SecProbe.io

Mail Stop 6010

 November 27, 2006

Hojabr Alimi
Chief Executive Officer and President
Oculus Innovative Sciences, Inc.
1129 N. McDowell Blvd.
Petaluma, California 94954

Re: Oculus Innovative Sciences, Inc.
 Amendment No. 2 to Registra tion Statement on Form S-1
 Filed November 13, 2006
 File No. 333-135584

Dear Mr. Alimi:

We have reviewed your registration stat ement and have the following comments.
Where indicated, we think you should revise  your document 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.  Pl ease 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 re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  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.

General

1. Please amend your filing to include all non-Rule 430A information, including the
number of securities to be offered.  Refe r to Item B.90 of our Manual of Publicly
Available Telephone Interpretations  available on our website at www.sec.gov .
Also, revise the fee table if necessary.

2. We reissue comment 1.  If you must incl ude technical terms in the body of your
prospectus that are understood only by industry experts, you should explain these terms where you first use them. In addition, do not use technical terms or industry jargon in your explanations.  We note, for example your references to “oxidized

Hojabr Alimi
Oculus Innovative Sciences, Inc.
November 27, 2006 Page 2
chemical species,” “receptor binding, molecular transport, ” hypochlorite-based
solution,” “adhesive metrix,” “histamine production and cytokine release,” and “in vitro” on page 59 and “bacterial load reduction,” “log 10 reduction” and
“baseline” on page 61.  Please note that these are merely examples and do not
constitute a comprehensive list.

We may face intellectual propert y infringement claims, page 19

3. Please tell us why you have not filed as exhibits the settlement agreements disclosed in the last pa ragraph of this section.

Use of Proceeds, page 30

4. We note your disclosure that you plan to repay your bridge loan with proceeds
from this offering.  Please pr ovide the disclosure require d by Instruction 4 to Item
504 of Regulation S-K.

Dilution, page 33

5. Regarding your dilution table, please make  sure you start with historical net
tangible book value per share. Then show  how you derived the pro forma amounts
before the offering (reflecting conversion of preferred to common) that you are
using for comparison to net tangible book va lue per share after the offering.

Our dependence on distributors for sales could limit or prevent us from selling, page 16

6. Please file as an exhibit your agre ement with your Indian distributor.

Revenues, page 42

7. Please expand the last paragraph on pa ge 42 to explain why the revenues
increased.  Also, expand the second full paragraph on page 44 to explain why the
expenses increased.

Business, page 53

8. Please tell us why you deleted the disc losure on pages 55 and 56 about your
products.

Overview, page 54

9. We note your disclosure regarding mile stones you hope to achieve through 2009.
Please balance your disclosure here by addressing the material hurdles to

Hojabr Alimi
Oculus Innovative Sciences, Inc.
November 27, 2006 Page 3
achieving these milestones and/or assump tions made in estimating your timetable
for achieving these milestones.

Industry Background, page 54

10. Please provide us with copi es of the industry reports you cite on pages 54-56 and
page 65.  Also, clearly mark the relevant sections that suppor t the data you have
included in your prospectus and the page  number of your prospectus where such
data has been used.

11. Please revise pages 56 and 65 to clarify which portion of the billion dollar and
multi-million dollar markets are related to your business.

Physician Clinical Studies, page 62

12. We note your disclosure in the first full paragraph on page 62 regarding clinical
studies of Microcyn.  Please address in your  risk factors any risk in relying on the
results of those studies, given your disc losure in the last sentence of that
paragraph.

13. We reissue comment 19 from our letter dated July 28, 2006.  We note, for
example, your reference to a study co nducted by Fermin Martinez de Jesus.

Equity Compensation Plans, page 87

14. Please discuss the material terms of the pl ans.  For example, we note the reference
on page 14 to the “right of rescission” gr anted under certain stock option plans.

Financial Statements, page F-1

Report of Independent Registered Public Accounting Firm, page F-2

15. We note your “draft” report for the effect  of a reverse stock split of your stock.
Prior to going effective, th e audit report should be si gned and the draft language
should be removed.

Note 1 – The Company, page F-11

Stock Split, page F-11

16. Since your board of directors has not appr oved the actual reverse stock split ratio,
please tell us why it is appropriate to retroactively adjust your consolidated
financial statements to reflect a 1 for 4 reverse stock split.

Hojabr Alimi
Oculus Innovative Sciences, Inc.
November 27, 2006 Page 4
Note 3.  Summary of Significant Accounting Policies, page F-12

Convertible Instruments, page F-20

17. We note your response to prior comment 13 in our letter dated October 12, 2006.
Your disclosure on page F-20 states th at your convertible preferred stock is
conventionally convertible because the stock is convertible into a fixed number of
shares.  However, we note on page F-32 th at the conversion rate  of your preferred
stock will be adjusted in the event of fu ture issuances of equity securities or
convertible instruments that feature pri ces more favorable than the conversion
rates specified in the preferred shares.  Please tell us how this feature impacts
your assessment of whether the preferre d shares are conventional convertible
instruments in your EITF 00-19 analysis.  If the instrument does not qualify as
conventional convertible, pa ragraphs 12-32 of EITF 00- 19 must be analyzed to
determine whether the conversion feature s hould be accounted for as a liability or
equity.

18. Additionally, we refer to your disclosure that you record the embedded conversion options as a discount to conve rtible notes and that you record as
deemed dividends the intrinsic value of conversion options embedded in preferred
shares.  Please revise to identify the embedded derivatives you have identified,
disclose the value of these derivatives at  each balance sheet date and discuss the
related accounting treatm ent in your footnotes.

Note 11 – Commitments, Contingenc ies and Other Matters, page F-29

Legal Matters, page F-29

19. We see that you entered into a settlement agreement in November 2006 with a former employee which provides for the issuance of a warra nt to purchase 50,000
shares of common stock at $3.00 per shar e.  Please revise to disclose the
accounting treatment and the expense exp ected to be recognized from the
issuances of the warrants. We note that the exercise price is significantly lower
than the mid-point of the IPO filing range.

20. Please revise to disclose the amount, if any, accrued for the recall of Cidalcyn.  If no amounts are accrued as of September 30, 2006 for the recall, please tell us why
you do not believe a liability is necessary.

Hojabr Alimi
Oculus Innovative Sciences, Inc.
November 27, 2006 Page 5
Note 12 – Stockholders’ Equity, page F-28

Stock Purchase Warrants Issued in Financing Transactions, page F-34

21. We see that the exercise price on warrants  issued with financing is equal to the
lesser of a stated exercise price or the price offered to any other investor in
subsequent stock offerings prior to the expi ration date of the warrants.  Please tell
us how this impacted your assessment of whether the warrant liability should be bifurcated since it appears the number of  shares issuable upon conversion of the
convertible instrument is variable.  Add itionally, please tell us whether there is a
cap on the number of shares which could be  issued.  If there is no explicit limit on
the number of shares that are to be de livered upon exercise of the conversion
feature, you would not be able to assert that you will have sufficient authorized and unissued shares to settle the conv ersion option. As a result, the conversion
feature would be accounted for as a derivativ e liability, with changes in fair value
recorded in earnings each period.  Refe r to paragraphs 20-24 of EITF 00-19.

Valuation of Common Stock, page F-31

22. We see your response to prior comment 10 in our letter dated October 12, 2006.
Please further demonstrate why you believe th at there was no change in the fair
value of your stock from the valuation r eceived in July 2005 for options issued
through January 2006.  Please reference sign ificant events or  changes in your
business to support your conclusion.

23. On page F-35, you disclose that warrants issued during the six month period ended September 30, 2006 were valued usi ng a fair value of underlying stock of
$18.00 per share.   Yet, on page F-36, you di sclose that all equity transactions
completed during the six months ended September 30, 2006 were based on a fair
value of $13.00 per share, the mid point of  the IPO filing range.  Please explain
this discrepancy.

Note 13 – Stock Compensation Plans, page F-37

Stock-Based Compensation Before Adoption of SFAS No. 123(R), page F-38

24. Please revise to disclose the weighted average fair value of options granted during each year for which an income statement is provided, as required by paragraph 47(b) of SFAS 123.

25. Please revise to remove the pro forma disc losures of the effect on net loss if you
had applied the fair valu e provisions of SFAS 123 to  stock-based compensation
arrangements for the six months ended September 30, 2005 and 2006.  Refer to paragraph 85 of SFAS 123(R).

Hojabr Alimi
Oculus Innovative Sciences, Inc.
November 27, 2006 Page 6

Item 15. Recent Sales of Unregistered Securities, page II-1

26. Please revise your disclosure to include all of the information required by Item
701 of Regulation S-K for the debt tr ansaction referenced on page 4.

*     *     *     *     *

As appropriate, please amend your regist ration statement in response to these
comments.  You may wish to provide us with marked copies of the amendment to expedite our review.  Please furnish a cove r letter with your amendment that keys your
responses to our comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please understa nd that we may have
additional comments after reviewing your amendment and responses to our comments.
You may contact at Kristin Lochhead at  (202) 551-3664 or Brian Cascio, Branch
Chief, at (202) 551-3676 if you have ques tions regarding comments on the financial
statements and related matters.  Please cont act Donald C. Hunt at (202) 551-3647 or me
at (202) 551-3602 with any other questions.

Sincerely,

Thomas A. Jones
Senior Attorney

cc (via fax):   Sylvia K. Burks, Esq., Pillsbury Winthrop Shaw Pittman LLP   Gabriella A. Lombardi, Esq., Pillsbury Winthrop Shaw Pittman LLP