AO-40 was the post launch designator given to the long awaited Phase 3D satellite. It was the largest, most complex and most powerful satellite ever launched for the Amateur Satellite Service. It took over ten years to build and launch, and employed a number of new and advanced facilities never before attempted in an amateur satellite. AO-40 was not just a single channel "repeater in the sky". It was a linear transponder, which means that it had a band of frequencies in which it would receive signals, and retransmit those signals unchanged. Thus a variety of modes were possible, including SB, CW, digital modes, etc. However FM was not acceptable, for efficiency reasons.

Shortly after launch a plugged valve vent on the 400 N motor prevented proper functioning of the burn valves and had probably allowed build-up of fuel pressure in the cooling coils around the motor bell housing. These coils apparently ruptured and in the process damaged one or (less likely) both of the burn valves. During cycling of the pressurization valve the following day, one component of the fuel apparently escaped from the damaged burn valve at the motor housing and mixed with residual second fuel component in the motor, creating a localised explosion. During this cycling (which should have been safe since the burn valves were indicated in the telemetry as closed) the spacecraft suddenly went silent. This pressure wave seems to have vented primarily through the centre section of the spacecraft, damaging the omni antennas on the opposite end and perhaps removing part of the covering from the omni end of the spacecraft. AO-40 was recovered several weeks later but several of the subsystems were no longer functioning.

In January of 2004, AO-40 suffered suffered a catastrophic failure of the main battery which is clamping the buss voltage at a low level. This shut off the S2 Tx, and probably crashed the IHU-1. Subsequent efforts to recover the satellite failed, and although the main and aux. batteries were been tied together there is not enough voltage at this time to recover the satellite.