The Gulfstream III was built at Savannah, Georgia, in the United States and was designed as an improved variant of the Grumman Gulfstream II. Design studies were performed by Grumman Aerospace Corporation in collaboration with Gulfstream American Corporation. Design of the Gulfstream III started with an effort to synthesize a completely new wing employing NASA supercritical airfoil sections and winglets. Optimization studies considering weight, drag, fuel volume, cost, and performance indicated that a substantial portion of the new wing benefit could be secured with modifications to the existing wing. As a result, the new wing concept was canceled and work began on design modifications that would retain the Gulfstream II wing box structure and trailing edge surfaces.
Compared to the G-1159 Gulfstream II, the wing has 6 ft (1.8 m) more span and 5 ft (1.5 m) winglets added, the leading edge is longer and its contour is modified. The fuselage is 2 ft (0.6 m) longer aft of the main door, the radome is extended and there is a new curved windshield. Maximum takeoff weight is increased to 68,200 lb (30,935 kg) or 69,700 lb (31,615 kg) and there are various changes to the autopilot, flight instruments, and engine instruments. The aircraft received its type certificate from the American Federal Aviation Administration on 22 September 1980. A total of 202 Gulfstream IIIs were built, with the last example built in 1986.
In 2013, the FAA modified 14 CFR part 91 rules to prohibit the operation of jets weighing 75,000 pounds or less that are not stage 3 noise compliant after December 31, 2015. The Gulfstream III is listed explicitly in Federal Register 78 FR 39576. Any Gulfstream III's that have not been modified by installing Stage 3 noise compliant engines or have not had "hushkits" installed for non-compliant engines will not be permitted to fly in the contiguous 48 states after December 31, 2015. 14 CFR §91.883 Special flight authorizations for jet airplanes weighing 75,000 pounds or less – lists special flight authorizations that may be granted for operation after December 31, 2015.
By 2018, prices for a used 1982 GIII started at $695,000.
Gulfstream III in 1981
Model G-1159A Gulfstream III - Two or three-crew executive, corporate transport aircraft, powered by two Rolls-Royce Speyturbofan engines.
C-20D - United States Navy Operational Support Airlift (OSA) aircraft with modified communications equipment for use by the Navy, normally in support of high-ranking naval officials
C-20E - Stretched fuselage/redesigned wing variant for use by the United States Army as an Operational Support Airlift (OSA) aircraft
Gulfstream III SRA-1 - Special reconnaissance and surveillance version for export.
Gulfstream III SMA-3 - Export model for Denmark, fitted with a Texas Instruments APS-127 search radar. Three maritime reconnaissance and patrol, fisheries protection, search and rescue, and VIP transport aircraft were built for the Royal Danish Air Force in 1983. No longer in service.
A NASA Gulfstream C-20B (83-0502 cn 389) has been fitted with a centerline pylon to allow it to carry the Unmanned Aerial Vehicle Synthetic Aperture Radar (UAVSAR) pod.
A NASA Gulfstream III (N992NA cn 309) has also been fitted with a centerline pylon to allow it to carry the Airborne Microwave Observatory of Subcanopy and Subsurface (AirMOSS) pod, a modification of the UAVSAR pod.
The Phoenix Air Group operates two former Royal Danish Air Force SMA-3 aircraft (N173PA cn 313, N163PA cn 249) and a Gulfstream III (N186PA cn 317). One aircraft provides airborne maritime range surveillance for the Missile Defense Agency (MDA) and other Department of Defense range facilities using a high definition Texas Instruments APS-127 Surface Search Radar system. All three are configured with a large cargo door. In 2008 Phoenix Air developed an Airborne Biomedical Containment System with the CDC. In 2014, the system was deployed during the Ebola virus epidemic in Liberia to fly 12 ebola missions to the United States.
N30LX (cn 438) has been modified by the addition of a ventral canoe and sensor turret as the "Dragon Star" Airborne Multi-Intelligence Laboratory for use by Lockheed Martin. This has been leased by Italy since 2012.
Calspan operates N710CF (cn 448), which has been modified as an airborne test bed. Modifications include a centerline pylon  and a dorsal satcom radome 
Two Gulfstream IIIs, K2961 (cn 494) and K2962 (cn 495), equipped with long-range oblique photography cameras mounted in the fuselage, were delivered to the Indian Air Force.
Military and government operators
Cockpit of a C-20A
Military and government operators of the Gulfstream III and C-20 include:
August 3, 1996 - Flew into mountain during final approach to Vagar Airport on Faroe Islands. The Gulfstream III (F-330) from RDAF - Royal Danish Air Force was destroyed killing all nine people on board, including the Danish Chief of Defence Jørgen Garde.
July 4, 2017 - On the outskirts of Margarita Island, a Gulfstream III YV-2896 of the Venezuelan Vice-President crashed into the sea with nine people on board. Two bodies were later recovered, with the remaining seven occupants believed to have been killed.
Specifications (Gulfstream III)
Data from Jane's Civil and Military Aircraft Upgrades 1994–95
^Boppe, Charles W., "Computational Aerodynamic Design: X-29, the Gulfstream Series and a Tactical Fighter", SAE paper 851789, 1985 Wright Brothers Award Paper, presented at the Aerospace Technology Conference & Exposition, Long Beach California, October 1985.