Project Sign's final report, published in early 1949, stated that while some UFOs appeared to represent actual aircraft there was not enough data to determine their origin. However, prior to this final report, Sign officially argued that UFOs were likely of extraterrestrial origin, and most of the project's personnel came to favor the extraterrestrial hypothesis before this opinion was rejected and Sign was dissolved and replaced with Project Grudge.
Project Sign was first disclosed to the public in 1956 via the book The Report on Unidentified Flying Objects by retired Air Force Captain Edward J. Ruppelt. The full files for Sign were declassified in 1961.
On June 24, 1947 while flying his small airplane near Mt. Rainer, Washington, businessman Kenneth Arnold said he witnessed nine disc- or saucer-like aerial objects. (A month later he added that one was actually more crescent-shaped.) By pacing their progress against known landmarks, Arnold conservatively calculated their speed at a then-fantastic 1,200 mph. Arnold, widely considered a sincere and credible witness, earned major press coverage, and his was easily the most prominent of the more than 800 "flying saucer" reports made by Americans in the summer of 1947.  Because of their extreme maneuvers that would kill a human pilot, Arnold initially concluded he'd witnessed either the test flight of a new military remote-controlled weapon or that the objects were from another world.
By the first week of July 1947, Pentagon officials were expressing alarm about the flying disk reports, due in no small part to a remarkable series of close encounters in and near the restricted airspace near Muroc Army Air Base (now Edwards AFB). On 7 July 1947 at about 10.00 a.m., pilot Major J.C. Wise was readying his XP-84 jet at Muroc when he observed a circular white-yellow object at about 10,000 feet. It flew to the east at what Wise estimated was 200 to 225 mph (320 to 360 km/h). On 8 July at about 8.00 a.m., three highway department employees near Yuma, Arizona reported three silvery disks flying at high altitude towards the northeast. At roughly 9.30 a.m., four military personnel at Muroc reported two circular objects flying against the wind at about 300 mph (480 km/h), making tight circular motions as they receded towards the horizon. At about noon at nearby Rogers Dry Lake test range, two technicians observing an ejection seat test also observed a silvery object at about 20,000 feet (6000 m) for about 90 seconds. At about 9.00 pm that evening, a P-51 pilot twice attempted to intercept what he would describe as a "flat object of light-reflecting nature," thought he was unable to reach its altitude. Though they occurred six months before Sign's official creation, the Muroc incidents were cataloged as the first case in Sign's files.
Following the Muroc incidents, military personnel were told to not publicly discuss flying saucers without permission. New orders were issued requiring all unexplained flying saucer incidents to be reported to the T-2 division at Wright Field. T-2, which studied enemy aircraft during WWII, would soon be renamed Technical Intelligence Division (TID).
In a document dated July 10, the office of Air Force Directorate of Intelligence at the Pentagon requested the assistance of other branches of the armed forces and the Federal Bureau of Investigation in compiling data and determining how to best investigate the flying saucer reports.
In a document dated 30 July 1947, Lt. Col. George Garrett at the Pentagon analyzed data from sixteen flying saucer reports which had occurred from 19 May to 12 July 1947; several had occurred at military facilities. Garrett's report noted that credible eyewitnesses, some of them with scientific or technical training, gave detailed descriptions of highly unorthodox aircraft that exhibited advanced flight capabilities and were seemingly under intelligent control. He wrote, "something is really flying around." Given the distinct lack of inquiries about the flying saucers from "topside" (i.e., higher-ranking officials), Garrett thought it probable that they were a newly developed "domestic aircraft." Garrett's report was forwarded to his superiors and to the FBI, both of whom inquired of military contacts to determine if the flying disks were in fact domestically-developed aircraft. The answer was a resounding no.
Gen. George Schulgen, Garrett's superior at the Pentagon, ordered a more thorough review of flying saucer data. In response, Lt. Gen. Nathan F. Twining, then-head of Air Material Command's intelligence and engineering divisions at Wright-Patterson Air Force Base (then Wright Field), compiled and analyzed the data. Twining's memorandum to Schulgen, dated 23 September 1947, stated, in part:
- The phenomenon reported is something real and not visionary or fictitious.
- There are objects probably approximately the shape of a disc, of such appreciable size as to appear to be as large as a man-made aircraft.
- There is the possibility that some of the incidents may be caused by natural phenomena, such as meteors.
- The reported operating characteristics such as extreme rates of climb, maneuverability (particularly in roll), and action which must be considered evasive when sighted or contacted by friendly aircraft and radar, lend belief to the possibility that some of the objects are controlled either manually, automatically or remotely.
- It is possible within the present U.S. knowledge... to construct a piloted aircraft which has the general description ...
- Any development in this country along the lines indicated would be extremely expensive...
- Due consideration must be given to the following:
- The possibility that these objects are of domestic origin - the product of some high security project not known to AC/AS-2 or this command.
- The lack of physical evidence in the shape of crash recovered exhibits which would undeniably prove the existence of these objects.
- The possibility that some foreign nation has a form of propulsion, possibly nuclear, which is outside of our domestic knowledge.
Twining also recommended that " ... Army Air Forces issue a directive assigning a priority, security classification and code name for detailed study of this matter."  Though conducted by the Army Air Force, the study's information and conclusions would be made available to all the armed services, and to scientific agencies with formal government ties.
In early December 1947, Gen. Curtis LeMay asked for an update on the flying saucer investigation. Twining's memo, which had been revised and expanded as it climbed the chain of command, recommended that a project be formally established to investigate the flying saucer phenomenon. The project was formally authorized on 30 December 1947 by Director of Research and Development under the Deputy Chief of staff for Materiel at Headquarters U.S. Air Force., Maj. Gen. Laurence Craigie, who had recently replaced LeMay.
Project Sign, designated MCIAXO-3, was established under the Technical Analysis division of T-2 (military intelligence) at Wright Field. According to Craigie's directive, it would be the role of Sign to: "...collect, collate, evaluate and distribute to interested government agencies and contractors all information concerning sightings and phenomena in the atmosphere which can be construed to be of concern to the national security." 
On January 22, 1948, a week after the Air Force was officially separated from the Army, Project Sign formally began its work. Sign was a branch of Air Technical Intelligence Center (ATIC) at Wright-Patterson Air Force Base, under the direction of Captain Robert R. Sneider. Michael D. Swords writes:
- The core personnel for the project were probably the most talented group to work on UFOs until the air force ended its investigation in 1969. Aiding chief officer, Capt. Robert R Sneider, were two outstanding aeronautical engineers, Alfred Loedding and Albert B. Deyarmond ... Completing the group was nuclear and missile expert Lawrence Truettner ... The quality of these people indicates the seriousness (and the comparative difference in later years) with which the air force considered the flying disk problem.
Notable were the facts that Leodding had worked extensively on disk-shaped and low-aspect aircraft designs for both the military and private companies, and that he was also one of very few people in America with first-hand expertise in rocket engines. He was firmly convinced that a disc-shaped aircraft could fly, and he had designed several such models and prototypes.
Ruppelt wrote that Sign "was given a 2A priority, 1A being the highest priority an Air Force project could have." Though it was classified "restricted", Sign's existence was eventually known to the general public under the moniker "Project Saucer". However, UFO historian Wendy Connors claimed, through an interview with a surviving Sign secretary, that "Project Saucer" was the project's original informal name and had actually begun in late 1946. If this was the case, then the Army Air Force had already begun investigation of UFOs well before the Kenneth Arnold sighting that launched the first flood of UFO reports of June–July 1947 in the United States. (See, e.g., WWII foo fighter UFOs and the post-war ghost rockets)
Flying saucer investigations were conducted by Air Intelligence at the Air Force base nearest to any particular UFO report. However, some cases were studied directly by Air Materiel Command personnel.
By late 1947, Air Force files included 109 UFO reports, nine of which remain listed as unsolved. There were four categories for UFOs: flying disks; cigar/torpedo shaped objects; balloon/spherical objects; and "balls of light". Preliminary investigation revealed that about a fifth of Sign's UFO cases were explained prosaically, with the expectation that a substantial portion of the remaining cases could be similarly explained.
The earliest hypothesis, even before Sign was formally established, was that UFOs were Soviet aircraft. Sign was based at Wright Field partly because it was the headquarters for American analysis of German aeronautical data. There was concern in U.S. military intelligence circles that the Soviet Union could make aeronautical advances on the work of Nazi scientists, especially the Horten brothers, "a pair of brilliant aeronautical engineers far in advance of their U.S. counterparts." The Horten brothers's "flying wing" designs were strikingly similar to some early UFO reports, such as Arnold's crescent-shaped objects. However, due to a lack of evidence supporting the Soviet hypothesis, a faction within the U.S. Military began contemplating an extraterrestrial explanation -- not because any specific evidence supported it, but mainly because all other interpretations for the data were exhausted.
Sign's first major investigation occurred in the aftermath of the widely publicized Mantell Incident. On 7 January 1948, Air Force pilot Capt. Thomas Mantell crashed his aircraft near Franklin, Kentucky while in pursuit of a UFO. Numerous eyewitnesses, both civilian and military, had reported a large, metallic object in the skies. Mantell was one of four pilots on a nearby training mission who were ordered to investigate. Upon reaching about 10,000 feet (3000 m), Mantell's companions abandoned their pursuit due to a lack of high-altitude oxygen gear. Mantell continued, however, and reportedly described the aerial artifact as "a metallic object ... it is of tremendous size."  Mantell is presumed to have blacked out from oxygen deprivation at about 15,000 feet (4500 m), whereupon his airplane crashed and he died. The USAF formally announced that Mantell had died in pursuit of the planet Venus. Sign's personnel never accepted this explanation, and regarded the incident as an unknown. Some believe that Mantell died while chasing a then-secret Skyhook high-altitude weather balloon.
Other investigations followed the Mantell case. On the evening of 18 February 1948, an unusual light illuminated the skies over Norcatur, Kansas. An accompanying shockwave broke windows, and area residents initially thought an airplane had exploded in flight. Sign did not formally investigate, but consulted with scientist Lincon La Paz. The incident was probably an exceptionally bright bolide, said La Paz. But his explanation was provisional as no fragments were discovered and some eyewitnesses testimony was inconsistent with a meteor.
On 5 April 1948, three experienced balloon technicians at Holloman Air Force Base in New Mexico reported an unusual sighting of two roughly circular objects, white in color and very high in altitude, moving erratically and at great speed. The technicians asserted to Loedding that the objects were definitely not balloons or conventional aircraft. Moreover, the witnesses also reported that odd radar returns were common at Holloman, distinct from the usual radar "angels" caused by clouds or other known phenomena. The Holloman incident was reported as an "unknown" in Sign's files.
On 7 May 1948, two witnesses near Memphis, Tennessee claimed to have observed 50-60 silvery objects moving at high altitude and in tight formations. Sign reached no conclusion on this incident, but later Air Force records describe the objects as meteors. However, astronomer Paul Herget had earlier specifically excluded this explanation. This case was the first to feature the involvement of J. Allen Hynek, who is believed to have invented the meteor explanation. Hynek, then teaching astronomy at Ohio State University, was hired as a consultant to help weed out UFO reports which could be misidentified meteors, stars and the like. He would consult not only for Sign, but for Project Grudge and Project Blue Book until the latter was decommissioned in 1969. In a 1985 interview, Hynek reported that he was initially dismissive of UFO reports: "I was quite negative in most of my evaluations. I stretched far to give something a natural explanation, sometimes when it may not have really had it." By the mid-1960s, however, Hynek's opinion had changed: he believed, after encountering a minority of UFO reports, that, in his opinion, some reports seemed to defy conventional explanation. Hynek also spoke out against what he saw as shoddy research by the Air Force.
On 17 May, businessman William A. Bonneville reported an extended UFO incident while driving between Plevna, Montana and Miles City, Montana. A luminous ball, brilliantly lit and brighter than the moon, emerged from behind hills to the northwest and traveled first to the south, then to the west, over a 20 minute period. Sign regarded this as an unknown but later files, possibly Hynek's interpretation, blamed the incident on "refraction of the planet Mars."
Near Monroe, Michigan on 25 May, two Air Force officers reported a UFO sighting. They were passengers in an Air Force plane when one officer observed three disk-like objects flying at about the plane's altitude for 10–15 seconds before making a sudden sharp turn and accelerating rapidly out of view. The officer spoke to his traveling companion, who hadn't observed the incident. Moments later, however, both officers reported the appearance of two objects, similar to the first grouping, which maneuvered radically and accelerated rapidly into the distance. Sign classified this incident as an unknown.
A husband and wife driving near Hecla, South Dakota reported another sighting which Sign classified as an "unknown." On the evening of June 30, the couple spotted what they took to be an unusually bright star. The husband, a professional engineer and amateur astronomer, stopped their car several times to observe the light, which he eventually realized was not a star. Three small glowing fragments seemed to "fall off" the light. The three fragments arranged themselves in the points of an equilateral triangle around the light. The triangular formation maintained its geometric proportions as it rose to a great height and disappeared from view. The engineer would later assert, "my convictions at this point were that it could not have been anything terrestrial." 
A turning point for Sign came with the Chiles-Whitted UFO Encounter over Montgomery, Alabama on 24 July 1948. In this case, two experienced airline pilots, both veterans of combat flying during WWII, reported that a rocket-shaped UFO, 100 feet (30 m) long and emitting reddish exhaust, approached them on a near-collision course. Chiles and Whitted also reported the object appeared to show a double row of ports or windows emitting an intense bluish-white light. The reports of "windows" also suggested the object was possibly occupied. Additional corroboration came from four sources: a passenger on the plane who saw the object's exhaust trail as it sped from view; from an experienced military ground witness in Alabama; from a military pilot who reported an unusual light in the vicinity of Montgomery at roughly the time of the encounter; and from a sighting of a very similar object near The Hague, Netherlands on July 20. Moreover, the Chiles-Whitted object also faintly echoed the mysterious Scandinavian "ghost rockets" of 1946, reports of which had intrigued American military officials.
Loedding and others interviewed Chiles and Whitted two days after the incident, and were deeply impressed by their testimony. Ruppelt would later write, "According to the old timers at ATIC, this report shook them worse than the Mantell Incident. This was the first time two reliable sources had been really close enough to anything resembling a UFO to get a good look and live to tell about it."
The Chiles-Whitted case became the centerpiece of Project Sign's investigation for the next several months. According to Swords, "The flying fuselage encounter [i.e., Chiles-Whitted] intrigued them." Such a torpedo-like design was in fact flightworthy according to the theories of German engineer Ludwig Prandtl, but would require power far in excess of conventional fuels in 1947, possibly nuclear power. Given that no American technology could account for the flying saucer sightings, and that there was no definitive evidence of the German/Russian hypothesis, Sign's personnel began to take the interplanetary hypothesis more seriously. Swords argues that this consideration of non-earthly origin was "not as incredible in [military] intelligence circles as one might think." Because many in the military were "pilots, engineers and technical people" they had a "'can do' attitude" and tended to regard unavailable technologies not as impossibilities, but as challenges to be overcome. Rather than dismissing UFO reports out of hand, they considered how such objects might plausibly function. This perspective, argues Swords, "contrasted markedly with many scientists' characterizations of such concepts as impossible, unthinkable or absurd."
The Estimate of the Situation
In the document "Estimate of the Situation," probably written in September 1947 mainly by Sneider and Loedding, Sign explained their controversial assessment of the unknowns. As Ruppelt wrote, "The situation was the UFO's; the estimate was that they were interplanetary!"
In September or October 1948, the Estimate was approved by Colonels William Clingerman and Howard McCoy (Sneider's superiors) who then submitted the document to Gen. Charles P. Cabell, chief of Air Force intelligence. In the Pentagon, opinions about UFOs were divided. Some took the extraterrestrial hypothesis seriously; others believed the flying discs were a puzzling problem while reserving final judgement; others still dismissed the entire subject as absurd. According to Ruppelt, the Estimate "drew considerable comment but no one stopped it on its way up [the Air Force chain of command]." Cabell, newly appointed, was presumably reluctant to take a strong stand for or against the Estimate, passing it on to then-Chief of Staff Gen. Hoyt S. Vandenberg. Citing a lack of supporting physical evidence, Vandenberg rejected the Estimate. All copies of the Estimate were ordered destroyed. A few copies were allegedly saved as keepsakes for at least half a decade or so and the Estimate has been described as the "Holy Grail of ufology."
At about the same time the Estimate was working its way up the ranks, another group was arguing against any extraterrestrial origins for the saucers. Informally led by Major Aaron J. Boggs, this group doubted that any flying saucers existed; Swords noted that his peers described Boggs as "the Pentagon's 'saucer killer'". Under Boggs' guidance, a competing document prepared by the anti-extraterrestrial group in the Directorate of Intelligence was also making the rounds in military intelligence. With input from the Office of Naval Intelligence this study argued that the flying saucers were probably real, though made by the Soviet Union. The saucers were operated so openly in U.S airspace by the Soviets probably as a method of psychological warfare "to negate U.S. confidence in atom bomb as the most advanced and decisive weapon."
Rejection of Estimate
With Gen. Hoyt S. Vandenberg's rejection of The Estimate, Ruppelt said it was clear to the Sign personnel who supported extraterrestrial hypothesis (ETH) that there was no support at the top. Yet Sign's personnel stuck by their conclusions. Sign continued their investigations of UFO reports, still favoring the ETH. Swords speculates that this refusal to change their approach was due to strong minority support for the ETH within the Pentagon and/or a rather mild rejection of the Estimate. In one case, for example, seeking evidence of an advanced propulsion system, Sign personnel tested the radiation levels of George Gorman's National Guard aircraft which was said to have had a "dog fight" with a flying saucer over Fargo, North Dakota on October 1, 1948. When a Geiger counter revealed evidence of radiation, Sign personnel thought they'd discovered more corroboration for their extraterrestrial hypothesis. Clingerman wrote a memo requesting a Rand Corporation study on how an interstellar spacecraft might plausibly function.
General Charles P. Cabell asked Sign for a second, non-extraterrestrial opinion of the flying saucers. Sign submitted a brief response which did not explicitly mention extraterrestrial ideas but strongly hinted at them, even citing the works of Charles Fort to argue that unusual objects had been flying in the earth's skies for decades before the Arnold encounter. A document signed by Sneider, dated December 20, 1948 but written earlier, has been called the "Ghost of the Estimate" since it echoes many of the same ideas explained in the lost Estimate of the Situation.
Sign's continued devotion to the interplanetary explanation led to a debate at the National Bureau of Standards in November, 1948 where the competing hypotheses were represented by Sneider and Boggs (other personnel attended, but their identities are uncertain). Ultimately, Boggs and the anti-extraterrestrial faction were victorious.
The rejection of the Estimate quickly took its toll on Project Sign and supporters of the ETH. As Ruppelt wrote, "More and more work was being pushed off onto the other investigative organization that was [sic] helping ATIC. The kickback on the Top Secret Estimate of the Situation was beginning to dampen a lot of enthusiasms. It was definitely a bear market for UFOs."
By late 1948, Project Sign was discontinued in name and replaced by a much more negatively oriented Project Grudge. Ruppelt reported that the choice of the word "Grudge" to describe the new project was deliberate: Grudge was intended to provide prosaic explanations for as many UFO reports as possible.
"On February 11, 1949, an order was written that changed the name of the UFO project from Project Sign to Project Grudge. The order was supposedly written because the classified name, Project Sign, had been compromised. This was always my official answer to any questions about the name change. I'd go further and say that the names of the projects, first Sign, then Grudge, had no significance. This wasn't true; they did have significance, a lot of it."
Ruppelt referred to the Project Grudge era as the "Dark Ages" of official Air Force UFO investigations. Still, by late 1949, some 20 percent of UFO sightings remained classified as "unknown" by Grudge. By late 1951, according to Ruppelt, some highly influential Pentagon generals had become so disenchanted with Grudge's debunking that Grudge itself was dismantled and replaced by Project Blue Book, with Ruppelt in charge.
Historian David Michael Jacobs argues that, overall, Project Sign's personnel did an admirable job. However, Jacobs has also stated, "[Project Sign's] main problem was that the staff was too inexperienced to discriminate between which sightings to investigate thoroughly. Because of unfamiliarity with the phenomenon, the staff spent inordinate amounts of time on sightings that were obviously aircraft, meteors or hoaxes."
- Blum, Howard, Out There: The Government's Secret Quest for Extraterrestrials. Simon and Schuster, 1990
- Edward J. Ruppelt (1956). The Report on Unidentified Flying Objects, Doubleday & Co. online
- Swords, Michael D. (2000). "Project Sign and the Estimate of the Situation." Journal of UFO Studies, n.s. 7, 2000, pp. 27-64.
- Hoyt, Diana Palmer (2000). UFOCritique: UFOs, Social Intelligence, and the Condon Committee; Master's thesis, Virginia Polytechnic Institute and State University.
- Bloecher, Ted (1967). Report on the UFO Wave of 1947.
- Interview with Arnold in Chicago Daily Times, July 7, 1947, p.3, "'Flying discs' called real by 2 air veterans."
- Hall, Michael D. and Wendy Connors (n.d.). Alfred Loedding and the Great Flying Saucer Wave of 1947.
- Twining, Nathan (1947). AMC Opinion Concerning "Flying Discs"; URL accessed February 23, 2007
- Clark, Jerome (1998). The UFO Book: Encyclopedia of the Extraterrestrial. Detroit: Visible Ink, ISBN 1-57859-029-9
- Text of Craigie's directive setting up Project Sign
- Swords, Michael D. "UFOs, the Military, and the Early Cold War" (pp. 82–122 in UFOs and Abductions: Challenging the Borders of Knowledge. David M. Jacobs, editor; University Press of Kansas, 2000
- Connors, Wendy. "Project Blue Book"
- Ruppelt wrote:
- ATIC's intelligence specialists were confident that within a few months or a year they would have the answer to the question, "What are UFO's?" The question, "Do UFO's exist?" was never mentioned. The only problem that confronted the people at ATIC was, "Were the UFO's of Russian or interplanetary origin?" Either case called for a serious, secrecy-shrouded project. Only top people at ATIC were assigned to Project Sign.
- Ruppelt wrote:
- Those who were convinced that the UFO's were of Soviet origin now began to eye outer space, not because there was any evidence that the UFO's did come from outer space but because they were convinced that UFO's existed and only some unknown race with a highly developed state of technology could build such vehicles. As far as the effect on the human body was concerned, why couldn't these people, whoever they might be, stand these horrible maneuver forces? Why judge them by earthly standards? I found a memo to this effect was in the old Project Sign files.
- Stacy, Dennis (1985). "Close Encounter with Dr. J. Allen Hynek"
- Jacobs, David Michael (1975). The UFO Controversy In America. Indiana University Press, ISBN 0-253-19006-1
- The Chiles-Whitted Case (archived from the original)
- The Chiles/Whitted Sighting (ufocasebook.com)
- Randles, Jenny and Peter Hough (1994). The Complete Book of UFOs: An Investigation into Alien Contact and Encounters. Sterling Publishers, ISBN 0-8069-8123-6, p. 85.
- "Air Intelligence Report AIR 100-203-79: ANALYSIS OF FLYING OBJECT INCIDENTS IN THE U.S. URL accessed February 23, 2007
- McCoy Memo - 1948
- "Air Intelligence Report 102-122-79" URL accessed February 23, 2007
- Dolan, Richard M. (2002) UFOs and the National Security State: Chronology of a Cover-up 1941–1973, ISBN 1-57174-317-0
- Peoples, Curtis (1994). Watch the Skies! - A Chronicle of the Flying Saucer Myth. Smithsonian, ISBN 1-56098-343-4.
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