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The Junkers Ju 86E was the first military version of the Ju 86 to be powered by BMW radial engines in place of the diesel engines of earlier versions. The diesel engines had not performed well in Spain, and so in the spring of 1937 one Ju 86D-1 was re-engined with two BMW 132 radial engines, licence built versions of the Pratt & Whitney Hornet.
After successful trials the new version of the aircraft entered production, joining the Luftwaffe towards the end of the summer of 1937. The Ju 86E was produced in two versions: The E-1, powered by the 819hp BMW 132 F and the E-2, powered by the 864hp BMW 132 N. Thirty E-1s were built before production moved on to the E-2.