Developed from the PWS-12 and PWS-14 trainers, the PWS-16 two-seat biplane design introduced a number of improvements particularly improved ailerons. A variant designated PWS-16bis had a revised fuel system to allow inverted flight. It had also improved aerodynamics and its silhouette changed. The aircraft entered service with the Polish Air Force training units between 1933 and 1934. An improved armed version was developed as the PWS-26 and when the PWS-26 entered service in 1937, the PWS-16 was relegated to secondary duties.