On May 21, 1948, the United States Navy issued a "Request for Proposal" to build a carrier-based jet day fighter.  The Navy wanted an aircraft equal or superior to the high performance land-based fighters being built at that time.

In its first incarnation (F3H-1N) the homely Demon was an underpowered flop, lacking essential performance and reliability, largely due to its Westinghouse engine forced upon McDonnell by the Navy. After initial program cancellation and substantial redesign of the aircraft, the engine was replaced with an Allison with substantially more power (which required larger intakes), and the
wing chord increased.

The jet engine that the Navy chose to power this aircraft was the Westinghouse afterburner equipped J40 turbojet which provided twice the thrust of any engine then in Navy service.  Eleven companies responded to the RFP and competed for the contract.  McDonnell won the contract in December 1948, and in January 1949 the XF3H-1 prototype was ordered.  The specification called for a single-engine, single-seat fighter with wings and tail surfaces swept back to forty-five degrees.

In July of 1949, the Navy inspected a mockup of the XF3H-1 which resulted in some redesign to lower the predicted gross weight and two XF3H-1 prototypes were ordered on September 30, 1949.  After the prototypes entered construction, the Navy decided that it wanted the production version of the aircraft to be designed as an all-weather fighter and specified that this production version would be designated as the F3H-1N.  The mockup was modified to incorporate the changes directed by the Navy and was inspected again in July of 1951.  The design changes resulted in a major delay in the Demon program, although the XF3H-1 prototypes were not affected because they were to be used mainly as platforms in which to conduct the aerodynamic testing.

The afterburner version of the Westinghouse J40-WE-8 was not available to install in the prototypes however, so the non-afterburner J40-WE-6 was installed in its place.  The maiden flight of the Demon (BuNo. 125444), piloted by Robert Edholm, launched on August 7, 1951.  The second prototype (BuNo. 125445) had its initial flight in January of 1952.

A whole host of problems plagued the prototype testing program.  The Westinghouse J40 proved to be an unreliable power plant and the first prototype was damaged during a dead-stick landing eventuated by an engine failure in August of 1952.  Both prototypes were grounded due to engine problems.  Other problems that were revealed during testing included poor forward visibility, an unacceptably slow roll rate, and poor lateral stability.  McDonnell redesigned the nose section to deal with the visibility problem and moved the ailerons further inboard to solve the roll rate problem.  Wing fences on the outboard wing panel were removed to improve lateral stability.

A 10,500 lb. static thrust afterburning Westinghouse J40-WE-8 was installed in the second prototype in January of 1953, but this engine was not any more dependable than the WE-6. Preliminary flight evaluation tests at the Naval Air Test Center Patuxent, Maryland were conducted in August of 1953 and in October the second XF3H-1 was used for initial carrier landing evaluation flights aboard USS Coral Sea (CVA-43).  Although no major problems were encountered during these tests,  restricted visibility during  the final carrier approach was noted by the test pilots.

The first prototype crashed after an in-flight engine explosion March 18, 1954.  This resulted in the grounding of the second prototype and it eventually was shipped to the Naval Air Development Center at Johnsville, Pennsylvania where it was used to conduct barricade engagement tests.
 
The appearance of the Soviet swept-wing MIG-15 in the air war in Korea hastened the Navy to order the F3H-1N into production in spite of the fact that the XF3H-1 had yet make its first flight.  In fact, the Navy went so far as to award a contract to the Dallas, Texas based Temco Aircraft Corp. for 100 Demons under license from McDonnell.  This ill-conceived, hasty decision was to have disastrous results.

The F3H-1N airframe varied from that of the prototype by having the ailerons moved inboard to mid-wing and the radome and cockpit where angled downward by five degrees to alleviate the forward visibility problem encountered during carrier landings.  Fuel tank size was increased by 378 gallons (2756 lbs).  The APG-30 radar and four 20mm cannon were installed as components of the weapon system.  The mounting of the 20mm cannon just behind the jet engine air intakes was to cause significant problems later in the program.

The Navy clearly had high hopes for the F3H platform because in September, 1952 the ordered 22 photo-reconnaissance versions of the F3H-1N designated the F3H-1P.  The guns and radar were replaced by cameras in this version. 

The F3H-1N was initially powered by the Westinghouse J40-WE-8 turbojet engine but the J40-WE-22 was installed in the production aircraft.  The Navy knew that the aircraft was grossly under-powered with this engine and planned to replace it with J40-WE-24 when it was ready.  But by September of 1953, the Navy realized that Westinghouse was not going to produce the WE-24 and that they were stuck with the WE-22.

The first production model of the F3H-1N, BuNo. 133489, made it's first flight Christmas eve of 1953.  That aircraft went to NATC Patuxent River, Maryland early the next year for service evaluation flights.

Late delivery of J40-WE-22 engines drastically slowed down the F3H-1N production line.  Serious problems also plagued the Navy service test program.  Eleven accidents, some fatal, over several days got the attention of the press and they complained loudly about how the Navy was spending a lot of money to acquire an aircraft whose greatest virtue seemed to be in killing its own pilots.  This was the truth since the F3H-1N was a dangerous aircraft to fly and one that was hated by its pilots.  But in the face of this, the aircraft actually set an unofficial time-to-climb to record by going to 10,000 feet in 71 seconds.

Facing the fact that there was no way to solve the J40 engine problems, the Navy halted production of the F3H-1N after the 58th aircraft rolled off the line.  TemCo's contract was cancelled and the F3H-1P program was cancelled before a single aircraft was built.  In July of 1955 the Navy reluctantly grounded all F3H-1Ns and had to face growing congressional disfavor in light of the 200 million dollars expended on the aircraft and its ill-fated engine.  Worse, the Navy had to endure the humiliation of barging F3H-1Ns from St. Louis to Memphis, where the would be towed to the Naval Air Station for maintenance training, and barging F3H-1Ns from Patuxtant River down to Norfolk for the same purpose.

The utter failure of the J40 engine forced Westinghouse to shut down its jet engine manufacturing division.  The future of McDonnell looked rather grim at the time but the company was able to survive and go on to bigger and better things by building the F3H-2 version of the Demon which was fitted with the Allison J71 engine.

In 1952 McDonnell Aircraft executives, fearing that the grossly underpowered Westinghouse J40 engine might be the stake through the heart of the F3H Demon program,  asked for and received permission from an initially reluctant Bureau of Aeronautics to consider other turbojet engines for the aircraft.  BuAir hesitated at first because the J40 had been designated as the powerplant in many of the aircraft programs on the drawing board.  But the handwriting was on the wall and BuAir authorized McDonnell to conduct a feasibility study of fitting the F3H with the Allison J71 afterburning turbojet. 

This new version of the F3H with the J71 engine was designated the F3H-2N.  In August of 1953 BuAir inspected a mockup of this version and in November of 1953 they amended the McDonnell contract to fit the 32nd and 34th F3H-1N aircraft with Allison J71 prototypes.  Another amendment followed which called for the 61st and all subsequent Demons to be fitted with the J71.

The Allison engine was heavier than the Westinghouse J40 and this increased weight plus the increase accrued in the process of making the Demon an all-weather fighter forced changes in the F3H airframe specifications.  Wing area was increased by 77 square feet by lengthening the wing chord by 40 inches at the root and moving the trailing edge back.

On April 23, 1955, the first F3H-2N prototype (BuNo 133520) lifted off the runway at Lambert Field and the first production F3H-2N flew in June of 1955.  McDonnell delivered 140 production F3H aircraft  powered by the Allison J71-A2 engine to the Navy.  The A2 engine provided 10,000 lbs. of thrust at full military power and 14,400 lbs. in afterburner.  The A-2 was later replaced by A-2A or A-2B versions of the engine. 

Another version of the F3H, the F3H-2M, was concurrently produced with the F3H-2N.  The "M" version, "M" for missile, was equipped with the APG-51B radar that was configured for the guidance of the semi-active homing Sparrow III (AIM-7C) missile.  Although four Sparrows could be carried, their combined weight seriously compromised aircraft performance and a full load of Sparrows was rarely carried by fleet aircraft.  80 F3H-2M were delivered to the Navy by McDonnell.

There was proposal to build a photographic reconnaissance version designated the F3H-2P which carried cameras in place of the radar and missiles.  This proposal was the lingering shadow of the ill-fated J40 powered F3H-1P project and never materialized into aircraft production.

In addition to Sparrow III capability, the F3H-2 was configured to carry the AIM-9B Sidewinder heat seeking missile as well as up to 6000 pounds of air-to-ground ordnance.  Other external store configurations included an external fuel tank, an inflight refueling pod, and a towed target (Del Mar) system.  Demon pilots just loved carrying the external fuel tank.  Early in 1955 an air-to-air refueling probe was added to the starboard side of the fuselage just under the canopy rail.

The last F3H-2 Demon was delivered to the Navy on April 8, 1960.  The total number of production aircraft built and delivered by McDonnell was 519.  In March of 1956  the VF-14 Tophatters at NAS Cecil Field Florida received the F3H-2N and flew the aircraft from USS Forrestal (CVA-59) during a January to July, 1957 Mediterranean deployment.  The Navy eventually equipped 22 squadrons with the Demon.

In early 1961, a technician detected a severe patch of metal fatigue in the outboard inside of the intake duct in the form of a disrupted surface tear about 8-10 inches long, apparently due to a resonant "oil canning" vibration. The affected aircraft immediately became a "hanger queen". Within a few months, this and its sibling aircraft were retrofitted with additional bulkheads in the area behind the intake lip.

The last squadron to fly the Demon was VF-161 at NAS Miramar California.  Cdr. Wayne Welty, the Commanding Officer, flew the last Demon from Miramar to NAF Litchfield park on 21 September, 1964.