To pull heavy freight and passenger trains over the Sierra Nevada, the Southern Pacific ordered large locomotives for mixed service from ALCO Schenectady in 1925. They were the first locomotives in the USA with the 4-10-2 wheel arrangement, so the SP called them "Southern Pacific", which led to the class designation SP-1.

In order to better cope with the boiler's high output, they had three cylinders. While the outer two each had their own Walschaert valve gear, the middle one was controlled via Gresley's conjugated valve gear. It also had a stroke that was four inches shorter. For starting off, a booster was also installed on the trailing axle. 

By 1927, 49 locomotives had been built in three batches, designated SP-1 to SP-3. They were initially supposed to be used at Donner Pass, but the five driving axles proved to be too rigid there. They now came to the Sunset Route, which ran east from Los Angeles, where they pulled heavy trains over the grades at speeds of 30 to 35 mph. Today only SP-2 No. 5021 exists, which was last restored in 1965 and is now in Pomona, California.