Developed in great secrecy, the first of five FSD prototypes flew in 1981, and in 1983 the first USAF unit was declared operational. The F-117A was officially acknowledged by the Pentagon in 1988, and in 1989 the type finally went into action during the US invasion of Panama.

The F-117 made a significant contribution to Operation Desert Storm; 42 aircraft flew from Saudi Arabia on nightly missions against high priority targets in Iraq and occupied Kuwait. The F-117A struck Serbian targets during Operation Allied Force in 1999 and suffered its first operational loss.

In USAF planning the F-117 is used for attacks against highly leveraged targets such as C³l centers, air defense sector centers, key bridges and airfields. The F-117A uses a highly accurate internal navigation system to put it in the right position to begin the attack. A forward-looking infra-red and downward-looking infra-red are used to acquire the target. Precision guided munitions are guided to a direct hit on the target by a laser boresighted with the downward-looking infra-red.

After the Gulf War, the F-117 came out of the USAF's black or beyond top secret programmes and was integrated into the war-fighting capabilities of the Air Combat Command. In 1990 Lockheed began an Offensive Capability Improvement Program for the 57 F-117As remaining out of 59 production and five pre-series aircraft delivered. The object was to increase combat effectiveness by reducing cockpit workload. The upgrade added a new flight management system, new cockpit instrumentation with full color multi-function displays, digital moving map and a new turret-mounted infra-red acquisition and designation systems. The internal navigation system was replaced by a new ring laser gyro system that later integrated GPS.

All aircraft had been upgraded by 1995. F-117s currently equip the 49th Fighter Wing at Holloman air force base, NM. Future upgrades with a new digital databus are being considered to allow the F-117 to carry new weapons such as AGM-145 JDAM and AGM-154 JSOW.