8-K

               SECURITIES AND EXCHANGE COMMISSION

                     WASHINGTON D.C.  20549

                            FORM 8-K



       Current Report Pursuant to Section 13 or 15(d) of
              the Securities Exchange Act of 1934



               Date of Report:     August 30, 1996
               (Date of earliest event reported)


             Bion Environmental Technologies, Inc.
     (Exact Name of Registrant as Specified in its Charter




   Colorado                0-19333              84-1176672
  (State of              (Commission         (I.R.S. Employer
Incorporation)            File No.)          Identification No.)





      555 17th Street, Suite 3310, Denver, Colorado 80202
     (Address and Zip Code of Principal Executive Offices)






Registrant's telephone number including area code: (303) 294-0750


ITEM 5.   OTHER EVENTS.

(a)  (i)   Bion  Environmental Technologies,  Inc.,  through  its
     wholly-owned  subsidiaries  Bion  Technologies,   Inc.   and
     BionSoil,   Inc.   (collectively   referred   to   as    the
     "Registrant") has recently commenced design, permitting  and
     preliminary   construction  activities  for  BionSoil   NMSO
     systems for two additional hog producing facilities (with  a
     total of 21,000 animals) in North Carolina.

     (ii) Currently the Registrant has seven BionSoil NMS systems
     in  operation  in  New York, Washington, Florida  and  North
     Carolina,  seven in various stages of construction  (ranging
     from  final  design to initial operation) in  Maryland,  New
     York,  Washington and Oregon, and five signed contracts  for
     installations in New York and North Carolina.  The  BionSoil
     NMS  process  is designed for the treatment and disposal  of
     large quantities of untreated livestock waste and wastewater
     that  are  produced  in  large animal  raising  agricultural
     facilities.   The  wastes  generated  in  these   facilities
     represents  a  significant  environmental  problem  for  the
     agricultural  industry.  The process  is  also  designed  to
     lessen  the  individual farmer's cost of disposing  of  such
     waste  by  making  the treatment and disposal  process  more
     affordable,   and  by  producing  a  marketable  by-product,
     BionSoilO, a nutrient-rich organic soil like product that is
     saleable in the organic soils and soil enhancers market.

(b)  On  August  30,  1996, the Registrant issued warrants  under
     Registrant's Fiscal Year 1994 Incentive Compensation Plan to
     seven  employees of Bion Technologies, Inc. (a wholly  owned
     subsidiary of the Registrant) to purchase 60,000  shares  of
     the Registrant's Common Stock at a price of $5.00 per share.
     The   Warrants  are  exercisable  for  a  60  month   period
     commencing September 1, 1996 and expiring August 31, 2001.

(c)  Effective  September  25,  1996,  the  Registrant  signed  a
     Memorandum of Understanding (the "Memorandum") with Scott R.
     Sieck  ("Employee")(collectively  the  Registrant  and   the
     Employee  are  the  "Parties") whereby  the  Registrant  has
     employed  Employee  in  the position of  Manager,  Corporate
     Development  and  Shareholder  Relations  (the  "Position").
     Under  the  terms  of  the Memorandum  the  Position,  which
     reports  to the Chief Executive Officer, is to be a  regular
     half time position, Employee's performance is to be reviewed
     at least annually, Employee compensation is to be $5,000 per
     month  paid  in  cash ($3,000) and restricted  and  legended
     Common Stock of the Registrant ($2,000), long term incentive
     is  provided through three Class K Warrants each to purchase
     up  to  100,000 restricted and legended shares of the Common
     Stock  of  the  Registrant  at prices  of  $6.00  per  share
     (exercisable  from March 1, 1998 to October 1, 1999),  $8.00
     per  share  (exercisable from March 1, 2000  to  October  1,
     2001), and $10.00 per share (exercisable from March 1,  2002
     to  October  1,  2003)(with  the first  Warrant  vesting  on
     October 1, 1997, the second vesting on October 1, 1998,  and
     the third vesting on October 1, 1999), and Employee shall be
     awarded  two  options under Registrant's  Fiscal  Year  1994
     Incentive  Compensation Plan, one to purchase up  to  50,000
     shares of the Registrant's Common Stock at a price of  $3.75
     exercisable  upon signing of the Memorandum through  January
     1,  1997  and the second to purchase up to 50,000 shares  of
     the   Registrant's  Common  Stock  at  a  price   of   $5.25
     exercisable upon signing of the Memorandum through April  1,
     1997.   A  copy  of  the Memorandum is  attached  hereto  as
     Exhibit 10.1.


ITEM 7.   FINANCIAL STATEMENTS AND EXHIBITS.


     10.1 Memorandum of Understanding dated September  25,  1996,
          with Scott R. Sieck



                           SIGNATURES

     Pursuant  to the requirements of the Securities and Exchange
Act  of  1934, the Registrant has duly caused this report  to  be
signed on its behalf by the undersigned hereunto duly authorized.


                             BION ENVIRONMENTAL  TECHNOLOGIES, INC.


Date: October 3, 1996       By: /s/ M. Duane Stutzman
                                M.   Duane Stutzman
                                N.   Chief Executive Officer


                       INDEX TO EXHIBITS

Financial Statements and Exhibits.


     10.1 Memorandum of Understanding dated September  25,  1996,
          with Scott R. Sieck

EX-10

                   Memorandum of Understanding



This  Memorandum  of  Understanding ("Memorandum")  between  Bion
Environmental Technologies, Inc. ("Company") and Scott  R.  Sieck
("Employee")(collectively  the  "Parties")  reflects  the  mutual
understanding  of  the  Parties of the  terms  of  employment  of
Employee by Company.


1.   Employee's title shall be Manager, Corporate Development and
Shareholder Relations.

2.  Position is a regular, half time position.

3.   Employee's  performance will be reviewed at least  annually.
It  is  the  intent of the Parties that, from  time  to  time  as
conditions  warrant, such bonus payments as appropriate  will  be
made to Employee.

4.  Position reports to the Chief Executive Officer.

5.   Total compensation will be $5,000 per month, $3,000 paid  in
cash  on  normal payroll schedule, $2,000 paid in restricted  and
legended  shares of the Company's common stock.   Stock  will  be
issued  at  the  end of each three month period.  The  number  of
shares to be issued will be calculated based on a price of  $5.00
per  share for the first 12 month period, $7.50 per share for the
second  12  month period, and $10.00 per share for the  third  12
month  period.   The Company hereby accepts a pro rata  share  of
office  and  clerical support services rendered at 601-B  Webster
Ave.,  not  to  exceed  $2,000.00  per  month.   Direct  expenses
incurred  on  behalf  of  the Company  will  be  reimbursed  upon
submission  and  approval of appropriate expense reports  on  the
15th  and  last day of the month following submission.   Expenses
should   be  detailed  to  the  extent  required  to   meet   IRS
requirements.

6.   To  provide long term incentive to the employee the  Company
shall issue the following Class K Warrants to Employee:

          *  a Class K-1 Warrant to purchase up to 100,000 shares
          of  the  restricted and legended common  stock  of  the
          Company  for  $6.00 per share exercisable  from  3/1/98
          through 10/1/99.

          *  a Class K-2 Warrant to purchase up to 100,000 shares
          of  the  restricted and legended common  stock  of  the
          Company  for  $8.00 per share exercisable  from  3/1/00
          through 10/1/01.

          *  a Class K-3 Warrant to purchase up to 100,000 shares
          of  the  restricted and legended common  stock  of  the
          Company  for  $10.00 per share exercisable from  3/1/02
          through 10/1/03.

     The Class K Warrants shall vest as follows:

          As to the Class K-1 Warrant, fully vested on 10/1/97.
          As to the Class K-2 Warrant, fully vested on 10/1/98.
          As to the Class K-3 Warrant, fully vested on 10/1/99.


7.   Employee  shall be awarded the following options  under  the
Company's Fiscal Year 1994 Incentive Compensation Plan:

          *   an  option to purchase up to 50,000 shares  of  the
          Company's  common stock at a price of $3.75 exercisable
          upon  signing  of  this memorandum through  January  1,
          1997.

          *   an  option to purchase up to 50,000 shares  of  the
          Company's  common stock at a price of $5.25 exercisable
          upon signing of this memorandum through April 1, 1997.

8.   This Memorandum shall not restrict Employee from engaging in
any  other business or activity which in not competitive with the
business  of the Company; provided that such additional  business
does  not interfere with nor is inconsistent with the performance
by the Employee of his duties under this Memorandum.

9.   Employee  agrees to sign a standard Bion Technologies,  Inc.
Employee Confidential Information and Invention Agreement.

By  consent of the Parties this Memorandum may be incorporated in
a document drafted by legal counsel at a later date.



Bion Environmental Technologies, Inc.

/s/ Jon Northrop             Date:  October 3, 1996
Jon Northrop, C.E.O.


/s/ Scott R. Sieck           Date:  October 3, 1996
Scott R. Sieck