This paper presents the history of development, testing, and two years operation of the Scanning Hydrographic Operational Airborne Lidar Survey (SHOALS) system. The SHOALS system was developed for the US Army Corps of Engineers (USACE) as part of an objective to facilitate private sector investment in lidar bathymetry by demonstrating the technology and commercial applications. The system services the USACE by providing hydrographic surveys of many of its projects, as well as providing services to other US government agencies including the National Ocean Service and Navy. Laboratory development was completed in November 1993 and field tests were conducted January through February 1994 to determine performance and compliance with contract specifications. Since acceptance in March 1994, and as of April 1996, SHOALS has surveyed over 50 projects covering more than 1,500 km2 and faced many technical and operational challenges.