In 1984 the UK Ministry of Defence began studies of a Mid-Life Update (MLU) of the aircraft to rectify shortcomings of the GR.1. This update, to Tornado GR.4 standard would improve capability in the medium level role while maintaining the Tornado's exceptional low-level penetration capability. The GR.4 upgrade was approved in 1994, after it had been revised to include lessons learned from the GR.1's performance in the 1991 Gulf War. One major change was the move from low level penetration to medium level attacks, while maintaining the low level capability. The contracts were signed with British Aerospace in 1994 for the upgrade of the GR.1’s to GR.4 standard, work began in 1996 and was finished in 2003.

Upgrades to the more than twenty-year old aircraft included FLIR (Forward-Looking InfraRed), a wide-angle HUD (Heads-Up Display), improved cockpit displays, NVG (Night Vision Goggles) capabilities, new avionics and weapons systems, updated computer systems, and a Global Positioning System receiver. The updated weapons system allowed integration of the latest offensive weapons, for example the Storm Shadow and Brimstone missiles and reconnaissance equipment such as the RAPTOR pod. As of late 2006, the GR.4 fleet is being fitted with a new 12.8-inch Multi-function display in the rear cockpit to replace the circular Combined Radar and Projected Map Display (CRPMD): The BAE Systems Tornado Advanced Radar Display Information System (TARDIS) is an Active-matrix liquid crystal display. TARDIS is currently being fitted to aircraft of the Fast Jet and Weapons Operational Evaluation Unit, before being fitted to all GR.4 aircraft.