The British Parliament created the Royal Air Force in 1918. Soon afterwards, its governing body the Air Council set out to establish a flag identifying the RAF and its stations. Under British law, the Admiralty had the right to veto the introduction of any new flag that was to be flown within the British Empire or on a British vessel. They were initially opposed to allowing the Air Force to have its own flag, but reluctantly consented after pressure from the Air Council.

The Admiralty’s approval came with instruction that the new flag should be the Union Flag defaced with a suitable device. The Air Council was not pleased as they wanted to use the British White Ensign with St. George’s Cross removed a suggestion which had earned approval of the War Office. The Admiralty rejected the Air Council's suggestion on the basis that the White Ensign was exclusively reserved for Royal Navy use.

The dispute continued when the Air Council then submitted a design featuring a jack with a white border only to have it rejected as it was already in use as the signal to summon a ship's pilot. The Air Council’s reaction was to then re-submit the original design, which to no ones surprise was again rejected. The dispute eventually became the knowledge of HM King George V, who referred the issue to Cabinet who sat on the issue.

When the dispute became public knowledge, suggestions began to come from the public. These included use of a roundel, which had been used by the Royal Flying Corps and the Royal Navel Air Service. Air Vice Marshal Sir John Salmond suggested that the Union Flag be placed in the canton in order to convey the mark of British authority. A civilian suggested the use of azure blue to convey the clear blue sky of Britain and its empire. The Air Council incorporated these and other ideas into the design in use today as their preferred option. The Chief of the Air Staff, Air Marshal Sir Hugh Trenchard, presented the design to HM the King who approved it. The design was then forwarded to the Admiralty where it was approved and granted official Ensign status in December 1920. On 24 March 1921, the King signed an Order in Council officially designating its use.

Flag Measures 36 in x 60 in and is 100% polyester with grommets for easy flying.