The F-104 was designed to use the General Electric J79 turbojet engine, fed by side-mounted intakes with fixed inlet cones optimized for performance at Mach 1.7 (increased to Mach 2 for later F-104s equipped with more powerful J79-GE-19 engines). Unlike some supersonic aircraft, the F-104 did not have variable-geometry inlets; instead at high Mach numbers excess air was bypassed around the engine. This bypass air also helped cool the engine. Its thrust-to-drag ratio was excellent, allowing a maximum speed well in excess of Mach 2. Available thrust was actually limited by the geometry of the inlet scoop and duct; the aircraft was capable of even higher Mach numbers if the aluminum skin of the aircraft were able to withstand the heating due to air friction. Furthermore, speeds above Mach 2 quickly overheated the J79 engine beyond its thermal capabilities, which resulted in the F-104 being given a design airspeed limitation of Mach 2.

The engine consisted of a 17-stage compressor, an accessory drive section, an annular combustion chamber, a three-stage turbine, and an afterburner. The most powerful version of the J79, the J79-GE-19, was rated at 52.8 kN (11,900 lbf) dry thrust and 79.6 kN (17,900 lbf) with afterburner. Bleed air from the compressor's 17th stage was used for a number of purposes: the BLCS, cabin pressurization and air conditioning, hot-air jet rain removal, fuel transfer, canopy and windshield defogging and defrosting, pressure for the pilot's anti-G suit, pressurization and cooling of the nose-mounted radar equipment, and purging of gas from the M61 autocannon. The accessory drive ran two hydraulic pumps, two variable-frequency generators, the generator for the tachometer, and pumps for engine fuel and oil.