With the beginning of the construction of the first carrier Graf Zeppelin in 1937, two aircraft producers, Fieseler and Arado, were ordered to produce prototypes for a carrier-based torpedo bomber. By the summer of 1938 the Fiesler design proved to be superior to the Arado design, the Ar 195.
After two prototypes (Fi 167 V1 & Fi 167 V2), twelve pre-production models (Fi 167 A-0) were built. These had only slight modifications from the prototypes. The aircraft exceeded by far all requirements, had excellent handling capabilities and could carry about twice the required weapons payload. Like the famous Fieseler Fi 156 Storch, the Fi 167 had surprising slow-speed capabilities; the plane would be able to land almost vertically on a moving aircraft carrier.
For emergency landings at sea the Fi 167 could jettison its landing gear, and airtight compartments in the lower wing would help the aircraft stay afloat at least long enough for the two-man crew to evacuate.
Since the Graf Zeppelin was not expected to be completed before the end of 1940, construction of the Fi 167 had a low priority. When construction of the Graf Zeppelin was stopped in 1940, the completion of further aircraft was stopped and the completed examples were taken into Luftwaffe service in the 'Erprobungsgruppe 167'.
When construction of the Graf Zeppelin was resumed in 1942 the Ju 87C took over the role as a reconnaissance bomber, and torpedo bombers were no longer seen to be needed. Nine of the existing Fi 167 were sent to a coastal naval squadron in the Netherlands and then returned to Germany in the summer of 1943. After that they were sold to Croatia, where their short-field and load-carrying abilities (under the right conditions, the aircraft could descend almost vertically) made it ideal for transporting ammunition and other supplies to besieged Croatian Army garrisons between their arrival in September 1944 and the end of the War. During one such mission, near Sisak on 10 October 1944, an Fi 167 of the Air Force of the Independent State of Croatia was attacked by five P-51 Mustang Mk IIIs of 213 Squadron RAF. The crew of the Fieseler had the distinction of shooting down one of the Mustangs before itself being shot down. Possibly one of the last bi-plane 'kills' of the war..
The remaining planes were used in the 'Deutsche Versuchsanstalt für Luftfahrt' (German Aircraft Experimental Institute) in Budweis, Czechoslovakia, for testing different landing gear configurations. The large wing area and resulting low landing speeds made the Fi 167 'too good' for this task, so in order to test landings with higher wing loads, the two test aircraft had their lower wings removed just outboard of the landing gear.
No examples of this aircraft survive.