The DUKW was designed by Rod Stephens Jr. of Sparkman & Stephens Inc. yacht designers, Dennis Puleston, a British deep water sailor, and Frank W. Speir, an ROTC Lieutenant out of MIT. Developed by the National Defense Research Committee and the Office of Scientific Research and Development, it was initially rejected by the armed services. When a United States Coast Guard patrol craft ran aground on a sandbar near Provincetown, Massachusetts, an experimental DUKW happened to be in the area for a demonstration scheduled to take place a few days later. Winds up to 60 knots (110 km/h), rain, and heavy surf prevented conventional craft from rescuing the seven stranded Coast Guardsmen, but the DUKW had no trouble, and the military opposition melted. The DUKW would later prove its seaworthiness by crossing the English Channel.

Its designation as a DUKW is not a military pun, the name comes from the terminology used for military vehicles in World War II; the D indicates a vehicle designed in 1942, the U meant "utility (amphibious)", the K indicated all-wheel drive and the W indicated two powered rear axles. The DUKW prototype was built around the cab-over-engine six-wheel-drive military truck GMC ACKWX (a COE version of the GMC CCKW), with the addition of a watertight hull and a propeller. The final production design was based on the CCKW. The vehicle was built by the GMC division of General Motors (called Yellow Truck and Coach at the beginning of the war). It was powered by a GMC Straight-6 engine of 270 in³ (4.416 L). The DUKW weighed 7.5 tons and operated at 6.4 mph (10 km/h) on water and 50 mph (80 km/h) on land. It was 31 feet (9.3 m) long, 8.25 feet (2.4 m) wide, and 8.8 feet (2.6 m) high with the folding-canvas top up. More than 21,000 were manufactured. It was not an armored vehicle, being plated with sheet steel between 1/16" and 1/8" thick to keep the weight down. A high-capacity bilge pump system kept the DUKW afloat if the thin hull was breached by holes up to a couple inches in diameter.

The DUKW was the first vehicle to allow the driver to vary the tire pressure from inside the cab, an accomplishment of Speir's device. The tires could be fully inflated for hard surfaces such as roads and less inflated for softer surfaces—especially beach sand. This added to the DUKW's great versatility as an amphibious vehicle. This feature is now standard on many military vehicles.