As freight cars grew taller, observing a train from the cupola of a caboose became increasingly difficult. In the wooden car era, another problem with cupola cabooses was sagging roofs. In an effort to solve these problems, the Akron, Canton & Youngstown railroad introduced the bay window caboose in 1923. (In fact, however, bay windows had been used on New York & Harlem Railroad passenger cars as far back as the 1850s, to enable conductors to better anticipate station arrivals.)

In 1930 the Baltimore & Ohio became the first railroad to adopt the bay window style as its standard caboose; it never purchased another cupola model. During the same decade, the Milwaukee Road and the Northern Pacific built substantial bay window fleets as well.