Designed by Mikhail M. Pashinin, the I-21 was built to incorporate lessons learned from the combat experiences of Soviet pilots during the Spanish Civil War and the Nomonhan Incident with the Empire of Japan.

Despite showing promising performance, the I-21 did not get past the prototype stage, as it was felt the type did not offer a significant enough increase in capability over competitors already in production, such as the Yakovlev Yak-1 or Mikoyan Gurevich MiG-3.

The resulting I-21 featured a low set wing with retractable undercarriage, a Klimov M-107 engine, and a framed canopy with good visibility.

As a result, Pashinin made modifications to the second prototype, consisting of new outer wing panels with tapered leading and trailing edges to improve stability.

In the event, a planned pre-series run for five aircraft was canceled by Soviet officials, who likely felt the I-21 simply did not offer much more than types already in established production.