SPACEHAB Subsidiary Awarded New $1.0 Million NASA Contract.

HOUSTON -- SPACEHAB, Incorporated (NASDAQ/NMS:SPAB), a leading provider of commercial space services, announced today that its Astrotech Space Operations subsidiary has been awarded a new contract by NASA/Kennedy Space Center to provide payload processing services from the Company's high-tech facilities in Titusville, Florida.

The contract, which is valued at approximately $1.0 million, is for the processing of NASA's THEMIS spacecraft. This new mission is part of the indefinite-delivery, indefinite-quantity (ID/IQ) contract that NASA awarded to Astrotech in September 2005 and has a total value of up to $4.9 million.

"We are pleased to be able to support yet another NASA research mission set to answer more questions about the development of our planet and the surrounding universe," stated Jim Royston, Deputy General Manager of Astrotech Space Operations. "With hundreds of successfully processed commercial spacecraft passing through our doors, it is exciting to have continued growth in our government sector initiatives."

The mission, to be launched in 2007 following its preparation activities at Astrotech's facilities, is the Time History of Events and Macroscale Interactions during Substorms (THEMIS) program. THEMIS is a five-satellite mission with the job of determining the causes of auroras, a celestial phenomenon that has amazed people for centuries while often looking into the northern skies. The small satellites will be put in carefully coordinated orbits, and every four days they will line up along the Earth's magnetic tail, allowing them to track disturbances. Currently, little is known about the explosive events that create these particles throughout the universe.

Under the previously established NASA ID/IQ contract, Astrotech is also gearing up to support the STEREO observatory and the Dawn mission, both scheduled for launch in 2006. Astrotech provides all support necessary for the customer to successfully process their spaceflight hardware for launch, including advance planning; use of unique facilities; and spacecraft checkout, encapsulation, fueling, transport, and remote control through launch. In its twenty-year history, Astrotech has supported the processing of more than 230 spacecraft without a single impact to a customer's mission launch schedule.

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 International 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 that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, trends, and uncertainties that could cause actual results to be materially different from the forward-looking statement. These factors include, but are not limited to, continued government support and funding for key space programs, product performance and market acceptance of products and services, as well as other risk factors and business considerations described in the company's Securities & Exchange Commission filings including the annual report on Form 10-K. Any forward-looking statements in this document should be evaluated in light of these important risk factors. The Company assumes no obligation to update these forward-looking statements.