The HK416 uses a HK-proprietary short-stroke gas piston system that derives from the HK G36, forgoing the concentric to bore gas piston system standard in AR-15 rifles.[8][9] The HK G36 gas system was in turn partially derived from the AR-18 assault rifle designed in 1963.[10] The HK system uses a short-stroke piston driving an operating rod to force the bolt carrier to the rear. This design prevents combustion gases from entering the weapon's interior—a shortcoming with direct impingement systems.[11] The reduction in heat and fouling of the bolt carrier group increases the reliability of the weapon and extends the interval between stoppages. During factory tests the HK416 fired 10,000 rounds in full-auto without malfunctioning.[12]

The HK416 is equipped with a proprietary accessory rail forearm with MIL-STD-1913 rails on all four sides. This lets most current accessories for M4/M16-type weapons fit the HK416. The HK416 rail forearm can be installed and removed without tools by using the bolt locking lug as the screwdriver. The rail forearm is "free-floating" and does not contact the barrel, improving accuracy.

The HK416 has an adjustable multi-position telescopic butt stock, offering six different lengths of pull. The shoulder pad can be either convex or concave and the stock features a storage space for maintenance accessories, spare electrical batteries or other small kit items. It can also be switched out for other variations like Magpul stocks.

The trigger pull is 34 N (7.6 lbf). The empty weight of a HK416 box magazine is 250 g (8.8 oz).

The HK416's barrel is cold hammer-forged with a 20,000-round service life and features a 6 grooves 178 mm (7 in) right hand twist. The cold hammer-forging process provides a stronger barrel for greater safety in case of an obstructed bore or for extended firing sessions. Modifications for an over-the-beach (OTB) capability such as drainage holes in the bolt carrier and buffer system are available to let the HK416 fire safely after being submerged in water.