Exhibit 99.1

FOR IMMEDIATE RELEASE                                              July 27, 2000

CONTACT:      Donald L. Rich, President & CEO                       408-496-0474

Castelle  Reports  Second  Quarter  2000  Results: 3  Consecutive  Quarters  of
Profitability

SANTA CLARA,  Calif.,  July 27, 2000 - CASTELLE  (Nasdaq:  CSTL) today announced
financial results for the second fiscal quarter ended June 30, 2000.

Net sales  for the  second quarter of 2000  were $3.8 million, compared to $3.7
million for  the same  period in 1999. The  Company recorded net income for the
second quarter of 2000 of $211,000 or earnings  of $0.04 per share,  on a fully
diluted  basis, compared  to  a net loss of $1.5 million or a loss of $0.31 per
share for the same period in 1999.  This compares to net income in the fourth
quarter of 1999 and first quarter of 2000 of $114,000 and $169,000,respectively,
or earnings of $0.02 and $0.03 per share, respectively.

Net sales for the first six months of 2000 were $7.9 million compared with $8.2
million  for  the same period  of 1999. Net income for the six-month period was
$380,000 or $0.07 per share compared to a net loss of $2.9 million or $0.64 per
share for the 1999 period, resulting from  higher margins and reduced operating
expenses. The shortfall in sales was largely due to the continued decline in
demand for our print server product line, mainly in the Asia Pacific Region. The
loss in 1999 included a $1.1 million reserve for excess inventory related to the
print serve  product line. Excluding  the reserve, the net  loss for the period
would have been $1.7 million, or $0.38 per share.

Donald L. Rich, President and CEO, stated, "Our strategy over the past 18 months
has  been to  stabilize the business, return to  profitability  and develop new
products  to  grow our  revenues. We are  pleased  with  our third  consecutive
profitable quarter and the healthy trend of increasing earnings per share.  Our
higher-margin fax server product line has continued to do well with a slight
increase in  shipments  over  the  same  period last year  as well as the first
quarter of this year, offsetting lower print server product sales.  During  the
third quarter we will enter new markets by introducing the OfficeDirect product
family  of  unified  email/fax  messaging and  network  attached storage server
appliances for small and medium size offices."

About  Castelle Founded in 1987, Castelle  develops  and markets  products that
enable  organizations  to easily implement Internet and Intra-office messaging,
data  storage and printing  over local  area networks. Castelle  is  one of the
pioneers of  application  server  appliances  and  has  developed  expertise  to
integrate most complex  functions  into  very  easy-to-use and maintain, "plug-&
-forget" shared devices. We believe Castelle's products are more economical than
comparable software-only solutions, as they do not require a large technical
staff  to install, operate  and  maintain. Castelle  products  are  utilized by
industry leaders including Fortune 1000 companies  and also by small and medium-
sized  business  worldwide  and  are  available  through a worldwide network of
distributors, value-added resellers, systems integrators, e-commerce retailers,
and the Castelle On-Line Store. Castelle is headquartered in Santa Clara and can
be reached at 408-496-0474, fax 408-496-0502 or www.castelle.com.

Forward-Looking Statements
This press  release contains forward-looking  statements that involve risks and
uncertainties, relating to  the  future  events, including  the  ability of the
Company to  continue  to (i) develop, introduce  and  achieve acceptance of new
products,(ii) be profitable,(iii) be cash flow positive, (iv) improve on working
capital,and (iv)deliver quality customer support. Actual events or the Company's
results  may  differ  materially  from  the  events or results discussed in the
forward-looking statement for a number of reasons including, without limitation,
the  timely development, acceptance and pricing of new products and the general
economic conditions as they affect the Company's customers.  The Company assumes
no obligation to update the forward-looking information.  Investors are referred
to  the  full  discussion  of risks  and uncertainties  associated with forward-
looking statements as contained in the Company's reports to  the Securities and
Exchange Commission, including the Company's Form 10-K for the fiscal year ended
December 31, 1999.
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