The landing gear was similar to the Boeing Monomail, the main wheels retracting backwards about halfway into the wings.

The armament of one 0.30-cal and one 0.50 cal machine guns mounted in the fuselage sides and firing between the cylinder heads of the radial engine was the same as the P-26A.

The first Model 264 featured a long, narrow, sliding canopy, essentially a transparent continuation of the P-26's protective headrest, extending all the way to the windshield frame.

Aside from slight dimensional variations, military equipment carried, and the performance ratings of its Wasp engine, the naval fighter was very similar to its Army antecedents.

The airplane made its maiden flight on 20 January 1934 and was flown to Wright Field for Army testing under the experimental military designation XP-940 five days later.

The cleaner design of the P-29A resulted in a speed increase of 16 mph over the P-26A, but its greater weight cut down on the aircraft's ceiling and maneuverability.

The second prototype was completed with a large and roomy glasshouse enclosure around the cockpit and, in addition, the tailwheel was housed in a different fairing.

Nevertheless, the landing speed of the YP-29 was considered too high for Army operational use and the YP-29 was returned to the factory for the installation of wing flaps.

An additional variant with a 700 hp (520 kW) R-1535 (civil Twin Wasp Junior) was proposed, as the XP-32, but was never constructed.

[1] Flying for the first time in September 1933, the XF7B-1 (BuNo 9378) was the first monoplane fighter to be tested by the U.S. Navy, although concerns over its high landing speed rendered it unsuitable for carrier operations.