Exhibit 99.1

MTS Systems Corporation
14000 Technology Drive
Eden Prairie, MN 55344-2290
Telephone 952-937-4000
Fax 952-937-4515

News Release

FOR IMMEDIATE RELEASE	For More Information Contact:
JULY 27, 2005	Susan Knight, Chief Financial Officer
	(952) 937-4000
	Paul Runice, Treasurer
	(952) 937-4003

MTS Reports Third Quarter Earnings Increase of 50%, Raises Full Year Outlook

Eden Prairie, Minn., July 27, 2005 – MTS Systems Corporation (NASDAQ: MTSC) today reported third quarter net income of $9.9 million, or $0.49 per diluted share, an increase of 50 percent compared to net income of $6.6 million, or $0.31 per diluted share, for the third quarter of fiscal 2004.

“MTS delivered very strong earnings growth on solid revenue for the quarter,” said Sidney W. Emery, Jr., Chairman and CEO. “Earnings exceeded expectations due to heightened gross margin performance in both the Test and Industrial segments. While Test segment margins in backlog continue to be under pressure as previously indicated, we experienced an upswing in higher margin short-cycle orders and productivity gains in both segments that will continue to contribute to higher margins through the remainder of the fiscal year. Strong orders in Europe and Asia continue to offset a generally weak North American market. Given the strength of the third quarter results and our current outlook for the fourth quarter, we are raising our full year earnings per share guidance from a range of $1.48-$1.53 to $1.65-$1.70 on revenue of $400-$405 million. This guidance excludes any impact from the anticipated sale of our engine testing business.”

Third quarter orders were $84.1 million, an increase of 6 percent compared to $79.7 million for the third quarter of fiscal 2004, primarily due to increased volume in both the Test and Industrial segments in Europe and Asia. Backlog decreased 10 percent in the quarter, from $231 million to $209 million, compared to backlog of $204 million at the end of third quarter fiscal 2004.

Revenue for the third quarter was $99.7 million, an increase of 9 percent compared to revenue of $91.6 million for the third quarter of fiscal 2004. This increase was primarily due to increased project and short-cycle business in the Test segment and continued growth in the Sensors business, as well as approximately $1 million of favorable currency translation. Third quarter income from operations was $15.5 million, an increase of 50 percent compared to $10.3 million for the third quarter of fiscal 2004, driven by increased volume and improved margins in both segments. A favorable tax rate in the third quarter also contributed approximately 3 cents in earnings per share compared to the prior year quarter.

Cash, cash equivalents and short-term investments at the end of the third quarter increased to $156 million, compared to $148 million at the end of second quarter fiscal 2005. The Company used $8.9 million in cash to repurchase 292,000 shares of its common stock during the third quarter.

Segment Results

Test Segment:

Orders for the Test segment were $68.1 million for the third quarter of fiscal 2005, an increase of 6 percent compared to orders of $64.4 million for the third quarter of fiscal 2004, primarily due to increased volume in the infrastructure and aerospace markets. Backlog decreased 10 percent in the quarter, from $221 million to $200 million, compared to backlog of $196 million at the end of third quarter fiscal 2004.

Third quarter revenue was $83.1 million, an increase of 8 percent compared to $76.6 million for the third quarter of fiscal 2004, primarily due to increased project and short-cycle business in the ground vehicles and infrastructure markets, as well as approximately $1 million of favorable currency translation. Third quarter gross profit as a percent of revenue was 43.1 percent, an increase of 4.8 percentage points compared to 38.3 percent for the third quarter of fiscal 2004, due to increased volume with favorable mix and productivity gains. The segment reported $12.9 million in income from operations, an increase of 57 percent compared to $8.2 million for the third quarter of fiscal 2004.

Industrial Segment:

Orders for the Industrial segment were $16.0 million for the third quarter, an increase of 5 percent compared to orders of $15.3 million for the third quarter of fiscal 2004. The segment’s Sensors business had double-digit orders growth, primarily driven by European customers. Backlog decreased 10 percent in the quarter, from $10 million to $9 million, compared to backlog of $8 million at the end of third quarter fiscal 2004. Revenue was $16.6 million for the third quarter, an increase of 11 percent compared to revenue of $15.0 million for the third quarter of fiscal 2004, driven by increased Sensors business volume across all geographies. Third quarter gross profit as a percent of revenue was 50.0 percent, an increase of 3.5 percentage points compared to 46.5 percent for the third quarter of fiscal 2004, primarily due to the increase in revenue. Income from operations was $2.6 million, an increase of 24 percent compared to income from operations of $2.1 million for the third quarter of fiscal 2004.

Third Quarter Conference Call

A conference call will be held on Thursday, July 28, at 9:00 a.m. CDT (10:00 a.m. EDT). Call +1-773-756-0439; state the Passcode “Third Quarter” and conference leader “Chip Emery.” Telephone re-play will be available through 6:00 p.m. EDT, August 28, 2005. Call +1-203-369-0257.

If you prefer to listen live over the Internet, please log on to the web at <http://www.mts.com/news/financial_news.htm> and click on the webcast image. The call will be archived through 6:00 p.m. EDT, October 28, 2005.

About MTS Systems Corporation

MTS Systems Corporation is a leading global supplier of test systems and industrial position sensors. The Company’s testing hardware and software solutions help customers accelerate and improve their design, development, and manufacturing processes and are used for determining the mechanical behavior of materials, products, and structures. MTS’ high-performance position sensors provide controls for a variety of industrial and vehicular applications. MTS had 1,615 employees and revenue of $367 million for the fiscal year ended October 2, 2004. Additional information on MTS can be found on the worldwide web at http://www.mts.com.

This release contains “forward-looking statements” made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that are subject to certain risks and uncertainties, as well as assumptions, that could cause actual results to differ materially from historical results and those presently anticipated or projected. The Company does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. In addition to the factors discussed above, other important risk factors are delineated in the Company’s SEC reports, including Form 10-K for the year ended October 2, 2004.

MTS SYSTEMS CORPORATION
Consolidated Statements of Income
(unaudited - in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	July 2, 2005			June 26, 2004			July 2, 2005			June 26, 2004
Revenue	$	99,685		$	91,553		$	299,068		$	264,463
Cost of sales		55,605			55,241			171,763			159,957
Gross profit		44,080			36,312			127,305			104,506
Operating expenses:
Selling		16,319			15,371			49,748			43,858
General and administrative		8,459			7,487			24,034			20,297
Research and development		3,754			3,156			12,240			9,692
Total operating expenses		28,532			26,014			86,022			73,847
Income from operations		15,548			10,298			41,283			30,659
Interest expense		(524	)		(766	)		(1,639	)		(2,148	)
Interest income		698			495			1,635			1,360
Other (expense) income, net		(705	)		582			(344	)		1,904
Income before income taxes		15,017			10,609			40,935			31,775
Provision for income taxes		5,110			3,981			14,363			11,029
Net income	$	9,907		$	6,628		$	26,572		$	20,746
Earnings per share:
Basic earnings per share	$	0.50		$	0.32		$	1.35		$	0.99
Weighted average number of common shares outstanding - basic		19,639			20,735			19,735			20,869
Diluted earnings per share	$	0.49		$	0.31		$	1.29		$	0.96
Weighted average number of common shares outstanding - diluted		20,339			21,566			20,529			21,705

MTS SYSTEMS CORPORATION
Consolidated Balance Sheets
(in thousands, except per share data)

	July 2, 2005			October 2, 2004
ASSETS
Current Assets:
Cash and cash equivalents	$	78,252		$	66,948
Short-term investments		77,346			62,355
Accounts receivable, net of allowances for doubtful accounts		59,033			66,066
Unbilled accounts receivable		29,235			35,896
Inventories		37,531			37,736
Prepaid expenses		4,174			4,108
Current deferred tax assets		6,283			6,290
Other current assets		2,246			256
Total current assets		294,100			279,655
Property and Equipment:
Land		2,478			2,478
Buildings and improvements		46,669			47,541
Machinery and equipment		79,155			87,265
Accumulated depreciation		(76,836	)		(84,509	)
Total property and equipment, net		51,466			52,775
Goodwill		4,426			4,447
Other assets		3,379			2,283
Non-current deferred tax assets		2,442			2,475
Total Assets	$	355,813		$	341,635
LIABILITIES AND SHAREHOLDERS’ INVESTMENT
Current Liabilities:
Notes payable	$	1,602		$	1,501
Current maturities of long-term debt		6,740			6,841
Accounts payable		13,657			15,675
Accrued payroll-related costs		26,217			31,966
Advance payments from customers		52,511			49,918
Accrued warranty costs		6,615			6,147
Accrued income taxes		8,264			3,857
Current deferred income taxes		6,959			7,101
Other accrued liabilities		15,705			13,887
Total current liabilities		138,270			136,893
Deferred income taxes		1,341			1,382
Long-term debt, less current maturities		21,202			22,376
Other long-term liabilities		9,407			9,188
Total Liabilities		170,220			169,839
Shareholders’ Investment:
Common stock, $.25 par; 64,000 shares authorized:
19,652 shares issued and outstanding		4,913			4,913
Retained earnings		169,411			155,825
Accumulated other comprehensive income		11,269			11,058
Total shareholders’ investment		185,593			171,796
Total Liabilities and Shareholders’ Investment	$	355,813		$	341,635