The Avro 504K was used as an elementary trainer by Nos 5, 6, 7, and 8 (Training) Squadrons Australian Flying Corps (AFC) at Minchinhampton and Leighterton in England during World War I. After World War I, the 504K, 20 of which were ordered in 1918 and another 35 were received as part of the Imperial Gift, became an important part of the newly-formed RAAF's operational capability throughout the 1920s. The Imperial Gift was Britain's donation of aeroplanes and equipment to the Dominions in 1919 to establish air forces. The Central Flying School (CFS) at Point Cook operated the 504Ks. 

Additionally, 17 of these aircraft were used for the Second Peace Loan and flown to areas of Australia that previously had never seen an aircraft. The 504K was gradually retired from RAAF service from July 1928. All remaining examples were destroyed with the exception of A3-4, the sole survivor, which is with the Australian War Memorial. The Avro was the first training aircraft used by the RAAF that could be flown aerobatically. This feature allowed pilot training to become more comprehensive and extensive with aerobatics becoming an integral part of the curriculum. The addition of the 'Gosport' tube allowed for better instructional conditions, with the instructor being able to clearly communicate with the student.

The RAAF Museum's Avro 504K is a replica constructed from the original drawings by AJD Engineering of the United Kingdom using original fittings, instruments and engine. The aircraft is airworthy. Painted as E3747, it represents one of the twenty Avro 504Ks ordered by the Australian Flying Corps in 1918 for the Central Flying School. Arriving in Australia in April 1919, E3747 was sent to No 1 Military District in Queensland during August 1919 for the First Peace Loan, and crashed at Gympie on 17 September 1919. The aircraft was returned to the Aeroplane Repair Section at Point Cook in October of that year, and was struck off charge in April 1920.