Morningstar worked with Mark S. Miller on Project Xanadu, the first distributed hypertext system (founded in 1960). Later, from 1984 to 1992, he worked at Lucasfilm, Ltd. as a designer and programmer, as well as cyberspace consultant. While at Lucasfilm, Morningstar held the position of Project Leader for "Habitat", an early graphical online multiplayer environment, released in 1986. Morningstar oversaw all development staff, as well as writing substantial portions of the server system himself. Use of the term “avatar” for a human being's representative in a game world originated in Habitat, the term referring to a deity's Earthly incarnation in Hindu belief. Morningstar also worked on the SCUMM game engine, used in Maniac Mansion (1987) and Zak McKracken and the Alien Mindbenders (1988).