Although it was adopted by the Israeli military in the 1950s, the Uzi submachine gun did not generate much interest in the United States until the 1980s. The guns were used in limited numbers by the CIA covertly in Vietnam (and elsewhere), and also by various security elements of the US government - like the Secret Service. The events that would change this began in the 1970s when Uzi Gal left the Israeli military and moved to the United States, where he was hired by a company called Action Manufacturing.

The owner of the company, Harry Stern, got the idea to market a semiautomatic variant of the weapon, and Uzi himself designed the modifications to make it semiautomatic only. The resulting gun was then produced by IMI in Israel and imported by Action Arms, a new branch of Action Manufacturing. The gun was introduced at the 1980 SHOT Show, and proved to be very popular. By the time the 1989 import ban ended importation, Action Arms sold about 72,000 of the guns.

There were two main variations of the semauto Uzis made by IMI for Action Arms, the Model A and Model B (which replaced the A in 1983). The Model B added a firing pin safety that eliminated the possibility of the gun firing out of battery, which had been possible on the Model A. The B also incorporated some minor changes to the sights and sling swivels.