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To reduce development costs and increase sales opportunities, France entered into an agreement with the United Kingdom, Germany, Italy and Spain to develop an agile, multi-role 'Future European Fighter Aircraft', which would eventually lead to the Eurofighter Typhoon. However, disagreements over the division of labor and differing operational requirements led France to pursue its own development program. Dassault built a technology demonstrator, which made its first flight in July 1986 as part of an eight-year test program that eventually led to the project being approved.

The Rafale differs from other European fighters of the same period in that it was developed almost entirely by a single country. Major French defense companies, including Dassault, Thales and Safran, were involved in its production. Many of the avionics and systems, such as voice control, the RBE2 AA active electronically scanned array (AESA) radar and the infrared search and track (IRST) sensor, were developed and produced in France specifically for the Rafale. The Rafale was originally scheduled for operational deployment in 1996, but post-Cold War budget cuts and changing priorities caused significant delays to the project.

There are three main variants: the Rafale C, a single-seat land-based version, the Rafale B, a two-seat land-based version, and the Rafale M, a single-seat carrier-based version.