FarSounder proposes to develop a low cost 3D sonar system for underwater threat detection. This system will be based on the design and feasibility study developed during the recently completed Phase I SBIR. FarSounder has developed this solution concept with effective performance and end usability in mind, using FarSounder 3D sonar technology and a hardware architecture that utilizes COTS components thereby ensuring affordable future product costs. This approach will leverage FarSounder`s advanced processing techniques to increase the system`s performance when compared to currently available port security sonars. Through simulation, field testing with existing hardware and acoustic modeling, FarSounder has already validated the key elements of the design. For this Phase II effort FarSounder will design and build a prototype low cost, low power, small size system for incorporation into a multi-faceted Port Security System. The ultimate commercialized system will be easy to use, easy to deploy, have a low false alarm and fall within the goal of less than $100K per 1000 feet of protected asset. This system will have the ability to detect open circuit divers, closed circuit divers, divers with propulsion assistance and underwater vehicles that approach or enter the security zone and provide an alert to a central station or system operator. FarSounder`s solution will have a high probability of detection of real underwater threats and a low false alarm rate for these targets. Benefits include increased protection of ports, critical waterside infrastructures and other fixed shoreline sites and prevention of attacks affecting large areas of local populations such as those near LNG terminals. The system will provide the first underwater port security system practical for use in all US ports and along extensive areas of US coastlines and inland waterways. Spinoff commercial applications include a solution for the protection of endangered marine mammals, by enabling effective localization, identification and avoidance of these mammals; a cost efficient localization and identification sonar appropriate for the $3.2B annual US fisheries industry to reduce by-catch; and a low-cost on-board security sonar system for commercial cargo ships, oil tankers, passenger vessels and large recreational boats.