**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-K/A**


**(Amendment
      No. 1)**





ý
            ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
                EXCHANGE ACT OF 1934For
                the fiscal year ended December 31, 2006ORo
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
                EXCHANGE ACT OF 1934




Commission
      file number: 0-22332





**INSITE
      VISION INCORPORATED**


(Exact
      name of registrant as specified in its charter)





**Delaware**
            
            **94-3015807**(State
                or other jurisdiction of
            
            (I.R.S.
                Employerincorporation
                or organization)
            
            Identification
                No.)**965
                Atlantic Avenue, Alameda, CA**
            
            **94501**(Address
                of principal executive offices)
            
            (Zip
                Code)





**(510)-865-8800**


(Registrant’s
      telephone number, including area code)




Securities
      registered pursuant to Section 12(b) of the Act:




Title
                of each class
            
            Name
                of each exchange on which registeredCommon
                Stock, $0.01 par value per share
            
            American
                Stock Exchange




Securities
      registered pursuant to Section 12(g) of the Act: None





Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act.  Yes
o  No
x





Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Exchange Act.  Yes
o  No
x





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. Yes
x No
o





Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein, and will not be contained, to the best
      of registrant's knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any amendment to
      this
      Form 10-K. x





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange
      Act.




Large accelerated filer o
            Accelerated filer x
            Non-accelerated filer o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes
o No
x





The
      aggregate market value of registrant’s Common Stock, $0.01 par value, held by
      non-affiliates of the Registrant as of June 30, 2006 was approximately
      $124,602,189 (based upon the closing sale price of the Common Stock on the
      last
      business day of the registrant’s most recently completed second fiscal quarter).
      Shares of Common Stock held by each officer and director and by each person
      who
      owns 5% or more of the Common Stock have been excluded from such calculation
      as
      such persons may be deemed affiliates. This determination of affiliate status
      is
      not necessarily a conclusive determination for other purposes.





Number
      of
      shares of Common Stock, $0.01 par value, outstanding as of April 16,
      2007 :
      93,476,537.








**EXPLANATORY
      NOTE**




This
      Amendment No. 1 on Form 10-K/A (this “Amendment”) amends the Registrant’s Annual
      Report on Form 10-K for the fiscal year ended December 31, 2006, originally
      filed on March 15, 2007 (the “Original Filing”). The Registrant is filing the
      performance graph required pursuant to Item 201(e) of Regulation S-K and is
      re-filing Part III to include the information required by Items 10, 11, 12,
      13
      and 14 to Part III within the period required by General Instruction G(3) to
      Form 10-K. In addition, in connection with the filing of this Amendment and
      pursuant to the rules of the Securities and Exchange Commission, or the SEC,
      the
      Registrant is including with this Amendment certain currently dated
      certifications. Except as described above, no other changes have been made
      to
      the Original Filing.










**PART
      I**





**Item
      5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities**





**Stock
      Performance Graph**




The
        following graph compares the percentage change in (i) the cumulative total
        stockholder return on our common stock from December 31, 2001 through December
        31, 2006 with (ii) the cumulative total return on (a) the American Stock
        Exchange (U.S. Index); (b) the American Stock Exchange (biotech) and (c)
        the
        American Stock Exchange Health Products and Services (HP&S) index. The
        comparison assumes (i) an investment of $100 on December 31, 2001 in each
        of the
        foregoing indices and (ii) reinvestment of dividends, if any.




***The
      stock price performance shown on the graph below represents historical price
      performance and is not necessarily indicative of any future stock price
      performance.***







ISV
                
                AMEX
                
                AMEX
                    BIOTECH
                
                AMEX
                    HP&S12/31/01
                
                
                100
                
                
                100
                
                
                100
                
                
                10012/31/02
                
                
                39
                
                
                82
                
                
                69
                
                
                6912/31/03
                
                
                31
                
                
                111
                
                
                121
                
                
                12112/31/04
                
                
                48
                
                
                128
                
                
                97
                
                
                12512/31/05
                
                
                45
                
                
                138
                
                
                121
                
                
                10812/31/06
                
                
                84
                
                
                160
                
                
                134
                
                
                139




*Notwithstanding
        anything to the contrary set forth in any of our previous filings under the
        Securities Act of 1933 or the Securities Exchange Act of 1934 which might
        incorporate any of our future filings made under those statutes, the preceding
        Stock Performance Graph will not be incorporated by reference into any of
        those
        prior filings, nor will such graph be incorporated by reference into any
        of our
        future filings made under those statutes.*









**PART
      III**





**Item
      10. Directors, Executive Officers and Corporate Governance**





As
      of
      April 16, 2007, the directors of the Company were as follows:





**Name**
            
            **Position(s)
                with the Company**
            
            **Age**
            
            **Director
                Since**S.
                Kumar Chandrasekaran, Ph.D.
            
            Chairman
                of the Board,
              President,
                Chief Executive Officer and Chief Financial Officer
            
            64
            
            1989Mitchell
                H. Friedlaender, M.D.
            
            Director
            
            61
            
            1996John
                L. Mattana
            
            Director
            
            78
            
            1997Jon
                S. Saxe, Esq.
            
            Director
            
            70
            
            2000Anders
                P. Wiklund
            
            Director
            
            67
            
            1996




**Business
      Experience of Board Members**




**S.
      Kumar Chandrasekaran, Ph.D.** has been
      a Director of the Company since 1989. Dr. Chandrasekaran joined the Company
      in
      September 1987 as Vice President, Development. From 1988 to 1989, Dr.
      Chandrasekaran served as Vice President, Research and Development. From 1989
      to
      1993, Dr. Chandrasekaran served as President and Chief Operating Officer. Since
      August 1993, he has served as Chairman of the Board of Directors, President
      and
      Chief Executive Officer and since December 1999, he has served as Chief
      Financial Officer, a position he also held from December 1995 to December 1997.
      Dr. Chandrasekaran holds a Ph.D. in Chemical Engineering from the University
      of
      California at Berkeley.





**Mitchell
      H. Friedlaender, M.D.** has
      been
      a Director of the Company since May 1996. He has served as an ophthalmologist
      at
      Scripps Clinic and Research Foundation (“Scripps”) since 1986 and currently
      serves as Head of Division of Ophthalmology and Director, LaserVision Center,
      Scripps Clinic. Prior to joining Scripps, Dr. Friedlaender served as a full-time
      faculty member at the University of California, San Francisco for 10 years.
      He
      is the founder of the Aspen Corneal Society and the Pacific Ophthalmic Forum,
      co-editor in chief of International Ophthalmology Clinics, a member of four
      scientific editorial boards, a member of the Sjogren’s Syndrome Foundation
      Medical Advisory Board, and former president of the Ocular Microbiology and
      Immunology Group. He also serves as a consultant for several pharmaceutical
      companies and performs clinical studies on new ophthalmic drugs. Dr.
      Friedlaender holds an M.B.A. from the University of Phoenix and an M.D. from
      the
      University of Michigan.





**John
      L. Mattana** has
      been
      a Director of the Company since September 1997. From 1992 to 1997, Mr. Mattana
      served as an Investment Vice President at New York Life Insurance Company,
      where
      he was a Director of Venture Capital Investments. From October 1997 through
      February 2004 he served as a Vice President at Ceptor Corporation. Mr. Mattana
      holds an M.B.A. from New York University.




2





**Jon
      S. Saxe, Esq.** has
      been
      a Director of the Company since December 1999. Mr. Saxe was also a Director
      of
      the Company from 1992 through 1997, when he resigned as a member of the Board
      of
      Directors and became Director Emeritus until December 1999. Mr. Saxe is a
      Director of Protein Design Labs, Inc., a biotechnology company for which he
      served as President from January 1995 to May 1999. Mr. Saxe served as President
      of Saxe Associates, a biotechnology consulting firm, from May 1993 to December
      1994, President, Chief Executive Officer and a Director of Synergen, Inc.,
      from
      October 1989 to April 1993, and Vice President, Licensing & Corporate
      Development for Hoffmann-LaRoche from August 1984 through September 1989. Mr.
      Saxe serves on the board of directors of First Horizon Pharmaceutical
      Corporation, Protein Design Labs, Inc., SciClone Pharmaceuticals, Inc., Durect,
      Inc. and Entelos, Inc. Mr. Saxe also serves on the board of directors of several
      private companies. Mr. Saxe holds a B.S. in Chemical Engineering from
      Carnegie-Mellon University, a J.D. from George Washington University School
      of
      Law, and an L.L.M. from New York University School of Law.




**Anders
          P. Wiklund** has
          been
          a Director of the Company since November 1996. Since January 2007, Mr.
          Wiklund
          has served as President of Effrx, Inc., a privately-held company that develops
          innovative drug delivery solutions. Since January 1997 he has also served
          as
          Principal at Wiklund International Inc., an advisory firm to the biotechnology
          and pharmaceutical industries, and from 1997 through 2002 served as Senior
          Vice
          President at Biacore Holding Inc., a life science technology company. He
          served
          as Vice President, Corporate Business Development of Pharmacia & Upjohn from
          January 1996 to December 1996, as Executive Vice President of Pharmacia
          U.S.
          Inc. from 1994 to 1996 and as President and Director of Pharmacia Development
          Corp. from 1993 to 1994. Mr. Wiklund served as Chief Executive Officer,
          President and Director of KABI Pharmacia Inc. from 1990 to 1993. Mr. Wiklund
          serves on the board of directors of several private companies. Mr. Wiklund
          holds
          a Master of Pharmacy from the Pharmaceutical Institute, Stockholm,
          Sweden.





There
      are
      no family relationships between any members of our Board of Directors and our
      executive officers.




**SECTION
      16(A) BENEFICIAL** **OWNERSHIP
      REPORTING COMPLIANCE**




Section
        16(a) of the Securities Exchange Act of 1934 requires our directors and
        executive officers, and persons who beneficially own more than 10% of a
        registered class of the Company’s equity securities, to file with the SEC
        initial reports of beneficial ownership and reports of changes in beneficial
        ownership of our common stock and other equity securities. Officers,
        directors and greater than 10% stockholders are required by the Securities
        Exchange Act of 1934, as amended, to furnish us with copies of all Section
        16(a) reports they file.





Based
        solely upon review of the copies of such reports furnished to us and
        written representations that no other reports were required, we believe
        that during the fiscal year ended December 31, 2006, our officers,
        directors and holders of more than 10% of the common stock complied with
        all
        Section 16(a) filing requirements.




**CODE
      OF ETHICS**





We
      have
      adopted a Code of Ethics for our principal executive officer, principal
      financial officer, principal accounting officer or controller, or persons
      performing similar functions. Our Code of Ethics can be found on our website
      located at www.InSiteVision.com under “Investor Relations.” Any future
      amendments to our Code of Ethics will also be posted on our website. A copy
      of
      the Code of Ethics is available to investors free of charge by writing to InSite
      Vision Incorporated, Investor Relations, 965 Atlantic Avenue, Alameda, CA
      94501.





**AUDIT
      COMMITTEE**





The
      Audit
      Committee currently consists of three directors: John L. Mattana, Jon S. Saxe
      and Anders P. Wiklund.




3








The
        Board
        of Directors has determined that each of the members of the Audit Committee
        is
“independent” as that term is defined in Section 121(A) of the American
        Stock Exchange’s listing standards and also meets the additional criteria for
        independence of Audit Committee members set forth in Rule 10A-3(b)(1) under
        the
        Securities Exchange Act of 1934. In addition, the Board of Directors has
        determined that each member of its Audit Committee is “financially
        sophisticated” and that therefore the Audit Committee meets the requirement
        under the rules of the American Stock Exchange that at least one member of
        the
        audit committee be “financially sophisticated.” Although the Board of Directors
        does not believe any member of the Audit Committee currently qualifies as
        an
        "audit committee financial expert" as defined by the SEC, we believe that
        the experience and financial acumen of the members of the Audit Committee
        is sufficient given our current needs and financial position. The Board of
        Directors will continue to assess the qualifications of the members of its
        Audit
        Committee, including the need to appoint a financial expert, in light
        of our financial complexity, position and requirements in order to
        serve our best interests and that of
        our stockholders.





**Item
      11. Executive Compensation**





**COMPENSATION
      DISCUSSION AND ANALYSIS**





This
      section contains a discussion of the material elements of compensation awarded
      to, earned by or paid to our principal executive officer, our principal
      financial officer, and our three other most highly compensated executive
      officers. These individuals are listed in the “Summary Compensation Table” below
      and referred to as the “Named Executive Officers” in this Annual
      Report.





Our
      executive compensation programs are determined and approved by our Stock Plan
      and Compensation Committee (the “Compensation Committee”). None of the Named
      Executive Officers are members of the Compensation Committee or otherwise had
      any role in determining the compensation of other Named Executive Officers,
      although the Compensation Committee does consider the recommendations of Dr.
      Chandrasekaran in setting compensation levels for our executive officers other
      than Dr. Chandrasekaran.





**Executive
      Compensation Program Objectives and Overview**





The
      Compensation Committee’s principal goals in making its executive compensation
      decisions are:





·  to
        ensure
        that there exists an appropriate relationship between executive pay and both
        our
        performance and the creation of stockholder value, particularly (but not
        exclusively) as reflected in the price of our common stock;
        and


·  to
      attract, motivate and retain key executives in the face of competition within
      the bio-technology industry for qualified personnel.





Our current
        executive compensation program is based on three components, which are designed
        to be consistent with our compensation philosophy: (1) base salary, (2) annual
        incentive bonuses, and (3) stock options that are subject to time-based vesting
        requirements. In structuring executive compensation packages, the Compensation
        Committee considers how each component promotes retention and/or motivates
        performance by the executive. We
        do not
        provide any material perquisites or personal benefits to our Named Executive
        Officers nor do we have any severance arrangements or agreements with any
        of our
        Named Executive Officers.




4





Base
      salaries are primarily intended to attract and retain highly qualified
      executives. Annual bonuses are primarily intended to motivate Named Executive
      Officers to achieve specific strategic and operating objectives for that year.
      Our long-term equity incentives are primarily intended to align Named Executive
      Officers’ long-term interests with stockholders’ long-term interests. We also
      believe that annual bonuses and equity incentives play a role in helping us
      to
      attract and retain top executives. These are the elements of our executive
      compensation program that are designed to reward performance and thus the
      creation of stockholder value.




The
          Compensation Committee believes that performance-based compensation such
          as
          annual bonuses and long-term equity incentives play a significant role
          in
          aligning management’s interests with those of our stockholders. For this reason,
          these forms of compensation constitute a substantial portion of each of
          our
          Named Executive Officers’ compensation. For 2006, the Compensation Committee
          approved executive compensation arrangements for Dr. Chandrasekaran that
          resulted in up to 75% of his total direct compensation being incentive
          compensation tied directly to stockholder value creation, with his base
          salary
          constituting the balance of his 2006 total direct compensation. (As used
          in this
          discussion, the term “total direct compensation” means the aggregate amount of
          the executive’s base salary, annual incentive bonus, and long-term equity
          incentive awards based on the grant-date fair value of such awards as determined
          under the accounting principles used in our financial reporting.) With
          respect to our other Named Executive Officers, the Compensation Committee
          approved executive compensation arrangements that resulted in up to 40%
          of each
          executive’s total direct compensation being incentive compensation tied directly
          to stockholder value creation, with base salary constituting the balance
          of
          their 2006 total direct compensation. Our compensation packages are designed
          to
          promote teamwork, initiative and resourcefulness by key employees whose
          performance and responsibilities directly affect our results of
          operations.




As
          part
          of its annual review of executive compensation, the Compensation Committee
          has
          generally reviewed the compensation paid to similarly situated executive
          officers in the technology and bio-technology industries in the San Francisco
          Bay Area. Such internal surveys are used by the Compensation Committee
          as one
          factor in determining appropriate compensation for our Named Executive
          Officers. The Compensation Committee does not bench-mark based on these
          surveys.
  In
          2006,
          the Compensation Committee determined that funds that could otherwise have
          been
          used for increases in executive compensation would be more appropriately
          allocated to helping us achieve regulatory approval for AzaSite and other
          strategic objectives. Accordingly, the Compensation Committee did not increase
          2006 salaries over 2005 levels nor were any bonuses paid to the Named Executive
          Officers in 2006. The Compensation Committee intends to conduct a comprehensive
          review in 2007 of total compensation paid to the Named Executive
          Officers.





**Current
      Executive Compensation Program Elements**




**Base
      Salaries**




Salaries
        for our Named Executive Officers are reviewed by the Compensation Committee
        on
        an annual basis. In general, the Compensation Committee targets base salary
        levels at approximately the middle percentile among other companies in our
        industry in the San Francisco Bay Area as described above. In setting specific
        salary levels for each Named Executive Officer, the Compensation Committee
        assesses the executive’s past performance and expected future contributions as
        well as Dr. Chandrasekaran’s recommendations (with respect to executive officers
        other than himself). We have not entered into employment agreements with
        any of
        the Named Executive Officers that provide for minimum levels of base salary.
        As
        noted above, the Compensation Committee determined not to increase base salaries
        in 2006 from the levels in 2005. The Compensation Committee believes that
        the
        base salary levels of the Named Executive Officers generally are reasonable
        in
        view of competitive practices, our performance and the contribution of those
        officers to that performance.





5




**Annual
      Bonuses**




Historically,
        annual incentive bonuses have been awarded to executive officers based upon
        multiple performance criteria, including evaluations of personal job performance
        and performance measured against objective business criteria. In addition,
        the
        Compensation Committee considered the practices and performance of other
        similarly situated companies in the San Francisco Bay Area as described above.
        As with base salaries, the Compensation Committee generally targets bonus
        levels
        in the middle percentile for similarly situated companies. However, because
        the
        Compensation Committee has broad discretion to establish annual bonuses based
        on
        our performance and performance of the individual executive, the actual bonuses
        paid to the Named Executive Officers in any given year may differ substantially
        from the annual bonuses paid to comparable officers at similarly situated
        companies.




For
        2006,
        the key performance factors considered by the Compensation Committee in
        determining annual bonuses for our Named Executive Officers included successful
        completion of the AzaSite Phase 3 clinical trials, filing a New Drug Application
        with the Food and Drug Administration for AzaSite, completion of an AzaSite
        license and an assessment of the executive’s job performance for 2006. Because
        the 2006 performance criteria were only met in part and due to our financial
        constraints, the Compensation Committee decided not to pay any bonuses for
        2006.




Our
        Named
        Executive Officers do not have contractual rights to receive a fixed actual
        or
        target bonus for any given year. Their actual annual bonuses are established
        by
        the Compensation Committee in its sole discretion based on its assessment
        of our
        performance and the performance of the executive for the year as described
        above.





**Long-Term
      Incentive Equity Awards**




Our
        policy is that the long-term compensation of our Named Executive Officers
        and other executive officers should be directly linked to the value provided
        to
        stockholders. Therefore, we have historically made annual grants of stock
        options to provide further incentives to our executives to increase stockholder
        value. The Compensation Committee bases its award grants to executives each
        year
        on a number of factors, including:





·  the
      executive’s position and total compensation package;





·  the
      executive’s performance of his or her individual responsibilities;





·  the
      equity participation levels of comparable executives at comparable companies;
      and





·  the
      executive’s contribution to the success of our business
      objectives.




In
          addition, the size, frequency and type of long-term incentive grants may
          be
          determined on the basis of the grant’s tax consequences to us and to
          the individual, accounting impact and potential dilution
          effects.




Our
        stock
        option grants to the Named Executive Officers have an exercise price that
        is
        equal to the closing price of our common stock on the grant date. Thus, the
        executives will only realize value on their stock options if our stockholders
        realize value on their shares. The stock options also function as a retention
        incentive for our executives as they vest ratably over the four-year period
        after the date of grant. In February 2006, the Compensation Committee approved
        grants of options to each of our Named Executive Officers. The material terms
        of
        these options are described below under “Grants of Plan-Based
        Awards.”




6




We
        generally do not make regular grants of equity awards to executives on an
        annual
        or other periodic basis. Rather, our practice has been to grant equity awards
        to
        executives primarily after certain performance objectives have been achieved
        and, in all cases, only after the achievement of these objectives has been
        fully
        disclosed and the public market has had opportunity to
        respond.





**Policy
      with Respect to Section 162(m)**




Section 162(m) of
        the Internal Revenue Code generally disallows a tax deduction to publicly
        held
        companies for compensation exceeding $1 million paid to their chief executive
        officers and four other most highly compensated executive officers unless
        certain performance and other requirements are met. Our intent generally
        is to
        design and administer executive compensation programs in a manner that will
        preserve the deductibility of compensation paid to our executive officers,
        and
        we believe that a substantial portion of our current executive compensation
        program (including the stock options granted to our Named Executive Officers
        as
        described above) satisfies the requirements for exemption from the $1 million
        deduction limitation. However, we reserve the right to design programs that
        recognize a full range of performance criteria important to our success,
        even
        where the compensation paid under such programs may not be deductible. The
        Compensation Committee believes that no part of our tax deduction for
        compensation paid to the Named Executive Officers for 2006 will be disallowed
        under Section 162(m). The Compensation Committee will continue to monitor
        the
        tax and other consequences of our executive compensation program as part
        of its
        primary objective of ensuring that compensation paid to our executive officers
        is reasonable, performance-based and consistent with our goals and the goals
        of
        our stockholders.





**STOCK
      PLAN AND COMPENSATION COMMITTEE REPORT ON EXECUTIVE
      COMPENSATION** **(1)**





The
      Compensation Committee has certain duties and powers as described in its
      charter. The Compensation Committee is currently composed of the two
      non-employee directors named at the end of this report, each of whom is
      independent as defined by the American Stock Exchange listing
      standards.





The
        Compensation Committee has reviewed and discussed with management the
        disclosures contained in the Compensation Discussion and Analysis section
        of
        this annual report. Based upon this review and discussion, the Compensation
        Committee recommended to our Board of Directors that the Compensation Discussion
        and Analysis section be included in our Annual Report on Form 10-K/A to be
        filed with the SEC.





**Stock
                Plan and Compensation Committee of the Board of
                Directors**John
                L. MattanaAnders
                P. Wiklund







(1)
              SEC
                    filings sometimes “incorporate information by reference.” This means that
                    we are referring you to information that has previously been
                    filed with
                    the SEC, and that this information should be considered as part
                    of the
                    filing you are reading. Unless we specifically state otherwise,
                    this
                    report shall not be deemed to be incorporated by reference and
                    shall not
                    constitute soliciting material or otherwise be considered filed
                    under the
                    Securities Act of 1933 or the Securities Exchange Act of
                    1934.





**COMPENSATION
      COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION**




The
        Compensation Committee members whose names appear on the Compensation Committee
        Report above were committee members during all of 2006. No member of the
        Compensation Committee is or has been one of our former or current executive
        officer or had any relationships requiring disclosure by us under the SEC’s
        rules requiring disclosure of certain relationships and related-party
        transactions. None of our executive officers served as a director or a member
        of
        a compensation committee (or other committee serving an equivalent function)
        of
        any other entity, where the executive officers of such other entity served
        as a
        director or member of the Compensation Committee during the fiscal year ended
        December 31, 2006.




7




**SUMMARY
      COMPENSATION TABLE - FISCAL 2006**





The
        following table presents information regarding compensation of our principal
        executive officer, our principal financial officer and our three other most
        highly compensated executive officers for services rendered during 2006.
        These
        individuals are referred to as “Named Executive Officers” in this Annual
        Report.




Name
                and
                Principal
                Position
              
              Year
              
              Salary
                ($)
              
              Bonus
                ($)
              
              Stock
                Awards
                ($)
              
              Option
                Awards
                ($)(1)
              
              Non-Equity
                  Incentive Plan Compen-sation
                ($)
              
              Change
                  in
                Pension
                Value
                  and
                Nonquali-
                fied
                Deferred
                Compensa-
                tion
                Earnings
                ($)
              
              All
                Other
                Compen-
                sation
                ($)(2)
              
              Total
                ($)(a)
              
              (b)
              
              (c)
              
              (d)
              
              (e)
              
              (f)
              
              (g)
              
              (h)
              
              (i)
              
              (j)**S.
                  Kumar Chandrasekaran, Ph.D.**
                Chairman
                  of the Board, President and Chief Executive Officer and Chief Financial
                  Officer
              
              
              2006
              
              $
              390,000
              
              
              
              
              
              
              
              
              379,736
              
              
              
              
              
              
              
              $
              5,782
              
              
              775,518**Lyle
                  M. Bowman, Ph.D.**
                Vice
                  President, Development and Operations
              
              
              2006
              
              $
              220,000
              
              
              
              
              
              
              
              
              56,725
              
              
              
              
              
              
              
              $
              2,012
              
              
              278,737**David
                  Heniges**
                Vice
                  President and General Manager, Commercial Opportunities
              
              
              2006
              
              $
              235,000
              
              
              
              
              
              
              
              
              50,924
              
              
              
              
              
              
              
              $
              3,326
              
              
              289,250**Sandra
                  C. Heine**
                Vice
                  President, Finance and Administration
              
              
              2006
              
              $
              145,000
              
              
              
              
              
              
              
              
              51,981
              
              
              
              
              
              
              
              $
              288
              
              
              197,269


(1)
          The
          amount reported in Column (f) of the table above reflects the aggregate
          dollar
          amounts recognized for option awards for financial statement reporting
          purposes
          with respect to 2006 (disregarding any estimate of forfeitures related
          to
          service-based vesting conditions). No option awards granted to Named Executive
          Officers were forfeited during 2006. We have not granted any
          equity-based awards other than stock options to Named Executive Officers
          that
          were outstanding during 2006. For a discussion of the assumptions and
          methodologies used to value the awards reported in Column (f), please see
          the
          discussion of option awards contained in Note 10, Employee Stock-based
          Compensation, to our Consolidated Financial Statements, December 31, 2006.
          For information about the option awards granted to our Named Executive
          Officers
          for 2006, please see the discussion under “Grants of Plan-Based Awards”
below.




(2)
        These
        amounts represent our payment of term life insurance premiums on behalf of
        each Named Executive Officer. We are not the beneficiary of the life
        insurance policies, and the premiums that we pay are taxable as income to
        the applicable officer. This insurance is not split-dollar life
        insurance.




8





**Compensation
      of Named Executive Officers**





The
      Summary Compensation Table above quantifies the value of the different forms
      of
      compensation earned by or awarded to our Named Executive Officers in 2006.
      The
      primary elements of each Named Executive Officer’s total compensation reported
      in the table are base salary and long-term equity incentives consisting of
      stock
      options. Named Executive Officers also earned the other benefits listed in
      Column (i) of the Summary Compensation Table, as further described in footnote
      (2) to the table. As noted above, we have not entered into employment agreements
      with any of our Named Executive Officers.





The
      Summary Compensation Table should be read in conjunction with the tables and
      narrative descriptions that follow. The Grants of Plan-Based Awards table and
      accompanying narrative description provides information regarding the stock
      options granted to Named Executive Officers in 2006. The Outstanding Equity
      Awards at Fiscal Year End and Option Exercises and Stock Vested tables provide
      further information on the Named Executive Officers’ potential realizable value
      and actual value realized with respect to their equity awards.





**GRANTS
      OF PLAN-BASED AWARDS - FISCAL 2006**





The
      following table presents information regarding the equity incentive awards
      granted to the Named Executive Officers for 2006. Each of these awards was
      granted under our 1994 Stock Option Plan, as amended (the “1994 Plan”).


Estimated
                  Future Payouts
                Under
                  Non-Equity Incentive
                Plan
                  Awards
              
              Estimated
                  Future Payouts Under
                Equity
                  Incentive Plan Awards
              
              All
                Other
                Stock
                Awards:
                Number
                of
                Shares
              
              All
                Other
                Option
                Awards:
                Number
                of
                Securities
                Under-
              
              Exercise
                or
                  Base
                Price
                  of
              
              Grant
                  Date Fair Value of Stock
                  andName
              
              Grant
                Date
              
              Thresh-
                old
                ($)
              
              Target
                ($)
              
              Maxi-
                mum
                ($)
              
              Thresh-
                Old
                (#)
              
              Target
                (#)
              
              Maxi-
                mum
                (#)
              
              of
                  Stock
                or
                  Units
                (#)
              
              lying
                Options
                (#)
              
              Option
                  Awards
                ($/Sh)
              
              Option
                  Awards
                ($)(1)(a)
              
              (b)
              
              (c)
              
              (d)
              
              (e)
              
              (f)
              
              (g)
              
              (h)
              
              (i)
              
              (j)
              
              (k)
              
              (l)S.
                  Kumar Chandrasekaran, Ph.D.
              
              
              2/1/06
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              800,000
              
              
              1.50
              
              $
              792,160Lyle
                  M. Bowman, Ph.D.
              
              
              2/1/06
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              80,000
              
              
              1.50
              
              $
              79,216David
                  Heniges
              
              
              2/1/06
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              65,000
              
              
              1.50
              
              $
              64,363Sandra
                  C. Heine
              
              
              2/1/06
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              75,000
              
              
              1.50
              
              $
              74,265





(1)
        The
        amounts reported in Column (l) reflect the fair value of these awards on
        the
        grant date as determined under the principles used to calculate the value
        of
        equity awards for purposes of our financial statements. For the assumptions
        and
        methodologies used to value the awards reported in Column (l), please see
        footnote (1) to the Summary Compensation Table.




9




**Description
      of Plan-Based Awards**





Each
      of
      the options reported in the Grants of Plan-Based Awards Table was granted under,
      and is subject to the terms of the 1994 Plan. The 1994 Plan is administered
      by
      the Compensation Committee. The Compensation Committee has authority to
      interpret the plan provisions and make all required determinations under the
      plan. This authority includes making required proportionate adjustments to
      outstanding awards upon the occurrence of certain corporate events such as
      reorganizations, mergers and stock splits, and making provision to ensure that
      any tax withholding obligations incurred in respect of awards are satisfied.
      Awards granted under the plan are generally only transferable to a beneficiary
      of a Named Executive Officer upon his or her death. However, the Compensation
      Committee may establish procedures for the transfer of awards to other persons
      or entities, provided that such transfers comply with applicable securities
      laws
      and, with limited exceptions, are not made for value.





Each
        option reported in the table above was granted with a per-share exercise
        price
        equal to the fair market value of a share of our common stock on the grant
        date.
        For these purposes, and in accordance with our option grant practices, the
        fair
        market value is equal to the closing price of a share of our common stock
        on the
        applicable grant date. Each of these options is also subject to a four-year
        vesting schedule, with 25% of the option vesting on each of the first
        anniversary of the grant date and the remaining 75% vesting ratably on a
        daily
        basis over the next three years of service thereafter. If the Named Executive
        Officer’s service with the Company terminates for any reason, the
        unvested portion of his or her option will immediately
        terminate.





Once
        vested, each option will generally remain exercisable until its normal
        expiration date. Each of the options granted to our Named Executive Officers
        in
        2006 has a term of ten years. However, vested options may terminate earlier
        in
        connection with a change in control transaction or a termination of the Named
        Executive Officer’s employment. Subject to any accelerated vesting that may
        apply in the circumstances, the unvested portion of the option will immediately
        terminate upon a termination of the Named Executive Officer’s service with the
        Company. The Named Executive Officer will generally have three months to
        exercise the vested portion of the option following a termination of his
        or
        her employment. This period is extended to 12 months if the termination was
        a result of the Named Executive Officer’s death or disability.





The
      options granted to Named Executive Officers during 2006 do not include any
      dividend rights.




Under
        the
        terms of the 1994 Plan, if a “corporate transaction” occurs, outstanding
        options granted under the plan will generally become fully vested and
        exercisable, unless the Compensation Committee provides for the substitution,
        assumption or other continuation of the outstanding options. Any options
        that
        accelerate under the 1994 Plan in connection with a corporate transaction
        will
        generally terminate upon the transaction. The 1994 Plan defines a “corporate
        transaction” as either a merger or consolidation in which securities possessing
        more than 50% of the total combined voting power of our outstanding securities
        are transferred to a person or persons different from the persons holding
        those
        securities immediately prior to the transaction, or the sale, transfer or
        other
        disposition of all or substantially all of our assets in complete liquidation
        or
        dissolution of the Company.




If
          a
“change in control” occurs, outstanding options granted under the 1994 Plan will
          generally become fully vested and exercisable. Any options that accelerate
          under
          the 1994 Plan in connection with a change in control will remain exercisable
          until the expiration or sooner termination of the option term specified
          in the
          option agreement. The 1994 Plan defines a “change in control” as an acquisition
          of 40% or more of our voting power pursuant to a tender offer made directly
          to
          our stockholders which the Board does not recommend or certain changes in
          the membership of the Board of Directors.





**OUTSTANDING
      EQUITY AWARDS AT 2006 FISCAL YEAR-END**





The
      following table presents information regarding the outstanding stock options
      held by each of our Named Executive Officers as of December 31, 2006, including
      the vesting dates for the portions of these options that had not vested as
      of
      that date. None of our Named Executive Officers held any outstanding restricted
      stock awards as of that date.




10





Name
              
              Option
                  Grant Date
              
              Number
                  of Securities Underlying Unexercised Options
                (#)
                Exercisable
              
              Number
                  of Securities Underlying Unexercised Options
                (#)
                Unexercisable
              
              Option
                  Exercise Price
                ($)
              
              Option
                Expiration
                  Date(a)
              
              (b)
              
              (c)
              
              (d)
              
              (e)
              
              (f)S.
                  Kumar Chandrasekaran, Ph.D.
              
              
              2/1/06
                6/1/05
                6/1/04
                3/30/04
                12/12/03
                9/23/03
                2/14/03
                9/20/02
                6/18/01
                2/23/99
                10/27/97
              
              
              **--**
                486,393
                77,463
                41,318
                97,249
                100,000
                75,000
                65,000
                50,000
                250,000
                250,000
              
              
              800,000(1
                513,607(2
                42,537(3
                18,682(4
                22,751(5
                --
                --
                --
                --
                --
                --
              )
                )
                )
                )
                )
              
              1.50
                0.63
                0.75
                0.88
                0.41
                0.63
                0.85
                0.93
                1.45
                1.13
                3.75
              
              
              2/1/16
                6/1/15
                6/1/14
                3/30/14
                12/12/13
                9/23/13
                2/14/13
                9/20/12
                6/18/11
                2/23/09
                10/26/07Lyle
                  M. Bowman, Ph.D.
              
              
              2/1/06
                6/1/05
                6/1/04
                3/30/04
                12/12/03
                9/23/03
                2/14/03
                9/20/02
                6/18/01
                2/23/99
                10/27/97
              
              
              **--**
                85,119
                25,821
                13,772
                25,000
                15,000
                25,000
                15,000
                15,000
                25,000
                15,000
              
              
              80,000(1
                89,881(2
                14,179(3
                6,228(4
                --
                --
                --
                --
                --
                --
                --
              )
                )
                )
                )
              
              1.50
                0.63
                0.75
                0.88
                0.41
                0.63
                0.85
                0.93
                1.45
                1.13
                3.75
              
              
              2/1/16
                6/1/15
                6/1/14
                3/30/14
                12/12/13
                9/23/13
                2/14/13
                9/20/12
                6/18/11
                2/23/09
                10/26/07David
                  Heniges
              
              
              2/1/06
                6/1/05
                6/1/04
                3/30/04
                12/12/03
                9/23/03
                2/14/03
                9/20/02
              
              
              **--**
                60,799
                19,365
                10,329
                10,000
                5,000
                25,000
                75,000
              
              
              65,000(1
                64,201(2
                10,635(3
                4,671(4
                --
                --
                --
                --
              )
                )
                )
                )
              
              1.50
                0.63
                0.75
                0.88
                0.41
                0.63
                0.85
                0.93
              
              
              2/1/16
                6/1/15
                6/1/14
                3/30/14
                12/12/13
                9/23/13
                2/14/13
                9/20/12Sandra
                  C. Heine
              
              
              2/1/06
                6/1/05
                6/1/04
                3/30/04
                1/7/03
                9/20/02
                6/18/01
                9/17/99
                2/23/99
                3/17/97
              
              
              **--**
                72,959
                25,821
                13,772
                25,000
                15,000
                15,000
                15,000
                10,000
                10,000
              
              
              75,000(1
                77,041(2
                14,179(3
                6,228(4
                --
                --
                --
                --
                --
                --
              )
                )
                )
                )
              
              1.50
                0.63
                0.75
                0.88
                0.70
                0.93
                1.45
                2.38
                1.13
                3.88
              
              
              2/1/16
                6/1/05
                6/1/14
                3/30/14
                1/7/13
                9/20/12
                6/18/11
                9/17/09
                2/23/09
                3/17/07





(1)
      25%
      vest at 2/1/07, balance daily thru 2/1/10


(2)
      15%
      vest at 9/29/05, 25% vest at 6/1/06, balance daily thru 6/1/09


(3)
      25%
      vest at 6/1/05, balance daily thru 6/1/08


(4)
      25%
      vest at 3/30/05, balance daily thru 3/30/08




11




(5)
      20%
      vest at 12/30/03, 20% vest at 12/12/04, balance daily thru 12/12/07





**OPTION
      EXERCISES - FISCAL 2006**





The
      following table presents information regarding the exercise of stock options
      by
      Named Executive Officers during 2006. No Named Executive Officers held any
      restricted stock awards that vested during 2006.


Name
              
              Number
                  of Shares Acquired on Exercise
                (#)
              
              Value
                  Realized on Exercise
                ($)(1)(a)
              
              (b)
              
              (c)S.
                  Kumar Chandrasekaran, Ph.D.
              
              
              0
              
              
              0Lyle
                  M. Bowman, Ph.D.
              
              
              0
              
              
              0David
                  Heniges
              
              
              0
              
              
              0Sandra
                  C. Heine
              
              
              20,000
              
              
              36,800





(1)
      The
      dollar amounts shown in Column (c) above for option awards are determined by
      multiplying (i) the number of shares of our common stock to which the exercise
      of the option related, by (ii) the difference between the per-share closing
      price of our common stock on the date of exercise and the exercise price of
      the
      options.





**POTENTIAL
      PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL**




As
          noted
          above, we have no severance arrangements with any Named Executive Officers,
          other than with respect to the acceleration of vesting under the 1994 Plan
          in
          connection with a “change of control” or a “corporate transaction” as noted
          under “Grants of Plan-Based Awards – Description
          of
          Plan-Based Awards” above.




12




**Item
      12. Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters**





The
        following table sets forth certain information known to us regarding
        beneficial ownership of our common stock, as of April 16, 2007 by (i) each
        person who is known by us to beneficially own more than 5% of our
        common stock, (ii) the Chief Executive Officer and each of the other Named
        Executive Officers of the Company, (iii) each director, and (iv) all current
        executive officers and directors as a group. Unless otherwise indicated,
        the
        principal address of each of the stockholders below is: c/o InSite Vision
        Incorporated, 965 Atlantic Avenue, Alameda, California 94501. Except as
        otherwise indicated, we believe that each of the beneficial owners of the
        common stock listed below has sole voting and investment power with respect
        to
        such shares, subject to community property laws, where
        applicable.





The
        percentage of beneficial ownership is calculated based on the 93,476,537
        shares
        of common stock that were outstanding on April 16, 2007. This percentage
        also
        includes common stock of which such individual or entity had the right to
        acquire beneficial ownership of as of April 16, 2007 or within 60 days
        thereafter, including but not limited to upon the exercise of options and
        warrants; however, such common stock shall not be deemed outstanding for
        the
        purpose of computing the percentage owned by any other individual or
        entity.




**Beneficially
                Owned****Name
                of Beneficial Owner**
            
            **Number
                of Shares**
            
            **Percent
                of Class**Pinto
                Technology Ventures, L.P.
              1000
                Main Street, Suite 3250
              Houston,
                TX 77002
            
            
            10,239,000(1
            )
            
            10.67
            %Eli
                Jacobson
              125
                Broad Street, 32nd Floor
              New
                York, NY 10004
            
            
            5,958,528(2
            )
            
            6.35
            %Wellington
                Management
              75
                State Street
              Boston,
                MA 94051
            
            
            5,181,000(3
            )
            
            5.54
            %Jonathan
                M. Glaser
              11601
                Wilshire Boulevard, Suite 2180
              Los
                Angeles, CA 90025
            
            
            4,757,882(4
            )
            
            5.09
            %S.
                Kumar Chandrasekaran, Ph.D.
            
            
            2,218,723(5
            )
            
            2.33
            %Lyle
                M. Bowman, Ph.D.
            
            
            375,647(6
            )
            
            *David
                F. Heniges.
            
            
            244,884(7
            )
            
            *Sandra
                C. Heine
            
            
            320,625(8
            )
            
            *Mitchell
                H. Friedlaender, M.D.
            
            
            170,000(9
            )
            
            *John
                L. Mattana
            
            
            205,000(10
            )
            
            *Jon
                S. Saxe
            
            
            182,000(11
            )
            
            *Anders
                P. Wiklund
            
            
            170,000(12
            )
            
            *All
                current executive officers and directors as a group (8
                persons)
            
            
            3,886,879(13
            )
            
            4.02
            %





*  Less
        than
        one percent of our outstanding common stock.




13







(1)  Information
      based on a Schedule 13G filed with the SEC on August 21, 2006 by Pinto
      Technology Ventures, L.P., Pinto Technology Ventures GP, L.P. and Pinto TV
      GP
      Company LLC (collectively, the “Pinto Entities”) and Matthew Crawford and Evan
      Melrose. The Pinto Entities and Messrs. Crawford and Melrose share voting and
      dispositive power with respect to such shares. Messrs. Crawford and Melrose
      disclaim beneficial ownership in the shares held by the Pinto Entities, except
      to the extent of their pecuniary interest therein, and any shares held in their
      name. The amount above includes 7,744,621 shares held by Pinto Technology
      Ventures, L.P. and 2,494,379 shares of common stock issuable upon the exercise
      of warrants .





(2)
        Information based on a Schedule 13G/A filed with the SEC on February 15,
        2007.
        The amount noted above includes 423,863 shares issuable upon the exercise
        of
        warrants purchased in the March 26, 2004, June 14, 2004 and May 26, 2005
        private
        placements.





(3)  Information
      based on a Schedule 13G filed with the SEC on December 31, 2006 by Wellington
      Management Company, LLP (“Wellington Management”). Wellington Management shares
      voting and dispositive power with respect to such shares and may be deemed
      to
      beneficially own such shares which are held of record by clients of Wellington
      Management.




(4)  Pursuant
        to a Schedule 13G filed with the SEC on March 2, 2007 by Jonathan Glaser,
        JMG
        Capital Management, Inc. (“JMG Inc.”), JMG Capital Management, LLC (“JMG LLC”),
        Daniel Albert David, Roger Richter, Pacific Assets Management, LLC (“PAM”) and
        Pacific Capital Management, Inc. (“PCM”). Mr. Glaser shares voting and
        dispositive power with respect to 4,607,882 shares of common stock. JMG Inc.
        and
        JMG LLC share voting and dispositive power with respect to 2,303,941 shares
        of
        common stock. PAM, PCM and Messrs. David and Richter share voting and
        dispositive power with respect to 2,303,941 shares of common stock. Each
        of
        Messrs. Glaser, David and Richter and JMG Inc., JMG LLC, PAM and PCM disclaim
        beneficial ownership of such shares except to the extent of their pecuniary
        interest therein and any shares held in their name.





(5)  Includes
      1,893,698 shares issuable upon the exercise of stock options exercisable on
      April 16, 2007 or within 60 days thereafter.





(6)  Includes
      310,759 shares issuable upon the exercise of stock options exercisable on April
      16, 2007 or within 60 days thereafter.





(7)  Includes
      of 244,884 shares issuable upon the exercise of stock options exercisable on
      April 16, 2007 or within 60 days thereafter.





(8)  Includes
      239,447 shares issuable upon the exercise of stock options exercisable April
      16,
      2007 or within 60 days thereafter.





(9)  Includes
      150,000 shares issuable upon the exercise of stock options exercisable on April
      16, 2007 or within 60 days thereafter.





(10)  Includes
      155,000 shares issuable upon the exercise of stock options exercisable on April
      16, 2007 or within 60 days thereafter.





(11)  Includes
      160,000 shares issuable upon the exercise of stock options exercisable on April
      16, 2007 or within 60 days thereafter.





(12)  Includes
      150,000 shares issuable upon the exercise of stock options exercisable on April
      16, 2007 or within 60 days thereafter.





(13)  Includes
      3,303,818 shares issuable upon the exercise of stock options exercisable on
      April 16, 2007 or within 60 days thereafter.




14





**Item
      13. Certain Relationships and Related Transactions and Director
      Independence**





*Related
      Transactions*





Our Restated
        Certificate of Incorporation, or Certificate, provides for indemnification
        of
        our directors and officers to the fullest extent permitted by the General
        Corporation Law of the State of Delaware, or Delaware Law. Each of our
        current directors and executive officers have entered into separate
        indemnification agreements with us. In addition, the Certificate limits the
        liability of directors to the Company or its stockholders to the fullest
        extent
        permitted by the Delaware Law.





On
      February 15, 2007, in connection with the pay-off and redemption of our senior
      secured notes issued in December 2005 and January 2006, we redeemed for cash
      a
      senior secured note with an aggregate principal amount of $231,000 that was
      issued to Dr. Chandrasekaran, our chief executive officer, chief financial
      officer and a member of our board of directors. The total accrued interest
      paid
      under such note was $15,797.





In
        May
        2000, We issued loans in an aggregate principal amount of $276,897 to Dr.
        Chandrasekaran related to his exercise of 126,667 options to acquire common
        stock. The loans bear interest at a rate of 7% per annum. In May 2001, the
        term
        for each of the loans was extended from 4 years to 5 years. In January 2006,
        all
        outstanding principal and interest under such loans was paid in
        full.





Each
        of
        the transactions set forth above were approved by the Board and the Board
        believes that each such transaction was made on terms no less favorable
        to us than could have been obtained from unaffiliated third parties.
        Pursuant to recently adopted American Stock Exchange regulations, our
        corporate governance policies and our revised Audit Committee charter, all
        future related-party transactions will be reviewed and approved by the Audit
        Committee.





*Director
      Independence*





The
      Board
      has determined that each of Messrs. Friedlaender, Mattana, Saxe and Wilkund
      is
      an “independent director” as that term is defined under the American Stock
      Exchange listing standards.





**Item
      14. Principal Accounting Fees and Services**





**Audit
      Fees**





Audit
        fees billed for professional services rendered for the integrated audit
        of our consolidated financial statements and of our internal control
        over financial reporting, for review of the interim consolidated financial
        statements included in quarterly reports and for services that are normally
        provided by Burr, Pilger & Mayer LLP in connection with statutory and
        regulatory filings or engagements for the fiscal year ended December 31,
        2006
        totaled $346,942. Audit fees billed to us by Burr, Pilger & Mayer LLP
        for review of the financial statements included in our quarterly
        reports on Form 10-Q and annual report on Form 10-K for the fiscal year ended
        December 31, 2005 totaled $114,157.





**Audit-Related
      Fees**





Burr,
        Pilger & Mayer LLP billed us amounts during the 2006 and 2005 fiscal
        years for assurance and related services reasonably related to the performance
        of the audit or review of our financial statements that were not reported
        in the paragraph above under the caption "Audit Fees." These services include
        accounting consultations in connection with transactions, and consultations
        concerning financial accounting and reporting standards. These audit-related
        fees were $7,187 fiscal year 2006 and $6,795 for fiscal year
        2005.




15





**Tax
      Fees**





Burr,
        Pilger & Mayer LLP did not bill us any amounts during the 2006 or 2005
        fiscal years for tax compliance, tax advice or tax planning.





**All
      Other Fees**





Burr,
        Pilger & Mayer LLP did not bill us any amounts during the 2006 or 2005
        fiscal years for any other products or services.





All
        of
        the audit fees, audit-related fees and tax fees, and all other fees, were
        pre-approved by the Audit Committee. The Audit Committee has delegated to
        Mr.
        Jon Saxe the ability to pre-approve audit-related fees and services on behalf
        of
        the Audit Committee in accordance with Rule 10A-3 under the Securities Exchange
        Act of 1934.





The
      Audit
      Committee considered whether the provision of audit-related services, tax
      services and other non-audit services is compatible with the principal
      accountants’ independence.




**PART
      IV**





**Item
      15. Exhibits, Financial Statement Schedules**





(3)  Exhibits


No.
              
              Exhibit
                  Table31.1
              
              Certification
                  of Chief Executive Officer pursuant to Rules 13a-14(a)
                  and15d-14(a)
                  promulgated under the Securities Exchange Act of 1934, as amended.31.2
              
              Certification
                  of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a)
                  promulgated under the Securities Exchange Act of 1934, as
                  amended.


16








**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) 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.


INSITE
              VISION
              INCORPORATEDDated:
              April
              30, 2007
            By:
            /s/ S.
              Kumar
              ChandrasekaranS.
                Kumar Chandrasekaran, Ph.D.
              Chairman
                of the Board, President,
              Chief
                Executive Officer and
              Chief
                Financial Officer





Pursuant
      to the requirements of the Securities Exchange Act of 1934, this report has
      been
      signed by the following persons on behalf of the Registrant and in the
      capacities and on the dates indicated.


Name
              
              Capacity
              
              Date/s/
                  S. Kumar Chandrasekaran
              
              Chairman
                  of the Board, President,
              
              April
                  30, 2007S.
                  Kumar Chandrasekaran, Ph.D.
              
              Chief
                  Executive Officer and
                Chief
                  Financial Officer/s/ *
              
              Director
              
              April
                  30, 2007Mitchell
                  H. Friedlaender, M. D./s/ *
              
              Director
              
              April
                  30, 2007John
                  L. Mattana/s/ *
              
              Director
              
              April
                  30, 2007Jon
                  S. Saxe/s/ *
              
              Director
              
              April
                  30, 2007Anders
                  P. Wiklund


*
      S.
      Kumar Chandrasekaran, Ph.D. by signing his name hereto, does sign this document
      on behalf of the above noted individuals, pursuant to powers of attorney duly
      executed by such individuals, which have been filed with the original Annual
      Report on Form 10-K filed with the SEC on March 15, 2007.




By:
            /s/
              S. Kumar
              Chandrasekaran, Ph.D.S.
                Kumar Chandrasekaran, Ph.D.
              Attorney-in-fact


17