On 8 October 1948, the board of senior officers of the U.S. Air Force (USAF) made recommendations that the service organize a competition for a new interceptor scheduled to enter service in 1954; as such, the all-new design would initially be dubbed the "1954 Ultimate Interceptor". Four months later, on 4 February 1949, the USAF approved the recommendation and prepared to hold the competition the following year. In November 1949, the Air Force decided that the new aircraft would be built around a fire-control system (FCS). The FCS was to be designed before the airframe to ensure compatibility. The airframe and FCS together were called the weapon system.
In January 1950, the USAF Air Materiel Command issued request for proposals (RFPs) to 50 companies for the FCS, of which 18 responded. By May, the list was revised downward to 10. Meanwhile, a board at the U.S. Department of Defense headed by Major General Gordon P. Saville reviewed the proposals, and distributed some to the George E. Valley-led Air Defense Engineering Committee. Following recommendations by the committee to the Saville Board, the proposals were further reduced to two competitors, Hughes Aircraft and North American Aviation. Although the Valley Committee thought it was best to award the contract to both companies, Hughes was chosen by Saville and his team on 2 October 1950.
Proposals for the airframe were issued on 18 June 1950, and in January 1951 six manufacturers responded. On 2 July 1954, three companies, Convair, Republic and Lockheed won the right to build a mockup. Until then, Convair had done research into delta-winged aircraft, experimenting with different designs, two of which fell under the name P-92. Of the three, the best design was to win the production contract under the name "Project MX-1554". In the end, Convair emerged as the victor with its design, designated "XF-102", after Lockheed dropped out and Republic built only a mockup. The development of three different designs was too expensive and in November, only Convair was allowed to continue with its Model 8-80. To speed development, it was proposed to equip the prototypes and pre-production aircraft with the less-powerful Westinghouse J40 turbojet. Continued delays to the J67 and MA-1 (formerly "MX-1179") FCS led to the decision to place an interim aircraft with the J40 and a simpler fire control system (dubbed "E-9") into production as the F-102A. The failure of the J40 led to the Pratt & Whitney J57-P-23 turbojet with afterburner, rated with 10,000 pounds-force (44 kN) of thrust being substituted for the prototypes and F-102As. This aircraft was intended to be temporary, pending the development of the F-102B, which would employ the more advanced Wright J67, a licensed derivative of the Bristol-Siddeley Olympus which was still in development. The F-102B would later evolve to become the F-106A, dubbed the "Ultimate Interceptor".
The prototype YF-102 made its first flight on 23 October 1953, at Edwards AFB, but was lost in an accident nine days later. The second aircraft flew on 11 January 1954, confirming a dismal performance. Transonic drag was much higher than expected, and the aircraft was limited to Mach 0.98 (i.e. subsonic), with a ceiling of 48,000 ft (14,630 m), far below the requirements.