The squadron was formed and reformed a number of times throughout its history. It was reformed once more on 1 January 1954 at RAF Ballykelly, in County Londonderry, Northern Ireland and was equipped with Avro Shackleton, a long-range maritime patrol aircraft.

In 1965, Ian Smith's Rhodesian minority white government made a Unilateral Declaration of Independence, leading to United Nations sanctions against what was up until then a British colony. One of the major thrusts of this action was to try and deprive the country of oil. Being land-locked, Rhodesia relied on a pipeline through Mozambique from the port of Beira. Up until 1972, the sanctions were applied by the Royal Navy working with the RAF, which undertook reconnaissance flights of the Beira Straits from its base in Madagascar. The RAF was located at the airfield close to the port of Majunga, on the north-west coast of Madagascar. No. 204 Squadron was the unit tasked with this responsibility just prior to the evacuation and closure of the base in March 1972. It operated a detachment of two Avro Shackleton Mk.2. The last flight took place on 17 March 1972. The squadron was disbanded on 28 April 1972.