Although the BMD-1 was an innovative design and packed a powerful punch against enemy tanks, it's major drawback was its performance against infantry and soft vehicles. This was particularly evident during the Afghanistan War where Soviet airborne units were heavily involved. These deficiencies prompted the development of the upgraded BMD-2, which was fitted with a modified BMP-2 turret armed with the same 30-mm autocannon as well as AT-4/-5 missiles that were significantly more accurate than the AT-3s in its predecessor. Aside from the turret, however, there we no other major design changes from the BMD-1's hull and chassis and it retained its capability for being aid-dropped from medium and heavy transports as well as large helicopters like the Mi-26. Combat history largely mirrored that of the BMD-1, seeing service in South Ossetia as well as in peacekeeping missions in the former Yugoslavia.

Attempts to fit the BMP-2's turret into the BMD-1 were largely unsuccessful due to the turret's large size compared to the BMD-1's hull. As a result, a modified turret was designed, resulting in the BMD-2 (Ob'yekt 960), with only minor hull alterations. A modernized version is known as the BMD-2M and includes smoke grenade launchers on the turret sides.