The MR64 was developed by a Peruvian military officer and engineer, Juan Erquiaga, in the early 1960s. Erquiaga, who was wanted in the United States for having illegally produced and supplied guns to Communist revolutionaries in Cuba during the 1950s, set up covert manufacturing facilities in California in 1962 to produce the MR64. The expressed purpose of the weapon was to sell it to Cuban anti-Communist exiles. Erquiaga was assisted in this endeavor by Gordon Ingram, who worked as a chief engineer on the project.
Initially an order of 500 guns was made by a Cuban exile group headquartered in Miami. 25 prototypes were completed in July 1964 and sent to the customers for testing. The FBI attempted to intercept this delivery but only managed to recover one gun; the rest were diverted by Erquiaga to the Dominican Republic and sold to Communist revolutionaries in Santo Domingo instead of their intended customer.
Although the FBI wanted to raid the factory, Erquiaga's operation seems to have received protection from government officials, who allowed production and sales of the gun to continue under the guise of military sales to Costa Rica. The production facilities were relocated and the remainder of the 500 ordered guns were produced, with detachable suppressor attachments being developed. By the time production was finally completed in February 1965 and the guns were ready to be shipped, the FBI raided the factory and confiscated the vast majority of the produced guns. Most were destroyed but some were kept as evidence. It is thought that the Costa Rican government pulled out of the deal, and thus the Erquiaga operation's plausible deniability was compromised, allowing the FBI to shut it down for good.
Erquiaga managed to escape to South America and returned to his home country of Peru after the FBI raid on his factory. Some surviving MR64s were obtained by another Californian company, CommSpec Ltd., who attempted to market them under the name "MP66" but had little financial success.
The MR64 was a basic blowback-operated, 9x19mm submachine gun that largely copied from the Sten. It fed from 32-round Sten magazines. The gun lacked a buttstock but featured a three-hole muzzle compensator. The bolt featured a detachable dead weight that could be removed to increase the rate of fire from 600rpm to 1,000rpm. A suppressor attachment was also developed for the MR64.