The German Rüstungs-und-Kriegsproduktion Stab ordered 200 Fiat CR.42LW (LW=Luftwaffe) for the Luftwaffe to use for night harassment and anti-partisan roles. The aircraft was equipped with exhaust flame dampers, a pair of 12.7mm machine-guns and underwing bomb racks for four 50kg bombs.
The Rüstungs-und-Kriegsproduktion Stab took control of Italy's aircraft industry after the Italian armistice of 8 September 1943. An American air raid on the Fiat factory in Turin destroyed several completed and semi-completed aircraft on the production line. This attack resulted in the completion of only 150 CR.42LWs, with the Luftwaffe accepting 112 of those into service.
Nachtschlachtgruppe (NSGr.) 9 and 7 are known to have used the CR.42 operational during the war.

NSGr. 9
Ten experienced crew of NSGr.3 were withdrawn from the northern sector of the Eastern Front during October 1943 to form the nucleus of NSGr. 9. They were posted to Stubendorf, which was a centre for night/blind flying training. Here they convert to the Caproni Ca.314 (their previous machines had been Arado Ar 66s), which was planned to be used against partisans in the Alps and in Istria and Croatia.
Formally constituted on 30 November, 1./NSGr. 9 moved to Udine, Italy, in December to test the Caproni's combat-worthiness, initially in daylight.

In January 1944, the unit transferred to Caselle, Torino to attack guerrillas in the southern Alpine area, only to establish the Ca.314's unsuitability for combat, particularly in improvised night operations.

On 28 January, a second Staffel was set up, this time with Fiat CR.42LWs.
Although the Ca.314 shows up in strength returns as late as 29 February, it is doubtful that any remained operational by then.

In January the Allies noticed the unit for the first time as what they termed the 'E8 Communications Unit' after the Gruppe's recognition code and the motley assortment of Italian aircraft and one Fieseler Storch they had detected on its roster, not suspecting that it was a combat outfit. During February, seven aircraft of 1. and two from 2. Staffel had been logged in signals traffic, all thought to be based at Centocelle, near Rome. There was impatience with the time being taken to bring the new unit to operational readiness and at the beginning of February the then Commanding Officer was replaced by Hauptmann (later Major) Rupert Frost, who was to command it to the end.

The landings at Anzio-Nettuno on 22 January 1944 led to NSGr. 9's 'promotion' to front-line service. Trial CR.42 sorties were flown over the front lines following deployment of a half-dozen aircraft to Viterbo during March. Operations were essentially confined to moonlit periods since crews were inexperienced, and the biplanes carried no radio navaids and had to make a long flight over mountainous terrain to reach their targets. Sorties were flown against high-value objectives within the Allied beachhead, often in the face of very strong defences. At the outset, however, losses were few and the Fiat was felt to have proved itself operationally.
The Fiats were also used against Anglo-American forces around Monte Cassino.

Nonetheless, the biplane's days with NSGr. 9 were numbered owing to supply problems and the loss of five when P-47s strafed Rieti on 21 April. The combat status of 2. Staffel's aircraft fluctuated between 're-equipping', 'operational' and 'training' during the April-June period, and its Staffel Kapitän, Oberleutnant Rolf Martini, was killed when his CR.42 crashed at Caselle on 22 May during a mock combat with Fiat's test pilot Valentino Cus.

The Fiats were from late February 1944 replaced by Junkers Ju 87 D Stukas, which carried a larger bomb load and better navigational aids. The CR.42s were first replaced in the 1 Staffel while the 2 Staffel continued to use the biplanes well into June.

In May 1944, RAF Intelligence noted '20-30 Ju 87s and most probably CR.42s operating over the battle area at points of Allied penetration, without causing significant damage'.

On 31 May 1944, 2./NSGr. 9 reported 18 CR.42s of which 15 were serviceable.

During the night of 1/2 June, 2./NSGr. 9 were flying attacks on the U.S. 7th Fleet at Anzio-Nettuno from the landing ground at Fabrica di Roma, about 20km east south east of Viterbo. On the return flight, near Lago di Vico, Feldwebel Horst Greßler was chased by a Beaufighter at around 1400m and, after around 10-15 minutes, fired upon. He and his aircraft was hit by 40 cannon shells and 120 machine-gun rounds. He managed to get away, regaining control at 200m and despite massive loss of blood, he was able to bring back the aircraft to his airfield where it was destroyed by fire after the emergency landing. Greßler was the first of NSGr. 9 to be shot down by a night fighter. He was hospitalized but returned to operations with NSG 9 some months later.
Greßler had been shot down by an Allied night fighter (Beaufighter MM905/M of 600 Squadron, flown by Flying Officer Stewart W. Rees (RAAF) and his radar operator Flying Officer D. C. Bartlett. They reported that at 00:01 they were at 10,000ft south of Rome when they were given vector 270 degrees on to a bandit travelling south at 8,000ft. Contact was obtained at 4 miles range, below and to port. The target was taking evasive action, losing height and changing course. The contact was lost when the target entered the Anzio flak area. At 00:15, while at 6,000ft, they were vectored again and contact was regained at 4 miles range, below and to starboard on target at 5,000ft. The enemy aircraft was now on a northerly course and weaving. After 15 minutes chase at an indicated 110-120mph where the target was altering course, speed and height, the Beaufighter finally closed in to 700ft with the wheels down and 30 degrees of flap. They identified the target as a CR.42, now at 4,000ft. The target continued to lose height and speed and the Beaufighter dropped back and closed in rapidly. At 00:30, they opened fire from 150ft and fired one short burst. The enemy aircraft was seen to blow up in mass of flames and burning pieces were seen to fall in Lago di Vico.

Feldwebel Horst Greßler in Fiat CR.42LW E8+BK of 2./NSG 9.
Image kindly provided by Nick Beale.

On 2 June, 2./NSGr. 9's Ju 87s started to arrive. 14 came from the Eastern Front and three were new.

On 8 June 1944, NSGr. 9 brought three CR.42s and a pair of Ju 87s to Bologna.

Nine Ju 87s and CR.42s attacked assembly areas and gun positions in the Viterbo/Montefiascone/Orbetello area with bombs and guns during the night of the 13/14 June.

NSGr. 7
The newly formed 3./NSGr. 7 at Zagreb, Croatia was equipped with CR.42LWs in April of 1944. The Gruppe's other two Staffeln operated a mix of elderly Heinkel He 46, Henschel Hs 126, and Dornier Do 17 aircraft on anti-partisan duties in the Balkans.

By September, 2. Staffel was transferred to Pleso, Croatia and began operating 26 CR.42LWs alongside 3. Staffel already deployed there.

The Fiat aircraft later equipped 1. Staffel, based at Graz, Austria.

On 8 February 1945, 10 CR.42s of Stab and 2. Staffel of NSGr. 7 took off from their base at Agram-Gorica in Croatia for an anti-partisan mission. Their intended target was Grabovica airfield, used by partisan forces, but in the last moments the target area was changed and they were sent against the partisan forces north-west of Sisak. Several km south-east of Agram-Gorica the CR.42 formation was jumped by P-38s of 14th FG. During the ensuing battle, the NSGr. 7 suffered serious losses when four CR.42LWs failed to return (one reportedly by AA-fire). According to American records, between 12:16-12:32, 1st Lieutenant Lawrence V. Bach Jr. of 37th FS claimed two biplanes, 1 probable and one damaged. However, the historian Csaba Becze's research has shown that the battle was not one-sided, since one of the NSGr. 7’s pilots claimed a P-38 during this dogfight as well. Unfortunately, his name is not known and nothing more remains about his identity in the existing documents. What is known is that the 14th FG lost two P-38s in this mission when 1st Lieutenant Fredrick R. Branscombe (MACR 12138) and Captain Kyle J. Pinney Jr. (MACR 12139) was shot down, reportedly by AA and small arms fire.
This combat seems to be the last biplane victory ever claimed.

When World War Two ended in Europe, over 20 CR.42LWs remained with NSGr. 7's Gruppenstab and 2. and 3. Staffeln based at Zagreb-Goriza. The 1. Staffel remained at Graz.

NSGr. 20
NSGr. 20 based in France also used an unknown number of CR 42AS.

JG 107
Luftwaffe schools and training units also used a number of CR 42 as fighter-trainers in France, Italy Austria and the Balkans. A number of the Belgian CR 42s (at least five) is unaccounted for after the Belgian capitulation and the ultimate fate of the remaining Belgian CR.42s at Chartres is uncertain, but it is likely that it was these aircraft that were subsequently employed as fighter-trainers by Jagdgeschwader 107 at Toul. It is also possible that these aircraft came from Italian sources.
The Luftwaffe trainee pilots nicknamed the CR.42 as ‘Die Pressluftorgel’ (the Pneumatic Organ), presumably on account of its profusion of pneumatic systems.

Source:
Air War Italy 1944-45 - Nick Beale, Ferdinando D'Amico and Gabriele Valentini, 1996 Airlife Publishing, Shrewbury, ISBN 1-85310-252-0
Fiat CR 32/CR 42 in action - George Punka, 2000 Squadron/Signal Publications, Carrollton, ISBN 0-89747-411-2
Ghost Bombers: The moonlight war of NSG 9 - Nick Beale, 2001 Classic Publications Ltd, ISBN 1-903223-15-6
Additional information kindly provided by Nick Beale and Csaba Becze.