Instituted on 6 September 1886 by Queen Victoria in a Royal Warrant published in the The London Gazette on 9 November, the first DSOs awarded were dated 25 November 1886. It is typically awarded to officers ranked major (or its equivalent) or higher, but the honour has sometimes been awarded to especially valorous junior officers. During the First World War, 8,981 DSOs were awarded, each award being announced in The London Gazette.

The order was established for rewarding individual instances of meritorious or distinguished service in war. It was a military order, until recently for officers only, and normally given for service under fire or under conditions equivalent to service in actual combat with the enemy, although it was awarded between 1914 and 1916 under circumstances which could not be regarded as under fire (often to staff officers, which caused resentment among front-line officers). After 1 January 1917, commanders in the field were instructed to recommend this award only for those serving under fire. Prior to 1943, the order could be given only to someone mentioned in despatches (MID). The order is generally given to officers in command, above the rank of captain. A number of more junior officers were awarded the DSO, and this was often regarded as an acknowledgement that the officer had only just missed out on the award of the Victoria Cross. In 1942, the award of the DSO was extended to officers of the Merchant Navy who had performed acts of gallantry while under enemy attack. The DSO is no longer awarded in New Zealand and has been superseded by New Zealand Honours and Decorations.

This enamelled replica is of the highest quality, beautifully finished with exquisite detailing.