Developed as part of the Federation Forces Reconstruction Project that began in U.C. 0081, the design of the RGM-79N GM Custom was based on the RGM-79SC GM Sniper Custom, the RGM-79G GM Command, the RGM-79GS GM Command Space Type, and the RX-78NT-1 Gundam NT-1. It was developed at Augusta Base and incorporated many parts that were developed for Gundam NT-1, which was originally considered for mass production. Because of this, the GM Custom's specifications were considered top class even among Augusta series mobile suits, which were already renowned for their high performance. Its thrust was almost twice that of previous GMs and its generator output rivalled Gundam type mobile suits, making it one of the Federation's highest performing mass production unit prior to the Delaz Conflict.
In U.C. 0083, the nuclear weapon-equipped RX-78GP02A Gundam "Physalis" was stolen by the remnants of the Principality of Zeon, Delaz Fleet. Three GM Customs were deployed to the Albion, a Pegasus-class assault ship that was tasked with retrieving the stolen Gundam, and were piloted by Captain South Burning, the ship's MS Squadron Commander, and Lieutenants Alpha A.