This Small Business Innovation Research (SBIR) Phase II project aims to design a network of locally intelligent, acoustic monitors for deployment on water and gas pipelines. Each monitor will transmit data on a regular, long-term basis to a central base station. Pipeline integrity monitoring will be performed using sophisticated signal processing methods to detect leaks at an early stage. Leaks manifest as pipeline vibrations due to the turbulent flow that emanates from the leak site. Currently, gas sniffing and water listening surveys are the most widely used means of leakage control. In contrast to the present labor-intensive survey techniques, this proposal uses state of the art methods to detect leakage network-wide, below the current sensing thresholds and in an automated cost-effective manner. Commercial applications of this project are well defined. A product for monitoring water and gas distribution networks will be released during the last six months of the grant period. If successful, the product will feature long-term data recording, remote processing, data transmission and alarm features. In subsequent years this product will be made more sophisticated and expanded to include electric utility pipe, steam, and long-distance gas transmission lines. The total market potential in the US is estimated to be at least $400 million.