The Hawker Typhoon was the result of Air Ministry specification "F.18/37", which reached final form in early 1938 and specified a heavily armed interceptor to destroy heavy long-range escort fighters. The specification called for an armament of twelve 7.7 millimeter (0.303 caliber) Browning machine guns, or preferably four 20 millimeter cannon if development of these weapons then in progress proceeded on course. Such heavy armament meant a heavy aircraft and so a very powerful engine.

The British had three very powerful piston engines in the works. One was the Bristol "Centaurus" sleeve-value air-cooled 18-cylinder radial engine, but prewar air races had biased many in the British air establishment against radials, and engine options felt to be most promising were two 24-cylinder water-cooled inline designs, the Rolls-Royce "Vulture" and the Napier "Sabre".

The Vulture and the Sabre were very unconventional engines. The Vulture consisted essentially of two V-12 Peregrine engine cylinder blocks joined top-to-top, with the two blocks driving a common crankshaft. The Sabre consisted of two flat-12 engines sitting on top of each other, with each driving its own crankshaft, and the two crankshafts joined by a common gearbox. Both engines provided about 1,490 kW (2,000 HP).

A design team under the well-known Sydney Camm at Hawker had already been working on designs for powerful interceptors that fit the F.18/37 specification, and quickly sent the Air Ministry proposals. One design was to be powered by the Rolls-Royce Vulture and was known as the "Type R", and the other was to be powered by the Napier Sabre and was known as the "Type N". The Air Ministry quickly accepted the proposals and ordered two of each aircraft. The Vulture-powered Type R was to be named "Tornado", while the Sabre-powered Type N was to be named "Typhoon".

Unsurprisingly, the two aircraft had similar airframes, and in fact they both somewhat resembled a bigger version of the Hawker Hurricane. They were built very strong, had a thick wing, and were "taildraggers", with the main landing gear hinged in the wings and retracting towards the fuselage, giving the aircraft a very wide track. The pilot got in and out of the cockpit through a car-style door.

The first Tornado flew on 6 October 1939 with a 1,313 kW (1,760 HP) Vulture II. The Air Ministry was so enthusiastic about the new Hawker designs that even though they were unproven, an order was placed with Hawker for 1,000 of them, with 500 to be Tornadoes, 250 to be Typhoons, and 250 to be whatever proved to be the better aircraft after evaluation. Since Hawker production was heavily committed at the time, Avro was to build the Tornado and Gloster was to build the Typhoon. Both companies had a relationship with Hawker through the Hawker-Siddeley group.

The first prototype Tornado suffered from engine cooling problems and so near the end of 1939 it was fitted with a large chin radiator, giving the aircraft a very distinctive appearance. The second prototype first flew much later, on 5 December 1940.

The first Typhoon prototype flew on 24 February 1940. It looked very much like the updated Tornado, except that the Tornado had two separate rows of exhausts on each side of the engine, while in the Typhoon the sets of exhausts for each engine were merged into what appeared to be a single row.

Great things were expected of the Typhoon but the Sabre engine proved unreliable, a taste of things to come. Vibration was a particular problem. On 9 May 1940, the Typhoon prototype suffered a structural failure, breaking aft of the cockpit, with the pilot, Philip G. Lucas, remarkably managing to land the aircraft. The second prototype flew on 3 May 1941.

* The test program proceeded through 1940, and by the summer of 1941 both the Tornado and the Typhoon appeared to be close to production, except for the fact that the engines, for which so much had been hoped, were proving mechanical nightmares. The Vulture development program was particularly troublesome. The main rationale for Vulture development was to power the Avro Manchester bomber, which was fitted with two of the big engines. The Vulture was so unreliable that one bomber squadron equipped with the Manchester joked that they should be redesignated as infantrymen. With Vulture development becoming a bottleneck, the decision was made to get rid of the two Vultures and fit the bomber with four Rolls-Royce Merlin inlines, and the result was the superlative Lancaster.

This eliminated most of the need for the Vulture. Rolls-Royce was heavily committed to Merlin engine production, there was no strong reason to divert resources to work on the Vulture, and so the Vulture was cancelled, killing Tornado production in turn. Only one production Tornado ever flew, in August 1940. Hawker managed to get Air Ministry permission to fit a Bristol Centaurus engine into a Tornado airframe, with this aircraft flying on 23 October 1941.

The Centaurus-powered Tornado proved much superior in reliability and performance to either the Vulture-powered Tornado or the Sabre-powered Typhoon. However, although it seemed like a good idea, for whatever reason Air Marshal Wilfrid Freeman, in charge of aircraft procurement, was against it. In his defense it appears he simply didn't want British aircraft development going off in too many directions at one time. The Centaurus was having development problems of its own, and the Centaurus-powered Tornado was set aside for the time being.

Hawker and the RAF were stuck with the Typhoon. Despite the problems, the Typhoon started rolling off the production lines in May 1941, with initial deliveries to RAF squadrons in September 1941. RAF pilots called the big fighter the "Tiffy".