operational flying training along with fleet support, trials and communications tasks.
724 Squadron became an all-jet conversion training squadron again in December 1968 and was equipped with two-seat trainer variants of the new A-4G Skyhawks, Vampires and Venoms. The Vampires and Venoms were replaced by new MB-326 Macchi trainers between 1970 and 1972.
Despite its rating as a second-line training unit, 724 Squadron participated in some fleet exercises and used its Skyhawks to provide close air support to Army units during ground manoeuvres. The squadron's Skyhawks were also used in a new aerobatic team called the Checkmates.
In June 1982, HMAS Melbourne was decommissioned without being replaced. As a result, the RAN's fixed-wing aircraft squadrons were rapidly decommissioned. 724 Squadron absorbed 805 Squadron's Skyhawks in July 1982 and transferred its Macchis to the Royal Australian Air Force in 1983.
The squadron was decommissioned at HMAS Albatross on 30 June 1984 and its Skyhawks were later sold to the Royal New Zealand Air Force.