In early 1937, the Reichsluftfahrtministerium (German Ministry of Aviation) issued a specification for a carrier-based torpedo bomber to operate from Germany's first aircraft carrier, the Graf Zeppelin construction of which had started at the end of 1936.

The specification was issued to two aircraft producers, Fieseler and Arado, and demanded an all-metal biplane with a maximum speed of at least 300 km/h (186 mph), a range of at least 1,000 km (631 mi) and capable both of torpedo and dive-bombing.

[4] The remaining planes were used in the Deutsche Versuchsanstalt für Luftfahrt (German Aircraft Experimental Institute) in Budweis, Czechoslovakia, for testing different landing gear configurations.

[3] The Fi 167's short-field landing and load-carrying abilities made it ideal for transporting ammunition and other supplies to besieged Croatian Army garrisons, between their arrival in September 1944 and the end of the war.

During one such mission, near Sisak on 10 October 1944, an Fi 167 of the Air Force of the Independent State of Croatia, flown by eight-kill ace nar Bozidar Bartulovic,[5] was attacked by five North American Mustang Mk IIIs of No.