During late 1961, early 1962, Alco decided to upgrade the 1800 horsepower RS11 (DL-701) design with improvements that had been introduced in the RS27 and RS32. For this design, Alco maintained the specification DL-701, but gave it a new designation, RS36. Externally the RS36 had the same hood features as the RS27 and RS32, and had the same overall length. Production of the RS36 began between the first NYC order and the SP order, the first units were part of an order from the Nickel Plate, which was completed after the conclusion of the RS32 production. A total of 11 units were delivered to the NKP, on which the railroad traded in its PA-1's. The last two NKP RS36's were high nose units equipped with steam genrators, completing NKP's conversion to road switchers for its remaining passenger service. In typical trade-in fashion, the PA's GT 566 main generators were re-used in the RS36's. The final RS36 production was for the Tennessee Central, for which a single unit each was delivered in April, June, and August 1963. A total of 40 RS36's were built.