Early in the Vietnam War, the US Navy acquired a quantity of Swedish M/45B submachine guns (“Swedish K”) for special forces use. By 1966, however, the Swedish government would no longer authorize sales of arms to the United States because of involvement in the Vietnam War. So instead, the US turned to Smith & Wesson to design and produce a copy of the gun. In January of 1967 the first prototypes were presented of the S&W Model 76, which incorporated a number of changes form the Swedish original. The S&W gun had an ambidextrous selector lever allowing either semiauto or full auto fire, and a permanently fitted magazine well for use with a close copy of the Suomi 36 round double stack box magazine. Most interestingly, the inside of the receiver tube is cut with long rifling-like grooves to allow dirt and fouling to accumulate without impacting the gun’s reliability.
Only a relatively small number of 76s were procured by the Navy (under the designation Mk 24 Mod 0), as the availablity of AR15/M16 carbines proved more attractive option than 9mm submachine guns. The company would continue making them until 1974, with a total of 6,000 produced. This particular example is a T prefix serial, which I suspect (but cannot prove) was Navy purchase.
The reputation of the S&W 76 has been unfortunately tarnished by a succession of full auto and semiauto clones, none of which are as well made or as reliable in use as the original S&W production.