In April 1978, Aeritalia and Aermacchi combined their resources to meet requirements from the Italian air force (AMI) for an advanced multi-purpose strike and reconnaissance aircraft. The programme received extra impetus in 1980 when it was joined by Brazil, with EMBRAER chosen as the industrial partner. Procurement was signed initially for 79 AMXs for Brazil and 187 for Italy, plus six prototypes. The type's Rolls-Royce Spey Mk 807 turbofan powerplant was built under license. The initial AMX flew in May 1984.

   Design features include hands on stick and throttle controls, internal navigation system, head-up and head-down displays, digital databus, active and passive electronic counter measures, and provision for air-to-air refueling.

   By mid-1998, programme totals had increased to 332 aircraft, including 66 two-seat AMX-Ts (known in Brazil as A-1Bs). In these variants, a fuel bay behind the original cockpit is replaced by a second Martin-Baker Mk 10L ejection seat, causing some reduction in range. The first of three AMX-T prototypes initially flew in Italy on 14 March 1990, although funding problems delayed first flight of the Brazilian two-seat prototype until 14 August 1991. Radar-equipped versions of the AMX-T have also been considered in Brazil and Italy for enhanced all-weather, electronic combat reconnaissance, maritime strike roles, and Italian trials with the Exocet anti-ship missile proved successful.

   In the reconnaissance role, the AMX can either carry external photo or infra-red pods, or can be equipped with any one of three sensor pallets for internal carriage in the forward fuselage. The first operational Aeronautica Militare Italiana squadron received its first AMX on 7 November 1989.

   The first Brazilian A-1 unit began to receive its aircraft on 17 October 1989. In 1998 Venezuela announced its intention to purchase on advanced AMX-ATA variant and further prospects include a variant that is powered by a 60 kN non-afterburning version of the Eurofighter's EJ200 turbofan.