SPACEHAB Awarded NASA Exploration Contract; Company Becomes Key Player in Supporting New Vision for Space Exploration.

HOUSTON -- SPACEHAB, Incorporated (NASDAQ/NMS:SPAB), a leading provider of commercial space services, announced today that it has been awarded a six-month NASA study contract valued at approximately $1.0 million to support the space agency's new exploration initiatives.

"We are excited to be one of the companies selected to define concepts for accomplishing human lunar exploration," said Michael E. Kearney, SPACEHAB President and Chief Executive Officer. "Our innovative solutions and commercial approach will prove valuable to our Nation's Vision for Space Exploration."

In June 2004, NASA issued a Broad Agency Announcement soliciting proposals that meet the agency's objectives for lunar exploration. With a multitude of proposals submitted, SPACEHAB's response for the Concept Exploration and Refinement solicitation was one of a just a handful selected. In addition to this six-month contract effort, the Company may be awarded a contract option that includes an additional six-month effort also valued at nearly $1.0 million.

Per NASA's specifications, bidders were asked to identify systems that are common or extensible to Mars missions and other destinations. SPACEHAB's proposal documented the Company's approach for designing an architecture that took full advantage of commercial efficiencies; specifically, how private industry can contribute to the investment in getting people to the moon and elsewhere. The result would be low program costs, a stimulated economy, and the benefit of applying existing capabilities and mature technology.

"This competitive award demonstrates our understanding of the complex challenges of space exploration, NASA's development philosophy, and the broad spectrum of potentially viable solutions to enable exploration of the Moon, Mars, and beyond," stated Michael Bain, Vice President Space Commerce Development. "We are excited about this opportunity to make a valuable contribution to NASA's space exploration initiative," added Bain.

About SPACEHAB, Incorporated

SPACEHAB, Incorporated (www.spacehab.com) is a leading provider of commercial and government space services with three primary business units. The Flight Services business unit develops, owns, and operates habitat and laboratory modules and cargo carriers aboard NASA's Space Shuttles for Space Station resupply and research purposes. SPACEHAB's Astrotech subsidiary provides payload processing support services for both commercial and government customers at company-owned facilities in Florida and California. The Company's Government Services business unit supports NASA's Johnson Space Center providing configuration management, product engineering, and support services for both the Space Station and Space Shuttle programs. Additionally, through The Space Store, Space Media provides space merchandise to the public and space enthusiasts worldwide (www.thespacestore.com).

The statements in this document may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the statements. In addition to those risks and uncertainties discussed herein, such risks and uncertainties include, but are not limited to, whether the Company will fully realize the economic benefits under its U.S. National Aeronautics and Space Administration ("NASA") and other customer contracts, whether NASA and other customers will continue to utilize the Company's habitat modules and related commercial space assets, whether plans to complete the International Space Station ("ISS") are fulfilled, continued availability and use of the U.S. Space Shuttle system, technological difficulties, product demand and market acceptance risks, the effect of economic conditions, uncertainty in government funding, the impact of competition, delays and uncertainties in future space shuttle and ISS programs, resolution of the Company's indemnification claim with NASA arising from the loss of the Columbia orbiter and its crew during the STS-107 mission, and other risks described in reports filed by the Company with the Securities and Exchange Commission. The Company assumes no obligation to update these forward-looking statements.