A propfan is a modified turbofan engine, with the fan placed outside of the engine nacelle on the same axis as the compressor blades. Propfans are also known as ultra-high by-pass (UHB) engines. The design is intended to offer the speed and performance of a turbofan, with the fuel economy of a turboprop.

General Electric's Unducted Fan (UDF) is a variation on NASA's original propfan concept, and appears similar to a pusher propeller-driven piston engine.

The reason propeller engines lose efficiency at high speed is the same reason that airplanes find it difficult to fly at supersonic speeds: an effect known as wave drag significantly increases drag just below the speed of sound, and led to the concept of the sound barrier.

In the case of a propeller this effect can happen any time the prop is spun fast enough that the tips of the prop start travelling near the speed of sound, even if the plane is sitting still. This can be controlled to a large degree by adding more blades to the prop, using up more power at a lower speed. This is why most WWII fighters started with two-blade props and were using five-blade designs by the end of the war. As their engines increased in power, they couldn't just spin the prop faster. However this solution does not help as the plane itself accelerates; at some point the forward speed of the plane combined with the rotational speed of the propeller will once again result in wave drag problems.

A method of decreasing wave drag was discovered by German researchers in WWII: sweeping the wing backwards. Today almost all aircraft designed to fly much above 450 mph (700 km/h) use a swept wing. In the 1970s, NASA started researching propellers with similar sweep. Since the inside of the prop is turning more slowly than the outside, the blade became progressively more swept toward the outside, leading to a curved shape.

The propfan concept was intended to deliver 35% better fuel efficiency than contemporary turbofans, and in this they succeeded. In static and air tests, propfans reached a 30% improvement without difficulty. This efficiency comes at a price, as one of the major problems with the propfan is noise, particularly in an era where aircraft are required to comply with increasingly strict Stage III and Stage IV noise requirements.

Boeing intended to offer GE's pusher UDF engine on the 7J7 platform, and McDonnell Douglas were going to do likewise on their MD-94X airliner. Both airliners were to use rear-fuselage mounted General Electric GE-36 engines. Neither project came to fruition.

Antonov developed the Antonov An-70 with four Progress D-27 propfan powerplants for Ukrainian air forces. Russian air forces ordered 164 aircraft in 2003.