The light armored car Sd.Kfz.221 was developed in 1934 as a replacement for Kfz.13/14 and was based on standard heavy four-wheeled passenger car chassis (sPkw I Horch 801) with an armoured body with well sloped armour and small open top machine gun turret. Later models had the turret fitted with mesh wire covers for protection against hand grenades and shrapnel and was armed initially with the 7.92mm MG13 and later the 7.92mm MG34 machine gun.

For defence against light tanks some also mounted the 7.92mm Panzerbüchse 39 anti-tank rifle as supplementary armament with the MG34 still in place on the turret mounting and the PzB 39 resting on its bipod mount. According to Panzer Tracts No.13 Panzerspäehwagen Armored Cars only 339 Sd.Kfz.221s were produced in two series by Eisenwerk Weserhuette AG from 1935 to May of 1940 with a few more for the SS and export to China.

After being replaced by the 2cm armed Sd.Kfz.222 in 1942 some Sd.Kfz.221 vehicles were refitted with modified turrets armed with 28mm sPzB 41 heavy anti-tank rifleto extend the service, which gave the vehicle a very distinctive appearance.