PRISMA is an ongoing satellite project comprising two satellites. The project constitutes an in-orbit test bed for Guidance, Navigation and Control (GNC) algorithms and sensors for advanced closed-loop formation flying and rendezvous. The satellites will be launched in a low earth orbit and carry out a series of maneuvering experiments and sensor experiments during a mission time of 8-10 months. Autonomous formation flying in decimeter precision will be demonstrated using relative GPS and Formation Flying RF metrology instruments. Vision based methods using a modified star camera will demonstrate autonomous homing and rendezvous from hundreds of kilometers down to close proximity. Proximity operations based on GPS or optical information shall be demonstrated all the way down to almost physical contact. A new environmentally friendly, non-toxic chemical propulsion system as well as a new MEMS microthruster system will be flight demonstrated.