The civil SA365 N variant of the Dauphin was used as the starting point for the project; the new rotorcraft was designed to perform utility, anti-tank, troop-transport, and maritime operations.

[12] The main cabin can be rapidly reconfigured to conduct various roles, such as troop-transport, SAR, and MEDIVAC missions; optional equipment includes a full medical suite, forward-looking infrared (FLIR) camera, emergency flotation, loudspeaker, variable-speed hoist, cargo sling, search light, and a stretcher-support structure.

[14] To aid in shipboard landings under rough sea conditions and high winds, some variants can be furnished with the hydraulic Harpoon deck-lock securing device.

[12] For improved survivability, the radar signature is reduced due to the use of composite materials across the airframe and the use of the fenestron tail rather than a conventional tail rotor; low infrared paints are also typically applied to the exterior surfaces and jet exhaust dilution devices are installed on the engines to reduce the Panther's infrared signature.

The additions and alterations include a new glass cockpit compatible with night vision goggles (NVG), electro-optical sensors, a new anti-jamming radio, Link 11 data-link, and a self-protection system based on that used on the Eurocopter Tiger.

[22] Changes on the Panther K2 include new Turbomeca Arriel 2C2CG engines which produce 40% more power, a glass cockpit containing new avionics and radio systems, a four-axis autopilot, a new weather radar, NVG-compatibility, and measures to reduce pilot workload, and shall extend the airframe's service life for a further 25 years.

[24] In September 2014, the Panther K2 passed its technical operation evaluation, having reportedly demonstrated a 98% availability rating throughout the trial period, clearing the way for the full modernisation program to proceed.

[23] Following positive experiences of operating a pair of Aerospatiale SA366G Dauphins, the Israeli Air Force opted to procure five AS565MA helicopters, locally designated as Atalef.

[25] Their mission is to extend the naval reach of Israel's defense forces, they can be deployed on board the Israeli Navy's Sa'ar 5-class corvettes when required; the rotorcraft are equipped with long range sensors to identify targets in the Mediterranean and a datalink to convey sensory data to the corvettes,[26] their combined sensory capability has reportedly helped foil several attempted terrorist attacks.

[27] During the Gulf War, the Royal Saudi Navy engaged five Iraqi patrol boats using a number of Panther helicopters, a total of 15 AS 15 TT Anti-ship missiles were fired.