At the outbreak of World War I in August 1914, the Royal Aircraft Factory asked Rolls-Royce to develop a new 200 hp (150 kW) air-cooled engine.

Based initially on the 7.4 litre 40/50 Rolls-Royce Silver Ghost engine, and drawing also on the design of a 7.2 litre Daimler DF80 aero engine used in a 1913 Grand Prix Mercedes that had been acquired,[2] the power was increased by doubling the number of cylinders to twelve and increasing their stroke to 6.5 inches (170 mm), although their bore remained at 4.5 inches (110 mm) of the 40/50.

The Eagle first ran on a test bed at Rolls-Royce's Derby works in February 1915, producing 225 hp (168 kW) at 1,600 rpm.

[9] When the Ministry of Munitions took over coordination of aircraft production in 1917, Sir William Weir declined to intervene in the company's commercial strategy, even though success of the engine owed much to the technology transfer directed by the RNAS.

He preferred to support untested engines using cast aluminium components like the Siddeley Puma and the Sunbeam Arab, believing them to be better suited to mass production, in comparison to the intricate machining required to build the Eagle and its smaller cousin the Falcon.