Current Identification, Friend or Foe (IFF) transponder systems are designed for manned aircraft. Their large size, weight and power consumption requirements make them unsuitable for Unmanned Aerial Vehicles (UAV). Even IFF Crypto appliqués are too large and heavy for small UAVs. IAI will continue developing the Micro Identification Friend or Foe Transponder (MIFFT) that can receive the required interrogations, provide the related replies, and manage the Automatic Dependent Surveillance. This innovation complies at a minimum with the Air Traffic Control Radar Beacon System Identification Friend or Foe (IFF) Mark XII System (AIMS) 03-1000B and Radio Technical Commission for Aeronautics (RTCA) DO-260B, within a volume of 3.5 cubic inches. IAI’s solution is ideal for battery-powered UAV applications. MIFFT also complies with Federal Aviation Administration (FAA) initiatives to integrate UAVs into the National Air Space by enabling large-scale commercial UAV use. This technology is vitally important for full-scale commercial UAV employment. IAI will now continue the trade study and develop a fully functional MIFFT prototype that can be compliance-tested and integrated with Group-2 UAVs like the RQ-21A.