In the Phase I program we successfully demonstrated the feasibility of the Pulsed ElectroGasdynamic (PEG) thruster for attitude control and orbital maneuvering. In this thruster, propellant gas is introduced into the thrust nozzle through a fast acting gas valve where a short, high voltage pulse is applied to break down and heat the propellant gas. The heated gas expands in the nozzle generating a high impulse (~mN-s per pulse) at a high specific thrust (120 £gN-s/joule). The specific impulse (Isp) will be in the range of 500~1500 sec. This process can be repeated at a frequency to meet the spacecraft thrust requirements. The thrust generating mechanism of the proposed thruster is gasdynamic expansion, not magnetohydrodynamic interaction. The proposed thruster is different from the conventional pulsed electrothermal thruster in that the joule heating of the propellant takes place as the propellant gas expands through the divergent nozzle, thereby eliminating the heat and momentum losses at the nozzle throat. Our Phase II objectives are: (i) develop an engineering model; and (ii) develop a proto-flight model of the proposed thruster system.