However, the latter would not receive their Ar 95s as a consequence of the outbreak of the Second World War; instead, they were taken over by the Kriegsmarine and used as trainers and coastal patrol aircraft off the coast of Latvia and Estonia as well as in the Gulf of Finland.

[3] By early 1935, it was determined that the Kriegsmarine's existing fleet of Heinkel He 60 floatplanes was lacking in performance, thus the Reichsluftfahrtministerium sought out a suitable successor to replace it.

It was designed to perform various missions, including coastal patrol, aerial reconnaissance, artillery spotting, target-towing, as well as torpedo and bomber attacks.

He opted to produce a relatively compact all-metal aircraft, being largely composed of duralumin, that was suited to the challenging maritime environment.

The BMW-powered version was considered worthy of further study, and a batch of six was sent for further evaluation with the Legion Condor, and thus flew active combat missions during the Spanish Civil War.

[11] The third prototype was the first to be fitted with a three-blade metal variable-pitch propeller along with an automated RPM control system; it was also the first model outfitted to be operated by a crew of three, comprising a pilot, gunner, and radio operator/observer.

The RLM were reportedly interested in operating a land-based model, but ultimately chose not to procure it, allegedly due to it not achieving performance expectations.

[9] Even prior to the start of flight testing, it had become increasingly clear that the RLM favoured a rival submission, the Heinkel He 114, yet the ministry still encouraged development to continue, albeit with alterations that would make it better suited as a universal naval aircraft suitable for export customers.

During late 1938, an Ar 95 was lost in a fatal accident, killing test pilot Graf Resseguier, while attempting to perform a snap roll in spite of restrictions during a demonstration flight to visiting officials from Chile.