Advances in commercial IC fabrication technology have made possible the integration of wireless transceivers, CMOS signal processing, and sensing in one integrated circuit package. Combination with actuation is also possible. This amounts to a low-cost means to link communications and computer networks to the physical world, and may have profound consequences in such diverse areas as security, process control, planetary exploration, and medical monitoring and diagnosis. We outline the system design issues for a distributed sensor network, in which each node has a limited energy supply and relatively low data rate link. The nodes must establish a synchronous multi-hop network, determine locations, and cooperate for such purposes as beamforming and passing messages to the outside world.