The PT-17 traces its roots to the Stearman Model 70, built as a private venture to meet a 1934 U.S. Army Air Corps request for a new trainer to replace its aging primary trainer fleet. Re-engined with a Wright J-5 Whirlwind, the design was first ordered by the U.S. Navy in 1935 as the NS-1. Using a Lycoming R-680-5 radial engine and known as the Model 75, the Air Corps ordered the type into production as the PT-13 in 1936. With a variety of engines and designations, the Model 75 went on to become one of the most widely produced and used primary trainers in U.S. military service.

The Model 75 biplane featured a fabric-covered, welded steel tube fuselage and spruce wing construction, and enjoyed a reputation as a simple, cost effective design. Student pilots occupied the front cockpit, while the instructor sat in a rear cockpit with identical controls. Its rugged, forgiving nature made it an excellent primary trainer, providing a relatively safe introduction for pilot trainees into military flight.

The Boeing Aircraft Company bought out the Stearman Company in the middle 1930s, and continued production of the Model 75 for the military. Although built by Boeing, the Model 75 continued to be known as the "Stearman". In 1940, a Continental R-670-5 engine was fitted to the design to create the PT-17, of which over 3,500 were eventually ordered for U.S. Army service. The plane also enjoyed large U.S. Navy orders as the N2S, and in 1942 both services adopted an interchangeable version as the N2S-5/PT-13D, powered by the Lycoming R-680-17 engine. Demand for the Stearman at the outbreak of World War II outstripped engine supply, so another powerplant, the Jacobs R-755-7, was used on the airframe to create the PT-18.