Desmond Norman and the late John Britten had started their association in the development of crop-spraying equipment, and in 1964 began detail design work on a new lightweight feederline transport. Envisaged as a new-generation replacement for the ageing de Havil-land Dragon Rapide and other aircraft in this class, the Britten-Norman BIM-2 Islander soon attracted considerable interest, and construction of a prototype was initated in September 1964. This aircraft flew for the first time on 13 June 1965, powered by two 157kW Rolls-Royce/Continental IO-360-B engines, and with wings that spanned 13.72m. A number of changes resulted from flight testing, the most important being a 1.22m increase in wing span, and the installation of 194kW Avco Lycoming O-540-E engines, and this has remained the standard powerplant of the Islander, still being installed in production aircraft in its O-540-E4C5 version.

Initial production aircraft were BN-2 Islanders, of high-wing monoplane configuration with a functional rectangular-section fuselage, conventional tail unit, non-retractable tricycle-type landing gear with twin wheels on the main units, and accommodation for a pilot and nine passengers. This 'high-density' seating arrangement had been contrived in a cabin that was only 1.09m wide at its maximum by installing 'wall-to-wall' seats, with access via two doors on the port side, and one on the starboard side, making an aisle unnecessary. Exit in emergency can be made by removing the door windows. The first production example of the BN-2 made its initial flight on 24 April 1967, and the first Islander entered service less than four months later, on 13 August. The BN-2 Islander was superseded in mid-1969 by the improved BN-2A Islander, which introduced detail aerodynamic and equipment improvements, in addition to a new side-loading baggage facility. Since 1978 the standard production version has the designation BIM-2B Islander II. This differs primarily by having an increased maximum landing weight, improved internal design, and smaller diameter propellers to reduce the cabin noise level.

Various items of alternative equipment have become available over the years to extend the usefulness of the Islanders. These include 224kW Avco Lycoming IO-540-K1BS piston engines, or 239kW Allison 250-B17C turboprop engines, and aircraft with this latter powerplant installation are designated BIM-2T Turbine Islander. Other options include an extended nose to provide an additional 0.62m³ of baggage space, raked wingtips containing auxiliary fuel tanks, and a Rajay turbocharger installation to enchance performance.

In addition to operation in a passenger-carrying capacity, the Islander can be used as a freighter with the passenger seats stored in the rear baggage bay, as an ambulance carrying three stretchers and two medical attendants, and for a variety of utility purposes when suitably equipped. Defender and Maritime Defender military versions are also available, and these can be adapted for casualty evacuation, patrol, transport, and search and rescue operations.

The success of this aircraft, which from the outset was intended to provide a low-cost reliable aircraft that could, if desired, be used in a number of differing roles, is highlighted by worldwide sales in approximately 120 countries, and which in late 1989 were past the 1100 mark. Of this total more than 300 had been built under licence in Romania, and 35 were assembled in the Philippines from components that had been manufactured by Britten-Norman.

Financial problems for Britten-Norman during the early 1970s led to the takeover by The Fairey Group in 1972. During the following year production of the Islander was transferred from Bern-bridge to Gosselies in Belgium. But in 1977 The Fairey Group itself went into receivership, and the Britten-Norman part of the Group was bought by Pilatus, and in the form of Pilatus Britten-Norman Ltd the company continues to complete aircraft in the Isle of Wight after their basic manufacture in Romania.