During World War II, Peenemünde hosted the Heeresversuchsanstalt, an extensive rocket development and test site established in 1937. Prior to that date the team headed by Wernher von Braun and Walter Dornberger had worked in Kummersdorf, south of Berlin. However, Kummersdorf proved too small for testing. Peenemünde, located on the coast, permitted the launching of rockets and their subsequent monitoring across about 200 miles of open water.
Between 1937 and 1945 the Peenemünders developed many of the basics of rocket technology and two weapons, the V-1 and the V-2. Test-firing of the first V-1 occurred in early 1942 and the first V-2 (then called the A-4) first flew on October 3, 1942, from Prüfstand VII. The German Luftwaffe ran the V-1 cruise missile experiments in Peenemünde west, whereas the Heer (army) ran the ballistic missile development (V-2) project.
The Peenemünde establishment also developed other techniques, such as the first closed-circuit television system in the world, installed at Test Stand VII to track the launching rockets.
In the course of World War II some heavy air-raids targeted the site, including an attack by almost 500 RAF heavy bombers on the night of 16 – 17 August, 1943 (“Operation Hydra”). This raid killed some 700 staff, including Walter Thiel, the head of engine development. This raid prompted the moving of the production of the V rockets underground.
In spite of the raids, many technical installations in Peenemünde remained intact at the end of World War II, because most of the bombs landed on the housing areas and on the camps for foreign workers.