In 1982, following the deployment of a Phantom squadron to the Falkland Islands, the government decided that the resulting gap in the UK's air defences needed to be filled, and so sought to raise an additional interceptor squadron. Although, at that time, there were a large number of surplus Lightnings in storage, a lack of pilots qualified on the type prevented the formation of a third Lightning squadron, a proposal that had originally been mooted in 1979. So, in order to fill the gap resulting from the transfer of 23 Squadron to the South Atlantic, the government made the decision to purchase another squadron's worth of Phantoms.
Because the aircraft in RAF service were a special production batch built to UK specifications, it was not possible to obtain identical aircraft, and so the RAF looked to versions of the Phantom that were as close as possible to their existing versions. Initially, the UK looked to procure a batch of F-4S aircraft - the F-4S was the most up to date version of the Phantom in service with the US Navy, having been produced through a programme to update the existing F-4J with new engines, hydraulics, electronics and modified wings. However, the US Navy couldn't at the time spare enough F-4S aircraft to allow the RAF to establish an entire squadron. So, as a fall back option, surplus US Navy and US Marine Corps F-4J aircraft were looked at instead, the F-4J being the variant from which the RAF's F-4Ks and F-4Ms were developed, and thus the closest available version to the British aircraft.
Fifteen airframes, each with no more than 4,300 hours, were selected from among the best of the ex-USN F-4Js stored at the Aerospace Maintenance and Regeneration Center (colloquially known as "The Boneyard") at Davis-Monthan Air Force Base in Arizona. However, three of the initially selected airframes had to be rejected, and were replaced with three alternatives. The 15 that were ultimately procured were extensively refurbished at the Naval Air Rework Facility (NAWF) at Naval Air Station North Island, and brought to a standard almost equivalent to the F-4S, the only differences being the absence of leading-edge slats and a helmet gun sight.
Work began in September 1983, with the rollout of the first completed aircraft in August 1984. Two months later, sufficient numbers had arrived at RAF Wattisham in Suffolk to allow 74 Squadron, which had been designated as the new unit to operate the type, to be stood up. The squadron was declared operational on the new type on 31 December 1984.