There were four main model modifications (Ausführung A through Ausf. D), which formed the basis for at least 22 variants. The initial idea was for a vehicle that could be used to transport a single squad of panzergrenadiers to the battlefield protected from enemy small arms fire, and with some protection from artillery fire. In addition, the standard mounting of at least one MG 34 or MG 42 machine gun allowed the vehicle to provide support by fire for the infantry squad once they had disembarked in battle.
Positive aspects of the open top included greater situational awareness and faster egress by the infantry, as well as the ability to throw grenades and fire over the top of the fighting compartment as necessary while remaining under good horizontal cover. Downsides to the open top were a major vulnerability to all types of plunging fire; this included indirect fire from mortars and field artillery as well as depressed-trajectory small arms fire from higher elevated positions, lobbed hand grenades, and strafing by Allied aircraft.
The first two models were produced in small numbers from 1939. A and B model can be identified by the structure of the nose armor which comprises two trapezoids. The lower trapezoid has a cooling hatch. Production of the B modification from 1940 eliminated the fighting compartment's side vision slits. The C modification introduced into production in mid-1940 featured a simplified hexagonal-shape forward armoured plate for the engine. Ausf. A through C had rear doors of the vehicle bulging out. The C variant had a larger production run, but was a quite complex vehicle to build, involving many angled plates that gave reasonable protection from small arms fire. From early 1943, the Ausf D variant was developed with a purpose of reducing the number of angled body plates by 50%, simplifying the design and thus speeding up the production. Ausf D can be easily recognized by its single piece sloping rear (with flat doors).
The standard personnel carrier version was equipped with a 7.92 mm MG 34 or MG 42 machine gun mounted at the front of the open compartment, above and behind the driver. A second machine gun could be mounted at the rear on an anti-aircraft mount.
Variants were produced for specialized purposes, including with anti-aircraft guns, light howitzers, anti-tank guns and mortars or even large unguided artillery rockets, as well as a version with an infrared search light used to spot potential targets for associated Panther tanks equipped with infrared detectors.
Another potentially good design feature of the Sd.Kfz.251 was the large track area, with the characteristic "slack track" design with no return rollers for the upper run of track, and overlapping and interleaved main road wheels common to virtually all German halftracks of the period. This lowered ground pressure and provided better traction, giving the Sd.Kfz.251 better cross country performance than most other nations' half-tracked vehicles. The interleaved and overlapping main road wheels, however, shared a chief problem with the Tiger I and Panther main battle tanks that also used such roadwheel configurations - in muddy or winter weather conditions, such as those during a rasputitsa mud season or the coldest Russian winter conditions, accumulated mud and/or snow could freeze solid between the road wheels, possibly immobilizing the vehicle.