Japan has started a project of Quasi-Zenith Satellite System (QZSS) since FY2003. QZSS will be highly useful not only for communications but for complement of the modernized GPS in urban canyon and mountainous area with its high visibility brought out by its inclined orbits. National Institute of Information and Communications Technology, Japan (NICT) is to develop a Space-borne Hydrogen Maser (SHM) and time management system, and carry out experiments using them. A breadboard model (BBM) of the SHM was developed to overcome the issues such as size, weight and life time, which are required in space environment. Basic design was carried out for time management system to achieve nano second level time transfer. The design and the manufacturing of the engineering models (EM) of the on-board equipment have been carried out since 2004. The first satellite is planned to be launched in FY 2008.