Colt's first two models produced after the acquisition of the rifle from Armalite were the 601 and 602, and these rifles were in many ways clones of the original Armalite rifle (in fact, these rifles were often found stamped Colt Armalite AR-15). The 601 and 602 are easily identified by their "slab-sided" lower receivers without the commonly found "fencing" around the magazine well, and in certain cases their green or brown furniture.
The 601 was adopted first of any of the rifles by the USAF, and was quickly supplemented with the XM16/M16 (Colt Model 604) as improvements were made. There was also a limited purchase of 602s, and a number of both of these rifles found their way to a number of Special Operations units then operating in South East Asia, most notably the U.S. Navy SEALs. The only major difference between the 601 and 602 is the switch from the original 1-14 inch rifling twist to the more common 1-12 inch twist.

Variant originally adopted by the USAF. This was the first M16 adopted operationally. This variant had triangular handguards, a three-pronged flash suppressor, and no forward assist. Bolt carriers were originally chrome plated and slick-sided, lacking any notches for a forward assist. Later, the chrome plated carriers were dropped in favor of Army issued notched and parkerized carriers. The Air Force continues to operate these weapons and upgrades them as parts wear or break and through attrition.

The prototype army-version, XM16E1, was essentially the same weapon as the M16 with the addition of a forward assist. The M16A1 was the finalized production model. To address issues raised by the XM16E1's testing cycle, a "bird-cage" flash suppressor replaced the XM16E1's three-pronged flash suppressor, which was too easy for foreign material to get into and which caught on twigs and leaves. After numerous problems in the field, numerous changes were fielded. Cleaning kits were developed and issued; barrels with chromed chambers and later fully-chromed bores were introduced. The number of malfunctions due to fouling and corrosion declined and later troops were generally unfamiliar with early problems.

Modifications to the M16A2 were more extensive. In addition to the new rifling, the barrel was made with a greater thickness in front of the front sight post to resist bending in the field. A new adjustable rear sight was added, allowing the rear sight to be dialed in for specific range settings between 300 and 800 meters to take full advantage of the ballistic characteristics of the new SS-109 rounds. The flash suppressor was again modified, this time to be closed on the bottom so it would not kick up dirt or snow when being fired from the prone position. The front grip was modified from the original triangular shape to a round one, which better fit smaller hands. The new handguards were also symmetrical so that armories didn't need separate left and right spares. The buttstock was redesigned to be longer and stronger. The new buttstock is said to be ten times stronger than the original due to advances in plastics and design. The heavier bullet has a reduced muzzle velocity from 3,200 feet per second (975 m/s) in the earlier models, to about 2,900 feet per second (875 m/s) in the A2. A special spent case deflector was incorporated into the upper receiver to the rear of the ejection port to prevent spent casings from striking left-handed users.

The action was also modified, replacing the fully-automatic setting with a three-round burst setting. When using a fully-automatic weapon, poorly trained troops often hold down the trigger and "spray" when under fire. The U.S. Army concluded that three-shot groups provide an optimum combination of ammunition conservation, accuracy and firepower. There are mechanical flaws in the M16A2 burst mechanism. The trigger group does not reset when the trigger is released. If a soldier lets go of the trigger between the second and third round of the burst, for example, the next trigger pull would only result in a single shot. Even in semi-automatic mode, the trigger group mechanism affects weapon handling. With each round fired, the trigger group cycles through one of the three stages of the burst mechanism. The trigger pull at each of these stages is slightly different, detracting from accuracy, though not by any noticable amount for most shooters. All together, the M16A2s new features added weight and complexity to the M16 while simultaneously decreasing barrel life and removing the fully-automatic setting. While the new gun was said to be more accurate, the heavier bullets had a more curved trajectory requiring more precise range estimation for accurate shot placement. Critics also point out that neither of the rear sight apertures is ideally sized. The small aperture is too small, making quick acquisition of the front site post difficult, and the large aperture is too large, resulting in decreased accuracy. To make matters worse, the rear sight apertures are not machined to be on the same plane. In other words, the point of impact changes when the user changes from one aperture to the other. The rear sight's range adjustment feature is rarely used in combat as soldiers tend to leave the rear sight on its lowest range setting: 300 meters. Despite criticism, a new rifle was needed both to comply with NATO standardization of the SS-109 (M855) and to replace aging Vietnam era weapons in the inventory.

The M16A3 was a fully-automatic variant of the M16A2 adopted in small numbers around the time of the introduction of the M16A2, primarily by the U.S. Navy for use by the SEALs. It features a Safe-Semi-Auto (S-1-F) trigger group like that of the M16A1. Some confusion continues to exist regarding the M16A3. It is often described as the fully-automatic version of the M16A4. Descriptions of the M16A3 that claim that it shares the M16A4's Picatinny rail are incorrect. This misunderstanding most likely stems from the usage of the A2 and A3 designations by civilian manufacturers to differentiate between A2-style fixed carry handles and Picatinny rail versions.

The M16A4, now standard issue for frontline U.S. Army and USMC units, replaces the combination fixed carry handle/rear iron sight with a MIL-STD-1913 Picatinny rail , allowing for the rifle to be equipped with a carry handle and/or most military and consumer scopes or sighting systems. All of the U.S. Marine Corps' M16A4s are equipped with a Knight's Armament Company M5 RAS handguard, allowing vertical grips, lasers, tactical lights, and other accessories to be attached. U.S. Army M16A4s also often feature the KAC M5 RAS. In U.S. Army Field Manuals, M16A4s fitted with the RAS are sometimes referred to as M16A4 MWS or Modular Weapon System.

M16A4 MWS. Shown above, from left to right: AN/PEQ-2 Infra-Red Laser and Illuminator; M68 red dot sight; AN/PVS-4 Night Sight, and the carry handle/sight combination. Starting at left on the bottom and moving counter-clockwise: handguards in various lengths, the M203 grenade launcher, the M203 quadrant sight, a vertical grip, and the M203 leaf sight.

With the expanding conflict in South East Asia, Colt developed two rifles of the M16 pattern for evaluation as possible light sniper or designated marksman rifles. The Colt Model 655 M16A1 Special High Profile was essentially a standard A1 rifle with a heavier barrel and a scope mount that attached to the rifle's carry handle. The Colt Model 656 M16A1 Special Low Profile had a special upper receiver with no carrying handle. Instead, it had a low-profile iron sight adjustable for windage and a Weaver base for mounting a scope, a precursor to the Colt and Picatinny rails. It also had a hooded front iron sight in addition to the heavy barrel. Both rifles came standard with either a Leatherwood/Realist scope 3-9x Adjustable Ranging Telescope. Some of them were fitted with a Sionics noise and flash suppressor Neither of these rifles were ever standardized.
These weapons can be seen in many ways to be predecessors of the U.S. Army's SDM-R (Squad_Designated_Marksman_Rifle) and the USMC's SAM-R (Squad_Advanced_Marksman_Rifle) weapons.

In Vietnam, some soldiers were issued a carbine version of the M16 called the XM177 (Colt_Commando). The XM177 had a shorter barrel (~260 mm) and a telescoping stock, which made it substantially more compact. It also possessed a combination flash hider/sound moderator to reduce problems with muzzle flash and loud report. The USAF's GAU-5/A (XM177) and the U.S. Army's XM177E1 variants differed over the latter’s inclusion of a forward assist. The final USAF GAU-5A/A and U.S. Army XM177E2 had a 290 mm barrel with a longer flash/sound suppressor. The lengthening of the barrel was to support the attachment of Colt's own XM148 40 mm grenade launcher. These versions were also known as the Colt Commando model commonly referenced and marketed as the CAR-15. The variants were issued in limited numbers to special forces, helicopter crews, Air Force pilots, officers, radio operators, artillerymen, and troops other than front line riflemen.

The M4 Carbine was developed from various outgrowths of these designs, including a number of 14.5" barreled A1 style carbines. The XM4 (Colt Model 720) started its trials in the mid-80s, with a 14.5 inch (368 mm) barrel. Officially adopted as a replacement for the M3 "Grease gun" (and the Beretta M9 and M16A2 for select troops) in 1994, it was used with great success in the Balkans , the 2000s War on Terrorism , and in Iraq .

Colt also returned to the original "Commando" idea, with its Model 733, essentially a modernized XM177E2 with many of the features introduced on the M16A2. A more complete history of this weapon can be found with other information on the Colt Commando .

A Firing Port Weapon or FPW was also developed to work with the Bradley IFV , designated the M231 .

The Mk 4 Mod 0 was a variant of the M16A1 produced for the U.S. Navy SEALs during the conflict in Vietnam and adopted in April 1970. It differed from the basic M16A1 primarily in being optimized for maritime operations and coming equipped with a sound suppressor. Most of the operating parts of the rifle were coated in Kal-Guard, a quarter-inch hole was drilled through the stock and buffer tube for drainage, and an O-ring was added to the end of the buffer assembly. The weapon could reportedly be carried to the depth of 200 feet (60 m) without damage.

The initial Mk 2 Mod 0 Blast Suppressor was based on the U.S. Army's Human Engineering Lab's (HEL) M4 noise suppressor. The HEL M4 vented gas directly from the action, requiring a modified bolt carrier. A gas deflector was added to the charging handle to prevent gas from contacting the user. Thus, the HEL M4 suppressor was permanently mounted though it allowed normal semi-automatic and automatic operation. If the HEL M4 suppressor were removed, the weapon would have to be manually loaded after each single shot. On the other hand, the Mk 2 Mod 0 blast suppressor was considered an integral part of the Mk 4 Mod 0 rifle, but it would function normally if the suppressor were removed.

The Mk 2 Mod 0 blast suppressor also drained water much more quickly and did not require any modification to the bolt carrier or to the charging handle. In the last 1970s, the Mk 2 Mod 0 blast suppressor was replaced by the Mk 2 blast suppressor made by Knight's Armament Company (KAC). The KAC suppressor can be fully submerged and water will drain out in less than eight seconds. It will operate without degradation even if the M16A1 is fired at the maximum rate of fire. The U.S. Army replaced the HEL M4 with the much simpler Studies in Operational Negation of Insurgency and Counter-Subversion (SIONICS) MAW-A1 noise and flash suppressor.