RAE Systems Closes First Quarter with Increased Worldwide Deployments

SUNNYVALE, Calif. May 10, 2004 RAE Systems Inc. (AMEX: RAE), a leading global developer and manufacturer of rapidly-deployable, multi-sensor chemical and radiation detection monitors and networks for homeland security and industrial applications, today provided details of first quarter worldwide customer deployments.

While buying cycles for RAE Systems solutions can have seasonal fluctuations, we were pleased to demonstrate solid traction with new sales and repeat sales from our existing customer base, said Robert I. Chen, president and CEO of RAE Systems. The breadth of our solution portfolio provides our customers with the most sensitive, powerful products tailored to their specific needs. Our North American customers rely on us for homeland security applications, while our European and Asian customers are accelerating purchases of RAE Systems solutions for environmental security, public venue protection and worker safety in mines and other large infrastructure projects.

Selected worldwide application deployments from the first quarter included:

Public safety/WMD response/HazMat
Rapid Deployment Kits, scalable kits of wireless AreaRAEs designed to shave valuable minutes off response times, were in demand around the world, and were purchased by response teams and fire departments in Perth, Australia; New York State; Rhode Island; Lexington, Frankfort and Louisville, Kentucky; Madison, Wisconsin; Evansville and Wayne County, Indiana.

The Rapid Deployment Kit was purchased by a major U.S. aerospace firm for their increasing monitoring and sensing needs.

Police departments in The Netherlands purchased MiniRAE 2000s for arson investigations

Environmental and indoor air quality monitoring
Government agencies in China purchased ppbRAEs to monitor indoor air quality and security

Government agencies in Korea, in response to new regulations, purchased IAQRAEs to monitor of indoor air quality and security

Government agencies in Japan purchased additional MiniRAE 2000s and ppbRAEs to monitor indoor air quality and security

Industrial protection and confined space entry
An electric power company in West Virginia purchased AreaRAEs for fence line monitoring

Petrochemical facilities and steel mills across China purchased additional ToxiRAE IIs and BadgeRAEs for worker protection and workplace monitoring

The water treatment agency in Singapore purchased RAEGuards for perimeter and site monitoring

Petrochemical processing facilities in Malaysia purchased BadgeRAE units for worker protection

About RAE Systems
RAE Systems is a leading global developer and manufacturer of rapidly-deployable, multi-sensor chemical detection monitors and networks for homeland security and industrial applications. In addition, RAE Systems offers a full line of portable single-sensor chemical and radiation detection products. RAE Systems products enable the military and first responders such as firefighters, law enforcement and other emergency management personnel to detect and provide early warning of weapons of mass destruction and other hazardous materials. Industrial applications include the detection of toxic industrial chemicals, volatile organic compounds and petrochemicals. RAE Systems products are used by many U.S. government agencies, including the Department of Homeland Security, the Department of Justice, and the Department of State, as well as all branches of the U.S. military, and by numerous city and state agencies. Our end users also include many of the worlds leading corporations in the airline, automotive, computer and oil industries. Our products are used in civilian and government atmospheric monitoring programs in over 50 countries. For more information about RAE Systems, please visit www.RAESystems.com

Safe Harbor Statement
This press release contains “forward- looking” statements, as that term is used in Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are denoted by such words as continue to be strong. These types of statements address matters that are subject to risks and uncertainties, which could cause actual results to differ materially. Factors that could cause or contribute to such differences include, but are not limited to, the general economic and industry factors and receptiveness of the market to RAE and its products. In addition, our forward- looking statements should be considered in the context of other risk factors discussed in our filings with the Securities and Exchange Commission, including but not limited to our annual report on Form 10-K and 10-Q filings, available online at http://www.sec.gov. All forward-looking statements are based on information available to the company on the date hereof, and the company assumes no obligation to update such statements.