Production deliveries on the first 45 Douglas O-2s began in January 1926. Normal armament was one .30-caliber M1921 Browning fixed gun over the engine and one or two Lewis guns on the observer’s Scarff ring, but when the Third Attack Group became the first to receive the O-2s to replace its DH-4Bs, a pair of .30-caliber Brownings and bomb racks were added to the lower wings.
Aircraft specialized for ground attack were required, and in March 1926, the 46th O-2 was ordered converted to the XA-2 attack (the XA-l designation had been used for a Cox-Klemin ambulance plane). Powered by an inverted Liberty, air-cooled to dispense with the vulnerable water radiator, the XA-2 was armed with six .30-caliber Brownings firing forward, and two flexible Lewis guns for the gunner. Two of the fixed guns were in the nose, two were in the upper wing, two were in the lower wing, and bombs were in internal racks.
Eighteen Douglas biplanes were delivered in 1926 as O-2As with night flying equipment and six unarmed O-2Bs had dual controls for use as senior officers’ personal transports, while the last five aircraft on the contract were used for power plant development. Douglas also delivered five O-5 seaplanes, an armed twin-float version of the famed Liberty-powered World Cruiser that was used in the Philippines, and Thomas-Morse contracted April 21, 1926, to build an all-metal version of the O-2 called the O-6. The first of five O-6 biplanes was tested at McCook Field May 18, 1926.
Three O-2s with Packard engines were known as the O-7 and first tested April 26, 1926. The O-8 was another O-2 tested in October with a 400-hp Wright R-1454 radial, while the last O-2 became the O-9 with a geared Packard and four-bladed propeller. All five of these aircraft reverted to the normal Liberty engine O-2 configuration after their tests.
Douglas next received a contract for the O-2C, which introduced a new nose flat radiator, and built 46 O-2Cs, two unarmed O-2D transports and an O-2E with modified tail fin. Two more O-2Cs went to a San Diego Marine unit as the OD-l, and eight were sold to the Mexican army. There was no O-2F or G model.
The most widely used model was the O-2H, whose new wings had a Goettingen 398 airfoil of German origin and a pronounced forward stagger, along with landing gear and tail refinements. Armament still included the standard fixed M1921 Browning gun, but an M1922 flexible Browning replaced the traditional drum-fed Lewis guns in the rear cockpit.
There were 140 O-2Hs delivered in 1927-29, to both Air Corps and National Guard squadrons, along with three O-2J officer transports and 57 O-2K dual-control basic trainers. The latter were redesignated BT-l for school use and were the last Liberty-powered Army planes to remain in service, not retiring until 1935.
Army observation aviation in this period consisted of a twelve-plane squadron for each of the nine continental corps areas and three overseas departments. By January 1930, 19 National Guard squadrons were active, and two School squadrons at Kelly and Maxwell fields got the second-hand aircraft. Douglas O-2 biplanes were used by nearly all of these squadrons by the end of the Twenties.