In January 1989, McDonnell Douglas Helicopters officially launched the development of the Explorer, initially referred to as MDX. The Explorer was the first McDonnell Douglas helicopter to incorporate the NOTAR system from its initial design. McDonnell Douglas partnered with Hawker de Havilland of Australia to manufacture the airframes. 10 prototypes were built with seven being used for ground tests. McDonnell Douglas Helicopters became a launch customer for Pratt & Whitney Canada's PW200 series of engines, with an exclusive agreement to power the first 128 Explorers with two PW206As. Meanwhile, plans to offer the Turbomeca Arrius as an option were dropped. The first flight of the Explorer took place on 18 December 1992, with ship #2 (N900MD). FAA certification for the Explorer was granted on 2 December 1994, with JAA certification following shortly after.
In September 1997, a range of improvements were introduced, including PW206E turboshafts with higher single engine inoperative ratings, revised engine air inlets, improved NOTAR inlet design and a more powerful stabiliser control system. Benefits include improved range and endurance and an increased maximum takeoff weight. This enhanced Explorer was unofficially designated the MD 902.
The MD Explorer features the NOTAR anti-torque system, with benefits including increased safety, far lower noise levels and performance and controllability enhancements. Instead of an anti-torque tail rotor, a fan exhaust is directed out of slots in the tail boom, using the Coandă effect for yaw control. Boeing retains the design rights to the NOTAR technology despite selling the former McDonnell Douglas civil helicopter line to MD Helicopters in early 1999. The Explorer also features a bearingless five blade main rotor with composite blades, plus carbonfibre construction tail and fuselage.