The P226 was originally designed as a double-stack 9mm version of the SIG-Sauer P220 for entry into the XM9 Service Pistol Trials (see also Joint Service Small Arms Program) that were held by the US Army in 1984 on behalf of the US armed forces to find a replacement for the M1911A1. Only the Beretta 92F and the SIG P226 satisfactorily completed the trials. According to a GAO report, Beretta was awarded the M9 contract for the 92F due to a lower total package price. The P226 cost less per pistol than the 92F, but SIG's package price with magazines and spare parts was higher than Beretta's. The Navy SEALs, however, chose to adopt the P226 later. Schweizerische Industrie Gesellschaft is a Swiss company and Swiss law severely restricts the export of firearms. Consequently, SIG entered into an agreement with German gun manufacturer (and eventual owner) J.P. Sauer & Sohn to facilitate an export market for their products. For the U.S. military XM9 trials, the P226 was imported by Saco Defense. Interarms took over importing when the pistol was introduced for civilian sales. SIG Sauer eventually founded SIGARMS, Inc. in the United States, to handle importation of their products. In 2000 the SIG Holding AG sold J.P. Sauer & Sohn GmbH to two German businessmen. The brand name SIG Sauer remained at the J.P. Sauer & Sohn GmbH.
It was developed for the US Military Joint Small Arms Program to use higher capacity, staggered-column double stack magazines in place of the single-column magazines of the P220. The P226 itself has spawned further sub-variants; the P228 and P229 are both compact versions of the staggered-column P226 design. The SIG Sauer P226 and its variants are in service with numerous law enforcement and military organizations worldwide, including the Navy SEALs. The P226 slides that were produced in Germany were made from a stamped hunk of heavy gauge sheet metal that was then folded into the slide and a nosepiece was finely welded on. These stamped slides can be identified by the top front half of the slide being flat. The P226 slides made after 1996 in America are milled, cut from a single hunk of stainless steel, leading to higher production costs. American P226s also feature an accessory rail, whereas the German P226s did not.
The all-metal P226, like the other members of the SIG Classic family, operates by the locked breech short-recoil method pioneered by John Browning. On firing, the slide and barrel are locked together for a few millimeters of rearward movement, after which the barrel is cammed down at the rear. By this time the bullet has left the barrel and the pressure has dropped to safe levels, whereupon the slide completes the rearward stroke, ejecting the spent cartridge. The recoil spring then propels the slide forward, stripping a round from the magazine and in the last few millimeters of forward movement the barrel is cammed upwards, locking the slide and barrel together again. Instead of the locking lugs and recesses milled into the barrel and slide of other Browning-type weapons (such as the Colt M1911A1, Browning Hi-Power and CZ 75), the P226 locks the barrel and slide together using an enlarged breech section of the barrel locking into the ejection port. This modified system, which was devised by SIG based on Charles Petter's Modèle 1935A pistol and their own SIG P210, has no functional disadvantages compared to the original system, and has since been copied by numerous firearm manufacturers. The slide of the pre-1996 P226 was a heavy gauge, mill finished sheet metal stamping with a welded on nose section incorporating an internal barrel bushing. The breech block portion was a machined insert attached to the slide by means of brazing and a roll pin visible from either side. Since 1996, production has shifted to CNC machining and the slide is now milled from a single piece of stainless steel. Therefore the current standard P226 has a black anodized, stainless steel slide. This resulted in a stronger slide, which was necessary to chamber the more powerful .40 S&W and .357 SIG cartridges. The frame of most models is made from hard anodized aluminum alloy. The standard SIG P226 incorporates a decocking lever on the left side of the frame above the magazine release button, which first appeared on the Sauer 38H prior to World War II, which allows the hammer to be dropped safely. In chambering or firing a round, the actuation of the slide automatically cocks the hammer. By using the decocking lever, the hammer can be de-cocked without actuating the firing pin block, making it impossible to accidentally fire the weapon by using the decocking lever. Furthermore, using the decocking lever makes the weapon "drop safe", which means the firing pin will be blocked from striking a loaded round unless the trigger is pulled. Pulling the trigger and slowly lowering the hammer does not make the weapon "drop safe", and can result in an accidental discharge if sufficient force is applied to the hammer. Properly decocked, the pistol can be holstered safely and can be fired in double action mode by simply pulling the trigger. The SIG P226 has no manual safety. Double action trigger pressure is approximately 44 N (10 lbf). Subsequent shots are fired in single action mode with a lighter trigger pressure of approximately 20 N (4.5 lbf). As with other DA/SA pistols such as the HK USP and Beretta 92F, some training is required to minimize the difference in point of aim caused by the different trigger pressure between a first double action shot and subsequent single action shots. The hammer may also be manually cocked at any time by the user to fire in single action mode.