The Phalanx close-in defense system was first fitted to the USS Coral Sea in 1980 and is actually a 20 mm M61 Vulcan (Gatling-type) rotary cannon which is controlled by a system that acquires and tracks possible threats by radar.
Initially the system was able to fire only 3000 rounds per minute, but that improved as the Block 1, 1A and 1B came into play with upgraded radar, control systems, new sensors (FLIR) and rates of fire up to 7000 rpm.
The Phalanx was put to use only once, in the 1990 Gulf war. A Silkworm sea-missile was fired at either the USS Missouri or the HMS Gloucester. The only ship equipped with the Phalanx system was the nearby USS Jarrett. Unfortunately, the USS Missouri deployed chaff which got the attention of the automated Phalanx system on board the Jarret. The system fired at the chaff hitting the USS Missouri but causing minor damages and no wounded. The incoming missile threat was intercepted by a Sea-dart from the HMS Gloucester.
The Phalanx system is thought to be inadequately equipped for the interception of modern threats, and is being replaced on all allied ships by the RIM-116 Rolling Airframe Missile.
The land based system of the Phalanx uses High-Explosive Incendiary Tracer Self-Destruct rounds and is used for intercepting incoming rockets, artillery and mortars. Below is a very impressive video showing it in action!
Phalanx CIWS shooting at incoming Exocet missiles.
Pictures of the Phalanx close-in defense system