Operation Gyroscope was a US Army program implemented between 1955 and 1959. Taking place during the Cold War, this initiative modified the system of troop rotation so that entire divisions were rotated out of overseas service together rather than individual soldiers. The program also applied to smaller non-divisional units and was primarily used to exchange units between the United States and Germany under United States Army Europe. The system aimed to increase retention rates by boosting morale and unit cohesion, with the added incentive of improving military family stability by keeping soldiers together for most of their careers. Although the program initially increased morale, the Army was unable to keep its promises to the soldiers, and the expected benefits failed to materialize. As a result, the program was terminated early, after just one of the planned three-year rotation cycles had been completed.

Following the end of the Korean War, the United States Army found itself facing massive retention problems. It was failing to retain experienced enlisted soldiers in service due to the army being unpopular compared to civilian careers. Manpower requirements could be filled by the draftees of the Selective Service System, but they had only a two-year service obligation and little incentive to remain in the army. Even those who enlisted voluntarily did not re-enlist in quantities high enough to meet the demands of the army. The issues of retention especially affected specialized branches that required advanced training, such as radar technicians, aircraft mechanics, and signal troops.

Retention problems further increased instability and inefficiency within the army. Every year vast quantities of replacements needed to be trained and sent to their permanent duty stations, in order to compensate for the equally vast numbers of those returning for discharge. As a result of the manpower shortage, in 1954, a career soldier might have only had six months stateside between foreign tours, and there were units with 70% personnel turnover. The situation was exemplified by the 25th Infantry Division in Hawaii, where in 1954 and 1955 it was short by at least 1,000 personnel. The division had 4,000 soldiers nominally on the rolls, who were in fact either transferring into or out of the unit, in addition to having only 108 out of 882 authorized officers. Such turbulence made it difficult to train and as a result, the commander described the situation as essentially "garrison duty." High personnel turnover was inherent in the individual replacement system used by the army, leading to a complete change in unit personnel over three years. The individual replacement system thus required the Army to maintain excess manpower to compensate for soldiers in transit between stations and for the low retention rates.

In an attempt to solve the retention problem, senior army officers sought a solution in the replacement of the individual replacement system with one based on unit rotation. Before World War II, soldiers would spend their entire careers in the same unit, thus creating a "surrogate family" that generated strong esprit de corps and motivated them to remain in the service. However, the need for manpower during wartime forced a move to an individual training and replacement system, which was effective at meeting wartime manpower requirements but detrimental to peacetime needs. By the end of the Korean War, the system was criticized in the army as damaging to morale, unit cohesion, and combat effectiveness, with one report to Army Chief of Staff General Matthew Ridgway declaring that the replacement system reduced "the individual soldier to the same status as a piece of equipment which is moved from place to place according to his MOS whenever a blank file exists." The report blamed the system for reducing discipline in combat, which it argued was the cause of the perceived unsatisfactory conduct and even defection of some American prisoners of war in Korea. Furthermore, polls of officers and enlisted men leaving the army reinforced the conclusions of Chief of Army Field Forces Lieutenant General John E. Dahlquist that "instability of assignments" and too frequent overseas deployments were barriers to retention. Since 1941, career soldiers and military families had lived a transitory existence unable to reconcile long-term plans with the army, "never secure enough to buy a house, plan their children's education, or put down roots in the community."

Matthew Ridgway, the then Army Chief of Staff, was a strong believer in the importance of esprit de corps and the prewar traditional regimental culture, and thus opposed the individual replacement system. Through a unit rotation system, he argued, career soldiers could make long-term plans, have relative stability, and would have greater incentives for self-improvement if promotion did not entail leaving their comrades; most importantly in his opinion, the system would keep morale high. The benefits of unit rotation were generally supported, and the end of the Korean War in 1953 finally gave the army an opportunity to adjust the replacement system. Between 1953 and 1955, United States Army Europe (USAREUR) implemented a promising system of unit rotation on a small scale in which tank and infantry platoons were sent to Europe intact. Meanwhile, the army staff began developing the Gyroscope program of unit replacement in response to Ridgway, Dahlquist, and army staff Deputy Chief of Staff for Personnel (G-1) Major General Robert N. Young, who agreed that a unit-based replacement system would have economic, unit cohesion, and efficiency benefits.

Planners intended that under Gyroscope, an individual soldier would be with the same unit for most of his career and spend an equal amount of time stationed in CONUS and overseas, and would be able to move stations together with his family to avoid long separations that damaged troop morale. Such stability was anticipated to lead to increased unit cohesion and thus higher retention rates, decreasing the costs of training caused by the frequent personnel turnover and improving efficiency. Ambitiously, the planners intended that the morale benefits arising from Gyroscope would improve American public perception of service in the army. The program objectives of improved morale, increased combat effectiveness, and reduced costs were planned to be achieved through the pairing of divisions stationed in the Continental United States (CONUS) with overseas divisions, who would exchange places every three years, and the transfer of basic and advanced individual training responsibilities to CONUS units. The latter change reduced the number of training units and thus excess personnel needed, allowing for the phasing out of training divisions and their replacement by branch replacement centers. In response to wartime requirements, it made it possible for an entire division to be replaced in the event of its destruction by nuclear attack. Most vehicles and heavy weapons were slated to be kept at permanent bases with Gyroscope units using their predecessor's materiel. In practice, Gyroscope would be almost exclusively limited to exchanges between USAREUR in Germany and CONUS, but planners envisaged divisions and independent regiments rotating overseas stations between Germany and Asia over a nine-year cycle separate by a stint in the United States.

In Little Gyroscope, the 216th Field Artillery Battalion and 156 wives and children were transported to Germany aboard the USS Patch in March 1955 to test the program. This was considered a success by the army, with the personnel and dependents in place at Darmstadt within a day of docking at Bremerhaven and boarding waiting trains, having been provided extensive assistance in settling in by sponsors from the 760th Field Artillery Battalion. After almost a year of preparation, the first Gyroscope swap, designated GYROSCOPE I, was made on 1 July 1955 with the rotation of the 1st Infantry Division, which had been in Germany with United States Army Europe (USAREUR) since World War II ended, and its replacement by the 10th Infantry Division from Fort Riley, Kansas. Also included in GYROSCOPE I were the exchanges of the non-divisional 2nd Armored Cavalry Regiment from Germany and the 3rd Cavalry Regiment from Fort Meade, and the 508th Airborne Infantry Regimental Combat Team (RCT) from Fort Campbell and 187th Airborne Infantry RCT from Japan.

Initial reports boded well for the future of the program, with one division commander reporting that career soldiers were volunteering on their own initiative for the previously unpopular duty of recruit training and also "writing detailed instructions to help the incoming unit." Another officer found that the system cultivated a "sense of belonging" within soldiers as they now remained with the same unit throughout service. The units part of the Gyroscope program were not only re-equipped but also were intended to have higher personnel quality. 11th Airborne Division officer Robert Elton attested to such gains, with the discharge of "malcontents, misfits, and criminals" and their replacement with motivated trainees whom training instructors worked hard to prepare, "knowing that they might lead these same soldiers in combat." By the time the 11th Airborne Division returned stateside, Elton wrote that officers and soldiers "all knew their stuff, they could all do everything...and they could maintain these things because they have done it, and done it, and done it."