With development work started in 1940, the UTI-26 differed from its predecessor in its larger span wing being placed farther back for balance as well as having two cockpits with dual controls and a rudimentary communication system.

It was armed with a single 7.62 mm (0.30 in) ShKAS machine gun in the cowling, mainly for use in training, but Yakovlev envisioned a multi-purpose aircraft that could also undertake courier and light transport duties at the front.

One of these aircraft (serial number 04-11) was fitted with an armored backrest plate over the rear position, self-sealing fuel tanks which filled with inert gas as they emptied, three "RO" rocket launchers under each wing for as many RS-82 rockets, an axial motornaya pushka-mount 20 mm (0.79 in) ShVAK cannon firing through the propeller spinner, with 120 rounds, and two 7.62 mm ShKAS machine guns under the cowling, each with 750 rounds.

[4] The rear cockpit position was retained, allowing it to accommodate a second seat (without controls) for fast courier and transport duties or a fuel tank for extended range.

The insulation of the airframe was improved, the tail wheel was totally retractable; joints and skin were more carefully made; the panels on the engine cowling fitted better; the propeller reduction gear worked better; an electro-pneumatic reloading system was installed; the canopy frame was reinforced.

But defects were also noted: there was too much drag from the radiators, the canopy glass was of bad quality; the pilot was not protected enough, taking-off and landing distances were too long and, above all, it was underpowered.

With this modified engine, the Yak-7B top speed was of 599 km/h (372 mph), it climbed much faster up to 5,000 m (16,000 ft) and it was more manoeuvrable both in the horizontal and the vertical planes.

[7] The Yak-7 proved to be an effective close support fighter although the first two-seaters were considered nose-heavy, consequently, the factory introduced a rear cockpit fuel tank.

There were constant changes to the design based on combat observations including a definitive single-seat variant, the Yak-7B, which was produced in large numbers.

After trials in April–May 1942, a small batch of 22 Yak-7-37s was authorised, all of which were issued to the 42nd Fighter Aviation Regiment (IAP) at the North-Western front, where they proved highly successful both in air-to-air combat and ground attack.