-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 HARG3uDvvpJzr59qTZoHufKOMw0lm9PNMH83E9OK0M7FxX6AytH8IMvmQy1obNoN
 U+fhUjiFecUa+wFC22tcnw==

<SEC-DOCUMENT>0001181431-06-035306.txt : 20060605
<SEC-HEADER>0001181431-06-035306.hdr.sgml : 20060605
<ACCEPTANCE-DATETIME>20060605192425
ACCESSION NUMBER:		0001181431-06-035306
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20060602
FILED AS OF DATE:		20060605
DATE AS OF CHANGE:		20060605

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			RAE SYSTEMS INC
		CENTRAL INDEX KEY:			0001084876
		STANDARD INDUSTRIAL CLASSIFICATION:	MEASURING & CONTROLLING DEVICES, NEC [3829]
		IRS NUMBER:				770588488
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		3775 NORTH FIRST STREET
		CITY:			SAN JOSE
		STATE:			CA
		ZIP:			95134
		BUSINESS PHONE:		408-952-8200

	MAIL ADDRESS:	
		STREET 1:		3775 NORTH FIRST STREET
		CITY:			SAN JOSE
		STATE:			CA
		ZIP:			95134

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NETTAXI INC
		DATE OF NAME CHANGE:	19990422

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			CHEN ROBERT I
		CENTRAL INDEX KEY:			0001171523

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31783
		FILM NUMBER:		06887576

	BUSINESS ADDRESS:	
		STREET 1:		1339 MOFFETT PARK DRIVE
		CITY:			SUNNYVALE
		STATE:			CA
		ZIP:			95112
		BUSINESS PHONE:		4087520723

	MAIL ADDRESS:	
		STREET 1:		1339 MOFFETT PARK DR
		CITY:			SUNNYVALE
		STATE:			CA
		ZIP:			95112
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>rrd120532.xml
<DESCRIPTION>10B5-1 SALE
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2006-06-02</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0001084876</issuerCik>
        <issuerName>RAE SYSTEMS INC</issuerName>
        <issuerTradingSymbol>AMEX: RAE</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001171523</rptOwnerCik>
            <rptOwnerName>CHEN ROBERT I</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>C/O RAE SYSTEMS INC</rptOwnerStreet1>
            <rptOwnerStreet2>3775 NORTH FIRST STREET</rptOwnerStreet2>
            <rptOwnerCity>SAN JOSE</rptOwnerCity>
            <rptOwnerState>CA</rptOwnerState>
            <rptOwnerZipCode>95134</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>1</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>Chief Executive Officer</officerTitle>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock Sale</value>
            </securityTitle>
            <transactionDate>
                <value>2006-06-02</value>
            </transactionDate>
            <deemedExecutionDate>
                <value>2006-06-02</value>
            </deemedExecutionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>38000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>4.1981</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>15741865</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>under an approved 10b5-1 plan</value>
                    <footnoteId id="F1"/>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock Sale</value>
            </securityTitle>
            <transactionDate>
                <value>2006-06-05</value>
            </transactionDate>
            <deemedExecutionDate>
                <value>2006-06-05</value>
            </deemedExecutionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>17500</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>4.401</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>15724365</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>under an approved 10b5-1 plan</value>
                    <footnoteId id="F1"/>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
    </nonDerivativeTable>

    <footnotes>
        <footnote id="F1">Robert I. Chen &amp; Lien Chen Trust, Robert I. Chen and Lien Q. Chen trustees</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>Michael R. Ownby as Attorney in-fact for Robert I. Chen</signatureName>
        <signatureDate>2006-06-05</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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