Northrop's Chief Test Pilot Vance Breese flew the first N-3PB (c/n 301) on 22 December 1940 from Lake Elsinore, California. The flight test and customer acceptance trials were successfully completed using the first production aircraft. Due to the use of the more powerful Cyclone engine, all performance estimates were exceeded and flight characteristics including maneouverability were considered "excellent." All 24 aircraft were delivered to the exiled Royal Norwegian Navy Air Service by the end of March 1941.
In late February 1941, six production N-3PBs were flown to RCAF Station Patricia Bay, Vancouver Island in Canada, one of the Canadian winter bases of the Flyvåpnenes Treningsleir (FTL) Norwegian training bases known as "Little Norway". The N-3PB's service as an advanced trainer in Canada in the "Little Norway" summer base at Island Harbour, Toronto and winter bases along the western coast of Canada, was relatively brief and ended when it was determined that pilot and air crew graduates were to be integrated into RAF squadrons. Arrangements were made later in 1941 for the advanced flight training of Norwegian pilots to be carried out in RAF and Royal Canadian Air Force schools on types that better fit the transition to combat flying. Consequently, the three surviving N-3PBs were stored until shipped to Iceland in March 1942 on the steamer Delta.
The remaining 18 N-3PBs were used to equip No. 330 (Norwegian) Squadron RAF in Reykjavík, Iceland. The N-3PBs sent to Iceland were all shipped across the Atlantic in crates on board the Norwegian steamer Fjordheim, the voyage from New York to Reykjavik taking 13 days to complete. Part of the reason for deploying the N-3PBs to Iceland were to avoid having the unusual aircraft operating over the United Kingdom, with the involved risk of friendly fire incidents.
No. 330(N) Squadron was declared operational on 25 April 1941; the N-3PBs were erected in a seaplane hangar at Reykjavik, with the first aircraft flying by 2 June 1941. The squadron flew antisubmarine and convoy escort patrols from 23 June 1941, with flights based at Reykjavík, Akureyri and Budareyi. While the squadron's N-3PBs carried out eight attacks on German U-boats, including one on U-570 after it had surrendered to the British, no U-boats were sunk. On a number of occasions in 1942, the N-3PBs clashed with Focke-Wulf Fw 200 long range reconnaissance bombers and Blohm & Voss BV 138 flying boats, being credited with at least one damaged. On 10 October 1942, a "Northrop" from Budareyi was involved in a friendly fire incident, attacking a British Lockheed Hudson. The incident ended without any of the aircraft involved being hit.
In an effort to publicize the N-3PB operations, the British Air Ministry circulated a report that two Norwegian-flown aircraft had been involved in the attack on the German battleship Bismarck on 21–22 May 1941, but it was merely an example of wartime propaganda. Despite many aviation historians disputing the claim, it still appears in current accounts of the sinking of the Bismarck. No. 330(N) was formed on 25 April 1941 and received its first of 18 N-3PBs on 19 May, two days before the attack on the Bismark but didn't fly until 2 June 1941 and their first official operational flight wasn't until 23 June 1941. No. 330(N) Squadron began supplementing the N-3PBs with Consolidated Catalina flying boats in 1942, and both the Catalina and the N-3PB began to be displaced in February 1943 by the arrival of the more capable Short Sunderland. Flying boats allowed for longer patrols to be carried out, and had superior seakeeping qualities to the N-3PB. The surviving N-3PBs continued to operate alongside the Catalinas, flying fighter patrol, escort and antisubmarine operations off Iceland's east coast until early 1943. Throughout the transition to other types, the squadron's C-Flight maintained an "all-Northrop" unit, predominately involved in secondary roles including army cooperation, transport, air-sea rescue, ice reconnaissance and ambulance roles. In early 1943, No. 330(N)'s crews relocated to Oban, Scotland, aboard the troop ship Leinster. Two of the remaining N-3PBs flew to Oban. The eight aircraft left behind on Iceland were scrapped in Reykjavik between December 1942–April 1943.
Throughout its combat service from 23 June 1941–30 March 1943, No. 330(N)'s N-3PBs carried out 1,1011 operational sorties, totalling 3,512 hours flying time. Although the eight attacks they carried out on U-boats proved inconclusive, N-3PB escort patrols and antisubmarine sweeps were an important part of the Allied effort in keeping the North Atlantic sea lanes open. After the end of the type's combat service on Iceland, the Norwegian naval authorities considered basing two N-3PBs on Svalbard, an Arctic archipelago previously known as Spitzbergen. A German naval raid on 8 September 1943 resulted in the deployment being cancelled.