In the late 1970s, Denmark, Norway, Belgium, and the Netherlands began searching for a new fighter jet to replace their outdated aircraft. These countries soon signed an agreement with the United States to produce the F-16A in Europe, which reduced procurement costs and allowed for production at European factories. In May 1979, the Royal Netherlands Air Force chose the F-16 Fighting Falcon to replace the F-104G Starfighter and the Northrop NF-5. Dutch aircraft were assembled by Fokker. The first F-16A and F-16B aircraft were delivered to Leeuwarden Air Base on June 6, 1979. A total of 213 aircraft were ordered, and deliveries were completed by February 1992.

In the late 1990s, the Dutch F-16s underwent the Mid-Life Update (MLU) program and received the designations F-16AM Block 20 MLU and F-16BM Block 20 MLU, respectively. The aircraft received a new mission computer, a modernized cockpit with color multifunction displays, an improved AN/APG-66(V)2 radar, and the ability to use modern guided weapons, including AIM-120 AMRAAM missiles. Thanks to this modernization, the F-16AM remained the backbone of Dutch fighter aviation until it was replaced by the F-35A.

The Dutch F-16AM was introduced in Update 2.57 "Heavy Cavalry", as part of the French aircraft tree. Thanks to its wide range of available weapons, the versatile F-16AM can perform both fighter and strike aircraft roles. For air combat, it carries AIM-120B AMRAAM ARH missiles and AIM-9M Sidewinder missiles with IR seekers. These are paired with special PIDS+ pylons. Its excellent flight performance helps it succeed in close-range combat. For ground attacks, the aircraft has access to a variety of precision-guided weapons, including AGM-65 Maverick missiles and JDAM bombs. The AN/AAQ Sniper targeting pod's high-resolution thermal imager and excellent zoom make guiding these weapons onto targets easier. One drawback of the fighter is its limited number of AAMs.