Sir William Tritton in 1917 developed the Tadpole Tail: an extension of the tracks to be fitted to the back of a tank to improve trench crossing abilities. This was necessary because the Hindenburg Line had 3.5 metre wide trenches to stop the British tanks. When Major Philip Johnson of Central Tank Corps Workshops heard of this project, he immediately understood that the weight of the heavy girders strengthening the attachment might be put to a better use by creating a larger tank. He cut a Mark IV in half and stretched the hull, lengthening it by six feet. When details had been forgotten it has for a long time been assumed that most Mark V* had been field conversions made by Johnson. We now know that they were all factory-built. It had a larger 'turret' on the roof and doors in the side of the hull. The weight was 33 tons. 645 were built out of an order for 500 Males and 200 Females.

The extra section was also designed to house a squad of infantry. This was the first ever purpose designed tracked armoured personnel carrier (APC), it was also the first APC to be significantly armed, as some earlier conversions of tanks into supply carriers lacked any armament. It could operate as a tank as well as carrying troops, and it was not until the post WWII era Merkava that a tank that could also carry troops under protection was produced.

Because the Mark V* had been lengthened, its original length-width ratio had been spoiled. Lateral forces in a turn now became unacceptably high causing thrown tracks and an enormous turn circle. Therefore Major Wilson redesigned the track in May 1918, with a stronger curve reducing ground contact (but increasing ground pressure as a trade-off). An uprated 225 hp Ricardo engine was fitted. The cabin for the driver was combined with the roof cabin; there now was a separate machine gun position in the back. 197 were built out of an order for 750 Males and 150 Females.