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This paper describes the development of an automated laboratory test bench named MODEST (Mode S Transponder Test Tool). The objective of the tool is to perform vendor independent verification of Mode S transponders, with emphasis on basic functionality and protocols. A set of test procedures as defined in EUROCAE MOPS ED-73A for Mode S transponders have been translated into automatically executable test suites. The test tool is of a modular design, built around a Windows NT-based generic and re-usable test kernel ARTIS (Avionics Research Test and Integration System). ARTIS is extended with several application specific components for RF, ARINC-429, ARINC-718 data link interface and discrete I/O to interface with the transponder. The tool engineering process has been guided by the tool qualification approach defined in RTCA-DO178B, from Tool Operational Requirements to Tool Qualification. After a first delivery of the basic tool set early 2002, an upgrade of the tool with test suites to verify the ACAS-transponder protocols and interface in accordance with ED-73A and ARINC-735 is under development.