The design for the 14th fighter for the VVS, the I-14, started as an advanced (for the era) monoplane under the direction of Andrei Tupolev. He grew concerned that the design would not mature, and orded up two backup biplane designs as the I-14A and B just to be safe. Polikarpov had just been released from prison in August 1932, and was handed the I-14A project. When both the I-14 and I-14A were ordered into production, Polikarpov's design became the famous I-15.
While still in jail he had already begun the design of his dream project, a monoplane fighter. Most of the fuselage was wooden, but built using plywood over pine stringers and then covered with fabric and sanded down. The wing was built from steel tubing covered in sheet duralumin and fabric, the tail was aluminum tubing with fabric. On the modern side, the main gear was fully retractable, although it had to be cranked up and down by hand and required a huge amount of work to operate. Another modern feature were the ailerons, which ran almost the entire trailing edge of the wing and also operated as flaps. Overall the plane was very small, and very light, yet still fairly simple to build.
The design was produced as the TsKB-12, named for the prison group who constructed it. The first of two 450hp M-22 (Bristol Mercury) powered prototypes flew in December 1933. The aircraft proved to be very difficult to fly and was unstable in all three axes. On the plus side, its rolls and loops were startlingly fast. Despite the problems, it was judged superior to the original I-14, and ordered into production as the I-16 in May 1934.
When they entered service in 1936, the I-16 Type 4s were the most advanced fighters in the world. The Type 5 quickly introduced with the new 700hp M-25 (Wright R-1820) engine, and would go on to be the most produced version of the plane, with over 3,000 being delivered.
The start of Spanish Civil War in 1936 led to pleas from the Republicans for fighter aircraft. After payment in gold, Stalin dispatched a 500 I-16 Type 5's and 6's (basically a Type 5 for Spanish use) for Republican service. They went straight into action, immediately besting the Heinkel He 51 and Arado Ar 68 biplanes they met. It wasn't until the introduction of the Messerschmitt Bf 109 and Fiat C.R.32's that the plane was beaten. The only real concern in service was the light gun load of only two 7.62mm machine guns.
Another 250 I-16 Type 10s were supplied to China. This model tried to correct the armament issue with the addition of a second set of 7.62mm ShKAS's, added armor behind the pilot, and mounting the slightly upgraded 750hp M-25A engine. In 1939 they operated against the Japanese, beating the Ki-27 and matching the Mitsubishi A5M. Further large scale action took place in fighting between the Soviet Union and Japan in 1939. However the IJN responded by introducing the Mitsubishi A6M Zero in 1940, which swept the I-16 from the skies.
A number of attempts were made to upgrade the firepower of the plane using 20mm cannons. Pilots loved the results, but the ShVAK guns were in very short supply and only tiny numbers of these various models (17, 27, and 28) were built. More notable was the addition of a traditional landing flap instead of the drooping ailerons, removal of the sliding canopy, a tailwheel to replace the skid, and the introduction of the much more powerful 1,100hp M-63 engine. All of these changes were rolled into the Type 24, which was built to the tune of 934 examples, along with 650 Type 29s which replaced two of the ShKAS guns with a single 12.7mm (50 cal) UBS.
By 1941 the I-16 was still the most numerous Russian fighter and made up about 2/3rds of the VVS. Hundreds were destroyed in the Luftwaffe's initial attacks on airfields, and at 50mph slower, it was obvious that the I-16 was no match for the Messerschmitt. Nevertheless the need for fighters was so desperate production continued, and about half of all produced were still in service in 1943 when they were finally replaced. A total of 7,005 single seat versions were produced, along and a fairly extensive run of 1,639 two seaters as training planes.