We study in this work piloting agile practices in embedded space system development projects. The case involves three companies acting as last or next to last subcontractors in a space project. Initial interviews and a subsequent survey revealed challenges that embedded space system development poses to the agile software development. These include high specialization and emphasis on individual performance, formal customer interface requiring extensive documentation, and the management of several simultaneous projects. Iterative way of working is characteristic to agile systems development, but novel to the examined project teams. We observed that it enhanced team collaboration through planning and reviewing the work together and in transferring emphasis from the individuals to the team. Resource allocation between projects was taken properly into account when planning the iteration, or when cancelling an iteration for the project. Furthermore, the customer interface was tackled better by utilizing backlogs. According to the end survey and interviews, the main benefits of the agile practices were better communication and knowledge sharing inside the team, enhanced teamwork, and setting the pace for the sometimes slowly proceeding embedded space system development. Also documentation, while it barely changed, was seen more adequate in two of the cases. Overall, the teams felt that they were given a better possibility to affect their ways of working. The case study results show that agile practices can be applied to embedded space system development with notable benefits.