In April 1956 Fokker in the Netherlands concluded an agreement with Fairchild for manufacture of the F27 Friendship then under development in Holland. Thus Fairchild became responsible for production and marketing in North America of the F27 series of aircraft that corresponded to some of those built by the Dutch company. However, when Fokker developed a 'stretched' version known as the F27 Mk 500, Fairchild decided to design its own version with a lengthened fuselage and this was identified as the Fairchild Hiller FH-227.

The FH-227 differed from the standard F27 by having a fuselage 'stretch' of 1.83m to provide accommodation for a maximum of 52 passengers, with increased baggage and cargo space, and by the installation of 1678kW Rolls-Royce Dart RDa.7 Mk 532-7 turboprop engines. The first of two FH-227 prototypes made its initial flight on 27 January 1966. Production of FH-227s and their variants had reached 79 when production ended. About 30 FH-227s of different marks remained in airline service in 1991.