- "The Phantom Project was just that, a phantom. It didn't exist."
- ―Wedge Antilles
Developed by Rorax Falken and the Mrlssti students working for him, it was essentially a smoke-screen designed to swindle the Empire out of every credit it would pay. Funds for the project were diverted to other research under Falken's control, a fact that went unnoticed under Palpatine's reign. Following Palpatine's death at Endor, the remnants of the Empire began demanding results from Falken, who had suffered a breakdown upon learning of the use of his work in the construction of the Death Star. Gyr Keela, who succeeded Falken as President of the Academy, was unaware that the Phantom Project was fake and attempted to deal with the Empire. He decided to gain every credit possible by putting the Project up for bids to the New Republic and the remnants of the Empire. Wedge Antilles became the New Republic's representative in the negotiations for the Phantom's plans, opposite his old nemesis Loka Hask. The proposed design of the Phantom Project was unique in that it required very little energy to maintain the cloaking effect over an entire ship. It also had the ability to resist the effects of a gravity well projector. The falsehood of the Project was revealed when Rogue Squadron defeated Loka Hask and discovered - from Falken's students - that the project was not real. However, it did lead to the discovery of the Gravitic polarization beam.