Royal Ordnance plc was formed on 2 January 1985 as a public corporation, owning the majority of what until then were the remaining United Kingdom government-owned Royal Ordnance Factories (abbreviated ROFs) which manufactured explosives, ammunition, small arms including the Lee–Enfield rifle, guns and military vehicles such as tanks. It owned some 16 factories; and employed about 19,000 staff.

Royal Ordnance plc was bought by British Aerospace (BAe) in April 1987, which became BAE Systems in 1999. The name Royal Ordnance was retained for almost another twenty years; and the sites retained their former names, either as Royal Ordnance or later RO Defence sites. The Royal Ordnance name was dropped in 2004 and after having traded as Land Systems, the division is now known as Land UK.

The Royal Ordnance Factories (ROFs) can trace their history back to 1560 with the founding of the Royal Gunpowder Factory (RGPF) at Waltham Abbey, Essex. This was linked to the Royal Small Arms Factory (RSAF) at Enfield Lock and the Royal Arsenal at Woolwich. All three were based near London— but not too close in case of explosion. The title of Royal Arsenal was introduced in 1805 to encompass the Royal Laboratories, Royal Gun Factory, and the Royal Carriage, which were originally separate and based in Greenwich.

In 1927 these three Royal Factories were transferred, within the War Office, from the Ministry of Munitions to the Department of the Master-General of the Ordnance. As World War II loomed, a further 40 ROFs were built by the Ministry of Supply, from the late 1930s into the 1940s, employed around 300,000 personnel. The number of factory sites and personnel employed shrank considerably after the end of the Second World War.

As part of its privatisation process in the 1980s, the UK Government transferred some of the, formerly separate, research and development capability of the Defence Research Establishments into the ROFs. Other parts of the UK's defence research and design capability were later closed down; remained with the UK Ministry of Defence, later to become Dstl; or became part of the privatised QinetiQ. The small number of ROFs involved in nuclear weapons production, ROF Burghfield and ROF Cardiff, were removed from ROF management and did not pass over to Royal Ordnance upon privatisation. They were transferred to the control of AWRE; which later became the Atomic Weapons Establishment.

On 2 January 1985, vesting day, the twelve ROFs that still remained open, plus the Waltham Abbey South site, RSAF Enfield and three agency factories, became a UK government-owned company: Royal Ordnance plc. Its headquarters was moved to ROF Chorley, Lancashire; with its registered office located in central London. The intention of the government at this stage was to privatise Royal Ordnance as soon as possible through a stock market flotation.

In mid-1985 a target date of July 1986 was set; however, by June 1986 the government announced that flotation would not be possible and that it intended to sell the company privately. The following problems were identified as barriers to a flotation:

The problems associated with ROF Leeds were solved when Royal Ordnance agreed the sale of the factory and intellectual property rights of the Challenger tanks to Vickers plc on 4 October 1986, the final agreement was signed on 31 March 1987 valuing ROF Leeds at £15.2 million. Vickers became Alvis Vickers and, in 2004, became part of BAE Systems, and the Leeds factory was closed. The relationship with the MOD was resolved by certain guarantees given to the company by the MOD regarding future procurement strategies. The financial position of the company was resolved by a Treasury cash injection and the proceeds of the ROF Leeds sale. The liabilities were with regard to a sub-contract for a missile systems between British Aerospace (BAe) and an MOD research establishment transferred to Royal Ordnance on Incorporation; BAe and the MOD reached agreement in February 1987.