The formula for the surface area of a sphere is given by $4\pi r^2$, where $r$ is the radius of the sphere. Since the diameter of the sphere is 40 inches, the radius is half of the diameter, or $40/2=20$ inches. Plugging this value into the formula, we find that the surface area of the sphere is $4\pi(20^2)= \boxed{1600\pi}$ square inches.
