A paradigm shift is emerging in spacecraft engineering from single, large, and multifunctional satellites towards cooperating groups of small satellites. This will enable innovative applications in areas like Earth observation or telecommunication. Related interdisciplinary research in the field of formation control and networked satellites are key challenges of this proposal.Modern miniaturization techniques allow realization of satellites of continuously smaller masses, thus enabling cost-efficient implementation of distributed multi-satellite systems. In preparation my team has already realized two satellites at only 1 kg mass in the University Würzburg’s Ex¬perimental satellite (UWE) program, emphasizing crucial components for formation flying, like communication (UWE-1, launched 2005), attitude determination (UWE-2, launched 2009), and attitude control (UWE-3, launched 2013).My vision for the proposed project is to demonstrate formation control of four pico-satellites in-orbit for the first time worldwide. To realize this objective, innovative multi-satellite networked orbit control based on relative position and attitude of each satellite is to be implemented in order to enable Earth observations based on multipoint measurements. Related sensor systems used in my laboratory in research for advanced characterization of teams of mobile robots will be transferred to the space environment. Breakthroughs are expected by combining optimal control strategies for coordination of relative motion with a robust flow of information in the network of satellites and ground stations, implemented via innovative use of ad-hoc networks in space. Based on my team’s expertise in implementing very small satellites, first time a system composed of four satellites will be launched to demonstrate autonomous distributed formation control in orbit. This research evaluation in space is expected to open up significant application potential for future distributed satellite system services in Earth observation.