German company Volocopter produced the two-seater aircraft, which runs on rechargeable batteries, boasts 18 propellers and flies at speeds of up to 110 kilometers per hour.
Officials demonstrated the vehicle's stability in a short flight.
They plan to launch the world's first flying taxi service at the 2024 Paris Olympics.
Race heats up
"Flying cars" are no longer the stuff of science-fiction. Competition is heating up among manufacturers around the world.
Japanese venture firm SkyDrive successfully tested a manned flying vehicle for the first time in 2020.
The company is now involved in a flying shuttle service to launch at the Expo 2025 in Osaka.
Major Japanese airliner ANA Holdings and US venture firm Joby Aviation are also taking part in the project.
They've been jointly developing a five-seat aircraft that can take off and land vertically like a drone.
Officials at a Japanese research institute expect the industry will be worth about 847 billion dollars two years from now.
Flight in Okinawa breaks new ground
Last week, a group of Japanese companies successfully tested a "flying car" in a remote part of Okinawa Prefecture.
Their efforts led to what they say is the first "island-hopping" flight of its kind in Japan.
The vehicle, which was developed by a Chinese manufacturer, travelled about two kilometers between Iheya island and Noho island.
The companies eventually plan to use flying cars to connect Okinawa's remote areas with the main island.