During the early years of PAF, aeronautical and electronics engineers were trained abroad as service had no such technical training facilities and no engineering university in Pakistan offered curricula in the requisite fields. Schools of Aeronautics and Electronics were later established in the PAF, primarily for training airmen technicians. After these schools had been functioning for few years, officers training sections were added to them for training of engineering officers. The schools inducted science graduates and imparted them one year engineering training. However, with rapid advancement in technology and increasing complexity of PAF equipment, this training proved to be inadequate. The civilian institutes of engineering still did not have any plans to offer aeronautical and electronics engineering curricula. The initiative to establish facilities for educating PAF engineers to the level of at least a Bachelor’s Degree had to be taken by the PAF either in collaboration with one of the existing engineering institutions or by establishing its own engineering college.

After studying several proposals, it was decided that the most practical and economical solution for the PAF was to set up its own college at Korangi Creek, Karachi, where considerable training facilities already existed. Accordingly, in October, 1963, a detailed proposal was made and the Government of Pakistan sanctioned the establishment of the PAF College of Aeronautical Engineering with effect from March, 1965.

For smooth functioning of the College, the United States Air Force lent the services of three qualified and experienced officers for the posts of the Principal and the Heads of the Department of Aerospace and Avionics Engineering. Colonel John H. Blakelock from USAF Institute of Technology arrived on July 7, 1965 to be the first Principal. Gp Capt. A. K. Sufi, the first PAF officer to head the College, succeeded him in June 1969. Two USAF officers continued to serve in the faculty of the College till June, 1978.

The College was initially affiliated with the University of Karachi. Later, on the establishment of NED University of Engineering and Technology in March, 1977, affiliation of the College was transferred to NED University. The first batch of students arrived at the College on 24 July, 1965 and instructions for the course started on 29 July, 1965. Graduation ceremony of the first-degree course was held on 9 November, 1968. In May, 1986, CAE was shifted to Risalpur and since then it is an integral part of the PAF Academy. In December, 1994, the College became one of the constituent colleges of National University of Sciences and Technology (NUST), Rawalpindi.

In 1999, to keep pace with the technological advancements and to meet the international requirements, ISO 9000 certification for the quality management system of its academic programs was successfully achieved.