The YC-15 was McDonnell-Douglas' entry into the USAF's Advanced Medium STOL Transport (AMST) competition, to replace the C-130 Hercules as the USAF's standard STOL tactical transport. The AMST project introduced a number of innovative features, such as under-surface blowing , which used double-slotted flaps to direct part of the jet exhaust downwards, while the rest of the exhaust passed through and downward over the flaps, introducing the Coanda effect.

The YC-15, as well as Boeing's entry into the competition, the YC-14, met or exceeded the specifications of the contest. However, the project was cancelled before either product could be chosen. The YC-15 would see a new life, however, when it was developed into the highly successful C-17 Globemaster III, which included several YC-15 innovations, such as under-surface blowing.

The first flight was August 26, 1975.