One major blow to the He-111 program came in 1938, when the RLM ( the German Air Ministry ) decided that all DB600 engines would go to the Messerschmitt company, for use on the new Bf-109 and Bf-110 fighters. This left the He-111 without the only engine that gave it a reasonably good performance. Problem wasn't solved until late 1938, when deliveries of the new 1200HP Jumo 211 inline engines began. Together with the new nose ( the famous glazed "dome" that gave improved visibility and less friction ) the new engine allowed the He-111 to reach almost 400 km/h. This new version was designated as He-111H, and was by far the most mass-produced version of the war. Later versions, although were fitted with improved Jumo engines were pretty much similar with those built in 1939 and were clearly outclassed by the new generation of Allied fighters. Many attempts were made to give the He-111 more defensive firepower, even mounting a 20 mm MG/FF canon in a pod under the plane's belly, but it still remained vulnerable to enemy fighters, as the plane was so overburdened with equipment that it could rarely exceed 360 km/h.

It was late 1940 when the first 32 Heinkel He-111H3's were delivered to Romania. In 1940, these were the very best bombers the ARR had in its arsenal, so it was decided to create an elite "heavy" bomber unit : the 5th Bomber Group. By Romanian standards, the He-111, with its 2000 kg bombload, was a "heavy" bomber, although the plane is remembered mostly as a medium bomber. The He-111's did a very good job during the Bassarabian campaign, when they shot down 17 Soviet fighters and claimed to have destroyed 47 more Soviet planes on th ground, for the loss of just 7 Heinkels.

However, it seems that they were occasionally employed as bombers as well, since they still had the capacity to carry 1000 kg of bombs. Like most aircraft, the Heinkels were used again for frontline duty in the summer of 1944, when the Red Army had reached Romania's eastern border. After August 1944, they equipped the 78th Bomber Squadron until October 1944, when the last three He-111H6's left were pulled out of active service.

One He-111H20 captured after the 23rd of August 1944 was converted into a VIP transport aircraft and used extensively by King Mihai and his entourage.