It was in May 1942 when the Aichi Aircraft Company received specifications to develop and produce a special attack bomber. At first, the use of the then new Suisei bomber with some modifications was proposed, but the conversion was found impractical because of the difficulty to have interchangeability of major assemblies. On November 1943, the first prototype made its maiden flight. Undergoing several improvements, the Aichi Aircraft Company received an order for limited production from the Navy in May 1944. The engine was a 12-cylinder liquid-cooled Atsuta 32, which was based on the German Daimler-Benz DB603. A 12.7mm, type-2 flex mounted machine gun was equipped at the rear, and torpedo or a 250kg/800kg bomb could be carried. The Seiran was to be carried by the I-400 class submarine in the hanger tube of 4.2m in diameter and 30.5m in length. The hanger tube was capable of holding three Seirans. They were stored on catapult launching cars with armaments for quick ejection after surfacing. To cope with the space limitation, the Seiran was designed to conserve space by folding the wings. The wings were pivoted on the main spar where it joined the fuselage. By rotating the leading edge downward, the wing could lie back flat against the sides of the fuselage. The outer portions of each stabilizer and elevator hinged at 90cm from the fuselage centerline and folded downward. Vertical clearance was obtained by folding the tip of the fin to the right.