Encouraged by pressure from existing Gulfstream I operators, in early 1965 Grumman began preliminary studies for a turbofan-engined version of its very successful corporate turboprop. Market research indicated a requirement for an aircraft with the cabin volume of the Gulfstream I with high-speed transoceanic capability, but also capable of good short-field performance. By the time the planned full-scale mock-up had been completed, Grumman had received 30 firm orders, resulting in a programme go-ahead on 5 May 1965. There was no prototype as such, the first aircraft making its maiden flight on 2 October 1966.

With two Rolls-Royce Spey Mk 511-8 engines, each producing 5171kg thrust in an airframe some 65% of the weight of a similarly powered aircrach such as the BAe (BAC) One-Eleven and Fokker F28, the Grumman Gulfstream II met the short-field performance with ease and had a maximum-fuel range of more than 6115km.

All Gulfstream IIs were fitted with avionics and custom interiors at distributors, and in December 1967 the fifth aircraft was handed over to AiResearch Inc. for completion before becoming the first to reach a customer, in this case National Distillers and Chemical Corporation of New York. It became the first executive jet to fly non-stop across the North Atlantic in both directions, flying from Teterboro, New Jersey, to London Gatwick in 6 hours 55 minutes on 5 May 1968, and back to Burlington, Vermont, on 12 May in 7 hours 10 minutes.

Manufacture and improvement continued until December 1979, when the last of 258 production aircraft was delivered. By then Gulfstream American (now Gulfstream Aerospace) had superseded it in production by the more advanced Gulfstream III, and the advanced wing developed for this aircraft has become available as a retrofit for the Gulfstream II, the resulting conversion designated Gulfstream Il-B. Gulfstream Aerospace now has an active conversion programme in progress, the new wing increasing the range of the Gulfstream II and, at the same time, giving a significant improvement in fuel efficiency.