Hungarian engineer Rudolf Frommer worked his way up the company ranks of Budapest-based FEG ("Femaru-Fegyver"). From the period beginning in 1900, he served as the primary lead designs emerging from the firm which served weapons to the Austro-Hungarian and, later, Hungarian national armies. In 1912, Austro-Hungarian reserve units were issued the Pistol 12M (also known as the "Frommer Stop") in 7.65mm chambering and these served throughout World War 1 (1914-1918). In the post-war years, with the Austro-Hungarian Empire no longer an established national entity, the newly-formed Hungarian Army adopted the same pistol though under the designation of "Pistol 19M" in 1919.
In service, the 12M/19M lines proved complex yet functional. In the 1920s, the Hungarian Army began seeking a simplified product to serve as an official sidearm and Frommer developed the Model 29M of 1929 for this purpose. The weapon relied on a blowback system of operation and featured an external hammer but was otherwise an improvement of the complex 12M/19M line. The weapon was adopted in 1930.
By the middle of the decade, the Hungarian Army was in need of additional pistols for its small arms inventory to which Frommer revised the Model 29M to introduce the Model 37M of 1937. While he died shortly in 1936, the pistol was adopted in large numbers by the Hungarian government. It was chambered for the 9x17mm Short (.380 ACP) cartridge.
The Model 37M proved a clean-looking weapon no doubt influenced by the famous American Colt M1911 brought about by John Browning. This included a long slide hiding the action, barrel and recoil spring as well as a fixed handle covered by a two-piece grip overlay. The trigger was solid in is form and seated in a rounded ring guard. The slide included a ribbed aft section for gripping and its ejection port was set to the right side of the frame. The hammer was partially exposed at the rear while the rear face of the pistol grip served as a grip safety requiring a deliberate hand hold when firing. The weapon was fed from a spring-loaded 7-round detachable box magazine inserted into the base of the grip. Magazines featured an extension at the toe to serve as part of the grip. The same blowback, semi-automatic system or operation found in the 29M was retained as was the 9x17mm Short (.380 ACP) chambering. For all intents and purposes, the 37M was in fact the 29M with a new body and slightly revised physical features.
Hungary entered World War 2 (1939-1945) as part of the Axis powers, in line with Nazi Germany and fascist Italy. The 37M was therefore pressed into military service and was one of the active weapons in the short-lived Slovak-Hungarian War (March 23rd, 1939 - April 4th, 1939) which resulted in a tactical Hungarian victory. Hungarian forces were then part of the Invasion of Yugoslavia (April 1941) and participated in the German Invasion of the Soviet Union in June 1941 through "Operation Barbarossa". During the latter half of the war, the Hungarian government began secret negotiations with the British and Americans to end its participation. When Hitler learned of the communications, German forces invaded and occupied Hungary. This occupation would last until 1945 when a combined Soviet-Romanian force removed the German occupiers.
During the occupation, FEG factories continued output of 37M pistols and a stock of 50,000 in 7.65mm form were ordered by the conquering Germans. These were issued to Luftwaffe elements requiring a reliable, readily-available semi-automatic sidearm though Army forces were also given a large stock of the pistol in 7.65mm (.32 ACP) chambering. The German version included a manual, thumb-operated safety catch fitted to the left side of the frame near the hammer but, on the whole, the pistols were faithful to the original Hungarian design of 1937. German Luftwaffe variants were clearly marked along the left-side of the slide with "P.MOD. 37 KAL 7.65" to indicate model and chambering. In German service, these pistols were given the designation of "Pistole 37(u)" - the lowercase "u" used to signify their Hungarian origins ("Ung" = "Hungary").
Production of the FEG pistol totaled some 85,000 units.