Intended to be powered by a small inline piston engine, the contract was cancelled before a prototype could be constructed, due to the Army's concerns about the projected performance of the aircraft.

Following the consideration of a modified French Caudron racer by the U.S. Army Air Corps, a proposition that was considered uneconomical,[2] Douglas Aircraft made an unsolicited proposal to the Army Air Corps of their Model 312 design in 1939.

[2] Intended to be powered by a Ranger XV-770 inverted V-12 engine equipped with a supercharger, Douglas' proposal was considered worth pursuing by the Army Air Corps, and on 5 August 1939 a single prototype was ordered.

[3] Closely resembling the later Bell XP-77,[4] the design of the XP-48 featured a wing of remarkably high aspect ratio, and was equipped with a pair of synchronized machine guns for armament,[3] Douglas touted the XP-48 as offering outstanding performance, with a top speed of at least 350 miles per hour (560 km/h),[3] and, according to Douglas' estimates, possibly as high as 525 miles per hour (845 km/h).

[7] Accordingly, in February 1940 the Army cancelled the XP-48 contract,[3] and without government funding Douglas ceased development of the aircraft.