When the XP-40 (Model 81) prototype was still undergoing trials back in 1939, a team of engineers at Curtiss-Wright Corporation, Airplane Division led by Donovan Berlin were already working on its successor – the XP-46 (Model 86) fighter design.
Although smaller than the P-40, the new aircraft was to receive a more powerful Allison V-1710 series F engine, better armament and stronger armor protection. It would also have a much improved performance compared to its predecessor. US Army Air Corps (USAAC) command showed a keen interest in the proposed design and in September 1939 placed an order for two XP-46 prototypes. In early 1940 the XP-46 project was temporarily put on the back burner due to intensive preparations for the launch of the P-40 production. As a result the Curtiss management submitted a proposal to develop an improved version of the P-40 that would incorporate only some of the XP-46 design features. That way the new aircraft would be available sooner and its production would require significantly less effort than launching a completely new design. With the war raging across Europe it was not long before the improved P-40 became a hot commodity: France and Great Britain placed orders for several hundred examples as early as May 1940. A month later USAAC also accepted Curtiss bid and terminated the XP-46 program to focus on the development of the improved P-40.
The new aircraft was officially designated Model 87. It was powered by a V-1710-39 (F3R) powerplant equipped with a single stage, single speed supercharger and delivering 1,150 hp. The engine was only 26 lb (12 kg) heavier than the C series powerplants, but it was also shorter and taller than the previous units. Additionally, the engine’s shaft ran 6 in (150 mm) higher, which meant the engine mount and cowling had to be completely redesigned. The carburetor air scoop on top of the engine was also modified: it now featured a flatter, rounded shape. The radiator air intake under the engine was enlarged and lengthened which brought its front edge closer to the propeller. The air splitters inside the intake duct were also reshaped.
The new engine left no room under the cowl for the installation of nose guns, so the aircraft’s internal armament fit consisted solely of wing-mounted weapons: a pair of Browning M-2 .50 cal (12.7 mm) machine guns installed in each wing with a supply of 615 rounds of ammunition per pair. The guns were mounted deeper inside the wing, so their barrels did not protrude from the leading edge as much as in the previous version of the fighter. Although there was a provision for additional installation of 20 mm cannons, the weapons were never installed. As some extra space became available after removal of nose-mounted guns, the oil tank was moved from its original location in the rear section of the fuselage and placed between the engine bay and the cockpit. The instrument panel also benefited from the lack of nose guns and it now featured a full, semicircular shape (unlike the inverted T-shaped panel in the previous models).
Due to extensively redesigned nose section the new aircraft was 7 in (17 cm) shorter and measured 31 ft 2 in (9.50 m) instead of 31 ft 9 in (9.67 m). The mid and rear fuselage sections also saw major redesign: the “hump” behind the cockpit was lowered and a completely new canopy design was introduced. The windshield section featured an integral armored glass panel separated by metal frames from bubble-shaped side panels. The sliding canopy section was also redesigned compared to the earlier models. The aft transparencies behind the cockpit were enlarged. The aircraft was equipped with a new N-2A gun sight, later superseded by the N-3A model. Gone was the characteristic rectangular gun sight reflector glass attached to the inside of the windshield on the previous models. Internal fuel load was reduced by as much as 32 gal. (121 l) compared to the P-40 version, but the fuel tanks featured self-sealing liners (P-40B had a similar fuel tank design). To compensate for the reduced internal fuel capacity, the aircraft had a provision for the installation of an external 52 gal. (197 l) drop tank under the fuselage. Alternatively, a 500 lb (227 kg) bomb could be carried on the centerline hardpoint, although neither drop tank pylons, nor bomb racks were provided as standard factory fit. The aircraft featured improved cockpit and pilot seat armor protection.
The redesigned fighter not only looked different (only the wing and the tail assembly remained unchanged), but also gained some weight: its empty weight was now 6,208 lb (2,816 kg) and loaded weight went up to 7,740 lb (3,511 kg). Despite a stronger powerplant the aircraft performance suffered in almost every respect – compared to the P-40 it had a lower top speed, initial climb rate, service ceiling and a shorter range.