One year after the N1K1-J, the Shiden-Kai was first flown on 31st December 1943 and production started a short time later. The main differences, in comparison to its predecessor, were its low-wing design, the changed tailplane and the lengthened fuselage. Furthermore the undercarriage was simplified as far as possible. Only 1/3 of the design remained the same as on the Shiden and because of the use of different materials, the new aircraft was 225 kg lighter. The machine guns were removed; instead of them it was equipped with four 20 mm cannons.
The Shiden-Kai was used as a naval-interceptor; they were mainly used over Taiwan, Okinawa and the Philippines. At the end of the War the Shiden-Kai was also used for Kamikaze missions. In aerial combat, the N1K2-J was a very dangerous opponent for American planes, 12 Grumman F6F Hellcat were solely downed by the pilot Kinsuke Muto, using the Shiden-Kai. However the Shiden-Kai was less successful in intercepting American bombers, because of its worse rate of climb and high-altitude performance.
All in all 428 Shiden-Kai fighters have been built; the most produced variant was the fighter-bomber N1K2-Ja, of which 415 were built.