The successor to arguably the finest second-generation Western main battle tank, the Chieftain, began life as a custom-made design for the Shah of Iran known as the Shir 2. However, the deal fell through after the 1979 revolution, resulting in the British Army taking up the unfulfilled order. The Challenger 1 was Britain's first third-generation tank, and also the second after the US M1 to be fitted with the novel Chobham composite armor which consisted of numerous ceramic and elastic layers sandwitched between steel plates. As with most contemporary NATO tanks, the Challenger 1's turret was large and heavily sloped although its low profile was negated by the height of the hull. Large steel side skirts were also incorporated and a special armor package could also be installed which included additional Chobham armor blocks to the sides as well as ERA on the front hull. Like the Chieftain, it was also underpowered and noticeably slower than its NATO counterparts, although range issues were partly compensated by optionally carrying two fuel tanks in the rear hull, an arrangement more commonly seen in Soviet tanks. With regards to armament, the Challenger 1 was fitted with the tried and tested L11A5 120mm rifled gun, the same as that on the Chieftain, which stood out from the NATO and Soviet preference for smoothbore guns. These were able to fire depleted uranium rounds (such as the 'Jericho' APFSDS) if necessary although tungsten rounds were more commonly used. Despite the gun's penetrating power, teething problems led to the Challenger falling behind contemporary Western tanks such as the M1 and the Leopard 2 during NATO gunnery competitions in the 1980s, prompting British authorities to claim that the tank was 'built for combat and not competitions'. This proved true: the Challenger 1 gave a very good account of itself during the Gulf War, where over 100 were deployed as part of the 1st (UK) Armoured Division, Britain's land component in Operation Granby. During the four days of ground combat, Challengers destroyed 300 enemy tanks and vehicles without loss, including a 4.7 km hit on an enemy that was a record for its day. Challenger 1s also participated in the Yugoslav conflicts later in the decade, before being gradually replaced in British service by the outwardly-similar but thoroughly redesigned Challenger 2 in the early 2000s. Despite expectations of numerous NATO and global orders, it was only exported to Jordan.

The Challenger 1 entered service in March 1983, with the Royal Hussars of the British Army of the Rhine. Numerous upgrades were undertaken throughout its service life, particularly during its participation in the Gulf War. These included GPS systems, thermal sights, and reactive armor. The Challenger Armored Repair and Recovery Vehicle (CRARRV) is based on the Challenger 1 chasis and entered service in the mid-1980s. It remains active servicing British and Omani Challenger 2 units. Jordanian versions of the Challenger 1 are known locally as Al-Hussein.