By the autumn of 1940 three prototypes had been completed and were assigned to Tank Detachment 100 as part of Operation_Sea_Lion. It was intended to use them for pulling ashore unpowered assault barges during the invasion and for towing vehicles across the beaches. They would also have been used to carry supplies directly ashore during the six hours of falling tide when the barges were grounded. This involved towing a Kässbohrer amphibious trailer (capable of transporting 10-20 tons of freight) behind the LWS.
The Landwasserschlepper was demonstrated to General Franz Halder on 2 August 1940 by the Reinhardt Trials Staff on the island of Sylt and, though he was critical of its high silhouette on land, he recognized the overall usefulness of the design. It was proposed to build enough LWSs that each invasion barge could be assigned one or two of them, but difficulties in mass-producing the vehicle prevented implementation of that plan.
Due to protracted development, the Landwasserschlepper did not enter regular service until 1942 and, though it proved useful in both Russia and North Africa, it was produced in only small numbers.
In 1944 a completely new design was introduced, the LWS II. This vehicle was based on a Panzer IV tank chassis and featured a small raised armoured driver's cabin and a flat rear deck with four fold-down intake and top mounted exhaust system.