In 2366, he learned of Lieutenant Commander Data's success in building another Soong-type android on the USS Enterprise-D. He believed that the study of this new android should be done with a strict peer-review process and convinced Starfleet Command that he should take custody of Lal. He contacted Jean-Luc Picard and informed him of his intentions. Picard said he would allow it if Data accompanied her, but Haftel did not think it best, since Data is still developing as well.
Haftel transported on a Federation starship to the Enterprise to review Lal's progress. He first tried to convince Data to willingly allow her to come back with him, but Data refused, as he would not part with his child, and he is capable of performing all the diagnostics that Haftel's team could perform. Haftel then observed Lal, impressed with her abilities but did not approve of her learning human interaction in Ten Forward. He spoke to her directly, stating his intention, but she said she wished to remain with her father. When Lal had left, Haftel ordered Picard to release her to him. Picard refused, saying it's too soon and that Lal depends on Data. Picard said he would take the matter to Starfleet, despite Haftel's order.
He later assisted Data when Lal suffered a neural system failure caused by the conflicts she felt upon being taken away. They were, however, unsuccessful in saving her. The admiral sadly remarked that "it just wasn't meant to be." (TNG: "The Offspring")