In early 1930s the Polish Air Force was equipped with the then state-of-the-art PZL P.11 all-metal high-wing monoplanes, the latest of a family of fighter aircraft designed by Zygmunt Pulawski. However, by the end of decade they had become obsolete, as new fighter and bomber aircraft with higher performance started to appear. There was no development carried out on other fighters, apart from PZL P.24 export variants of Pulawski's P.11 design. By the mid-1930s, the Polish Air Force Command led by Gen. Ludomil Rayski expected, that a basic Polish general-purpose fighter and light bomber would be a twin-engine heavy fighter-bomber PZL.38 Wilk, supplemented by a light, cheap low-wing monoplane PZL.39/LWS-4. While potentially a suitable design, the PZL.38 had problems finding proper engines and the estimated performance of the PZL.39 was too low (maximum speed 400 km/h), resulting in both programs being canceled. Future wartime experience showed, that heavy fighters were not well matched against fast single-engine interceptors. It became evident that the Air Force needed a modern interceptor aircraft to defend the country, and at last, in October 1936, the Armament Committee (KSUS) submitted a demand for such an interceptor.
In late 1936, Rayski ordered the PZL (National Aviation Works)'s Chief Designer Wsiewolod Jakimiuk, a lead designer of the P.11c, to abandon work on the PZL.44 Wicher passenger airliner, and to start work on a modern single-engine fighter with retractable landing gear and a speed of some 500 km/h. At the same time, Rayski selected the British 840 hp Bristol Mercury VIII radial engine as the project's powerplant. PZL had already manufactured Mercury V engines and would be able to retool to build the later version, as a Polish-produced engine was one of primary considerations in the design. This choice however restricted performance of the future fighter, and, according to historians, the whole program started at least two years too late.
The project PZL.50 (or PZL P.50) and named Jastrzab (Hawk), started in late 1936. The design was accepted by the Air Force Command in 1937 and two prototypes were ordered. In June 1938, 300 Mercury VIII engines were also ordered for the PZL, the first to be delivered in June 1939. The engine for the prototype was imported from Great Britain and fitted in September 1938. The prototype was almost ready by October, but its completion was delayed by the lack of a retractable landing gear, delivered by the British Dowty firm. Due to the delay, the Polish aviation authorities missed the chance of starting flying tests with some temporary fixed landing gear, since Polish industry had not yet produced suitable retractable gears. Avia-manufactured undercarriage units were specified for the production series.
Finally, the first prototype PZL.50/I was completed and flown in late February 1939 by pilot Jerzy Widawski. Despite being officially classified as a secret, on 27 February it was on static display for the Italian Foreign Minister, Count Galeazzo Ciano. Tests were carried out mainly by Boleslaw Orlinski and several other pilots who noted that the prototype, after modifications to the tail, exhibited satisfactory handling and maneuverability characteristics although it not agile enough as an interceptor. The greatest concern was that even without radio and machine guns, it was only able to achieve 420–430 km/h. The Mercury VIII engine had problems with delivering full power due to an unsuitable carburetor intake and after modifications, the prototype was able to reach 442 km/h. Test pilots continued to complain about power output being too low, although with a better engine, some observers estimated that a production example would have been able to top 470 km/h.
It was first planned to order 300 P.50s, but in April 1939, the new Air Force Commander Gen. Kalkus and Air Defence Inspector Gen. Józef Zajac estimated that the current PZL.50 design did not meet its specified performance goals and ordered PZL to develop it further, building an improved pattern aircraft with only a limited series of 25-30 aircraft on order, designated the P.50A. Production aircraft were to have the wing area increased from 15.8 m² to 19 m². The total planned order was decreased to 200 and Poland started to look for fighters abroad, ordering 160 Morane-Saulnier MS 406 fighters from France. As an interim measure, 100 PZL P.11g Kobuz fighters were ordered, fitting the P.11c airframe with Mercury VIII engines.
The second prototype PZL.50/II was to be equipped with a more powerful 1,200-1,400 hp engine, but never was. Only in 1939, was the PZL.50/II reworked with a 1,100 hp Gnome-Rhône 14N21 for an export variant P.50B (estimated maximum speed 560 km/h / 348 mph) or 1,150 hp Bristol Taurus III or IV for the Polish Air Force (estimated speed 530–560 km/h). The Gnome-Rhone engine was only delivered in August 1939, while the newest British Taurus was scheduled to be delivered in October or November, but final deliveries were prevented by war. Nonetheless Taurus development had proved to be troublesome. Other possible engine alternatives were the Polish PZL Waran engine, which was to be ready in spring 1940, the 1,000 hp Pratt & Whitney Twin Wasp or 1,375 hp Bristol Hercules. As early as 1938, Jakimiuk proposed a variant with the 1,100 hp Hispano-Suiza 12Y inline engine, designated PZL.56 Kania, but it was not accepted.