Pfalz Flugzeugwerke (PFW) was arranged to manufacture aircraft for the Bavarian Flying Service in 1913. In 1914, the German Empire found itself in a World War across Europe and relied on such companies to stock its air service's inventory. Some of the more notable contributions by the concern during the conflict became the Pfalz D.III and D.XII models, both completed as fighting biplanes in 1917 and 1918 respectively.
Prior to the war in 1914, the company had secured local license production of the French Morane-Saulnier Type H and Type L monoplanes, the latter a variant of the former. In time, the company committed to the E.I, E.II, E.V, and E.VI monoplane products all their own which were influenced by the French design but fitted with progressively powerful, local engines. The E.I was the beginning of the line and broadly based on the original French offering - the German offshoot served in World War 1 (1914-1918) from late October 1915 on and this became the company's first to field a machine gun armament.
The new aircraft was powered by an Oberursel U0 rotary piston engine of 80 horsepower, this also based on the French Gnome rotary series. The engine was mounted at the nose of the aircraft in the traditional way with the pilot's open-air cockpit seated directly aft. The monoplane wings were shoulder-mounted along the slab-sided fuselage. The fixed, wheeled undercarriage resided under the frontal mass of the aircraft with a skid bringing up the rear. The tail unit utilized a single vertical fin and low-mounted horizontal planes. A network of cables connected the wing mainplanes to the dorsal and ventral regions of the aircraft's fuselage. Construction was largely of wood save for sections of the engine compartment which also held a rounded cowling affixed over the engine's face.
Armed as potential fighters, the E.I carried a single 7.92mm LMG 08/15 machine gun. This weapon was synchronized to fire through the spinning propeller blades (by way of "interrupter" gear). Some forms, required to conduct high-speed reconnaissance runs, had their weapons stripped as a weight-savings measure.
Type certification for the E.I occurred during September of 1915 and a pair of these aircraft were formed in the German ranks the month following. By the end of April 1916, fleet strength reached some twenty-seven examples and these were active participants in the armed escort role, partnered with slower moving observation platforms used to help gain the advantage against enemy movements on the ground. Beyond their service over European battlefields, the E.I also saw combat exposure in the Middle East during the Sinai Campaign (1916).