Development on the missile began in the early 1980s after an evaluation of missile and gun options to increase air defence capabilities showed that a high-velocity missile system would best meet the needs and could also replace existing shoulder-launched missiles. A General Staff Requirement (GSR 3979) was drawn up with the requirements of the system, specifying the requirement of three launch platforms for the missile:
- A self-propelled launcher.
- A three-round lightweight launcher.
- A man-portable launcher.
In 1984, the British Ministry of Defence awarded development contracts to British Aerospace (BAe) and Shorts Missile Systems. The BAe missile was known as Thunderbolt. Shorts won the competition and were awarded the £356 million. Further development and a production contract materialized in November 1986, and the missile was officially accepted into service in September 1997. The missile was intended to replace the Javelin surface-to-air missile in British service. The LML and shoulder-launched versions have been in use since 2000.
In July 2001, Thales received a contract for a Successor Identification friend or foe system for Starstreak.
In mid-2007, Thales UK in Northern Ireland revealed that it had developed Starstreak II, a much improved successor to the Starstreak missile. Some of the advantages included in this new missile are an improved range of 7 kilometres, an improved targeting system and the ability to operate it at much higher altitudes, up to 16404 ft (5 km).
In 2011, when it won a contract for the Lightweight Multirole Missile, Thales announced it agreed with the MOD to "re-role previously contracted budgets to facilitate the full-scale development, series production and introduction of the LMM." The contract affected is speculated to have been Starstreak.