Northrop developed the F-20 "Tigershark" as an improved version of the F-5E intended for foreign military sales (FMS). The aircraft first flew on 30 August 1982 and compiled an impressive performance, reliability and weapons delivery record. During its flight test program, the F-20 fired the AIM-7 "Sparrow" and AIM-9 "Sidewinder" air-to-air missiles, AGM-65 "Maverick" air-to-ground missile, 2.75" folding fin aerial rockets (FFAR), dropped MK82 bombs, and fired rounds from a 30mm gun pod in addition to the two internal M-39 20mm cannon.

The F-20 was never considered for USAF service and the US Navy decided to buy F-16s for its aggressor aircraft program. These two facts essentially doomed the F-20 FMS program. Although the test program demonstrated the potential of the F-20, countries tended to buy the F-16, in part, because it was used by the USAF and USN (and the F-20 was not).