SPEX (Spectropolarimeter for Planetary Exploration) was developed in close cooperation between scientific institutes and space technological industries in the Netherlands. It is used for measuring microphysical properties of aerosols and cloud particles in planetary atmospheres. SPEX utilizes a number of novel ideas. The key feature is that full linear spectropolarimetry can be performed without the use of moving parts, using an instrument of approximately 1 liter in volume. This is done by encoding the degree and angle of linear polarization (DoLP and AoLP) of the incoming light in a sinusoidal modulation of the intensity spectrum. Based on this principle, and after gaining experience from breadboard measurements using the same principle, a fully functional prototype was constructed. The functionality and the performance of the prototype were shown by extensive testing. The simulated results and the laboratory measurements show striking agreement. SPEX would be a valuable addition to any mission that aims to study the composition and structure of planetary atmospheres, for example, missions to Mars, Venus, Jupiter, Saturn and Titan. In addition, on an Earth-orbiting satellite, SPEX could give unique information on particles in our own atmosphere.