Via Facsimile and U.S. Mail
Mail Stop 03-09


April 15, 2005


Mr. Alan M. Wright
Senior Vice President Administrative and Financial Operations
      and Chief Financial Officer
Aastrom Biosciences, Inc.
24 Frank Lloyd Wright Drive
P.O. Box 376
Ann Arbor, MI  48106


Re:	Aastrom Biosciences, Inc.
	Form 10-K for the fiscal year ended June 30, 2004
	File No. 000-22025

Dear Mr. Armstrong:

      We have reviewed your filing and have the following
comments.
We have limited our review of the above referenced filing to only
those issues addressed. Where our comments call for disclosure, we
think you should amend your document in response to these
comments.
In one of our comments, we ask you to provide us with supplemental
information so we may better understand your disclosure.  Please
amend your Form 10-K for the fiscal year ended June 30, 2004 and
subsequent Form 10-Qs, and respond to these comments within 15
business days or tell us when you will provide us with a response
prior to the expiration of the 15-day period.  If we have
requested
additional information as well as an amendment, or if you disagree
with any comment that calls for disclosure, please provide this
letter prior to your amendment.  You may wish to provide us with
marked copies of the amendment to expedite our review.  Your
letter
should key your responses to our comments.  Detailed letters
greatly
facilitate our review.  Please file your letter on EDGAR under the
form type label CORRESP.  Please understand that we may have
additional comments after reviewing your amendment and responses
to
our comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.




Form 10-K for the year ended June 30, 2004, filed September 13,
2004

Management`s Discussion and Analysis of Financial Condition and
Results of Operations, pg. 20

1. Please refer to the Division of Corporation Finance "Current
Issues and Rulemaking Projects Quarterly Update" under section
VIII -
Industry Specific Issues - Accounting and Disclosure by Companies
Engaged in Research and Development Activities.  You can find it
at
the following website address:
http://www.sec.gov/divisions/corpfin/cfcrq032001.htm#secviii.

Please disclose the following information for each of your major
research and development projects:

a. The current status of the project;
b. The costs incurred during each period presented and to date on
the
project;
c. The nature, timing and estimated costs of the efforts necessary
to
complete the project;
d. The anticipated completion dates;
e. The risks and uncertainties associated with completing
development
on schedule, and the consequences to operations, financial
position
and liquidity if the project is not completed timely; and finally
f. The period in which material net cash inflows from significant
projects are expected to commence.

Regarding b., if you do not maintain any research and development
costs by project, disclose that fact and explain why management
does
not maintain and evaluate research and development costs by
project.
Provide other quantitative or qualitative disclosure that
indicates
the amount of the company`s resources being used on the project.

Regarding c. and d., disclose the amount or range of estimated
costs
and timing to complete the phase in process and each future phase.
To
the extent that information is not estimable, disclose those facts
and circumstances indicating the uncertainties that preclude you
from
making a reasonable estimate.

Critical Accounting Policies, page 21

2. We acknowledge your systematic approach to determine your
reserves
for obsolete and excess inventory.  Please tell us how this
complies
to GAAP, specifically Chapter 4 of ARB 43.

Results of Operations, page 22

3. We acknowledge your disclosure about increased grant activity
and
additional grant awards.  Considering the significance of your
grant
revenue, please quantify and elaborate your discussion about the
factors causing the increase.  Additionally, please disclose the
nature and provisions of these contracts.

Consolidated Statements of Operations, page 35

4. It appears that you have not complied with Rule 5-03 of
Regulation
S-X in regards to your presentation of product sales and rentals.
Please reclassify separately, revenue generated from the sale of
products from rental revenue.  Please reclassify the costs
incurred
to generate these product sales and rental income, including the
provision for obsolete and excess inventory, to correspond to the
revenue classification.  Please revise your financial statements
accordingly.

*    *    *    *

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that

* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

   In addition, please be advised that the Division of Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Christine Allen, Staff Accountant, at (202)
824-5533 or Kevin Woody, Branch Chief, at (202) 942-7332 if you
have
questions regarding the comments. In this regard, do not hesitate
to
contact me, at (202) 942-1803.

								Sincerely,


								Jim B. Rosenberg
								Senior Assistant Chief
Accountant
??

??

??

??

Mr. R. Douglas Armstrong
Aastrom Biosciences, Inc.
Page 1