This paper describes the implementation and linearization of a coupled panel and vortex particle method in a state-variable form. More specifically, the coupled panel and vortex particle dynamics are formulated as a nonlinear system of ordinary differential equations in first-order form to be self-contained and inherently linearizable. Linearization of this coupled panel and vortex particle method is demonstrated via finite differencing and a novel analytical linearization technique to yield a linear time-invariant representation. The code is implemented in MATLAB® and validated against an open-source aerodynamic solver for a fixed wing in both stationary and unsteady conditions. The linearized models are verified against the nonlinear dynamics both in the time and frequency domains. Linearized models accurately represent the wake dynamics about the equilibrium condition for moderate amplitude inputs and for input frequencies covering the typical frequency range of flight dynamics and flight controls, i.e., 0.3–30 rad/s. Analytical linearization is shown to abate the cost of linearization over perturbation methods by O(n2), where n is the total number of states of the system. Linearized models of the coupled panel and vortex particle dynamics have applications in the flight dynamics of both fixed- and rotary-wing vehicles, where these dynamics can be used to augment the rigid-body dynamics. The coupled rigid-body and wake dynamics can be leveraged to assess the stability, response characteristics, and handling qualities of vehicles experiencing aerodynamic interactions between rotors, wings, and/or obstacles.