Development of the Ki-32 began in May 1936 after the Imperial Japanese Army asked Mitsubishi and Kawasaki to build a new light bomber. The IJA hoped to replace the outdated Ki-3 biplane bomber by the end of 1936.

Although both companies designed very similar aircraft, the distinct difference between the Kawasaki Ki-32 and the Mitsubishi Ki-30 was the engine. Mitsubishi preferred reliable radial engines, but Kawasaki risked installing their Ha-9-IIb liquid-cooled inline engine.

The first Kawasaki Ki-32 prototype took to the skies in March 1937 and showed comparable performance to Mitsubishi’s Ki-30, which had made its maiden flight just a month earlier.

Unfortunately for Kawasaki, their risky choice of engine exhibited cooling problems. And by the time the cooling issues were addressed, Mitsubishi was ready to begin mass-producing the Ki-30.

This would have killed the Ki-32 project if the second Sino-Japanese War hadn’t started in July 1937. The conflict sparked demand for a light bomber and the Kawasaki Ki-32 was ordered to production alongside the Mitsubishi Ki-30.

In 1938, the Kawasaki Ki-32 entered production under the official designation Army Type 98 Single-Engine Light Bomber. Production continued until 1940, and the Ki-32 served with the Japanese army up until 1942, after which it was removed from active service and repurposed as a training aircraft. Between 1938 and 1940, few hundreds of Ki-32s were produced.

Besides the Japanese, the Manchukuo air force also used a number of Ki-32s. The final conflict where the Ki-32 would be used was in 1945 during the Indonesian National Revolution, where Indonesian guerrillas captured a small number of Ki-32s from abandoned Japanese air bases.