X‐ray observations and the properties of Active Galactic Nuclei are re ed and the requirements for 21st century observations are discussed. To obtain the data necessary to directly study evolution, determine redshifts, study accretion disks and determine characteristic timescales of variability requires del E about 100 ev, a collecting at E about 6 kev of ≳ 3000 cm(2), a broad energy range of 0.1–10 kev, good spatial resolution (<10‘) and the capacity for long observations (e.g., a non‐low earth orbit). (AIP)