Potentially one of the most exciting aircraft to serve with the RAF in the 1920s, the idea for this high-performance two-seat day bomber almost certainly came to C. R. Fairey (later Sir Richard) in 1923. In that year the Schneider Trophy Contest at Cowes, Isle of Wight was won by an American Curtiss CR-3 racing seaplane at a speed of 285km/h, piloted by Lieut David Rittenhouse. Close behind was a second CR-3 flown by Lieut Rutledge Irvine with a speed of 279.16km/h. The only other aircraft to complete the 344.69km course was Britain's Supermarine Sea Lion III, powered by a Napier Lion engine which was almost 19% more powerful than the Curtiss D-12 carrying the CR-3 to victory.
Richard Fairey realised that the Curtiss engine, in combination with a Curtiss-Reed propeller, was a most significant factor in this American success. The engine itself was revolutionary: the world's first wet-sleeve monobloc aero-engine; in addition it was of abnormally small frontal area, which meant that a neat streamlined fuselage could be tailored to conform. It took somebody like Fairey to appreciate how important the propeller was to the success of the enterprise. Of comparatively small diameter with forged duralumin blades of thin aerofoil section, it could be rotated at high speed - the blade tips approaching the speed of sound - without any serious loss of efficiency. So fast was the rotational speed that there was no need to interpose an energy-stealing reduction gear between engine and propeller. No reduction gear, small-diameter lightweight propeller blades and (resulting from this latter factor) a shorter landing gear, all produced weight savings that were vitally important to a high-performance aircraft.
Fairey was soon busy negotiating for the licence rights to import and/or build this power plant in Britain, and acquired in short time an engine and propeller for the development of a fast day bomber for the RAF. A prototype was built as a private venture, of single-bay biplane configuration with unequal-span staggered wings. Landing gear, tail unit and fuselage were all typical of Fairey design of that era; the fuselage, of course, was much slimmer than usual. Notable were the considerable efforts made to produce a structure as free from drag as then possible. Even the mounting for the gunner's defensive Lewis gun was of Fairey design, to eliminate the drag induced by the normal Scarff ring.
The prototype was first flown on 3 January 1925. By the time that development was finished, the company was aware that it had produced an aircraft which was aptly named Fox: well able to lead the field and even to make circles round them. Demonstrated in October of that year to Air Chief Marshal Sir Hugh Trenchard, its performance was so impressive that a complete squadron of aircraft was ordered into production. Strict budgets of that time (which became tighter as the 1930s approached) limited procurement to 28 aircraft. When issued to No 12 Squadron (in August 1926) they proved to be some 80km/h faster than the Fairey Fawns which they superseded, and were able to show an embarrassingly clean pair of heels to any contemporary fighter. At a later period some of these aircraft were re-engined with the Rolls-Royce Kestrel and redesignated Fox IAS, remaining operational until 1931.