5
1
NONE

  0001017465
  xqo@x5ob
  Officer


  INSTEEL INDUSTRIES, INC.
  0000764401
  56-0674867

09/28/02
5
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 5
ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

[ ] Check box if no longer subject to Section 16.
    Form 4 or Form 5 obligations may continue.

[ ] Form 3 Holdings Reported

[ ] Form 4 Transactions Reported

1. Name and Address of Reporting Person(s)
   Gazmarian, Michael C.
   1373 BOGGS DRIVE
   MOUNT AIRY,

   NORTH CAROLINA  27030
2. Issuer Name and Ticker or Trading Symbol
   INSTEEL INDUSTRIES, INC. (IIIN)
3. I.R.S. Identification Number of Reporting Person, if an entity (Voluntary)

4. Statement for Month/Year
   09/02
5. If Amendment, Date of Original (Month/Year)
6. Relationship of Reporting Person(s) to Issuer (Check all applicable)
   [ ] Director                   [ ] 10% Owner
   [X] Officer (give title below) [ ] Other (specify below)
   Treasurer
7. Individual or Joint/Group Filing (Check Applicable Line)
   [X] Form filed by One Reporting Person
   [ ] Form filed by More than One Reporting Person



Table I   Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
- ------------------------------------------------------------------------------------------------------------------------------------
1)Title of Security                           2)Trans-    3.Trans- 4.Securities Acquired(A)      5)Amount of    6)  7)Nature of
                                              action      action   or Disposed of (D)            Securities         Indirect
                                              Date        Code                   A               Beneficially   D   Beneficial
                                              (Month/                            or              Owned at       or  Ownership
                                              Day/Year)   Code     Amount        D  Price        End of Year    I
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                           



Table II (PART 1)  Derivative Securitites Acquired, Disposed of, or Beneficially Owned  (Columns 1 through 6)
- ------------------------------------------------------------------------------------------------------------------------------------
1)Title of Derivative          2)Conversion    3)Trans-       4)Trans-  5)Number of Derivative            6)Date Exercisable and
Security                       or Exercise     action         action    Securities Acquired (A)           Expiration Date
                               Price of        Date           Code      or Disposed of (D)
                               Derivative
                               Security                       Code      A                D                Exercisable  Expiration
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  
Incentive Stock Option (right  $0.3500         02/19/02       A         32,398.00                                      02/19/12
to buy)
Non-Qualified Stock Option     $0.3500         02/19/02       A         5,602.00                                       02/19/12
(right to buy)


Table II (PART 2)  Derivative Securitites Acquired, Disposed of, or Beneficially Owned  (Columns 1,3 and 7 through 11)
- ------------------------------------------------------------------------------------------------------------------------------------
1)Title of Derivative          3)Trans-  7)Title and Amount                           8)Price     9)Number of   10) 11)Nature of
Security                       action    of Underlying                                of Deri-    Derivative        Indirect
                               Date      Securities                                   vative      Securities    D   Beneficial
                                                                        Amount or     Security    Beneficially  or  Ownership
                                                                        Number of                 Owned at      I
                  -                      Title                          Shares                    End of Year
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                               

Incentive Stock Option (right  02/19/02  Common Stock                   32,398.00                 32,398.00     D   Direct
to buy)
Non-Qualified Stock Option     02/19/02  Common Stock                   5,602.00                  5,602.00      D   Direct
(right to buy)


Explanation of Responses:




SIGNATURE OF REPORTING PERSON
/S/ Gazmarian, Michael C.
DATE 10/22/02