Being largely composed of wood, the Me 328 was forecast to be several times cheaper than the cost of traditional German fighter aircraft, such as the Focke-Wulf Fw 190 or Bf 109.

It was proposed to use various forms of propulsion, including a single Jumo 004 turbojet engine, either two or four Argus As 014 pulsejets (as used on the V-1 flying bomb), and even as an unpowered glider.

During its protracted development, a wide variety of other roles were explored for the Me 328; at Adolf Hitler's direction, resources were invested into its potential use as a bomber.

As the conflict turned increasingly in favour of the Allies, the Me 328 project was resurrected for consideration as a Selbstopfer (suicide weapon) aircraft, but was deemed to be unsuitable even for this purpose.

Work on what would become the Me 328 can be traced back to early 1941 and an approach by the German engine manufacturer Argus Motoren to the aircraft company Messerschmitt AG to inform the latter of its recent advances with pulsejet technology.

Aviation author Dan Sharp observed that much of the aircraft's design appeared to be shaped as to permit as rapid an entry into service as possible as well as to minimise costs.

[10][12] Messerschmitt believed that the type would be capable of performing in several roles ranging from a fighter to aerial reconnaissance, bomber, and interceptor aircraft.

[6] During February 1942, the project was transferred to the Deutsche Forschungsanstalt für Segelflug (DFS - "German Research Institute for Sailplane Flight") for further development.

[10] Even with a reduced wingspan, the aircraft demonstrated a very satisfactory performance, and it was planned to build up to 1,000 for use as disposable bombers to be flown by volunteers from 5/KG200, the so-called Leonidas Squadron.

[10][12] Sharp notes a major factor in the Me 328's suspension was the superior results from turbojet development, making aircraft that harness them, such as the Me 262, more attractive prospects.

[10] Bomber versions of both types were proposed, and work continued on them at the insistence of Adolf Hitler long after the point when anything other than token use could have been made of them.

Despite all this, the vibration problem simply could not be overcome and the program was abandoned in early 1944, even as production facilities were being readied to construct the aircraft at the Jacobs Schweyer sailplane factory in Darmstadt.