The C-40 combines the Boeing 737-700 fuselage with the strengthened wings and landing gear of the larger and heavier 737-800.

[4] The U.S. Navy Reserve was the first customer for a 737 Next Generation based "combi" aircraft (capable of transporting cargo and passengers).

[4] The Clipper meets or exceeds international noise and environmental requirements, which the fleet of Naval Reserve C-9s did not.

[9] The United States Air Force selected the C-40B, a military version of the 737-700 Boeing Business Jet, to replace the aging fleet of C-137 aircraft used to transport U.S. combatant commanders.

The 86th Airlift Wing, Ramstein AB, Germany, acquired its C-40B for U.S. Air Forces in Europe in December 2004.

[3] The C-40C is a VIP transport aircraft often used to carry members of the Cabinet and Congress, and is intending to replace the Boeing C-22.

The 201st Airlift Squadron, District of Columbia Air National Guard acquired two C-40C aircraft in October 2002.

The Air Force Reserve 932d Airlift Wing, Scott AFB, Illinois acquired three C-40C aircraft in 2007.