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Future microwave sensors such as the active microwave instrument (AMI) of the first European remote sensing satellite (ERS-1) to be launched in 1990 will be increasingly conducted in an operational mode. This fact implies an increased amount of synthetic aperture radar (SAR) data to be processed systematically, and, furthermore, combines with the growing needs of the user community in terms of various product levels, adequate production, and organization schemes. Among these needs are the requirements regarding much improved radiometric and absolute geometric accuracy of the generated SAR images. Therefore, an end-to-end SAR processing system has been designed that is significantly different from existing ones. The challenging requirements for high precision combined with high throughput of the generated products will be met by two systems: the knowledge-based intelligent SAR processor (ISAR) and the geocoding system. They represent the backbone of a distributed computer network engaged in SAR processing and image restitution within the German Processing and Archiving Facility (D-PAF) for ERS-1, which shall be built up and operated by the German Aerospace Research Establishment (DFVLR). This paper describes the requirements for the system as well as the specific hardware and software concepts.