SecProbe.io

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                            INSTEEL INDUSTRIES, INC.

April 1, 2005

VIA EDGAR

Mr. Rufus Decker
Accounting Branch Chief
Division of Corporation Finance
United States Securities and Exchange Commission
Washington, D.C. 20549-0510

RE:      Insteel Industries, Inc. ("Insteel" or the "Company")
         Form 10-K/A#1 for the fiscal year ended October 2, 2004
         File 1-9929

Dear Mr. Decker:

Following is our response to the letter of the staff of the Division of
Corporation Finance (the "Staff") dated March 23, 2005 concerning Insteel's
amended Form 10-K/A (Amendment No. 1) for the fiscal year ended October 2, 2004.
We have repeated the Staff's comments from the March 23, 2005 letter and
reflected our response immediately following each item. Please note the
numbering of the items corresponds to the numbering of the comments in the
Staff's March 23, 2005 letter.

GENERAL

     1.  WHERE A COMMENT BELOW REQUESTS ADDITIONAL DISCLOSURES OR OTHER
         REVISIONS TO BE MADE, PLEASE PROVIDE TO US YOUR INTENDED DISCLOSURE.
         THESE REVISIONS SHOULD BE INCLUDED IN YOUR FUTURE FILINGS.

Company Response

We acknowledge your comment and have provided the requested disclosure or other
revisions to the Staff's comments in our responses below, as applicable, and
will include such additional disclosures or other revisions in our future
filings as indicated.

MANAGEMENT'S DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
FINANCIAL COVENANTS. PAGE 18

     2.  WE NOTE YOUR RESPONSE TO COMMENT 2 IN YOUR LETTER DATED MARCH 18, 2005.
         EBITDA IS AN ACCEPTED NON-GAAP MEASURE WITH A COMMONLY ACCEPTED
         DEFINITION. YOUR CALCULATION OF EBITDA IS NOT CONSISTENT WITH THIS
         COMMONLY ACCEPTED DEFINITION. PLEASE RETITLE YOUR CALCULATION AND
         FOLLOW THE GUIDANCE SET FORTH IN QUESTION 10 OF OUR "FREQUENTLY ASKED
         QUESTIONS REGARDING THE USE OF NON-GAAP FINANCIAL MEASURES," WHICH IS
         AVAILABLE ON OUR WEBSITE.

1373 BOGGS DRIVE/MOUNT AIRY, NORTH CAROLINA 27030/336-786-2141/FAX 336-786-9463

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Company Response

The titles that are reflected in the table of supporting calculations for the
financial covenants are consistent with the definitions specified in the
Company's Credit Agreement. However, in order to prevent any misinterpretation
on the part of investors, we will revise the "EBITDA" references to "Adjusted
EBITDA" to differentiate the associated amounts from the commonly accepted
calculation of EBITDA. Following is a revised version of the disclosure that was
reported in the amended Form 10-K for the year ended October 2, 2004:

                        FIXED CHARGE COVERAGE RATIO
              For the four-month period ended October 2, 2004

         ($ amounts in thousands)
         Adjusted EBITDA(1)                           $30,436
         Less Unfunded Capital Expenditures            (1,505)
                                                      --------
                                                       28,931

         Fixed Charges                                 15,245
                                                      --------
             Fixed Charge Coverage Ratio                 1.90
                                                      ========

         Net earnings                                 $12,019
         Cash pension contributions                      (213)
         Income tax provision                           8,815
         Interest expense                               2,236
         Depreciation and amortization (net)            1,792
         Pension expense                                  254
         Expense associated with option grants          5,515
         Net non-cash losses recorded as other
             expenses                                      18
                                                      --------
                 Adjusted EBITDA(1)                   $30,436
                                                      ========

         (1) As defined in the Company's Credit Agreement

     The Company's credit facility includes financial covenants such as a
     Fixed Charge Coverage Ratio, as defined above, that are derived from
     non-GAAP financial measures, particularly, earnings before interest,
     taxes, depreciation and amortization as defined in the Company's Credit
     Agreement ("Adjusted EBITDA"). Adjusted EBITDA includes additional
     adjustments to GAAP net earnings as set forth in the table above. The
     Company's management uses Adjusted EBITDA and the debt covenant ratios
     to measure compliance with its debt covenants and evaluate the
     operations of the Company. Management believes this presentation is
     appropriate and enables investors to (i) evaluate the Company's
     compliance with the financial covenants of its credit facility and (ii)
     assess the Company's performance over the periods presented. Adjusted
     EBITDA and the debt covenant ratio as presented here may not be
     comparable to similarly titled measures used by other companies in that
     they are specifically based on the definitions provided for in the
     Company's Credit Agreement. Adjusted EBITDA (i) should not be considered
     as an alternative to net earnings (determined in accordance with GAAP)
     as an indicator of the Company's financial performance, (ii) is not an
     alternative to cash flow from operating activities (determined in
     accordance with GAAP) as a measure of the Company's liquidity, and (iii)
     is not indicative of funds available to fund the Company's cash needs
     because of needed capital replacement or expansion, debt service
     obligations, or other cash commitments and uncertainties.

Beginning with the Form 10-Q for the quarter ending April 2, 2005, we will
provide the revised disclosure for the applicable financial covenant
calculations as defined under the terms of the Credit Agreement.

                            INSTEEL INDUSTRIES, INC.

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FINANCIAL STATEMENTS
NOTE 12 - BUSINESS SEGMENT INFORMATION, PAGE 39

     3.  WE NOTE YOUR RESPONSE TO COMMENT 6 IN YOUR LETTER DATED MARCH 18, 2005.
         THE BUSINESS UNITS APPEAR TO HAVE DIFFERENT GROSS MARGINS. THEREFORE,
         BASED UPON THE INFORMATION YOU HAVE PROVIDED US, IT IS NOT CLEAR THAT
         THE TWO BUSINESS UNITS HAVE SIMILAR ECONOMIC CHARACTERISTICS AS
         CONTEMPLATED BY PARAGRAPH 17 OF SFAS 131. PARAGRAPH 17 OF SFAS 131
         PRECLUDES AGGREGATION OF OPERATING SEGMENTS WITH DISSIMILAR ECONOMIC
         CHARACTERISTICS. IN THIS REGARD, PLEASE PROVIDE THE PROPER DISCLOSURES
         BY SEGMENT AS EXPLAINED IN PARAGRAPHS 25 TO 28 OF SFAS 131.

Company Response

Although the financial results for the Concrete Reinforcing Products business
unit have trended higher in recent years, the Company continues to believe that
segment disclosure is not appropriate because the Company's business units share
similar economic characteristics as well as similarities with respect to the
other aggregation criteria specified in Paragraph 17 of SFAS 131.

Similar Economic Characteristics

o    The Company's products are highly material intensive, with the cost of its
     primary raw material, hot-rolled steel wire rod, representing 57% of net
     sales for both business units in fiscal 2004.

o    In general, the higher spreads between selling prices and raw material
     costs for certain products within both business units are offset by the
     incremental conversion costs associated with the additional processes that
     are required to manufacture such products.

o    Profitability for both business units is highly volume sensitive as the
     cost structure of their manufacturing facilities implies a significant
     degree of operating leverage.

Similarities on Aggregation Criteria

The Company's business units also share similarities with respect to the other
aggregation criteria specified in Paragraph 17, including the following:

a)       Nature of Products

         o        The product offering for both business units is exclusively
                  wire products which are all manufactured from steel wire rod
                  that is drawn into wire.

b)       Nature of Production Processes

         o        All of the Company's products and facilities share similar
                  production processes, beginning with the chemical cleaning or
                  mechanical descaling of steel wire rod, which is then drawn or
                  reduced using drawing or rolling lines to a smaller diameter
                  wire.

c)       Type or Class of Customer for Products

         o        The products for both business units are sold to
                  manufacturers, distributors and wholesalers for a broad range
                  of applications, and, with the exception of certain industrial
                  wire products which

                            INSTEEL INDUSTRIES, INC.

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                  represent an immaterial portion of the Company's sales, the
                  same type or class of customer can be serviced from multiple
                  facilities.

d)       Methods Used to Distribute Products

         o        The products for both business units are sold by its inside
                  and outside sales force through indirect distribution
                  channels, including manufacturers, wholesalers or
                  distributors, rather than to the end customers.

         o        Each of the business unit's plants manufacture products that
                  are sold to different distribution channels and, with the
                  exception of certain industrial wire products which represent
                  an immaterial portion of the Company's sales, the same
                  distribution channels can be serviced from multiple
                  facilities.

e)       Nature of the Regulatory Environment (if applicable)

         o        This criterion would not be applicable to either business unit
                  or to the wire industry as a whole.

As previously indicated in our letter dated March 18, 2005, to the extent that
the economic characteristics of the business units were viewed to differ, the
Industrial Wire Products business unit was only slightly above two of the three
quantitative thresholds for fiscal 2004 as defined in Paragraph 19 of SFAS 131.

In addition, following the completion of the recently announced expansions in
the Company's Concrete Reinforcing Products business unit, the Company believes
that the Industrial Wire Products business unit will fall below all of the
quantitative thresholds. As a result, the requested disclosure would only be
applicable for a very limited period of time.

Finally, the Company does not believe that the provision of the business unit
information as separate reportable segments would be deemed to be material to
investors or improve their ability to understand the Company's business or make
investment decisions about the enterprise as a whole.

Contrary to the Company's initial understanding, the Grant Thornton engagement
team did not consult with the firm's national office with regard to the
Company's segment reporting assessment and disclosure at the time of the audit
or in connection with its review of the Company's responses to the Staff's
comment letters.

In the event that the Staff continues to disagree with the Company's position
and in order to resolve this matter, beginning with the Form 10-K for the fiscal
year ending October 1, 2005, the Company will provide the disclosures by segment
for its business units as explained in Paragraphs 25 to 28 of SFAS 131 assuming
that their economic characteristics were determined to differ based on the
quantitative thresholds defined in Paragraph 19 of SFAS 131.

                                     * * * *

                            INSTEEL INDUSTRIES, INC.

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In connection with our response, we acknowledge that:

o        the Company is responsible for the adequacy and accuracy of the
         disclosure in its filings;

o        Staff comments or changes to disclosure in response to Staff comments
         do not foreclose the Commission from taking any action with respect to
         the filing; and

o        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 should have any additional information requests or questions regarding
our responses in this letter, please call me at (336) 786-2141, Ext. 3020.

Sincerely,

/s/ Michael C. Gazmarian

Michael C. Gazmarian
Chief Financial Officer and Treasurer

                            INSTEEL INDUSTRIES, INC.
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