Pleased with the company's VE-7, in 1926 the Navy gave Vought a $459,709 contract for 20 convertible land/sea fighters. Vought already had a two-seat observation plane, the UO-1, basically a VE-7 with additional fuselage streamlining and a Wright J-3 radial engine. This was made into a fighter simply by covering over the front cockpit of the observation plane, mounting machine guns in that area, and upgrading to a 220 hp (160 kW) Wright R-790 Whirlwind with a supercharger. With the help of the supercharger, the newly designated FU-1 was able to reach a speed of 147 mph (237 km/h) at 13,000 ft (4,000 m).
The FU-1s were delivered to VF-2B based in San Diego, California. With their float gear mounted, one was assigned to each of the battleships of the Pacific Fleet, where these observation seaplanes were launched from catapults. They spent eight months in this role, but as the squadron went to aircraft carrier operations, the further-aft cockpit proved to have a visibility problem when maneuvering around a carrier deck. In response, the forward cockpit was re-opened, the resulting aircraft being designated FU-2.
By this time they were obsolescent, and the two-seaters served primarily as trainers and utility aircraft.
