The Universal was designed in 1963 as a new primary trainer for the Brazilian Air Force, as a replacement for the T-6 Texan and Fokker S-11/S-12 types then in use. The prototype (Registration PP-ZTW) first flew on 29 April 1966. The Brazilian Air Force ordered 150 aircraft as the T-25 Universal, and increased this order in 1978 by an additional 28 aircraft. A further developed version (designated the YT-25B Universal II) first flew on the 22 October 1978 but was not put into production.
The Universal was also adopted as a counter-insurgancy aircraft. It was later replaced by the Tucano in both the training and attack roles.
Fuerza Aerea Paraguaya and Fuerza Aerea Boliviana also operate/operated the T-25 Universal (aircarft donated by the Brazilian Air Force).