The military Mannlicher–Schönauer was not commercially successful, in the sense that it did not attract many contracts for export. The unusual design and calibre, the high quality, high cost, and the fact that no major power adopted it, contributed to the results. Other foreign Mannlicher clients opted instead for versions of the issue rifle of Austria-Hungary, the M1895, or simpler turn-bolt rifles like the M1893 and the Dutch M1895. The Mannlicher–Schönauer M1903 though fulfilled the specifications of the Greek Army and the first major contract was signed by the Greek Government in 1903. This contract was part of a major modernisation plan; until then the Greeks were using single-shot, black powder rifles Gras rifles. Most of the Greek Gras were made by the Steyr factory and that might partly explain how Mannlicher advertised their new design.
The Mannlicher–Schönauer rifle was the main small arm for the Greek military for some of the most active years of its modern history. Greece was almost continuously in state of war between the years 1904–1922 and 1940–1948. The version history of this rifle is rather confusing. It appears that the Greeks issued four main contracts. The original Steyr-made Y1903 ("Y" stands for model in Greek), started being supplied in 1906–07 to a total of about 130,000 long rifles and carbines. This was the main weapon during the victorious Balkan Wars of 1912–13
The Greeks seemed satisfied with the rifle's performance and their armoury was increased with a new batch of 50,000 rifles from Steyr in 1914, with the model Y1903/14, presenting minor improvements, most obviously the addition of a full handguard. These rifles were used for the first time in World War I. When the war broke out, the Austrians stopped the delivery of the rifles, as Greece chose to be neutral for the first three years.
Following the Asia Minor Campaign (1919–22), the Greeks were in urgent need of serviceable weapons and tried to get Mannlicher–Schönauer rifles from every possible source in order to replace war losses (almost 50% were captured by the Turks). Starting in 1927, Greece received about 105,000 "Breda" marked Y1903/14/27 rifles. This Italian factory might have used Austrian captured parts and machinery, or more likely, might have just mediated on behalf of the Steyr factory, due to treaty restrictions with the Austrian weapons manufacturer. These rifles saw extensive use against the Italians and Germans in World War II and many passed to the resistance fighters and thence to the combatants of the Greek Civil War that followed. The last official contract was in 1930, when they received 25,000 more Y1903/14/30 carbines, this time directly from the Steyr factory.
Despite its good performance, it was only the Greek government that chose the Mannlicher–Schönauer as official service rifle. The Portuguese military also favored the Mannlicher–Schönauer, but it was deemed too expensive and the locally-designed Mauser-Vergueiro, which paired a bolt based on that of the Mannlicher–Schönauer with an action based on the Mauser 98, was adopted instead. However, due to expediency other countries made limited use of them too. At the outbreak of World War I, a significant number of 6.5 mm Mannlicher–Schönauer rifles manufactured for Greece under the 1914 contract were sequestered and, due to urgent needs, used by the Austrian Army. After the dissolution of the Austro-Hungarian Empire, these were passed on as war reparations to the original intended recipient, the Greek Army. Small numbers also saw occasional use by Greece's enemies as captured war booty, but mainly by reserve units.