SPACEHAB SUBSIDIARY AWARDED NEW $1.3 MILLION NASA CONTRACT

FOR IMMEDIATE RELEASE

SPACEHAB SUBSIDIARY AWARDED NEW $1.3 MILLION NASA CONTRACT
Astrotech-Processed Mission Studies Earth’s Climate and Reaches Out to Students

Houston, Texas, July 6, 2004 – SPACEHAB, Incorporated (NASDAQ/NMS: SPAB), a leading provider of commercial space services, today announced that its Astrotech Space Operations subsidiary has been awarded a new contract by NASA/Kennedy Space Center to provide the payload processing facilities and support for the CALIPSO/CloudSat mission.

The CALIPSO and CloudSat satellites are scheduled for a January 2005 delivery to Astrotech's facility located at Vandenberg Air Force Base (VAFB), California where the Company will begin providing its processing services. The NASA contract, valued at approximately $1.3 million, provides for processing support from satellite arrival at VAFB through launch on a Delta II expendable launch vehicle (ELV) complex.

Scheduled for launch in April 2005, CALIPSO and CloudSat are part of the Earth Science Enterprise program whose mission is to study the planet's environment. These satellites will fly in close proximity, providing combined, detailed observations about the Earth's condition, assisting scientists with making predictions related to global climate change.

The CALIPSO and CloudSat spacecrafts, as part of a six satellite formation known as the A-Train, also provide students with a link to NASA research through the GLOBE Program, a hands-on, primary and secondary education science program. Students from around the world take ground-based measurements of weather, clouds, and aerosols, collecting information that scientists can compare with related satellite data.

Astrotech is currently providing processing support for the NASA Aura spacecraft, scheduled for launch on July 10, 2004, another of the A-Train observation satellites. Processed at Astrotech's VAFB facility and secured onboard a Delta II ELV, Aura's mission is to study the dynamics of chemistry occurring in the atmosphere. The spacecraft will provide data to help researchers better understand the Earth's ozone, air quality, and climate change

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.

For more information, contact:

Kimberly Campbell
Director of Marketing and Communications
SPACEHAB, Inc.
Phone 713.558.5049
campbell@spacehab.com