In an echo of U.S. heraldic practice, the stars represent the four federated states: Chuuk, Pohnpei, Kosrae and Yap, arranged like the points of the compass.

In the 1950s, the residents had protested the adoption of a flag, citing the lack of a cohesive identity for the disparate group of islands, and the scheme was dropped.

[3] The flag was designed by Gonzalo Santos and officially approved in 1965 by the National Congress.

[3] A four-star variation of the former trust territory flag was adopted on 30 November 1978 prior to independence; Kosrae was split from Pohnpei and is represented by the fourth star.

[3][4] The four white stars are oriented in a circle with none of the "rays" pointing inwards, adorning a shade of blue representing the Pacific Ocean.