Anxious to retain its position as chief supplier of observation aircraft to the USAAC, Douglas developed a proposal for a high-wing monoplane successor to the O-2.

A fabric-covered gull-wing monoplane,[1] the XO-31 had a slim corrugated dural-wrapped fuselage, similar to the Thomas-Morse O-19,[2] carrying a tandem arrangement of open cockpits for the pilot and observer.

The second aircraft was completed as the YO-31, with a geared Curtiss V-1570-7 Conqueror engine[1] and an enlarged fin, 3" longer cowling, and a two-blade, dextrorotatory propeller.

Four YO-31A aircraft delivered during early 1932 were modified radically with an elliptical wing planform, a new tail assembly, a smooth semimonocoque fuselage, three-blade propeller, and a canopy over the cockpits.

The aircraft appeared with a variety of tail units, the final version (five built) designated O-31A featured a very pointed fin with an inset rudder.