Designed to a 1936 requirement known as Bomber A, the aircraft was originally intended to be a purely strategic bomber intended to support a long-term bombing campaign against Soviet industry in the Urals. In spite of its large, 30 metres (98 ft) wingspan size, the design was limited to using two engines. During the design phase, Luftwaffe doctrine came to stress the use of moderate-angle dive bombing, or "glide bombing", in order to improve accuracy. Applying the changes needed for this type of attack to such a large aircraft was entirely unrealistic.
In order to deliver the power required from only two engines on an aircraft this large, engines of at least 2,000 horsepower (1,500 kW) were needed. Such designs were not well established at the time, and the DB 606 "power system" engine, combined with the cooling and maintenance problems caused by the tight nacelles, caused the engines to be infamous for catching fire in flight: due to these issues with early models the type was nicknamed by Luftwaffe aircrew as the Reichsfeuerzeug ("Reich's lighter") or the "Flaming Coffin".
The type eventually matured into a usable design, but too late in the war to play an important role. It was built and used in some numbers, especially on the Eastern Front where its range was particularly useful. It is notable for its use in mass raids on Velikiye Luki in 1944, one of the late-war heavy bombing efforts by the Luftwaffe. It saw considerably less use on the Western Front, although it played a role during Operation Steinbock, or "baby blitz", against the UK in 1944.
In 1936, the company of Heinkel Flugzeugwerke received details of the new Bomber A specification from the Reichsluftfahrtministerium (RLM). This specification, first proposed by the RLM on 3 June 1936 – ironically, the same day that the main advocate for the Luftwaffe having a strategic bomber force, General Walther Wever, lost his life – called for an aircraft more advanced than the Dornier Do 19 or Junkers Ju 89 "Ural bomber" prototypes that General Wever had championed. The Bomber A aircraft specification required the plane to carry a bomb-load of at least 1,000 kg (2,200 lb) over a range of 5,000 km (3,100 mi), with a maximum speed of not less than 500 km/h (311 mph) at altitude.
This was a formidable specification, calling as it did for an aircraft able to outrun any modern fighter – as was expected with the top speeds of the main force Schnellbomber concept – and outperform, by a considerable margin, any bomber then in service. On 2 June 1937, Heinkel Flugzeugwerke received instructions to proceed with construction of a full-scale mock-up of its Projekt 1041 Bomber A. That was completed in November 1937, and on 5 November 1937 it was allocated the official RLM airframe type number "8-177", the same day that the Luftwaffe High Command (OKL) stipulated that the new design should possess sufficient structural strength to enable it to undertake medium-degree diving attacks. Heinkel Flugzeugwerke's estimated performance figures for Projekt 1041 included a top speed of 550 km/h (342 mph) at 5,500 m (18,050 ft) and a loaded weight of 27,000 kg (59,500 lb). In order to achieve these estimates, Ernst Heinkel's chief designer, Siegfried Günter, employed several revolutionary features.