The locomotive was created in connection with the industrialization conducted in the USSR. Planning took only 100 days, and typical construction time was 170 days. For certain features the design engineers referred to American practice in steam locomotive design. The first locomotive was built at the Lugansk Locomotive Factory in 1931 and sent for a show to Moscow.
Tests, in which the locomotive performed well, were conducted in 1932. In that year the Voroshilovgradskom plant began mass production of ФД20 locomotives. Over the course of production their construction got better steadily. From the beginning of the Great Patriotic war in 1941, production was interrupted only in 1942; four locomotives were built in Ulan Ude. Total production was 2927 locomotives of ФД20 and 286 locomotives of ФД21. The two subclasses only differed in the type of superheater.
The locomotives of ФД operated in areas with high turnover of goods. They worked on 23 of 43 railways in the USSR, including in Siberia and in the Urals. From middle of 1950, in connection with conversion to diesel engines and electric locomotives, the locomotives of ФД began to be pushed aside from work. Also in 1958–1960 about 1000 locomotives were transferred to China.