The Panzerschreck was designed as a lightweight infantry anti-tank weapon. The weapon was shoulder-launched and fired a rocket-propelled, fin-stabilized grenade with a shaped charge warhead. It was made in much smaller numbers than the Panzerfaust, which was a disposable recoilless rifle firing an anti-tank warhead.
In 1941, when the Germans encountered the new Soviet tank designs such as the T-34, they quickly discovered the effectiveness of the high explosive anti-tank (HEAT) round which many of their early tanks such as the Panzer IV were equipped with against this new threat. The need of a more effective infantry anti-tank weapon than the Panzerbüchse 39 (PzB 39) anti-tank rifles was paramount for the German army. Development for such a weapon which used the HEAT principle quickly ensued. The first development was a converted anti-tank grenade launcher version of the P.z.b 39 anti-tank rifle called the G.z.b 39. Development created the Faustpatrone and later the Panzerfaust which were highly effective against Allied armor but lacked the range and multi-purpose nature of the 2.36-inch (60mm) M1A1 "Bazooka". Later in the fighting in Africa, German troops captured many Allied bazookas in North Africa as well as some lend-lease versions on the Eastern front. The German army quickly developed an enlarged German version of the M1A1 Bazooka, the Raketenpanzerbüchse, which had double the penetrative performance and used a bigger 88 mm round. Although this was a much heavier round than its Allied counterpart, it proved itself against Allied armor on all fronts, earning the nickname "tank terror".The first model was the RPzB 43 which was 164 cm long and weighed about 9.25 kg when empty. Operators of the RPzB 43 had to wear a protective poncho and a gas mask without a filter to protect them from the heat of the backblast when the weapon was fired. In October 1943, it was succeeded by the RPzB 54 which was fitted with a blast shield to protect the operator. This was heavier and weighed 11 kg empty. This was followed by the RPzB 54/1 with an improved rocket, shorter barrel and a range increased to about 180 meters.
Firing the RPzB generated a lot of smoke both in front and behind the weapon. Because of the weapon's tube and the smoke, the German troops nicknamed it the Ofenrohr ("Stove Pipe"). This also meant that Panzerschreck teams were revealed once they fired, making them targets and, therefore, required them to shift positions. This type of system also made it problematic to fire the weapon from inside closed spaces (such as bunkers or houses), filling the room with toxic smoke and revealing the firing location immediately. This was in contrast to the British PIAT's cumbersome, but non-smoking system, or the Panzerfausts short burst launch system.
The Panzerschreck was an effective weapon. Allied bazookas had problems with new up-armored German armor present on German tanks, most notably the Tiger tank and the Panther tank. By comparison the Panzerschreck rocket could penetrate over 200 mm of armor, which was only found on the IS-2 Soviet tanks, but paid for this extra hitting power with extra weight. The rocket projectile weighed 3.3 kg (7.25 lb).  One direct hit was usually enough to destroy any Allied armored vehicle. When handled by well-trained crews, this weapon became the bane of Allied armored units, who frequently attempted to add improvised protection to their tanks, e.g. sandbags, spare track units, logs and so on. Most of this make-shift protection had little actual effect.