A conversion unit for converting an AR-15 style military assault rifle to a submachine gun includes a central assembly having a magazine well and rear barrel mount. The magazine well can be inserted downwardly into the lower receiver of the assault rifle and accommodates magazines for shorter cartridges. The conversion unit also includes a forearm and barrel assembly and an upper receiver with a stabilizing rail. A pressure equalizing gas operating system eliminates the need for a buttstock with recoil spring. An operating rod extends forward from the upper receiver and into the forearm enclosure. The operating rod is attached to the bolt of the submachine gun and engaged with a reciprocating gas cylinder that surrounds the barrel.