The Atari 1200XL was released in early 1983 as a successor to the Atari 800. Compared to the 800, it had 64 KB of RAM, extra function keys, character support for several European languages, and a built-in self-test diagnostic program. It also had a sleek and contemporary (for the time) look which contrasted with the 800's late 1970s styling and bulk. Internally, the 1200XL was far less complex with all components placed on a single PCB and using thin RF shielding.

Despite its new features, the 1200XL's high price over the 800, lack of true expansion capabilities and compatibility issues with some programs greatly hindered sales, and it was discontinued after just a few months. It was succeeded by the 800XL, introduced in late 1983.