Development of the Ki-108 began in April 1943 after Kawasaki wanted to fulfil a standing requirement with the Japanese Army for a heavy interceptor that initially began with the Ki-45 heavy fighter series. The Ki-108’s design was derived mostly from the previous Ki-102 project and took some elements of the Ki-96 as well, effectively combining the two designs into one. After the first B-29 Superfortress bombers made their appearance over the Japanese home islands, the need for such a high-altitude interceptor became even more emphasized. Two Ki-102 otsu airframes were taken from the assembly line in 1944 to produce the initial Ki-108 prototypes. Compared to the Ki-102, which was intended as a low-altitude attack aircraft, the Ki-108 was an interceptor meant for high altitude operations. To allow for this, the Ki-108’s cockpit had to be significantly reduced in size and was to be hermetically sealed. This effectively turned the Ki-108 into a single-seater, reduced weight and decreased the strain on the engines all at the same time, which allowed for better performance at higher altitudes.

The two initial prototypes were completed in July and August 1944, respectively. An improved version of the Ki-108 was designed based around the Ki-102 Hei, featuring a wider wingspan and a longer fuselage, in an effort to improve high-altitude handling. Two examples of the Ki-108 Kai variant were built and subsequently tested in 1945. However, the worsening war situation for Japan prematurely concluded testing of the type and both versions never left prototype stage, yet alone seeing combat. A total of four Ki-108s were manufactured between 1944 - 1945.