The S-56 came into being as an assault transport for the United States Marine Corps (USMC), with a capacity of 26 fully equipped troops; the order was placed in 1951, the first prototype flew in 1953, and production deliveries of the HR2S began in July 1956 to the Marine Corps' HMX-1, sixty aircraft in total being produced.

The United States Army evaluated the prototype in 1954 and ordered 94 examples as the CH-37A, the first being delivered also in summer 1956. All Marine and Army examples were delivered by mid-1960. Army examples were all upgraded to CH-37B status in the early 1960s, being given Lear auto-stabilization equipment and the ability to load and unload while hovering. In the 1962 unification of United States military aircraft designations, USMC examples became CH-37C.

At the time of delivery, the CH-37 was the largest helicopter in the Western world, and it was Sikorsky's first twin-engined helicopter. Two Pratt & Whitney R-2800 Double Wasp radial engines were mounted in outboard pods that also contained the retractable landing gear. This left the fuselage free for cargo, which could be loaded and unloaded through large clamshell doors in the nose. The early models could carry a payload of either 3 Mighty Mites a light weight jeep like vehicles or 26 troops. For storage, the main rotor blades folded back on the fuselage and tail rotor mast folded forward on the fuselage.  The single main rotor was five-bladed, and designed to function with one blade shot away in combat.

The CH-37 was one of the last heavy helicopters to use piston engines, which were larger, heavier and less powerful than the turboshafts subsequently employed. This accounted for the type's fairly short service life, all being withdrawn from service by the late 1960s, replaced in Army service by the distantly related CH-54 Tarhe and in the Marine Corps by the CH-53 Sea Stallion.

Four CH-37Bs were deployed to Vietnam in 1963 to assist in the recovery of downed U.S. aircraft. They were very successful at this role, recovering over US$7.5 million worth of equipment, some of which was retrieved from behind enemy lines.