In 1955, Hughes Tool Company's Aircraft Division carried out a market survey which showed that there was a demand for a low-cost, lightweight two-seat helicopter.

With this model, Hughes successfully captured a large portion of the civilian helicopter market[2] with an aircraft that would prove itself popular in agriculture, police work and other duties.

For three-seat aircraft, the middle collective control stick is removable and a seat cushion can be put in its place for the third passenger.

In 1958, prior to full-time production, Hughes provided five preproduction Model 269A examples to the U.S. Army for evaluation as a light observation helicopter to replace the aging OH-13 Sioux and OH-23 Raven.

While the U.S. Army had not found the Model 269A adequate for combat missions, in 1964 it adopted a modified version of the 269A as its training helicopter to replace the TH-23 and designated it the TH-55A Osage.

This new model introduced a more powerful 190 hp (140 kW) Lycoming HIO-360-D1A engine and an increased-diameter rotor, giving a payload increase of 45%, plus overall performance improvements.

Between Hughes and Schweizer, and including foreign-licensed production civil and military training aircraft, nearly 3,000 copies of the Model 269/300 have been built and flown over the last 50 years.