Ownership Submission
FORM 4
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
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(Print or Type Responses)
1. Name and Address of Reporting Person *
BROTZMAN RICHARD W
   2. Issuer Name and Ticker or Trading Symbol
NANOPHASE TECHNOLOGIES CORPORATION [NANX] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director _____ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
VP - Research & Development
(Last)
(First)
(Middle)
1319 MARQUETTE DRIVE		 3. Date of Earliest Transaction (Month/Day/Year)
07/31/2006
(Street)

ROMEOVILLE, IL 60446		 4. If Amendment, Date Original Filed(Month/Day/Year)
 6. Individual or Joint/Group Filing(Check Applicable Line)
_X_ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)		 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)		 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)		 5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4)		 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)		 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V Amount (A) or (D) Price
Common Stock 07/31/2006   M   7,420 A $ 1.75 7,420 D  
Common Stock 07/31/2006   S   7,420 D $ 5.6466 0 D  
Common Stock               3,000 D  

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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)		 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)		 5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)		 6. Date Exercisable and Expiration Date
(Month/Day/Year)		 7. Title and Amount of Underlying Securities
(Instr. 3 and 4)		 8. Price of Derivative Security
(Instr. 5)		 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)		 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)		 11. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Common Stock (right to buy) $ 3.886             11/07/1997(1) 11/07/2006 Common Stock 21,580   21,580 D  
Common Stock (right to buy) $ 3.8125             07/31/1999(2) 07/31/2008 Common Stock 40,600   40,600 D  
Common Stock (right to buy) $ 1.75 07/31/2006   M     7,420 07/27/2000(3) 07/27/2009 Common Stock 7,420 $ 1.75 0 D  
Common Stock (right to buy) $ 7.6875             05/24/2001(3) 05/24/2010 Common Stock 22,500   22,500 D  
Common Stock (right to buy) $ 10.875             01/26/2002(3) 01/26/2011 Common Stock 20,000   20,000 D  
Common Stock (right to buy) $ 7.0625             02/28/2002(3) 02/28/2011 Common Stock 20,000   20,000 D  
Common Stock (right to buy) $ 6.65             01/03/2003(3) 01/03/2012 Common Stock 20,000   20,000 D  
Common Stock (right to buy) $ 3.66             03/24/2004(3) 03/24/2013 Common Stock 20,000   20,000 D  
Common Stock (right to buy) $ 5.55             10/11/2005(3) 10/11/2014 Common Stock 11,000   11,000 D  
Common Stock (right to buy) $ 6.03             09/27/2006(3) 09/27/2015 Common Stock 10,000   10,000 D  

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
BROTZMAN RICHARD W
1319 MARQUETTE DRIVE
ROMEOVILLE, IL 60446		       VP - Research & Development  

Signatures

 By Jess Jankowski, under UPA for Richard W. Brotzman, Jr.   08/02/2006
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) Subject to certain restrictions, 51,485 of this original option grant of 69,480 shares vested in five equal annual installments beginning on 11/07/1997, with the remainder vesting on 11/07/2004.
(2) Subject to certain restrictions, beginning on this date, options vest in five equal installments.
(3) Subject to certain restrictions, beginning on this date, options vest in three equal annual installments.
 
Remarks:
The sales reported in this Form 4 were effected pursuant to a rule 10b5-1 plan adopted by Dr. Brotzman on January 3, 2005.

Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.

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