Development of the C-1 commenced in 1966 in response to a requirement from the JASDF, which sought an indigenous jet-powered replacement for its aging Second World War–era Curtiss C-46 Commando transport fleet.

[3] It is powered by a pair of Pratt & Whitney JT8D-M-9 low-bypass turbofan engines, which were locally manufactured under license by Mitsubishi, each capable of generating up to 64 kN (14,500 lbf) of thrust.

In terms of payload capacity, a single C-1 could carry up to 80 fully-equipped troops, 45 paratroopers, or 36 stretcher-bound personnel, in addition to bulky cargo, including a whole truck or a pair of jeeps, which would be loaded via a ramp deployed at the airlifter's rear.

This may have been a factor in the decision to reduce the planned procurement of the C-1 in favour of the American-built C-130H Hercules utility transport aircraft instead, which entered service with the JASDF's 401st Tactical Airlift Squadron in 1989.

[8] Beyond its primary purpose as a military-orientated airlifter, at one stage, MITI had decided to adopt the C-1's design as the basis for a next-generation commercial transport project.

[9] Efforts were made to incorporate the technologies and knowledge learned from the C-1 programme into other sectors of Japanese commercial undertakings; according to author Richard J. Samuels, substantial benefits, such as a greater understanding of structural design and fatigue-prevention techniques, were transferred into the manufacture of automotive and rolling stock, along with smaller-scale items such as control panels and display systems.

[2] However, Samuels also notes that a high-priority political goal of the programme, the transformation of Japan's aerospace companies to become global leaders in the field, was largely unfulfilled.

In comparison with the older C-1, the C-2 is a considerably larger airlifter, being able to lift three times more payload in terms of weight, as well as possessing greater endurance.