Gravity Probe B (GP-B) is a satellite borne science experiment that will measure the gravitational distortion of space-time predicted by Einstein's general theory of relativity. It will compare the change in orientation of gyroscopes, as they undergo relativistic drift, to the reference direction of a star (Figure 1, Figure 3). The two predicted changes, called the geodetic and frame-dragging effects, are 6.6 arcseconds per year and 33 milliarcseconds per year respectively. The GP-B star-tracking telescope is the key reference for the experiment and needs to be tested before launch. A portable artificial star (AS3) is being developed to simulate the reference star and perform an in situ test of the telescope. The AS3 ''starlight'' beam will verify telescope focus and star tracking, over a range of 2 arcminutes. The tracking function of the telescope requires a scan resolution approaching 2 milliarcseconds. AS3 is attached to the satellite structure (Figure 9), where the vibration environment is predicted to cause 300 milliarcsecond beam angle disturbance. This necessitates an extremely vibration insensitive optics structure and an active vibration cancellation control system. This paper details the background, design requirements, design approach chosen, system components built to date, and current state of progress of the AS3 project. AS3 will be delivered in the summer 1997.