At one point, the Klingon Empire experimented with combining a molecular phase inverter, a device capable of altering the normal structure of matter, enabling it to pass through normal matter and energy, with a cloaking device. Vessels equipped with such a device would theoretically be able to pass through normal matter, allowing them to hide anywhere, even inside a planet, and would be immune to conventional weapons, all while being invisible. The Klingons abandoned this research, however, due to several accidents which occurred as a result.

In the 2350s, a secret group in Starfleet Security experimented with the technology. A direct violation of the Treaty of Algeron, which banned cloaking technology aboard Federation starships, the Molecular Phase Cloaking Device was first tested aboard the USS Pegasus in 2358, under the command of Captain Erik Pressman. In response to the illegal use of this device, the crew of the Pegasus mutinied against Pressman, forcing Pressman and a small group of officers who sided with him, including a young Ensign Will Riker, to flee the ship. The cloak blew out the plasma relays aboard the ship, and it drifted into an asteroid field in the Devolin system while still in a phased state. When it passed through a particularly large asteroid, the cloak failed, causing the Pegasus to partially materialize inside solid rock. With the crew dead, the Pegasus remained entombed in the asteroid for the next twelve years, though the device itself survived. A Judge Advocate General's investigation into the mutiny was initiated, but, in order to conceal the illegal test, Starfleet Intelligence classified the file.

In 2368, the Romulans attempted the same experiment, equipping one of their vessels with an interphase generator. This experiment ended in disaster, however, resulting in a forced chamber explosion in their resonator coil, severely damaging the ship. The USS Enterprise-D answered the Romulans' distress call, and assisted them in making repairs. Upon beaming back to the Enterprise, however, Lieutenant Commander Geordi La Forge and Ensign Ro Laren became contaminated with chronitons leaking from the Romulans' cloaking device, and became phased themselves, unable to interact or communicate with anyone but each other and a phased member of the Romulan crew. La Forge and Ro were eventually de-phased when they were subjected to a high-intensity anyon emission.

In 2370 Pressman, then an admiral at Starfleet Intelligence, boarded the USS Enterprise-D and mounted a mission to retrieve the cloaking device. He was successful, but not before a Romulan Warbird sealed the Enterprise inside the asteroid. Riker, then the first officer of the Enterprise, decided to reveal the existence of the device to Captain Picard in order to use it to escape the asteroid. This plan worked, and Picard subsequently ordered the Enterprise to decloak in front of the Warbird, thereby revealing the existence of the phasing cloaking device to the Romulans. Both Admiral Pressman and Commander Riker were subsequently taken into custody for their respective roles in the illegal experiment.