On November 9, 1939, the first prototype, the He 177 V1 was flown for the first time with Dipl. Ing. Leutnant Carl Francke chief of the Erprobungsstelle Rechlin central flight test center at the controls. The initial flight terminated abruptly after only twelve minutes as a result of overheating engines. Francke referred favorably to the general handling and landing characteristics of the prototype but complained of some vibration in the airscrew shafts, the inadequacy of the tail surfaces under certain conditions, and some flutter which accompanied any vigorous movement of the elevators. The He 177 V2 made its first flight soon afterwards. Following Francke's initial flight, the He 177 V1 received several modifications suggested by the initial trials, including a 20% increase in the tail surface area. These modifications were not applied to the He 177 V2 when another test pilot undertook the first diving trials. During the diving trials, the V2 developed severe control flutter an d broke-up in the air. Following this incident, the tail surfaces of the V3, V4, and V5 prototypes were modified in a similar fashion to those of the He 177 V1. The He 177 V3 was allocated the task of power plant development. The V1 through V3 prototype airframes were all equipped with two counterclockwise rotating DB 606 A powerplants, while the V4 prototype and all later aircraft, throughout the production run of the A-series, used a DB 606 A or DB 610 A engine on the starboard wing and one clockwise rotating B-version of the same powerplant on the port wing, so that the propellers rotated "away" from each other at the tops of the propeller arcs. The He 177 V4 was retained at Heinkel's test field where it undertook diving trials. While flying over the Baltic, the He 177 V4 failed to recover from a moderate dive, crashing into the sea near Ribnitz. It was later discovered that the accident had resulted from the malfunctioning of an airscrew pitch control mechanism.

Before the V3 and V4 prototype airframes had even been started, on 17 November 1938, Ernst Heinkel had personally requested permission from the RLM that the V3 and V4 airframes be set aside for a trial installation of four separate Junkers Jumo 211 powerplants to address the concerns that the RLM Technischen-Amt technical department's director Ernst Udet and Heinkel had expressed over the RLM's dive-bombing priority for the He 177A, but was turned down for the trial fitment.

He 177V5, coded (PM+OD), featuring the early cockpit design used on V1 to V8.
[Source: U.S. Navy]

The He 177 V5 incorporated a number of changes which were principally concerned with defensive armament installations. Early in 1941, during a simulated low-level attack, both DB 606 engines burst into flames, the V5 hitting the ground and exploding. The He 177 V6 was the first aircraft equipped with main production type DB 606 A/B engines instead of the pre-production units which offered a slight increase in takeoff power by 100 PS to 2700 PS (2,663 hp, 1,986 kW). The He 177 V7 featured a revised nose section which, while generally following the contours of the nose sections employed by the previous prototypes, was considerably reinforced and embodied fewer glazed panels. In September 1941, the He 177 V8, the last of the aircraft to be built as prototypes from the outset with a different, almost "bulletlike" cockpit shaping and construction from the production He 177A series aircraft, was made available for engine tests, but owing to the urgency of other development work it was retur ned to Heinkel after only forty days, and it was not possible to resume engine tests in the air until February 1942. The He 177 V1 to V8 and the A-0 production prototypes are notable for having a broad-bladed set of four-bladed propellers, with blade shapes and profiles similar to those used on the Junkers Ju 88 medium bomber, which were not used on the production He 177A series aircraft. A He 177s outline in flight, heading away from the camera.

Photographs of the first eight prototypes show a largely circular fuselage cross-section, especially forward of the wing root, with the A-0 series possessing flatter sides, dorsal and ventral surfaces of the main A-series production aircraft. The choice of what was called the "Cabin 3" cockpit design on September 20, 1939 for the production A-series run, placed a well-framed hemispherical "fishbowl" nose onto the He 177 A-0, giving it the generic "stepless cockpit", without a separate windshield for the pilot and co-pilot, that almost all German bomber aircraft had in World War II. The He 177A's "stepless" cockpit's forward glazing had its characteristic framing of four supporting frame members running in each orthogonal direction, running as the parallels and meridians on a globe would. Two sets of four roughly square windows, themselves arranged in a square of four windows each, on each side of the upper cockpit, just behind the "fishbowl's" rear edge, provided sideways vision f rom the cockpit for the pilot and crew. Often, the two lower rows of the "fishbowl's" windows in the lower nose were made opaque, with the exception of the bombardier's protruding bombsight window offset to starboard in the lower nose glazing, either by painting them over or replacement with metal panels that performed the same function.