In addition to seeing action in the Second Italo-Abyssinian War, the Second Sino-Japanese War, the Spanish Civil War, the Slovak-Hungarian War, and the Anglo-Iraqi War, the L3 was used almost everywhere that Italian troops fought during World War II. L3s were found on the Italian/French border, North Africa, Italian East Africa, the Balkans, USSR, Sicily, and Italy.
The combat performance of the L3s during the interwar period was poor. On at least two occasions during the Italian invasion of Ethiopia, L3s were put out of action by massed infantry attacks. In the Spanish Civil War, L3s of the Corps of Volunteer Troops (Corpo Truppe Volontarie, or CTV) were totally out-classed by the T-26 and BT-5 tanks provided to the Republican forces by the Soviet Union. Fortunately for the Hungarians, the L3s were not a factor in their brief war with Slovakia.
On 10 June 1940, when Italy entered World War II, the Royal Italian Army (Regio Esercito) possessed only about one-hundred M11/39 medium tanks in two tank battalions. L3 tankettes still equipped all three Italian armoured divisions, the tank battalions in the motorized divisions, the light tank squadron group in each "Fast" (Celere) division, and numerous independent tank battalions.
On 22 March 1941, two Iraqi L3s were reported to have been put out of action near Fallujah during the Anglo-Iraqi War.
More than 40 captured L3 tankettes were used by the Greek Army during the Greco-Italian War, fought from 1940 to 1941, and were used to equip the 19th Mechanized Division, although they did not take part in combat with the latter. After the invasion of Yugoslavia and Greece in April 1941, L3 tankettes were also captured by the Yugoslav and Greek resistance forces. From 1941, some L3 tankettes were given to the German puppet government of the Independent State of Croatia (Nezavisna Država Hrvatska, or NDH).
Though numerous, Italy's tankettes proved to be outclassed from the start and also proved to be of low tactical value. They were vulnerable to the British Boys anti-tank rifles. Other than those used for occupation duties in the Balkans and elsewhere, few L3s remained in front line service past the end of 1940. After the Italian armistice with the Allies in 1943, L3 tankettes were used by German Army forces and by the pro-Nazi National Republican Army of the Italian Social Republic. Hungarian L3s had by this point been issued to the Gendarmerie and 10 saw combat in Budapest and were destroyed in the fighting to reclaim the Racecourse Airfield.
L3/35s also joined the Chinese Nationalist Army and fought against the Japanese Imperial Army during the Second Sino-Japanese War.