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 September 30, 2003

                                       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
                                        ---     ---

As  of  November  7,  2003,  there  were outstanding 14,394,292 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 September 30, 2003

                                      INDEX

                                                                            Page
                                                                            ----

PART  I.   FINANCIAL  INFORMATION

Item  1.       Financial  Statements  (Unaudited)

               Balance Sheets as of September 30, 2003,                    3
               and December 31, 2002

               Statements of Operations for the Three and Nine             4
               Months Ended September 30, 2003 and 2002

               Statements of Cash Flows for the Nine                       5
               Months Ended September 30, 2003 and 2002

               Notes to Financial Statements                               6

Item  2.       Management's Discussion and Analysis of                    10
               Financial Condition and Results of Operations

Item  3.       Quantitative and Qualitative Disclosures about             11
               Market Risk

Item  4.       Controls and Procedures                                    12


PART  II.  OTHER INFORMATION

Item  1.       Legal Proceedings                                          12
Item  2.       Changes in Securities                                      12
Item  3.       Defaults upon Senior Securities                            12
Item  4.       Submission of Matters to a Vote of Security Holders        12
Item  5.       Other Information                                          12
Item  6.       Exhibits and Reports on Form 8-K                           12


SIGNATURES                                                                13


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

                         CLEAN DIESEL TECHNOLOGIES, INC.

                                 BALANCE SHEETS

                         (in thousands except share data)

                                                  September 30,    December 31,
                                                      2003             2002
                                                 ---------------  --------------
                                                   (Unaudited)
<S>                                              <C>              <C>
ASSETS
Current assets:
Cash and cash equivalents                        $        3,994   $       2,083
Accounts receivable                                         151             284
Inventories                                                 299             314
Other current assets                                         63              76
                                                 ---------------  --------------
Total current assets                                      4,507           2,757
Patents, net                                                230             114
Other assets                                                114             108
                                                 ---------------  --------------
Total assets                                     $        4,851   $       2,979
                                                 ===============  ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses            $          363   $         223
                                                 ---------------  --------------
             Total current liabilities                      363             223

Deferred compensation and pension benefits                  441             418
                                                 ---------------  --------------
             Total long term liabilities                    441             418

Stockholders' equity:
Preferred stock, par value $.05 per share,
  authorized 80,000 shares, no shares issued
  and outstanding                                            --              --
Series A convertible preferred stock, par
  value $.05 per share, $500 per share
  liquidation preference, authorized 20,000
  shares, no shares issued and outstanding                   --              --
Common stock, par value $0.05 per share,
  authorized 30,000,000 and 15,000,000 shares,
  issued and outstanding 14,381,016 and
  11,968,387 shares, respectively.                          719             598
Additional paid-in capital                               32,263          28,519
Accumulated deficit                                     (28,935)        (26,779)
                                                 ---------------  --------------
Total stockholders' equity                                4,047           2,338
                                                 ---------------  --------------
Total liabilities and stockholders' equity       $        4,851   $       2,979
                                                 ===============  ==============
</TABLE>


See notes to financial statements.


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

                               (in thousands except per share data)


                                             Three  Months Ended         Nine Months Ended
                                                September  30,            September  30,
                                              2003          2002         2003        2002
                                          ------------  ------------  ----------  -----------
<S>                                       <C>           <C>           <C>         <C>
Revenue:
Product revenue                           $        81   $        39   $     291   $      115
License and royalty revenue                        18            12         187           26
                                          ------------  ------------  ----------  -----------
Total revenue                                      99            51         478          141

Costs and expenses:
Cost of sales                                      47            17         167           72
General and administrative                        517           569       1,855        1,704
Research and development                          171           185         590          597
Patent filing and maintenance                      29             4          29           31
                                          ------------  ------------  ----------  -----------

Loss from operations                             (665)         (724)     (2,163)      (2,263)
Interest income                                     1             7           7           32
Interest expense                                   --            --          --           (9)
                                          ------------  ------------  ----------  -----------

Net loss                                  $      (664)  $      (717)  $  (2,156)  $   (2,240)
                                          ============  ============  ==========  ===========

Basic and diluted loss per common share   $     (0.05)  $     (0.06)  $   (0.18)  $    (0.20)
                                          ============  ============  ==========  ===========

Weighted average number of common shares
  outstanding - basic and diluted              12,119        11,241      12,021       11,232
                                          ============  ============  ==========  ===========
</TABLE>

See notes to financial statements.


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

                            STATEMENTS OF CASH FLOWS
                                  (Unaudited)

                                 (in thousands)

                                                     Nine Months Ended
                                                       September 30
                                                       2003      2002
                                                     --------  --------
<S>                                                  <C>       <C>
OPERATING ACTIVITIES
Net loss before preferred stock dividend             $(2,156)  $(2,240)
Adjustments to reconcile net loss to cash used in
   operating activities:
   Depreciation and amortization                          59        17
   Amortization of deferred financing cost                --         8
   Compensatory stock warrants                            --        95
Changes in operating assets and liabilities:
   Accounts receivable                                   133       170
   Inventories                                            15       (27)
   Other current assets                                   13        35
   Accounts payable and accrued expenses                 163      (234)
                                                     --------  --------

Net cash used in operating activities                 (1,773)   (2,176)
                                                     --------  --------

INVESTING ACTIVITIES
Patent costs                                            (142)      (49)
Purchase of fixed assets                                 (39)      (86)
                                                     --------  --------
Net cash used in investing activities                   (181)     (135)
                                                     --------  --------

FINANCING ACTIVITIES
Proceeds from issuance of common stock, net            3,865        --
Repayment of term loan                                    --      (250)
                                                     --------  --------

Net cash (used in) provided by financing activities    3,865      (250)
                                                     --------  --------

Net increase(decrease) in cash and cash equivalents    1,911    (2,561)
                                                     --------  --------
Cash and cash equivalents at beginning of period       2,083     4,023
                                                     --------  --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD           $ 3,994   $ 1,462
                                                     ========  ========
</TABLE>


See note to financial statements.


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

                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2003
                                   (Unaudited)

BASIS  OF  PRESENTATION

     The  accompanying  unaudited,  consolidated  financial statements have been
prepared  in  accordance  with  accounting  principles generally accepted in the
United  States  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 accounting principles generally
accepted  in the United States 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 nine-month period ended September 30, 2003, are not necessarily
indicative  of the results that may be expected for the year ending December 31,
2003.  For  further information, refer to the Financial Statements and footnotes
thereto  included  in  the  Company's  Form 10-K for the year ended December 31,
2002.

     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 12.7% interest in the Company
as  of  September  30,  2003.

     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.  During December 1999,
the  Company received its EPA registration for its platinum - cerium product and
recorded  its first commercial sales.  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.

     As  a result of the Company's recurring operating losses ($24,183,000 since
inception  excluding  non-cash  preferred stock dividends), the Company has been
unable  to  generate positive cash flow.  In management's opinion, the Company's
cash  balance  at  September  30,  2003 will be sufficient to fund the Company's
operations through at least 2004.  The Company may require additional capital to
fund  its  future  operations  and  working capital needs.  Although the Company
believes  that it would be successful in raising additional capital, there is no
guarantee  that  it  will  be  able  to  raise  such funds on terms that will be
satisfactory  to the Company.  The Company will develop contingency plans in the
event  future  financing  efforts  are  not  successful.  Such plans may include
reducing  expenses  and selling or licensing some of the Company's technologies,
which  could  have a material adverse effect on the business, operating results,
financial  condition  and  long-term  prospects.

INVENTORIES

     Inventories  are  stated  at  the  lower  of  cost or market and consist of
finished  product.  Cost  is  determined  using  the  first-in, first-out (FIFO)
method.

REVENUE  RECOGNITION

     The  Company  recognizes  revenue  from  sales  of Platinum Plus fuel borne
catalyst  and  ARIS  systems  upon  shipment.

     In  December  2002,  Clean  Diesel  Technologies  completed  an  additional
exclusive  license  agreement  with  Mitsui  for  the mobile ARIS technology for
Japan.  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  required to be performed by CDT. The Company will also receive ongoing
royalty  payments  on  a  per  unit  basis.


                                      -6-
<PAGE>
     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. Under terms of the
agreement CCA agreed to pay CDT a $150,000 license fee and committed to spend an
additional  $100,000  in  developing,  testing  and  demonstrating  ARIS  mobile
prototypes.  CDT will also receive 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.

     Royalty fees are recognized by the Company when earned.

RESEARCH  AND  DEVELOPMENT  COSTS

     Costs  relating  to  the  research,  development  and  testing  of products
including  testing  to  support  verification  programs  with the California Air
Resources Board (CARB) and the Environmental Protection Agency (EPA) are charged
to  operations  as  they are incurred. These costs include test programs, salary
and  benefits,  consultancy  fees,  materials  and  certain  testing  equipment.

PATENT  EXPENSE

     Patent  costs are capitalized and amortized over the remaining life of each
patent.

NOTES  PAYABLE

     In  November  2000,  the Company arranged a $1,000,000 term loan with three
private  lenders.  The term loan had a 10% interest rate and was payable in full
on  May  14,  2002.  The  Company  drew  down  $500,000 in November 2000 and the
remaining  $500,000  in  March  of 2001.  As part of the private placement stock
transaction in December 2001, $750,000 of the outstanding term loan plus accrued
interest  was  converted to common stock.  The remaining $250,000 portion of the
term  loan  plus  accrued  interest  was  paid  in  cash  on  January  18, 2002.

STOCKHOLDERS'  EQUITY

     In  September  2003, Clean Diesel Technologies received $3.865 million (net
of  $39,000  in expenses) through a private placement of 2,395,597 shares of its
Common  Stock  on  the  AIM  (Alternative Investment Market) of the London Stock
Exchange under the ticker symbol CDT.  The new shares were issued in reliance on
Regulation  S  under  the  US  Securities  Act  and  because they are subject to
transfer restrictions for a period of time, they may not be resold to persons in
the  US  or  US  persons  but  may  otherwise  be traded in the UK without other
restrictions.  In  conjunction  with  the  private  placement,  230,240 ten year
warrants with an exercise price of $1.63 per share were issued.

     In  October 2002, Clean Diesel Technologies received $1.356 million (net of
$69,000 in expenses) through a private placement of 704,349 shares of its Common
Stock.

STOCK-BASED  COMPENSATION


     Clean  Diesel  Technologies  accounts for stock option grants in accordance
with  Accounting  Principles  Board  (APB)  Opinion No. 25, Accounting for Stock
Issued  to  Employees.  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.
In  December  2002,  the  FASB  issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition  and  Disclosure."  SFAS  No.  148  amends SFAS No. 123,
"Accounting  for  Stock-Based  Compensation,"  to provide alternative methods of
transition  for  a voluntary change to the fair value based method of accounting
for  stock-based  employee  compensation.  In addition, the Statement amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in both
annual  and  interim  financial  statements  about  the method of accounting for
stock-based  employee compensation and the effect of the method used on reported
results.  The  Company has adopted the disclosure requirements of this Statement
as  of  December  31,  2002.


                                      -7-
<PAGE>
     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 increased to the pro forma amounts indicated below
for  the  nine  months  ended  September  30:

<TABLE>
<CAPTION>
                                                                       2003      2002
                                                                     --------  --------
<S>                                                                  <C>       <C>
     Net loss as reported                                            $(2,156)  $(2,240)
     Deduct: Total stock-based employee compensation expense
         determined under fair value based method for all awards,
         net of related tax effects                                     (406)     (451)
                                                                     --------  --------
     Pro forma net loss                                              $(2,562)  $(2,691)
     Net loss per share:
     Basic and diluted loss per common share-as reported             $ (0.18)  $ (0.20)
     Basic and diluted per common share-pro forma                    $ (0.21)  $ (0.24)
</TABLE>

     In  accordance with the provisions of SFAS No. 123, for purposes of the pro
forma  disclosures the estimated fair value of the options is amortized over the
option  vesting  period.  The application of the pro forma disclosures presented
above  are  not representative of the effects SFAS No. 123 may have on operating
results  and  loss  per  share in future years due to the timing of stock option
grants  and  considering  that  options  vest  over  a  period  of  three years.

     The  Black-Scholes option-pricing model was developed for use in estimating
the fair value of traded options that have no vesting restrictions and are fully
transferable.  In  addition,  option-pricing  models require the input of highly
subjective  assumptions  including  the expected stock price volatility. Because
CDT's  employee  stock options have characteristics significantly different from
those  of traded options and because changes in the subjective input assumptions
can  materially  affect  the  fair  value estimate, in management's opinion, the
existing models do not necessarily provide a reliable single measure of the fair
value  of  its  stock  options.

     The fair value of each option grant, for pro forma disclosure purposes, was
estimated  on  the date of grant using the modified Black-Scholes option-pricing
model  with  the  following  weighted-average assumptions for the second quarter
2003 grants, expected dividend yield 0%, risk free interest rate 1.23%, expected
volatility  95.7% and expected life of the option 4 years.  The weighted-average
assumptions  for the third quarter 2003 grants were: expected dividend yield 0%,
risk  free  interest rate 2.48%, expected volatility 99.41% and expected life of
the  option  4  years.

LOSS  PER  SHARE

     Employee stock options and stock purchase warrants were not included in the
computation  of  diluted earnings per share for 2003, because either the Company
reported  a  loss  for the period or their exercise prices were greater than the
average  market  price  of the common stock and therefore would be antidilutive.

RELATED  PARTY  TRANSACTIONS

     In  November 2000, the Company secured a $1,000,000 term loan facility at a
10%  interest rate from several preferred shareholders, including Fuel Tech Inc.
which  pledged  $250,000.  In  2000  and  2001  the Company drew down the entire
$1,000,000  term  loan.  In  December  2001,  $750,000  of term loan and accrued
interest  was  repaid  as  part of the December 2001 private placement of common
stock  discussed in the stock holders equity note.  In January 2002, the Company
repaid  the  remaining  $250,000  term  loan  payable  to Fuel Tech plus accrued
interest.

     The  Company  has a Management and Services Agreement with Fuel Tech. Under
the  agreement,  the Company pays Fuel Tech a fee equal to an additional 3 - 10%
of  the  costs  paid  on  the Company's behalf, dependent upon the nature of the
costs  incurred.  Currently,  a fee of 3% is assessed on all costs billed to the
Company from Fuel Tech.  Charges to the Company, inclusive of the administrative
fee,  were  approximately  $17,300  in  both the third quarter of 2003 and 2002,
respectively.


                                      -8-
<PAGE>
     The  Company had a deferred salary plan with its Chief Executive Officer in
which  he  deferred  $62,500  of  his annual salary until the Company reaches $5
million  in  revenue.  This  agreement  was  terminated  in  March  2001 and the
executive's  salary  was  returned  to  full  pay.  At  September 30, 2003 total
obligations  were  $135,400  pertaining  to  this  plan.

     The  Company  makes  annual  pension  payments  or  accruals  pursuant to a
deferred  compensation  plan  on  behalf  of  its Chief Executive Officer.  This
agreement  was  suspended  as  of June 15, 2003 and the company does not plan to
make  any  additional  accruals  in  the  future.  At  September  30, 2003 total
obligations  were  $305,616  pertaining  to  this  plan.

COMMITMENTS

     The  Company  is  obligated  under  a  sublease agreement for its principal
office.  The  Company  has  agreed  to  a  12 month extension with a three month
notice  for termination of the lease through December 2003, at an annual rate of
$116,000.  For  the  quarters  ended September 30, 2003 and 2002, rental expense
approximated  $27,625  for  each  quarter.

     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 will pay
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  $6,545,455 in 2003 and declining annually to $1,090,910 in 2008. The Company
as  assignee  and owner will maintain the technology at its own expense. Minimum
royalties  were  paid to Fuel Tech in 2002 and royalties payable to Fuel Tech at
September  30,  2003  are  $3,600.

MARKETING  AND  LICENSE  AGREEMENTS

     In  December  2002,  Clean  Diesel  Technologies  completed  an  additional
exclusive  license  agreement  with  Mitsui  for  the mobile ARIS technology for
Japan.  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.  Clean Diesel has previously completed an
exclusive  ARIS  license  for  the  ARIS NOx reduction technology for stationary
applications  in  Japan.  CDT  receives royalties on each system sold by Mitsui.

     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.  Under terms of the
agreement CCA agreed to pay CDT a $150,000 license fee and committed to spend an
additional  $100,000  in  developing,  testing  and  demonstrating  ARIS  mobile
prototypes.  CDT will also receive 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.

SUBSEQUENT  EVENTS

        On  October  13,  2003,  the  Company  announced  that  it  had received
notification  from  the  US  Environmental  Protection Agency of verification of
emissions  reduction  performance  of  its  Platinum  Plus(R) Purifier system to
retrofit to 1988-1993 diesel engines.  The EPA verification will allow end-users
to  receive  emission  reduction credit, as well as access to federal, state and
local  funds  to pay for the verified system.  The Company intends to supply the
verified systems directly to end-users and through a planned network of licensed
distributors.


                                      -9-
<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 Form 10-K for the year ended December 31, 2002.

RESULTS  OF  OPERATIONS

     Prior  to  2000,  the  Company  was  a development stage enterprise and its
efforts  were  devoted  to  the  research,  development and commercialization of
platinum  fuel  catalysts  and  nitrogen  oxide reduction technologies to reduce
emissions  from  diesel engines.  During December 1999, the Company received its
US  EPA registration for its platinum-cerium fuel catalyst product and completed
its  first  commercial  sales.

     Product  sales  and cost of sales were $81,000 and $47,000 respectively for
the  third  quarter  of 2003 versus $39,000 and $17,000 for 2002.  Platinum Plus
fuel catalyst sales of $58,000 and $11,000 were recorded in the third quarter of
2003 and 2002, respectively.  ARIS product sales of $12,000, primarily to Mitsui
&  Co.,  Ltd.,  were  recorded  in  the third quarter of 2003.  The remainder of
product  revenue  in  2003  consists  of  additive  dispensing  equipment.

     Included in the 2003 and 2002 third quarter revenue is $18,000 and $12,000,
respectively,  of  license  and  royalty  income.  The  2003 license and royalty
income is from continuing ARIS system royalties from Mitsui & Co., Ltd.

     Year-to-date  sales  and  cost  of sales were $478,000 and $167,000 in 2003
versus  $141,000  and  $72,000  in  2002.  Included in the total year revenue is
$187,000  and  $26,000  of  ARIS  license  and royalty revenue for 2003 and 2002
respectively.  Year-to-date  ARIS 2000 system sales for 2003 were $87,000 versus
$87,000  in  2002.  Year-to-date  Platinum Plus FBC sales for 2003 were $138,000
versus  $28,000  in  2002.

     General  and  administrative  expenses decreased $52,000 to $517,000 in the
third  quarter  2003  versus $569,000 in the same period of 2002.  For the first
nine  months  of  2003 general and administrative expenses increased $151,000 to
$1,855,000 versus $1,704,000 in 2002.  The year-to-date 2003 increase in general
and  administrative  expenses  is  related  to  increases in marketing and sales
activities  and  higher  professional  fees  including  insurance  and  advisory
services.

     Research  and  development  expenses  decreased  $14,000 to $171,000 in the
third  quarter  2003  versus  $185,000 in the comparable period in 2002. For the
year  research and development costs are down $7,000 to $590,000 versus $597,000
in  the  same  period  in  2002.  The  decrease is attributable to the timing of
expenses  related  to  several  verification  and certification programs for the
Platinum  Plus  FBC.

     Patent  filing  costs  increased $25,000 to $29,000 in the third quarter of
2003  versus  $4,000  in the comparable 2002 period.  The increase is related to
increased amortization of patent expenses as the patents near retirement and the
addition  of  new  patents.  For  the  year, patent cost has decreased $2,000 to
$29,000 versus a $31,000 in the same nine month period in 2002.

     Third  quarter  interest  income  decreased $6,000 in 2003 to $1,000 versus
$7,000 in the comparable period in 2002.  For the year interest income decreased
$25,000  to  $7,000 versus $32,000 in the same


                                      -10-
<PAGE>
period  in  2002. This was a result of a decrease in the amount of cash and cash
equivalents  on  hand  in  2003.

LIQUIDITY  AND  SOURCES  OF  CAPITAL

     Prior  to  2000,  the  Company  was  primarily  engaged  in  research  and
development  and  has  incurred  losses since inception aggregating $ 24,183,000
(excluding  the  effect of the non-cash preferred stock dividends).  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 product in 1999 and licensing revenue in 2000 and 2001, sales and
revenue  to  date  have  been  insufficient to cover operating expenses, and the
Company  continues to be dependent upon sources other than operations to finance
its  working  capital  requirements.

     For the six months ended September 30, 2003 and 2002, the Company used cash
of $1,773,000 and $2,176,000 respectively, in operating activities.

     At  September 30, 2003 and December 31, 2002, the Company had cash and cash
equivalents  of  $3,994,000  and $2,083,000, respectively.  The increase in cash
and  cash  equivalents  in  2003  was the result of the issue of Common Stock as
discussed  in the next paragraph.  Offsetting some of this increase are expenses
relating  the verification programs with EPA and CARB and the on-going marketing
and operation costs. The Company anticipates incurring additional losses through
at least the next 12 months as it further pursues its commercialization efforts.

       In September 2003, Clean Diesel Technologies received $3.865 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.

       In  October  2002, Clean Diesel Technologies received $1.356 million (net
of  $69,000  in  expenses)  through a private placement of 704,349 shares of its
Common  Stock  on the AIM (Alternative Investment Market) London Stock Exchange.

     In  November 2000, the Company secured a $1,000,000 privately financed term
loan  facility.  In  December  2000,  the Company drew down $500,000 of the term
loan  facility  and  in  March  2001 the remaining $500,000 of the term loan was
drawn  down.  As  part  of  the  private placement stock transaction in December
2001,  $750,000 of the outstanding term loan plus accrued interest was converted
to  common stock.  The remaining $250,000 plus accrued interest was paid in cash
in  January  2002.

     As  a  result  of the Company's recurring operating losses, the Company has
been  unable  to  generate  positive  cash  flow.  In  management's opinion, the
Company's  cash  balance  at  September  30, 2003 will be sufficient to fund the
Company's  operations through at least 2004.  The Company may require additional
capital  to  fund  its future operations.  Although the Company believes that it
will be successful in its capital-raising efforts, there is no guarantee that it
will  be  able  to  raise  such  funds on terms that will be satisfactory to the
Company.  The  Company  will  develop  contingency  plans  in  the  event future
financing  efforts are not successful.  Such plans may include reducing expenses
and  selling  or  licensing  some  of  the  Company's  technologies.


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


                                      -11-
<PAGE>
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.



PART II.   OTHER  INFORMATION

Item 1.   Legal  Proceedings
          None

Item 2.   Changes  in  Securities

               Effective September 26, 2003, the Company sold at $1.63 per share
          pursuant  to  the  Regulation  S exemption from registration under the
          Securities  Act,  2,395,597  shares  of  Common  Stock, par $0.05 (the
          "Stock"),  to  twenty  non-U.S.  investors  certain  of  whom  are
          stockholders  of  the  Company,  including  D. R. Gray a director (the
          "Investors). Such sale also included delivery to the Investors and one
          financial advisor to the Company of warrants to purchase also at $1.63
          per  share  for 10 years, 230,240 shares of the Stock. The proceeds of
          this  private placement are to be applied toward the Company's general
          corporate purposes, including the costs of development and testing for
          verification  by  governmental  authorities in the U.S. of a catalyzed
          wire  mesh  filter  as used with the Registrant's fuel borne catalyst.

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
                         A  report  on  form  8-K was filed September 8, 2003 to
          announce  signed  commitments  from  a  strategic  partner and several
          current  UK  based  shareholders to invest $3.8M into CDT. The closing
          was  expected  to  be  September  26,  2003.


                                      -12-
<PAGE>
                         CLEAN DIESEL TECHNOLOGIES, INC.
                                   SIGNATURES



     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: November 7, 2003                   By: /s/Jeremy D. Peter-Hoblyn
                                             --------------------------------
                                             Jeremy D. Peter-Hoblyn
                                             Chief Executive Officer
                                             and Director



Date: November 7, 2003                   By: /s/David W. Whitwell
                                             --------------------------------
                                             David W. Whitwell
                                             Chief Financial Officer,
                                             Vice President and Treasurer


                                      -13-
<PAGE>