Since the Graf Zeppelin was not expected to be completed before the end of 1940, construction of the Fi 167 had a low priority. When construction of the Graf Zeppelin was stopped in 1940, the completion of further aircraft was stopped and the completed examples were taken into Luftwaffe service in the Erprobungsgruppe 167 evaluation/test unit.

When construction of the Graf Zeppelin was resumed in 1942 the Ju 87C took over the role as a reconnaissance bomber, and torpedo bombers were no longer seen to be needed. Nine of the existing Fi 167 were sent to a coastal naval squadron in the Netherlands and then returned to Germany in the summer of 1943. After that they were sold to Croatia, where their short-field and load-carrying abilities (under the right conditions, the aircraft could descend almost vertically) made it ideal for transporting ammunition and other supplies to besieged Croatian Army garrisons between their arrival in September 1944 and the end of the War. During one such mission, near Sisak on 10 October 1944, an Fi 167 of the Air Force of the Independent State of Croatia was attacked by five North American Mustang Mk IIIs of No. 213 Squadron RAF. The crew of the Fieseler had the distinction of shooting down one of the Mustangs before itself being shot down, possibly one of the last biplane "kills" of the war.

The remaining planes were used in the Deutsche Versuchsanstalt für Luftfahrt (German Aircraft Experimental Institute) in Budweis, Czechoslovakia, for testing different landing gear configurations. The large wing area and low landing speeds made it difficult for the Fi 167 to properly carry out the tests so the two test aircraft had their lower wings removed just outboard of the landing gear.

Sources:
Wikipedia
Green, William. Warplanes of the Third Reich. New York: Doubleday, 1972. ISBN 0-385-05782-2.
Savic, D. and Ciglic, B. Croatian Aces of World War 2, Oxford, 2002 ISBN 1-84176-435-3.
Green, William - Bombers & Reconnaissance Aircraft Volume 9, Macdonald, London 1967