The tethered satellite system (TSS) project was developed, starting from 1984, as a unique system to make active experiments in space plasmas. This paper aims at providing a thorough description of the basic electrodynamic aspects of a TSS orbiting in the ionosphere. As will be seen, a wide variety of plasma physics phenomena are associated with the interaction of a conducting tether with the ionospheric plasma and, as a consequence, numerous basic science objectives can be addressed with a TSS system. Besides reviewing the various electrodynamic phenomena and our present knowledge on them, we provide also a description of the scientific payload and the nominal science objectives of the first tethered satellite project (TSS-1). A brief account, as well as a first evaluation, are also given of the mission itself, which was flown with the shuttle Atlantis launched on July 31, 1992. ¿ American Geophysical Union 1993