The DFS 346 was designed as a reconnaissance plane carried aloft by a larger aircraft and launched at high altitude. The 11,000 lb (5,230 kg) vehicle would then ignite its two Walter HWK 109 liquid rocket engines and accelerate to supersonic speeds before being disengaged. In combat, the plane would then glide over enemy territory to take reconnaissance photos before re-igniting the engines again to gain speed and altitude. After exhausting the fuel supply, the DFS 346 would have enough power to glide back to a friendly base in France or Germany.
Given Germany's advanced knowledge of high-speed flight, the DFS 346 design featured highly swept wings and tail surfaces, wing fences, and a very clean streamlined fuselage to reduce drag. The plane also carried a single pilot laying on his stomach in the aircraft's nose. Although this position was uncomfortable, it allowed the plane to maintain a more aerodynamic profile to reduce drag and improve performance.
The sole DFS 346 prototype was about half-built at the time it was captured, so the plane and the German engineers working on it were moved to a location in the Soviet Union to complete development. The vehicle was renamed simply as Samolyot 346, or "aircraft 346," and finished in 1946. This prototype was used for various purposes including wind tunnel tests. In 1947, a second example was completed as an unpowered glider to conduct launch and slow-speed tests. This 346-P was successfully launched from a captured American B-29 that had made an emergency landing in Siberia during the war, and the glider landed safely under the command of German pilot Wolfgang Ziese.
This success encouraged the Soviets to build three more examples called the 346-1, 346-2, and 346-3. The third prototype was the first fully functional plane with a working propulsion system. Testing of these aircraft continued from 1947 through 1951 when 346-3 was destroyed after a loss of control in flight.
Although engineers had specified a speed limit of Mach 0.9 in testing due to concerns over the plane's stability near Mach 1, there have been claims that the DFS 346 rerached the speed of sound sometime prior to the American X-1. There is no conclusive evidence to support these claims, however, and it seems unlikely that such an event could have occurred. Only the third aircraft, 346-3, was fitted with a complete propulsion system that was theoretically capable of reaching supersonic speeds, and it was not flown until 1951. As indicated above, this aircraft was lost shortly thereafter, so it is extremely doubtful that any example of the DFS 346 ever broke the sound barrier.