Although most manned space programs were assigned to NASA in 1958, the Air Force retained a modest effort to explore the potential of manned military missions in the upper atmosphere and near-earth orbit. It was known as the Dyna-Soar or X-20 program. When President Johnson's Defense officials decided that such a mission could be performed better by NASA's Gemini capsules or something like them, the program was canceled in December 1963. At the same time, Secretary of Defense McNamara announced the beginning of a program to develop an orbiting laboratory module for manned military space missions. The module would be called the Manned Orbiting Laboratory (MOL), and it would provide a shirt-sleeve environment in which military astronauts would be able to conduct experiments in near-earth orbit for up to thirty days.

General Schriever, by then commander of Air Force Systems Command, assigned the management of all manned military space programs, including MOL and its launch vehicle, to Space Systems Division. SSD issued contracts for the preliminary design work in March 1965 and for full-scale development in September 1966. Unfortunately, the program experienced delays, weight and cost increases, and changes in mission, launch site, and launch vehicle. The program's only launch occurred in November 1966, when a MOL heatshield incorporating a hatch cover survived a suborbital reentry test. In June 1969, the Office of the Secretary of Defense (OSD) announced the cancellation of the program because of high projected costs and because advances in automated, unmanned space systems made it unnecessary. By the time the program was canceled, work was almost finished on construction of a new launch site for the program's Titan IIIM booster at Vandenberg AFB. That launch site was modified ten years later for the Space Shuttle.

Artist's conception of the Manned Orbiting Laboratory (MOL) in orbit. The white, cylindrical element was the laboratory itself; the darker element was a Gemini capsule that would be used to bring astronauts to the lab and return them to earth after their mission was over.

Group photo showing 14 of the 17 MOL astronauts. The first group of eight astronauts was selected in November 1965, the second group of five in June 1966, and the third group of four in June 1967. Following cancellation of the MOL program, seven of the former MOL astronauts became astronauts for NASA, an three later attained general officer or admiral rank. James Abrahamson (top right) became a lieutenant general and Director of the Strategic Defense Initiative Organization. Robert Herres (top left) became a four-star general and Commander-in-Chief of the US Space Command. Richard Truly (bottom right) became a vice admiral and head of the US Naval Space Command. After retiring from NASA, Admiral Truly joined NASA, serving first as Associate Administrator for Space Flight and later as Administrator.