The units were designed to operate on inner-suburban commuter lines in and around Birmingham and Manchester with swift acceleration and high reliability.

In June 1990, the contract was awarded to Hunslet Transportation Projects of Birmingham, a new company set up by a team of engineers and managers who had left Metro-Cammell, a Birmingham-based train manufacturer at the time.

The trains were designed in Birmingham, but built and fitted out at the Hunslet works in Leeds, with the traction motors supplied by the Dutch firm Holec.

[16] When the electrification of the Leeds/Bradford – Skipton/Ilkley Airedale/Wharfedale Lines was confirmed in the early 1990s, Regional Railways and West Yorkshire PTE applied to the government for fourteen units to add to those already on order.

[25] At the time, government spending on the railways was restricted due to the impending privatisation of British Rail and eventually, when funding was not forthcoming, the order was cancelled.

[26] The units are known for a distinctive whine made during acceleration or deceleration, rising/falling through multiple phases falsely suggestive of a motor connected to a gearbox with a great many ratios, caused by use of a gate turn-off thyristor-based inverter as part of the traction control circuitry that drives the three-phase AC motors, a common setup in the early-to-mid 1990s which is notably also present in the Networker family of EMUs.

Electric services began on 26 November 1992 on the northern section of the Cross-City Line, before the entire route was energised in June the following year.

[16][29] As part of the privatisation of British Rail, all 43 were sold to Porterbrook in 1994 and allocated to the Central Trains and North West Regional Railways shadow franchises.

In mid-to-late 2019, a number of West Midlands Trains' Class 323 units were used for an in-service pilot test of retrofitted Double Variable-Rate Sanders, sponsored by the Rail Safety and Standards Board.

The 323s were planned to leave Arriva Rail North in December 2018 when replaced by the Class 331 fleet,[35][36][37][page needed] but this did not occur.

[44] On 18 December 2008, unit 323231 collided with a Nissan 4x4 which had rolled down the embankment from a delivery company car park at North Rode, Congleton.