[1] Based on the success of the earlier DV20/DA20 two-seat aircraft, the company designed a four-seat variant, the DA40 Diamond Star.

[clarification needed] In the last half of 2007 the company updated the DA40 line by introducing the XLS and CS versions and eliminated the FP model.

The XLS is the deluxe version, with the integration of some options into the standard offering including a Powerflow tuned exhaust, WAAS-capable G1000, GDL69 datalink, and TAS traffic alert system.

The major difference is the choice of propeller, with the CS using a Hartzell two-blade aluminum constant speed prop and the XLS using an MT composite three-blade unit.

[5][6] Past DA40 models were available with either traditional mechanical instruments or an optional Garmin G1000 glass cockpit suite.

[7] In October 2021, Diamond Aircraft announced an all-electric training variant, the eDA40, with initial flights scheduled for the second quarter of 2022 and EASA/FAA Part 23 certification expected in 2023.

[9] The DA40-F (marketed as the "FP") has a fixed pitch propeller, a 180 hp (130 kW) Lycoming O-360-A4M engine, which has a carburetor rather than fuel injection and a more basic interior, but is otherwise similar to the XL.

The wheel fairing streamlining was improved, a three-blade scimitar-type constant speed propeller was incorporated and the Powerflow exhaust system from the XL was retained.

The aircraft can be trimmed full nose up, engine set to idle and it will descend at 600–1,200 feet per minute (180–370 m/min) at 48 kn (55 mph; 89 km/h) hands-off, a lower rate of descent than the competitor Cirrus SR22 can achieve with its airframe ballistic parachute deployed.

[13] In a 2011 analysis by Aviation Consumer magazine, the DA40 was shown to have had a fatal accident rate of 0.35/100,000 hours, the lowest in US general aviation and considerably better than the market leading Cirrus SR20 and SR22, which that year had a combined fatal accident rate of 1.6/100,000, despite its full aircraft parachute system.

At the December 2018 MEBAA show, OxfordSaudia Flight Academy by the Saudi Arabian National Company of Aviation-CAE Inc. in Dammam ordered 60 single-engine DA40 NG and twin-engine DA42-VI, to be delivered over five years, with Garmin G1000 NXi glass panels and diesel engines.