This Small Business Innovative Research Phase I project proposes to develop a system to forecast ionospheric currents and related effects, such as enhancements in the auroral oval heating, density irregularities and ground induced currents at customer specific locations . These forecasts will depend directly on real-time measurements of the solar wind velocity, density and interplanetary magnetic field. A novel, new method, the state-space approach, has been developed for classifying and predicting active geomagnetic intervals and substorm occurrences. Application of this method to space weather forecasting will provide, for the first time, 1 to 2 hour forecasts of impending geomagnetic storm and substorm activity which can be used to improve ground-based operations such as power distribution, pipeline management, and six-sigma manufacturing, and positively impact the functionality and reliability of communications, navigation and space operations. Complementing space weather forecasting systems currently being developed for the NOAA Space Environment Service Center (SESC) and the Air Force Space Forecast Center (AFSFC), the proposed product will provide customer specific forecasts for both commercial and government space and ground based applications. At the end of Phase III of this proposed system Mission Research Corporation projects an operating value-added space weather service, complementing the capabilities of the AFSFC and the SESC, for commercial and government customers.