Grey Squadron constituted a military division within the Rebel Alliance. This division was established during the era of the Galactic Civil War and was under the command of X2, a former Clone trooper. The squadron's designation was derived from Falon Grey, a Jedi Knight who served as X2's genetic father.
Grey Squadron engaged in numerous conflicts against both the Galactic Empire and the Imperial Remnant, notably participating in the Battle of Yavin and the Battle of Hoth. Similar to Rogue Squadron, another squadron within the Rebel Alliance, their primary starfighter was the X-wings. Grey Squadron's origins can be traced back to the Geonosis strike team (Rebel), whose mission to penetrate an Imperial outpost on Geonosis ended in failure. The team was captured and held until Jedi Rahm Kota dispatched X2 to liberate them, leading to the unit's unwavering loyalty to X2. Subsequently, they participated in a multitude of battles against Imperial forces and were involved in the Battle of Endor where, upon the discovery that the Death Star II was operational, they were assigned to defend Admiral Gial Ackbar's flagship, known as the Home One. It was during this period that Rahm Kota introduced Shara, a former bounty hunter, to the squadron.
During a mission that took place on Dathomir, an Imperial saboteur surreptitiously placed detonation packs on the squadron's X-Wings, which resulted in significant losses for the unit. X2 was on the verge of killing the Imperial in retaliation, but he refrained from doing so after Shara reminded him to not follow the same dark path as X1.
In the year 2 BBY, the Alliance to Restore the Republic came into being with the purpose of opposing the Galactic Empire. Among the initial members of the Rebellion was Jedi Master and General Rahm Kota, a survivor of the Great Jedi Purge. At a later time, Kota was dispatched to the planet Dantooine with the intention of enlisting his former Padawan, Falon Grey, into the cause. However, upon his arrival, he only found X2, a clone of Grey, as Grey himself had been killed years prior by another of his clones, X1. Sensing the Force within X2, General Kota extended an invitation for him to join the Rebellion, which X2 accepted. Around this time, the Alliance deployed a strike team to the planet Geonosis with the mission of infiltrating an old Imperial droid foundry. However, the team was captured due to their large numbers.