This article describes the results of a study to demonstrate the feasibility of a Mach 10 to 20 air breathing propulsion test facility. The key element of this wind tunnel is a heater which uses a continuous high-power electric arc discharge potentially capable of heating air to temperatures over 10,000 K and to pressures of 15,000 atm. The heated air is then expanded through a supersonic nozzle to obtain the test condition. The features unique to this facility are the heater design, which allows arbitrarily high pressures to be generated (limited only by the material strength of the chamber), and the use of liquid air which improves the heater efficiency and alleviates the problems associated with conventional arc heaters operating at high pressure. Analytical and experimental studies were conducted to determine the simulation limits of the facility and demonstrate stable operation of the heater with a cryogenic liquid, respectively. The analytical study indicated that the high pressure improves recombination chemistry in the facility nozzle by allowing chemical equilibrium to prevail to the freezing point. However, the high pressure also enhances the formation of nitric oxide which contaminates the test gas at roughly 5% by volume throughout the simulation envelope. The practical simulation limit of the facility was found to extend to about Mach 16, where pressure containment, high nozzle throat heat flux rates, and chemical freezing in the nozzle become limiting factors. The experimental study on a subscale, 2-ms test facility were successful in that steady arc discharges were observed with liquid nitrogen flowing into the arc chamber. The measured steady pressure in the arc chamber was 4559 psi, which is at least 20% greater than the maximum total pressure obtainable in conventional arc heaters.