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Traditionally, the US Military designates the year that the weapon was accepted, as the Model number. Such as the Model 1911 Colt .45 (automatic) pistol, or the M-1903 Springfield (bolt action) rifle. In the case of the M-16 rifle, Armalite manufactured 14 firearms prior to their AR-15; thus, when the military adapted it, they added military modifications to it, making it different from the AR-15, therefore it was a 16th AR type firearm. Model (M stands for Military Model) 16.

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Q: Why is an m16 called an m16?
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