Small numbers of early aircraft were purchased both by the Royal Flying Corps (RFC) and the Royal Naval Air Service (RNAS) prior to the start of World War I, and were taken to France when the war started. One of the RFC aircraft was the first British aircraft to be shot down the Germans, on 22 August 1914. The RNAS used four 504s to form a special flight in order to bomb the Zeppelin works at Friedrichshafen on the shores of Lake Constance. Three set out from Belfort in southern France on 21 November 1914, carrying four 20 lb bombs each. While one aircraft was shot down, the raid was successful, with several direct hits on the airship sheds and destroying the hydrogen plant.
The 504 was the first airplane to strafe troops on the ground as well as the first to make a bombing raid over Germany. It was also the first Allied airplane to be downed by enemy anti-aircraft fire and was the first military aircraft flown by Billy Bishop.
Soon obsolete as a front line aircraft, it came into its own as a trainer, with thousands being built in the war, with major production types being the 504J and the mass production 504K, which was designed with modified engine bearers to accommodate a range of engines, in order to cope with engine shortages. A total of 8,340 Avro 504s had been produced by the end of 1918.
Following the end of the war, while the type continued in service as the standard trainer of the RAF, large numbers of surplus aircraft were available for sale, both for civil and military use.
The improved, redesigned and radial engined 504N was produced by Avro in 1925. After evaluation of two prototypes powered by Bristol Lucifer and Armstrong-Siddeley Lynx engines respectively, the Lynx powered aircraft was selected by the RAF to replace the 504K. A total of 592 were built between 1925 and 1932, equipping the five RAF flight training schools, while also being used as communication aircraft. The 504N was also exported to the militaries of Belgium, Brazil, Chile, Denmark, Greece, Thailand and South Africa, with licenced production taking place in Denmark, Belgium, Canada and Japan.
The 504N was finally replaced in 1933 by the Avro Tutor in RAF service, with small numbers continuing in civilian use until 1940, when seven were impressed into RAF service, where they were used for target towing.