The basic design of the aircraft was set by 1999. The development of the aircraft was funded 13% by Lockheed Martin, 17% by Korea Aerospace Industries (KAI), and 70% by the government of South Korea.
The T-50 Golden Eagle design is largely derived from the F-16 Fighting Falcon, and they have many similarities: use of a single engine, speed, size, cost, and the range of weapons. KAI's previous engineering experience in license-producing the KF-16 was a starting point for the development of the T-50.
The T-50 Golden Eagle uses a single General Electric F404-102 turbofan engine license-produced by Samsung Techwin, upgraded with a Full Authority Digital Engine Control (FADEC) system jointly developed by General Electric and Korea Aerospace Industries. The engine consists of three-staged fans, seven axial stage arrangement, and an afterburner. The aircraft has a maximum speed of Mach 1.4-1.5.[42] Its engine produces a maximum of 78.7 kN (17,700 lbf) of thrust with afterburner.The General Electric F414 engine has been suggested as the new engine for the T-50 family, as well as Rolls Royce's EJ200 to allow better compatibility with European air forces. Both engines provide more thrust compared to the F404.