UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM 10-Q

(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934

                  For the Quarterly Period Ended June 30, 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 0-11688


                          AMERICAN ECOLOGY CORPORATION
                          ----------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                DELAWARE                                  95-3889638
                --------                                  ----------
    (State or other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                 Identification Number)

          Lakepointe Centre I,
    300 E. Mallard Drive, Suite 300
              Boise, Idaho                                   83706
              ------------                                   -----
(Address of principal executive offices)                  (Zip Code)


                                 (208) 331-8400
                                 --------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Sections 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 Exchange Act).
                                Yes [X]   No [ ]

At July 29, 2005 Registrant had outstanding 17,635,919 shares of its Common
Stock.


<PAGE>
<TABLE>
<CAPTION>
                                AMERICAN ECOLOGY CORPORATION
                           QUARTERLY REPORT ON FORM 10-Q FOR THE
                              THREE MONTHS ENDED JUNE 30, 2005


                                     TABLE OF CONTENTS


                               PART I.  FINANCIAL INFORMATION


                                                                                       PAGE
<S>                                                                                    <C>
Item 1.   Financial Statements

          Consolidated Balance Sheets
            (Unaudited)                                                                   4

          Consolidated Statements of Operations
            (Unaudited)                                                                   5

          Consolidated Statements of Cash Flows
            (Unaudited)                                                                   6

          Notes to Consolidated Financial Statements                                      7

Item 2.   Management's Discussion and Analysis of Financial Condition and Results of
          Operations                                                                     15

Item 3.   Quantitative and Qualitative Disclosures About Market Risk                     25

Item 4.   Controls and Procedures                                                        25


                                  PART II. OTHER INFORMATION


Item 1.   Legal Proceedings                                                              26

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds                    27

Item 3.   Defaults Upon Senior Securities                                                27

Item 4.   Submission of Matters to a Vote of Security Holders                            27

Item 5.   Other Information                                                              28

Item 6.   Exhibits                                                                       28

          Signatures                                                                     28
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
OFFICERS                                          CORPORATE OFFICE
--------                                          ----------------
<S>                                               <C>
Stephen A. Romano                                 Lakepointe Centre I
Chief Executive Officer, President and Chief      American Ecology Corporation
Operating Officer                                 300 East Mallard Drive, Suite 300
                                                  Boise, Idaho 83706
James R. Baumgardner                              (208) 331-8400
Senior Vice President, Chief Financial Officer    (208) 331-7900 (fax)
Treasurer and Secretary                           www.americanecology.com
                                                  -----------------------

Michael J. Gilberg
Vice President and Controller

Steven D. Welling                                 COMMON STOCK
Vice President, Sales & Marketing                 ------------
                                                  American Ecology Corporation's common stock
                                                  trades on the Nasdaq National Market under the
John M. Cooper                                    symbol ECOL.
Vice President and Chief Information Officer


DIRECTORS                                         FINANCIAL REPORTS
---------                                         -----------------
Edward F. Heil, Chairman                          A copy of American Ecology Corporation
Independent Businessman                           Annual and Quarterly Reports, as filed on Form 10-K
                                                  and 10-Q with the Securities and Exchange
Rotchford L. Barker                               Commission, may be obtained by writing:
Independent Businessman                           Lakepointe Centre I
                                                  300 E. Mallard Drive, Suite 300
Roy C. Eliff                                      Boise, Idaho 83706
Independent Businessman                           or at www.americanecology.com
                                                        -----------------------

Kenneth C. Leung
Managing Director of Investment Banking, Sanders
Morris Harris                                     TRANSFER AGENT
                                                  --------------
                                                  American Stock Transfer & Trust Company
Richard Riazzi                                    59 Maiden Lane
Independent Businessman                           New York, New York 10038
                                                  (718) 921-8289
Stephen A. Romano                                 or at www.amstock.com
Chief Executive Officer, President and Chief            ---------------
Operating Officer

General Jimmy D. Ross                             AUDITOR
U.S. Army, Retired                                -------
                                                  Moss Adams LLP
General Richard T. Swope                          1001 Fourth Avenue, Suite 2900
U.S. Air Force, Retired                           Seattle, WA  98154
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
-----------------------------
ITEM 1. FINANCIAL STATEMENTS.

                                       AMERICAN ECOLOGY CORPORATION
                                  CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                                   ($ IN 000'S EXCEPT PER SHARE AMOUNTS)


                                                                        June 30, 2005   December 31, 2004
                                                                        --------------  ------------------
<S>                                                                     <C>             <C>
ASSETS
Current Assets:
  Cash and cash equivalents                                             $        1,685  $            2,160
  Short term investments                                                        10,960              10,967
  Receivables, net                                                              13,636               8,963
  Insurance receivable                                                             636               1,285
  Prepayments and other                                                          2,616               1,469
  Deferred income taxes                                                          5,613               5,613
                                                                        --------------  ------------------
    Total current assets                                                        35,146              30,457

Property and equipment, net                                                     32,008              27,363
Facility development costs                                                       6,478               6,478
Other assets                                                                     1,136                 462
Deferred income taxes                                                           10,338              12,473
                                                                        --------------  ------------------
    Total assets                                                        $       85,106  $           77,233
                                                                        ==============  ==================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Current portion of long term debt                                     $        1,459  $            1,457
  Accounts payable                                                               3,176               3,022
  Dividends payable                                                              2,645                  --
  Deferred revenue                                                               1,248                 724
  State burial fees payable                                                      1,541               1,446
  Management incentive plan payable                                                630                 934
  Customer advances                                                              1,364                  --
  Customer refunds                                                                  --               2,512
  Accrued liabilities                                                            1,443                 725
  Accrued closure and post closure obligation, current portion                   2,323               2,323
                                                                        --------------  ------------------
    Total current liabilities                                                   15,829              13,143

Long term debt                                                                   2,004               2,734
Long term customer advances                                                      2,136                  --
Long term accrued liabilities                                                      522                 441
Accrued closure and post closure obligation, excluding current portion           9,385               9,304
                                                                        --------------  ------------------
    Total liabilities                                                           29,876              25,622
                                                                        --------------  ------------------

Commitments and contingencies
Shareholders' equity:
  Convertible preferred stock, 1,000,000 shares authorized,
  Common stock, $.01 par value, 50,000,000 authorized, 17,635,709
    and 17,398,494 shares issued and outstanding                                   176                 174
  Additional paid-in capital                                                    52,715              51,015
  Retained earnings                                                              2,339                 422
                                                                        --------------  ------------------
    Total shareholders' equity                                                  55,230              51,611
                                                                        --------------  ------------------

Total Liabilities and Shareholders' Equity                              $       85,106  $           77,233
                                                                        ==============  ==================
</TABLE>

See notes to consolidated financial statements


                                        4
<PAGE>
<TABLE>
<CAPTION>
                                      AMERICAN ECOLOGY CORPORATION
                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                                              (UNAUDITED)
                                 ($ IN 000'S EXCEPT PER SHARE AMOUNTS)


                                                          Three Months Ended      Six Months Ended
                                                               June 30,                June 30,
                                                           2005        2004        2005        2004
                                                        ----------  -----------  --------  ------------
<S>                                                     <C>         <C>          <C>       <C>
Revenue                                                 $   18,779  $   13,795   $31,333   $    27,700
Direct operating costs                                       9,559       7,449    18,272        15,061
                                                        ----------  -----------  --------  ------------

Gross profit                                                 9,220       6,346    13,061        12,639
Selling, general and administrative expenses                 3,358       2,578     5,872         5,450
Business interruption insurance claim                           --          --       (41)           --
                                                        ----------  -----------  --------  ------------
Operating income                                             5,862       3,768     7,230         7,189

Interest income                                                 93          45       178            81
Interest expense                                                48          49        95            98
Other income                                                    22          20        39            65
                                                        ----------  -----------  --------  ------------

Income before income tax and discontinued operations         5,929       3,784     7,352         7,237
Income tax (benefit) expense                                 2,223     (11,338)    2,790       (10,174)
                                                        ----------  -----------  --------  ------------

Income before discontinued operations                        3,706      15,122     4,562        17,411
Gain from discontinued operations - Oak Ridge Facility          --         920        --         1,069
                                                        ----------  -----------  --------  ------------

Net income                                              $    3,706  $   16,042   $ 4,562   $    18,480
                                                        ==========  ===========  ========  ============

Basic earnings from continuing operations                      .21         .88       .26          1.02
Basic earnings from discontinued operations                     --         .05        --           .06
                                                        ----------  -----------  --------  ------------
Basic earnings per share                                $      .21  $      .93   $   .26   $      1.08
                                                        ==========  ===========  ========  ============

Diluted earnings from continuing operations                    .21         .85       .26           .98
Diluted earnings from discontinued operations                   --         .05        --           .06
                                                        ----------  -----------  --------  ------------
Diluted earnings per share                              $      .21  $      .90   $   .26   $      1.04
                                                        ==========  ===========  ========  ============

Dividends paid per common share                         $       --  $       --   $    --   $        --
                                                        ==========  ===========  ========  ============
</TABLE>

See notes to consolidated financial statements.


                                        5
<PAGE>
<TABLE>
<CAPTION>
                              AMERICAN ECOLOGY CORPORATION
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (UNAUDITED, $ IN 000'S)


                                                              Six Months Ended June 30,
                                                        -------------------------------
                                                                  2005             2004
                                                        --------------  ---------------
<S>                                                     <C>             <C>
Cash flows from operating activities:
  Net income                                            $       4,562   $       18,480
  Adjustments to reconcile net income to net
      cash provided by operating activities:
  Depreciation, amortization, and accretion                     3,066            3,029
  Income from discontinued operations                              --           (1,069)
  Income tax benefit on exercise of stock options                 652               --
  Deferred tax asset                                            2,135          (10,171)
  Stock compensation                                              180               --
Changes in assets and liabilities:
  Receivables                                                  (4,673)           3,059
  Other assets                                                 (1,874)            (685)
  Closure and post closure obligation                            (460)            (382)
  Income taxes payable/receivable                                  --             (201)
  Accounts payable and accrued liabilities                      2,256            1,494
                                                        --------------  ---------------
      Net cash provided by operating activities                 5,844           13,554

Cash flows from investing activities:
  Capital expenditures                                         (7,217)          (2,394)
  Proceeds from sale of assets                                    749              106
  Transfers from cash to short tem investments, net                 7           (6,398)
                                                        --------------  ---------------
      Net cash used by investing activities                    (6,461)          (8,686)

Cash flows from financing activities:
  Payments of indebtedness                                       (728)            (758)
  Retirement of common stock warrants                              --           (5,500)
  Stock options exercised                                         870              511
                                                        --------------  ---------------
      Net cash provided (used) by financing activities            142           (5,747)
                                                        --------------  ---------------

Increase (decrease) in cash and cash equivalents                 (475)            (879)
Net cash used in discontinued operations                           --           (2,594)
Cash and cash equivalents at beginning of period                2,160            6,674
                                                        --------------  ---------------
Cash and cash equivalents at end of period              $       1,685   $        3,201
                                                        ==============  ===============

Supplemental disclosures of cash flow information:
Cash paid during the year for:
  Interest                                              $          95   $           98
  Income taxes paid                                                 4              201
Non-cash investing and financing activities:
  Common stock dividends accrued                                2,645               --
  Common stock issued for director compensation                   180               --
</TABLE>

See notes to consolidated financial statements.


                                        6
<PAGE>
AMERICAN ECOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  BASIS OF PRESENTATION

In  the opinion of management, the accompanying unaudited consolidated financial
statements  contain  all adjustments and disclosures necessary to present fairly
the  financial  position,  results  of  operations,  and  cash flows of American
Ecology  Corporation  and  its  wholly-owned subsidiaries (the "Company"). These
financial  statements and notes should be read in conjunction with the financial
statements  and  notes included in the Company's 2004 Annual Report on Form 10-K
for  the  year  ended  December 31, 2004, filed with the Securities and Exchange
Commission.

Certain  reclassifications of prior quarter amounts have been made to conform to
current  quarter  presentation,  none  of  which  affect previously recorded net
income.

NOTE  2.  EARNINGS  PER  SHARE

Basic  earnings  per  share are computed based on net income available to common
shareholders and the weighted average number of common shares outstanding during
the  quarter.  Diluted earnings per share reflect the assumed issuance of common
shares  for  outstanding  options and conversion of warrants. The computation of
diluted  earnings per share does not assume exercise or conversion of securities
whose  exercise  price  is greater than the average common share market price as
the  assumed  conversion  of these securities would increase earnings per share.
The computation of diluted loss per share does not assume exercise or conversion
of  any  securities  as the assumed conversion of securities would decrease loss
per  share.

<TABLE>
<CAPTION>
                                                            Three Months Ended       Six Months Ended
                                                          ----------------------  ---------------------
                                                                 June 30,               June 30,
                                                          ----------------------  ---------------------
      ($in thousands except per share amounts)               2005        2004        2005       2004
                                                          ----------  ----------  ----------  ---------
<S>                                                       <C>         <C>         <C>         <C>

Income before discontinued operations                     $    3,706  $   15,122  $    4,562  $  17,411
Income from operations of discontinued segments                   --         920          --      1,069
                                                          ----------  ----------  ----------  ---------
Net income                                                $    3,706  $   16,042  $    4,562  $  18,480
                                                          ==========  ==========  ==========  =========

Weighted average shares outstanding-
  Common shares                                               17,509      17,202      17,460     17,146
  Effect of dilutive stock options                               436         641         421        584
                                                          ----------  ----------  ----------  ---------

Average shares                                                17,945      17,843      17,881     17,730
                                                          ==========  ==========  ==========  =========

Basic earnings per share from continuing operations       $      .21  $      .88  $      .26  $    1.02
Basic earnings per share from discontinued operations             --         .05          --        .06
                                                          ----------  ----------  ----------  ---------
Basic earnings per share                                  $      .21  $      .93  $      .26  $    1.08
                                                          ==========  ==========  ==========  =========

Diluted earnings per share from continuing operations     $      .21  $      .85  $      .26  $     .98
Diluted earnings per share from discontinued operations           --         .05          --        .06
                                                          ----------  ----------  ----------  ---------
Diluted earnings per share                                $      .21  $      .90  $      .26  $    1.04
                                                          ==========  ==========  ==========  =========
</TABLE>


NOTE 3.  EQUITY

On  May  26,  2005  the  Company declared a dividend of $.15 per common share to
stockholders  of  record  on July 1, 2005.  The dividend was paid out of cash on
hand  on  July  15,  2005  and  totaled  $2,645,000.

NOTE 4.  LINE OF CREDIT

On  May  25,  2005  the  Company  entered  into  an  Amended and Restated Credit
Agreement  with  Wells  Fargo  Bank


                                        7
<PAGE>
("Bank") which extended its $8,000,000 line of credit maturity to June 15, 2007,
eliminated  the  Bank's  security  interest  in  Company assets and, among other
things,  allowed for the payment of quarterly dividends and/or stock repurchases
subject  to  specified  covenants.

NOTE  5.  OPERATING  SEGMENTS

The  Company  operates  within  two  segments, Operating Disposal Facilities and
Non-Operating Disposal Facilities, based on its internal reporting structure and
nature  of  services offered. The Operating Disposal Facility segment represents
facilities accepting hazardous and radioactive waste. The Non-Operating Disposal
Facility  segment  represents  facilities that are no longer accepting hazardous
and/or radioactive waste or formerly proposed new disposal facilities.

On December 27, 2002, the Company committed to discontinue commercial operations
within  its  Processing  and  Field  Services  segment  which  aggregated,
volume-reduced,  and  performed  remediation  and  other services on radioactive
material,  but  excluded  processing  performed  at its disposal facilities. All
prior  segment  information has been restated in order to present the operations
at  its  former  Oak  Ridge  facility  and associated Field Services division as
discontinued  operations.  On  June  30,  2004  the  Oak Ridge assets were sold.

Income  taxes are assigned to Corporate, but all other items are included in the
segment  where  they originated. Inter-company transactions have been eliminated
from the segment information and are not significant between segments.

Summarized financial information concerning the Company's reportable segments is
shown  in  the  following  table:

<TABLE>
<CAPTION>
($in thousands)                     Operating     Non-Operating    Discontinued
                                     Disposal       Disposal      Processing and
                                    Facilities     Facilities     Field Services    Corporate     Total
<S>                                <C>           <C>              <C>              <C>          <C>
THREE MONTHS ENDED JUNE 30, 2005
--------------------------------
Revenue                            $    18,762   $           17   $            --  $       --   $ 18,779
Direct operating cost                    9,456              103                --          --      9,559
                                   ------------  ---------------  ---------------  -----------  ---------
Gross profit (loss)                      9,306              (86)               --          --      9,220
S,G&A                                    1,257                2                --       2,099      3,358
                                   ------------  ---------------  ---------------  -----------  ---------
Income (loss) from operations            8,049              (88)               --      (2,099)     5,862
Interest income, net                        10               --                --          35         45
Other income                                22               --                --          --         22
                                   ------------  ---------------  ---------------  -----------  ---------
Income (loss) before income tax
and discontinued operations              8,081              (88)               --      (2,064)     5,929
Income tax expense (benefit)                --               --                --       2,223      2,223
                                   ------------  ---------------  ---------------  -----------  ---------
Net Income (loss)                        8,081              (88)               --      (4,287)     3,706
                                   ============  ===============  ===============  ===========  =========
Depreciation, amortization, and
accretion                          $     1,588   $           95   $            --  $        7   $  1,690
Capital Expenditures               $     4,685   $            3   $            --  $       --   $  4,688
Total Assets                       $    46,702   $        6,545   $            --  $   31,859   $ 85,106
THREE MONTHS ENDED JUNE 30, 2004
--------------------------------
Revenue                            $    13,762   $           33   $            --  $       --   $ 13,795
Direct operating cost                    7,335              114                --          --      7,449
                                   ------------  ---------------  ---------------  -----------  ---------
Gross profit (loss)                      6,427              (81)               --          --      6,346
S,G&A                                    1,147               19                --       1,412      2,578
                                   ------------  ---------------  ---------------  -----------  ---------
Income (loss) from operations            5,280             (100)               --      (1,412)     3,768
Interest expense (income)                  (14)              --                --          18          4
Other income                                 4                2                --          14         20
                                   ------------  ---------------  ---------------  -----------  ---------
Income (loss) before income tax
and discontinued operations              5,298              (98)               --      (1,416)     3,784
Income tax expense (benefit)                --               --                --     (11,338)   (11,338)
Discontinued operations                     --               --               920          --        920
                                   ------------  ---------------  ---------------  -----------  ---------
Net Income (loss)                        5,298              (98)              920       9,922     16,042
                                   ============  ===============  ===============  ===========  =========
Depreciation, amortization, and
accretion                          $     1,531   $            2   $            --  $        8   $  1,541
Capital Expenditures               $     1,427   $           --   $            --  $       32   $  1,427
Total Assets                       $    37,150   $        6,539   $            --  $   31,138   $ 74,827
</TABLE>


                                        8
<PAGE>
<TABLE>
<CAPTION>
                                   Operating     Non-Operating     Discontinued
                                    Disposal       Disposal       Processing and
                                   Facilities     Facilities      Field Services    Corporate     Total
<S>                               <C>           <C>              <C>               <C>          <C>
SIX MONTHS ENDED JUNE 30, 2005
------------------------------
Revenue                           $    31,299   $           34   $            --   $       --   $ 31,333
Direct operating cost                  18,063              209                --           --     18,272
                                  ------------  ---------------  ----------------  -----------  ---------
Gross profit (loss)                    13,236             (175)               --           --     13,061
S,G&A                                   2,364                7                --        3,501      5,872
BI claim                                  (41)              --                --           --        (41)
                                  ------------  ---------------  ----------------  -----------  ---------
Income (loss) from operations          10,913             (182)               --       (3,501)     7,230
Interest income, net                       20               --                --           63         83
Other Income (expense)                     39               --                --           --         39
                                  ------------  ---------------  ----------------  -----------  ---------
Income (loss) before income tax        10,972             (182)               --       (3,438)     7,352
Income tax expense                         --               --                --        2,790      2,790
                                  ------------  ---------------  ----------------  -----------  ---------
Net Income (loss)                      10,972             (182)               --       (6,228)     4,562
                                  ============  ===============  ================  ===========  =========
Depreciation, amortization, and
accretion                         $     2,861   $          190   $            --   $       15   $  3,066
Capital Expenditures              $     7,214   $            3   $            --   $       --   $  7,217
Total Assets                      $    46,702   $        6,545   $            --   $   31,859   $ 85,106
SIX MONTHS ENDED JUNE 30, 2004
------------------------------
Revenue                           $    27,653   $           47   $            --   $       --   $ 27,700
Direct operating cost                  14,838              223                --           --     15,061
                                  ------------  ---------------  ----------------  -----------  ---------
Gross profit (loss)                    12,815             (176)               --           --     12,639
S,G&A                                   2,371               24                --        3,055      5,450
                                  ------------  ---------------  ----------------  -----------  ---------
Income (loss) from operations          10,444             (200)               --       (3,055)     7,189
Interest expense (income)                 (25)              --                --           42         17
Other Income (expense)                     18               19                --           28         65
                                  ------------  ---------------  ----------------  -----------  ---------
Income (loss) before income tax
and discontinued operations            10,487             (181)               --       (3,069)     7,237
Income tax expense (benefit)               --               --                --      (10,174)   (10,174)
Discontinued operations                    --               --            (1,069)          --      1,069
                                  ------------  ---------------  ----------------  -----------  ---------
Net Income (loss)                      10,487             (181)           (1,069)       7,105     18,480
                                  ============  ===============  ================  ===========  =========
Depreciation, amortization, and
accretion                         $     3,009   $            4   $            --   $       16   $  3,029
Capital Expenditures              $     2,362   $           --   $            --   $       32   $  2,394
Total Assets                      $    37,150   $        6,539   $            --   $   31,138   $ 74,827
</TABLE>

NOTE 6.  STOCK OPTION PLANS

The  Company  had  two  stock-based  compensation plans, which are accounted for
under  the  recognition  and  measurement  principles  of  APB  Opinion  No. 25,
Accounting  for  Stock  Issued  to  Employees  and  related  Interpretations. No
stock-based employee compensation cost is reflected in net income. The following
table  illustrates  the effect on net income and earnings per share applying the
fair  value  recognition  provisions  of  FASB Statement No. 123, Accounting for
Stock-Based  Compensation  to  stock-based  compensation  for  the three and six
months  ended  June  30,  2005  and  2004:


                                        9
<PAGE>
<TABLE>
<CAPTION>
                                                                    Three Months Ended        Six Months Ended
                                                              ------------------------  ----------------------
                                                                     2005         2004        2005        2004
                                                              -----------  -----------  ----------  ----------
<S>                                                           <C>          <C>          <C>         <C>
Net income, as reported                                       $    3,706   $   16,042   $   4,562   $  18,480
Deduct: Total stock-based employee compensation expense
determined under fair value based method for all awards, net
of related tax effects                                               (94)        (520)       (227)       (614)
                                                              -----------  -----------  ----------  ----------
Pro forma net income                                          $    3,612   $   15,522   $   4,335   $  17,866
                                                              ===========  ===========  ==========  ==========

EARNINGS PER SHARE:
  Basic - as reported                                         $      .21   $      .93   $     .26   $    1.08
                                                              ===========  ===========  ==========  ==========
  Basic - pro forma                                           $      .21   $      .90   $     .25   $    1.04
                                                              ===========  ===========  ==========  ==========
  Diluted - as reported                                       $      .21   $      .90   $     .26   $    1.04
                                                              ===========  ===========  ==========  ==========
  Diluted - pro forma                                         $      .20   $      .87   $     .24   $    1.00
                                                              ===========  ===========  ==========  ==========
</TABLE>


The  stock option plan summary and changes during the three and six months ended
June  30  are  as  follows:

<TABLE>
<CAPTION>
                                                                    Three Months Ended         Six Months Ended
                                                                 ------------------------  -----------------------
                                                                        2005         2004        2005         2004
                                                                 -----------  -----------  ----------  -----------
<S>                                                              <C>          <C>          <C>         <C>
Options outstanding, beginning of period                            878,408    1,125,181     913,708    1,266,281
Granted                                                                  --       57,500       7,500       57,500
Exercised                                                          (179,377)     (36,400)   (222,177)    (177,500)
Canceled                                                            (25,000)     (55,000)    (25,000)     (55,000)
                                                                 -----------  -----------  ----------  -----------
Options outstanding, end of period                                  674,031    1,091,281     674,031    1,091,281
                                                                 ===========  ===========  ==========  ===========

Weighted average exercise price of options, beginning of period  $     4.50   $     4.08   $    4.40   $     3.90
Weighted average exercise price of options granted               $       --   $     9.20   $   11.53   $     9.20
Weighted average exercise price of options exercised             $     4.01   $     3.95   $    3.92   $     2.79
Weighted average exercise price of options canceled              $     4.00   $    10.13   $    4.00   $    10.13
Weighted average exercise price of options, end of period        $     4.65   $     4.05   $    4.65   $     4.05

Options exercisable at end of period                                521,361      785,941     521,361      785,941
                                                                 ===========  ===========  ==========  ===========

Options available for future grant at end of period                 188,976      507,176     188,976      507,176
                                                                 ===========  ===========  ==========  ===========
</TABLE>


The following table summarizes information about the stock options outstanding
under the Company's option plans as of June 30, 2005

<TABLE>
<CAPTION>
                        Weighted
                         average                       Weighted                      Weighted
                        remaining                       average                       average
 Range of exercise  contractual life     Number     exercise price     Number     exercise price
  price per share        (years)       outstanding     per share     exercisable     per share
------------------  -----------------  -----------  ---------------  -----------  ---------------
<S>                 <C>                <C>          <C>              <C>          <C>
   1.00 - $1.47            2.2             27,500  $          1.26       27,500  $          1.26
   1.60 - $2.25            3.9             20,000  $          2.13       20,000  $          2.13
   2.42 - $3.50            7.4            184,732  $          2.93      130,336  $          2.90
   3.75 - $4.50            7.3            258,046  $          4.41      194,585  $          4.38
       6.50                7.6            131,253  $          6.50       96,440  $          6.50
   9.20 - $12.15           9.1             52,500  $          9.95       52,500  $          9.95
                                       -----------                   -----------
                                           674,031                       521,361
                                       ===========                   ===========
</TABLE>


                                       10
<PAGE>
As  of  June  30,  2005,  the  1992  Stock Option Plan for Employees had options
outstanding  to  purchase  514,331  common  shares with 188,976 shares remaining
available for issuance under option grants.

Effective  March  28, 2005, the Company's Board of Directors terminated the 1992
Amended  and  Restated  Outside  Director  Stock  Option Plan, except for option
grants  then  outstanding.  As  of June 30, 2005 the 1992 Outside Director Stock
Option Plan had options outstanding to purchase 159,700 common shares.

The  fair  value  of  each  option  grant  is  estimated using the Black-Scholes
option-pricing  model  with  the following weighted-average assumptions used for
grants during the three and six months ended June 30:

<TABLE>
<CAPTION>
                                               Three Months Ended June 30        Six Months Ended June 30
                                            -----------------------------  ------------------------------
                                                    2005             2004            2005            2004
                                            ------------  ---------------  --------------  --------------
<S>                                         <C>           <C>              <C>             <C>
Expected volatility                                   --              73%             50%             73%
Risk-free interest rates                              --            4.72%            4.1%           4.72%
Expected lives                                        --        10 years        10 years        10 years
Dividend yield                                        --               0%            2.7%              0%
Weighted-average fair value of options
granted during the quarter (Black-Scholes)            --  $         7.42   $        5.28   $        7.42
</TABLE>

NOTE 7.  2005 NON-EMPLOYEE DIRECTOR COMPENSATION PLAN

The  2005  Non-Employee  Director  Compensation  Plan  ("Plan")  was approved by
shareholders at the Company's May 25, 2005 Annual Meeting. The Plan provides for
Non-Employee  Directors  to  be  paid an annual retainer of $16,000 in cash plus
$25,000  in  restricted  stock.  The  Plan  also  provides for each Non-Employee
Director  to be paid a meeting fee of $750 or $1,000 for each Committee or Board
meeting  that  they attend, as well as an additional payment, when appointed, of
$4,000  for  each standing committee Chairman and $20,000 to the Chairman of the
Board.  The  current  Chairman has elected to waive the chairman's fee for 2005.

As  of  June  30, 2005, 14,700 shares of restricted stock had been issued to the
Non-Employee Directors and 185,300 shares of stock remain available for issuance
under  the  Plan.

NOTE 8.  LITIGATION

Significant  developments  have  occurred  on  the following legal matters since
December  31,  2004:

ENTERGY  ARKANSAS,  INC.  ET  AL, CENTRAL INTERSTATE LOW-LEVEL RADIOACTIVE WASTE
--------------------------------------------------------------------------------
COMMISSION  AND  US  ECOLOGY,  INC. ("PLAINTIFFS") V. STATE OF NEBRASKA, ET AL.,
------------------------------------------------------------------------------
CASE NO. 4:98CV3411, U.S. DISTRICT COURT, DISTRICT OF NEBRASKA

This  action was brought in federal court in December 1999 by electric utilities
that  generate  LLRW  within  the Central Interstate Low-Level Radioactive Waste
Compact  ("CIC"). The action sought declaratory relief and damages for bad faith
in the State of Nebraska's processing and denial of the Company's application to
develop  and  operate  a LLRW disposal facility near Butte, Nebraska. US Ecology
was  the  CIC's  contractor  and  intervened  as  a  plaintiff.

In  September  2002,  the US District Court for the District of Nebraska entered
judgment  against  Nebraska  in  favor  of  the  CIC for $153 million, including
approximately  $50 million for prejudgment interest. Of this amount, USE's share
was $6.2 million plus $6.1 million for prejudgment interest. The Company carries
$6.5  million  on  its balance sheet for capitalized facility development costs.
The  State  appealed  the judgment to the Eighth Circuit Court of Appeals, which
affirmed  the  District  Court  ruling  in  its  entirety.

On August 9, 2004 Nebraska and the CIC entered into a settlement under which the
State  agreed to pay in full, or to make four equal payments of $38.5 million to
the  CIC  beginning  August  1,  2005  and  annually  thereafter  for  three


                                       11
<PAGE>
years.  The  full  $154 million settlement reflects a principal amount of $140.5
million,  plus  interest  of  3.75%  compounded annually and beginning August 1,
2004.  During  its  2005 session, the Nebraska legislature appropriated the full
$154 million settlement amount to the State Attorney General's Office.

On  July 15, 2005, the CIC adopted a resolution to pay the Company approximately
$11,800,000 provided that CIC receives a 'substantial' payment from the State of
Nebraska.  No  assurance  can  be  given that the Nebraska Attorney General will
remit  the  full  settlement amount to the CIC and that the Company will receive
the  funds  settling  its  claim  as  resolved  by  the  CIC.

MANCHAK  V.  US  ECOLOGY,  INC., U.S. DISTRICT COURT FOR THE DISTRICT OF NEVADA,
--------------------------------
CASE  NO.  CV-S-97-0655.

In  April  1996, Frank Manchak, Jr. ("Manchak") filed suit against subsidiary US
Ecology,  Inc.,  alleging infringement of a sludge treatment patent to stabilize
hazardous  waste  at  the  Company's  Beatty,  Nevada  hazardous waste facility.
Manchak  sought  unspecified damages for infringement, treble damages, interest,
costs  and  attorney fees. In October 2002, the United States District Court for
the  District of Nevada dismissed the matter. Manchak's subsequent appeal to the
U.S.  Court  of  Appeals  for  the  Federal  Circuit was also dismissed, and his
requests  for  reconsideration and en banc review were rejected in October 2003.
In  January 2004, Manchak filed a Rule 60(b) motion in the Nevada District Court
seeking  relief  from  that  Court's  orders  granting  summary  judgment  of
non-infringement  and  denying  reconsideration.  Manchak  appealed a March 2004
District  Court  order. On March 18, 2005 the United States Court of Appeals for
the Federal Circuit affirmed the lower Court's ruling rejecting Manchak's claim.
The  Company  considers  the  matter  closed.

DAVID  W.  CROW  V.  AMERICAN ECOLOGY CORPORATION, U.S. DISTRICT COURT OF HARRIS
--------------------------------------------------
COUNTY,  TEXAS;  280TH  JUDICIAL  DISTRICT.

Former  employee  David  Crow alleged he was hired by the Company as its General
Counsel  in  October  1995 and that his compensation package included options to
purchase  Company  common stock with an oral agreement that the options would be
exercisable  for  ten  years.  The complaint alleged breach of written contract,
breach  of  oral  contract, fraudulent inducement, and declaratory judgment that
Crow is entitled to purchase 150,000 shares of stock at a strike price of $4 per
share.

Mr.  Crow's  lawsuit, initially filed in Harris County (Texas) District Court in
May  2004  was  removed to federal court. Mr. Crow, the Plaintiff, estimated his
damages  in the Complaint as between $1,050,000 and $1,258,500 based on the then
value of the Company's stock. On June 13, 2005, the United States District Court
for  the  Southern  District  of  Texas  granted the Company's motion of summary
judgment. In early July, the deadline for timely appeal passed without any known
filing by Crow. The Company considers the matter closed.

US ECOLOGY, INC. V. THE STATE OF CALIFORNIA, ET AL., CASE NO.GIC747562, SUPERIOR
---------------------------------------------------
COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN DIEGO

In 2000, subsidiary US Ecology, Inc. sued the State of California in state court
for  monetary  damages  exceeding  $162  million  based  on California's alleged
abandonment of the formerly proposed Ward Valley LLRW disposal project. In March
2003,  the  Superior  Court ruled that the Company failed to establish causation
and that its claim was further barred by the doctrine of unclean hands. Based on
the trial court's adverse decision, the Company wrote off a $20,951,000 deferred
site  development  asset  on  March  31, 2003. In June 2003, the Company filed a
notice of appeal with the California Fourth Appellate District Court. On May 25,
2005,  the  California  Court  of Appeal, Fourth Appellate District affirmed the
trial  court.  No further appeal is planned and the matter is considered closed.

NOTE 9.   COMMITMENTS AND CONTINGENCIES

Effective  January  1,  2003,  the  Company  established  the  American  Ecology
Corporation  Management  Incentive Plan ("MIP"). The Plan provides for specified
participants  to  receive bonuses based on pre-tax operating income levels. Plan
bonuses  are  to  be paid out over three years with a maximum in any one year of
$1,125,000  if  pre-tax  operating  income exceeds $12,000,000 including all MIP
costs.  The  Company  has  accrued  for  the  MIP  as  follows:


                                       12
<PAGE>
<TABLE>
<CAPTION>
                                  Three Months Ended June 30,      Six Months Ended June 30,
                               ------------------------------  -----------------------------
($in thousands)                         2005             2004           2005            2004
                               -------------  ---------------  -------------  --------------
<S>                            <C>            <C>              <C>            <C>
MIP expense included in SG&A   $         541  $           322  $         541  $          614
</TABLE>

In  June 2005, the Company entered into a five year operating lease for 152 rail
cars  at  $475  a  month  for  each  car  leased.

On  June  27,  2005,  the  Company  committed  to  purchase  75 rail cars for an
aggregate  purchase  price  of  $5,400,000

On  May  26,  2005  the  Company declared a dividend of $.15 per common share to
stockholders  of  record on July 1, 2005 and payable July 15, 2005.  The Company
intends  that shareholders of record on October 3, 2005 and January 2, 2006 will
also  receive  a  $.15  per share dividend subject to compliance with applicable
Bank  covenants.

NOTE 10.  CLOSURE AND POST CLOSURE OBLIGATIONS

Closure and post closure obligations are recorded when environmental assessments
and/or  remedial efforts are probable, and the costs can be reasonably estimated
consistent  with Statement of Financial Accounting Standards ("SFAS") No. 5 with
the  liability  calculated in accordance with SFAS No. 143. The Company performs
periodic  reviews  of  both  non-operating  and operating facilities and revises
accruals for estimated post-closure, remediation and other costs when necessary.
The  Company's recorded liabilities are based on best estimates of current costs
and  are  updated  periodically  to  reflect  current  technology,  laws  and
regulations,  inflation  and  other  economic  factors.

Changes  to  reported closure and post closure obligations were as follows ($ in
thousands):

<TABLE>
<CAPTION>
                               Accrued Closure and
                             Post Closure Obligation
                            -------------------------
<S>                         <C>

January 1, 2005 obligation  $                 11,627
Accretion of obligation                          541
Payment of obligation                           (460)
Adjustment of obligation                          --
                            -------------------------
June 30, 2005 obligation    $                 11,708
                            =========================
</TABLE>

At  June  30,  2005,  none  of  the Company's assets were legally restricted for
purposes  of  meeting  closure  and  post  closure  obligations.

NOTE  11.  DISCONTINUED  OPERATIONS

During  2002,  the  Company  offered for sale its former Processing Facility and
Field  Services  operations  in  Oak Ridge, Tennessee. On December 27, 2002, the
facility  ceased  revenue-producing  operations  and  all  on-site  waste  was
subsequently  shipped to off-site processors and disposers. The Oak Ridge assets
were  sold  to  Toxco, Inc. on June 30, 2004. As of June 30, 2005, there were no
"Assets  held  for  sale  or  closure"  associated  with  discontinued Oak Ridge
operations.  The  revenue,  costs  and  expenses and cash flows for these former
operations have been excluded from continuing operations results and reported as
"Gain  (loss)  from discontinued operations" and "Net cash provided by (used in)
discontinued  operations".  Prior  periods  have  been restated to reflect this.


                                       13
<PAGE>
Operating  results for the discontinued operations were as follows for three and
six  months  ending  June  30  2004:

<TABLE>
<CAPTION>
($in thousands)                      Processing and Field
                                     Services Operations
<S>                                 <C>
Three months ending June 30, 2004
---------------------------------
Revenues, net                       $                  --
Operating income (loss)                               (10)
Net income (loss)                                     920
Basic earnings (loss) per share                       .05
Diluted earnings (loss) per share                     .05

Six months ending June 30, 2004
-------------------------------
Revenues, net                       $                  --
Operating income (loss)                               139
Net income (loss)                                   1,069
Basic earnings (loss) per share                       .06
Diluted earnings (loss) per share                     .06
</TABLE>

Costs  incurred at the former Oak Ridge facility during the three and six months
ended June 30, 2004 are summarized as follows: ($ in thousands)

<TABLE>
<CAPTION>
                                                                    Three Months    Six Months
                                                                   --------------  ------------
<S>                                                                <C>             <C>
Net operating costs in excess of previous accruals                 $         108   $       142
Additional impairment of property and equipment                               --            --
Accounts receivable collected in excess of valuation allowance               (58)         (265)
Gain on sale of facility                                                    (930)         (930)
Increase (decrease) in estimated cost to dispose of removed waste            (40)          (16)
                                                                   --------------  ------------

Net (income) for the three and six months ended June 30            $        (920)  $    (1,069)
                                                                   ==============  ============
</TABLE>

Cost  changes  for  Oak  Ridge  activities  and disposal liabilities for removed
wastes are as follows for the six months ending June 30, 2004:

<TABLE>
<CAPTION>
                          December 31,2003  Cash Payments   Adjustments   June 30,2004
                          ----------------  --------------  ------------  ------------
<S>                       <C>               <C>             <C>           <C>
Waste disposal liability               623           (358)          (16)           249
On-site discontinued
operation cost liability               442           (448)            6             --
</TABLE>

Adjustments  reflect differences between the estimated costs accrued at December
31,  actual  costs  incurred  during  the first and second quarters of 2004, and
differences between estimated and actual costs incurred for disposition of waste
removed  from  the  facility.

NOTE 12.  HONEYWELL  INTERNATIONAL  CONTRACT

On  June  8,  2005,  the  Company  entered  into  a  contract  with  Honeywell
International,  Inc.  for  transport,  treatment, and disposal of an estimated 1
million  tons  of chromite ore processing residue over an estimated four to five
year  period.  A  $3,500,000  advance  payment  was  received  from, and will be
credited back to, Honeywell during the contract term. The contract provides that
the  Company will receive substantially all of the material shipped off-site for
disposal. No assurance can be given regarding the actual amount of waste that is
ultimately  shipped  to  the  Company  under  the  contract.

NOTE 13.  PARTIAL SERVICE INTERRUPTION AT ROBSTOWN, TEXAS FACILITY

Hazardous  waste  treatment  operations at the Company's Robstown Texas facility
were  suspended  following a July 1, 2004 fire in the facility's waste treatment
building.  Treatment revenue had previously represented approximately 50% of the
Texas  facility's  revenue.  Direct disposal operations, which continued without
interruption  after  the  fire, represent the balance of the facility's revenue.
While  the  Company  is  insured  for property and equipment damage and business
interruption,  insurance  deductibles, operational upgrades and loss of customer
business  have, and may continue to negatively impact financial performance. The
facility  resumed  limited  treatment  services  in  December 2004, but will not
resume  all  permitted services until the new treatment building is operational.
The  Company  currently  expects to open the new building for waste treatment in
August  2005.


                                       14
<PAGE>
The  Company  filed  a  property  insurance  claim  and received $790,000 of the
$954,000  recognized  as  of  June  30,  2005. The balance of the claim is under
review  by  its  insurance  carrier.  The  Company  has also filed approximately
$2,400,000  in  claims under its business interruption insurance policy for July
2004  through  April  2005,  of  which  $472,000  has  been  recognized  in  the
consolidated  statement  of operations through June 30, 2005. This claim is also
under  review  by  its insurer. The Company anticipates recognizing the value of
the  claims  after  its insurer accepts or confirms amounts. No assurance can be
given  that  the Company will be able to recognize the pending insurance claims.

NOTE 14. SUBSEQUENT EVENT - WASHINGTON SUBLEASE

On  July  27,  2005  the  Company entered into a new sublease for the Washington
disposal  facility.  The  agreement  provides for a ten year sublease with four,
ten-year  renewal  options  and  an  annual inflation-adjusted rental payment of
approximately  $63,000.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

This document contains forward-looking statements that involve known and unknown
risks  and  uncertainties  which  may  cause actual results in future periods to
differ  materially from those indicated herein. These risks include, but are not
limited  to,  the  impact of the July 2004 fire at its Robstown, Texas facility,
compliance  with  and  changes  to  applicable  laws,  regulations  and permits,
enforcement  actions,  exposure to and results of litigation, access to capital,
access  to  insurance  and  financial  assurances, new technologies, competitive
environment, labor disputes, general economic conditions, and loss or diminution
of major contracts. The Form 10-K for the year ending December 31, 2004 contains
additional  risk  factors  and  an  expanded disclosure of these risks. When the
Company  uses  words  like  "will", "may," "believes," "expects," "anticipates,"
"should,"  "estimates,"  "project,"  "plans,"  their  opposites  and  similar
expressions,  the  Company is making forward-looking statements. These terms are
most  often  used  in  statements  relating  to  business  plans,  strategies,
anticipated  benefits or projections about the anticipated revenues, earnings or
other aspects of our operating results. The Company makes these statements in an
effort  to keep stockholders and the public informed about our business based on
management's current expectations about future events. Such statements should be
viewed  with  caution and are not guarantees of future performance or events. As
noted  elsewhere in this report, our business is subject to uncertainties, risks
and  other  influences,  many  of  which  the  Company  has  no  control  over.
Additionally,  these  factors,  either  alone  or  taken  together, could have a
material  adverse  effect  on  the  Company  and  could  change  whether  any
forward-looking  statement  ultimately  turns  out  to  be  true.  The  Company
undertakes  no  obligation  to  publicly  release  updates or revisions to these
statements.  The  following  discussion  should  be read in conjunction with the
audited  consolidated  financial  statements and the notes thereto filed on Form
10-K  for  the  year  ending  December  31,  2004.

Unless otherwise described, changes discussed relate to the increase or decrease
from  the  three  and six month periods ended June 30, 2004 to the three and six
month  periods  ended  June  30,  2005.

INTRODUCTION
------------

The  Company  is  a  hazardous, PCB, industrial and radioactive waste management
company  providing transportation, treatment and disposal services to commercial
and  government entities including, but not limited to nuclear power plants, oil
refineries,  chemical  manufacturing plants, steel mills, the U.S. Department of
Defense,  biomedical  facilities,  universities  and  research institutions. The
majority  of its revenues are derived from fees charged for use of the Company's
four fixed waste disposal facilities. The Company and its predecessors have been
in  business  for  52  years.

A significant portion of the Company's revenue is attributable to discrete waste
clean-up  projects  ("Event  Business")  which  vary  substantially  in size and
duration.  The one-time nature of Event Business necessarily creates variability
in  revenue and earnings. Moreover, the types and amounts of waste received from
recurring  ("Base  Business")  customers  also  varies quarter to quarter. These
variations  in  service  mix  are  difficult  to  forecast  with  precision, and


                                       15
<PAGE>
can  produce  large  quarter  to  quarter swings in revenue, gross profit, gross
margin  and operating profit. Management's strategy is to continue expanding its
recurring  customer  business while simultaneously securing both large and small
Event  Business  projects.  When the Company's Base Business covers fixed costs,
much  of  the  Event  Business  revenue  falls  through to the bottom line. This
strategy  takes advantage of the largely fixed cost nature of the waste disposal
business.

OVERALL COMPANY PERFORMANCE
---------------------------

The  Company's  operational performance for the three months ended June 30, 2005
was  substantially  improved  over  the second quarter of 2004.  All four of the
Company's  disposal  facilities  improved performance over the previous quarter,
and  3  of the 4 sites improved their performance over the same quarter in 2004.
Another significant factor in this improvement was an increase in second quarter
waste  shipments  to  the  Company's  Idaho  facility  from multiple, previously
delayed,  clean-up  projects.

Quarter  to  quarter  comparisons  were  also  materially  affected  by  several
non-operating  events  in 2004 including a gain on the Oak Ridge asset sale, and
the  reversal  of  the valuation allowance on the Company's deferred tax assets.
These  events  and  the  Honeywell  International contract are discussed in more
detail  below.

Oak Ridge Asset Disposition: On June 30, 2004 the Company sold substantially all
----------------------------
of  its  assets  and  related  environmental liabilities associated with its Oak
Ridge  operations to Toxco, Inc ("Toxco"). Toxco received $1,650,000 in cash and
$2,060,000  in  property  and  equipment. In return, Toxco assumed $4,625,000 in
estimated  environmental  and other liabilities. The Company recorded a $930,000
gain  on  sale  of the facility which is included in the results of discontinued
operations for the three months ending June 30, 2004.

Income  Tax  Expense:  Based  on  the  Company's evaluation of year-to-date 2004
---------------------
pre-tax  income, expectations of continued profitability, and disposition of the
Oak Ridge facility, the deferred tax asset's valuation allowance was reversed at
June  30,  2004.  This  resulted in an income tax benefit of $11,338,000 for the
three  months  ended  June  30,  2004.

Honeywell  International  Contract:  On  June 8, 2005 the Company entered into a
-----------------------------------
contract  to  transport, treat, and dispose of contaminated soils from a site in
Jersey  City,  New  Jersey.  Initial engineering studies estimate that 1 million
tons  of  chromite  ore processing residues are present at the Jersey City site.
Depending  on  the volume of material shipped off-site and the Company's ability
to successfully perform under the contract, the Company estimates revenue in the
range  of  $175 to $240 million over a 4 to 5 year period. A significant portion
of  the  revenue  under  the contract will include transportation services. As a
result,  management  expects  that  while  revenue  dollars  will  increase, the
Company's  gross  margin  relative  to  revenue  will  decrease.

Under  the terms of the contract, American Ecology will treat and dispose of the
contaminated  soil  at  Company  owned  hazardous waste disposal facilities. The
contract  specifies  that American Ecology will receive substantially all of the
waste  shipped  offsite,  subject to applicable contract conditions. The Company
plans  to  expand  its facilities and increase rail transport capabilities at an
estimated  cost of up to $12 million. Off-site disposal of the material began in
July  2005.  No assurance can be given regarding the actual amount of waste that
is  ultimately  shipped  to  the  Company  under  the  contract.

Transportation  Costs:  Because of increasing fuel  costs and higher  rates  for
----------------------
transportation  services, the Company's ability to compete for disposal projects
could be impacted.

CRITICAL  ACCOUNTING  POLICIES
------------------------------

In  preparing  the  financial  statements,  management  makes many estimates and
assumptions  that  affect  the  Company's  financial  position  and  results  of
operations.  Accounting  for  the  July  1,  2004  Texas Fire, Disposal Facility
Accounting,  and  Litigation  involve  subjective  judgments,  estimates  and
assumptions  that would likely produce a materially different financial position
and  result of operations if different judgments, estimates, or assumptions were
used.  These  matters  are  discussed  below.


                                       16
<PAGE>
ACCOUNTING FOR THE JULY 1, 2004 TEXAS FIRE

A  July  1, 2004 fire in the Robstown, Texas facility's waste treatment building
resulted  in  an insurance claim for Property and Equipment damaged in the fire.
As  of  December  31,  2004  the Company had fully impaired the $679,000 in book
value  of  assets  damaged in the fire and recognized $954,000 of Fire insurance
proceeds,  which  net  to  the  $275,000  net  claims  shown in the Consolidated
Statements  of Operations. This amount represents the stated values submitted to
the  insurance  carrier  at  the inception of coverage and the probable recovery
expected  by  management.  As  of  June 30, 2005, $790,000 in property insurance
proceeds  had  been  received  by  the  Company.

As  of June 30, 2005, the Company has filed approximately $2,400,000 in business
interruption insurance claims with its insurer, of which $472,000 of incremental
costs  due  to  the  fire  have  been recognized. The Company has not recognized
significant  lost  revenue  associated  with  suspension  of  treatment services
following  the  fire  pending determination of the actual amounts recovered from
its  insurer.

DISPOSAL  FACILITY  ACCOUNTING

In  general  terms,  a  disposal  cell  development asset exists for the cost of
building  usable  disposal  space  and  a  closure liability exists for closing,
maintaining  and  monitoring  the disposal unit once this space has been filled.
Major  assumptions  and  judgments used to calculate cell development assets and
closure  liabilities  are  as  follows:

-    Personnel  and  equipment  costs  incurred  to construct disposal cells are
     capitalized  as  a  cell  development  asset.

-    The  cell  development  asset  is amortized as each available cubic yard of
     disposal  space  is  filled.  Periodic  independent  engineering survey and
     inspection  reports  are  used to determine the remaining volume available.
     These  reports  take  into account waste volume, compaction rates and space
     reserved  for  capping filled cells. Additionally, changes in the estimated
     useful  lives  of the cells or related expansion plans have a direct effect
     on  the  amortization expense related to those cells during future periods.

-    The closure liability is the present value based on a current cost estimate
     prepared by an independent engineering firm of the costs to close, maintain
     and  monitor  filled  disposal  units.  Management  estimates the timing of
     payment,  accretes the current cost estimate by an estimated cost of living
     (1.5%),  and  then discounts (9.3%) the accreted current cost estimate back
     to  a  present  value.  The  final  payments  of  the closure liability are
     estimated  as  being paid in 2056 based upon current permitted capacity and
     estimated  annual  usage.

LITIGATION

The  Company  is  involved  in litigation requiring estimates of timing and loss
potential whose disposition is controlled by the judicial process.
ENTERGY  ARKANSAS,  INC.  ET  AL, CENTRAL INTERSTATE LOW-LEVEL RADIOACTIVE WASTE
--------------------------------------------------------------------------------
COMMISSION  AND  US  ECOLOGY,  INC. ("PLAINTIFFS") V. STATE OF NEBRASKA, ET AL.,
------------------------------------------------------------------------------
CASE NO. 4:98CV3411, U.S. DISTRICT COURT, DISTRICT OF NEBRASKA

This  action was brought in federal court in December 1999 by electric utilities
that  generate  LLRW  within  the Central Interstate Low-Level Radioactive Waste
Compact  ("CIC"). The action sought declaratory relief and damages for bad faith
in the State of Nebraska's processing and denial of the Company's application to
develop  and  operate  a LLRW disposal facility near Butte, Nebraska. US Ecology
was  the  CIC's  contractor  and  intervened  as  a  plaintiff.

In  September  2002,  the US District Court for the District of Nebraska entered
judgment  against  Nebraska  in  favor  of  the  CIC for $153 million, including
approximately  $50 million for prejudgment interest. Of this amount, USE's share
was $6.2 million plus $6.1 million for prejudgment interest. The Company carries
$6.5  million  on  its balance sheet for capitalized facility development costs.
The  State  appealed  the judgment to the Eighth Circuit Court of Appeals, which
affirmed  the  District  Court  ruling  in  its  entirety.

On August 9, 2004 Nebraska and the CIC entered into a settlement under which the
State  agreed to pay in full, or to make four equal payments of $38.5 million to
the  CIC  beginning  August  1,  2005  and  annually  thereafter  for  three


                                       17
<PAGE>
years.  The  full  $154 million settlement reflects a principal amount of $140.5
million,  plus  interest  of  3.75%  compounded annually and beginning August 1,
2004.  During  its  2005 session, the Nebraska legislature appropriated the full
$154 million settlement amount to the State Attorney General's Office.

On  July 15, 2005, the CIC adopted a resolution to pay the Company approximately
$11,800,000 provided that CIC receives a 'substantial' payment from the State of
Nebraska.  No  assurance  can  be  given that the Nebraska Attorney General will
remit  the  full  settlement amount to the CIC and that the Company will receive
the funds settling its claim as resolved by the CIC.

MANCHAK  V.  US  ECOLOGY,  INC., U.S. DISTRICT COURT FOR THE DISTRICT OF NEVADA,
--------------------------------
CASE  NO.  CV-S-97-0655.

In  April  1996, Frank Manchak, Jr. ("Manchak") filed suit against subsidiary US
Ecology,  Inc.,  alleging infringement of a sludge treatment patent to stabilize
hazardous  waste  at  the  Company's  Beatty,  Nevada  hazardous waste facility.
Manchak  sought  unspecified damages for infringement, treble damages, interest,
costs  and  attorney fees. In October 2002, the United States District Court for
the  District of Nevada dismissed the matter. Manchak's subsequent appeal to the
U.S.  Court  of  Appeals  for  the  Federal  Circuit was also dismissed, and his
requests  for  reconsideration and en banc review were rejected in October 2003.
In  January 2004, Manchak filed a Rule 60(b) motion in the Nevada District Court
seeking  relief  from  that  Court's  orders  granting  summary  judgment  of
non-infringement  and  denying  reconsideration.  Manchak  appealed a March 2004
District  Court order.  On March 18, 2005 the United States Court of Appeals for
the Federal Circuit affirmed the lower Court's ruling rejecting Manchak's claim.
The  Company  considers  the  matter  closed.

DAVID  W.  CROW  V.  AMERICAN ECOLOGY CORPORATION, U.S. DISTRICT COURT OF HARRIS
--------------------------------------------------
COUNTY,  TEXAS;  280TH  JUDICIAL  DISTRICT.

Former  employee  David  Crow alleged he was hired by the Company as its General
Counsel  in  October  1995 and that his compensation package included options to
purchase  Company  common stock with an oral agreement that the options would be
exercisable  for  ten  years.  The complaint alleged breach of written contract,
breach  of  oral  contract, fraudulent inducement, and declaratory judgment that
Crow is entitled to purchase 150,000 shares of stock at a strike price of $4 per
share.

Mr.  Crow's  lawsuit, initially filed in Harris County (Texas) District Court in
May  2004  was  removed to federal court. Mr. Crow, the Plaintiff, estimated his
damages  in the Complaint as between $1,050,000 and $1,258,500 based on the then
value of the Company's stock. On June 13, 2005, the United States District Court
for  the  Southern  District  of  Texas  granted the Company's motion of summary
judgment. In early July, the deadline for timely appeal passed without any known
filing by Crow. The Company considers the matter closed.

US ECOLOGY, INC. V. THE STATE OF CALIFORNIA, ET AL., CASE NO.GIC747562, SUPERIOR
---------------------------------------------------
COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN DIEGO

In 2000, subsidiary US Ecology, Inc. sued the State of California in state court
for  monetary  damages  exceeding  $162  million  based  on California's alleged
abandonment of the formerly proposed Ward Valley LLRW disposal project. In March
2003,  the  Superior  Court ruled that the Company failed to establish causation
and that its claim was further barred by the doctrine of unclean hands. Based on
the trial court's adverse decision, the Company wrote off a $20,951,000 deferred
site  development  asset  on  March  31, 2003. In June 2003, the Company filed a
notice of appeal with the California Fourth Appellate District Court. On May 25,
2005,  the  California  Court  of Appeal, Fourth Appellate District affirmed the
trial  court.  No further appeal is planned and the matter is considered closed.


                                       18
<PAGE>
RESULTS  OF  OPERATIONS
-----------------------

The  following table presents, for the periods indicated, the operating costs as
a percentage of revenues in the consolidated income statement:

<TABLE>
<CAPTION>
                                                  Three Months Ended                       Six Months Ended
                                        --------------------------------------  ---------------------------------------
($in 000's)                               June 30, 2005       June 30, 2004        June 30, 2005       June 30, 2004
                                        -----------------  -------------------  ------------------  -------------------
<S>                                     <C>      <C>       <C>        <C>       <C>       <C>       <C>        <C>
                                              $         %          $         %         $         %          $         %
                                        -------  --------  ---------  --------  --------  --------  ---------  --------

Revenue                                  18,779              13,795              31,333               27,700
Direct operating costs                    9,559     50.9%     7,449      54.0%   18,272      58.3%    15,061      54.4%
                                        -------            ---------            --------            ---------

Gross profit                              9,220     49.1%     6,346      46.0%   13,061      41.7%    12,639      45.6%
SG & A                                    3,358     17.9%     2,578      18.7%    5,872      18.7%     5,450      19.7%
Business interruption insurance claim        --      0.0%        --       0.0%      (41)     -0.1%        --       0.0%
                                        -------            ---------            --------            ---------

Income from operations                    5,862     31.2%     3,768      27.3%    7,230      23.1%     7,189      26.0%

Interest income                              93      0.5%        45       0.3%      178       0.6%        81       0.3%
Interest expense                             48      0.3%        49       0.4%       95       0.3%        98       0.4%
Other income                                 22      0.1%        20       0.1%       39       0.1%        65       0.2%
                                        -------            ---------            --------            ---------

Net income before income taxes and
discontinued operations                   5,929     31.6%     3,784      27.4%    7,352      23.5%     7,237      26.1%
Income tax (benefit) expense              2,223     11.8%   (11,338)    -82.2%    2,790       8.9%   (10,174)    -36.7%
                                        -------            ---------            --------            ---------

Net income before discontinued
operations                                3,706     19.7%    15,122     109.6%    4,562      14.6%    17,411      62.9%
                                        =======            =========            ========            =========
</TABLE>


COMPARISON OF THREE MONTHS ENDED JUNE 30,  2005 AND 2004
--------------------------------------------------------

REVENUE
-------

For  the  three  months  ended  June 30, 2005, the Company reported consolidated
revenue  of  $18,779,000,  a  36% increase over the $13,795,000 reported for the
same period in 2004. All four waste disposal facilities generated higher revenue
during the second quarter of 2005 as volumes increased 25% over the same quarter
last  year.  Higher  quarterly  waste volume was combined with an 8% increase in
average selling price ("ASP") for the Company's treatment and disposal services.
The increase in waste volume primarily resulted from an increase in both project
(or  "Event")  work  and  base  business during the quarter. The increase in ASP
reflects  an  increased  percentage  of  revenue  from  higher  priced niche and
treatment  services. Also contributing to the quarterly revenue growth was a 63%
increase  in  transportation revenue over the same quarter last year. During the
three  months ending June 30, 2005 and 2004, revenue from a contract between the
Company's  Idaho  facility  and  the  U.S. Army Corps of Engineers accounted for
$6,849,000  and $4,975,000 or 37% and 36% of revenue, respectively. The Army and
other  federal  agencies  continue  to  ship  waste  under  this contract to the
Company's  Grand  View,  Idaho  facility.

Operating  Disposal  Facilities
-------------------------------

At the Richland, Washington LLRW disposal facility revenue increased 26% for the
three  months ended June 30, 2005 from the same period in 2004. This increase in
revenue was due to above average rate-regulated shipments to the facility during
the second quarter of 2005 which were below average during the second quarter of
2004.  For  2005,  the  Washington  Utilities  and Transportation Commission has
approved  a  revenue  requirement  of  $5,346,000  for  the  Richland facility's
rate-regulated low-level radioactive waste interstate compact business.

At  the Grand View, Idaho disposal facility, a 45% increase in waste volumes and
a 1% increase in ASP, drove a 46% increase in revenue over the same quarter last
year.  Management  expects  the  U.S.  Army  Corps  of  Engineers,  Honeywell
International,  and other customers to continue to ship to the Grand View, Idaho
disposal  facility.

At  the  Beatty,  Nevada  hazardous  treatment  and  disposal  facility, revenue
increased  15%  for the three months ended June 30, 2005 from the same period in
2004. The increased revenue reflects a 25% decrease in waste volumes offset by a
more favorable service mix, as evidenced by a 49% increase in ASP. The decreased
volume  was  due  to  decreased  activity  from  highly  competed,  lower-priced
remediation  projects.  Higher  ASP  reflected  greater  delivery  of  treatment
services,  including receipt of corrosive wastes, allowed by the facility's five
year hazardous waste permit renewal, which took effect in April 2005.


                                       19
<PAGE>
At  the  Robstown,  Texas  hazardous  treatment  and  disposal facility, revenue
increased  33%  for the three months ended June 30, 2005 from the same period in
2004.  The  increased  revenue  reflected  an 11% higher priced mix of treatment
wastes  as well as a 21% increase in waste volumes received at the site compared
to  the  second  quarter  of  2004.

DIRECT OPERATING COSTS
----------------------

For  the  three  months ended June 30, 2005, consolidated direct operating costs
increased  28% to $9,559,000 compared to $7,449,000 for the same period in 2004.
This  primarily  reflects  increased  waste  volumes  and  transportation costs.
Relative  to revenue direct operating costs decreased from 54% of revenue in the
second quarter of 2004 to 51% for the same quarter this year.

Operating  Disposal  Facilities
-------------------------------

Direct costs at all four of the operating disposal facilities increased from the
same  quarter last year. The increase in consolidated direct operating costs for
the Company was largely driven by an increase in direct costs at the Grand View,
Idaho  facility  of  $1,561,000.  This  increase  was due to increased wages and
consumption  of  disposal  airspace  and  increased  transportation  costs  of
$1,156,000  to  handle  higher  waste  volumes.  Higher fuel charges were also a
factor  in  pushing  costs  higher.

Non  Operating  Disposal  Facilities
------------------------------------

Non  Operating  Disposal  Facilities  incur  current  period  expenses  for  the
accretion  of  engineering,  laboratory  and other contractor expenses and labor
costs  required to meet the Company's obligations subsequent to operational use.
For  the three months ended June 30, 2005 and 2004, the Company reported $12,000
and  $13,000  of  expenses  on  proposed  development  projects, and $91,000 and
$101,000  of  costs in 2005 and 2004 to remediate or close facilities subsequent
to  use.

GROSS  PROFIT
-------------

Significantly  higher  quarterly  revenue contributed to a 45% increase in gross
profit.  This  pushed quarterly gross profit to $9,220,000 compared with a gross
profit  of  $6,346,000 for the same quarter last year. Increased disposal direct
costs  at  all three hazardous waste disposal facilities was more than offset by
the higher revenue, producing an increased gross margin. This is consistent with
the  largely  fixed cost nature of the waste disposal business and the operating
leverage  delivered by increased waste throughput. Gross margin increased to 49%
of  revenue  compared  to 46% of revenue in 2004. This was despite the increased
transportation costs associated with the bundling of transportation and disposal
services  on  certain  large  clean-up  projects. Large remediation projects can
increase  earnings  substantially while simultaneously decreasing gross margins,
particularly  when low margin transportation services are bundled with treatment
and  disposal  services.  The  Company seeks to maximize contribution margin and
gross profit by controlling direct costs and increasing waste volumes.

SELLING, GENERAL AND ADMINISTRATIVE COSTS (SG&A)
------------------------------------------------

For  the  three  months  ended  June  30,  2005,  the  Company  reported SG&A of
$3,358,000 (18% of revenue), a 27% increase from the $2,578,000 (19% of revenue)
for the same three months of 2004.

Operating  Disposal  Facilities
-------------------------------

During  the  quarter  ended  June  30,  2005, Operating Disposal Facilities SG&A
increased $110,000 primarily due to the hiring of additional personnel needed to
properly  manage  and  track the additional waste volumes being processed at the
Grand  View,  Idaho  facility.


                                       20
<PAGE>
Corporate
---------

During  the  quarter ended June 30, 2005, Corporate SG&A increased $687,000. The
increase in SG&A reflects a $541,000 catch-up accrual in 2005 for the Management
Incentive  Plan or $219,000 higher than the accrued MIP in the second quarter of
2004. The Company did not accrue any Management Incentive Plan obligation in the
first  quarter  of  2005.  The Company will accrue costs for the 2005 Management
Incentive  Plan  if  and when pro rata operating income of $12,000,000 including
the  $906,000  cost of the plan is achieved. The Company also incurred  $136,000
for  legal  costs,  higher  costs  for  director  fees under the new shareholder
approved  2005  Director  compensation  plan,  consulting  and  auditing fees to
implement internal controls as mandated by Section 404 of the Sarbanes-Oxley Act
of  2002, and bank fees associated with renewal of the Company's line of credit.

Non  Operating  Disposal  Facilities
------------------------------------

Non  Operating  Disposal  Facilities  incur primarily legal costs to recover the
Company's  investment in formerly proposed disposal site development projects in
Ward Valley, California and Butte, Nebraska. For the three months ended June 30,
2005  and  2004,  the  Company reported $2,000 and $5,000 of such SG&A expenses.

COMPARISON OF SIX MONTHS ENDED JUNE 30, 2005 AND 2004
-----------------------------------------------------
REVENUE
-------

For  the  six  months  ended  June  30,  2005, the Company reported consolidated
revenue  of  $31,333,000,  a  13% increase over the $27,700,000 reported for the
same  period  in  2004.  All three hazardous waste disposal facilities generated
higher  revenue  during the first half of 2005. The higher revenue resulted from
increased  waste  volumes  and slightly higher average selling price ("ASP") for
the  Company's  treatment  and  disposal  services. At the three hazardous waste
disposal  facilities,  volumes increased 13% over the same six months last year.
The  increase in waste volume resulted primarily from an increase in project (or
"Event")  work performed during the period. The 2% increase in year-to-date 2005
ASP reflected a more favorable mix of niche treatment and disposal business. The
balance  of  the  increase  in  consolidated  revenue  resulted  from  increased
transportation  revenue  as  the  Company  continued  to  employ its strategy of
selective  bundling  of  disposal  with  transportation services to win targeted
contracts. During the six months ending June 30, 2005 and 2004, revenue from the
Grand  View,  Idaho  site's  contract  with  the  U.S.  Army  Corps of Engineers
accounted for $9,498,000 and $8,966,000 or 30% and 32% of revenue, respectively.
The  Army and other federal agencies continue to ship waste under this contract,
which  was  renewed  by  the  Army for five years in the second quarter of 2004.

Operating  Disposal  Facilities
-------------------------------

At  the Richland, Washington LLRW disposal facility revenue decreased 3% for the
six  months  ended  June 30, 2005 from the same period in 2004. This decrease in
revenue  was  due  to above average non rate-regulated shipments to the facility
during  2004 which did not fully recur during 2005. The Washington Utilities and
Transportation  Commission has approved a 2005 revenue requirement of $5,346,000
for  the  Richland  facility's  rate-regulated  low-level  radioactive  waste
interstate  compact  business.

At  the  Grand  View, Idaho disposal facility, higher waste volumes and slightly
higher  disposal  ASPs  drove a 20% increase in revenue over the same six months
last  year.  During  the  first six months of 2005, the facility disposed of 22%
more  waste  volume  than  in  the same period last year. The U.S. Army Corps of
Engineers and other federal agencies are presently shipping to the facility from
multiple  sites.

At  the  Beatty,  Nevada  hazardous  treatment  and  disposal  facility, revenue
increased  10%  for  the  six months ended June 30, 2005 from the same period in
2004.  The  increased  revenue  was  due  to  a 13% increase in ASP despite a 7%
decrease  in  disposal  volume.  This  decrease  resulted from less lower-priced
remediation projects. Shipments from recurring base business customers increased
slightly.  During  the  second quarter of 2005, the facility received regulatory
approval  to  treat  corrosive  wastes which contributed to the increase in ASP.

At  the  Robstown,  Texas  hazardous  treatment  and  disposal facility, revenue
increased  6%  for  the  six  months ended June 30, 2005 from the same period in
2004. The increased revenue reflected a more favorable mix of wastes received at
the site, reflected in a 4% increase in ASP . During the first half of 2004, the
site  received  a  high  volume,  lower-priced  project at the site that was not
replaced  in  the  first  half  of  2005.  A  fire  in the permitted containment


                                       21
<PAGE>
building  on  July  1,  2004  continued to limit the scope of treatment services
offered.  A gradual increase in the facility's revenues is expected once the new
treatment  building becomes operational and full service capability is restored.

DIRECT OPERATING COSTS
----------------------

For  the  six  months  ended  June 30, 2005, consolidated direct operating costs
increased  21%  to  $18,272,000 (58% of revenue) compared to $15,061,000 (54% of
revenue)  for  the  same  period  in  2004.  This  primarily reflected increased
transportation  costs  and  waste  volumes.  Direct  operating  costs  increased
slightly  relative  to  revenue,  reflecting  an  increase  in  low  margin
transportation  services  provided  in  conjunction  with disposal services. The
Company's  transportation  assets  were  fully utilized by the end of the second
quarter  of  2005,  an  improvement over the first quarter of 2005 when clean-up
project  shipment  delays  led  to substantial underutilization of the Company's
leased  railcar  fleet.

Operating  Disposal  Facilities
-------------------------------

Direct  costs at all four disposal facilities increased from the same six months
last  year.  The increase in consolidated direct operating costs for the Company
was  largely  driven  by  an  increase  in direct costs at the Grand View, Idaho
facility  of  $2,056,000.  This  increase was due to increased waste volumes and
related transportation costs. Approximately $1,482,000 or 75% of the increase in
direct  operating  costs at Grand View was for costs incurred to transport waste
to the facility.  During the six months ended June 30, 2005 the Company was able
to  reduce  the  costs of waste treatment additives, lowering variable costs for
certain  waste  streams. Higher fuel charges also increased transportation costs
over  the  same  quarter  of  2004.

Non Operating Disposal Facilities
---------------------------------

Non  Operating  Disposal  Facilities  incur  current  period  expenses  for  the
accretion  of  engineering,  laboratory  and other contractor expenses and labor
costs  required to meet the Company's obligations subsequent to operational use.
For  the  six  months ended June 30, 2005 and 2004, the Company reported $26,000
and  $23,000  in  expenses  on  proposed  development projects, and $183,000 and
$200,000 in costs to remediate and/or monitor such facilities.

GROSS  PROFIT
-------------

Significantly  higher  revenue  allowed the Company to generate a 3% increase in
gross  profit, pushing gross profit to $13,061,000, compared with a gross profit
of  $12,639,000 for the same six months last year. Increased disposal revenue at
all  operating  hazardous  waste  disposal  facilities  produced  more  earnings
contribution  due  to  a  more favorable service mix combined with the operating
leverage  produced  by  high volume throughput. Gross margin decreased to 42% of
revenue  from  46% of revenue due to increased low margin transportation revenue
and underutilized transportation assets in the first quarter of 2005.

SELLING, GENERAL AND ADMINISTRATIVE COSTS (SG&A)
------------------------------------------------

For  the six months ended June 30, 2005, the Company reported SG&A of $5,872,000
(19%  of  revenue),  an 8% increase from the $5,450,000 (20% of revenue) for the
same  six months of 2004. The increase in SG&A primarily resulted from increases
in  legal  expenses,  auditing,  consulting,  and director fees. The Company has
resolved  multiple  lawsuits, reducing legal fees and freeing up management time
and  resources  to  focus  on  growing  the  business.

Operating  Disposal  Facilities
-------------------------------

During  the  six  months ended June 30, 2005, Operating Disposal Facilities SG&A
decreased  $7,000.

Corporate
---------

During  the  six  months ended June 30, 2005, Corporate SG&A increased $446,000.
The  increase  in  SG&A  is from increases from a variety of expenses, including
legal,  auditing, consulting, and director fees, all of which management expects
to  decrease  in  the  second  half  of  2005.


                                       22
<PAGE>
The  Company  complied  with the internal control requirements of Section 404 of
the  Corporate  Reform Act of 2002 (Sarbanes-Oxley) during the second quarter of
2005.  The Company invested significant time and resources complying with Sectio
404  requirements  and  retained  independent  contractors to assist.  While the
Company  will  continue to devote resources to this effort in the second half of
2005,  the  time  and  cost  devoted  to  maintain Section 404 compliance should
decrease from the second half of 2004 and the first half of 2005.

Non  Operating  Disposal  Facilities
------------------------------------

Non  Operating  Disposal  Facilities  incur  primarily  legal  costs  to support
recovery  of  the  Company's  investment in the Butte, Nebraska and Ward Valley,
California  projects.  For  the  six  months  ended  June 30, 2005 and 2004, the
Company  reported  $7,000  and  $24,000  of  SG&A expenses, respectively, at Non
Operating  Disposal  Facilities.

COMPARISON OF THREE AND SIX MONTHS ENDED JUNE 30, 2005 AND 2004
---------------------------------------------------------------

INTEREST INCOME
---------------

For the three and six months ended June 30, 2005, the Company earned $93,000 and
$178,000  of  interest  income, an increase from $45,000 and $81,000 in the same
periods  of 2004 due to higher cash balances and higher interest rates available
on  short  term  investments.  Interest  income  is  earnings  on cash balances,
short-term  investments,  and notes receivable for which income is a function of
prevailing  market  rates. Based on current interest rates, the Company does not
anticipate  significant  interest  income  in  2005.

INTEREST  EXPENSE
-----------------

For  the three and six months ended June 30, 2005, the Company reported interest
expense of $48,000 and $95,000, a decrease from $49,000 and $98,000 in 2004. The
primary  cause of this decrease was the reduction in average debt outstanding by
$1,400,000  from  June 30, 2004 to 2005 offset by rising interest rates. For the
six  months  ending  June  30,  2005,  the  interest  rate  paid  on  its single
outstanding  term loan was 5.5%, an increase of 2.12% from the 3.38% at June 30,
2004. Additional reductions may occur as debt balances continue to be paid down,
however  interest expenses will increase if interest rates increase. At June 30,
2005,  the  line  of  credit  had  a  zero  balance.

OTHER INCOME (LOSS)
-------------------

Other Income is composed of the following ($ in thousands):

<TABLE>
<CAPTION>
                                                      Three Months Ended June 30,     Six Months Ended June 30,
                                                        2005            2004            2005            2004
                                                    -------------  ---------------  -------------  --------------
<S>                                                 <C>            <C>              <C>            <C>
Data processing services                                       --               14             --              34
Cash receipts for sale or rent of property rights              22                6             39              22
Other miscellaneous income, net                                --               --             --               9
                                                    -------------  ---------------  -------------  --------------

Total other income (loss)                           $          22  $            20  $          39  $           65
                                                    =============  ===============  =============  ==============
</TABLE>

INCOME TAXES
------------

The  components  of  the  income tax provision (benefit) were as follows for the
periods ended June 30 (in thousands):

<TABLE>
<CAPTION>
                                                         Three Months Ended        Six Months Ended
                                                    -----------------------  ----------------------
                                                          2005         2004        2005        2004
                                                    ----------  -----------  ----------  ----------
<S>                                                 <C>         <C>          <C>         <C>
State income tax expense                            $      167  $       --   $      210  $      --
Federal income tax expense                               2,056       1,593        2,580      2,757
Reversal of deferred tax asset valuation allowance          --     (12,931)          --    (12,931)
                                                    ----------  -----------  ----------  ----------
Income tax (benefit) expense                        $    2,223  $  (11,338)  $    2,790  $ (10,174)
                                                    ==========  ===========  ==========  ==========
</TABLE>


                                       23
<PAGE>
The  tax effects of temporary differences between income for financial reporting
and income taxes give rise to deferred tax assets and liabilities. The potential
realization of a significant portion of net deferred tax assets is based in part
on  the  Company's  estimates  of  the  timing of reversals of certain temporary
differences and on the generation of taxable income before such reversals.

The  net  operating  loss  carry  forward  at  June  30,  2005 was approximately
$30,000,000  and  expires  on  various  dates  between 2011 and 2020. Due to the
Company's  net  operating  loss  carry  forwards,  2005  income  tax  expense of
approximately  2%  of  pretax income tax expense is expected to be paid in cash.
The remaining approximately 35% of income tax expense will be offset against the
net  operating  loss  carry  forwards.

On  July  20,  2005,  a  registration  statement  on Form S-3 was filed with the
Securities  and Exchange Commission allowing for two Directors of the Company to
sell  their  shares  without  certain  restrictions. Section 382 of the Internal
Revenue  Code  imposes  an annual limitation on the amount of net operating loss
carryforwards  that  may be used to offset taxable income when a corporation has
undergone significant changes in its ownership. Should a change of control occur
due  to the two Directors selling their shares, the Company may be subject to an
annual limitation upon the usage of the net operating losses

The  Company  will  continue to assess the deferred tax asset for utilization as
needed  but  at  least  annually.

SEASONAL EFFECTS
----------------

Operating  revenues  are  generally  lower  in the winter months than the warmer
summer  months  when  more short duration, one-time remediation projects tend to
occur.  While  both  disposal and processing revenue are generally more affected
by  market  conditions than seasonality, weather related clean-up project delays
did have an adverse impact on the first quarter of 2005.

CAPITAL RESOURCES AND LIQUIDITY
-------------------------------

At  June  30,  2005,  cash  and  short  term  investments totaled $12,645,000, a
decrease of $482,000 from December 31, 2004. The small decrease in cash reflects
the  Company's  capital expenditures and growth in accounts receivable offset by
the  Company's continued profitability and an advance payment received under its
contract  with  Honeywell.

During  the  first  three  months  of 2005, the Company's days sales outstanding
("DSO")  increased at June 30, 2005, to 66 days compared to December 31, 2004 at
60  days.

As  of  June 30, 2005 the Company's liquidity, as measured by the current ratio,
was  2.2 to 1.0. The debt to equity ratio decreased to 0.5:1.0 at June 30, 2005.
There have not been any substantial changes to working capital or debt to equity
ratio  during  the  six  months ended June 30, 2005. The debt to equity ratio is
defined as total liabilities divided by stockholders equity.

SOURCES  OF  CASH

On  June  30,  2005,  the  Company had an unsecured $8,000,000 revolving line of
credit with Wells Fargo Bank in Boise, Idaho maturing June 15, 2007. At June 30,
2005,  the  outstanding  balance  on  the revolving line of credit was $-0-. The
Company  borrows  and  repays  according to business demands and availability of
cash.  It  currently  reserves  $5,000,000 of the line of credit for a letter of
credit used as collateral for an insurance policy.

On  June  8,  2005, the Company was awarded a contract for transport, treatment,
and  disposal  of approximately 1 million tons of waste over a four to five year
period  from  Honeywell  International.  A $3,500,000 advance was received from,
and  will  be credited back to Honeywell International during the contract term.

Company  operations  produced  an average of almost $4,000,000 a quarter in cash
flow over the past three years. Management expects 2005 quarterly cash flow from
operations  to,  on  average,  be higher. The $12,645,000 in cash and short term
investments  at June 30, 2005 was comprised of short term investments which were
not  required  for


                                       24
<PAGE>
operations  of  $10,960,000,  cash  immediately  available  for  operations  of
$3,314,000, and a net checks outstanding amount of ($1,629,000).

The  potential  receipt of approximately $11.8 million in proceeds in resolution
of  the  Company's  claim  to  proceeds  in  the  settlement between the Central
Interstate  Compact  and  the State of Nebraska would augment the Company's cash
resources,  if  and  when  received.

USES OF CASH

Management  currently  expects  its  capital spending could reach $20,000,000 in
2005,  including  investments  to  increase rail transportation capabilities and
waste  unloading  throughput  capabilities  to  more  efficiently  manage  waste
received at the Idaho facility under contracts with Honeywell International, the
U.S.  Army  Corps  of  Engineers and other customers. Disposal cell expansion at
each  of  the  Company's four sites is also underway in 2005, with new buildings
under development in Texas and Nevada. Certain of these cash outlays will extend
into  2006.

The  Company  paid  a  $0.15  quarterly dividend on July 15, 2005 out of cash on
hand.  The  Company  also intends that shareholders of record on October 3, 2005
and  January  2,  2006  will  also  receive a $.15 per share dividend subject to
compliance  with  applicable  Bank  covenants.

The  Company believes that cash on hand and cash flow from operations, augmented
as needed by periodic borrowings under the line of credit, will be sufficient to
meet the Company's cash needs for the foreseeable future.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The  Company  does not maintain equities, commodities, derivatives, or any other
instruments  for  trading  or  any  other  purposes,  and  does  not  enter into
transactions denominated in currencies other than the U.S. Dollar.

The Company has minimal interest rate risk on investments or other assets due to
the Company's preservation of capital approach to investments. At June 30, 2005,
approximately  $12,600,000  was  held in cash or short term investments at terms
ranging from overnight to three months. Together, these items earned interest at
approximately  3%  and  comprised  15%  of  assets.

The Company has interest rate risk on debt instruments due on a fully amortizing
term  loan  due  Wells Fargo Bank. At June 30, 2005, $3,383,000 of variable rate
debt  was  owed  under  the term loan, accruing interest at the rate of 5.5%.  A
hypothetical change of 1% in interest rates would change annual interest expense
paid  by  the  Company  by  approximately  $27,000.

ITEM 4.   CONTROLS  AND  PROCEDURES.

(a)  As  of  the  end  of  the  period covered by this quarterly report, Company
management,  under  the  direction  of  the  Chief  Executive  Officer and Chief
Financial  Officer, carried out an evaluation of the effectiveness of the design
and  operation  of  the Company's disclosure controls and procedures pursuant to
Rule  13a-14  of the Securities Exchange Act of 1934 (Exchange Act).  Based upon
that evaluation, the Chief Executive Officer and Chief Financial Officer believe
that  the  Company's  disclosure controls and procedures are effective in timely
alerting  them to material information required to be disclosed in the Company's
Exchange  Act  filings.

(b)  The  Company  maintains  a system of internal controls that are designed to
provide reasonable assurance that its records and filings accurately reflect the
transactions  engaged  in.  For  the quarter ending June 30, 2005, there were no
changes  to  internal  controls or in other factors that could materially affect
these  internal  controls.

On April 25, 2005 the Company filed an Amended Form 10-K with the Securities and
Exchange Commission that contained the opinions of management and the Company's
Independent Registered Public Accounting firm regarding the Company's internal
controls over financial reporting. Both Management and the Independent
Registered Public Accounting firm found that the Company's controls over
financial reporting at December 31, 2004 were effective and that no material
weaknesses existed.


                                       25
<PAGE>
PART II OTHER INFORMATION.
--------------------------
ITEM 1.  LEGAL PROCEEDINGS.

Significant  developments  have  occurred  on  the following legal matters since
December  31,  2004:

ENTERGY  ARKANSAS,  INC.  ET  AL, CENTRAL INTERSTATE LOW-LEVEL RADIOACTIVE WASTE
--------------------------------------------------------------------------------
COMMISSION  AND  US  ECOLOGY,  INC. ("PLAINTIFFS") V. STATE OF NEBRASKA, ET AL.,
------------------------------------------------------------------------------
CASE NO. 4:98CV3411, U.S. DISTRICT COURT, DISTRICT OF NEBRASKA

This  action was brought in federal court in December 1999 by electric utilities
that  generate  LLRW  within  the Central Interstate Low-Level Radioactive Waste
Compact  ("CIC"). The action sought declaratory relief and damages for bad faith
in the State of Nebraska's processing and denial of the Company's application to
develop  and  operate  a LLRW disposal facility near Butte, Nebraska. US Ecology
was the CIC's contractor and intervened as a plaintiff.

In  September  2002,  the US District Court for the District of Nebraska entered
judgment  against  Nebraska  in  favor  of  the  CIC for $153 million, including
approximately  $50 million for prejudgment interest. Of this amount, USE's share
was $6.2 million plus $6.1 million for prejudgment interest. The Company carries
$6.5  million  on  its balance sheet for capitalized facility development costs.
The  State  appealed  the judgment to the Eighth Circuit Court of Appeals, which
affirmed the District Court ruling in its entirety.

On August 9, 2004 Nebraska and the CIC entered into a settlement under which the
State  agreed to pay in full, or to make four equal payments of $38.5 million to
the  CIC  beginning  August 1, 2005 and annually thereafter for three years. The
full $154 million settlement reflects a principal amount of $140.5 million, plus
interest  of  3.75% compounded annually and beginning August 1, 2004. During its
2005  session,  the  Nebraska  legislature  appropriated  the  full $154 million
settlement  amount  to  the  State  Attorney  General's  Office

On  July 15, 2005, the CIC adopted a resolution to pay the Company approximately
$11,800,000 provided that CIC receives a 'substantial' payment from the State of
Nebraska.  No  assurance  can  be  given that the Nebraska Attorney General will
remit  the  full  settlement amount to the CIC and that the Company will receive
the  funds  settling  its  claim  as  resolved  by  the  CIC.

MANCHAK  V.  US  ECOLOGY,  INC., U.S. DISTRICT COURT FOR THE DISTRICT OF NEVADA,
--------------------------------
CASE  NO.  CV-S-97-0655.

In  April  1996, Frank Manchak, Jr. ("Manchak") filed suit against subsidiary US
Ecology,  Inc.,  alleging infringement of a sludge treatment patent to stabilize
hazardous  waste  at  the  Company's  Beatty,  Nevada  hazardous waste facility.
Manchak  sought  unspecified damages for infringement, treble damages, interest,
costs  and  attorney fees. In October 2002, the United States District Court for
the  District of Nevada dismissed the matter. Manchak's subsequent appeal to the
U.S.  Court  of  Appeals  for  the  Federal  Circuit was also dismissed, and his
requests  for  reconsideration and en banc review were rejected in October 2003.
In  January 2004, Manchak filed a Rule 60(b) motion in the Nevada District Court
seeking  relief  from  that  Court's  orders  granting  summary  judgment  of
non-infringement  and  denying  reconsideration.  Manchak  appealed a March 2004
District  Court  order. On March 18, 2005 the United States Court of Appeals for
the Federal Circuit affirmed the lower Court's ruling rejecting Manchak's claim.
The  Company  considers  the  matter  closed.

DAVID  W.  CROW  V.  AMERICAN ECOLOGY CORPORATION, U.S. DISTRICT COURT OF HARRIS
--------------------------------------------------
COUNTY,  TEXAS;  280TH  JUDICIAL  DISTRICT.

Former  employee  David  Crow alleged he was hired by the Company as its General
Counsel  in  October  1995 and that his compensation package included options to
purchase  Company  common stock with an oral agreement that the options would be
exercisable  for  ten  years.  The complaint alleged breach of written contract,
breach  of  oral  contract, fraudulent inducement, and declaratory judgment that
Crow is entitled to purchase 150,000 shares of stock at a strike price of $4 per
share.

Mr.  Crow's  lawsuit, initially filed in Harris County (Texas) District Court in
May  2004  was  removed to federal court. Mr. Crow, the Plaintiff, estimated his
damages  in  the  Complaint  as  between  $1,050,000  and  $1,258,500  based


                                       26
<PAGE>
on  the  then  value of the Company's stock. On June 13, 2005, the United States
District  Court  for the Southern District of Texas granted the Company's motion
of  summary  judgment.  In  early  July,  the  deadline for timely appeal passed
without any known filing by Crow. The Company considers the matter closed.

US ECOLOGY, INC. V. THE STATE OF CALIFORNIA, ET AL., CASE NO.GIC747562, SUPERIOR
---------------------------------------------------
COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN DIEGO

In 2000, subsidiary US Ecology, Inc. sued the State of California in state court
for  monetary  damages  exceeding  $162  million  based  on California's alleged
abandonment of the formerly proposed Ward Valley LLRW disposal project. In March
2003,  the  Superior  Court ruled that the Company failed to establish causation
and that its claim was further barred by the doctrine of unclean hands. Based on
the trial court's adverse decision, the Company wrote off a $20,951,000 deferred
site  development  asset  on  March  31, 2003. In June 2003, the Company filed a
notice of appeal with the California Fourth Appellate District Court. On May 25,
2005,  the  California  Court  of Appeal, Fourth Appellate District affirmed the
trial  court.  No further appeal is planned and the matter is considered closed.


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The  Company  held  its  Annual Meeting of Stockholders on May 25, 2005.  On the
record  date  of  March  28,  2005  there were 17,441,294 shares of common stock
issued  and outstanding.  At the Annual Meeting the Company's eight nominees for
Director  were  all elected to the Board, the selection of Moss Adams LLP as the
Company's  independent  auditor was ratified, and the 2005 Non-Employee Director
Compensation  Plan  was approved.  The voting on the three items was as follows:

<TABLE>
<CAPTION>
               Nominee for Director                          For      Withheld
               --------------------                       ----------  --------
<S>                                                       <C>         <C>
Rotchford L. Barker                                       16,713,078   136,983
Roy C. Eliff                                              16,793,017    57,044
Edward F. Heil                                            16,679,113   170,948
Kenneth C. Leung                                          16,793,336    56,725
Richard Riazzi                                            16,801,492    48,569
Stephen A. Romano                                         16,789,452    60,609
Jimmy D. Ross                                             16,798,136    51,925
Richard T. Swope                                          16,771,699    78,362

Ratification of Moss Adams LLP
------------------------------

For                                                       16,761,832
Against                                                     22,998
Abstain                                                     65,231

Approval of 2005 Non-Employee Director Compensation Plan
--------------------------------------------------------

For                                                       12,173,379
Against                                                     316,205
Abstain                                                     87,409
Broker Non-Vote                                            4,273,068
</TABLE>


                                       27
<PAGE>
Following  its  annual  meeting of stockholders on May 25, 2005 in Boise, Idaho,
American Ecology Corporation's Board of Directors met and elected Edward F. Heil
to  serve  as  chairman  of  the  newly  elected  Board.

ITEM 5.   OTHER INFORMATION.

None.

ITEM 6.   EXHIBITS.

     (a)  The following exhibits are filed as part of this report:

<TABLE>
<CAPTION>
Exhibit No.                                         Description
-----------  ----------------------------------------------------------------------------------------
<S>          <C>
    31.1     Certifications of June 30, 2005 Form 10-Q by Chief Executive Officer dated July 29, 2005
-----------  ----------------------------------------------------------------------------------------
    31.2     Certifications of June 30, 2005 Form 10-Q by Chief Financial Officer dated July 29, 2005
-----------  ----------------------------------------------------------------------------------------
    32.1     Certifications of June 30, 2005 Form 10-Q by Chief Executive Officer dated July 29, 2005
-----------  ----------------------------------------------------------------------------------------
    32.2     Certifications of June 30, 2005 Form 10-Q by Chief Financial Officer dated July 29, 2005
-----------------------------------------------------------------------------------------------------
</TABLE>


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.


                                        AMERICAN ECOLOGY CORPORATION
                                        (Registrant)


Date:  July 29, 2005                    By:/s/ Stephen A. Romano
                                        ------------------------
                                        Stephen A. Romano
                                        President, Chief Executive Officer and
                                        Chief Operating Officer

Date:  July 29, 2005                    By:/s/ James R. Baumgardner
                                        ---------------------------
                                        James R. Baumgardner
                                        Senior Vice President,
                                        Chief Financial Officer,
                                        Secretary and Treasurer


                                       28
<PAGE>
<TABLE>
<CAPTION>
                                          EXHIBIT INDEX


Exhibit                                          Description
-------                                          -----------
<S>      <C>
  31.1   Certifications of June 30, 2005 Form 10-Q by Chief Executive Officer dated July 29, 2005
  31.2   Certifications of June 30, 2005 Form 10-Q by Chief Financial Officer dated July 29, 2005
  32.1   Certifications of June 30, 2005 Form 10-Q by Chief Executive Officer dated July 29, 2005
  32.2   Certifications of June 30, 2005 Form 10-Q by Chief Financial Officer dated July 29, 2005
</TABLE>


                                       29