Kurt Tank's team at Focke-Wulf had been working for some time on a fast attack bomber called the TA 211, so named because it planned to use an uprated Junkers Jumo 211R engine. The plane was a high-wing twin-engine design that bears a strong resemblance to the Grumman F7F Tigercat, and was built primarily of plywood bonded with a special glue called Tego-Film. The only large-scale use of metal was in the pressurized cockpit.
In August 1942 the RLM (the German Air Ministry) asked for designs to meet a need for a dedicated night-fighter, and the competition quickly boiled down to the Heinkel He 219 and an adapted version of the TA 211 called the Ta 154. Fifteen prototypes of each were ordered for further testing. Throughout the contest the RLM generally favored the 219 due to its better visibility and range. They also seemed to be suspect of the 154's wooden construction. In 1942 the Messerschmitt Me 210 should have been the only plane considered, but it was suffering terrible development problems and was ignored.
It was at about this time that the de Havilland Mosquito arrived over Germany. It quickly racked up an impressive record; in its first 600 bombing missions only 1 was shot down, which compared to an average of 1 in 5 for the heavy bombers. Erhard Milch personally requested a purpose-built German answer, and selected the 154 as that plane. Infighting started almost immediately, because the RLM and nightfighter units still wanted the He 219. Milch took this personally, and spent the better part of the next two years trying to have the 219 killed.
Development of the Ta 154 was already well advanced, and the first prototype with 211F engines flew on July 1st 1943. It was followed by V2 with 211N engines, which was kept at the factory for handing trials. V1 was then sent to Rechlin for fly-off testing against the 219 and the new Junkers Ju 388. There the 154 reached almost 700km/h and easily outflew the other two planes, but they were both fully armed and included radar.
The first armed version of the Ta 154 was the V3, which also was the first to fit the 211R engines. The added weight of the guns and drag of the radar antennas slowed the plane by a whopping 75km/h, although that was still somewhat faster than the 219. The rest of the 15 prototypes were then delivered as A-0 models, identical to V3. Some of these also included a raised canopy for better vision to the rear.
It quickly became clear that the 211R would not be available any time soon, if at all. Future production turned to the more powerful Jumo 213, but these were also suffering from long delays. The 154 program spent most of the next year testing various prototypes, and sent many of the A-0's to Erprobungskommando 154. During these tests the plane showed an alarming tendency to break its landing gear, and about half of the V series were lost this way.
By June 1944 the 213 was finally arriving in some numbers, and a small run of 154A-1's were completed with these engines. Just prior to delivery the only factory making Tego-Film was bombed out, and the plywood glue had to be switched to one that was not as strong. In July several A-1's crashed due to wing failure. Not only was the glue not as strong, but it turned out to react chemically with the wood and the plywood delaminated.
Tank halted production in August, and the RLM eventually killed the entire project in September (Milch had been removed by this point). In that time about 50 production versions had been completed, and a number of the A-0 pre-production planes were later modified to the production standard. Some of the planes served with NJG 3, and a few were later used as a training aircraft for jet pilots.