The Disturbance Reduction System (DRS) is designed to demonstrate technology required for future gravity missions, including the planned LISA gravitational-wave observatory, and for precision formation-flying missions. The DRS is based on a freely floating test mass contained within a spacecraft that shields the test mass from external forces. The spacecraft position will be continuously adjusted to stay centered about the test mass, essentially flying in formation with the test mass. Any departure of the test mass from a gravitational trajectory is characterized as acceleration noise, resulting from unwanted forces acting on the test mass. The DRS goal is to demonstrate a level of acceleration noise more than four orders of magnitude lower than previously demonstrated in space. The DRS will consist of an instrument package and a set of microthrusters, which will be attached to a suitable spacecraft. The instrument package will include two Gravitational Reference Sensors comprised of a test mass within a reference housing. The spacecraft position will be adjusted using colloidal microthrusters, which are miniature ion engines that provide continuous thrust with a range of 1-20 mN with resolution of 0.1 mN. The DRS will be launched in 2007 as part of the ESA SMART-2 spacecraft. The DRS is a project within NASA's New Millennium Program.