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April 8, 2005

  Via EDGAR AND Federal Express

  Securities and Exchange Commission

  450 Fifth Street, N.W.

  Washington, D.C. 20549

  Attn:  Mr.
  Derek B. Swanson

Re:                               Iteris, Inc. (formerly
known as Iteris Holdings, Inc.)

Registration Statement on Form S-3 filed January 10, 2005

(File No. 333-121942)

Form 8-K
filed October 12, 2004 (File No. 0-10605)

Dear Mr.Swanson:

We are in receipt of the additional comment of the
Staff of the Securities and Exchange Commission (the “Commission”) set forth in
your letter dated March 24, 2005 (the “SEC Comment Letter”) regarding the Form
8-K filed by Iteris, Inc. (the “Company” or “Iteris”) on October 12, 2004.  We are responding to the SEC Comment Letter
on behalf of the Company as set forth below.
The response set forth below contains the Staff’s comment in total, set off in bold type.
All factual representations in this letter are based upon information
provided to us by the Company.

*****

1.             Provide an expanded response to
prior comment 1 of our February 4, 2005 letter that clearly explains the basis
for management’s belief that the company’s disclosure controls and procedures
were effective during the relevant periods in light of the numerous significant
deficiencies identified by Ernst & Young.
In your response, please address the consideration management gave to
the nature and extent of the adjusting entries that you listed for us in your
letter of March 17, 2005.  Among other
things, we note that many of the adjusting journal entries were made on a
post-closing basis and were identified by Ernst & Young, not
management.  Also supplement your
response to acknowledge the existence of the other significant deficiencies in
addition to the delays in the reporting process.

During the relevant periods, the Company had disclosure
controls and procedures in place which it believes were effective in timely
alerting management to material information regarding the Company’s
business.  As noted in the Company’s
responses to the management letter by Ernst & Young (“E&Y”), which were
supplementally provided to the Staff with the Company’s initial responses to
the Staff’s comments, the Company acknowledges that it encountered certain
difficulties as part of the fiscal 2004 reporting process; however, the Company
believes such difficulties generally resulted from one-time transitional issues
arising

primarily from a restructuring of the Company, a
transition of the team responsible for accounting and reporting services from
persons at the parent level to persons at the operating subsidiary level, and
the pre-planned travel schedules of a key team member.  The combination of these unusual events made
the reporting process for fiscal 2004 a uniquely challenging one for the
Company.

With respect to the adjusting entries, while there
were multiple post closing adjustments in the audit, the Company identified the
majority of the items for E&Y, resulting in the post-closing adjusting
entries and provided the analyses that served as the basis for the adjustments.  At the beginning of the audit process, the
Company provided to E&Y preliminary trial balances and schedules based on
the information and estimates available at that time and indicated that the
Company would provide certain additional post-closing entries during the course
of the audit.  The Company subsequently
provided to E&Y analyses and information that identified many of the items
for which adjustments were later made.
For example, all of the adjusting entries categorized by the Company as
“judgmental,” other than the ones relating to inventory, were identified for
E&Y by the Company.  The Company’s
analyses showed potential overaccruals and E&Y requested that the Company
reduce such accruals.  These adjustments
were characterized as “judgmental” in the Company’s previous response because
they relate to estimates and reserves which can often be subjective.  The $175,548 adjustment relating to inventory
primarily related to specific inventory items that were identified by the
Company as potentially defective after the preliminary trial balance was
prepared.  E&Y proposed that a
special reserve be recorded for such inventory and the Company complied with
such request.  In addition, several of
the other adjusting entries resulted from a departure from the Company’s prior
practices.  For example, the $175,770
adjustment in the “change in analysis” category was mainly due to accruals
which were departures from prior practices — an accrual for a single fixed
asset purchase and an accrual for audit fees related to the 2004 audit.  Certain adjustments (including some of the
ones noted above) resulted from better information available after the
preliminary trial balances were prepared.
For example, the Company adjusted its accrual for the IRS penalty after
the Company obtained a more accurate estimate of the liability from its tax
advisor.

Please be advised that the Company had never
previously received a management letter from E&Y indicating any reportable
conditions, significant deficiencies, or material weaknesses.  The Company believes that the difficulties
experienced during fiscal 2004 were due to unusual circumstances and do not
indicate that its disclosure controls and procedures were ineffective.  However, the Company has completed its
transition of the team responsible for the accounting and reporting services
and is committed to continuous improvement of all of its processes and
procedures.

*****

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Any comments or questions
regarding the foregoing should be directed to the undersigned at (949)
932-3665.  Thank you very much for your
assistance with this matter.

  Sincerely,

  /S/ JOO RYUNG KANG

  Joo Ryung Kang

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