In 1983 General Dynamics Convair Division (GD/C) was awarded a development contract for the AGM-129A (the losing design was Lockheed Corporation's Senior Prom).

To reduce electronic emissions from the missile, the radar used in the AGM-86B was replaced with a combination of inertial navigation and terrain contour matching (TERCOM) enhanced with highly accurate speed updates provided by a Lidar Doppler velocimeter.

The flight test program took place during a period of high tension between the machinists' union and GDC management, with a 3+1⁄2-week-long strike occurring in 1987.

US Congressman Les Aspin called the ACM a procurement disaster with the worst problems of any of the eight strategic weapons programs his committee had reviewed.

In January 1992, the end of the Cold War led US President George H. W. Bush to announce a major cutback in total ACM procurement.

In 1992, the US Air Force was directed by the US Department of Defense to restart the program, an effort which was opposed by the General Accounting Office of the US Congress.

The Department of Defense document DoD 4120.15-L "Model Designation of Military Aerospace Vehicles" states that the AGM-129B was an AGM-129A "modified with structural and software changes and an alternate nuclear warhead for accomplishing a classified cruise missile mission."

The AGM-129A was released over the Utah Test and Training Range from a B-52H bomber assigned to Minot Air Force Base, North Dakota.

[1] The reductions also include all but 528 nuclear-armed ALCMs and are in part a result of the SORT/Moscow Treaty (2002) requirement to get below 2,200 deployed nuclear weapons by 2012, with the ACM chosen because it has reliability issues and higher maintenance costs.

[2] In March 2007, despite a Service Life Extension program (SLEP) intended to extend its operational usefulness to 2030, the USAF made the final decision to decommission its entire inventory of AGM-129s with the last missile being destroyed in April 2012.