BMW jet propulsion research was initiated in 1934, and work on the BMW 003 began in 1939 with a design thrust of 5,782 N (1,300 lb). Smaller and more compact than the earlier Junkers Jumo 004, the engine appeared so promising in 1942 tests on a Me 262 that the manufacturer was told to develop the 003 to such a level that it would become a replacement for the 004.

The redesigned BMW 003A was flight tested in October 1943 in a Junkers Ju 88, and first delivered in early-1944. The further improved BMW 003C produced 8,006 N (1,800 lb) thrust. Begun in 1944, the BMW 003D had an eight stage axial-flow compressor and two-stage axial-flow turbine, and produced 10,764 N (2,420 lb) thrust.

The BMW 003 was tested on the Heinkel He 162, Arado Ar 234 B/C, Junkers Ju 287, and Messerschmitt Me 262. This engine, a BMW 003 E.1, powered the He 162.