The MP7 essentially operates like a scaled-down assault rifle. It fires a specially designed, armor-piercing round with a muzzle velocity nearly as high as that of the 5.56x45mm NATO cartridge used by many modern rifles. This ammunition is unique among submachine guns in that the bullet is made almost entirely of a hardened steel penetrator instead of softer brass or lead. The ammunition is virtually exclusive to the gun  and also offers low recoil.

The round also has a small diameter (it can almost be described as a scaled down .223 Remington ), allowing for high capacity in a very small magazine.The weapon allows a conventional 20-round, 30-round, or 40-round box magazine to be fit within the pistol grip (the former being comparable in size to a 15-round 9 mm magazine, while the latter compares to a 30-round 9 mm magazine). The weapon features an ambidextrous fire-select lever and rear cocking grip. It has an extendable stock and a folding front grip; it can be fired either one-handed or two-handed. It is compact and light using polymers in its construction.