This paper will present the evolution of a third-generation, point-the-bit rotary steerable system (RSS) and its successful application for air drilling of directional wells and lateral intervals.There are a number of applications for air drilling; the primary one is obviously to drill hydrostatically underbalanced where extremely low bottomhole formation pressures are encountered. In certain circumstances, the requirement to have a very small rig footprint makes drilling with air preferable to drilling with mud systems.The engineering requirements for drilling with air obviously differ from more conventional drilling fluids. Pressure integrity of the mechanical components of the RSS device has to be sufficiently robust to withstand more extreme differential pressures. This paper will describe the steps in the evolution of the RSS design to accommodate this requirement and other functionalities of the system.Transmission of downhole information drilling with dry air necessitates effective communication of data via electromagnetic (EM) wave in the absence of the medium for conventional mud pulse telemetry (MPT). The timeline over nine years to integrate basic EM with more high-end LWD and steering devices is illustrated (Fig. 1). Optimization of controllable constraints to extend the reach of acceptable EM transmission is addressed.Results of successful deployments on over twenty bit runs so far will be demonstrated, along with a step-change in tool reliability delivered. Performance improvements were achieved using the surface output of the existing rig fleet without modifications. Lateral reach capability was extended, largely due to improved hole quality over the air motor drilling system used previously. This delivered greater production footage from fewer wellbores as well as the increased ability to reach topographically constrained payzones.