SecProbe.io

May 11, 2011
 Via E-mail

Terren S. Peizer, Chief Executive Officer Catasys, Inc. 11150 Santa Monica Blvd.   Suite 1500 Los Angeles, California  90025          RE:  Catasys, Inc.
                Regi stration Statement on Form S-1
                Filed April 21, 2011                 File No. 333-173659

Dear Mr. Peizer:
We have limited our review of your registra tion statement to those issues we have
addressed in our comments.  In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.
 Please respond to this letter by amendi ng your registration statement and providing
the requested information.  Where you do not be lieve our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
 After reviewing any amendment to your re gistration statement and the information
you provide in response to these comments,  we may have additional comments.

Form S-1

 Plan of Distribution, page 15

 1. You state on page 15 that you “intend to e ngage one or more underwriters, broker-dealers
or selling agents to sell the securities.”  Please confirm that you w ill file a post-effective
amendment with revised disclosure and exhi bit under Item 601(b )(1) of Regulation S-K
in the event you engage a selling agent.
 Signatures

 2. Please include the signature of your controller or principal accounting officer as required
by Form S-1.

Terren S. Peizer
Catasys, Inc. May 11, 2011 Page 2

Form 10-K for Fiscal Year Ended December 31, 2010

 General

 3. Please amend your Form 10-K to include a Management’s Annual Report on Internal
Control over Financial Reporting that contains  an effectiveness conclusion, as required
by Item 308(a) of Regulation S-K.
 Closing Comments

We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that th e filing includes the information the Securities Act
of 1933 and all applicable S ecurities Act rules require.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.

Notwithstanding our comments, in the event you request accelerati on of the effective
date of the pending registration statement pl ease provide a written statement from the
company acknowledging that:

 should the Commission or the staff, acting purs uant to delegated authority, declare the
filing effective, it does not foreclose th e Commission from taking any action with
respect to the filing;

 the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effective,  does not relieve the company from its full responsibility
for the adequacy and accuracy of th e disclosure in the filing; and

 the company may not assert staff comments a nd the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.  Please refer to Rules 460 and 461 regard ing requests for acceleration.  We will
consider a written request for acceleration of th e effective date of the registration statement
as confirmation of the fact that those request ing acceleration are aware of their respective
responsibilities under the Securi ties Act of 1933 and the Securiti es Exchange Act of 1934 as
they relate to the proposed public offering of th e securities specified in  the above registration
statement.  Please allow adequate time for us to review any amendment prior to the requested
effective date of the regist ration statement.

Terren S. Peizer
Catasys, Inc. May 11, 2011 Page 3

    Please contact Janice McGuirk, examiner at (202) 551-3395 or Jim Lopez at (202)
551-3536 with any questions.
Sincerely,
   /s/ James Lopez (for)   John Reynolds,
Assistant Director