In September 1981 the Japanese Defense Agency selected Kawasaki's KA-851 design as the winning contender for development of a new intermediate flying trainer. The new type would replace Fuji T1F (T-1) and Lockheed T-33 aircraft in service with the Japanese Air Self-Defense Force (JASDF) in the late 1980s.
Emphasis was placed on high subsonic maneuverability. Detail design was finalized by the end of 1983, and the construction of six XT-4 prototypes began in the spring of 1984. The construction effort was collaborative, with Fuji building the wing, rear fuselage and tail unit, Mitsubishi the centre fuselage and air inlets, and Kawasaki the forward fuselage.
Power is provided by two F3 engines developed by IHI. As prime contractor, Kawasaki is also responsible for final assembly and test. All four flyable prototypes had flown by July 1986; the first prototype taking to the air on 29 July 1985. Successful trials led to full-scale production with the first production T-4 flying in June 1988. Deliveries began three months later to the 31st and 32nd Flying Training Squadrons of the 1st Air Wing at Hamamatsu. Small numbers of T-4s are attached to the instrument/communications flights of most operational squadrons, as well as the flights of regional headquarters and operational group flights for liaison duties. Nine T-4s form the mount of the Blue Impulse national aerobatic display team.
The T-4 features a license-built Kaiser head-up and three external hardpoints (one underfuselage and two wingpoints) that allow it to have a secondary light attack tasking as well as a weapons training role. Kawasaki has proposed an enhanced version as possible replacement for the Mitsubishi T-2 in the dedicated armament training role. The JASDF has a requirement for 200 T-4s, and had received around 180 examples by 2001.