The German jet fighter that is now synonymous with the project that inspired it, the Volksjäger or People's Fighter program, first flew on December 6, 1944. The Reich Air Ministry issued specifications for the program on September 10, 1944, challenging manufacturer's to design, build, and fly, as quickly as possible, an "emergency, lightweight fighter" powered by a single BMW 003 engine. The specifications also spelled out these key requirements: the new design must be easily mass-produced with the least amount of strategic materials such as steel and aluminum, and flight performance must exceed that of piston-engined fighters. National Socialist ideology profoundly influenced another design criteria. The jet had to be so simple to operate that teenage Hitler Youth pilots could fly into combat after rudimentary training. The Nazis considered the Volksjäger squadrons the airborne equivalent of the Volkssturm (People's Guard) home defense squads that the Nazis formed to save the regime from imminent military defeat. (note: the He 162 has often been erroneously referred to as the Salmander. The term is a codename for the wing structure, not the aircraft.)

Heinkel designed and built the first prototype of the He 162 in record time. Just 74 days passed between the day Heinkel received the contract on September 23 and first flight on December 6. Numerous technical and design problems were apparent and the prototype crashed four days later. Pilots mastered some of the Spatz's nasty habits but the jet would always be a difficult, even dangerous, aircraft to fly, even for experienced pilots. Had the Luftwaffe fielded Hitler Youth squadrons flying the He 162, takeoff and landing would have killed as many pilots as combat. One of the central concepts of the program thus proved illusory.

The original armament, two 30 mm MK 108 cannons, was also too heavy for the small airframe, so Heinkel substituted two 20 mm MG 151/20 cannon, creating the He 162 A-2 variant. Heinkel started production before completing the initial testing and modification phase. Reequipment of JG 1 (Jagdgeschwader or Fighter Wing 1) began in February 1945. On March 31, the Luftwaffe transferred two Gruppen of JG 1 to Leck airbase, in Schleswig-Holstein near the border with Denmark, to begin operational training. In addition, an Erprobungskommando 162 (Test Command 162), also known as Erprobungskommando Bär after its commander, was formed in southern Germany. Because the aircraft was never certified ready for combat, He 162 pilots had only very limited encounters with Allied aircraft.

The NASM aircraft (Werknummer 120230) was one of the thirty-one JG 1 aircraft manufactured by Heinkel at Rostock-Marienehe and captured by the British at Leck on May 8, 1945. It was painted with the number "white 23" and its red-white-black nose bands were in reverse order from the usual paint scheme, which may indicate that the wing commander and high-scoring ace, Col. Herbert Ihlefeld, flew this particular aircraft. After transfer to Britain, the U. S. Army Air Forces accepted the airplane and shipped it to Wright Field, Ohio, for evaluation. It received the foreign equipment number FE-504 (later T2-504), and was later moved to Freeman Field, Indiana. For unknown reasons, mechanics replaced the tail unit at Wright Field with the tail unit of aircraft 120222. Although another He 162, T2-489, was tested at Muroc Field, California (later Edwards Air Force Base), FE/T2-504 was apparently never flown. Its flying days ended permanently when someone at Freeman Field neatly sawed through the outer wing panels sometime before September 1946. The wings were reattached with door hinges and the jet was shipped to air shows and military displays around the country. The U. S. Air Force transferred the aircraft to the Smithsonian Institution in 1949 but it remained in stored at Park Ridge, Illinois, until transfer to the Garber Facility in January 1955.