Boeing had been working on a number of small-scale studies on supersonic transport (SST) designs since 1952, but set up a permanent research committee in 1958 which slowly grew to a $1 million effort by 1960. They proposed a number of alternative designs, all under the name Model 733. Most of their designs were built on the basis of a large delta wing, but in 1959 another design was offered as an offshoot of Boeing's efforts in the swing-wing TFX project (which led to the purchase of the General Dynamics F-111 instead of the Boeing offering). In 1960 an internal "competition" was run on a baseline 150-seat aircraft for trans Atlantic routes, and the swing-wing version proved to be considerably better.

By the middle of 1962 it was becoming clear that the tentative talks earlier that year between the Bristol Aeroplane Company and Sud Aviation on a merger of their SST projects was more serious than originally thought, and it appeared there was a very real chance they would be offering a design shortly. In November they annouced that the Concorde would be built by a consortium effort. This set off something of a wave of panic in other countries, as it was widely believed that almost all future commercial aircraft would be supersonic, and it looked like the Europeans would be off to a massive lead.

On June 5, 1963 President John F. Kennedy committed the government to subsidizing the development of a commercial airliner to compete with the Concorde, forming the National Supersonic Transport program, which would pay for 75% of the development costs. The director of the Federal Aviation Administration, Najeeb Halaby, decided that the Concorde was too far ahead in development to bother building a direct competitor, and instead selected a much more advanced standard as their baseline. The SST was intended to carry 250 passengers (more than twice than the Concorde, or comparable to a modern wide-body), fly at Mach 2.7–3.0, and have a trans-Atlantic range of 4,000 miles. The high speed demanded that the aircraft be made out of either stainless steel or titanium, because skin friction at speeds above Mach 2.2 will cause duralumin (aircraft aluminium) to go "plastic". Request for Proposals were sent out to airframe manufacturers Boeing, Lockheed, and North American for the airframes, and Curtiss-Wright, General Electric and Pratt & Whitney for engines. The FAA estimated that by 1990 there would be a market for 500 SST's.

Preliminary designs were submitted to the FAA on January 15, 1964. Boeing's entry was essentially identical to the swing-wing Model 733 studied in 1960, known officially as the Model 733-197, but also referred to both as the 1966 Model and the Model 2707. For some unknown reason the latter name became the best known in public, while Boeing continued to use 733 model numbers. The design had an uncanny resemblance to the modern day B-1 Lancer bomber, with the exception that the engines were mounted in individual nacelles instead of the box-like system on the Lancer.

A "downselect" of the proposed models resulted in the North American and Curtiss-Wright efforts being dropped from the program, with both Boeing and Lockheed asked to offer models meeting the more demanding FAA requirements and able to use either of the remaining engine designs. In November another design review was held, and by this time Boeing had scaled up the original design into a 250-seat model, the Model 733-290. Due to concerns about jet blast, the four engines were moved to a position underneath an enlarged tailplane. When the wings were in their swept-back position they merged with the tailplane to give a delta-wing planform.

Both companies were now asked for considerably more detailed proposals, to be presented for final selection in 1966. When this occurred Boeing's design was now the 300-seat Model 733-390. Both the Boeing and Lockheed L-2000 designs were presented in September 1966 along with full-scale mock-ups. A lengthy review followed, and on December 31, 1966 Boeing was announced as the winner, to be powered by the General Electric GE4/J5 engines. Lockheed's L-2000 was judged simpler to produce and less risky, but its performance was slightly lower and its noise levels slightly higher. Given the FAA's mandate to produce a more advanced design, their decision is perhaps unsurprising.

The -390 would be an advance aircraft even if it was only subsonic. It was one of the earliest "wide body" designs, using a 2-3-2 row seating arrangement in a fuselage that was considerably wider than aircraft then in service (although not for long). The mock-up included both overhead storage for smaller items with restraining nets, as well as large drop-in bins between the various sections of the aircraft. In the main 247-seat tourist-class cabin the entertainment system consisted of retractable televisions placed between every 6th row in the overhead storage, and in the 30-seat first-class area every pair of seats included smaller televisions in a console between the seats. Windows were only 6" due to the high altitudes the aircraft flew at maximizing the pressure on them, but the internal pane was 12" to give an illusion of size.

Boeing predicted that if the go-ahead was given, construction of the prototypes would begin in early 1967 and the first flight could be made in early 1970. Production aircraft could start being built in early 1969, with the flight testing in late 1972 and certification by mid-1974. However during the prototype phase Boeing encounted insurmountable weight problems due to the swing-wing mechanism. The next major revision was the addition of canards behind the nose, which added weight. In October 1968 they were finally forced to abandon the variable geometry wing. The Boeing team fell back to a tailed delta wing, somewhat in irony given that Lockheed had been rejected because of a fixed wing. The new design was also smaller, seating 234, and known as the Model 2707-300. Work began on a full-sized mockup and two prototypes in September 1969, now two years behind schedule. A promotional film claimed that airlines would soon pay back the federal investment in the project, and it was projected that SSTs would dominate the skies with jumbo jets being only a passing intermediate fad.

By this point, the opposition to the project was becoming increasingly vocal. Environmentalists were the most influential group, voicing concerns about possible depletion of the ozone layer due to the high altitude flights, and about noise at airports and from sonic booms. The latter became particularly significant, the #1 cause to rally around, and supersonic flight over land was eventually banned. The project suffered political opposition from the left, who disliked the government subsidizing the development of a commercial aircraft to be used by private enterprise. The anti-SST campaign was led by Democratic Senator William Proxmire, who ran the campaign as a crusade against spending by the federal government.

In March 1971, the U.S. Senate rejected further funding. Afterward, letters of support containing money, nearly $1 million worth, poured in. But the project was cancelled May 20, 1971. At the time, there were 120 unfilled orders by 26 airlines. The two prototypes were never completed. The SST became the airplane that almost ate Seattle as a sign was put up "Will the last person leaving Seattle please turn out the lights".

The mockup was disassembled and shipped to Florida, where it sat in a scrapyard for 19 years before it was purchased and partially reassembled for display at the Hiller Aviation Museum in San Carlos, California. Today, the Concorde is on display next to the building where the SST was developed, retired because of the dominance of inexpensive wide and narrow bodied airliners like the 737 and 747 which remain in production today.