Exhibit 99.3

               Nanophase Technologies Completes Private Placement
                         Tuesday September 9, 5:05 pm ET

ROMEOVILLE, Ill., Sept. 9 /PRNewswire-FirstCall/ -- Nanophase Technologies
Corporation (Nasdaq: NANX - News), a technology leader in nanomaterials and
nanoengineered products, announced that it has successfully completed a private
placement of 453,001 newly issued shares of common stock to Grace Brothers,
Ltd., a large institutional investor in Evanston, Illinois, for a gross equity
investment of $2 million. The share price for the common stock was determined
based on the fifteen-day market closing average for the Company's stock (NANX)
ending September 5, 2003. Grace Brothers, Ltd. has been a long-term investor and
major stockholder of the Company since 1994. Nanophase plans to use the net
proceeds of this transaction to fund continued development and for general
corporate purposes.

The newly issued shares of common stock have not been registered under the
Securities Act of 1933, as amended, and may not be offered or sold in the United
States absent registration under the Securities Act and applicable state
securities laws, or an applicable exemption from such registration requirements.
Nanophase has agreed to file a Form S-3 registration statement covering the
securities issued in the private placement during the next 30 days. After the
effective date of registration, the Company expects to have approximately
15,707,943 shares outstanding. As a result of this investment, Grace Brothers,
Ltd., owns approximately 26% of the Company's shares.

Nanophase has also agreed to provide Grace Brothers, Ltd., the right to purchase
an additional 453,001 newly issued shares of common stock under the same terms
and conditions as the current purchase for an additional potential investment of
$2 million. These warrants are only valid for twelve months after the date of
the original purchase.

Joseph Cross, Nanophase's president and CEO, commented, "We believe that this
additional equity is necessary to fund working capital needs, including new
product development, and increased business development and marketing activity.
Grace has been a long-term investor in nanomaterials technology and a strong
supporter of the Company. We are pleased with their continuing confidence and
support. Based on this placement, the Company currently has approximately $6
million in cash and equivalents."

"Nanophase has made significant strides in its technologies and also in applying
those to its targeted and future markets over the past year," stated Bradford
Whitmore, Managing Director of Grace Brothers, Ltd. "We continue to believe that
the Company's technologies lead the emerging nanomaterials market. Business
development activities have accelerated, aided by an improving economy, and we
believe that Nanophase should experience meaningful growth by capturing
opportunities in emerging markets for applied nanomaterials solutions."

Nanophase also announced that its Board of Directors has approved an amendment
to its Stockholder Rights Agreement to revise the beneficial ownership threshold
at which a person or group of persons becomes an "acquiring person" and triggers
certain provisions



under the Rights Agreement. As revised, a person or group would become an
"acquiring person" if that person or group becomes the beneficial owner of 35%
or more of the outstanding shares of Nanophase stock. Prior to this amendment,
the beneficial ownership threshold was 25%.

Nanophase Technologies (NANX), www.nanophase.com, provides nanoengineered
solutions of nanostructured materials for a variety of industrial product
applications. Using patented and proprietary integrated nanotechnologies, the
Company creates products with unique performance attributes. Nanophase
Technologies currently owns or licenses 22 United States patents and patent
applications, consisting of 8 owned United States patents, 8 owned United States
patent applications, and 6 licensed United States patents. The Company also has
24 foreign patents and patent applications, consisting of 9 owned foreign
patents and 15 owned foreign patent applications, all of which are counterparts
to domestic filings covering its platform of nanotechnologies.

This press release contains words such as "expects", "anticipates", "plans",
"forecasts" and similar expressions that are intended to identify
forward-looking statements within the meaning of the Safe Harbor Provisions of
the Private Securities Litigation Reform Act of 1995. Such statements in this
announcement are made based on the Company's current beliefs, known events and
circumstances at the time of publication, and as such, are subject in the future
to unforeseen risks and uncertainties. It is possible that the Company's future
performance may differ materially from current expectations expressed in these
forward-looking statements due to a variety of important factors such as: a
customer's decision to defer, cancel or otherwise modify a purchase order or
supply agreement; demand for, and acceptance of, the Company's nanocrystalline
materials; changes in our development, supply and distribution relationships;
increasing price and product/service competition by foreign and domestic
competitors, including new entrants; technological developments and changes; the
ability to continue to introduce competitive new products and services on a
timely, cost effective basis; the Company's mix of products/services; increases
in raw material costs which cannot be recovered in product pricing; domestic and
foreign governmental and public policy changes including environmental
regulations; disruption of commercial activities and threats associated with
terrorism and efforts to combat it; protection and validity of patent and other
intellectual property rights; the cyclical nature of the Company's business; the
outcome of pending and future litigation and governmental proceedings; and other
risks described in the Company's filings with the Securities and Exchange
Commission. In addition, the Company's forward-looking statements could be
affected by general industry and market conditions and growth rates. The Company
undertakes no obligation to update or revise these forward-looking statements to
reflect new events, uncertainties or other contingencies.