On September 5, members of the Palestinian Black September group (with links to the PLO, the PFLP and the DFLP) entered the Olympic Village and took eleven hostages: David Berger, Ze'ev Friedman, Joseph Gottfreund, Eliezer Halfin, Joseph Romano, Andrei Schpitzer, Amitsur Shapira, Kahat Shor, Mark Slavin, Yaakov Springer and Moshe Weinberg. Weinberg was shot when he defended himself after discovering the hostage takers upon entering the apartment, while Romano was killed trying to escape.
The terrorists demanded that Israel release 200 Arab prisoners and that they be given safe passage out of Germany.
After a twenty hour stand-off the terrorists and hostages were flown by helicopter to Fürstenfeldbruck airbase intending to fly from there to Cairo. A failed attack by German forces led to a fire-fight. Nine hostages, five terrorists and one policeman were killed and the three remaining terrorists were captured. The surviving terrorists were imprisoned.
The Olympic Games were continued after sports events were cancelled due to the event and a remembrance service in the Olympic stadium. The decision to continue the Games, made by IOC president Avery Brundage ("The Games must go on"), was criticized by many. However, only a small number of athletes left the Games after the attack.
On October 29 1972, a Lufthansa jet was hijacked by terrorists demanding that the Munich killers be released - and released they were, without consultation from Israel. There remains speculation that the hijacking was a set-up designed to ease Germany's humiliating failure at Fürstenfeldbruck. Israel subsequently targeted eleven individuals as responsible and eight were later assassinated by Mossad agents. Of the remaining three, two were killed by possibly non-Mossad forces and one died of natural causes. But Mossad committed one major blunder in the Lillehammer affair, mistaking an innocent waiter for Ali Hassan Salameh then assassinating him in front of his pregnant wife.
The massacre was planned by , Mohammed Daoud Oudeh (Abu Daoud) who is still alive, residing in Amman Jordan. He has claimed that funds for the massacre were provided by Mahmoud Abbas.   .
The police's failure to adequately deal with this situation was seen in Germany as showing the need for a dedicated counter-terrorism unit and led to the creation of the GSG-9.