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The Hungarian AMD-65 (Automata Módosított Deszantfegyver - "Modified Paratrooper Automatic Rifle") was requested first in 1964 because the standard AKM-63 rifles in Hungarian service were too long for a lot of troops. The Ministry of the Interior requested a new rifle 30% shorter and 10% lighter than the standard AK, and the result was the AMD-65. The designers at FÉG decided that the regular Soviet underfolding stock design was too complicated and expensive - and also prone to getting loose with use - and designed their own folding stock design. It was cheap, easy to make, and solid - but it gave a lousy cheek weld. This was an acceptable compromise.

The AMD-65 first saw combat use with elements of the Hungarian forces that occupied Czechoslovakia in August 1968, and they liked it. In a surprise move a few months later, the Hungarian MoD decided to adopt it as the standard infantry rifle for all troops, on account of its lower cost than the AKM-63. This was really not the role the AMD-65 was intended for, but the decision stood. Production for the Hungarian military ran until 1980, and commercial and export production continued another decade until 1990. In total, about 1,068,000 AMD-65s were made, accounting for 56.5% of all Hungarian Kalashnikovs. It was widely exported, and is seen in conflict zones worldwide to this day.