The specifications that gave birth to the Lancaster were the same as those of its predecessors, the Handley Page Halifax and Short Stirling. The Lancaster was a direct development from the unsatisfactory twin-engine Avro Manchester which used two Rolls Royce Vulture engines and made it's first flight on July 25, 1939. The Vulture engine proved grossly inadequate for the Manchester's design and Rolls Royce was to occupied at the time with Merlin engine production to further improve the complex engine any further. A solution was found during the summer of 1940 when it was suggested that the Manchester be modified to in such a way to consist of not two, but four engines. Roy Chadwich, the designer, immediately took a Manchester off the assembly line and began modifications so that it could be fitted with four Merlin engines instead. On January 9, 1941 the new prototype took to the air for the first time and was initially designated the Manchester Mk. III. A second prototype was flown on May 13^th and flight tests proved it to be an excellent aircraft. After flight testing was completed, and the 200^th (and last) Manchester had rolled off the assembly line it was redesignated the Lancaster and the first production aircraft began construction incorporating the new engine modifications. The first of a total 7,366 production Lancaster's was built and flew for the first time on October 31, 1941. It had a rectangular fuselage, mid-set wing and twin tail fins and rudders as can be seen from the photographs and differed only slightly from the original Manchester design.

Apart from its excellent flying characteristics and overall performance at altitude, the Lancaster bears the distinction of carrying the heaviest bomb of the war by any bomber. The bomb was called the Grand Slam and weighed in at a mere 22,028 lbs. (9,979 kg). The first of these monsters was released on March 14, 1945 (target unknown as of this writing).

The aircraft was built not only by A.V. Roe & Co., Ltd., which became known simply as Avro, but also by Austin Motors, Vickers-Armstrong, and Armstrong Whitworth. In all, 3,425 Lancaster Mk. I's were produced until the high production rate lead to a shortage of the Merlin engines. Alternative engines needed to be found and lead to the construction of the next two variants, the Mk. II and the Mk. III.

The Merlin engine powered practically all of the most successful British aircraft of the war. From the Spitfire to the Hurricane, from the Mosquito to the other numerous types of aircraft in the Fleet Air Arm as well as the Lancaster. Once it was apparent that the engine would be in short supply, due to the high demand for its services, an alternative engine was sought out and found in the 1,735 hp Bristol Hercules radial VI and XVI versions. A prototype Lancaster was flown powered by the Bristol engine for the first time on November 26, 1941. Two more experimental aircraft were tested in early 1942 and were put through an intensive testing cycle. The results proved satisfactory, and production was resumed immediately afterwards with the Lancaster Mk. II designation being given to these Bristol powered variants.

However, despite its good overall characteristics, the Mk. II never succeeded in equaling those fitted with the Merlin engine. Although its performance on takeoff, ascent and at low altitude was in fact better, it was slower in flight and consumed more fuel. Due to these two factors, production of the Mk. II ceased after 301 units had been produced. The decision to abandon the Bristol engine was made in favor of the first Rolls-Royce Merlin engines being built by the United States by Packard. It was with this new and plentiful supply, the subsequent Mk. III variant was produced.

The Mk. III had only a slight modification to the tip of its nose, but was fitted with the American made engines. A total of 3,039 were built in all. The Mk. III's only major difference was that it carried the American Martin turret on it's back. The final version was designated Mk. VII of which 180 were built. Almost 430 Lancasters were built in Canada by the Victory Aircraft Company and were designated Mk. X. Again, these were fitted with the Packard engine and the first was completed on August 6, 1943.