As it was rearming its air force in the late 30s, Sweden decided to acquire its own high-speed scout bomber to perform tactical functions on the battlefield and support ground troops. The designing of the aircraft was entrusted to ASJA, whose engineers developed a project for a single-engine mid-winged aircraft that was quite technologically advanced given the state of Swedish manufacturing.

In order to implement the project, they had to recruit a team of experienced aircraft builders from the American company Northrop, and the project was brought to life with their direct involvement. At first, the aircraft was designed primarily to perform scouting operations and was supposed to be equipped with R-1830-SC3-G Twin Wasp engines from the American manufacturer Pratt & Whitney. However, the American moratorium on the sale of military technology to potential enemies in the upcoming war, the merging of ASJA into the SAAB concern, and protracted deadlines for reorganizing and rearming the air force led to some adjustments to the project.

First of all, the aircraft was rather quickly changed from a scout into a bomber, so it was given a bomb bay, and the doors on its deployed landing gear had to serve as something akin to an air brake for dive-bombing. Second, problems with the delivery of a batch of American engines made it necessary to equip the first mass-produced version with less powerful copies of British Bristol Pegasus XXIV engines. A version of the aircraft with the American engine eventually saw the light of day under the designation A after the mass-produced version of the B17B with a British engine had already been manufactured. A total of 300 SAAB B17s were manufactured in various modifications, including aircraft equipped with floats and even skis for use with winter airstrips. These aircraft were used in Sweden until the late 40s, and some of the bombers were exported (for example, to Ethiopia, where B17s were used up until the late 1960s).