The vehicle was originally prototyped starting in 1946, making it the first all-new Jeep to be designed for the U.S. military after World War II, and further developed during the 1950s by a team including four of the original Bantam engineers. A design called MARCO MM-100 by the Mid-American Research Corporation used a Porsche air-cooled engine and independent suspension. A competing prototype by Willys, the 1953 Bobcat or "Aero Jeep", which would share as many parts as possible with the M38 and M38A1 to save costs, was rejected in favor of the more advanced M422.

Although the vehicle was only to be used by the U.S. Marine Corps, and it was therefore clear from the beginning that production numbers would remain limited, the vehicle was extensively engineered and incorporated many innovations.

In order to keep the weight down, the M422 became the first U.S. Jeep to be fitted with an aluminium body. At 1,700 pounds (770 kg), it is the lightest of the North American military trucks to date, but still 100 lb (45 kg) heavier than the German World War II Kübelwagen. Also, this was the first U.S. small military vehicle designed with independent suspension all around (front: leading arms/trailing arms rear), sprung by ¼-elliptical leaf springs. Among the M422's many other unique features were differential-mounted brakes, center-point steering and the aluminum V4 engine developed by American Motors. The air-cooled 108 cu in (1.8 L) developed 52 bhp (39 kW) and 90 lb·ft (122 N·m) of torque, which propelled it to a top speed of 65 miles per hour (108 km/h), with a 55-mile-per-hour (89 km/h) military rating. Like the M151 MUTT, the transfer case only engages/disengages the front wheel drive and is part of the transmission. Thanks to full synchronization, it could be shifted from 2-wheel drive to 4-wheel drive on the fly.

Although basically a two-seater, the little vehicle could theoretically move six people, thanks to two additional fold-up seats that were integrated into the functional tailgate, as well as two folding backrests on the rear fenders.  Also, the M422 was rated to carry 850 lb (390 kg) off road, while all other standard GI 1/4 ton vehicles (even the M151) were rated at 800 lb (360 kg). And if needed, there was even a version of the M416 trailer specially adapted for towing by an M422: the M416B1.

Like any other USMC contract vehicle, the M422s came from the factory with all deep-water fording equipment installed, except for the pipes.

In 1958, seven prototypes passed grueling tests, and the first 250 vehicles were built by American Motors (AMC). These units went into mass production in 1960 and AMC built 3,922 Mighty Mites through 1962 for the U.S. Marine Corps. Over the years, the vehicle was produced in three model versions: the M422, M422A1, and M422A2. The M422 had a tiny 53-inch (1,300 mm) wheelbase. After production of 1,045 units, the rig evolved into the M422A1, six inches (152 mm) longer in both wheelbase and length, and 80 pounds (36 kg) heavier. The A1 also had a spare tire and a windshield similar to the M38A1.

At over US$5,000 per unit, it was relatively expensive, and by the time the 'Mite' went into full production, the military's helicopters had become so much more powerful, that the vehicle quickly became obsolete. The Marine Corps' Sikorsky H-19 with its 2,650-pound (1,200 kg) cargo limit (including crew and fuel), for which the M422 had been developed, was being superseded by the Vietnam era UH-1 “Huey", that could carry more than 1½ times that load. These factors may account for the small production total, as well as the short production time period