--------------------------------------------------------------------------------

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark  One)

[X]     QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR 15(d) OF THE SECURITIES
        EXCHANGE  ACT  OF  1934
     For the quarterly period ended March 31, 2005

                                       or

[ ]     TRANSITION  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE  ACT  OF  1934
     For the transition period from ______ to ______

     Commission  file  number:    0-27432
                               ------------


                         CLEAN DIESEL TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)

     Delaware                                        06-1393453
     --------                                        ----------
(State of Incorporation)                  (I.R.S. Employer Identification No.)

Clean Diesel Technologies, Inc.
300 Atlantic Street - Suite 702
Stamford, CT                                         06901-3522
(Address  of principal executive offices)            (Zip Code)

                                 (203) 327-7050
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the  past  90  days.

     Yes  X  No
         ---    ---

Indicate  by  check  mark  whether  the  registrant  is an accelerated filer (as
defined  in  Rule  12b-2  of  the  Act).

                                Yes     No  X
                                    ---    ---

As  of  May  12, 2005, there were outstanding 17,165,868 shares of Common Stock,
par  value  $0.05  per  share,  of  the  registrant.

================================================================================


<PAGE>
                        CLEAN DIESEL TECHNOLOGIES, INC.

                 Form 10-Q for the Quarter Ended March 31, 2005

                                      INDEX

                                                                         Page
                                                                         ----

PART I.     FINANCIAL INFORMATION

Item 1.     Condensed Financial Statements

            Balance Sheets as of March 31, 2005 (Unaudited),                3
            and December 31, 2004

            Statements of Operations for the Three Months                   4
            Ended March 31, 2005 and 2004 (Unaudited)

            Statements of Cash Flows for the Three Months                   5
            Ended March 31, 2005 and 2004 (Unaudited)

            Notes to Financial Statements                                   6

Item 2.     Management's Discussion and Analysis of                        11
            Financial Condition and Results of Operations

Item 3.     Quantitative and Qualitative Disclosures about Market Risk     13

Item 4.     Controls and Procedures                                        13


PART II.    OTHER INFORMATION

Item 1.     Legal Proceedings                                              14
Item 2.     Changes in Securities                                          14
Item 3.     Defaults upon Senior Securities                                14
Item 4.     Submission of Matters to a Vote of Security Holders            14
Item 5.     Other Information                                              14
Item 6.     Exhibits and Reports on Form 8-K                               14



SIGNATURES & CERTIFICATIONS                                                15


                                      -2-
<PAGE>
<TABLE>
<CAPTION>
PART I.     FINANCIAL INFORMATION
Item 1.     Condensed Financial Statements

                               CLEAN DIESEL TECHNOLOGIES, INC.

                                  CONDENSED BALANCE SHEETS

                                                          (in thousands, except share data)
                                                             MARCH 31,        December 31,
                                                          ----------------------------------
                                                                2005              2004
                                                            (Unaudited)
                                                          ----------------  ----------------
<S>                                                       <C>               <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                                 $         2,996   $         4,265
Accounts receivable, net of allowance of $14 and $12 in
  2005 and 2004, respectively                                         156               145
Inventories                                                           295               387
Other current assets                                                  125                71
                                                          ----------------  ----------------
TOTAL CURRENT ASSETS                                                3,572             4,868
Patents, net                                                          496               418
Fixed assets, net of accumulated depreciation of $218 in
  2005 and $188 in 2004, respectively                                 220               200
Other assets                                                           27                27
                                                          ----------------  ----------------
TOTAL ASSETS                                              $         4,315   $         5,513
                                                          ================  ================

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses                                 384               391
                                                          ----------------  ----------------
TOTAL CURRENT LIABILITIES                                             384               391

STOCKHOLDERS' EQUITY:
Preferred Stock, par value $0.05 per share,
100,000 shares authorized, no shares issued
  and  outstanding                                                     --                --
Common Stock, par value $0.05 per share, authorized
  30,000,000 shares, issued and outstanding
  17,165,868 shares                                                   858               858
Additional paid-in capital                                         38,431            38,431
Accumulated deficit                                               (35,358)          (34,167)
                                                          ----------------  ----------------
TOTAL STOCKHOLDERS' EQUITY                                          3,931             5,122
                                                          ----------------  ----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $         4,315   $         5,513
                                                          ================  ================
</TABLE>

See notes to condensed financial statements.


                                      -3-
<PAGE>
<TABLE>
<CAPTION>
                        CLEAN DIESEL TECHNOLOGIES, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                  (Unaudited)

                                                 (in thousands except per share data)


                                                          Three Months Ended
                                                               March 31,
                                                       2005                 2004
                                               --------------------  -------------------
<S>                                            <C>                   <C>
REVENUE:
Additive revenue                               $                95   $               57
Hardware revenue                                                92                  119
License and royalty revenue                                      5                   18
                                               --------------------  -------------------
Total revenue                                                  192                  194

COSTS AND EXPENSES:
Cost of revenue                                                110                  132
General and administrative                                   1,165                  790
Research and development                                        59                   80
Patent amortization and other expense                           39                   12
                                               --------------------  -------------------

Loss from operations                                        (1,181)                (820)
Other income (expense):
Foreign currency exchange gain/(loss)                          (19)                  --
Interest income                                                  9                   12
                                               --------------------  -------------------

Net loss attributable to common stockholders   $            (1,191)  $             (808)
                                               ====================  ===================

BASIC AND DILUTED LOSS PER COMMON SHARE        $             (0.07)  $            (0.05)
                                               ====================  ===================

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING - BASIC AND DILUTED                           17,166               15,679
                                               ====================  ===================
</TABLE>

See notes to condensed financial statements.


                                      -4-
<PAGE>
<TABLE>
<CAPTION>
                        CLEAN DIESEL TECHNOLOGIES, INC.

                       CONDENSED STATEMENTS OF CASH FLOWS
                                  (Unaudited)


                                                          (in thousands)

                                                         Three Months Ended
                                                             March 31,
                                                        2005         2004
                                                     -----------  -----------
<S>                                                  <C>          <C>
OPERATING ACTIVITIES
Net loss                                             $   (1,191)  $     (808)
Adjustments to reconcile net loss to cash used in
  operating activities:
    Bad debt                                                  2           --
    Depreciation and amortization                            42           24
  Changes in operating assets and liabilities:
    Accounts receivable                                     (13)         (45)
    Inventories                                              92           47
    Other current assets                                    (54)         (68)
    Accounts payable and accrued expenses                    (7)         (75)
                                                     -----------  -----------
Net cash used in operating activities                    (1,129)        (925)
                                                     -----------  -----------

INVESTING ACTIVITIES
Patent costs                                                (90)          (4)
Purchase of fixed assets                                    (50)         (30)
                                                     -----------  -----------
Net cash used in investing activities                      (140)         (34)
                                                     -----------  -----------

FINANCING ACTIVITIES                                         --            3
                                                     -----------  -----------
Proceeds from broker fee credit (2003 fundraising)           --            3
                                                     -----------  -----------
Net cash provided by financing activities

NET (DECREASE)INCREASEIN CASH AND CASH EQUIVALENTS       (1,269)        (956)
                                                     -----------  -----------
Cash and cash equivalents at beginning of period          4,265        6,515
                                                     -----------  -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD           $    2,996   $    5,559
                                                     ===========  ===========
</TABLE>

See notes to condensed financial statements.


                                      -5-
<PAGE>
                         CLEAN DIESEL TECHNOLOGIES, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2005
                                   (Unaudited)


NOTE  1:  BASIS  OF  PRESENTATION

The  accompanying  unaudited,  condensed, consolidated financial statements have
been  prepared  in  accordance with generally accepted accounting principles for
interim  financial  information  and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the information
and  footnotes required by generally accepted accounting principles for complete
financial  statements.  In the opinion of management, all adjustments considered
necessary  for  a fair presentation have been included. All such adjustments are
of a normal recurring nature. Operating results for the three-month period ended
March  31,  2005,  are  not  necessarily  indicative  of the results that may be
expected for the year ending December 31, 2005.The balance sheet at December 31,
2004  has  been  derived  from the audited financial statements at that date but
does  not  include  all the information and notes required by generally accepted
accounting principles for complete financial statement presentation. For further
information, refer to the Financial Statements and footnotes thereto included in
the  Company's  Annual Report on Form 10-K for the year ended December 31, 2004.

Clean Diesel Technologies, Inc. (the "Company" or "CDT") was incorporated in the
State of Delaware on January 19, 1994, as a wholly owned subsidiary of Fuel-Tech
N.V.  ("Fuel  Tech").Effective  December  12, 1995, Fuel Tech completed a Rights
Offering of the Company's Common Stock that reduced its ownership in the Company
to  27.6%. Fuel Tech currently holds a 10.6% interest in the Company as of March
31,  2005.

The Company is a specialty chemical and energy technology company supplying fuel
additives  and  proprietary  systems that reduce harmful emissions from internal
combustion engines while improving fuel economy. The Company's Platinum Plus FBC
fuel  additive  is  registered  with  the EPA for on-highway use and is approved
under  the  VERT-VSET  procedure.  The  Platinum  Plus FBC in combination with a
diesel  oxidation  catalyst  or  a  catalyzed  wire  mesh  filter have both been
verified  by  the  EPA  for  retrofit  emission  reduction.  The  success of the
Company's  technologies  will  depend  upon  the  market  acceptance  of  the
technologies  and  governmental  regulations including corresponding foreign and
state  agencies.

NOTE  2:  SIGNIFICANT  ACCOUNTING  POLICIES

FOREIGN  CURRENCY

The  US  dollar is considered the functional currency for CDT.CDT maintains a UK
bank  account  for  its  UK  representative office. Foreign currency translation
gains  or  losses  are  recognized  in the period incurred, which is included in
other  income  (expense)  in  the  accompanying  statements  of  operations. CDT
recorded  a foreign currency loss of $19,000 on its UK bank holdings as of March
31,  2005.

INVENTORIES

Inventories  are  stated  at  the  lower  of  cost  or market and consist of the
following:

                               MARCH 31,   December 31,
  (in thousands)                 2005         2004
                              ----------  -------------
Finished Platinum Plus FBC    $      106  $         142
Platinum concentrate/metal           133            150
Hardware (ARIS and Purifier)          25             77
Other                                 31             18
                              ----------  -------------
Total inventory               $      295  $         387

REVENUE  RECOGNITION


                                      -6-
<PAGE>
Clean Diesel Technologies generates revenue from the sale of additives including
the  Platinum  Plus  FBC  products  and  concentrate; hardware including the EPA
verified  Purifier  System,  ARIS  injectors and dosing systems; and license and
royalty  fees  from  the  ARIS  2000  System.  CDT  sells  to  end-user  fleets,
municipalities  and  construction companies, as well as fuel resellers, additive
distribution  companies  and  emission  reduction  companies.

CDT  shipping  terms  are  FOB shipping point and revenue is recognized when its
products  are shipped and collections are reasonably assured unless the purchase
order or contract specifically requires CDT to provide installation of hardware.
For  hardware projects where CDT is responsible for installation either directly
or  indirectly (third-party contractor), revenue is recognized when the hardware
is  installed  and/or  accepted  if  the project requires inspection/acceptance.

License  revenue  is  recognized when the license agreement is entered into, the
license  period  commences, the technology rights, information and know-how have
been  transferred  to  the  licensee  and  CDT  does  not  have  any  ongoing
responsibilities  or  performance  requirements  and  collection  is  reasonably
assured.  Royalty  income  is  recognized  when  earned.

During  the  third  quarter  of  2004, the RJM Corporation ceased operations and
consequently  their  ARIS  stationary  license  for  the  North  American market
reverted  back  to  CDT  and thus CDT will not receive any future royalties from
RJM.CDT  had  previously received and recognized $1.1 million in license revenue
from RJM in 2000 and 2001 for the exclusive ARIS stationary license in the North
American  market.

In  April  2003,  Clean  Diesel  Technologies  completed a non-exclusive license
agreement  with  Combustion  Component  Associates  Inc.  (CCA)  of  Monroe,
Connecticut,  for the mobile ARIS technology in the US for the remaining life of
the  patents, through 2018.Under terms of the agreement, CCA agreed to pay CDT a
$150,000  non-refundable  license  fee  and  the  licensee committed to spend an
additional  $100,000  in  developing,  testing  and  demonstrating  ARIS  mobile
prototypes.  CDT also receives ongoing royalty payments on a per unit basis. CDT
recognized  the $150,000 license revenue in the second quarter of 2003, as there
are  no  significant  ongoing  services  required  to  be  performed  by  CDT.

In  September  2004,  CCA  was  granted  a  limited  two-year non-exclusive ARIS
stationary  license for the US market. The license fee of $150,000 is due by the
end of a two-year trial period. Similar to the other ARIS license agreements for
stationary  applications,  a  per unit royalty of approximately $1,500 (based on
percentage  of  sales  price)  is  due  for  each  ARIS system sold. CDT did not
recognize  any  revenue  from  this  license  in  2004.

In  August  2001,  Clean  Diesel  Technologies  completed  an  exclusive license
agreement  with  Mitsui  Ltd  for  CDT's  ARIS  2000  NOx control system for all
stationary  diesel  power  generators  in  Japan  for  the remaining life of the
patents, through 2018.Under the agreement, CDT received a nonrefundable up-front
license  payment  of  $495,000,  and  will receive ongoing standard royalties of
between  $1,500  and  $2,500  on  each system sold by Mitsui. CDT recognized the
license payment as revenue in 2001, as there are no significant ongoing services
to  be  performed  by  CDT.

In  December  2002,  Clean Diesel Technologies completed an additional exclusive
license  agreement  with Mitsui for the mobile ARIS technology for Japan for the
remaining life of the patents, through 2018. Under terms of the agreement Mitsui
agreed  to  pay  CDT  a  $250,000  license  fee and Mitsui committed to spend an
additional  $200,000  in  developing,  testing  and  demonstrating  ARIS  mobile
prototypes. CDT recognized the $250,000 license revenue in the fourth quarter of
2002,  as  there  are  no  significant  ongoing services to be performed by CDT.

GEOGRAPHIC  INFORMATION

CDT  sells  its Platinum Plus additives and licenses its ARIS systems throughout
the world.  A geographic breakdown of revenue consists of the following:

                 First Quarter
(in thousands)   2005     2004
                ------  --------
REVENUE:
US              $  180  $     67
UK/Europe           12         0
Asia                 0       127
                ------  --------
Total Revenue   $  192  $    194

Foreign  assets held by Clean Diesel Technologies consist of capitalized foreign
patents  net  of  accumulated  amortization  and  are  as  follows:


                                      -7-
<PAGE>
                        MARCH 31,   December 31,
(in thousands)            2005          2004
                       ----------  -------------
US patents, net        $      106  $          79
Foreign patents, net          390            339
                       ----------  -------------
Total patents, net     $      496  $         418

PATENT  EXPENSE

CDT  capitalizes  all  direct  incremental  costs associated with initial patent
filing  costs  and  amortizes the cost over the estimated remaining life of such
patent.  Patents  are reviewed regularly and the remaining carrying value of any
patents  deemed not commercial or cost effective are written off. The expiration
dates  of  CDT's patents, in numerous countries throughout the world, range from
2005  to  2022.

RESEARCH  AND  DEVELOPMENT  COSTS

Costs  relating to the research, development and testing of products are charged
to  operations  as  they are incurred. These costs include test programs, salary
and  benefits,  consultancy  fees,  materials  and  certain  testing  equipment.

GENERAL  AND  ADMINISTRATIVE  EXPENSE

General and administrative expense is summarized as the following:


                                             First Quarter
(in thousands)                               2005     2004
                                           ------  --------
Compensation and benefits                  $  763  $    534
Occupancy                                     112        82
Professional                                  182       104
Other                                         108        70
                                           ------  --------
Total general and administrative expense   $1,165  $    790


STOCK-BASED  COMPENSATION

Clean  Diesel Technologies accounts for employee/director stock option grants in
accordance  with  Accounting  Principles Board (APB) Opinion No. 25, "Accounting
for  Stock  Issued  to  Employees"  and its related interpretations. Under CDT's
current  plan,  options may be granted at not less than the fair market value on
the  date  of  grant and therefore no compensation expense is recognized for the
stock  options  granted  to  employees.

If  compensation  expense  for  CDT's plan had been determined based on the fair
value  at  the grant dates for awards under its plan, consistent with the method
described  in SFAS No. 123, CDT's net loss and basic and diluted loss per common
share  would  have  been  as  follows  on  a  pro  forma  basis:

<TABLE>
<CAPTION>
                                                             First Quarter
                                                            2005      2004
                                                          --------  ---------
<S>                                                       <C>       <C>
Net loss attributable to common stockholders as reported  $(1,191)  $   (808)
Deduct: Total stock-based employee compensation expense
  determined under fair value-based method for all awards,
  net of related tax effects                                 (537)      (203)
                                                          --------  ---------
Pro forma net loss attributable to common stockholders    $(1,728)  $ (1,011)
Net loss per share attributable to common stockholders:
Basic and diluted net loss per common share-as reported   $ (0.07)  $  (0.05)
Basic and diluted per common share-pro forma              $ (0.10)  $  (0.06)
</TABLE>

In March 2005, the Board of Directors elected to vest all employees outstanding,
unvested  2003 option grants and up to 25,000 unvested 2004 option grants. Since
the  market price at the time of the vesting was below the option grant price no
additional  expense was recognized on the Company's statement of operations. The
remaining  compensation  value  for  the  363,000 of accelerated unvested option
grants  was $498,000 and is included in the pro formatable above. The 363,000 of
accelerated  option  grants  represent  less  than 14 percent of the 2.7 million
option  grants  outstanding  and 81% of the accelerated option grants would have
vested  in  2005.


                                      -8-
<PAGE>
The CDT Board's decision to accelerate the vesting of these option grants was in
response to the issuance by the FASB of SFAS No. 123R, "share based payment." As
a result of this measure, CDT will not be required to recognize any compensation
expense  in  the  current  year  or  future periods associated with these option
grants.

In accordance with the provisions of SFAS No. 123, for purposes of the pro forma
disclosure the estimated fair value of the options are amortized over the option
vesting  period. The application of the pro forma disclosures presented above is
not representative of the effects SFAS No. 123 may have on operating results and
earnings  (loss)  per  share  in  future years due to the timing of stock option
grants  and  considering that options vest over a period of two years (one third
at  grant,  and  one-third  on  the  first and second anniversary respectively).

BASIC AND DILUTED LOSS PER COMMON SHARE

Basic  and diluted loss per share is calculated in accordance with SFAS No. 128,
"Earnings  Per  Share." Basic loss per share is computed by dividing net loss by
the  weighted-average  shares  outstanding  during the reporting period. Diluted
loss  per share is computed similar to basic earnings per share, except that the
weighted-average  shares  outstanding are increased to include additional shares
from  the  assumed exercise of stock options and warrants, if dilutive using the
treasury  stock method. CDT's computation of diluted net loss per share does not
include  common  share  equivalents  associated  with  2,713,000  and  2,234,000
options,  respectively,  and  532,000 and 532,000 warrants, respectively for the
2005  and  2004  periods,  as  the  result  would  be  anti-dilutive.

STOCKHOLDERS'  EQUITY

Pursuant  to  a  Regulation  S  exemption with respect to an offshore placement,
Clean Diesel Technologies sold, effective October 8, 2004, 426,500 shares of its
common  stock.  The price of the common stock was 1.025 sterling (GBP) per share
(approximately  $1.82  per share).As part of the transaction, retired CEO Jeremy
Peter-Hoblyn  exchanged his deferred salary of $135,400 for 73,587 shares of CDT
common  stock. The proceeds  of  the common stock issuance, was $754,000 (net of
$25,000  in  expenses).

Pursuant  to  a  Regulation  S  exemption with respect to an offshore placement,
Clean  Diesel  Technologies sold, effective September 28, 2004, 1,000,000 shares
of  its common stock. The price of the common stock was 1.025 sterling (GBP) per
share (approximately $1.82 per share).The proceeds of the common stock issuance,
was  $1.789  million  (net  of  $65,000  in  expenses).

NOTE  3:  RELATED  PARTY  TRANSACTIONS

The  Company  has  a  Management  and  Services  Agreement  with  Fuel Tech. The
agreement  requires  CDT  to  reimburse  Fuel  Tech for management, services and
administrative  expenses  incurred  on our behalf. The Company has agreed to pay
Fuel  Tech  a  fee  equal  to  an  additional  3% of the costs paid on behalf of
administration  (approximately $500 for the quarter).Currently, and for the last
three  years  CDT  has reimbursed Fuel Tech for the expenses associated with one
Fuel  Tech  officer/director  who also serves as an officer/director of CDT. The
Company  believes  the  charges  under the Management and Services Agreement are
reasonable  and  fair. The Management and Services Agreement may be cancelled by
either  party by notifying the other in writing of the cancellation on or before
May  15  in  any  year.

NOTE  4:  COMMITMENTS

Clean  Diesel  Technologies  leases  3,925  square feet of administrative office
space at 300 Atlantic Street, Stamford, Connecticut. The five year lease through
March  2009  has  an  annual  cost  of  approximately  $123,000, including rent,
utilities  and  parking.

CDT  has  signed  a four year lease (through July 2008) for 2,750 square feet of
warehouse space in Milford, Connecticut. Annual rent including utilities will be
approximately  $21,000.

Effective  October  28,  1994, Fuel Tech granted two licenses to the Company for
all  patents  and  rights associated with its platinum fuel catalyst technology.
Effective  November  24, 1997, the licenses were canceled and Fuel Tech assigned
to the Company all such patents and rights on terms substantially similar to the
licenses.  In  exchange for the assignment, the Company pays Fuel Tech a royalty
of  2.5%  of  its annual gross revenue from sales of the platinum fuel catalysts
commencing  in  1998.  The  royalty  obligation expires in 2008. The Company may
terminate the royalty obligation to Fuel Tech by payment of $4.4 million in 2005
and  declining  annually  to $3.3 million in 2006, $2.2 million in 2007 and $1.1
million  in  2008.  The  Company  as  assignee  and  owner  is  responsible  for
maintaining  the


                                      -9-
<PAGE>
technology  at  its  own  expense. A royalty of $7,450 was paid to Fuel Tech for
2004  and  the royalty payable to Fuel Tech at March 31, 2005 and 2004 is $2,404
and $1,418, respectively.

NOTE  5:  CONCENTRATION

For  the  quarter ended March 31, 2005, three customers accounted for 50% of the
Company's  revenue.  For  the  comparable  quarter  in  2004, a different single
customer  accounted  for65%  of  the  Company's  revenue.


                                      -10-
<PAGE>
                         CLEAN DIESEL TECHNOLOGIES, INC.


Item  2.     Management's  Discussion  and  Analysis  of  Financial  Condition
             and  Results  of  Operations


FORWARD-LOOKING  STATEMENTS

Statements  in  this  Form  10-Q  that  are  not  historical  facts,  so-called
"forward-looking statements," are made pursuant to the safe harbor provisions of
the  Private  Securities  Litigation  Reform Act of 1995.Investors are cautioned
that  all  forward-looking statements involve risks and uncertainties, including
those  detailed  in  the  Company's  filings  with  the  Securities and Exchange
Commission.  See  "Risk Factors of the Business" in Item 1, "Business," and also
Item 7, "Management's Discussion and Analysis of Financial Condition and Results
of  Operations"  in  the Company's Annual Report on Form 10-K for the year ended
December  31,  2004.

RESULTS  OF  OPERATIONS

2005  VERSUS  2004

Revenues  and  cost  of  revenue  in the first quarter of 2005 were $192,000 and
$110,000,  respectively,  versus  $194,000  and $132,000, respectively. Revenues
consist  of  the  following:

                     First Quarter
(in thousands)       2005     2004
                    ------  --------
REVENUE:
Additive            $   95  $     57
Hardware                92       119
License & royalty        5        18
                    ------  --------

Total revenue       $  192  $    194

   In  the  foregoing  table  "Additive" includes the Platinum Plus FBC products
and  concentrate;  "Hardware"  includes  the  EPA verified Purifier System, ARIS
injectors  and  dosing  systems.

     CDT  received  EPA  verification  of  its  Purifier System (FBC and DOC) in
October  2003,  and  a  second  verification  for its catalyzed wire mesh filter
system  (FBC  and  CWMF)  in June 2004.Clean Diesel Technologies has applied for
verification for emission reduction by CARB for the CWMF/FBC system as well. The
Platinum  Plus  FBC  is  registered  with  the  EPA.

     Additive  revenue  has  increased  as  a result of successful demonstration
programs and sales of the verified Purifier System which requires the use of the
Platinum Plus FBC. The slight decrease in hardware sales is primarily the result
of the timing of ARIS injector sales mostly offset by higher Purifier sales.

     Clean  Diesel  Technologies  identified  a  market opportunity for its urea
selective  catalytic  reduction  (SCR)  system,  The ARIS 2000, to reduce NOx in
stationary  power  generation diesel engines. The ARIS 2000 NOx reduction system
is  a  single-fluid  injection  and  metering system complete with an electronic
control  unit  that  can  be  integrated  with  engine electronic and diagnostic
systems.  CDT's  business  strategy  is  to  license the ARIS 2000 NOx reduction
system to other companies for an up-front fee for the technology and information
transfer  and a separate on-going royalty per unit payment. CDT currently has an
exclusive  license  agreement  for  both stationary and mobile ARIS applications
with  Mitsui  Ltd for Japan. CDT has a non-exclusive license for both stationary
and  mobile  ARIS  applications  in the United States with Combustion Components
Associates  of Monroe Connecticut. CDT previously had an ARIS stationary license
agreement for North America with the RJM Corporation of Norwalk Connecticut, but
as  of August 2004 RJM was out of business and the ARIS license reverted back to
CDT.CDT  believes  that  the  ARIS  2000  system  can  most  effectively  be
commercialized  through  licensing  several companies with a related business in
these  markets.  Clean  Diesel  Technologies is actively seeking additional ARIS
licensees  for  both  mobile  and  stationary applications in the US, Europe and
Asia.


                                      -11-
<PAGE>
     General  and  administrative  expenses increased to $1,165,000 in 2005 from
$790,000  in  2004  as  summarized  in  the  following  table:

                                             First Quarter
(in thousands)                               2005     2004
                                            ------  --------
Compensation and benefits                   $  763  $    534
Occupancy                                      112        82
Professional                                   182       104
Other                                          108        70
                                            ------  --------

Total general and administrative expenses   $1,165  $    790

     Compensation  and  benefit  expense  increased  as of the result of several
staff  additions  in  the  second  half  of 2004 in the US and in Europe in 2005
related  to  increased  sales  and  marketing  efforts  and a new CEO. Occupancy
increased  in  2005  as  a  result  of  the establishment of a UK representative
office.  Professional  fees  also  increased  primarily due to the creation of a
technical  advisory  board,  additional  UK  advisors  and  Sarbanes  Oxley  404
compliance  work.

     Research and development expenses decreased to $59,000 in 2005 from $80,000
in  2004.  The decrease in research and development in 2005 is due to the timing
of  expenses  and  projects  from  year  to  year.

     Patent  amortization  and  other  costs increased to $39,000 in 2005 versus
$12,000  in  2004.The 2005 increase is related to higher amortization related to
prior  period  capitalization  and  non-capitalizable  patent  expenses.

     Interest  income decreased to $9,000 in 2005 from $12,000 in 2004due to the
higher  amount  of  invested  funds  in the first quarter of 2004 related to the
November  2003  fund-raising.

LIQUIDITY  AND  SOURCES  OF  CAPITAL

Prior to 2000, the Company was primarily engaged in research and development and
has  incurred  losses  since  inception  aggregating  $30,606,000 (excluding the
effect  of  the  non-cash preferred stock dividends on preferred shares prior to
conversion  to  common).The  Company  expects  to  incur  losses  through  the
foreseeable future as it further pursues its commercialization efforts. Although
the Company started selling limited quantities of Platinum Plus additive and the
verified  Purifier system and generating some ARIS licensing fees and royalties,
operating  revenue to date has been insufficient to cover operating expenses and
the Company continues to be dependent upon proceeds from fund raising to finance
its  working  capital  requirements.

For  the  three  months  ended March 31, 2005 and 2004, the Company used cash of
$1,129,000  and  $925,000  respectively,  in  operating  activities.

At  March  31,  2005  and  December  31,  2004,  the  Company  had cash and cash
equivalents of $2,996,000 and $4,265,000, respectively. The decrease in cash and
cash  equivalents  in  2005  was  the  result  of  limited revenues and on-going
operating  costs. The Company anticipates incurring additional losses through at
least  2005  as  it  further  pursues  its  commercialization  efforts.

In  October 2004, Clean Diesel Technologies received $754,000 (net of $25,000 in
expenses) through a private placement of 426,500 shares of its Common Stock. The
price  of  the  common  stock  was  1.025 GBP per share (approximately $1.82 per
share).The  proceeds of the common stock issuance are being used for the general
corporate  purposes  of  Clean  Diesel  Technologies.

In  September  2004,  Clean  Diesel Technologies received $1.789 million (net of
$65,000  in  expenses)  through  a  private placement of 1,000,000 shares of its
common  stock.  The  price  of  the  common  stock  was  1.025  GBP  per  share
(approximately  $1.82  per  share).The proceeds of the common stock issuance are
being  used  for  the  general  corporate purposes of Clean Diesel Technologies.

In  December  2003,  Clean  Diesel  Technologies received $3.583 million (net of
$170,000  in  expenses)  through  a private placement of 1,282,600 shares of its
common  stock.  The  price  of  the  common  stock  was  1.70  GBP  per  share
(approximately  $2.92  per  share).


                                      -12-
<PAGE>
In  September  2003,  Clean  Diesel Technologies received $3.866 million (net of
$39,000  in  expenses)  through  a  private placement of 2,395,597 shares of its
common  stock.  In  conjunction  with  the  private  placement, 230,240 ten year
warrants  with  an  exercise  price  of  $1.63  per  share  were  issued.

At  the  present  time,  the Company cannot estimate when, or if, its operations
will generate positive cash flows from operations. The Company does not have any
credit  facilities available with financial institutions or other third parties.
If  the Company cannot generate cash flow from operations, CDT will be dependent
upon  external  sources  of  best-efforts  financing, of which there are no firm
commitments  or  arrangements.  Based  on the current operating plan, management
believes  that  the  cash balance as of March 31, 2005 of $2.996 million will be
sufficient  to meet the cash needs into the first quarter of 2006.In the future,
unless operating revenues are sufficient to meet operating expenses, the Company
may  need to access capital markets to fund operations by incurring indebtedness
or  issuing equity securities. The Company can provide no assurance that it will
be  successful  in  any  future financing effort to obtain the necessary working
capital  to  support operations or if such financing is available, it will be on
acceptable terms. If management is unable to obtain the necessary financing from
external  sources,  the Company may need to manage any cash shortfalls by taking
measures  which may include deferring or reducing the scope of commercialization
efforts,  reducing  costs  and  overhead  expenses,  or  otherwise  curtailing
operations,  or  obtaining  funds  by  a  disposition  of  assets  or  through
arrangements with others that may require CDT to relinquish rights to certain of
its  technologies,  or  to license the rights to such technologies on terms that
are  less  favorable  to  CDT  than  might  otherwise  be  available.

ITEM 3.     QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

In  the opinion of management, with the exception of exposure to fluctuations in
the  cost of platinum, the Company is not subject to any significant market risk
exposure.

The Company generally receives most income in United States dollars. The Company
typically  makes  several  payments  monthly  in  various foreign currencies for
patent  expenses, product tests and registration, local marketing and promotion,
consultants  and  employees.

ITEM 4.     CONTROLS  AND  PROCEDURES

The  Company  maintains disclosure controls and procedures and internal controls
designed  to  ensure  that information required to be disclosed in the Company's
filings  under  the  Securities  Exchange  Act  of  1934 is recorded, processed,
summarized  and reported within the time periods specified in the Securities and
Exchange  Commission's  rules  and  forms.  The  Company's  management, with the
participation  of  its principal executive and financial officers, has evaluated
the  effectiveness of the Company's disclosure controls and procedures as of the
end  of  the  period  covered by this Quarterly Report on form 10Q.The Company's
principal  executive  and  financial  officers  have  concluded,  based  on such
evaluation,  that such disclosure controls and procedures were effective for the
purpose  for  which  they  were  designed  as  of  the  end  of  such  period.

There  was  no change in the Company's internal control over financial reporting
that  was identified in connection with such evaluation that occurred during the
period  covered  by  this  Quarterly  Report  on  form  10Q  that has materially
affected,  or  is reasonably likely to materially affect, the Company's internal
control  over  financial  reporting.


                                      -13-
<PAGE>
PART  II.     OTHER  INFORMATION

Item  1.     Legal  Proceedings
             None

Item  2.     Changes  in  Securities
             None

Item  3.     Defaults  upon  Senior  Securities
             None

Item  4.     Submission  of  Matters  to  a  Vote  of  Security  Holders
             None

Item  5.     Other  Information
             None

Item  6.     Exhibits  and  Reports  on  Form  8-K
             a.     Exhibits

                    None

             b.     Reports  on  Form  8-K

                    None


                                      -14-
<PAGE>
                         CLEAN DIESEL TECHNOLOGIES, INC.
                           SIGNATURES & CERTIFICATIONS



Pursuant  to  the  requirements  of  the  Securities  Exchange  Act of 1934, the
Registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  thereunto  duly  authorized.



Date: May 16, 2005                   By:  /s/Bernhard  Steiner
                                          --------------------
                                          Bernhard Steiner
                                          Director and
                                          Chief Executive Officer



Date: May 16, 2005                   By:  /s/David  W.  Whitwell
                                          ----------------------
                                          David W. Whitwell
                                          Chief Financial Officer,
                                          Vice President and Treasurer


                                      -15-