An Air Turbo Rocket (ATR) is a propulsion system which combines a turbo jet with a rocket engine. Currently it is being touted as a propulsion system for future missile systems, as these engines have a higher thrust density when compared to other air breathing engines. This paper explores the possibility of modifying the ATR for use in space application as well as during spacecraft re-entry. Such modified ATR’s could be used to power space vehicles up to the Low Earth Orbit (LEO) to dock with the International Space Station (ISS). In addition, thrust reversal techniques on the ATR systems could be used to improve the accuracy of Ballistic Missiles and hypersonic space planes upon Re-entry. Challenges faced would be in this type of air breathing engine would be operating at different atmospheric conditions. This paper will explore an ATR design, which will operate at different modes namely conventional mode, which will be used during below absolute ceiling, and the mission mode, which will be employed during flight in vacuum. Lastly, the reentry mode, which can be used for lessening the entry velocity of a vehicle to reduce the risks associated with reentry. The paper will try to emphasize the advantages of ATR as an affordable launch system for space shuttles and satellites with high maneuverability.