TABLE OF CONTENTS

          Any properly completed proxy may be revoked at any time before it is voted on any matter (without, however, affecting any vote taken prior to such revocation) by giving written notice of such revocation to the Secretary of the Company, or by signing and duly delivering a proxy bearing a later date, or by attending the Annual Meeting and voting in person. Attendance at the Annual Meeting will not, by itself, revoke a proxy.

Telephone Voting Procedures

          The telephone authorization procedure is designated to authenticate proxies by use of a personal identification number. The procedures allow registered stockholders to authorize a proxy to vote their shares and to confirm that their instructions have been properly recorded. Specific instructions to be followed are set forth on the enclosed Proxy Card. If you choose to authorize a proxy by telephone, you must do so prior to 12:00 p.m. Central Time on Wednesday, February 1, 2006. If you hold shares in a street name through a broker or bank, separate instructions for telephone proxy authorization may be provided on the voting instruction form provided by your broker or bank. Stockholders who return the Proxy Card are urged to specify their choices by marking the appropriate boxes on the card.

          The Annual Report of the Company, including financial statements for the fiscal years ended September 30, 2005 and September 30, 2004, is being mailed to stockholders of the Company concurrently with this Proxy Statement. The Annual Report, however, is not a part of the proxy solicitation material.

           THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEE OF THE BOARD OF DIRECTORS AS THE CLASS I DIRECTOR OF THE COMPANY.

           Audit Committee. The Audit Committee selects the independent accounting firm to audit the Company’s financial statements and to perform services related to the audit, reviews the scope and results of the audit with the independent accountants, reviews with management and the independent accountants the Company’s annual operating results, reviews the Company’s periodic disclosure related to its financial statements, considers the adequacy of the internal accounting procedures, considers the effect of such procedures on the accountants’ independence and establishes policies for business values, ethics and employee relations. The Audit Committee currently consists of three directors, William D. Corneliuson, as Chairman, Solomon Aronson, M.D. and Frank A. Katarow, each of whom is not an employee of the Company and is considered independent within the meaning of Rule 4200(a)(15) of the National Association of Securities Dealers’ Listing Standards and satisfy the other requirements for service on the Audit Committee set forth in Rule 4350 of the National Association of Securities Dealers’ Listing Standards. At this stage of the Company, the financial statements and accounting issues of the Company tend to be relatively straightforward. Accordingly, the Board of Directors has determined not to appoint an audit committee financial expert as that term is defined in Item 401 of Regulation S-K, though Mr. Corneliuson, the Chairman of the Committee, is considered financially sophisticated as such term is defined in Rule 4350(d)(2)(A) of the National Association of Securities Dealers Listing Standards. The Audit Committee has a written Charter adopted by the Board of Directors, which was amended and restated in February 2004 and was attached as Appendix B to our proxy statement for our 2004 Annual Meeting. A copy of this amended and restated Audit Committee Charter is available on our website at www.medwave.com and will be sent in paper form to any shareholder who submits a request to the Company’s Secretary at the address set forth on page 1. During fiscal year 2005, the Audit Committee held six meetings. The Audit Committee’s report to stockholders appears elsewhere in this Proxy Statement.

           Compensation Committee. The Compensation Committee reviews and recommends the compensation arrangements for officers and other senior level employees, reviews general compensation levels for other employees as a group, reviews succession planning for senior management, reviews the options or stock to be granted to eligible persons under the Company’s 2004 Amended and Restated Stock Option Plan and takes such other action as may be required in connection with the Company’s compensation and incentive plans. The Compensation Committee currently consists of three non-employee, independent directors, John L. Miclot, as Chairman, William D. Corneliuson and Solomon Aronson, M.D., and held two meetings during fiscal year 2005. The Compensation Committee’s report on executive compensation appears elsewhere in this Proxy Statement.

           Nominating and Corporate Governance Committee. In February 2004, the Board of Directors of the Company established a Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee oversees the qualification and nomination process for potential director candidates, reviews the continued qualification of existing directors and is responsible for corporate governance oversight. The Nominating and Corporate Governance Committee consists of three non-employee directors, William D. Corneliuson, as Chairman, John L. Miclot and Solomon Aronson, M.D.. No Nominating and Corporate Governance Committee meetings were held in fiscal year 2005. As required by Rule 4350(c) of the Nasdaq listing requirements, each member of the Nominating and Corporate Governance Committee is independent as defined in Rule 4200 of the Nasdaq listing requirements. The Nominating and Corporate Governance Committee has written charter adopted by the Board of Directors, which is available on the Company’s website at www.medwave.com and will be sent in paper form to any shareholder who submits a request to the Company’s Secretary at the address set forth on page 1.

          The Nominating and Corporate Governance Committee will review and consider director candidates who have been recommended by stockholders, with no regard to the source of the initial recommendation of the proposed candidate. Stockholders submitting candidates for consideration by the Nominating and Corporate Governance Committee should deliver a submission in writing to the Secretary of the Company and should follow the timing, informational and other requirements regarding stockholder proposals set forth in the Company’s By-laws or as set forth in Rule 14a-8 promulgated under the Exchange Act. Such proposal should specify whether the named person(s) should be considered by the Nominating and Corporate Governance Committee for inclusion as a Board of Directors nominee or whether the named person(s) are to be considered stockholder nominees under the By-laws. All securityholder recommendations for director candidates for election at the 2007 annual meeting of stockholders must be submitted the Secretary of the Company on or before November 4, 2006, and must include the following information:

	•		The name and address of the securityholder;
	•		A representation that the securityholder is a record holder the Company’s securities, or if the securityholder is not a record holder, evidence of ownership in accordance with Rule 14a8-(b)(2) under the Securities Exchange Act of 1934;
	•		The name, age business and residential address, educational background, current principal occupation or employment, and principal occupation or employment for the preceding five (5) full fiscal years of the proposed director candidate;
	•		A description of the qualifications and background of the proposed director candidate which addresses the minimum qualifications and other criteria for Board membership as approved by the Board from time to time;
	•		A description of all arrangements or understandings between the securityholder and the proposed director candidate; and
	•		Any other information regarding the proposed director candidate that is required to be included in a proxy statement filed pursuant to the rules of the SEC.

          At a minimum, each nominee, whether proposed by a stockholder or any other party, is expected to have the highest personal and professional integrity, shall demonstrate exceptional ability and judgment, have an experience base useful to the Company and complementary to the other directors, and shall be expected to effectively interact with other members of the Board to serve the long-term interests of the Company and its stockholders. A stockholder wishing to nominate a director separately from the slate of directors nominated by the Company should follow the procedures described in this Proxy Statement under the heading “Submission of Stockholder Proposals for 2007 Annual Meeting.”

          Please note, the information contained on our website is not incorporated by reference in, or considered to be a part of this Proxy Statement.

Director Compensation

          Directors are not currently paid fees for attending meetings. Under the Stock Option Plan, each non-employee director receives an option to purchase 30,000 shares of common stock upon his or her initial election to the Board. Each such option is for a term of ten years and vests over a four-year period. In addition, after three years of service, each non-employee director annually receives a ten-year, non-qualified option to purchase 10,000 shares, which vests on the first anniversary of the date of grant if the director is still serving as a director. Pursuant to the Stock Option Plan, directors are also eligible for discretionary option grants. Upon joining the Board of Directors in 2003, Dr. Aronson was granted an option to purchase 50,000 shares of common stock. The Board determined that Dr. Aronson should be granted these options because of the unique qualifications he brings to the Board of Directors.

Communication with the Board of Directors

          Any security holder desiring to send communications to the Board of Directors, or any individual director, may forward such document(s) to the Secretary of the Company at the Company’s office in Danvers, Massachusetts. The Secretary of the Company will collect and organize such communications and forward all of them to the Board of Directors or the particular director, as the case may be.

          The Company does not have a policy with respect to directors’ attendance at the Company’s annual meeting. William D. Corneliuson, as Chairman, Frank A. Katarow and Timothy J. O’Malley attended the Company’s annual meeting for fiscal year 2005, as members of the Board of Directors.

          The principal occupation and business experience for at least the last five years for each director of the Company is set forth below.

          WILLIAM D. CORNELIUSON, has been a director of the Company since May 1999 and Chairman of the Board since February 2002. Mr. Corneliuson is President of B.C. Holdings, Inc., a private investment company. Mr. Corneliuson has been with B.C. Holdings, Inc. since 1993. From 1976 to 1993, Mr. Corneliuson was President, Co-Founder, and Vice Chairman of the Board of Strong/Corneliuson Capital Management, Inc. He was also co-founder of the Strong family of mutual funds.

          TIMOTHY J. O’MALLEY, is the President, Chief Executive Officer and a director of the Company. He has served in these positions since October 1999. From 1984 until 1999, Mr. O’Malley was an employee of Siemens Medical Systems, Inc. At the time of his departure from Siemens, Mr. O’Malley was Vice President/Division Manager of Siemens Medical Systems, Electromedical Division for North America. Mr. O’Malley received his Associates of Applied Science degree in 1983 from Oakton College in Des Plaines, Illinois and attended DePaul University of Chicago from 1986 until 1991, with an emphasis in Business Management and Marketing.

          FRANK A. KATAROW, has been a director of the Company since 2002, and is currently consulting in the medical technology industry. Mr. Katarow had been the Chief Operating Officer of HomMed, LLC from October 2003 until their acquisition by Honeywell in December 2004. Prior to his position at HomMed, Mr. Katarow was President and Chief Operating Officer of BCI, Inc., a designer, manufacturer and distributor of patient monitoring equipment. Mr. Katarow was employed at BCI from October 1980 until October 2003, serving in various roles, including President and Chief Operating Officer from January 1993 to October 2003, Executive Vice President from January 1993 to November 1993, Senior Vice President and General Manager from March 1992 to January 1993, and Vice President of Operations from June 1990 to March 1992. In addition, Mr. Katarow was the President of SurgiVet, Inc., the wholly owned veterinary division of BCI, Inc. BCI was sold in 1998 to Smiths Group, plc., a public company traded on the London exchange. Mr. Katarow served as President of Smiths Group’s Patient Monitoring Division and President of Smiths Group’s Veterinary Division for five years after the sale of BCI to Smiths Group.

          JOHN L. MICLOT, has been a director of the Company since 2002, and became President and CEO of Respironics, Inc. on December 1, 2003. In November 2002, he was appointed the company’s Chief Strategic Officer responsible for developing and implementing strategic business and growth initiatives, both domestically and internationally, for each of Respironics’ four divisions. In May 2003, he was elected to the Board of Directors. Respironics is a publicly traded company, listed on the Nasdaq National Market. Prior to his position as Chief Strategic Officer, he was the President of the Homecare Division from July 1999 to November 2002. Mr. Miclot joined Respironics in 1998 when it acquired Healthdyne Technologies where he had served as Senior Vice President, Sales and Marketing from 1995 to 1998. He was appointed Group Vice President, Sleep Disorders, and was quickly promoted to Senior Vice President, Sales, Marketing and Manufacturing. Mr. Miclot began his career in sales for both DeRoyal Industries and the Edward’s Critical Care Division of Baxter Healthcare. In 1988, he joined the Ohmeda Division of BOC Healthcare as Director of Marketing and was appointed Director of International Marketing and Service in 1992 and assumed the position of Vice President of International Marketing in 1993. In 1994, Mr. Miclot joined Medex Inc., a medical device company specializing in cardiovascular pressure monitoring, as Vice President of Marketing. Mr. Miclot earned a Bachelor of Business Administration degree in Marketing from the University of Iowa. He is currently a member of the Young Presidents Organization.

          SOLOMON ARONSON M.D., FACC, FCCP, FAHA, has been a director of the Company since August 2003. Concurrently, Dr. Aronson is Professor and Executive Vice Chairman for Business Development and Finance for anesthesiology at Duke University Medical Center. He was previously Professor of Anesthesia and Critical Care at the University of Chicago and Chief of the Cardiothoracic and Vascular Anesthesia Division of the University of Chicago Hospitals and Clinics. In 1983, Dr. Aronson received his MD with honors in research from the Medical College of Wisconsin. In 1986, after completing his residency at the University of Texas where he served as Chief Resident in 1985, he was awarded a fellowship in cardiac and vascular anesthesia at the Texas Heart Institute in Houston. Following his fellowship in Texas, Dr. Aronson was recruited to the University of Chicago, Department of Anesthesia and Critical Care where he served as an instructor, assistant professor, and associate professor before being promoted to full professor in 1999. Dr Aronson is active in many professional organizations, including the American College of Cardiology, the American College of Chest Physicians, the American Heart Association, the American Society of Echocardiography for which he is Chair of the Intraoperative Council, the Society of Cardiovascular Anesthesiology for which he has been elected to serve on the Board of Directors, the National Board of Echocardiography for which he has also served on the Board of Directors, the American Society of Anesthesiology for which he serves on the Economic Committee, and the International Anesthesia Research Society. Dr. Aronson has recently been honored to serve through 2007 on the Anesthetic and Life Support Drug Advisory Committee for the FDA. He has also been honored with listings in “Who’s Who” & “How to Find the Best Doctors in America”. In 2000, 2001, and 2003, he was elected by his piers to “The Best Doctors in America”. Dr. Aronson has authored more than 75 journal articles, 40 book chapters, one textbook, and over 100 abstracts, and he has lectured extensively at universities throughout the United States and in many foreign countries.

Director Independence

          The Board of Directors has determined that each of Messrs. Corneliuson, Katarow, Miclot and Dr. Aronson is an “independent director” in accordance with the corporate governance rules of the National Association of Securities Dealers because none of them have a relationship with Company other than (1) serving as a director and a Board of Director committee member and (2) having beneficial ownership of the Company’s common stock as disclosed in this Proxy Statement. Therefore, the Company currently has a majority of “independent directors.”

Meetings of Independent Directors

          Independent directors of the Company regularly meet in executive sessions outside the presence of management. The presiding director for these meetings is currently Mr. Corneliuson. Any interested party who wishes to make their concerns known to the independent directors may contact William Corneliuson by sending a communication to the Secretary of the Company at the Company’s office in Danvers, Massachusetts.