It combined the characteristics and firepower of a light machine gun in a lightweight form slightly shorter (but considerably bulkier and heavier) than the standard-issue Karabiner 98k bolt-action infantry rifle.

[10] At the time of the Battle of Crete (Operation Mercury), German Fallschirmjäger (parachute infantry) were equipped with the same assortment of small arms as the Heer, carrying only 9×19mm Parabellum chambered pistols and hand grenades on them during parachute jumps, with 9×19mm Parabellum submachine guns, 7.92×57mm Mauser chambered rifles, and crew-served weapons stored separately in containers that were dropped from the wing of the exit craft.

The German RZ parachute harness, with one single riser and two straps attached to the body, making the paratrooper land on his hands and knees in a forward roll, did not allow heavier equipment such as rifles and machine guns to be safely carried during airborne jumps.

At Crete, long-range rifle and machine gun fire from dug-in Commonwealth defenders inflicted heavy casualties on the outgunned German paratroopers in the early stages of battle as they attempted to retrieve their support weapons from containers scattered all over the battlefield.

The engineers on staff had acquired considerable expertise developing lightweight automatic weapons, having successfully converted the MG 15 aircraft machine gun to a ground configuration.

[12] However, due to the high casualties sustained by the paratroopers during Operation Mercury, Hitler changed his mind about the usefulness of airborne assaults and the plans were terminated.

Mauser offered a version of the MG 81 (rejected due to excessive weight and its belt-fed operation)[14] while Krieghoff presented a rising-block prototype, which too was quickly dropped.

A design credited to Rheinmetall-Borsig's Louis Stange of Sömmerda who had previously worked on the MG 34 proved satisfactory and underwent military trials conducted by the GL/C E-6 test station at Tarnewitz in mid-1942.

The proposed system of operation was modeled on that used in World War I Lewis light machine gun, with a gas-operated turning bolt action geared to a spiral (clock-type) recoil spring.

When the Luftwaffe was finally given permission to produce 3,000 rifles for combat trials, the material specifications were changed to accommodate the use of manganese steel as a substitute.

[17] The weapon saw first operational use during the Gran Sasso raid (Unternehmen Eiche) in September 1943 when German paratroopers and Waffen-SS commandos rescued Italian dictator Benito Mussolini from his captors – 200 well-equipped Carabinieri guards.

After approximately 2,000 FG 42s had been produced by Krieghoff, supplies of the manganese steel from which the receivers were forged were diverted to other needs; this meant a redesign was required to use stamped sheet metal in its place.

Field reports that the lightweight rifle was not sturdy enough to handle full-power rifle ammunition in cyclic mode made Krieghoff engineers design the Type G. Improvements were: relocating the bipod from the front of the handguard to the muzzle to reduce shot dispersion; changing the pistol grip angle to near vertical; enlarging the handguard and changing the stock from stamped steel to wood to minimize overheating, adding weight to the bolt and lengthen its travel to reduce the cyclic rate of fire.

There were never enough FG 42s to arm most Fallschirmjäger as originally intended, however most were employed in the western front following the events of D-Day, with the particular use of FG-42 during the Battle of Carentan and the Falaise Pocket (nearly a quarter of all FG-42 produced were in the hands of the 2nd Parachute Division).

This layout, combined with the side magazine, placed both the center of gravity and the position of the shoulder stock nearly in line with the longitudinal axis of the bore, a feature increasing controllability during burst or automatic fire.

[17] The operating system was derived from that used in the successful Lewis light machine gun with a gas piston-actuated rotating bolt locking mechanism.

[17] The angled pistol grip on the first model was to maintain familiarity with the k98k as well as drop container storage and making it less likely to snag on all the straps of parachute equipment in a descent.

Owing to its main intended use by paratroopers, the rear sight (which necessarily was rather high due to the straight stock design) was a flip-up construction.