In February 1941, the U.S. Army requested a 13-metric-ton light tank with a compact silhouette, a stabilized 37-mm gun, and armor up to 38 mm thick. The first two tanks were the T7 and T7E1, which were to test different features. After reviewing a wooden mockup of the T7 on July 11, the planned weight was increased to 15 metric tons, and the requirements for speed and engine start-up temperatures were relaxed. In August, the program expanded to include five prototypes. The first prototype, the T7, was completed in January 1942 and featured a welded hull and a cast turret. It was to be followed by the T7E1; however, after the hull was built, the design was scrapped due to its riveted armor.

The T7E2 featured a major redesign, including a lower but wider profile and a British 57-mm gun, but it weighed 23 metric tons. It arrived for testing on May 26, 1942. Since the military did not consider the 57 mm gun to be adequate, they requested that it be replaced with the American 75 mm M3 gun. This led to the creation of the T7E5 in August. With an increased weight of 24 metric tons, the vehicle was reclassified as a medium tank and designated the M7 Medium Tank. It was soon put through a direct comparison with the M4A3, in which it was deemed inferior to the Sherman. Development of the vehicle continued for over a year, and an improved variant, the M7E2, was created to address mobility issues. On January 20, 1944, the project was officially canceled, and a total of seven M7s and six M7E2s had been built.

The M7 was introduced in Update 2.59 "Sky Odyssey". It is a tank with average mobility and a rather mixed-performance stabilized gun. It delivers good post penetration damage, but struggles to penetrate heavy targets. Additionally, the M7 has fairly weak armor itself.