The Ørsted Star Imager or Advanced Stellar Compass (ASC), includes the full functionallity of a traditional star tracker plus autonomy, i.e. it is able to quickly and autonomously solve "the lost in space" attitude problem, and determine its attitude with high precision. The design also provides robust error rejection and fault recovery, as well as graceful radiation induced, false object and thermal load degradation. The instrument was developed from concept to flight model within 3 years. The instrument surpasses the initial specifications for all design parameters. For Precision, Computational speed and Fault detection and recovery substantially. The high performance and low cost design was realized by the use of advanced high level integrated chips, along with a design philosophy of maximum autonomy at all levels. This approach necessitated the use of a prototyping facility which could do extensive component testing and screening which addressed the issues of reliability, thermo-mechanical properties, and radiation sensitivity of the commercial IC's. The facility helped to control costs by generating early information on component survival in space. The development philosophy and process are described, starting with the system specifications and its derived design drivers, through the design process and its iterations, including the specification, design and capability of the prototyping facility, and ending with the final system design. The rationale for IC-level selection and system flexibility are addressed.KEY WORDS: Micro satellite, stellar compass, star tracker, attitude determination.