The JetStar originated as a private project within Lockheed, with an eye to winning a United States Air Force (USAF) requirement that was later dropped due to budget cuts. Lockheed decided to continue the project on its own for the business market.
The first two prototypes were equipped with two Bristol Siddeley Orpheus engines, the first of these flying on 4 September 1957. The second of these was also equipped with the wing-mounted "slipper tanks", which was originally to be an option. Lockheed attempted to arrange a contract to produce the Orpheus in the US, but when these negotiations failed it re-engined the second prototype with four Pratt & Whitney JT12s in 1959. The outer engines were mounted beside the inner ones, an arrangement that was later used on the Vickers VC10 and Ilyushin Il-62. The slipper tanks were removed and placed on the first prototype.
Noise regulations in the United States and high fuel consumption led to the development of the 731 JetStar, a modification program which added new Garrett TFE731 turbofan engines with a number of detail changes. It has redesigned larger external fuel tanks that sit with their upper surfaces flush with the wing, rather than being centered on it. The cockpit area has a somewhat more "modern" looking nose and window arrangement. The 731 JetStar modification program was so successful that Lockheed produced 40 new JetStars, designated the JetStar II, from 1976 to 1979. The JetStar IIs were factory-new aircraft with the turbofan engines and revised external fuel tanks. Both 731 JetStars and JetStar IIs have greatly increased range, reduced noise, and better runway performance compared to the original JetStars. JetStar production totaled 204 aircraft by final delivery in 1978.