A novel approach to fusion power that combines the favorable aspects of magnetic and inertial confinements has recently been proposed in the “magnetically insulated inertial confinement fusion” (MICF) reactor. In contrast to conventional inertial confinement schemes, this approach relies on generating the needed plasma inside of a spherical shell by zapping the inside surface of a hollow pellet with an intense laser beam. Physical confinement is provided by the metallic shell that surrounds the deuterium-tritium fuel-coated inner surface, while very strong, plasma-generated magnetic fields provide the desired thermal insulation of the plasma from the surrounding surface. Because of these unique properties, the inertial confinement time can be increased by about two orders of magnitude relative to that of conventional inertial confinement schemes, with the result that truly impressive energy multiplication factors can result. Carbon dioxide lasers of hundreds of kilojoules may be readily employed for such reactors, and, since they are relatively efficient and can be chemically driven, these systems lend themselves nicely to such space applications as space-based power sources or rocket propulsion. It is shown that MICF can be utilized as a reactor, producing power in the range of hundreds of kilowatts to tens of megawatts as deemed desirable for space-based power systems. It is also shown that as a rocket propulsion scheme it can produce specific impulses of 1000 s or more, which are required for deep space (and other) missions that cannot be addressed by chemical propulsion.