The need for a European data relay system (DRS) stems mainly from the European decision to embark upon the development of the In-Orbit Infrastructure (IOI) requiring continuous communication capability between space and ground. At the same time, European autonomy, as well as integration and support to the other existing or planned DRSs, was sought. After briefly reviewing the users' requirements and the results of traffic scenario simulations needed to size the system, the current design of DRS (ground and space segment), as at the start of Phase Bl (July 1989), is presented in detail. This design may not be the one which will be ultimately selected for the Development Phase (Phase C/D). Several options are still possible, such as the use of an S-band multiple access array antenna. A final decision will only be taken in 1991 when the development of the Technology Mission Satellite will have progressed enough to assess the feasibility of incorporating some of its advanced technology in an operational mission, as is the DRS. The interrelationship with the other data relay systems (NASA tracking and data relay satellite system (TDRSS) and the Japanese data relay and tracking satellite system (DRTSS)) is discussed together with the current status of systems interoperability. Finally, the evolution of DRS into a second generation, foreseen for operation at the beginning of next century, is outlined in terms of user scenario, improved spacecraft and system configurations, and technology developments needed. © 1990 IEEE