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 March 31, 2005

                                       OR


 [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                          For the transition period from
           ____________________________to____________________________


                         Commission File Number 0-11688


                          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, 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 May 6, 2005 Registrant had outstanding 17,475,294 shares of its Common Stock.


<PAGE>
                          AMERICAN ECOLOGY CORPORATION
                      QUARTERLY REPORT ON FORM 10-Q FOR THE
                        THREE MONTHS ENDED MARCH 31, 2005


                                TABLE OF CONTENTS


                         PART I.  FINANCIAL INFORMATION


                                                                            PAGE
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                                             14

Item 3.     Quantitative and Qualitative Disclosures About Market Risk        22

Item 4.     Controls and Procedures                                           22


                          PART II.   OTHER INFORMATION



Item 1.     Legal Proceedings                                                 22

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds       23

Item 3.     Defaults Upon Senior Securities                                   23

Item 4.     Submission of Matters to a Vote of Security Holders               23

Item 5.     Other Information                                                 23

Item 6.     Exhibits                                                          23

            Signatures                                                        24


                                        2
<PAGE>
OFFICERS
--------
Stephen A. Romano
Chief Executive Officer, President and Chief Operating Officer

James R. Baumgardner
Senior Vice President, Chief Financial Officer
Treasurer and Secretary

Michael J. Gilberg
Vice President and Controller

Steven D. Welling
Vice President, Sales & Marketing

John M. Cooper
Vice President and Chief Information Officer


DIRECTORS
---------
Rotchford L. Barker, Chairman
Independent Businessman

David B. Anderson
President, Highland Capital Enterprises Corp.

Roy C. Eliff
Independent Businessman

Edward F. Heil
Independent Businessman

Kenneth C. Leung
Managing Director of Investment Banking, Sanders Morris Harris

Richard Riazzi
Independent Businessman

Stephen A. Romano
Chief Executive Officer, President and Chief Operating Officer

Jimmy D. Ross
U.S. Army, Retired

Stephen M. Schutt
Vice President, Nuclear Fuel Services, Inc.


CORPORATE OFFICE
----------------
Lakepointe Centre I
American Ecology Corporation
300 East Mallard Drive, Suite 300
Boise, Idaho 83706
(208) 331-8400
(208) 331-7900 (fax)
www.americanecology.com
-----------------------


COMMON STOCK
------------
American Ecology Corporation's common stock trades on the Nasdaq National Market
under the symbol ECOL.


FINANCIAL REPORTS
-----------------
A copy of American Ecology Corporation Annual and Quarterly Reports, as filed on
Form 10-K and 10-Q with the Securities and Exchange Commission, may be obtained
by writing:
Lakepointe Centre I
300 E. Mallard, Suite 300
Boise, Idaho 83706
or at www.americanecology.com
      -----------------------


TRANSFER AGENT
--------------
American Stock Transfer & Trust Company
59 Maiden Lane
New York, New York 10038
(718) 921-8289
or at www.amstock.com
      ---------------


AUDITOR
-------
Moss Adams LLP
1001 Fourth Avenue, Suite 2900
Seattle, WA  98154


                                        3
<PAGE>
<TABLE>
<CAPTION>
                                        AMERICAN ECOLOGY CORPORATION
                                        CONSOLIDATED BALANCE SHEETS
                                          ($ IN 000'S) (UNAUDITED)


                                                                         March 31, 2005   December 31, 2004
                                                                        ---------------  ------------------
<S>                                                                     <C>              <C>
ASSETS
Current Assets:
  Cash and cash equivalents                                             $        2,920   $           2,160
  Short term investments                                                        10,323              10,967
  Receivables, net                                                               8,742               8,963
  Insurance receivable                                                           1,161               1,285
  Prepayments and other                                                          1,077               1,469
  Deferred income taxes                                                          5,613               5,613
                                                                        ---------------  ------------------
    Total current assets                                                        29,836              30,457

Property and equipment, net                                                     28,735              27,363
Facility development costs                                                       6,478               6,478
Other assets                                                                       462                 462
Deferred income taxes                                                           12,041              12,473
                                                                        ---------------  ------------------
    Total assets                                                        $       77,552   $          77,233
                                                                        ===============  ==================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Current portion of long term debt                                     $        1,458   $           1,457
  Accounts payable                                                               2,556               3,022
  Deferred revenue                                                               1,296                 724
  State burial fees payable                                                      1,112               1,446
  Management incentive plan payable                                                 89                 934
  Customer refunds                                                               2,512               2,512
  Accrued liabilities                                                            1,251                 725
  Accrued closure and post closure obligation, current portion                   2,323               2,323
                                                                        ---------------  ------------------
    Total current liabilities                                                   12,597              13,143

Long term debt                                                                   2,369               2,734
Long term accrued liabilities                                                      523                 441
Accrued closure and post closure obligation, excluding current portion           9,314               9,304
                                                                        ---------------  ------------------
  Total liabilities                                                             24,803              25,622
                                                                        ---------------  ------------------

Commitments and contingencies
Shareholders' equity:
  Convertible preferred stock, 1,000,000 shares authorized,
  Common stock, $.01 par value, 50,000,000 authorized, 17,441,294
    and 17,398,494 shares issued and outstanding                                   174                 174
  Additional paid-in capital                                                    51,297              51,015
  Retained earnings                                                              1,278                 422
                                                                        ---------------  ------------------
    Total shareholders' equity                                                  52,749              51,611
                                                                        ---------------  ------------------

Total Liabilities and Shareholders' Equity                              $       77,552   $          77,233
                                                                        ===============  ==================

See notes to consolidated financial statements
</TABLE>


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


                                                                    Three Months Ended
                                                                   --------------------
                                                             March 31, 2005     March 31, 2004
                                                          --------------------  ---------------
<S>                                                       <C>                   <C>
Revenue                                                   $            12,554   $        13,905
Direct operating costs                                                  8,713             7,612
                                                          --------------------  ---------------

Gross profit                                                            3,841             6,293
Selling, general and administrative expenses                            2,514             2,872
Business interruption insurance claim                                     (41)               --
                                                          --------------------  ---------------

Income from operations                                                  1,368             3,421
Interest income                                                            85                36
Interest expense                                                           47                49
Other income                                                               17                45
                                                          --------------------  ---------------

Income before income tax and discontinued operations                    1,423             3,453
Income tax expense                                                        567             1,164
                                                          --------------------  ---------------

Income before discontinued operations                                     856             2,289
Income from discontinued operations (net of tax of $0)                     --               149
                                                          --------------------  ---------------

Net income                                                $               856   $         2,438
                                                          ====================  ===============

Basic earnings per share from continuing operations                       .05               .13
Basic earnings per share from discontinued operations                      --               .01
                                                          --------------------  ---------------
Basic earnings per share                                  $               .05   $           .14
                                                          ====================  ===============

Diluted earnings per share from continuing operations                     .05               .13
Diluted earnings per share from discontinued operations                    --               .01
                                                          --------------------  ---------------
Diluted earnings per share                                $               .05   $           .14
                                                          ====================  ===============

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

See notes to consolidated financial statements


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


                                                               Three Months Ended March 31,
                                                               2005             2004
                                                          --------------  -----------------
<S>                                                       <C>             <C>
Cash flows from operating activities:
  Net income                                              $         856   $          2,438
  Adjustments to reconcile net income to net
    cash provided by operating activities:
  Depreciation, amortization, and accretion                       1,376              1,488
  Income from discontinued operations                                --               (149)
  Income tax benefit on exercise of stock options                   130                 --
  Deferred income taxes                                             432                 --
Changes in assets and liabilities:
  Receivables                                                       221              4,020
  Other assets                                                      345                173
  Closure and post closure obligation                              (260)              (148)
  Income taxes payable/receivable                                    --              1,115
  Accounts payable and accrued liabilities                         (465)             1,699
                                                          --------------  -----------------
    Net cash provided by operating activities                     2,635             10,636

Cash flows from investing activities:
  Capital expenditures                                           (2,529)              (513)
  Proceeds from the sale of assets                                  222                110
  Transfers between cash and short term investments, net            644                 39
                                                          --------------  -----------------
    Net cash used by investing activities                        (1,663)              (364)

Cash flows from financing activities:
  Payments of indebtedness                                         (364)              (366)
  Warrants purchased and canceled                                    --             (5,500)
  Stock options exercised                                           152                359
                                                          --------------  -----------------
    Net cash used by financing activities                          (212)            (5,507)
                                                          --------------  -----------------

Increase in cash and cash equivalents                               760              4,765
Net cash used by discontinued operations                             --               (668)
Cash and cash equivalents at beginning of year                    2,160              6,674
                                                          --------------  -----------------
Cash and cash equivalents at end of quarter               $       2,920   $         10,771
                                                          ==============  =================

Supplemental disclosures of cash flow information:
Cash paid during the year for:
  Interest expense                                        $          47   $             49
  Income taxes paid                                                   4                 50
</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
with  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 March 31,
   ($in thousands except per share amounts)                   2005             2004
                                                          -------------  ----------------
<S>                                                       <C>            <C>
Income before discontinued operations                     $         856  $          2,289
Income from operations of discontinued segments                      --               149
                                                          -------------  ----------------
Net income available to common shareholders               $         856  $          2,438
                                                          =============  ================

Weighted average shares outstanding-
  Common shares                                                  17,410            17,090
  Effect of dilutive stock options                                  540               525
                                                          -------------  ----------------

Average shares                                                   17,950            17,615
                                                          =============  ================

Basic earnings per share from continuing operations                 .05               .13
Basic earnings per share from discontinued operations                --               .01
                                                          -------------  ----------------
Basic earnings per share                                  $         .05  $            .14
                                                          =============  ================

Diluted earnings per share from continuing operations               .05               .13
Diluted earnings per share from discontinued operations              --               .01
                                                          -------------  ----------------
Diluted earnings per share                                $         .05  $            .14
                                                          =============  ================
</TABLE>

NOTE  3.  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.


                                        7
<PAGE>
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  the  Oak  Ridge  facility,  including  the  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
Three months ended March 31, 2005
---------------------------------
<S>                                   <C>           <C>              <C>              <C>          <C>
Revenue                               $    12,537   $           17   $            --  $       --   $12,554
Direct operating cost                       8,607              106                --          --     8,713
                                      ------------  ---------------  ---------------  -----------  --------
Gross profit (loss)                         3,930              (89)               --          --     3,841
S,G&A,                                      1,107                5                --       1,402     2,514
Business interruption insurance
claim                                         (41)              --                --          --       (41)
                                      ------------  ---------------  ---------------  -----------  --------
Income (loss) from operations               2,864              (94)               --      (1,402)    1,368
Interest and other income/(expense)            10               --                --          28        38
Other income                                   17               --                --          --        17
                                      ------------  ---------------  ---------------  -----------  --------
Income (loss) before income tax and
discontinued operations                     2,891              (94)               --      (1,374)    1,423
Income tax expense (benefit)                   --               --                --         567       567
Discontinued operations                        --               --                --          --        --
                                      ------------  ---------------  ---------------  -----------  --------
Net Income (loss)                     $     2,891   $          (94)  $            --  $   (1,941)  $   856
                                      ============  ===============  ===============  ===========  ========
Depreciation and accretion            $     1,273   $           95   $            --  $        8   $ 1,376
Capital Expenditures                  $     2,529   $           --   $            --  $       --   $ 2,529
Total Assets                          $    38,732   $        6,531   $            --  $   32,289   $77,552
Three months ended March 31, 2004
---------------------------------
Revenue                               $    13,891   $           14   $            --  $       --   $13,905
Direct operating cost                       7,503              109                --          --     7,612
                                      ------------  ---------------  ---------------  -----------  --------
Gross profit (loss)                         6,388              (95)               --          --     6,293
S,G&A                                       1,224                5                --       1,643     2,872
                                      ------------  ---------------  ---------------  -----------  --------
Income (loss) from operations               5,164             (100)               --      (1,643)    3,421
Interest and other income/(expense)            25               17                --         (10)       32
                                      ------------  ---------------  ---------------  -----------  --------
Income (loss) before income tax and
discontinued operations                     5,189              (83)               --      (1,653)    3,453
Income tax expense (benefit)                   --               --                --       1,164     1,164
Discontinued operations                        --               --               149          --       149
                                      ------------  ---------------  ---------------  -----------  --------
Net Income (loss)                     $     5,189   $          (83)  $           149  $   (2,817)  $ 2,438
                                      ============  ===============  ===============  ===========  ========
Depreciation and accretion            $     1,386   $           94   $            --  $        8   $ 1,488
Capital Expenditures                  $       481   $           --   $            --  $       32   $   513
Total Assets                          $    36,307   $        6,529   $         2,292  $   19,217   $64,345
</TABLE>

NOTE  4.  STOCK  OPTION  PLANS


                                        8
<PAGE>
The  Company  has  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.

In December 2004, the Financial Accounting Standards Board ("FASB") revised SFAS
No.  123,  "Accounting  for Stock-Based Compensation." SFAS No. 123 will require
the  Company  to  recognize the fair value of options issued to employees or the
Board  of  Directors  over the period in which the option is earned. The Company
previously  accounted  for  stock-based  compensation  under APB Opinion No. 25,
which  is  superseded  by SFAS No. 123. On April 14, 2005, the effective date of
SFAS 123 was extended and will now be effective for the Company as of January 1,
2006.  Under  the revised SFAS No. 123 at March 31, 2005, the Company has issued
but  unvested options that, if earned, will result in the following compensation
expense  being  recognized:

<TABLE>
<CAPTION>
                                                                            Pro Forma
($in thousands)                                                       Compensation Expense
                                                                      ---------------------
<S>                                                                   <C>
Fair value of options to be earned during the first quarter of 2006   $                  47
</TABLE>

The  following table illustrates the effect on net income and earnings per share
if  the  Company applied the fair value recognition provisions of FASB Statement
No.  123,  Accounting  for Stock-Based Compensation, to stock-based compensation
for  the  quarters  ended  March  31,  2005  and  2004:

<TABLE>
<CAPTION>
($in thousands, except per share amounts)                                   2005     2004
                                                                           ------  -------
<S>                                                                        <C>     <C>
Net income (loss), as reported                                             $ 856   $2,438
Deduct: Total stock-based employee compensation expense determined
under fair value based method for all awards, net of related tax effects    (133)     (94)
                                                                           ------  -------
Pro forma net income (loss)                                                $ 723   $2,344
                                                                           ======  =======

EARNINGS (LOSS) PER SHARE:
   Basic - as reported                                                     $ .05   $  .14
                                                                           ======  =======
   Basic - pro forma                                                       $ .04   $  .14
                                                                           ======  =======
   Diluted - as reported                                                   $ .05   $  .14
                                                                           ======  =======
   Diluted - pro forma                                                     $ .04   $  .13
                                                                           ======  =======
</TABLE>

The  stock option plan summary and changes during quarters ended March 31 are as
follows:

<TABLE>
<CAPTION>
                                                                       2005        2004
                                                                  ---------  -----------
<S>                                                               <C>        <C>
Options outstanding, beginning of quarter                          913,708    1,266,281
Granted                                                              7,500           --
Exercised                                                          (42,800)    (141,100)
Canceled                                                                --           --
                                                                  ---------  -----------
Options outstanding, end of quarter                                878,408    1,125,181
                                                                  =========  ===========

Weighted average exercise price of options, beginning of quarter  $   4.40   $     3.90
Weighted average exercise price of options granted                $  11.53   $       --
Weighted average exercise price of options exercised              $   3.54   $     2.49
Weighted average exercise price of options canceled               $     --   $       --
Weighted average exercise price of options, end of quarter        $   4.50   $     4.08

Options exercisable at end of quarter                              725,496      819,841
                                                                  =========  ===========

Options available for future grant at end of quarter               492,176      509,676
                                                                  =========  ===========
</TABLE>

The following table summarizes information about the stock options outstanding
under the Company's option plans as of March 31, 2005:


                                        9
<PAGE>
<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                  2.6       37,500   $          1.32       37,500  $          1.32
  $1.60 - $2.25                  3.6       38,500   $          2.14       38,500  $          2.14
  $2.42 - $3.50                  7.5      246,109   $          2.90      191,471  $          2.87
  $3.75 - $4.50                  6.8      344,546   $          4.34      281,085  $          4.30
      $6.50                      7.9      139,253   $          6.50      104,440  $          6.50
  $9.20 - $12.15                 9.3       72,500   $          9.75       72,500  $          9.75
                                       -----------                   -----------
                                          878,408                       725,496
                                       ===========                   ===========
</TABLE>

As  of  March  31,  2005,  the  1992 Stock Option Plan for Employees had options
outstanding  to  purchase  575,208  common  shares with 188,976 shares remaining
available  for  issuance  under  option  grants.  The 1992 Stock Option Plan for
Directors had options outstanding to purchase 303,200 common shares with 303,200
shares  remaining  available  for  issuance  under  option  grants.

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  quarter  ended March 31 2005, with no options being granted
during  the  quarter  ended  March  31,  2004:

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

NOTE 5.  LITIGATION

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

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 for monetary
damages  exceeding  $162  million.  The  suit  stems  from  California's alleged
abandonment  of  the  formerly  proposed Ward Valley low-level radioactive waste
("LLRW")  disposal  project. State and federal law requires the State to build a
disposal  facility  for  LLRW  produced in California, Arizona, North Dakota and
South Dakota; member states of the Southwestern Compact. US Ecology was selected
to site and license the facility using its own funds on a reimbursable basis and
obtained  a  license  in  1993.

On March 26, 2003, the Superior Court ruled that the Company failed to establish
causation and that its claim is further barred by the doctrine of unclean hands.
The  latter  finding  was  based  on  actions  the  Court  concluded had created
obstacles  to  an  agreement  to  convey  the  proposed  site  from  the federal
government to the State. The Court also ruled that key elements of the Company's
promissory  estoppel  claim  were  proven  at  trial.  Specifically,  the  Court


                                       10
<PAGE>
ruled  that the State made a clear and unambiguous promise to US Ecology in 1988
to  use  its best efforts to acquire the site, that the State had abandoned this
promise, and that the Company's reliance on the State's promise was foreseeable.
However,  the  Court  found  that  the  State's  breach of its promise was not a
substantial factor in causing damages to US Ecology since the federal government
had  continued  to  resist  the  land  transfer.

Based  on  the  uncertainty  of  recovery  following  the  trial court's adverse
decision,  the Company wrote off the $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. The law firm of Cooley Godward was engaged on a fixed
price plus contingency basis to pursue the appeal. The fixed fee was expensed at
the  time  of  engagement in July 2003. The matter is now fully briefed and oral
argument  has  been  scheduled  for  May 9, 2005. A decision will be due 90 days
following  oral  argument.

The Company's financial interest in the matter was materially improved by a 2003
amendment to the 1998 Ward Valley Interest Agreement and Assignment entered into
by  the Company and its former primary lender. This amendment, entered into with
the former lender's successor, provides that any monetary damages obtained shall
first be allocated to the Company to recover past and future litigation fees and
expenses  relating  to the case. Any remaining amount recovered shall be divided
equally  between  the  Company  and  the  former  lender. The 1998 agreement had
provided  that the first $29.6 million less up to $1.0 million in legal fees and
expenses  would  be  owed  to  the  former  lender,  with any remaining recovery
reserved  to  the  Company.

No  assurance  can  be  given that the Company will prevail on appeal or reach a
settlement  to  recover  any  portion  of  its  investment  or  legal  expenses.


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 of 1999 by electric
utilities  that generate low-level radioactive waste ("LLRW") within the Central
Interstate  Low-Level  Radioactive  Waste Compact ("CIC"). CIC member states are
Nebraska,  Kansas,  Oklahoma,  Arkansas,  and  Louisiana.  The  action  sought
declaratory  relief  and  damages  for  bad  faith  in  the  State of Nebraska's
processing  and denial of US Ecology's application to develop and operate a LLRW
disposal  facility  near Butte, Nebraska. US Ecology is 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, US Ecology'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
where  it  was  argued  in  June  2003.

On  February  18,  2004,  the  Eighth U.S. Circuit Court of Appeals 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 make four equal
payments  of  $38.5  million  to  the  CIC beginning August 1, 2005 and annually
thereafter  for  three  years.  The $154 million settlement reflects a principal
amount  of  $140.5  million,  plus  interest  of  3.75%  compounded annually and
beginning  August  1,  2004.  The  principal  may  be reduced to $130 million if
Nebraska  and  the CIC negotiate suitable access to a proposed future Texas LLRW
disposal  site.  Settlement  payments  are  subject to appropriation. Should the
Nebraska  legislature fail to appropriate the required payments, the CIC retains
rights  to pursue enforcement by any and all legal remedies available. Under the
settlement, Nebraska waived any claim to sovereign immunity in a suit brought to
enforce  payment  and  agreed  to  dismiss  its  petition for U.S. Supreme Court
review.   The  Company  is  undertaking efforts to finalize payment arrangements
with  the  CIC  prior  to  the  intended  August  2005  disbursement.

No  assurance  can  be  given that the Nebraska legislature will appropriate the
funds  required  to comply with the settlement agreement or that the Company can
timely  finalize  acceptable  payment  arrangements  with  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


                                       11
<PAGE>
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 entered a
summary  judgment  in  favor  of  the  Company.  Manchak  filed  a  motion  for
reconsideration  that was denied.  Manchak's subsequent appeal to the U.S. Court
of  Appeals  for  the  Federal  Circuit  was  dismissed,  and  his  requests for
reconsideration  and en banc review were rejected in October 2003. On January 8,
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.  On  March  8,  2004, the District Court rejected
Manchak's  Rule  60(b)  motion,  prohibited  further  filings with the Court and
imposed  sanctions  on  Manchak. Manchak appealed the March 8, 2004 order, which
the  Federal  Circuit agreed to hear.  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  now  considers  the  matter  closed.

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

In the complaint, David. Crow alleges he was hired by the Company as its General
Counsel  in  October  1995  and  that  his compensation package included 150,000
options to purchase Company common stock with an oral agreement by the prior CEO
that  the  stock  options  would  be  exercisable  for  ten  years.

In  May  2000, Crow first contacted the Company regarding the stock options. The
Company  informed  Crow  by  letter that pursuant to the Company's 1992 Employee
Stock Option Plan, his options had expired thirty days after his employment with
the  Company  ended.

Crow's  lawsuit  was initially filed in Harris County District Court on or about
May 4, 2004. The Company removed the lawsuit to federal court based on diversity
jurisdiction.  The  complaint  alleges four counts:  breach of written contract,
breach  of  oral  contract, fraudulent inducement, and declaratory judgment that
Crow is entitled to purchase 150,000 shares of AEC stock at a strike price of $4
per  share.  Crow  estimates  his  damages between $1,050,000 and $1,258,500; an
amount  calculated by taking the difference of the Company's current and 52 week
high  stock  trading  price  and  the  $4/share  alleged  option  strike  price.

The  Company  believes  it  has insurance against a portion of the claim and has
notified  its  carrier  of  the  claim.  The  Company  further believes that the
allegations  are  without  merit  and intends to vigorously defend itself in the
matter.  However,  no  assurance  can  be  given  that  it  will prevail or that
insurance  proceeds  will  be  recognized.

NOTE 6.   COMMITMENTS AND CONTINGENCIES

On  January  21,  2005, the Company committed to a five year operating lease for
150  to  200  rail  cars  at  $475  a month for each car leased.  A formal lease
agreement  has  not  yet  been  prepared,  and  the specific number of rail cars
subject  to  the  lease  has  not  yet  been  determined.

NOTE 7.  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 No. 5. 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>
December 31, 2004 obligation  $                 11,627
Accretion of obligation                            270
Payment of obligation                             (260)
Adjustment of obligation                            --
                              -------------------------
March 31, 2005 obligation     $                 11,637
                              =========================
</TABLE>


                                       12
<PAGE>
At  March  31,  2005,  none  of the Company's assets were legally restricted for
purposes  of  settling  the  closure  and  post  closure  obligation.

NOTE  8.  DISCONTINUED  OPERATIONS

During  2002,  the  Company  offered  for sale its Processing Facility and Field
Services  operations  based  in  Oak Ridge, Tennessee. On December 27, 2002, the
facility  ceased  revenue-producing operations and further waste acceptance. All
Oak Ridge waste was subsequently shipped to off-site processors and disposers to
help  sell  the  facility  assets. These assets were subsequently sold to Toxco,
Inc.  on  June  30,  2004.  As of March 31, 2005, there were no "Assets held for
sale  or  closure"  associated  with  the discontinued Oak Ridge operations. The
revenue,  costs  and  expenses  and cash flows for the Oak Ridge 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. The assets and
liabilities  of  discontinued  operations  included  in the consolidated balance
sheet  as  of  March  31  are  as  follows  ($  in  thousands):

<TABLE>
<CAPTION>
                                         Processing and Field Services Facility
                                      ------------------------------------------
                                         Three Months         Ended March 31,
                                      -------------------  ---------------------
                                                     2005                  2004
                                      -------------------  ---------------------
<S>                                   <C>                  <C>
Current assets
--------------
  Current assets                      $                --  $                 183
  Property & equipment, net                            --                    552
                                      -------------------  ---------------------
                                                       --                    735
                                      ===================  =====================
Non-current assets
------------------
  Property, plant & equipment, net                     --                  1,509
  Other                                                --                     48
                                      -------------------  ---------------------
                                                       --                  1,557
                                      ===================  =====================
Current liabilities
-------------------
  Accounts payable & accruals                          --                    890
  Current portion long term debt                       --                     38
                                      -------------------  ---------------------
                                                       --                    928
                                      ===================  =====================
Non-current liabilities
-----------------------
  Closure/post closure obligations                     --                  4,593
  Long-term debt                                       --                     10
  Other                                                --                      5
                                      -------------------  ---------------------
                                                       --                  4,608
                                      ===================  =====================
</TABLE>

Operating  results  for  the  discontinued  operations were as follows for three
months  ending  March  31:

<TABLE>
<CAPTION>
($in thousands)                     Processing and Field
                                     Services Operations

2005
----
<S>                                 <C>
Revenues, net                       $                  --
Operating income (loss)                                --
Net income (loss)                                      --
Basic earnings (loss) per share                        --
Diluted earnings (loss) per share                      --

2004
----
Revenues, net                       $                  --
Operating income (loss)                               149
Net income (loss)                                     149
Basic earnings (loss) per share                       .01
Diluted earnings (loss) per share                     .01
</TABLE>


                                       13
<PAGE>
Costs incurred at the Oak Ridge facility to prepare the facility for sale during
the  three  months  ended  March  31 are summarized as follows: ($ in thousands)

<TABLE>
<CAPTION>
                                                                2005    2004
                                                                -----  ------
<S>                                                             <C>    <C>
Net operating costs in excess of previous accruals              $  --  $  34
Accounts receivable collected in excess of valuation allowance     --   (207)
Increase in estimated cost to dispose of removed waste             --     24
                                                                -----  ------

Net Income for the period ended March 31,                       $  --  $ 149
                                                                =====  ======
</TABLE>

Cost  changes for Oak Ridge facility on-site activities and disposal liabilities
for  removed  wastes  are  as  follows:

<TABLE>
<CAPTION>
($in thousands)            December 31, 2004  Cash Payments   Adjustments  March 31, 2005
                           -----------------  --------------  -----------  --------------
<S>                        <C>                <C>             <C>          <C>
Waste disposal liability                  --             --            --              --
On-site discontinued
operation cost liability                  --             --            --              --

($in thousands)            December 31, 2003  Cash Payments   Adjustments  March 31, 2004
                           -----------------  --------------  -----------  --------------

Waste disposal liability                 623           (139)           24             508
On-site discontinued
operation cost liability                 442           (221)           34             255
</TABLE>

The  adjustments  represent  differences  between the estimated costs accrued at
December  31,  actual  costs  incurred  during the first quarter, and changes in
estimated  future  costs  for  removed  waste  disposition.

NOTE 9. PARTIAL SERVICE INTERRUPTION AT ROBSTOWN, TEXAS HAZARDOUS WASTE 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,  generate 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 will continue to negatively impact financial performance. The
facility  resumed  limited  treatment  services  in  December 2004, but will not
resume  all  permitted  service until the new treatment building is operational.
This  is  projected  to  occur  in  the  third  quarter  of  2005.

The  Company  filed  a  property  insurance  claim  and received $265,000 of the
$954,000 recognized as of March 31, 2005. An additional $503,000 was received in
April  2005.  The balance of the claim is under review by the insurance carrier.
The Company has also filed approximately $2,300,000 in claims under its business
interruption  insurance  policy  for July 2004 through March 2005, of which only
$472,000  has  been  recognized  as  of March 31, 2005. This claim is also under
review  by  the insurance company. The Company anticipates recognizing the value
of  the  claims  after  the  insurance  carrier accepts or confirms the affected
amounts.  No  assurance  can be given, however, that the Company will be able to
recognize  the  pending  insurance  claims.


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


                                       14
<PAGE>
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,  dependence  on  key  personnel,  compliance  with  and  changes to
applicable  laws,  exposure  to  litigation,  access  to  capital,  access  to
cost-effective  insurance  and financial assurances, new technologies and patent
rights,  competitive environment, general economic conditions, potential loss or
diminution  of  major contracts, ability to collect on insurance claims, and the
availability  of  cost  effective rail transportation service. 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 month period ended March 31, 2004 to the three month period ended
March  31,  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,
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 at 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.  This  can  produce large quarter to quarter swings.
Management's  strategy  is  to  continue expanding its recurring business ("Base
Business")  while  simultaneously  securing  both large and small Event Business
projects. When the Company's Base Business covers fixed costs, more of the Event
Business revenue falls through to the bottom line. This strategy takes advantage
of  the  largely  fixed  cost  nature  of  the  disposal  business.

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

The  Company's  financial  performance for the three months ended March 31, 2005
was  substantially  lower  than  the first three months of 2004. This quarter to
quarter  difference  primarily  reflects  a less favorable waste service mix and
higher treatment and transportation costs incurred during the three months ended
March  31,  as  discussed  below.

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.

ACCOUNTING FOR THE JULY 1, 2004 TEXAS FIRE


                                       15
<PAGE>
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. 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 May 6, 2005,
$768,000  in  property  insurance  proceeds  had  been  received by the Company.

As of March 31, 2005, the Company has filed approximately $2,300,000 in business
interruption  insurance  claims with its insurance carrier, 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  insurance  company.

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. During 2003,
the  Company  wrote off $20,951,000 due to an adverse trial court decision which
cast substantial doubt on the Company's ability to recover its investment in the
formerly  proposed  Ward  Valley,  California  disposal project. The Company has
appealed  the  trial  court's  ruling.

The  US District Court for the District of Nebraska entered judgment against the
State  of  Nebraska  in  favor  of  the  Central  Interstate  Compact  and other
plaintiffs  including the Company. The Company's share of the judgment was $12.3
million.  On August 9, 2004 Nebraska and the CIC entered into a settlement under
which  the  State agreed to make four equal payments of $38.5 million to the CIC
beginning  August  1, 2005 and annually thereafter for three years. Payments are
subject  to  appropriation by the Nebraska legislature. The Company carries $6.5
million  on  its  balance  sheet  for capitalized facility development costs and
expects  to  recognize  the  difference between the balance sheet amount and the
full  value  of  its claim when final payment arrangements are entered into with
the  CIC  and  funds  are  appropriated  by  the  Nebraska  legislature.

No  assurance can be given that the Company will prevail in the above litigation
or  otherwise  recover  its  investment in the California project, or that funds
will be appropriated and acceptable payment arrangements made under the Nebraska
settlement.  The  decision  to  accrue  costs  or  write  off assets is based on
specific  facts  and  circumstances  pertaining  to  each  case and management's
evaluation  of  present  circumstances.

RESULTS  OF  OPERATIONS
-----------------------


                                       16
<PAGE>
The following table presents, for the periods indicated, the operating costs as
a percentage of revenues in the consolidated income statement:

<TABLE>
<CAPTION>
          ($in 000's)                                         Three Months Ended
                                                              ------------------
                                                      March 31, 2005       March 31, 2004
                                                   -------------------  ------------------
<S>                                                <C>        <C>       <C>       <C>
                                                           $         %         $         %
                                                   ---------  --------  --------  --------

Revenue                                              12,554               13,905
Direct operating costs                                8,713      69.4%     7,612     54.7%
                                                   ---------            --------

Gross profit                                          3,841      30.6%     6,293     45.3%
SG & A                                                2,514      20.0%     2,872     20.7%
Business interruption insurance claim                   (41)    (0.3)%        --      0.0%
                                                   ---------            --------

Operating income                                      1,368      10.9%     3,421     24.6%

Interest income                                          85       0.7%        36      0.3%
Interest expense                                         47       0.4%        49      0.4%
Other income (expense)                                   17       0.1%        45      0.3%
                                                   ---------            --------

Net income (loss) before income taxes                 1,423      11.3%     3,453     24.8%
Income tax expense (benefit)                            567       4.5%     1,164      8.4%
                                                   ---------            --------

Net income (loss) before discontinued operations        856       6.8%     2,289     16.5%
                                                   =========            ========
</TABLE>

COMPARISON OF THREE MONTHS ENDED MARCH 31, 2005 AND 2004
--------------------------------------------------------

REVENUE
-------
For  the  three  months  ended March 31, 2005, the Company reported consolidated
revenue  of  $12,554,000,  a  10% decrease from the $13,905,000 reported for the
same  period  in  2004.  Three  of four operating disposal sites generated lower
revenue  during  the first quarter of 2005. The lower quarterly revenue resulted
from  a  combination  of slightly lower waste volumes and average selling prices
("ASP")  for  the  Company's  treatment  and  disposal  services  and  decreased
shipments  to  the  Company's  disposal facility in Richland, Washington. At the
three  hazardous  waste  disposal  facilities,  volumes  decreased  1%  and  ASP
decreased  1%  over  the  same  quarter  last year. The decrease in waste volume
resulted  from  reduced  shipments  to  the Company's Idaho and Texas facilities
during  the  quarter.  The  decrease  in  ASP  reflected  a change in the mix of
treatment and direct disposal services. During the three months ending March 31,
2005  and  2004,  revenue  from a contract with the U.S. Army Corps of Engineers
accounted for $2,650,000 and $3,991,000 or 21% and 29% of revenue, respectively.
Also during the first quarter of 2004, one New York clean-up project represented
$1,438,000  or  10%  of  revenue.  This  project  was  completed  prior to 2005.

Operating  Disposal  Facilities
-------------------------------
Richland,  Washington LLRW disposal facility revenue decreased substantially for
the  three  months  ended  March  31,  2005 versus the same period in 2004. This
decrease  was  due  to a 52% decrease in rate-regulated wastes and despite a 17%
increase in non rate-regulated waste receipt. 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 business,
of  which  $684,000  was  recorded  in  the  three  months ended March 31, 2005.
Management  currently  expects  the Richland facility to reach its approved 2005
revenue  requirement.

At  the  Grand  View,  Idaho disposal facility, 5% lower waste volumes and lower
transportation  revenue  were  partially  offset by 5% higher ASP. Total revenue
dropped  6%, however, from the same quarter last year. A private clean-up in New
York contributed to first quarter 2004 revenue. Management expects the U.S. Army
Corps of Engineers and other customers to increase their rate of shipment to the
Grand  View,  Idaho  disposal  facility  for  the  balance  of  2005.

At  the  Beatty, Nevada hazardous treatment and disposal facility, total revenue
increased  5%  for the three months ended March 31, 2005 from the same period in
2004.  The  increased  revenue  was  due  to  a  28%  waste  volume


                                       17
<PAGE>
increase,  however,  ASP  decreased  by  23%. The increased volume was from both
clean-up  projects  and  increased  shipments  from recurring base business. The
lower  ASP resulted from a higher percentage of waste from lower priced clean-up
projects.

At  the  Robstown,  Texas  hazardous  treatment  and  disposal facility, revenue
decreased  21% for the three months ended March 31, 2005 from the same period in
2004. The decreased revenue reflected a less favorable mix of wastes received at
the  site  which reduced ASP by 3%, and a 19% decrease in waste volume following
the  July  1,  2005  treatment building fire. The Texas facility resumed limited
treatment  operations  on  December  1, 2004.  A new treatment building is being
constructed  and is expected to be operational during the third quarter of 2005.

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

For  the  three months ended March 31, 2005, consolidated direct operating costs
increased  14%  to  $8,713,000  (69%  of revenue) compared to $7,612,000 (55% of
revenue)  for  the  same  period in 2004. This was primarily caused by increased
labor,  transportation  and  waste  treatment  additive  costs  at the Company's
Beatty,  Nevada  and  Grand  View,  Idaho  hazardous  waste  facilities.  Higher
transportation  costs  reflected  fuel  surcharges,  an  expanded leased railcar
fleet,  increased  railcar  operating  lease  expenses,  and  mobilization costs
incurred  in  anticipation  of  the  several  large remediation projects. Only a
portion  of  these expenses could be passed on to customers.  Also affecting the
quarter  was  $175,000  spent  to secure preferred access to two east coast rail
transfer  points.  Relative  to  revenue,  direct  operating  costs  increased
substantially.  This  reflects  the  largely  fixed cost nature of the Company's
business.  The  Company  continues  its efforts to minimize direct costs through
operational improvements and efficiencies such as an improved design for the new
treatment building at the Robstown, Texas facility and improved reagent usage at
the  Beatty,  Nevada  facility.

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

Direct  costs  at  each of the four operating facilities increased from the same
quarter  last  year.  This  increase  in consolidated direct operating costs was
driven  by  an  increase  in  direct  costs at the Grand View, Idaho facility of
$495,000 primarily related to transportation, and an increase in direct costs at
the  Beatty,  Nevada  facility of $391,000 primarily related to higher treatment
reagent usage. For Idaho, $175,000 was spent securing preferred long-term access
to two east coast rail transfer facilities, and approximately $575,000 was spent
on  other  transportation-related  activities  during the first quarter of 2005.
This  included fuel surcharges and the costs of a temporarily underutilized rail
fleet  secured  for  clean-up shipping in the second quarter of 2005 and beyond.
While  most of a facility's direct costs are fixed, transportation and treatment
reagents  are  substantially  variable.  The  extent  to  which  these costs are
recovered  as  revenue  is  based  on  individual  contract  conditions,  the
characteristics  of  wastes  received  for  treatment,  and  other  factors.

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 March 31, 2005 and 2004, the Company reported $14,000
and  $10,000  of  expenses  on  proposed  development  projects, and $92,000 and
$109,000  of  costs in 2005 and 2004 to remediate or close facilities subsequent
to  use.

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

Lower  revenue  compounded by higher direct costs resulted in a 39% reduction in
gross  profit, pushing quarterly gross profit down to $3,841,000 compared with a
gross  profit  of  $6,293,000 for the same quarter last year. Decreased disposal
revenue  at  three  of  four  operating  disposal  facilities produced less fall
through  due  to  the largely fixed cost nature of the business. Higher variable
costs  also  reduced  gross  profit.  Gross  margin decreased from 45% to 31% of
revenue due to the lower revenue received in a period when spending increased to
prepare  for  increased  waste  volumes  in  subsequent  periods.

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


                                       18
<PAGE>
For  the  three  months  ended  March  31,  2005,  the  Company reported SG&A of
$2,514,000 (20% of revenue), a 12% decrease from the $2,872,000 (21% of revenue)
for  the same three months of 2004. The decrease in SG&A primarily resulted from
a  $292,000  accrual  in  2004  for  the Management Incentive Plan which was not
accrued in 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 costs
of  the  plan,  is  achieved.

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

During  the  quarter  ended  March  31, 2005, Operating Disposal Facilities SG&A
decreased  $117,000  due  to  centralization  of specific sales functions at the
corporate  office,  offset  by  miscellaneous  increases  in  SG&A.

Corporate
---------

During  the  quarter  ended  March  31, 2005, Corporate SG&A decreased $241,000.
$292,000  of  the  reduction is due to the lack of an accrual for the Management
Incentive  Plan  discussed  above.  During  the quarter ended March 31, 2005 the
Company  incurred costs of $105,000 for documentation and audit of the Company's
internal  controls as mandated by Section 404 of the Sarbanes-Oxley Act of 2002.

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 each of the three months ended
March  31,  2005  and  2004,  the Company reported $5,000 of such SG&A expenses.

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

For  the  three  months  ended  March  31,  2005,  the Company earned $85,000 of
interest  income,  an  increase  from  $36,000 in the same period 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 months ended March 31, 2005, the Company reported interest expense
of  $47,000,  a  decrease  of  $2,000 from the corresponding period in 2004. The
primary  cause of this decrease was the reduction in average debt outstanding by
$1,400,000  from  March  31, 2004 to 2005. For the three months ending March 31,
2005,  the  interest rate paid on its single outstanding term loan was 4.56%, an
increase  of  1.18%  from the 3.38% at March 31, 2004. Additional reductions may
occur  as  debt  balances  continue  to  be  paid down, however the Company will
experience  increased  interest expense should interest rates increase. At March
31,  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 March 31,
                                                         2005            2004
                                                    -------------  ----------------
<S>                                                 <C>            <C>
Data processing services                            $          --  $             20
Cash receipts for sale or rent of property rights              17                16
Other miscellaneous income, net                                --                 9
                                                    -------------  ----------------

Total other income (loss)                           $          17  $             45
                                                    =============  ================
</TABLE>

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


                                       19
<PAGE>
The components of the income tax provision were as follows ($ in thousands):

<TABLE>
<CAPTION>
                       Three Months Ended March 31,
                          2005            2004
                     -------------  ----------------
<S>                  <C>            <C>
Federal tax expense  $         521  $          1,164
State tax expense               46                --
                     -------------  ----------------

Income tax expense   $         567  $          1,164
                     =============  ================
</TABLE>

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  March  31, 2005 was approximately
$36,000,000  and  expires  at  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,
while  the  other approximately 35% of income tax expense will be offset against
the  net  operating  loss  carry  forwards.

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  March  31,  2005,  cash  and  short term investments totaled $13,243,000, an
increase of $116,000 from December 31, 2004. The small increase in cash reflects
the  Company's  continued  profitability.

During  the  first  three  months  of 2005, the Company's days sales outstanding
("DSO") increased at March 31, 2005, to 64 days compared to December 31, 2004 at
60  days.

As  of March 31, 2005 the Company's liquidity, as measured by the current ratio,
was 2.4 to 1.0. The debt to equity ratio decreased to 0.5:1.0 at March 31, 2005.
There have not been any substantial changes to working capital or debt to equity
ratio  during the three months ended March 31, 2005. The debt to equity ratio is
defined  as  total  liabilities  divided  by  stockholders  equity.

SOURCES  OF  CASH

On  March  31, 2005, the Company had an $8,000,000 revolving line of credit with
Wells  Fargo  Bank  in  Boise,  Idaho  maturing  June  15,  2005.  Management is
negotiating  with  the  Bank to renew and extend the line of credit. The line of
credit  is  secured by the Company's accounts receivable. At March 31, 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 for a letter of credit used as collateral for an
insurance  policy.

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 $13,243,000 in cash and short term
investments at March 31, 2005 was comprised of short term investments which were
not  required  for  operations  of  $10,323,000,  cash immediately available for
operations  of  $3,469,000,  and  a net checks outstanding amount of ($549,000).


                                       20
<PAGE>
USES OF CASH

Management  currently  expects  its  capital  spending to be up to an additional
$9,000,000  in  2005  with  $3,100,000  projected  to be spent completing a cell
expansion  at  the Idaho hazardous waste facility. Cell expansion at each of the
Company's  other  sites  are  also  underway  or  projected  in  2005.

The  Company  paid  a  $0.25  annual dividend on October 15, 2004. The Company's
Board  of  Directors  is  evaluating dividend policy and is considering changing
from  an  annual  to  quarterly  dividend.  While management anticipates that an
announcement  will  be  made  on  dividend  policy  on  or  around  its  annual
shareholders  meeting  on  May  25,  2005,  such announcement is contingent upon
approval  from  its commercial bank, Wells Fargo. Management is working with its
bank  to  modify  its  existing  credit  agreement  to allow for a change in the
Company's  dividend  policy,  however no assurance can be given that the Company
can  have  such  approval  prior  to  May  25,  2005.

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 March 31,
2005,  approximately  $13,200,000  was held in cash or short term investments at
terms  ranging  from  overnight  to  three  months. Together, these items earned
interest  at  approximately  2%  and  comprised  17%  of  assets.

The  Company  has  interest  rate risk on debt instruments due to the $7,000,000
five  year  amortizing  term  loan  due Wells Fargo Bank.  At December 31, 2004,
$3,733,000 of variable rate debt was owed under the term loan, accruing interest
at the rate of 4.6%.  A hypothetical change of 1% in interest rates would change
annual  interest  expense  paid  by  the  Company  by  approximately  $30,000.

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 March 31, 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.

PART II OTHER INFORMATION.
--------------------------

ITEM 1.     LEGAL PROCEEDINGS.


                                       21
<PAGE>
Significant  developments  have  occurred  on  the following legal matters since
December  31,  2004:

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 for monetary
damages  exceeding  $162  million.  The  suit  stems  from  California's alleged
abandonment  of  the  formerly  proposed Ward Valley low-level radioactive waste
("LLRW")  disposal  project. State and federal law requires the State to build a
disposal  facility  for  LLRW  produced in California, Arizona, North Dakota and
South Dakota; member states of the Southwestern Compact. US Ecology was selected
to site and license the facility using its own funds on a reimbursable basis and
obtained  a  license  in  1993.

On March 26, 2003, the Superior Court ruled that the Company failed to establish
causation and that its claim is further barred by the doctrine of unclean hands.
The  latter  finding  was  based  on  actions  the  Court  concluded had created
obstacles  to  an  agreement  to  convey  the  proposed  site  from  the federal
government to the State. The Court also ruled that key elements of the Company's
promissory  estoppel  claim  were proven at trial. Specifically, the Court ruled
that the State made a clear and unambiguous promise to US Ecology in 1988 to use
its best efforts to acquire the site, that the State had abandoned this promise,
and that the Company's reliance on the State's promise was foreseeable. However,
the  Court  found  that  the State's breach of its promise was not a substantial
factor  in  causing  damages  to  US  Ecology  since  the federal government had
continued  to  resist  the  land  transfer.

Based  on  the  uncertainty  of  recovery  following  the  trial court's adverse
decision,  the Company wrote off the $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. The law firm of Cooley Godward was engaged on a fixed
price plus contingency basis to pursue the appeal. The fixed fee was expensed at
the  time  of  engagement in July 2003. The matter is now fully briefed and oral
argument  has  been  scheduled  for  May 9, 2005. A decision will be due 90 days
following  oral  argument.

The Company's financial interest in the matter was materially improved by a 2003
amendment to the 1998 Ward Valley Interest Agreement and Assignment entered into
by  the Company and its former primary lender. This amendment, entered into with
the former lender's successor, provides that any monetary damages obtained shall
first be allocated to the Company to recover past and future litigation fees and
expenses  relating  to the case. Any remaining amount recovered shall be divided
equally  between  the  Company  and  the  former  lender. The 1998 agreement had
provided  that the first $29.6 million less up to $1.0 million in legal fees and
expenses  would  be  owed  to  the  former  lender,  with any remaining recovery
reserved  to  the  Company.

No  assurance  can  be  given that the Company will prevail on appeal or reach a
settlement  to  recover  any  portion  of  its  investment  or  legal  expenses.

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 of 1999 by electric
utilities  that generate low-level radioactive waste ("LLRW") within the Central
Interstate  Low-Level  Radioactive  Waste Compact ("CIC"). CIC member states are
Nebraska,  Kansas,  Oklahoma,  Arkansas,  and  Louisiana.  The  action  sought
declaratory  relief  and  damages  for  bad  faith  in  the  State of Nebraska's
processing  and denial of US Ecology's application to develop and operate a LLRW
disposal  facility  near Butte, Nebraska. US Ecology is 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, US Ecology'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
where  it  was  argued  in  June  2003.


                                       22
<PAGE>
On  February  18,  2004,  the  Eighth U.S. Circuit Court of Appeals 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 make four equal
payments  of  $38.5  million  to  the  CIC beginning August 1, 2005 and annually
thereafter  for  three  years.  The $154 million settlement reflects a principal
amount  of  $140.5  million,  plus  interest  of  3.75%  compounded annually and
beginning  August  1,  2004.  The  principal  may  be reduced to $130 million if
Nebraska  and  the CIC negotiate suitable access to a proposed future Texas LLRW
disposal  site.  Settlement  payments  are  subject to appropriation. Should the
Nebraska  legislature fail to appropriate the required payments, the CIC retains
rights  to pursue enforcement by any and all legal remedies available. Under the
settlement, Nebraska waived any claim to sovereign immunity in a suit brought to
enforce  payment  and  agreed  to  dismiss  its  petition for U.S. Supreme Court
review.   The  Company  is  undertaking efforts to finalize payment arrangements
with  the  CIC  prior  to  the  intended  August  2005  disbursement.

No  assurance  can  be  given that the Nebraska legislature will appropriate the
funds  required  to comply with the settlement agreement or that the Company can
timely  finalize  acceptable  payment  arrangements  with  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  entered  a  summary judgment in favor of the Company.
Manchak  filed  a  motion  for  reconsideration  that  was  denied.  Manchak's
subsequent  appeal  to  the  U.S.  Court  of Appeals for the Federal Circuit was
dismissed,  and his requests for reconsideration and en banc review were finally
rejected  in October 2003. On January 8, 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.  On March 8,
2004,  the  District  Court  rejected  Manchak's  Rule  60(b) motion, prohibited
further  filings  with the Court on the matter and imposed sanctions on Manchak.
Manchak  appealed the March 8, 2004 order and the Federal Circuit agreed to hear
the  appeal.  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.

In the complaint, David. Crow alleges he was hired by the Company as its General
Counsel  in  October  1995  and  that  his compensation package included 150,000
options to purchase Company common stock with an oral agreement by the prior CEO
that  the  stock  options  would  be  exercisable  for  ten  years.

In  May  2000, Crow first contacted the Company regarding the stock options. The
Company  informed  Crow  by  letter that pursuant to the Company's 1992 Employee
Stock  Option  Plan, Crow's options had expired thirty days after his employment
with  the  Company  ended.

Crow's  lawsuit  was initially filed in Harris County District Court on or about
May 4, 2004. The Company removed the lawsuit to federal court based on diversity
jurisdiction.  The  complaint  alleges four counts:  breach of written contract,
breach  of  oral  contract, fraudulent inducement, and declaratory judgment that
Crow is entitled to purchase 150,000 shares of AEC stock at a strike price of $4
per  share.  Crow  estimates  his  damages between $1,050,000 and $1,258,500; an
amount  calculated by taking the difference of the Company's current and 52 week
high  stock  trading  price  and  the  $4/share  alleged  option  strike  price.

The  Company  believes  it  has insurance against a portion of the claim and has
notified  its  carrier  of  the  claim.  The  Company  further believes that the
allegations  are  without  merit  and intends to vigorously defend itself in the
matter.  However,  no  assurance  can  be  given  that  it  will prevail or that
insurance  proceeds  will  be  recognized.

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

None


                                       23
<PAGE>
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

None

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

None

ITEM 5.  OTHER INFORMATION.

None

ITEM 6.  EXHIBITS.

     The following exhibits are filed as part of this report:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
Exhibit No.                                        Description
-----------  ---------------------------------------------------------------------------------------
<S>          <C>
   31.1      Certifications of March 31, 2005 Form 10-Q by Chief Executive Officer dated May 6, 2005
-----------  ---------------------------------------------------------------------------------------
   31.2      Certifications of March 31, 2005 Form 10-Q by Chief Financial Officer dated May 6, 2005
-----------  ---------------------------------------------------------------------------------------
   32.1      Certifications of March 31, 2005 Form 10-Q by Chief Executive Officer dated May 6, 2005
-----------  ---------------------------------------------------------------------------------------
   32.2      Certifications of March 31, 2005 Form 10-Q by Chief Financial Officer dated May 6, 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:  May 6, 2005                      By:/s/ Stephen A. Romano
                                        ------------------------
                                        Stephen A. Romano
                                        President, Chief Executive Officer
                                        and Chief Operating Officer

Date:  May 6, 2005                      By:/s/ James R. Baumgardner
                                        ---------------------------
                                        James R. Baumgardner
                                        Senior Vice President,
                                        Chief Financial Officer,
                                        Secretary and Treasurer


                                       24
<PAGE>
<TABLE>
<CAPTION>
                                               EXHIBIT INDEX

Exhibit                                         Description
-------                                         -----------
<S>            <C>
  31.1         Certifications of March 31, 2005 Form 10-Q by Chief Executive Officer dated May 6, 2005
  31.2         Certifications of March 31, 2005 Form 10-Q by Chief Financial Officer dated May 6, 2005
  32.1         Certifications of March 31, 2005 Form 10-Q by Chief Executive Officer dated May 6, 2005
  32.2         Certifications of March 31, 2005 Form 10-Q by Chief Financial Officer dated May 6, 2005
</TABLE>


                                       25