The BTR-40 was developed as a post World War Two replacement for such vehicles as the US M3A1 Scout Car which was provided under the "Lend-Lease" program.  The BTR-40 was designed to fill the role of both APC and scout vehicle and was eventually replaced in the recon role by the BRDM-1 scout car (which also was built on the same GAZ-63 truck chassis) and the BTR-152 in the APC role. 'BTR' is the acronym for "Bronetransporter", translated from Russian as 'armored transporter'.

Some of the other variants of this vehicle are the concurrently developed BTR-40A fire support/anti-aircraft vehicle, BTR-40B closed-top scout car, BTR-40/40B RKh chemical reconnaissance vehicles, BTR-40 ZhD rail scout car and East German BTR-40 9M14 ATGM Vehicle.