It is thought that 201 Squadron originated as a shadow designation for the rest of the force of Mystere IVAs deployed to Israel by the Armee de L'Air during the Suez Campaign. The aircraft from EC 2 deployed to Ramat David in October 1956.

The first IDF/AF to operate the F-4E Phantom, 201 sqn, was reformed in September 1969, under the command of Shmuel Hetz. He was killed in action shortly thereafter. After a rapid initial workup, 201 sqn became the Phantom OCU. During the period 1969-1975, a number of aircrews were cycled through the unit for type conversion, and then used to form the nucleus of new Phantom squadrons.

Despite this training activity, the unit was immediately brought into action in the War of Attrition, an attack being carried out on a SAM site near Abu Sueir in October 1969. As part of the psychological battle during the War Of Attrition, 201 sqn Phantoms laid sonic booms over Cairo the following November. The F-4 achieved its first IDF/AF kill with 201 sqn on 11th November 1969 against an Egyptian AF Mig-21 just south of Suez city.

201 sqn was also the first unit to receive aircraft from the Kurnass 2000 update programme for the F-4E. The first example being handed back in April 1989. In early 1992 the squadron moved from Hatzor to Tel Nof.