The important family of Douglas observation aircraft sprang from two XO-2 prototypes, the first of which was powered by the 420 hp (313 kW) Liberty V-1650-1 V-engine and test-flown in the autumn of 1924.

The US Army ordered 45 O-2 production aircraft in 1925, which retained the XO-2's welded steel tube fuselage, wooden wings, and overall fabric covering.

The fixed tailskid landing gear included a main unit of the divided type, the horizontal tail surface was strut-braced, and the engine was cooled by a tunnel radiator.

Major differences were heavily staggered wings, a more compact engine installation, and clean landing gear secured to the fuselage.

Apparently flying low, the aircraft hit a hill and burned after the crash, leaving only the found wreckage today.

Japanese ace fighter pilot Akio Matsuba, flying an A2N from the aircraft carrier Kaga in his first aerial combat engagement, claimed his first (shared) victory over an O-2M while providing air cover for Japanese troop landings in Shanghai on the third day during the airwar of the War of Resistance/WWII, 16 August 1937.