At its peak, the so-called IS caliphate controlled most of eastern Syria and about one-third of Iraq's territory.
Prime Minister Malcolm Turnbull and other dignitaries were on hand to welcome the group home and pay tribute to their courage and dedication.
"Thank you for your service. Australia is proud of you," Mr Turnbull said.
The prime minister said Australia's contribution to the war effort had helped discredit IS propaganda, which proclaimed it would ultimately "stable horses in the Vatican and sweep across Europe".
He also acknowledged the sacrifices of the families left behind while their loved ones were on deployment, but joked some personnel will be put back on lawn mowing duties now they're home.
An air-to-air refueller tanker and a Globemaster transport aircraft also returned to the air base.
As well as fighter pilots and weapons operators, aircraft maintenance workers and armament technicians ("gunnies") who assemble the precision-guided bombs were among the returning servicemen and women.
The return does not mark the end of Australia's military commitment in the fight against IS, with the Wedgetail air battlespace management aircraft, on an operational pause, expected to recommence sorties early this year.
Meanwhile, hundreds of Australian troops based out of Taji in Iraq will continue to train and mentor Iraqi soldiers.
Australia's air contribution to the fight against IS has not been without controversies.
An Australian Super Hornet was responsible for an air strike in west Mosul in Iraq which may have killed a child last June.
In a separate incident in March, Australian military personnel were involved in the target decision-making process of a botched air strike in which seven civilians were killed or injured, including a child.
The previous year, two Australian fighter jets dropped six bombs as a part of a bungled coalition air strike which hit Syrian government irregular forces rather than Islamic State.
RAAF OPERATIONS IN IRAQ AND SYRIA
* The Super Hornets have flown more than 21,800 flying hours, dropping more than 2400 precision-guided bombs on about 2799 sorties in the past three years.
* The air-to-air refueller tanker has flown 9400 hours on about 1200 sorties, and transferred about 42 million litres of fuel.
* The Wedgetail air battlespace management aircraft has clocked up more than 5000 flying hours and 400 sorties.