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Click here for Wookieepedia's article on the Canon version of this subject.  This article covers the Legends version of this subject. 

An Identify Friend/Foe transponder, also known as an identification-friend-or-foe transponder or IFF transponder, was a military-specific type of transponder signal that would broadcast the ship's affiliation in addition to the standard data. Some automated ships used IFF broadcast streams to dictate their actions. In the prelude to the Battle of Endor, the Rebels aboard the stolen Imperial shuttle Tydirium used an IFF transponder to transmit the clearance code that allowed them to land on the Forest Moon.[1] The automated war cruiser Valiant defended Rogue Squadron pilot Tycho Celchu when he recalibrated his IFF transponder to broadcast the same beacon used by the Another Chance.[2] IFF transponders could also be used to trick enemies into firing on each other by using an IFF transponder scramble command.

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