After General Electric had stopped to work together with ALCO to build road switchers, they initially started to build small locomotives of the Universal Series for export in 1956. In 1959, the U25B was the first full-size, four-axle road switcher for the domestic market built by GE without external support. They already had the knowledge for the electric part of the locomotive and only needed to develop a 2,500-hp diesel engine. While the smaller export models had used engines from Cooper-Bessemer, the U25B was the first one to use GE's own 7FDL engine. With this engine, it was the most powerful four-axle diesel locomotive in the USA.

While the name “Universal Series” was actually only used for the export models, the U25B and its variants became known as “U-Boats”. By 1966, a total of 478 U25B had been built for US customers. Although GE originally did not plan to develop a six-axle variant, an explicit order placed by the contractors of the Oroville Dam for a six-axle U25B led to the U25C. It was basically a longer U25B riding on two three-axle trucks and 113 had been built by 1965. Some of the last ones were built with engines rated at 2,750 or 2,800 hp, ultimately leading to the U28C.