UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D. C. 20549





FORM
      10-QSB







T
            
            QUARTERLY REPORT PURSUANT TO SECTION
              13 OR
              15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For
                the period ended March 31, 2006*
            
            TRANSITION REPORT UNDER SECTION 13 OR
              15(d)
              OF THE SECURITIES EXCHANGE Act of 1934For
                the transition period from ___ to
                ___.





Commission
      file number: 000-32905





AMANASU
      ENVIRONMENT CORPORATION


(Exact
      name of small business issuer as specified in its charter)





Nevada
            
            98-0347883(State
                or other jurisdiction of organization)
            
            (IRS
                Employer Identification No.)





701
      Fifth Avenue, 42nd Floor, Seattle, WA 98104


(Address
      of principal executive offices)





206-262-8188


(Issuer's
      telephone number)





(Former
      name, former address and former fiscal year, if changed since last
      report)





Check
      whether issuer (1) filed all reports to be filed by Section 13 or 15(d) of
      the
      Exchange Act during the past 12 months (or such shorter
      period that the registrant was required to file such reports), and (2) has
      been
      subject to such filing requirements for the past 90 days.   Yes
  X   
      No   O





APPLICABLE
      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING
      FIVE YEARS





Check
      whether the registrant filed all documents and reports required to be filed
      by
      Section 12, 13, or 15(d) of the Exchange Act after the distribution of
      securities under a plan confirmed by a court.  Yes   O
  No  O     
      N/A   X





APPLICABLE
      ONLY TO CORPORATE ISSUERS





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date: 44,000,816 as of November 10, 2005.
      Transitional Small Business Disclosure Format:   Yes  O     
      No  X












AMANASU
      ENVIRONMENT CORPORATION


QUARTERLY
      REPORT ON FORM 10QSB


FOR
      THE
      THREE MONTHS ENDED MARCH 31, 2005


TABLE
      OF
      CONTENTS





**PART1-FINANCIAL
      INFORMATION**





Item
                1:     FINANCIAL
                STATEMENTS:Balance
                Sheets as of March 31, 2006 (unaudited)
                and December 31, 2005 (audited)
            4Statement
                of Operations and Deficit
                Accumulated for the nine months ended March 31, 2006 and 2005
                (unaudited)
            5Statement
                of Operations and Deficit Accumulated for the
                three months ended March 31, 2006 and 2005
                (unaudited)
            6Statement
                of Cash Flows for the nine months ended
                March 31, 2006 and 2005 (unaudited)
            7Notes
                to Financial Statements
                (unaudited)
            8Item
                2:     MANAGEMENT’S DISCUSSION
                AND OR PLAN OF OPERAITON
            10Item
                3:     EFFECTIVENESS OF THE
                REGISTRANT’S DICLOSURE CONTROLS AND PROCEDURES
            14**PART2-OTHER
                INFORMATION**Item
                1:     LEGAL
                PROCEEDINGS
            15Item
                2:     CHANGES IN
                SECURITEIS
            15Item
                3:     DEFAULTS UPON SENIOR
                SECURITES
            15Item
                4:     SUBMISSION OF MATTERS TO VOTE
                OF SECURITEY HODERS
            15Item
                5:     OTHER
                INFORMATION
            15Item
                6:     EXHIBITS AND REPORTS ON FORM
                8-K
            15SIGNATURES
            16





2
 *Table
            of
            Contents*





**PART1-FINANCIAL
      INFORMATION**





ITEM
                1.
            FINANCIAL
                STATEMENTS





GENERAL





The Company's unaudited financial statements for the nine months ended
      March 31, 2006 are included with this Form 10-QSB. The unaudited financial
      statements have been prepared in accordance with the instructions to Form 10-QSB and,
      therefore, do not include all information and footnotes necessary for a complete
      presentation of financial position, results of operations, and cash flows in
      conformity with generally accepted accounting principles. In the opinion of
      management, all adjustments considered necessary for a fair presentation of
      the results of operations and financial position have been included and all
      such adjustments are of a normal recurring nature. Operating results for the
      nine months ended March 31, 2006 are not necessarily indicative of the results
      that can be expected for the fiscal year ending December 31, 2006.





3
 *Table
            of
            Contents*





**AMANASU
      ENVIRONMENT CORPORATION**


**(A
      Development Stage Company)**


**BALANCE
      SHEETS**


**(Unaudited)**





September
                30,
              2005
              (Unaudited)
            
            December
                31,
              2004
              (Audited)ASSETSCurrent
                Assets:Cash
            
            $
            175,266
            
            $
            9,459Miscellaneous
                receivables
            
            
            95,885
            
            
            1,885Total
                current assets
            
            
            271,151
            
            
            11,344Fixed
                Assets:Automotive
                equipment
            
            
            25,859
            
            
            25,859Operating
                equipment
            
            
            400,000
            
            
            -____Total
                equipment
            
            
            425,859
            
            
            25,859Less
                accumulated depreciation
            
            
            14,016
            
            
            12,685Net
                fixed assets
            
            
            411,843
            
            
            13,174Other
                Assets:Investment-Held
                to Maturity (certificate of deposit)
            
            
            2,000,000
            
            
            -Rent
                deposits
            
            
            143,595
            
            
            5,000Investments
                in joint ventures
            
            
            390,000
            
            
            -Licensing
                agreement, net of accumulated amortization of $59,756 and
                $44,470
            
            
            286,744
            
            
            302,030Total
                other assets
            
            
            2,820,339
            
            
            307,030Total
                Assets
            
            $
            3,503,333
            
            $
            331,548LIABILITIES
                AND STOCKHOLDERS’ EQUITYCurrent
                Liabilities:Accrued
                expenses
            
            $
            1,080
            
            $
            2,990Stockholder
                advance
            
            
            100
            
            
            100Deposit
                for capital stock
            
            
            -
            
            
            99,900Total
                current liabilities
            
            
            1,180
            
            
            102,990Stockholders’
                Equity:Common
                stock: authorized 100,000,000 shares of $.001 par value; issued and
                outstanding 44,000,816 and 43,000,816, respectively
            
            
            44,001
            
            
            43,001Additional
                paid-in capital
            
            
            4,257,039
            
            
            758,039Deficit
                accumulated during development stage
            
            
            (798,887
            )
            
            (572,482
            )Total
                stockholders’ equity
            
            
            3,502,153
            
            
            228,558Total
                Liabilities and Stockholders’ Equity
            
            $
            3,503,333
            
            $
            331,548





These
      statements should be read in conjunction with the year-end financial
      statements.





4
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            of
            Contents*





**AMANASU
      ENVIRONMENT
      CORPORATION**


**(A
      Development Stage Company)**


**STATEMENTS
      OF OPERATIONS AND DEFICIT**


**ACCUMULATED
      DURING DEVELOPMENT STAGE**


**(Unaudited)**




Nine
                    Month Periods Ended March 31,
                
                February
                    22, 1999
                  (Date
                    of Inception)
                  To
                    March 31, 20062005
                
                2004Expenses
                
                $
                258,550
                
                $
                87,148
                
                $
                834,500Operating
                    loss
                
                
                (258,550
                )
                
                (87,148
                )
                
                (834,500
                )Other
                    Income - interest
                
                
                32,145
                
                
                230
                
                
                35,613Loss
                    accumulated during development stage
                
                $
                (226,405
                )
                $
                (86,918
                )
                $
                (798,887
                )Loss
                    Per Share -Basic
                    and Diluted
                
                $
                (.01
                )
                $
                -Weighted
                    average number of sharesoutstanding
                
                
                43,916,567
                
                
                43,000,816
  These
          statements should be read in conjunction with the year-end financial
          statements.





5
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            of
            Contents*





**AMANASU
      ENVIRONMENT CORPORATION**


**(A
      Development Stage Company)**


**STATEMENTS
      OF OPERATIONS AND DEFICIT**


**ACCUMULATED
      DURING DEVELOPMENT STAGE**


**(Unaudited)**





Three
                Month Periods Ended September 30,
            
            February
                22, 1999
              (Date
                of Inception)
              To
                September 30, 20052005
            
            2004Expenses
            
            $
            89,402
            
            $
            29,082
            
            $
            834,500Operating
                loss
            
            
            (89,402
            )
            
            (29,082
            )
            
            (834,500
            )Other
                Income - interest
            
            
            18,071
            
            
            24
            
            
            35,613Loss
                accumulated during development stage
            
            $
            (71,331
            )
            $
            (29,058
            )
            $
            (798,887
            )Loss
                Per Share -Basic
                and Diluted
            
            $
            -
            
            $
            -Weighted
                average number of sharesoutstanding
            
            
            44,000,816
            
            
            43,000,816





These
      statements should be read in conjunction with the year-end financial
      statements.





6
 *Table
            of
            Contents*





**AMANASU
      ENVIRONMENT CORPORATION**


**(A
      Development Stage Company)**


**STATEMENTS
      OF CASH FLOWS**


**(Unaudited)**





Nine
                Month Periods
              Ended
                September 30,
            
            February
                22, 1999
              (Date
                of Inception)
              To
                September 30,2005
            
            2004
            
            2005**CASH
                FLOWS FROM OPERATIONS:**Net
                Loss
            
            $
            (226,405
            )
            $
            (86,918
            )
            $
            (798,887
            )Charges
                Not Requiring The Outlay Of Cash:Depreciation
                and amortization
            
            
            16,617
            
            
            16,578
            
            
            73,772Services
                provided for common stock
            
            
            **-**
            
            
            -
            
            
            70,000Changes
                in Assets and Liabilities:Increase
                (decrease) in accrued expenses
            
            
            (1,910
            )
            
            1,587
            
            
            1,080Increase
                in miscellaneous receivables
            
            
            (94,000
            )
            
            (400
            )
            
            (95,885
            )**Net
                Cash Consumed By****Operating
                Activities**
            
            
            (305,698
            )
            
            (69,153
            )
            
            (749,920
            )**CASH
                FLOWS FROM INVESTING ACTIVITIES:**Investment
                in certificate of deposit
            
            
            (2,000,000
            )
            
            -
            
            
            (2,000,000
            )Acquisition
                of licensing agreement
            
            
            -
            
            
            -
            
            
            (155,000
            )Investments
                in joint ventures
            
            
            (390,000
            )
            
            -
            
            
            (390,000
            )Purchase
                of automobile
            
            
            -
            
            
            **-**
            
            
            (25,859
            )Purchase
                of operation equipment
            
            
            (400,000
            )
            
            -
            
            
            (400,000
            )Rent
                deposits
            
            
            (138,595
            )
            
            -
            
            
            (143,595
            )**Net
                Cash Consumed By Investing Activities**
            
            
            (2,928,595
            )
            
            -
            
            
            (3,114,454
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES:**Sales
                of common stock
            
            
            3,500,000
            
            
            -
            
            
            4,039,540Advances
                received in anticipation ofcommon
                stock sales
            
            
            -
            
            
            -
            
            
            100,000Return
                of deposit for capital stock
            
            
            (99,900
            )
            
            -
            
            
            (99,900
            )**Net
                Cash Provided By****Financing
                Activities**
            
            
            3,400,100
            
            
            -
            
            
            4,039,640Net
                change in cash
            
            
            165,807
            
            
            (69,153
            )
            
            175,266Cash
                balance, beginning of period
            
            
            9,459
            
            
            92,055
            
            
            -Cash
                balance, end of period
            
            $
            175,266
            
            $
            22,902
            
            $
            175,266





These
      statements should be read in conjunction with the year-end financial
      statements.





7
 *Table
            of
            Contents*





**AMANASU
      ENVIRONMENT CORPORATION**


**(A
      Development Stage Company)**


**NOTES
      TO FINANCIAL STATEMENTS**


**March
      31, 2006**


**(Unaudited)**








**1.**
            **BASIS
                OF PRESENTATION**





The
      unaudited interim financial statements of Amanasu Environment Corporation (“the
      Company”) as of September 30, 2005 and for the three month, and nine month
      periods ended September 30, 2005 and 2004, have been prepared in accordance
      with
      accounting principles generally accepted in the United State of America. In
      the
      opinion of management, such information contains all adjustments, consisting
      only of normal recurring adjustments, necessary for a fair presentation of
      the
      results for such periods. The results of operations for the nine month period
      ended September 30, 2005 are not necessarily indicative of the results to be
      expected for the full fiscal year ending December 31, 2005.





Certain
      information and disclosures normally included in the notes to financial
      statements have been condensed or omitted as permitted by the rules and
      regulations of the Securities and Exchange Commission, although the Company
      believes the disclosure is adequate to make the information presented not
      misleading. The accompanying unaudited financial statements should be read
      in
      conjunction with the financial statements of the Company for the year ended
      December 31, 2004.








**2.**
            **INVESTMENTS**





The
      Company made several investments during the 2005 period: One is a $2,000,000
      certificate of deposit; this certificate is due April 9, 2007 and bears interest
      at 3.48 %. A second investment is a $94,000 advance to a consultant who will
      provide marketing promotion of Company products; this advance bears interest
      at
      7% and is due December 31, 2005. A third investment is a $400,000 purchase
      of a
“Swing Melter”, a machine which dissolves ash, a by-product of many recycling
      plants; **** this
      machine will be used as a demonstration machine for marketing purposes; machines
      of this type are manufactured by Kogure Kabushikigaisha Corporation (Kogure),
      a
      firm in which the Company has made another investment, described
      below.





In
      addition to the investments noted above, the Company made two other investments
      during 2005. One of these is a $290,000 investment in Kogure, which originally
      was an equity investment. This investment has changed. The $290,000 has been
      applied to the acquisition from Kogure of licensing rights to the Swing Melter.
      Finally, $100,000 was used to form a joint venture with Shinwa Yosetsu, Ltd.
      This venture will manufacture in Japan, and sell, water purification and
      desalinization systems. This investment will be accounted for by the equity
      method under which the investment account will be adjusted at the end of each
      period to recognize the Company share of the results of operations of the joint
      venture.





8
 *Table
            of
            Contents*





**AMANASU
      ENVIRONMENT CORPORATION**


**(A
      Development Stage Company)**


**NOTES
      TO FINANCIAL STATEMENTS**


**March
      31, 2006**


**(Unaudited)**






**3.**
            **EXPENSES**





The
      principal items of expense included on the statement of operations and deficit
      are presented below:





Nine
                Month Periods EndedJune
                30, 2005
            
            June
                30, 2004Rent
            
            $
            157,634
            
            $
            27,747Depreciation
                and amortization
            
            
            16,617
            
            
            16,578Professional
                fees
            
            
            14,345
            
            
            14,931Salaries
            
            
            31,600
            
            
            15,321Travel
            
            
            12,578
            
            
            10,527Consulting
            
            
            20,000
            
            
            -Other
                expenses
            
            
            5,776
            
            
            2,044Total
                expenses
            
            $
            258,550
            
            $
            87,148





**4.**
            **SUPPLEMENTAL
                DISCLOSURES OF CASH FLOWS
                INFORMATION**





There
      was
      no cash paid for interest or income taxes during the periods being reported.








**5.**
            **RELATED
                PARTY TRANSACTIONS**





The
      wife
      of the president of the Company, who supervises most Company administrative
      activities, was paid a $20,000 consulting fee during the 2005
      period.





9
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            of
            Contents*




ITEM
                2:
            MANAGEMENT
                DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                OPERATIONS





Cautionary
      Statement





SAFE
      HARBOR





This Form 10QSB contains "forward-looking statements" within the meaning
		of Section 27A of the Securities Act of 1933, as amended, and Section 21E
		the Securities Exchange Act of 1934, as amended and such forward-looking
		statements are made pursuant to the safe harbor provisions of the Private
		Securities Litigation Reform Act of 1995.  "Forward-looking statements"
		describe future expectations, plans, results, or strategies and are generally
		preceded by words such as  "may,"  "future," "plan" or "planned," "will" or
		"should," "expected," "anticipates," "draft," "eventually" or "projected."
		You are cautioned that such statements are subject to a multitude of risks
		and uncertainties that could cause future circumstances, events, or results
		to differ materially from those projected in the forward-looking statements,
		including the risks that actual results may differ materially from those
		projected in the forward-looking statements as a result of various factors,
		and other risks identified in a companies' annual report on Form 10-KSB and
		other filings made by such company with the United States Securities and
		Exchange Commission. You should consider these factors in evaluating the
		forward-looking statements included herein, and not place undue reliance on
		such statements.





The following discussion should be read in conjunction with the Company's
		Financial Statements, including the Notes thereto, appearing elsewhere in
		this Quarterly Report and in the Annual Report for the year ended December 31, 2006.








COMPANY
      OVERVIEW





The Company is a development stage company and significant risks exist with
		respect to its business. It has acquired the exclusive, worldwide license
		rights to a high temperature furnace, a hot water boiler, and ring-tube
		desalination methodology. At this time, the Company is not engaged in the
		commercial sale of any of its licensed technologies. Its operations to date
		have been limited to acquiring the technologies, conducting limited product
		marketing, and testing the technologies for commercial sale. For each such
		technology, proto-type or demonstrational units have been constructed by each
		licensor or inventor of the technology. The Company has conducted various
		internal tests on these units to determine the commercial viability of the
		underlying technologies. As a result of such testing, the Company believes
		that the products are not commercially ready for sale, and that product refinements
		are necessary with respect to each of the technologies. In addition, the Company
		may seek joint venture or other affiliations with companies competitive in each
		respective product market whereby the Company can capitalize on the existing
		infrastructure of such other companies, such as product design and engineering,
		marketing and sales, and warranty and post-warranty service and repair.
		The Company believes that its marketing efforts to sell any of its products
		will be limited until such time as it can complete the refinements of its
		technologies. The Company can not predict whether it will be successful in
		developing commercial products, or establishing affiliations with any operating company.








PRODUCTS





Amanasu
      Furnace


The Amanasu furnace is a waste disposal system that safely and efficiently
    disposes of toxic and hazardous wastes. The system has three general features;
    the proprietary combustion burner, the furnace compartment, and the gas processing
    compartment.





10
 *Table
            of
            Contents*





1.	The Company believed that the prior pricing structure for its furnaces
		was not competitive, and it was seeking ways to lower its manufacturing
		costs. In an effort to lower manufacturing costs, the Company was attempting
		to locate alternate suppliers that were less costly than currently identified
		suppliers. It also would attempt to re-design certain components of the furnace
		so as to reduce the manufacturing cost per component.  However, even though the
		Company has made a great effort to meet its goal, the Company has been confronted
		with several difficulties and has started reconsidering to alter the function
		of original furnace which manages daily wastes to a furnace which particularly
		manages specific waste such as industrial and medical waste, and simultaneously,
		the Company also seeks to potential manufacturers and/or organizations to
		sell right for them to utilize the Company's licensed technologies and adopt
		the technologies to their own use and benefit.  Additionally, the Company has
		entered into an agreement with a furnace producing company, Kogure Works Co,
		Ltd., has more advanced technologies of furnaces in Japan, and its furnace is
		produced comparatively in less-cost.  The pricing of the product is $100,000/t
		and eventually reducing the price to 20% less is ideal.








Fire
      Bird Boiler


The Fire Bird Boiler technology is a patented process which incinerates
		whole waste tires in a non-polluting manner emitting heat or steam in the
		incineration process.  The technology provides for combustion efficiency
		and seeks to minimize dioxin generation which is generally a by-product of
		imperfect combustion.





The Company believes that the Fire Bird Boiler is an effective technology for the
dual purpose of incinerating waste tires and generating heat. However, the Company
has recognized that the supply of waste tires in certain markets, including the
United States, has been greatly reduced due to the effect of recent efforts to recycle
waste tires. Thus, the reduction in the available supply of waste tires in these markets
has limited the market potential of the boiler. As a result, the Company has been
confronted with severe marketing difficulties for Fire Bird at present, and will seek
to refine the boiler to accept other forms of waste including hazardous waste.
The Company projects that necessary refine time will be enormous to estimate,
therefore the Company will see how things go thoroughly and determine the appropriate
time to finance for the refinement. The Company might need to utilize Kogure's
manufacturing facility and equipment for the case of production.  However the detailed
projection has not been discussed yet at this present time.
The Company will have no relationship with its former manufacturing company,
Ishimaki Seiki in Ishimaki-city, Japan.  Alternatively, the Company may sub-contract
the assembly and component manufacturing to firms located in proximity to its customer
so as to eliminate excessive shipping charges. However, no such arrangements have been
established by the Company at this time.











Ring-tube
      Desalinization Equipment


The Ring-Tube technology is used as a filter to purify seawater into drinking
		water and also treats sewage and wastewater, by removing pollutants and bacteria.
		The equipment filters bacteria and other impurities through its fine rings
		and comb type filter and reduces the presence of inhibiting scales on the
		equipment.  The impurities are then destroyed by the high pressure and
		temperature in the ring-tube.  The Company believes that its technology is
		more cost efficient to construct and operate than conventional RO equipment.
		Its fresh water recovery rate is 95% compared with less than 40% for a RO method.
		Moreover, water produced from the Company's technology retains a certain
		amount of salt and minerals and does not required a pH adjustment. RO filtration
		removes all minerals and salt, requiring minerals to be added to improve flavor,
		and an adjustment to reduce pH levels.  The reject brine resulting from RO
		filtration is discharged in the ocean creating higher salt concentrations in
		such areas, however, the by-product from the Company's  technology is sufficiently
		condensed allowing it to be sold as a salt product.





11
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            Contents*





The Company believes that the existing capacity of the Ring-Tube Desalination
		equipment is commercially insufficient for its targeted markets because
		the equipment is a hand-made manufacturing and it leads high cost production.
		Also there are many similar production companies which promote water
		purification systems in Japan therefore reducing the cost of manufacturing
		is the key to succeed in the competitive market.  Consequently, the Company
		has entered into an agreement with Shinwa Yosetsu, a subcontract manufacturing
		company which can manage Sakagami's technology under the instruction that
		may result in less-cost production.  The Company joint and cooperate with
		Shinwa Yosetsu investing $100,000 to establish a new company for the joint
		venture project to progress complete manufacturing and sales plan.  This
		technology has not been commercially produced yet.  The Company is also
		expecting to expand its market place in China in connection with establishing
		a new company merging with MINMETALS in China.





PLAN
      OF
      OPERATION





The Company was aware of an option of business cooperation with a company in the same industry.
		The Company has entered into an agreement with a furnace producing company, Kogure Works Co, Ltd.,
		with 34 years of successful business history and has more advanced technologies of furnace with
		less-cost production in Japan, and its consideration of cooperation with them investing the capital of $290,000.




On April 11, 2005, the Company purchased a model plant of furnace for ash
		disposal called "Swing Melter" from Kogure Works Co., LTD., and paid the
		amount of $400,000 for the model on April 19, 2005.  "Swing Melter" is a
		system of furnace for ash disposal currently patent pending by Kogure.
		Ash created and discharged from incinerators contains dioxin and other
		toxic substances, and the treatment of the remaining ash, in present
		circumstances, is in reclamation of lands in Japan.  The expense of
		conducting the reclamation is approximately 30,000-50,000 yen / ton.
		The expense of the treatment of the ash using "Swing Melter" is around
		15,000-20,000 yen / ton, and the by-product that remains after the process
		with the system is non-toxic and recyclable as construction material.
		In consideration of future environmental issues, the system is significant
		and a necessary equipment for the preservation of the earth.  The Company
		will promote the product to various organizations and industries and will
		operate the model plant of "Swing Melter" to show the running system and
		operations to potential customers such as public cleaning/garbage management
		organizations (800 facilities) and industrial waste treatment agencies (4,000 facilities).




As of August 4th, 2005, Kogure's six proprietary rights (See "Patents" below)
		to the license of the technologies and parts in connection with constructing
		the rotary kiln and its title were transferred to Amanasu Technologies Corporation,
		and the amount of $290,000 that the Company previously funded to Kogure for
		marketing and promotion purposes replaced in as transfer fee.  As a result,
		the Company possesses the exclusive worldwide right to the product, and can
		receive royalties from the sales of the rotary kiln by other companies including MINMETAL.





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As of December 19th, 2005, the Company established a new company, Amanasu
		Holdings Corporation ("Amanasu Holdings"), located at 1-5 Suda-cho, Chiyoda-ku,
		Tokyo, as a subsidiary company of Amanasu Environment Corporation with
		100 % control.  Amanasu Holdings and the former employees of Kogure jointly
		established an incorporation, named Amanasu Echo Frontier Corporation
		("Amanasu Echo Frontier"), with a capital of $240,000 (28,000,000 Yen)
		of which Amanasu Holdings invested $103,000 (12,000,000 Yen) in December,
		2005, and have employed 10 former technicians of Kogure.  Amanasu Echo Frontier,
		which conducts its operation as a subsidiary company of Amanasu Holdings,
		is mainly producing incinerator, furnace, and medical waste treatment plant
		using the 6 proprietary rights purchased from Kogure as stated above at a
		location of 1-24-8 Iwagami-cho, Maebashi, Gunma, Japan.  The Company's business
		plan for 2006 is to sell 5 units of furnace for $2,440,000 (285,000,000 Yen)
		per unit in Japan and 3 units of medical waste treatment plants for $1,300,000-
		$1,700,000 (150,000,000-200,000,000 Yen) per unit in china.  Also Amanasu Echo
		Frontier and Onyx, a used car sales company in Japan, has made a temporary
		agreement on an order of manufacturing and delivering an incinerator for $14,000,000
		(1,650,000,000 Yen) to Onyx by the end of 2007.




The Company or Amanasu Echo Frontier is considering establishing an organization
		of a joint venture with MINMETAL in China for the purpose of conducting a
		joint marketing of medical waste treatment plant with MINMETAL.
		The establishment might take place in 2006 with total investment of 50,000,000
		Yen, 51% of which will be invested by The Amanasu Environment or Amanasu Echo Frontier.





The Company was expecting to expand the distribution line over the country
		of Japan having a cooperation of Mitsui & Co., Ltd. ideally starting in
		April of 2006. However, consulting MINMETAL's will, the Company decided
		to refuse the involvement of Mitsui & Co., Ltd. to this project.





At this time the Company prefers to focus on the business of Kogure's products
		than on the Company's Fire Bird Boiler. Therefore, there has not been any
		expense incurred by the Fire Bird Boiler during the quarter and no further
		budget is set out respecting the product. However, the Company is willing
		to provide the license of Fire Bird Boiler to any business organizations
		that could make use of the technologies for their benefit.





The Company has entered into an agreement for co-establishing a new company
		with Shinwa Yosetsu, a subcontracted company  manufacturing Water desalination
		system.  The Company financed approximately $100,000 for the co-establishing
		of the new company, Amanasu Shinwa Corporation, as of March 14th, 2005.
		As of December 16th, 2005 Amanasu holdings invested an additional ?
		10,000,000 into Amanasu Shiwa, in Japan.  Amanasu Shinwa Corporation
		manufactures and distributes water purification systems and it had made a
		sale of approximately 30,000,000 YEN by the month of September 2005.
		Amanasu Holdings will invest $85,000 (10,000,000 Yen) for the following items:
		          1.	Production of a model plant for the water purification system, managed by Amanasu Shinwa.
		          2.	Five water purification units ($85,000 (10,000,000 Yen) per unit) for pools at sports clubs, that will be produced and distributed in Japan for the next 12 months.


Other than the provision of alternating business planning costs discussed above,
	    the Company estimates that its operating overhead, which includes general and
	    administrative charges, will be approximately $120,000 for the next 12 months.
	    This amount is comprised of the following estimated costs; $10,000 in annual
	    salaries for office personnel and consultants, $50,000 for rent, $20,000 for
	    professional fees and $20,000 for miscellaneous expenses. The Company does
	    not anticipate paying salaries to any of its officers for the next 12 months.
	    The Company has sufficient cash on hand to support its overhead for the next
	    12 months but no material commitments for capital at this time other than as
	    described above.  The Company and/or Amanasu Holdings will need issue and sell
	    the shares to gain the capital of the operation.
		On April 8, 2005, the Company") entered into an agreement with Mr. Izuo Kato ("Mr. Kato")
		to loan $94,000 to Kato for the purpose of marketing, researching, development, networking
		and other expenses regarding a marketing promotion of the Company's products. Mr. Kato is
		the sole representative of the Company in the Japan area, and he strives for the Company
		to move on to a new stage where the Company could commence sales of its products
		and earn a profit.  The Company loans him such amount to facilitate his project
		and assist in the success of the operation.  Mr. Kato was expected to reimburse
		the amount on December 31, 2005; however, The Company granted Mr. Kato an extension
		of the reimbursement date to December 31, 2006.   The Company will compensate him
		depending on the level of the achievement of his mission by the time of expiration
		date of this loan contract.


The
      Company has sufficient cash on hand to support its overhead for the next 12
      months but no material commitments for capital at this time other than as
      described above.





**“Patents”**


1.
            Rotary
                kiln (Patent number 3564012, as of July 2nd,
                2005); 2. Rotary kiln-Taiwan (Patent number 131102, as of August
                21st,
                2001); 3. Gas lark (petition number 2000-358861, patent pending);
                4. Ash
                melting furnace and incinerating system (petition number 2002-325560,
                patent pending); 5. The interior wall of the kiln (petition number
                2004-208198, patent pending); and 6. The method of cooling down the
                kiln
                (petition number 2004-208199, patent pending)





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MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





The
      Company did not generate any revenues for the three months ended September
      30,
      2005 or for the same period in 2004 except for interest earned in bank deposits
      in the amount of $18,071 and $24 respectively.





Total
      expenses for the nine months period ending September 30, 2005 was $258,550
      compared to $87,148 for the same period of 2004. The increase was due
      principally to higher rent, the result of opening a Tokyo office during the
      quarter.





Total
      expenses for the three months period ending September 30, 2005 was $ 89,402
      compared to $29,082 for the same period in 2004. The increase was due to an
      increase in management and marketing activities in Tokyo.





The
      Company sold 1,000,000 shares of its common stock at $3.50 per share to Hisako
      Kodaka and obtained proceeds of $3,500,000 during the first three months of
      2005. The Company believes that the amount of liquidity and capital resources
      will be sufficient for the operation of the Company for next 12
      months.








LIQUIDITY
      AND CAPITAL RESOURCES





In
      the
      nine months ended September 30, 2005 cash used in operating activities was
      $305,698 compared to $ 69,153 for the same period in 2004. The increase was
      due
      to increase in rent and expenses.





Total
      assets as of September 30, 2005 were $3,503,333 representing an increase of
      $3,171,785 from total assets of $331,548 as of December 31, 2004.











OFF-BALANCE
      SHEET ARRANGEMENTS





The
      Company has no off-balance sheet arrangements.






Item
                3:
            EFFECTIVENESS
                OF THE REGISTRANT’S DISCLOSURE CONTROLS AND
                PROCEDURES





EVALUATION
      OF DISCLOSURE CONTROLS AND PROCEDURES





The Company carried out an evaluation of the effectiveness of the Company's
		disclosure controls and procedures  (as defined by Rule 13a-15(e) under the
		Securities Exchange Act of 1934) under the supervision and with the participation
		of the Company's Chief Executive Officer and Chief Financial Officer as of a
		date within 90 days of the filings date of Form 10QSB.  Based on and as of
		the date of such evaluation, the aforementioned officers have concluded
		that the Company's disclosure controls and procedures have functioned
		effectively so as to provide information necessary whether:





(i)  this  quarterly  report  on  Form  10  QSB  contains  any  untrue
		statement  of  a  material  fact  or  omits  to  state  a  material  fact
		necessary  to  make  the  statements  made,  in  light  of  the  circumstances
		under  which  such  statements  were  made,  not  misleading  with
		respect  to the  period  covered  by  this  quarterly  report  on  Form
		10  QSB,  and(ii) the  financial  statements,  and  other  financial
		information  included  in this  quarterly  report  on  Form  10  QSB,
		fairly  present  in  all  material respects  the  financial  condition,
		results  of  operations  and  cash  flows of  the  Company  as  of,  and
		for,  the  periods  presented  in  this quarterly  report  on  Form  10  QSB.





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CHANGES
      IN INTERNAL CONTROLS





There
      have been no significant changes in the Company's internal controls or in other
      factors since the date of the Chief Executive Officer's, Chief Financial
      Officer's and Chief Accounting Officer’s evaluation that could significantly
      affect any internal control, including any corrective actions with regards
      to
      significant deficiencies and material weaknesses.








**PART2-OTHER
      INFORMATION**


Item
                1.
            LEGAL
                PROCEEDINGS


None





Item
                2.
            CHANGES
                IN SECURITEIES


None





Item
                3.
            DEFAULTS
                UPON SENIOR SECURITEIS


None


Item
                  4.
              SUBMISSION
                  OF MATTERS TO A VOTE OF
                  SECURITYHOLDERS
  None





Item
                5.
            OTHER
                INFORMATION


None





Item
                6.
            EXHIBITS


(a).
            Furnish
                the Exhibits required by Item 601 of Regulation
                S-B.





Exhibit
      31 - Certification Pursuant To Section 302 Of The
      Sarbanes-Oxley Act Of 2002.





Exhibit
      32 - Certification Pursuant To Section 906 Of The
      Sarbanes-Oxley Act Of 2002.





(b)
            Reports
                on Form 8-K.


None





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SIGNATURES





In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.





AMANASU
      ENVIRONMENT CORPORATION





Date:
      May 22, 2006





/s/
                Atsushi MakiAtsushi
                MakiChief
                Executive OfficerChief
                Financial OfficerChief
                Accounting Officer




16