The Mercedes-Benz 260 D, coded Mercedes-Benz W 138 according to internal works designation, was the first passenger car with diesel engine in a series production. The 260 D was named in reference to its engine displacement. Nearly 2,000 vehicles were assembled until 1940 when the Daimler-Benz devoted itself almost entirely to military manufacture.
An early attempt by Daimler-Benz to install a 6-cylinder diesel engine in a Mercedes-Benz Mannheim chassis ultimately failed due to its unacceptable vibration. 1935 saw the successful installation of the smaller OM 138, 2545 cc overhead valve, 4-cylinder engine in a Mercedes-Benz 230 (W21) chassis. It employed the Bosch diesel fuel injection system and produced at 3000 rpm. The car weighed approximately and could attain a top speed of . Branded as the 260 D, the car was introduced to the public at the 1936 Berlin Motor Show, although 13 pre-production units were produced the previous year. The car proved to be a good seller.
170 pullman-landaulets based on the W21 chassis were built from 1936 to 1937, called the Nullserie and used only as taxis, with a three-speed plus overdrive transmission, without synchromesh on the first gear.
The second series was introduced in 1937, and included improvements from the Mercedes-Benz W143, with a four-speed fully synchronized transmission. The chassis was based on contemporary Mercedes technology and had transverse leaf spring independent front suspension and swing axles at the rear. The brakes were hydraulic. A range of body types were made including saloons, landaulettes and cabriolets. The car was noted at the time for its good fuel economy of , compared to for its gasoline powered counterpart.
Production was stopped in 1939 as a result of World War II. After the war, the production of diesel engined cars was resumed with the Mercedes-Benz 170D in 1949. In total, 1,967 units of the 230 D were built since 1935.
A surviving example of the car is displayed at the Mercedes-Benz Museum in Stuttgart, Germany.