A replacement for the MQM-8 Vandal target drone was still required, and a specification was developed for a target drone, capable of being recovered via parachute and reused, for launch from a variety of aircraft.

[1] Bids for the contract were submitted by Martin Marietta, Ling-Temco-Vought, and Teledyne Ryan,[1] with the Martin Marietta design being judged the winner of the design competition in September 1984.

[2] Derived from the cancelled Advanced Strategic Air-Launched Missile developed by Martin Marietta for the United States Air Force, the missile utilised a Marquardt hybrid rocket-ramjet propulsion system, with a solid rocket booster providing initial thrust, with the rocket's chamber, following burnout, becoming the combustion chamber for a ramjet sustainer.

[1] The AQM-127 was designed to fly at speeds of Mach 2.5 at an altitude of 30 feet (9 m), following a pre-programmed course on autopilot.

[1] With the SLAT proving a consistent failure and the cost of the project increasing dramatically, the United States Congress stepped in, and during the summer of 1991 the AQM-127 program was cancelled.