In excess of 1,000 aircraft were produced prior to European Aeronautic Defence and Space Company (EADS) announcing on their website that production of the Wilga would cease in 2006.

On 24 April 1962, the prototype of the initial Wilga Mark 1 variant made the type's first flight, powered by an existing Polish 220 hp (160 kW) horizontally-opposed engine, the PZL WN-6RB.

The subsequent flight test programme with the prototype exposed a number of design faults, the most serious of which was the airframe's excessive weight and a rear view restriction that prevented the crew from easily seeing a towed glider.

Accordingly, an airframe review was performed by the design team that resulted in the thorough redevelopment of the aircraft, led by Polish aeronautical engineers Bronisław Żurakowski and Andrzej Frydrychewicz.

While the major structural elements and sub-assemblies which had been deemed to have been successful, such as the structure of the wings, were retained from the initial design, the redeveloped aircraft featured a completely new fuselage that was both slimmer and considerably strengthened beyond its prior counterpart; this new airframe also offered an excellent rear view aspect for the crew during glider towing operations, while the side doors were also re-engineered to open upwards for better aero observation or parachute jump sorties.

[citation needed] The Wilga 32 was an improved small-series export variant of the type, powered by a Continental flat engine, which was also locally produced in Indonesia as the "Gelatik".

This customised derivative, which was marketed as an alternative to helicopters in the law enforcement role, was furnished with a Wescam-built gimbal-mounted camera and infrared imaging system fixed to the exterior of the fuselage's centre-line.

The basic configuration of the aircraft was principally changed by the addition of a pair of under-wing hardpoints capable of carrying gun pods, along with both unguided or guided rockets.

The Wilga 2000 family benefitted from various improvements, it adopted an American Lycoming O-540 engine, capable of generating a maximum of 225 kW (300 hp), along with an AlliedSignal-Bendix avionics suite and a new wing, the latter of which offered increased fuel capacity and endurance, as well with aerodynamic refinements, such as fairings around the undercarriage.

[10] During November 2006, production of the Wilga came to end following a decision by EADS to reduce its presence within the civil aviation market, the firm also attributed the termination to be a consequence of a lack of internal resources and high associated costs.

In September 2024, Airbus Poland announced that they had agreed to transfer the PZL-104 type certificate and other intellectual property to the new Draco Aviation run by Mike Patey and Johannes von Thadden, with the intention of producing an updated version with a turbine engine.

[citation needed] The Wilga has been widely used in civil aviation circles; it has often been tasked with performing various duties, such as touring, observation, glider towing, parachute training and bush flying.