SecProbe.io

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Mail Stop 3561

									December 13, 2005

Mr. Robert S. Thomas
President & Chief Executive Officer
Charles & Colvard, Ltd.
300 Perimeter Park Drive, Suite A
Morrisville, NC 27560

		RE:	Charles & Colvard, Ltd.
			Form 10-K for Fiscal Year Ended December 31, 2004
Forms 10-Q for Fiscal Quarters Ended March 31, 2005, June 30, 2005
and September 30, 2005
Filed March 21, 2005, May 13, 2005, August 11, 2005 and November
9,
2005
			File No.  0-23329

Dear Mr. Thomas:

		We have reviewed your filings and have the following
comments.  We have limited our review to only your financial
statements and related disclosures and do not intend to expand our
review to other portions of your documents.  Where indicated, we
think you should revise your disclosures in response to these
comments.  If you disagree, we will consider your explanation as
to
why our comment is inapplicable or a revision is unnecessary.
Please
be as detailed as necessary in your explanation.  In some of our
comments, we may ask you to provide us with information so we may
better understand your disclosure.  After reviewing this
information,
we may raise additional 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
filings.
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 Fiscal Year Ended December 31, 2004

Independent Auditors` Report, page 35

1. Please amend your filing to provide an audit report that
includes
the city and State where issued consistent with the requirements
of
Rule 2-02(a)(3) of Regulation S-X.

Notes to Consolidated Financial Statements

Note 2.  Summary of Significant Accounting Policies, page 40

Principles of Consolidation, page 40

2. Please disclose your ownership interest in your Guangzhou
Charles
& Colvard Trading Limited subsidiary and method used to account
for
this investment.

Item 9A. Controls and Procedures, page 53

3. You state that your Chief Executive Officer and Chief Financial
Officer evaluated the effectiveness of your disclosure controls
and
procedures, as defined in Exchange Act Rule 13a-15.  However, your
principal executive and financial officers only concluded that
your
disclosure controls and procedures "enable [you] to record,
summarize
and report in a timely manner the information that the [you are]
required to disclose in Exchange Act reports."  Please confirm for
us, if true, that the same officers concluded that your disclosure
control and procedures were effective in ensuring that information
required to be disclosed in this report was recorded, processed,
summarized and reported within the time periods specified in the
Commission`s rules and forms.  Please also confirm for us, if
true,
that the same officers concluded the controls and procedures were
effective in ensuring that information required to be disclosed by
an
issuer in the reports that it files or submits under the Act is
accumulated and communicated to the issuer`s management, including
its principal executive and principal financial officers, or
persons
performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.  Your confirmation of the
preceding information applies to both your annual report and each
of
your subsequent quarterly filings.  See Items 307 of Regulation S-
K
and Exchange Act Rule 13a-15(e) for guidance.  Notwithstanding
your
response to this comment, please ensure your future filings
provide
the appropriate disclosures.  In particular, it should be clear
whether you have concluded that your disclosure controls and
procedures are effective or ineffective.

      As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please understand that we may have additional comments after
reviewing your responses to our comments.

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings to be certain that the
filings includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision.  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 filing;

* 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

* 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.

		If you have any questions regarding these comments,
please
direct them to Anthony Watson, Staff Accountant, at (202) 551-3318
or, in his absence, to me at (202) 551-3843.

									Sincerely,

									George F. Ohsiek, Jr.
									Branch Chief
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Mr. Robert S. Thomas
Charles & Colvard, Ltd.
December 13, 2005
Page 3

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