In 1939, Fairchild became interested in a process developed by Col. G.A. Clark for building airframes using a composite made of hot layers of plywood soaked with resin adhesive and bonded under pressure. Called the Clark Duramold process, Fairchild bought the process, as well as Clark's company, and renamed the process Fairchild Duramold. Fairchild used it on the wartime AT-21 Gunner trainer.

Fairchild took on the task in 1941 of producing military transports designed specifically for that purpose rather than by converting a civilian model to military purposes, as was customary. The large capacity twin-boom plane, called the C-82 Packet, had a hinged rear door for loading bulky cargo, and 223 were delivered from late 1945 until September 1948. Several flew assembled vehicles into Berlin during the airlift.

One reason that Fairchild was among the few aircraft firms to remain profitable after the war was the success of its C-119 Flying Boxcar, an improved Packet with more powerful engines and greater capacity. Deliveries of Boxcars began in December 1949. When production ended in 1955, more than 1,100 C-119s had been built for the U.S. military, Canada, Belgium, Italy, India, and other countries. It would, though, turn out to be the last Fairchild design to enter mass production. A C-119 was specially modified for midair retrieval of orbiting space capsules reentering the Earth's atmosphere. On August 19, 1960, one made the first midair recovery of a space capsule when it "snagged" the parachute lowering the Discoverer XIV satellite to Earth. In the 1960s, the plane was converted to a night attack gunship, the AC-119, for use in Vietnam.

In the early 1950s, Fairchild began to manufacture the C-123 Provider, a Chase Aircraft Company design that was transferred to Fairchild. More than 300 of this short-range assault transport were built up to 1958. They were used for a variety of purposes including spraying defoliants in Vietnam and controlling mosquitoes for the U.S. Department of Agriculture.

Fairchild purchased the license to manufacture the Fokker F-27 Friendship passenger airplane in 1956, building approximately 200 of six versions as well as its own stretched FH-227 version, which first flew in 1966. The F-27 became the first American-built jet airliner in service and, along with the FH-227, became widely used as "feeder" planes for commercial carriers both in the United States and abroad. The F-27, however, lost a total of $29 million for the company from 1958 to 1960.

In the mid-1950s, Fairchild began to diversify. Fairchild helped create Fairchild Semiconductor in 1957, a spinoff of Shockley Semiconductors by a group of unhappy Shockley employees. Fairchild Semiconductor disappeared in 1987 when it was absorbed by National Semiconductor. It separated from National Semiconductor in 1997 and has since grown to a business with almost $2 billion in revenue in 2000.

In 1961, Fairchild was renamed Fairchild-Stratos Corporation. It built meteoroid detection satellites for the National Aeronautics and Space Administration (NASA) and cameras for the Apollo missions.

In 1964, the company acquired Hiller Helicopters, becoming Fairchild Hiller. In 1966, it introduced the FH-1100 civilian helicopter and the Pilatus Porter turboprop short takeoff and landing (STOL) utility aircraft, which sold primarily as the AU-23 Peacemaker military helicopter. Production of the FH-1100 ended in January 1973, and Fairchild sold Hiller back to its founder Stanley Hiller soon after.

Fairchild acquired Republic Aviation, a major producer of combat aircraft, in September 1964. Republic became the Republic Aviation Division of Fairchild Hiller. Fairchild also created a Space and Electronic Systems Division in 1965, and began producing spacecraft and subsystems. It also produced parts for the F-4 Phantom and the Boeing 747 jumbo jet.

After the death of Sherman Fairchild in 1971, Fairchild Hiller became Fairchild Industries, Inc. The Republic Aviation Division became Fairchild Republic in 1973 and went on to build more than 700 A-10s Thunderbolt IIs between 1975 and 1984. Equipped with the most powerful gun ever fitted into an aircraft, the A-10 can "kill" all known armoured vehicles. Its pilot sits in a cockpit well forward from the wing to make ejection easier if needed, and the plane is designed to operate from unprepared takeoff and landing areas. Still in use, its first use in combat came in January 1991 with the start of Operation Desert Storm.

Another acquisition was Swearingen in 1971, a maker of light executive and commercial transports. The successful Metro II, based on a Swearingen design, along with the A-10, kept Fairchild active in the aircraft market through the 1970s.

In 1981, Fairchild began a partnership with the Swedish firm SAAB-Scania to develop and produce the SAAB 340 airliner, a plane accommodating about twice as many passengers as the Metro. Fairchild also won the contract for the T-46 trainer. But both programs encountered problems and late in 1985, company president Emanual Fthenakis announced that Fairchild would withdraw from civil aircraft production. In 1986, Fairchild sold its rights to the Metro. The T-46 was also cancelled. The official end of the T-46 program in March 1987 marked the end of over 60 years of Fairchild aircraft manufacturing. Late in 1987, Fairchild dismissed its remaining 3,500 employees at Farmingdale and closed the plant.

The company still retained space, electronics, and subcontracting work. A metals firm, Banner Industries of Ohio, acquired it in August 1989. The new company, a diversified firm with only a slight connection to the aerospace industry, was renamed Fairchild Corporation. In 1994, Orbital Sciences Corporation purchased Fairchild Space and Defence Corporation from Matra, a French aerospace company. Orbital sold Fairchild's Defence Unit to the British company, Smiths Industries, in 2000.