The 737-200 is based on the 737-100 with an extended fuselage. In 1965, 737-200 was launched by United Airlines and it entered service in 1968. The 737-200 Advanced is an improved version of the -200 and was introduced in May 20, 1971 by All Nippon Airways. The aircraft has improved aerodynamics, automatic wheel brakes, more powerful engines, more fuel capacity and longer range than the -200. Boeing 737-200C allows conversion between passenger and cargo use and the 737-200QC facilitates rapid conversion between roles.

The last delivery of the -200 series aircraft was in August 1988. There were many 737-200s still in service, mostly with "second tier" airlines and those of developing nations. There were 19 737-200s converted to trainer aircraft for navigators of the US Air Force, designated as T-43. Some were modified into CT-43s, used to transport passengers and the first one was delivered on July 31, 1973 and the last on July 19, 1974. The Indonesian Air Force ordered three modified 73-200s, designated as Boeing 737-2x9 Surveiller and they were used as Maritime reconnaissance (MPA)/transport aircraft, fitted with SLAMMAR (Side-looking Multi-mission Airborne Radar) and were delivered between May 1982 and October 1983.