Until the early nineties, the Portuguese army in general was a depleted force with a lot of older equipment. This was also the case within the air force. Flying 3rd generation fighters like the G-91R4 and A-7 ordered in the sixties and early eighties (as second-hand aircraft from the USNavy). In early 1990 the Portuguese government decided they had to re-equip its rapidly aging aircraft with more modern equipment. The Peace Atlantis I deal was signed for the delivery of 20 F-16s.
Esq. 201 was activated to receive those aircraft. The first one arrived in February of 1994. The aircraft are the latest version of the block 15 that were build worldwide. They received the strengthened block 30 airframe together with all equipment of the ADF version, except for the AIFF blade antennae.

PoAF F-16A,
#15102, returning home from a mission on 09/10/2003 [Photo by Jorge Ruivo]
Together with the acceptance of these new F-16s, Portugal joined the European Participating Air Forces (EPAF). This made them a part of the F-16 project group. Although it was decided that the F-16 would receive the MLU package, the squadron’s aircraft still have not received the upgrade at this time. Therefore its tasks are seriously hampered being limited to CAP and conventional attack.
Back in 1997, only 20 upgrade kits were ordered for an F-16 fleet counting 40 airframes. All MLU F-16s will be delivered to Esq. 301, while Esq. 201 will keep the non-upgraded vipers. Rumors have gone around that Portugal intends to sell its non-MLU F-16s. If and when this sale will go through is still highly uncertain. The impact it will have on the composition of the Portuguese F-16 squadrons is also still a vague mystery.
More recently it became apparant that the entire Portuguese fleet is upgraded with the MLU package. Therefore also esq 201 started receiving these upgraded jets in 2010.

PoAF F-16A block 15
#15101 is passing low over Monte Real AB to land there on November 6th, 2004. [Photo by Jorge Ruivo]