In 1936, Focke, in cooperation with another German named Gerd Achgelis, developed the Focke-Achgelis Fa 61 (often called the Focke-Wulf 61). The Fa 61 used the fuselage and engine of a training biplane known as the Focke-Wulf Stieglitz. The Stieglitz was a popular two-cockpit aircraft that had already earned the Focke-Wulf company an international reputation. Focke and Achgelis kept the open aft cockpit of the Stieglitz. They removed the wings and replaced them with two large three-bladed rotors mounted on tubular steel outriggers on either side of the fuselage. The outriggers were connected to the forward fuselage of the aircraft. This configuration made the Fa 61 look superficially like an autogyro with two rotors instead of one. But the airplane's propeller blades were shortened, and the propeller provided no power for forward flight as with an autogyro's forward propeller. However, the propeller still served as a cooling fan for the 160-horsepower (119-kilowatt) Siemens-Halske Sh14a radial engine, which powered the two rotors through a complicated system of gears and shafts.

Like Bréguet, Focke solved the torque problem by using two rotors turning in opposite directions. But the Fa 61's control system was much more robust. If the pilot pushed the control stick forward and backward, he could tilt the rotor discs forward and backward together, causing the aircraft to move in the desired direction. By moving the stick sideways, the pilot could increase the angle of the blades on one rotor and reduce it on the other to control the roll of the craft. The rudder pedals tilted the rotors forward and backward in opposite directions to control yaw. The Fa 61 had excellent stability and control and was capable of hovering, going straight up and down, and forward and backward.

On May 10, 1937, test pilot Rohlfs took the Fa 61 to an altitude of 1,130 feet (344 meters) and then pulled back the throttle to idle the engine. He used its spinning rotors to descend safely to the ground. This demonstration of autorotation finally proved that a helicopter would not automatically crash if its engine failed.

Seven weeks later, Focke began another series of tests and in seven days, Rohlfs broke every previous helicopter record—most of which were held by Bréguet craft. The Fa 61 made a flight of one hour and twenty minutes, reached a speed of 76 miles per hour (122 kilometres per hour), flew a distance of 143 miles (230 kilometres), and ultimately reached an altitude of 11,243 feet (3,427 meters). And unlike the French aircraft that had completed its tests in late 1936, the Fa 61 did not suffer damage during its flight tests.

Following interest by the Luftwaffe, Karl Francke, chief test pilot of the Rechlin experimental centre, and Germany's famed female pilot, 25-year-old Flugkapitan Hanna Reitsch, flew the Fa 61 in September 1937. Reitsch performed a number of test flights, breaking several of Rohlfs' previous records.

The Nazi government quickly recognized the propaganda value of having its famous female pilot fly such an advanced aircraft. In February 1938, Reitsch flew the Fa 61 for fourteen consecutive nights inside the huge, enclosed Deutschlandhalle sports stadium in Berlin. Although Reitsch had less than three hours flying experience with the aircraft, she was able to manoeuvre it successfully in front of large crowds. In fact, the heat and humidity produced by the crowd affected the Fa 61's engine performance.

Focke's Fa 61 was far more manoeuvrable than Bréguet's aircraft and also could fly for extended periods of time. Although many consider Bréguet's Gyroplane to be the first real helicopter, Focke's Fa 61 is considered the most successful early helicopter. It sufficiently impressed the Nazis that they allowed Focke and Achgelis to form a new helicopter company and awarded them a contract for an enlarged version of the Fa 61 that could lift 1,500 pounds (680 kilograms) of cargo.

This new craft, designated the Fa 223 Drache (Dragon), made its first flight by spring of 1940. The Drache had a 1,000-horsepower (746-kilowatt) engine turning two triple-bladed 39-foot (12-meter) rotors. It was more than 80 feet (24 meters) wide and 40 feet (12 meters) long and had a four-seat enclosed passenger cabin. Focke and Achgelis built seventeen prototypes and one production version before the assembly line was bombed. The Drache flew at speeds up to 115 miles per hour (185 kilometres per hour), rose to 23,400 feet (7,132 meters), and could transport loads weighing a full ton at low speeds and altitudes. Several Fa 223s survived the war and one became the first helicopter to cross the English Channel to England.