According to a Gamasutra report, a Halo MMO was in development at the now-defunct Microsoft-owned studio Ensemble. Speculation suggests the unnamed title was in the works for nearly a year, from 2006 to 2007. As depicted above and after the jump, a couple images of concept art have also surfaced.
What happened to it? Microsoft Game Studios Phil Spencer recently mentioned that "more than two or three teams" are hard at work on Halo projects. Could one of them be this MMO? Sure, Ensemble is gone, but that doesn't mean the entire effort was scrapped -- for all we know it could have been sent over to another developer.
Ensemble Studios' Canceled Project Was Halo MMO [Gamasutra]