On 10 December 1926, Lloyd Stearman as president, Fred Hoyt as vice president, and George Lyle as secretary, chartered Stearman Aircraft, Inc. Aircraft fabrication took place in Venice, California, with final assembly and test flights taking place at Clover Field.

On 6 September 1927, the company charter was filed with the State of Kansas, and primary shareholders included Stearman, Short, Dillon, and Innes, plus H.M. Steinbuschel and J.O.

[3][1] In June 1928, the C2B airframe designation was changed to C3B, with a larger baggage compartment and oil tank.

At peak production in 1929, the company employed 250 people, and used a network of 10 distributors throughout the country.

[1]: 79–91, 105–106 In July 1929, Lloyd Stearman, Walter Innes, Jr., and Harry Dillon met with the officials of United Aircraft and Transport Corporation, and agreed on a stock exchange, 375 shares of Stearman stock for 100 shares of United Aircraft and Transport.

Stearman's board of directors was reorganized with Frederick Rentschler as chairman, with William Boeing, Lloyd Stearman, Mac Short, Walter Innes, Jr., Julies Schaefer, and Harry Dillon as members.

[1]: 101–102 In December 1930, Innes took over the presidency of the company, and Lloyd Stearman was asked by Renstchler to focus on research, "...investigating and developing new models and new ideas on management, production, sales, and service, as well as aircraft design."

[1]: 127 In the autumn of 1939, the company employed 600, which increased to 1000 after the Army Air Corps ordered an additional 235 PT-13Bs in September.

By September 1940, the workforce totaled 1400 after receiving additional orders from the Army and Navy for hundreds more trainers.

[1]: 137–143 In December 1940, the company demonstrated the Model X90, its version of a monoplane trainer, to the Army and Navy.

[1]: 143–144 In February 1941, the company employed 2800 workers, and manufacturing facilities had increased to 300,000 square feet by that summer.