Harris & Harris Group Inc.

PRESS RELEASE

HARRIS & HARRIS GROUP, INC.	AUGUST 31, 2006
111 WEST 57TH STREET
NEW YORK, NEW YORK 10019
NASDAQ/NMS SYMBOL: TINY
CONTACT: CHARLES E. HARRIS
TEL. NO. (212) 582-0900

HARRIS & HARRIS GROUP INVESTS IN CRYSTAL IS

Harris & Harris Group, Inc., announced today that it has made a follow-on investment in Crystal IS, Inc., as part of a $10.6 million second round financing. The investor syndicate was led by Lux Capital, with participation by Arch Venture Partners, 3i, Credit Suisse, Taiwanese Linkmore Ltd. and Harris & Harris Group.

Crystal IS is commercializing single-crystal aluminum nitride (AlN) substrates for the cost-effective production of high power, high temperature, and optoelectronic devices such as blue and ultraviolet lasers. Earlier this year, Crystal IS released its low defect 2-inch native AlN substrates. Crystal IS was founded in the Rensselaer Polytechnic Institute (RPI) incubator program.

Harris & Harris Group is a publicly traded venture capital company that makes initial investments exclusively in tiny technology, including nanotechnology, microsystems and microelectromechanical systems (MEMS). The Company's last 30 initial private equity investments have been in tiny technology-enabled companies. The Company has 20,756,345 common shares outstanding.

Detailed information about Harris & Harris Group and its holdings can be found on its website at www.TinyTechVC.com.

This press release may contain statements of a forward-looking nature relating to future events. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect the Company's current beliefs, and a number of important factors could cause actual results to differ materially from those expressed in this press release. Please see the Company's Annual Report on Form 10-K and the Company's report on Form 10-Q for the quarter ended June 30, 2006, filed with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties associated with the Company's business, including but not limited to the risks and uncertainties associated with venture capital investing and other significant factors that could affect the Company's actual results. Except as otherwise required by Federal securities laws, Harris & Harris Group, Inc., undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties. The reference to the website www.TinyTechVC.com has been provided as a convenience, and the information contained on such website is not incorporated by reference into this press release.