http://news.bbc.co.uk/2/hi/americas/696028.stmsnip
Washington hopes that radar and communication systems - in combination with satellites in space - will provide early warnings of an attack.
The incoming missiles would then be destroyed by sophisticated interceptors based in the United States.
The Bush team proposes a multi-national defence system covering the territory of as many countries that want to sign up.
But the bigger the area to be defended, the greater the technical challenge ahead.
Where does the threat come from?
The National Missile Defense Act of 1999 states: "It is the policy of the United States to deploy as soon as is technologically possible an effective National Missile Defense system capable of defending the territory of the United States against limited ballistic missile attack (whether accidental, unauthorized, or deliberate)..."
The system is not designed to defend the US from an attack on the scale that Russia would have the ability to mount.
It is designed to be effective against attack from countries with limited missile programmes, such as North Korea and Iran.
The US says Moscow should recognise that it also faces the threat of nuclear attack from nuclear states.
However, Russia is vehemently opposed to the US plan - even though it has successfully tested a modernised anti-ballistic missile of its own.
How accurate would it be?
The system is faced with the challenge of destroying several incoming missiles, without debris falling on the intended target. That requires early warning, accuracy and multiple shots.
The technologies are still highly risky, and several tests have failed or been delayed.
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How does it differ from the original Strategic Defence Initiative?
The original Strategic Defence Initiative - or Star Wars - envisaged putting defensive weapons into space, as well as a huge number on the ground.
The national missile defence programme, on the other hand, would only deploy a small number of ground-based weapons.
It also incorporates some new technologies, such as the hit-to-kill kinetic energy weapon, Thaad.
Would it breach existing nuclear treaties?
In June 2002, the US administration unilaterally withdrew from the 1972 anti-ballistic missile (ABM) treaty - much to Russia's dismay.
The treaty, signed by the US and the Soviet Union, prohibited the development of a national missile defence system.
Some experts say the US could have carried on missile defence testing for some years without breaching the ABM treaty anyway.
After the US withdrawal from the ABM treaty, Russia pulled out of the Start II treaty - the nuclear arms reduction pact it signed with Washington in 1993.
But Russia and the US signed a major new arms reduction deal in May 2002, agreeing to cut their nuclear arsenals by two-thirds - to about 2,000 warheads each.