In 1932, the engineers at Lycoming Engines became aware that the United States Army Air Corps (USAAC) wanted a high performance engine that could produce at least one horsepower per cubic inch (46 kW/L) of engine displacement and that a contract had been made with Continental Motors, Inc., Lycoming's main rival in the general aviation engine market. Lycoming's management wanted to be considered for development of the next generation engine, but no USAAC development contract was signed. Still determined to become known as a high performance engine manufacturer, Lycoming began an experimental, high-performance engine of its own. After spending US $500,000, and after many attempts to develop a successful engine, it finally came close to the USAAC specifications with the 1,200 hp (895 kW) O-1230 engine.
Lycoming's O-1230 engine design was a 12-cylinder liquid-cooled horizontally-opposed low-profile piston engine that could be mounted either horizontally, buried in the wing of a multi-engine aircraft; or vertically, in the fuselage of a single engine fighter. From 1935 the engine design proceeded at a faster pace after a number of former Continental engineers, who had become unhappy with the working conditions there, joined Lycoming.
The last Vultee A-19 that had been ordered by the USAAC was delivered as the XA-19A, fitted with an O-1230-1 offering 1200 hp. It first flew on May 22, 1940. This aircraft was subsequently re-engined with a Pratt & Whitney R-1830-51 and redesignated.
Continued development of the O-1230 reached its peak when the engine was rated at over 1200 hp. It was as powerful as the Allison V-1710, but with a narrower cowling than the Allison V12 engine. The O-1230 was not well received by aircraft manufacturers, because it was not very reliable at that power setting.