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  innovative
  micro technology

  75 Robin Hill Road ·
  Goleta, CA 93117

  Ph: 805-681-2800 · Fax:
  805-967-2677

May
2, 2005

VIA
EDGAR AND FEDERAL EXPRESS

Securities
and Exchange Commission

Division
of Corporation Finance

450
5th Street, N.W.

Washington
D.C. 20549

Attn:  Jay
Webb, Reviewing Accountant

  Re:

  Innovative
  Micro Technology, Inc.

  Form
  10-KSB for Fiscal Year Ended October 2, 2004

  Forms
  10-QSB for Fiscal Quarter Ended January 1, 2005

  File
  Number: 001-066353

Dear
Mr. Webb:

On
behalf of Innovative Micro Technology, Inc. (the “Company”), the undersigned
hereby transmits for filing the Company’s response to a comment letter dated
April 5, 2005 issued by the staff of the Securities and Exchange Commission
(the “Staff”), in respect of the above-referenced filings.  A courtesy copy of this letter has also been
forwarded to your attention via Federal Express.

The
following consists of the Company’s responses to the Staff’s comment letter in
identical numerical sequence.  For ease
of reference, the comments have been reproduced below in bold face.

Form 10-KSB for Fiscal Year
Ended October 2, 2005

Item
8A.  Controls and Procedures- Page 22

1.             We note your
disclosure that management has concluded that your disclosure controls and
procedures are effective “in making known to them material information relating
to the Company (including its consolidated subsidiaries) required to be
included in this report.”  The language
that is currently included after the word “effective” in your disclosure appears
to be superfluous, since the meaning of “disclosure controls and procedures” is
established by Rule 13a-15(e) of the Exchange Act.  However, if you do not wish to eliminate this
language, please revise these disclosures in future filings so that the language
appears after the word “effective” is substantially similar in all material
respects to the language that appears in the entire two-sentence definition of “disclosure
controls and procedures” set forth in Rule 13a-15(e).

Response
to Comment 1:  The Company takes your
comment under advisement and will revise disclosures with respect to controls
and procedures in future filings to comply with the requirements of Rule
13a-15(e).

2.             We see that
there were no changes in your internal control over financial reporting “known to the Chief Executive Officer or the Chief Financial
Officer.”  Please tell us why you have
included the word “known.”  If your
disclosure controls and procedures were designed to provide reasonable
assurance of achieving your disclosure objectives and were effective, any
change in those disclosure controls and procedures would have been communicated
to your Chief Executive Officer or Chief Financial Officer.  Please revise future filings to remove the
qualification of “known” and discuss all changes in
your internal control over financial reporting, as required by Item 308(c) of
Regulation S-B, as amended effective August 13, 2003.

Response
to Comment 2:  The Company respectfully
submits that its disclosure controls and procedures were effective as of the
end of the period covered by the above-referenced Annual Report on Form
10-KSB.  Further, the Company takes your
comment under advisement and will revise future filings to comply in all respects
with Item 308(c) of Regulation S-B.

Item
7.  Financial Statements- Page F-1

3.             We noted
that on September 30, 2003, you induced the conversion of your Professional
Notes by reducing the conversion price of the common shares by $2.85 and
issuing warrants at various prices.
Paragraph 3 of FAS 84 states that, “an enterprise shall recognize an
expense equal to the fair value of all securities and other consideration
transferred in the transaction in excess of the fair value of securities
issuable pursuant to the original conversion terms.”  In this regard, supplementally tell us in
detail how you accounted for the conversion and extinguishment of the
Professional Notes.  Note our concerns
when preparing future filings.

Response to Comment 3:  Supplementally, as the Professional Notes
came due, the Company and the note holders agreed to convert 50% of the note at
the original conversion rate of $8.20 per share and pay the other 50% in
cash.  The Company also offered all of
the note holders a conversion rate of $5.35 per share if they converted 80% of
the note and took only 20% in cash.  The
lower conversion rate was provided to induce a conversion of a greater
percentage of the debt. In the conversion pursuant to the original
conversion terms, the debt was extinguished in exchange for equity pursuant to
the preexisting contract and was already recognized in the financial
statements; therefore, no gain or loss was recognized upon conversion.  In the conversion of the debt to equity
securities pursuant to the inducement offer described above, the Company
recognized an expense equal to the fair value of all securities and other
consideration transferred in the transaction in excess of the fair value of
securities issuable pursuant to the original conversion terms.

The fair value of the
securities or other consideration should be measured as of the date the

inducement offer is accepted by
the note holders. As
these two transactions were offered as alternatives, the fair value of the
stock was calculated based on a comparison of the two options. The
amount of debt owed to the note holders accepting this induced conversion
transaction was $614.1 thousand.  The
additional cash they would have received in the 50% cash payment option of
$184.2 thousand compared to the additional shares of 54.4 thousand received in
the 20% cash payment option provided for a fair value of the stock of $3.39 per
share. The Company then recorded an expense equal to the amount of the fair
value of the difference between the shares issued under the new conversion rate
and other consideration, and the shares that would have been issued under the
original agreement.

The note holders would have
received 74.9 thousand shares based upon the original equity conversion of
$8.20 per share, assuming 100% conversion. The 80% conversion to equity at
$5.35 per share and 20% cash alternative selected by the note holders resulted
in the issuance of 91.8 thousand shares plus $122.8 thousand in cash. The
warrants and legal expenses associated with this alternative amounted to
approximately $23.4 thousand. The value of the warrants was calculated using a
Black-Scholes model.  The conversion
expense of $203.6 thousand was determined by comparing the fair value of the
91.8 thousand shares or $311.3 thousand, plus the cash and legal expenses for a
total of $457.5 thousand to the fair value of the 74.9 thousand shares or
$253.9 thousand.

Further, the Company takes your comment under
advisement and will take into account the Staff’s concerns when preparing
future filings.

Form 10-QSB for Fiscal Quarter
Ended January 1, 2005

Item
3. Controls and Procedures- Page 27

4.             We note your
disclosure that “there were no significant
changes in the Company’s internal controls or in other factors that could significantly affect internal controls….”  Please revise these disclosures in future
filings to remove the word significant and
to discuss all changes in your internal controls over financial reporting that
have materially affected, or that are reasonably likely to materially affect,
your internal control over financial reporting, as required by Item 308(c) of
Regulation S-B, as amended effective August 13, 2003.

Response
to Comment 4:     The Company takes your comment under
advisement and will revise future filings to comply in all respects with Item
308(c) of Regulation S-B.

Further, pursuant to the Staff’s comment letter, the Company
acknowledges the following:

(a) the Company is responsible for the adequacy and accuracy of the
disclosure in this response letter and in all filings transmitted by the Company
to the Securities and Exchange Commission;

(b) Staff comments or changes to disclosure in response to Staff
comments do not foreclose the Securities and Exchange Commission from taking
any action with respect to the above-referenced filings or future filings; and

(c) 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.

If you have any questions or further comments, please do not hesitate
to contact the undersigned at (805) 681-2800 or James J. Slaby, Esq. of
Sheppard Mullin Richter & Hampton LLP at (213) 617-5411.

  Sincerely,

  /s/ Peter T. Altavilla

  Peter T. Altavilla

  Chief Financial Officer

cc:     James J. Slaby, Esq.