Staff Writer (Updated: 4/1/2016):
From the outset, Allied tank crews were at a disadvantage when tangling with the well-armored German tanks, needing numbers and ingenuity to usually overcome their counterparts. This resulted in Allied tank crews zeroing in for a near-point blank hit to the side or rear of the German units. The British and Americans were already looking into an upgunned version of the successful Medium Tank, M4 (or "M4 Sherman"), seeing that the weapon system was readily available in some quantity with a progressive stream of examples coming off the assembly lines at a record pace. Some in the American military offered mating a 90mm main gun to the existing M4 superstructure but others saw to it that the tank-versus-tank engagements should be handled by dedicated tank destroyer elements. Others were worried about the recoil effects and general unbalancing of adding such a weapon to the already heavy Sherman design. Still others balked at the prospect of having to redesign an entirely new turret system to take on such a weapon.
Going at it alone, the British were un-phased at the prospect. Seeing as how the Germans were able to fit their anti-tank guns into existing Panther tanks beginning in 1943, the British brought up the concept of fitting their 76.2mm anti-tank cannon (also known as the "17-pounder") into a Sherman. The 17-pounder was on par with the German 75mm guns and was already known to be a terrific penetrator of known armor configurations thanks to excellent propellant and a longer barrel. The early model Shermans and their turrets already in the possession of the British Army proved to be the right test bed for such a concept and the "Firefly" was accepted into service immediately. It was quickly issued to each tank group - which normally consisted of five tanks - one would be switched out in favor of a single Firefly.
Three variants of the Firefly were produced and these were noted by the type of Sherman chassis they were utilizing. In British service, the Medium Tank M4 went under the "Sherman" name followed by a roman numeral to distinguish each mark. Therefore, the Sherman I (which was a base M4 Sherman) was used for the new Sherman Firefly as were the Sherman I Hybrid (M4 Composite - named as sch due to the welded and cast hull construction) and the Sherman V (an M4A4 Sherman). In all, some 2,000 Sherman Fireflies would make it into service.
Seeing the fruits of British labor, the Americans now wanted in and put an order for up to 160 Fireflies. British Army shortages (and M4 Sherman chassis shortages in general) along with cultural prejudices within the US Army (it had to be "made in America by Americans" for it to be of value to the US Army) meant that the American order was not fulfilled in the end - though 100 such converted Shermans were in fact in the US Army inventory at war's end - just never utilized on the battlefield.
The Firefly now gave the Allies some punch at distance, with the Firefly able to effectively engage targets some 1,000 yards away. As more impressive munitions became available in the latter months of the war, the destructive power of the Firefly became ever moreso something for Axis tank crews to contend with. So definitive was the arrival of the Sherman Firefly that German anti-tank crews and tanks received explicit orders to engage and eliminate Fireflies as the first priority in any given engagement.
It should be noted that these Sherman conversions to Fireflies basically inherited the "adequate" armor protection of their original designs meaning that no additional armor protection was given to the new Firefly design. As such, Firefly tank crews would still have been wary of their own safety when in the line of enemy fire. Fireflies would appear in the Normandy beach landings of 1944 and were later attached to standard tank battalions onwards, though it was initially intended that Fireflies would form their own tank groups.