The Pegasus Air-Launched Space Booster is an innovative new space launch vehicle now under full-scale development in a privately-funded joint venture by Orbital Sciences Corporation (OSC) and Hercules Aerospace Company. Pegasus is a three-stage, solid-propellant, inertially-guided, all-composite winged vehicle that is launched at an altitude of 40,000 ft from its carrier aircraft. The 41,000 lb vehicle can deliver pay loads as massive as 900 lb to low earth orbit.This status report on the Pegasus development program first details the advantages of the airborne launch concept, then describes the design and performance of the Pegasus vehicle, and concludes with a review of the progress of the program from its conception in April 1987 through September 1989. First launch of Pegasus is scheduled for 31 Octoberl989 under contract to the Defense Advanced Research Projects Agency (DARPA). The second flight under the DARPA contract will be held several months later.