Evolving aerospace systems to include distributed intelligence can improve performance, further safety, and enhance quality, while offering improved cost-benefits. The opportunity addressed by this paper is the development of an Integrated System Health Management (ISHM) architecture and basic technologies, to provide order-of-magnitude improvements in operations strongly dependent on sensors, data acquisition, and condition management. From this new Integrated Health Management with Networked Intelligent Elements (IHNIE) approach, NASA gains the technology to better manage complexity, lower cost, and improve safety, reliability, and quality of space platforms, space vehicles, rocket engine testing, and flight operations. © 2005 American Institute of Physics.