On 28 May 1971, the prototype conducted its maiden flight, while the type entered service on 4 June 1974 with French airline Air Inter.

Attempts were made to market the type in the US, including partnerships with American manufacturers Douglas, Lockheed and General Dynamics, with the vision of producing it in the United States.

During 1968, the initial studies performed by the company's research team were orientated around a 110 to 120-seat airliner which was powered by a pair of rear-mounted Rolls-Royce Spey turbofan engines;[1] as time went on, a specification for a 150-seat aircraft with a 1000-km range (540 nm) was developed.

The French Government contributed 56 per cent of the programme's total development costs, which was intended to be repaid by Dassault via a levy on sales of the airliner.

[3] According to aerospace publication Flight International, the design of the new airliner had been shaped by Dassault's "philosophy of aiming the aircraft at a corner of the market which it believes existing types do not adequately serve".

"Wanting to give the name of a god of mythology, I found of them only one which had wings with its helmet and ailerons with its feet, from where the Mercure name.." said Marcel Dassault.

[5] On 28 May 1971, the maiden flight of the first prototype, powered by a pair of Pratt & Whitney JT8D-11 turbofan engines, capable of generating up to 6,800 kgf (15,000 lbf) of thrust, took place at Mérignac.

On 7 September 1972, the second prototype, which was powered by a pair of Pratt & Whitney JT8D-15 engines, which would be used on all subsequent Mercures built, flew for the first time.

[8] To answer an official request, Dassault proposed a variant with the new 22,000–25,000 lbf (98–111 kN) CFM International CFM56 and a supercritical wing.

Elements of the design were reportedly capable of supporting the envisioned expanded model with little or no change, including much of the wing, cabin, and the undercarriage.

The landing gear was spaced to accommodate the fitting of longer legs to, in turn, enable larger engines and an elongated fuselage to be later adopted.

The flaps formed a continuous spanwise unit when deployed in the take-off position, requiring neither low-speed ailerons nor cut-outs to accommodate jet exhaust, due to the engines being fixed low down upon deep pylons.

[2] Production Mercures were powered by a pair of Pratt & Whitney JT8D-15 turbofan engines, capable of generating a maximum of 15,500 lb (69 kN) thrust.

According to Flight International, there was a perception that the Federal Aviation Administration of the United States, a major potential market for the Mercure, may enact regulations that would necessitate the implementation of a noise-attenuation retrofit programme, and thus Dassault needed to be prepared to address this foreseen scenario.

[2] The design also benefitted from an advanced fail-safe structure, the majority of which having been milled in accordance to Dassault's traditional military manufacturing practices.

[2] Air conditioning also featured independent duplicated systems with a cross-feed tapped from the engines compressors along with, unusually, the auxiliary power unit for use during takeoffs and on the ground, as well as in the instance of a double-engine failure scenario.

[2] Additional manufacturing work was distributed across locations throughout Europe, the production programme being a collaborative effort between Dassault, Fiat Aviazione of Italy, SABCA (Société Anonyme Belge de Constructions Aéronautiques) of Belgium, Construcciones Aeronáuticas SA (CASA) of Spain and the Swiss National Aircraft Factory at Emmen, all of which acted as risk-sharing partners in the venture.