In 1902, a badge was urgently sought for the Australian contingents raised after Federation for service in South Africa during the Second Boer War. The most widely accepted version of the origin of the badge attributes the selection of its design to a British officer, Major General Sir Edward Hutton, the newly appointed General Officer Commanding, Australian Military Forces.

The design was first worn by the Australian Commonwealth Horse.Hutton had earlier received a "Trophy of Arms" as a gift from Major Joseph Gordon, a long-standing military acquaintance, comprising mounted cut and thrust swords and triangular Martini Henri bayonets arranged in a semicircle around a brass crown. To Hutton the shield was symbolic of the co-ordination of the Naval and Military Forces of the Commonwealth. 

 Three different designs were created, and they formed the basis of a new design created in 1903, which was subsequently adopted as the General Service Badge in 1911.

The original badge bore the words "Australian Commonwealth Military Forces" on the scroll at the bottom.

 However, because the original design was created in haste, it was subsequently redesigned, and that was the form of the badge worn by soldiers of the First Australian Imperial Force in World War I and the Second Australian Imperial Force (2nd AIF) in World War II, being used on both the slouch hat and the tunic, and it was also used in some Regimental badges.