During the airborne operation in Kreta the Fallschirmjäger were equipped with the same type of small arms as the Heer, with pistols and hand grenades on jumps, and submachine guns, rifles and other weapons dropped in containers. In Kreta long-range fire from the defender caused heavy casualties before they could retrieve their main weapons. This caused rethinking of the use of standard weapons for paratroops. Additionally newer semi-automatic arms were being developed for the Heer during this period. The Reich Air Ministry proposed a broad use automatic rifle to replace the other arms used by the Fallschirmjäger. This would simplify logistics for airborne operations as well, since neither the bolt action carbine nor short range submachine guns were adequate for airborne combat operation. Encountering resistance and conflicting priorities from other procurement entities in the Reich Hermann Göring ordered the project to continue independently.

RLM went directly to six German arms manufacturers with the LC-6 specification on 14 Dec 41. The initial design specifications were; not exceed 1,000 mm (39.4 in) long, no heavier than a Kar 98k rifle, selectable fire and use a detachable magazine for 7.92x57mm Mauser round. One interesting design point was the extreme cant to the grip, ostensibly to enable the Fallschirmjäger to fire downward while suspended under canopy. The selected design was from Rheinmetall-Borsig. The designer was Louis Stange. After several prototypes the LC-6/III variant was accepted for production as the Fallschirmjägergewehr-42 (FG 42). Fifty rifles were created by Rheinmetall for evaluation by the close of 1942. Some of these weapons experienced serious malfunctions and deformation. These malfunctions were fixed as were several other modifications and the weapon was authorized for limited production, approximately 2000 of this first Type E were manufactured. The weapon was first used in combat by Fallschirmjäger during operation to rescue Benito Mussolini.

Once deployed in the field it was found that the lightweight rifle wasn't sturdy enough to handle full power rifle ammunition in full automatic. In early '44 Krieghoff engineers designed Type G. It was longer and heavier, the stock was made from wood instead of steel, the grip was changed to vertical, the magazine design was changed. A four position gas regulator was fitted, the bolt and recoil spring were changed to wound wire, a case deflector was fitted and the muzzle brake and bayonet mount were changed. While all new FG-42 rifles had an integral dovetail, which accepted mounts for the ZF-41, scope equipped FG42's were very few and far between in the actual field. Scope equipped FG-42's mainly reside in collections with the ZF scope added post war.

The classifications are as follows:

• Type A - First design
• Type B - Revised model prototype
• Type C - "LC-6" Prototype
• Type D - First Fallschirmjägergewehr; acceptance trials
• Type E - First production Fallschirmjägergewehr (sometimes called the "Type I")
• Type F - First stamped receiver Fallschirmjägergewehr
• Type G - Final production model Fallschirmjägergewehr (sometimes called "Type II")

FG-42 is a gas operated, air-cooled, selective fire weapon, with a long stroke gas piston under the barrel, and it operates the rotating bolt with two lugs. The gas system of the Type G added a gas adjustment regulator. The trigger unit was designed to fire from closed bolt in single shots for accuracy, and open bolt in full auto for better cooling.

The FG-42 underwent continuous development, changes suggested from the field included changing the metal stock to wood for better insulation from heat during prolonged fire and a larger forestock. The bipod attachment point was moved forward and the grip became more vertical. This became the Type G and again had a small production run of about 5000 units.