The attack on Crete in May 1941 stands as the single most defining action undertaken by the Fallschirmjäger during WWII. The Battle of Crete began on the morning of 20 May 1941, when Nazi Germany launched an airborne invasion of Crete under the code name Operation Merkur (Mercury). The massive airborne attack consisted of nearly 13,000 paratroopers and glider troops from 7th Flieger Division. 14,000 Greek troops and 27,500 British and Commonwealth troops, along with Cretan civilians, defended the island.

The Battle of Crete was unprecedented because it was:

1. the first battle where Fallschirmjäger (German paratroops) were used in masse,
2. the first mainly airborne invasion in military history,
3. the first time the Allies made significant use of intelligence from the deciphered German Enigma code,
4. the first time German troops encountered mass resistance from a civilian population.

Because of the many casualties suffered by the paratroopers, six thousand dead or missing in action, Adolf Hitler forbade further large airborne operations. The Allies were impressed by the potential of paratroopers and started to build airborne formations.