The Marder III was yet another German attempt at fitting various anti-tank guns on an existing chassis, in this case that of the PzKpfw 38(t) that despite its effectiveness in the early blitzkrieg campaigns, was obsolete against more powerful Soviet tanks. Like the Marder II, the Marder III was equipped either with captured Soviet 76.2mm F-22 guns or German 7.5cm PaK 40s. The superstructure of the three main Marder III types varied noticeably but all were characterized by having no protection in the top and in the rear, as was the case in most German self-propelled anti-tank platforms (in fact, the superstructure of the initial type was little more than an oversized gun shield). The hull also underwent various modifications; in its final incarnation the engine was moved to the middle so that the fighting compartment could be located in the rear of the vehicle. The engine was also uprated compared to the original. Marder IIIs were first assigned to combat units in late 1942 where they served on the Eastern Front, Tunisia, Italy and the Western Front after D-Day. Like all the Marder series, they were meant only as a stop-gap design but their large numbers built compared to other tank destroyers made them useful additions to the panzerjäger detatchments and were in action until the end of the war.

A prototype was built in December 1941 and ordered almost immediately, with production of the Marder III (SdKfz 139), also known as the Panzerjäger 38(t), beginning in March. The initial version was equipped with the Soviet 76.2mm F-22 gun mounted directly on the hull, and protected by a relatively small superstructure. This was redesigned in the Ausf H (SdKfz 138) into a larger and more sloped superstructure and allowed use of the hull's fighting compartment which helped lower the profile. This version was armed with the 7.5cm PaK 40. The last and most widely produced variant was the Ausf M where the engine was moved from the rear to the middle of the hull, providing for a more efficient arrangement. Frontal armor was significantly reduced, however, but limited protection was added to the rear.