The Dornier 328 is a turboprop-powered commuter airliner. Initially produced by German company Dornier Luftfahrt GmbH, the firm was acquired in 1996 by US firm Fairchild Aircraft. The resulting firm, named Fairchild-Dornier, manufactured the 328 family in Oberpfaffenhofen, Germany, conducted sales from San Antonio, Texas, United States, and supported the product line from both locations. A jet-powered version of the aircraft, the Fairchild Dornier 328JET, was also produced. An updated version, the 328eco, is under development in Germany.

The Dornier 328 program started when Dornier was still owned by Deutsche Aerospace. Feedback from 1984 market research indicated a desire for a fast, quiet, and easy-to-maintain commuter airliner with a 30-seat capacity. Sales were projected to reach at least 400 units. Favorable features included a high cruising speed of 345 kn (639 km/h), and a higher cruising altitude and range, making the aircraft almost as fast as jet airliners while being more fuel-efficient. A trend away from spoke–and-hub distribution in favor of point-to-point transit was also viewed as being favorable to the 328.

In December 1988, the 328 project was relaunched following the granting of shareholder approval after negotiations between the Dornier family and Daimler Benz. As the result of a six-month evaluation, a selection of powerplants deemed to be appropriate for the 328 was formed, these being the General Electric CT7-9D, the Garrett TPE-341-21, and the Pratt & Whitney Canada PW119A. While the Garrett engine was viewed by Deutsche Aerospace as being technically superior, Pratt & Whitney's powerplant was more advanced in development, thus was chosen. The engine selection was soon followed by the selection of a six-bladed composite propeller from Hartzell, Hartzell's submission being reportedly substantially lighter than competing bids from Dowty and Hamilton Standard. Following various considerations between electromechanical and digital instrumentation, Dornier opted for a digital glass cockpit and selected Honeywell to provide this after considering options from Saab Group, Rockwell Collins, and Smiths Aerospace.

In May 1991, Horizon Air, a US-based airline, placed an order for 35 aircraft; this was the largest order for the 328 at that point and was larger than any other order for it or its competitors to be placed that year. In October 1991, the first prototype of the 328 was formally rolled out. On 6 December 1991, the first prototype conducted the type's maiden flight. On 4 June 1992, a second 328 prototype performed its first flight. On 14 December 1992, one of the 328 prototypes suffered a near-catastrophic in-flight propeller failure when all six propeller blades on one engine detached before puncturing the fuselage; the subsequent temporary loss of control caused the aircraft to roll 280° and descend 5,000 feet (1,500 m) before control was recovered.

On 13 October 1993, the 328 formally entered commercial service. The 328 was launched into the market during a period of large numbers of competing turboprop aircraft, as well as increasing competition from newly launched regional jets, which were becoming increasingly popular during the early 1990s. The 328 had the advantages of being both quieter and faster than many of its rivals, but this did not ensure its commercial success. The latter half of the 328 program took place during a recession, which curtailed demand for new aircraft from operators. Both the 328 and the wider Dornier division of Deutsche Aerospace proved to be losing money; accordingly, Deutsche Aerospace wavered in committing more resources to the regional aircraft market, repeatedly delaying a decision to proceed with a 48-seat stretched model of the 328, which had originally been unveiled in 1991.

During the early 1990s, Deutsche Aerospace and Fokker explored the prospects of a commercial relationship to mutually engage the regional aircraft market; this culminated in Deutsche Aerospace purchasing a 40% stake in Fokker in 1993. In June 1995, Deutsche Aerospace and Daewoo Heavy Industries were reportedly conducting talks on the establishment of a second 328 assembly line in South Korea for the Asian market. In 1995, both Fokker and Deutsche Aerospace suffered substantial financial difficulties, which ultimately led to the end of the latter's ambitions to dominate the European regional aircraft market. In June 1996, Deutsche Aerospace sold the majority of Dornier Luftfahrt GmbH to American manufacturer Fairchild Aircraft, leading to the creation of Fairchild Dornier GmbH. The newly combined Fairchild Dornier company emerged as the third-largest regional aircraft manufacturer in the world, and viewed the 328 as being both a key product in its lineup and the basis for a future family of aircraft.

Continuing development of a jet-powered variant of the 328 was initially designated as the Dornier 328-300 and later simply known as the Dornier 328JET, which had been started under Deutsche Aerospace. Fairchild Dornier also sought to develop a stretched version, designated as the Dornier 428JET, and a dedicated freighter model. Additionally, Farchild Dornier developed a larger aircraft, the Fairchild Dornier 728 family. In addition to typical passenger models, business jet configurations of both the 728JET and 928JET were projected, tentatively referred to as Envoy 3 and Envoy 7, respectively. The ambitious family project drew the support of the German government, which guaranteed US$350 million in loans for the scheme. During the late 1990s, Fairchild Dornier struggled to find both capital and strategic partners to support the project, and the company entered bankruptcy in April 2002.

Following the bankruptcy of Fairchild Dornier, AvCraft Aviation acquired the Dornier 328/328JET rights, but this company entered bankruptcy less than three years later. In June 2006, 328 Support Services GmbH acquired the type certificate for the Dornier 328. It provides maintenance, repair, and overhaul services to the existing in-service fleet.