Like many British manufacturers, AC Cars had been using the Bristol straight-6 engine in its small-volume production, including its AC Ace two-seater roadster. This had a hand-built body with a steel tube frame, and aluminium body panels that were made using English wheeling machines. The engine was a pre-World War II design by BMW which by the 1960s was considered dated. In 1961 Bristol decided to cease production of its engine.
In September 1961, American retired race car driver and automotive designer Carroll Shelby wrote to AC asking if they would build him a car modified to accept a V8 engine. Bristol engines for the AC Ace two-seater sports car had recently been discontinued so AC agreed, provided a suitable engine could be found. Shelby went to Chevrolet to see if they would provide him with engines, but not wanting to add competition to the Corvette they said no. However, Ford wanted a car that could compete with the Corvette and they happened to have a brand new engine which could be used in this endeavor: the Windsor 3.6-litre (221 cu in) engine – a new lightweight, thin-wall cast small-block V8. Ford provided Shelby with two engines.