These rifles are manufactured by IMBEL (Indústria de Material Bélico do Brasil) and are based on the 7.62mm NATO FN FAL, which was previously manufactured by IMBEL for many years under licence as the Brazilian Army's standard service rifle.

In following the trend to adopt the 5.56×45mm NATO round, IMBEL started experimenting with 5.56mm versions of the FN FAL in the early 1980s.

Further development resulted in the MD-2 and MD-3 series, which still closely resemble their FAL parent.

Early MD-1 prototypes retained the FAL-type tilting bolt with a locking shoulder immediately behind the magazine well.

The MD-2 series contains many FAL-derived parts, some of which remain interchangeable with the original FAL, and others which are modified to suit the new design.