In September 1939, Kawasaki was asked by the Koku Hombu to design an improved version as Ki-56.

The Japanese invasion of Sumatra in the Dutch East Indies campaign began with a paratroop drop from Ki-56 transports on Airfield P1 and the oil refineries near Palembang.

Royal Air Force Hawker Hurricane fighters flying from P1 to locate the Japanese invasion fleet passed the incoming Ki-56s but thought them to be friendly Lockheed Hudsons (also developed from the Lockheed Model 14) returning from a raid.

The defending anti-aircraft gunners at P1 were equally fooled, until parachutes began to open.

Once the AA guns opened fire, one transport was shot down, another force-landed, and others veered off course.