In 1934, the FCM company received an order from the French army to design a modern tank for their light tank regiments. FCM was an experienced tank manufacturer, having proved themselves with work on previous projects (such as the Char 2C and Char B1), and quickly developed a new light tank design. Just over a year after the initial wooden mockup was presented and approved by the Army, the first prototype was tested in April 1935. During the one year testing period, multiple changes were made to make the vehicle more reliable, lighter, and better protected.

In July 1936, the FCM 36 was declared the best of three competing vehicles (which included the Hotchkiss H35 and Renault R35), although all three vehicles were still produced. But due to the Rhineland crisis in May 1936, the FCM company received orders for 100 of the FCM 36 tanks before it was even proclaimed the winner of the competition. Production of the FCM 36 did not begin until 1937, after tests of an improved version failed to produce the desired results. The first FCM 36 tanks left the factory floor in May 1938, and joined the ranks of the Army the following year. After the initial order of 100 vehicles was fulfilled, production was discontinued in favour of the Char B1, (also manufactured by FCM).

During the Invasion of France in 1940, the 100 FCM 36s in service with the French army saw limited success against the latest German armour—most notably the Panzer III. Although both vehicles offered similar overall performance, long tank battles against the Panzer III often resulted with neither vehicle able to achieve a fatal blow against the other. Unfortunately, the welds of the FCM 36’s heavily angled and complex armour would eventually break from extensive and repeated battle damage, which left the Panzer III as the victor in the long run. During the German occupation, the FCM 36 was initially used by the German army as a training or reserve vehicle. In 1943/44, 37 captured FCM 36s were converted into tank destroyers or self-propelled artillery pieces.