This paper describes the design and preliminary testing of a new supersonic combustion facility ACT-2, built at the University of Illinois at Urbana-Champaign. ACT-2 is a pulsed, 250 kW (output) arc-heated hypersonic wind tunnel specifically designed for supersonic and hypersonic combustion experiments. The current design of ACT-2 provides two possible combustor configurations: direct-connect and free-flow. A maximum test time of up to 1 second allows for the study of transient flame development and propagation at supersonic conditions, such as those encountered during flame stabilization or unstart. The facility is optimized for laser and optical diagnostics and the development and integration of novel diagnostics techniques will run in parallel with the investigation of the flow physics. The first part of the paper is dedicated to the description of the facility and its performance specifications. The second part presents the results of the preliminary experimental activities carried out in ACT-2, focusing particularly on flow and flame visualization.