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AMERICAN INTERNATIONAL INDUSTRIES, INC

AMERICAN INTERNATIONAL INDUSTRIES, INC.

(OTCBB: "AMIN")

601 Cien St., Suite 235, Kemah, Texas 77565

Tel: (281) 334-9479 Fax: (281) 334 9508

Email: amin@americanii.com

www.americanii.com

October 20, 2005

U. S. Securities and Exchange Commission

100 F Street N.E.

Washington, DC 20549

Attention: Ms. Marie Trimeloni

Mail Stop 7010

RE: American International Industries, Inc.

Form 10-KSB for the fiscal year ended December 31, 2004

Form 10-QSB for the periods ended March 31, 2005 and June 30, 2005

File No. 0-25223

Dear Ms. Marie Trimeloni:

This letter is in response to the staff’s letter to American
International Industries, Inc. dated September 26, 2005. For the convenience of the staff,
we have set forth below each of the staff’s numbered comments followed by our
numbered response to each comment. We will also submit via EDGAR the amended Form 10-KSB
for 2004 and the Form 10-QSB for the first quarter of 2005 in response to the staff’s
letter.

General

Comment 1.

Please provide to us the acknowledgements that we requested at the end
of our July 14, 2005 letter. Specifically, we requested that you provide, in writing, a
statement acknowledging the following:

- the company is responsible for the adequacy and accuracy of the disclosure in their
filings;

- 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.

Response 1.

American International Industries, Inc., hereby acknowledges the
following:

- the Company is responsible for the adequacy and accuracy of the disclosure in their
filings;

- 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.

FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2004

Description of Business

Brenham Oil & Gas

Comment 2.

In light of your responses to comments 1 and 18 regarding your oil, gas
and mineral royalty interest, please add appropriate clarifying disclosure to indicate
that the royalty interest is carried on your books at $0 and that you have not received
any income from your royalty interest.

Response 2.

In response to this comment, we have filed the amended Form 10-KSB to
disclose in Note 17, Segment Information. as follows: "The oil, gas and mineral
royalty interest is carried on the Company’s books at $0, and the Company has not
received any income from the royalty interest in 2004 and 2003. The oil and gas segment is
related to Delta Seaboard Well Services, Inc. which provides a broad range of supplies and
services that are used by oil and gas companies". In addition, we expanded disclosure
under "Description of Business", subheading "Brenham Oil & Gas" to
reflect the above

Management's Discussion and Analysis

General and Results of Operations

Comment 3.

We note your response to comment 2, however, you have not addressed
why, in accordance with SFAS 144, you have not presented the operations related to this
component of your business within discontinued operations. In this regard, we note that
paragraph 37 of SFAS 144 requires that when a component of an entity either has been
disposed of or is classified as held for sale, the income statement of the business
enterprise for current and prior periods must report the results of operations of the
component, including any gain or loss recognized in discontinued operations. In this
regard, we also note that your remaining real estate property is classified as held for
sale. Therefore, please restate your financial statements for fiscal 2004 to report your
real estate operations discontinued operations and revise your Management’s
Discussion and Analysis to reflect such restatement.

Response 3.

In response to this comment, the amended Form 10-KSB discloses in a new
5th paragraph under Management’s Discussion and Analysis that the Company’s real
estate investment policy has been historically to invest in real estate opportunities as
they are made available to the Company. The Company believes that it shall be actively
involved in the real estate business in the future. The property listed on the balance
sheet as "real estate held for resale" has been renamed "real estate
acquired for resale". Because the Company continues to be involved in the acquisition
of real estate, including the recent acquisition of 11.6 acres of real estate including a
103,000 square foot manufacturing facility for a subsidiary, the Company’s real
estate business is not considered a discontinued business operation.

Comment 4.

We note your response to prior comment 6, however, we do not understand
how the minor revisions you made in Note 5 addresses our concerns regarding the
appropriateness of recognizing the sale of this real estate within revenues and cost of
goods sold. In light of our above comment, these concerns may be mitigated by presenting
your real estate operations within discontinued operations. However, if you continue to
believe that discontinued operations presentation is not appropriate for your real estate
operations and you provide to us sufficient information in response to the above comment
to address the appropriateness of your current presentation, we have the following
additional comments.

- Expand your business section to address the nature of your real estate operations. In
this regard, it is unclear to us whether you are in the real estate business or whether
you have simply acquired real estate assets as part of other business transactions. We
note that your current disclosure merely discusses several transactions you entered into
over the past several years.

- Tell us why it is appropriate to record the sale of your real estate property as
revenues and cost of goods sold rather than net as a gain or loss. Clarify why you believe
the guidance set forth in SFAS 66 is the appropriate literature rather than the guidance
set forth in SFAS 144. In this regard, it is unclear to us whether the real estate
property is "inventory" of your real estate operations or simply assets held for
sale. Clarify the exact nature of your business operations so that we may assess the
appropriateness of your accounting.

Response 4.

In response to this comment, the amended Form 10-KSB provides a
reclassification in the statement of operations. We have reclassified our statement of
operations to reclassify revenue and cost of goods sold to one line item entitled gain on
the sale of real estate held for resale. (See the revised Statement of Operations.)

Results of Operations

Comment 5.

We note your response to comment 5. Your revised disclosures do not
appear to address our prior comment. Please expand your discussion under Results of
Operations to disclose the extent to which changes in revenues are attributable to changes
in volumes of product sold and changes to prices charged to customers.

Response 5.

In response to this comment, the amended Form 10-KSB contains expanded
disclosure under Results of Operations of NPI to read as follows: During the 2004 fiscal
year NPI generated revenues of $7,735,277 compared to $6,361,776 during the prior year,
representing an increase of 22% or by $1,373,501. The revenue increase was principally due
to increased volumes from customers at year end. The increase volume enabled NPI to
negotiate lower costs per unit which was reflected in NPI's cost of goods increasing only
15% over the same period.

Item 8A. Controls and Procedures

Comment 6.

We note the changes made in response to our comment 8. Please correct
the date noted in the section entitled "Evaluation of disclosure controls and
procedures."

Response 6.

In response to this comment, the amended Form 10-KSB corrected the date
to 2004 in the section entitled Evaluation of Disclosure Controls and Procedures.

Financial Statements

Statement of Cash Flows

Comment 7.

We note the substantive revisions you made to your 2004 Statement of
Cash Flows as a result of or prior comments 12, 13 and 14 and have the following
additional comments.

Provide disclosure as required by paragraph 37 of APB 20 to address the corrections you
made to your 2004 Statement of Cash Flows and label your 2004 Statement of Cash Flows as
restated.

- Please request that your auditors provide an explanatory paragraph in their Report of
Independent Registered Public Accounting Firm as required by AU Section 420.13.

- It is unclear to us whether it is appropriate to record the $3,402,916 notes
receivable for real estate sale within your Cash Flows from investing activities. Clarify
for us why this is not included as a non-cash transaction reflected within your
supplemental schedule of non-cash transactions.

- Reconcile supplementally the $1,486,955 decrease in your balance sheet line item
Accounts payable and accrued expenses from 2003 to 2004 to your $946,609 use of cash in
2004 related to your Accounts payable and accrued expenses. Revise your statement of cash
flows or discussion of non-cash transactions as necessary.

- Reconcile supplementally your changes in your debt balance sheet line items to your
cash flows from financing activities. Revise your statement of cash flows and/or your
supplemental schedule of non-cash transactions as necessary.

Response 7.

We agree with the staff’s position. Our filings will be amended to

The Statements of Cash Flows have been restated and an appropriate
additional paragraph had been added to the auditors' report.

Statements of Operations

Comment 8.

We note the earnings per share footnote added in response to our
comment 10, however the weighted average common shares for the 2003 diluted shares on the
statement of operations does not agree to Note 12. Since all of the potentially dilutive
securities were anti-dilutive, the weighted average shares would be the same for both
basic and dilutive earning per share calculations. In this regard, please revise the 2003
weighted average diluted common shares on the statement of operations to be consistent
with your Note 12.

Respone 8.

We agree with the staff’s position. Our filings will be amended to
revise the 2003 weighted average diluted common shares on the statement of operations to
change diluted from 2315744 to 2132646.

Note 1. Summary of Significant Accounting Policies

Revenue Recognition

Comment 9.

We note the changes made in response to our comment 17. Please include
the explanation regarding your revenue recognition that you added to the first paragraph
in "Results of Operations" to your revenue recognition policy in Note 1.

Response 9.

We agree with the staff’s position. Our filings will be amended to
revise the explanation regarding revenue recognition added to the first paragraph in
"Results of Operations" to the revenue recognition policy in Note 1.
Furthermore, we have three reporting segments; industrial/commercial; oil and gas; and
corporate. Our subsidiary Delta receives purchase orders for all of its service work and
related pipe sales. All sales are recorded when the work is completed or when the pipe is
sold. NPI has purchase orders for all of its sales of which may of the items are requested
to be container shipped and shipped directly to the end users. All sales are recorded when
the items are shipped.

Note 2 - Acquisitions and Divestitures

Har-Whit's/Pitt’s & Spitt's

Comment 10.

With respect to the $499,200 note you received in 2003, please confirm
that all payments have been received on a timely basis. Also, clarify why it was
appropriate to recognize a gain on the machinery and equipment and trademark given the
significant balloon payment on the notes receivable in 2007. Finally, tell us where the
note is recorded in your financial statements.

Response 10.

Payments have been received on a timely basis. It was appropriate to
recognize a gain on the machinery and equipment and trademark given the significant
balloon payment on the notes receivable in 2007 due to the credit worthiness of the buyer.
The note is recorded on the balance sheet in the line item notes receivable and the
following is reference in the notes to consolidated financial statements, footnote 7 in
the Long-term Notes Receivable:

    Sales of real estate

    $3,401,916

    0

    Sale of machinery and equipment

    479,200

    499,200

    Sale of former subsidiary, Marald, Inc.

    243,331

    265,666

    Sale of former subsidiary, Marald, Inc.

    200,000

    200,000

    Net long-term notes receivable

    $4,324,447

    $964,866

Note 3 - Investment Securities and Note 5 – Real Estate
Transactions

Comment 11.

We note your response to prior comment 22. You continue to refer to
Orion Health Corp., Inc. in Note 3 and SRG in note 5. It was our understanding that Orion
Health Corp., Inc. and SRG were the same entity. If so, as previously requested, please
consistently refer to this entity throughout your filing.

Response 11.

We agree with the staff’s position. Our filings will be amended to
consistently refer to this entity throughout the 10KSB and 10QSB. Additionally, footnotes
3 and 5 will be amended consistently refer to this entity as Orion/SRG.

Note 14. Related Party Transactions

Comment 12.

We note your response to our comment 9. However, Note 14 appears to be
the same as your prior Note 12 except in a different format. In this regard, please
provide a note (or expand Note 14) to summarize the transactions that resulted in charges
in your accounts receivable and loans payable to your related party amounts and address
the disclosure requirements of SFAS 57, paragraph 2. In other words, describe the
transactions that resulted in the changes to the line items accounts receivable from
related parties and short-term loans to related parties on your balance sheet.

Response 12.

We agree with the staff’s position. Our filings will be amended to
expand Note 14 to summarize the transactions that resulted in charges in your accounts
receivable and loans payable to related party amounts and address the disclosure
requirements of SFAS 57, paragraph 2. The transactions that resulted in the changes to the
line items accounts receivable from related parties and short-term loans to related
parties on the balance sheet are further explained in …

Note 15 – Segment Information

Comment 13.

We note your response to prior comment 18. Revise your discussion of
your oil and gas segment to clarify that this segment is related to Delta Seaboard Well
Services, Inc. which provides a broad range of supplies and services that are used by oil
and gas companies. Your current disclosure implies that your oil and gas segment derives
its revenue from your oil, gas and mineral interest in Texas.

Response 13.

We agree with the staff’s position. Our filings will be amended to
revise the discussion in Note 17 of the oil and gas segment to clarify that this segment
is related to Delta Seaboard Well Services, Inc. which provides a broad range of supplies
and services that are used by oil and gas companies. Specifically, note 17 states
"The oil and gas segment owns an oil, gas and mineral royalty interest in Washington
County, Texas. The oil, gas and mineral royalty interest is carried on the Company’s
books at $0, and the Company has not received any income form the royalty interest in 2004
and 2003. The oil and gas segment is related to Delta Seaboard Well Services, Inc., which
provides a broad range of supplies and services that are used by oil and gas companies.

FORM 10-QSB FOR THE PERIODS ENDED MARCH 31, 2005 AND JUNE 30, 2005

General

Commen