Jagged Alliance: Flashback is not a "reboot", but a "reset", taking the franchise back to its roots. Full Control purchased the rights to create the game and members of their team have designed other award-winning video games, such as Star Wars: The Old Republic and Crysis. Chris Camfield, who was on the Jagged Alliance 2 development team and lead designer for Jagged Alliance 3 before it was canceled and two modders, helped in the creation of Flashback.

The game is a prologue to the first game, set in the 1980s, focusing on the formation of the A.I.M. organization, and implements the original turn-based gameplay.