Blue Lightning was announced in 1994 as one of the first upcoming titles for the Jaguar CD add-on, being advertised as a sequel to the Lynx original, but went through a troubled development cycle.

Members from the Blue Lightning squadron joined Drako's corrupted ranks, while the remaining loyal forces eager a chance to overthrow the criminal group.

[1][3][4] The player can toggle between third-person and first-person views, perform an aleron roll to minimize damage from enemy fire, and activate the plane's afterburner for a short speed boost.

[12][14] The coding work was handled by Andrew Howe and Jon Howard, with technical director Fred Gill (one of the original five founding members of ATD), Peter Long, and a programmer under the pseudonym "Sadge" providing additional support.

[13][14] David West, Ian G. Harling, Joanne Surman, and Kristi-Louise Herd were responsible for the artwork, while the full-motion video cutscenes were handled by Jon Baker and Vince Shaw-Morton.

[14] It features the voice work of comedian Rob Brydon, lead tester Hank Cappa and Carrie Tahquechi, who portrayed some of the in-game radio transmissions at Atari's in-house audio department.

[12][15] Tilley recalled building the levels using MS-DOS, drawing them by typing a letter on the keyboard in a pattern that equated to objects such as large rocks and tanks.

[23][24][25] It was first showcased with its final title, Blue Lightning, in a very early state at the 1994 ECTS Autumn event,[26] and then at the 1994 Summer Consumer Electronics Show.

[47] Game Players' Jeff Lundrigan commended the variety of terrains, Top Gun-inspired soundtrack, and number of planes to choose from, but faulted its "blocky" bitmap visuals and repetitive gameplay, which was compared with After Burner.

"[6] GameFan's three reviewers highlighted its introduction sequence, missions, and garage rock-style music, but criticized the "chunky" graphics and compared it unfavorably with Air Combat (1995).

[3] In contrast, VideoGames' Jim Loftus found the graphics admirable though not near to Sega Saturn or PlayStation standards, the hard rock soundtrack fitting but muffled, and its playability addictive.

"[8] Electronic Gaming Monthly's four writers echoed similar thoughts, criticizing the audiovisual presentation, slow gameplay, choppy technical performance, and controls.

[44] Atari Gaming Headquarters' Keita Iida concurred with Knight, writing that "Blue Lightning for the JagCD is neither the hardware showcase that its portable wonder was, nor does it possess half the gameplay that Lynx BL offered.

[52] The Atari Times' Dan Loosen found its gameplay fun but underwhelming and the soundtrack fitting, but gave negative comments towards the visuals.