The single-phase AC motors commonly used in German railway vehicles had reached the limits of their development in the 1970s, making it necessary to switch to three-phase AC motors. While the conventional motors had a torque curve that was extremely speed-dependent and therefore different locomotives had to be developed for different tractive forces and maximum speeds, the situation was completely different when using three-phase AC technology. This made it possible to develop high-speed universal locomotives that could also handle heavy freight trains.

The biggest problem with three-phase technology is controlling the motors with the right frequency for each speed, which ultimately led to the discontinuation of the earlier trials with three-phase locomotives at the beginning of the 20th century. With the help of modern semiconductor technology, it was now possible to convert the AC voltage from the overhead line into three-phase current of any frequency and voltage in converters. In addition, the energy from the dynamic brakes could now be fed back directly into the overhead line instead of being converted into useless heat in braking resistors. In the class 120, the main transformer was installed under the vehicle floor for the first time, which made it possible to create more space in the machine room.

In the 1970s, Henschel had already tested the diesel-electric DE 2500 and the electric E 1200 with three-phase traction motors. The aim was now to develop a significantly more powerful mixed-traffic locomotive with a top speed of 200 km/h with the class 120⁰. In the years 1979 and 1980, a total of five pre-production locomotives were built, which were initially tested at a top speed of 160 km/h. One example set a record of 231 km/h in August 1980 and the fifth example was factory-approved for 200 km/h. In 1984, one of the pre-production locomotives with a modified geara ratio set a new record of 265 km/h.

In the same year, these five units were officially put into service and 60 more production locomotives were ordered. The pre-production locomotives were mainly used under the designation class 752 as railway service vehicles. They were partly used as test vehicles and rebuilt several times. They also played an important part in the development of the ICE 1, whose power cars were derived directly from the class 120.

From 1987, the production locomotives were delivered as class 120¹. They were put under a lot of strain right from the start, as they were mainly used in front of intercity trains during the day and had to pull heavy freight trains at night. Only with the second stage of the railway reform in 1999 did the locomotives of the class 120 come to DB Fernverkehr and were therefore no longer available for use in front of freight trains. From 2007, a total of eight units were converted for use with 160 km/h push-pull trains and designated as class 120². Despite the availability of more modern locomotives such as the class 101, the class 120 remained an important part of IC traffic even after 2010. In some cases, engines that had already been retired were reactivated when demand increased. The last long-distance journey then took place in July 2020.