The weapon consists of a rocket packed inside of a launcher made up of two tubes, one inside the other. While closed, the outer assembly acts as a watertight container for the rocket and the percussion cap-type firing mechanism that activates the rocket. The outer tube contains the trigger, the arming handle, front and rear sights, and the rear cover. The inner tube contains the channel assembly which houses the firing pin assembly, including the detent lever. When extended, the inner tube telescopes outward toward the rear, guided by the channel assembly which rides in an alignment slot in the outer tube's trigger housing assembly. This causes the detent lever to move under the trigger assembly in the outer tube, both locking the inner tube in the extended position and cocking the weapon. Once armed, the weapon is no longer watertight even if the launcher is collapsed into its original configuration.

When fired, the propellant in the rocket motor completely combusts before leaving the tip of the launcher, producing gases around 1,400 °F (760°C). The rocket propels the 66 mm warhead forward without significant recoil. As the warhead emerges from the launcher, 6 fins spring out from the base of the rocket tube, stabilizing the warhead's flight. Once fired the launcher is no longer useful and may be discarded. 5RAR soldiers used the M72 primarily against enemy bunker systems.