Houston, Texas, October 26, 2006 – SPACEHAB, Incorporated (NASDAQ: SPAB), a leading provider of commercial space services, announced today that it has consummated the sale of its space-related merchandise internet and retail entity, The Space Store.

The transaction was made with a private investor who will continue to operate the internet business under its existing name and website address. “While The Space Store was a unique means for bringing the excitement of space to the average enthusiast, it simply does not support our goals associated with arranging, processing, and delivering cargo to orbit,” stated Michael E. Kearney, SPACEHAB President and Chief Executive Officer.

Originally purchased through SPACEHAB’s Space Media subsidiary in 2000, The Space Store carries hundreds of different space items including NASA flight suits for adults and kids, space food, astronaut mission patches, space toys, and more.

About SPACEHAB, Incorporated

Incorporated in 1984, SPACEHAB (www.spacehab.com) is a leading provider of commercial space products and services to NASA, international space agencies, Department of Defense, and private customers worldwide. The Company offers end-to-end space access solutions, space systems development, mission integration and pre-launch processing facilities and services, and large-scale government program support services. From securing a spaceflight opportunity and facilitating the integration of spacecraft and payloads for launch, to developing human habitats, supplying the International Space Station, and coordinating the transport and operation of cargo and experiments to and from orbit, SPACEHAB clearly demonstrates that “We Mean Business in Space.”

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.