Bearing the designation K5Y1, the new aircraft primarily differed from its predecessor in a redesigned upper wing with increased dihedral and sweep, mounted closer above the fuselage, and redesigned tail surfaces. The K5Y1 was a sesquiplane with fixed undercarriage, powered by Hitachi Amakaze 11 nine-cylinder air-cooled radial with Townend ring rated at 340 hp for takeoff and 300 hp at sea level, driving a two-blade wooden propeller.
The prototype was completed and flown in December 1933. Following an abbreviated flight trials program the aircraft was accepted by the Navy, and quantity production began at Kawanishi in January 1934 as the Navy Type 93 Intermediate Trainer. The land-based version of the aircraft bore the designation K5Y1, while the K5Y2 designation applied to the pictured version fitted with twin floats. Armament consisted of a forward-firing 0.303 in (7.7 mm) Type 89 machinegun and a flexible rear-firing 0.303 in (7.7 mm) Type 92 machine-gun. External stores could carry two 66 lb (30 kg) bombs or ten 22 lb (10 kg) bombs.
Three other versions of the aircraft, the K5Y3, K5Y4 and K5Y5, with more powerful models of the Amakaze radial enclosed in a smoother cowling, were planned, but only two prototypes of the float-equipped K5Y3 were manufactured by Nippon. The K5Y3 was fitted with the Amakaze 21 rated at 515 hp for takeoff and 480 hp at 4,920 ft (1,500 m). The land-based K5Y4 and K5Y5 remained on the drawing board, while the K5Y1 and K5Y2, coded Willow by the Allies, saw extensive service throughout the war.
A total of 5,770 K5Ys were built between 1933 and 1945 as follows:
Dai-Ichi Kaigun Kokusho, Kasumigaura: 75 K5Y1
Fuji: 869 K5Y1 and K5Y2
Hitachi: 1,393 K5Y1 and K5Y2
Kawanishi: 60 K5Y1 and K5Y2
Mitsubishi: 60 K5Y1
Nakajima: 24 K5Y1
Watanabe: 556 K5Y1 and K5Y2
Nippon: 2,731 K5Y1 and K5Y2; 2 K5Y3