The JetStar originated as a private project within Lockheed, intending to win a United States Air Force (USAF) requirement that later dropped due to budget cuts. Lockheed decided to continue the project on its own for the business market.
Two prototypes fitted with two Bristol Siddeley Orpheus engines, the first of these flying on 4 September 1957. Wing-mounted "slipper tanks" on the second of these prototypes were originally 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 prototype.
Noise regulations in the United States and high fuel consumption led to the development of the 731 JetStar, a modification program that added new Garrett TFE731 turbofan engines with several 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 received a more "modern" 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 turbofan engines and revised external fuel tanks. 731 JetStars and JetStar IIs have significantly increased range, reduced noise, and better runway performance than the original JetStars. JetStar production totaled 204 aircraft by final delivery in 1978.