Exhibit 99.1

Contact:  Mexican Restaurants, Inc.

 Andrew J. Dennard

 (713) 943-7574

Mexican Restaurants, Inc.

Announces 2009 Second Quarter Operating Results

(NASDAQ: CASA)

Houston, Texas (August 10, 2009)    For the 2009 second quarter of Mexican Restaurants, Inc. (the “Company”) ended June 28, 2009, the Company reported a net loss of $207,937 or $0.06 per diluted share, compared with a net income of $359,059 or $0.11 per diluted share for the second quarter of fiscal year 2008.  For the 26-week period ended June 28, 2009, the Company reported a net loss of $28,083 or $0.01 per diluted share, compared with net income of $434,576 or $0.13 per diluted share for the 26-week period of fiscal year 2008.

In the second quarter, the Company sold substantially all of its operating assets and liabilities of its La Senorita restaurant chain (consisting of five site locations) located in Michigan for an adjusted price of $2.6 million.  Proceeds from the sale on April 7, 2009 were used to pay down long-term debt.  The La Senorita sale, which resulted in a gain of $387,083 and an income tax expense of $303,558, was classified as discontinued operations and resulted in net income from discontinued operations of $43,720 for the second quarter of fiscal year 2009.  The higher effective tax rate results from permanent differences and an increase in the valuation allowance related to the La Senorita sale.

Effective June 28, 2009, the Company amended its Credit Agreement with Wells Fargo Bank, N.A., primarily to extend the maturity date from June 29, 2010 to June 29, 2012.  As of June 28, 2009, the Company was in compliance with all debt covenants and as of the date hereof expects to be in compliance with its debt covenants during the next 12 months.

The Company’s revenues for the second quarter of fiscal year 2009 decreased $636,048 or 3.4% to $18.3 million compared with $19.0 million for the same quarter in fiscal year 2008.  Restaurant sales for second quarter 2009 decreased by $609,296 or 3.3% to $18.1 million compared with $18.7 million for the second quarter of 2008.  The decrease in restaurant revenues primarily reflects a decrease in same-store sales, partially offset by new restaurants revenues.  For the second quarter ended June 28, 2009, Company-owned same-restaurant sales decreased approximately 6.6%.  Franchised-owned same-restaurant sales, as reported by franchisees, decreased approximately 1.2% over the same quarter in fiscal 2008.

On a year-to-date basis, the Company’s revenue decreased $16,850 to $37.5 million compared with the same 26-week period in fiscal 2008.  Restaurant sales for the 26-week period ended June 28, 2009 increased $6,703 to $37.1 million compared with the same 26-week period in fiscal 2008.  The flat sales primarily reflects a decline in same-store sales mostly offset by the re-opening of one restaurant that was closed last year due to fire damage and one new Mission Burrito restaurant.  For the 26-week period ended June 28, 2009, Company-owned same-restaurant sales decreased approximately 2.8% and franchised-owned same-restaurant sales, as reported by franchisees, increased approximately 0.2% over the same period in fiscal 2008.

Commenting on the Company’s second quarter results, Curt Glowacki, Chief Executive Officer, stated, “Sales and profit  performance during the second quarter of 2009 was certainly disappointing but not surprising given the impact of the troubled economic environment and of the swine flu on consumers’ discretionary spending habits.  For the near term, we continue to remain cautious regarding the economy and consumer spending.  We will continue to focus on the fundamentals of running great restaurants that offer delicious food at very affordable prices while positioning the Company to exit the recession stronger financially and operationally.”

Mexican Restaurants, Inc. operates and franchises 73 Mexican restaurants.  The current system includes 54 Company-operated restaurants, 17 franchisee operated restaurants and two licensed restaurants.

Special Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such factors include, among others, the following: growth strategy; dependence on executive officers; geographic concentration; increasing susceptibility to adverse conditions in the region; changes in consumer tastes and eating habits; national, regional or local economic and real estate conditions; demographic trends; inclement weather; traffic patterns; the type, number and location of competing restaurants; inflation; increased food, labor and benefit costs; the availability of experienced management and hourly employees; seasonality and the timing of new restaurant openings; changes in governmental regulations; dram shop exposure; and other factors not yet experienced by the Company.  The use of words such as “believes”, “anticipates”, “expects”, “intends” and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements.  Readers are urged to carefully review and consider the various disclosures made by the Company in this release and in the Company’s most recent Annual Report and Form 10-K , that attempt to advise interested parties of the risks and factors that may affect the Company’s business.

Mexican Restaurants, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

	13-Week Period Ended 6/28/2009			13-Week Period Ended 6/29/2008			26-Week Period Ended 6/28/2009			26-Week Period Ended 6/29/2008
Revenues:
Restaurant sales	$	18,107,695		$	18,716,991		$	37,121,251		$	37,114,548
Franchise fees, royalties and other		126,578			135,666			264,867			270,756
Business interruption		103,528			121,192			103,528			121,192
		18,337,801			18,973,849			37,489,646			37,506,496
Costs and expenses:
Cost of sales		5,263,291			5,452,696			10,513,537			10,637,856
Labor		6,050,108			6,131,887			12,173,097			11,981,025
Restaurant operating expenses		4,522,659			4,442,446			9,304,997			9,049,984
General and administrative		1,632,038			1,702,278			3,318,767			3,696,341
Depreciation and amortization		885,013			811,558			1,752,970			1,609,665
Pre-opening costs		--			10,427			--			47,311
Impairment and restaurant closure costs		214,778			22,577			237,231			54,829
Loss (gain) on involuntary disposals		15,028			(149,338	)		7,797			(275,709	)
Loss on sale of other property and equipment		36,934			14,663			73,696			41,670
		18,619,849			18,439,194			37,382,092			36,842,972
Operating income (loss)		(282,048	)		534,655			107,554			663,524
Other income (expense):
Interest income		883			828			1,863			2,910
Interest expense		(42,918	)		(91,689	)		(105,111	)		(233,212	)
Other, net		9,601			10,126			20,102			17,458
		(32,434	)		(80,735	)		(83,146	)		(212,844	)
Income (loss) from continuing operations before income taxes		(314,482	)		453,920			24,408			450,680
Income tax (expense) benefit		62,825			(101,237	)		(2,983	)		(102,763	)
Income (loss) from continuing operations		(251,657	)		352,683			21,425			347,917
Discontinued Operations:
Income (loss) from discontinued operations		(39,436	)		10,281			36,021			62,039
Restaurant closure income (expense)		(369	)		--			(190,941	)		52,289
Gain (loss) on sale of assets		387,083			(2,075	)		386,502			(2,075	)
Income from discontinued operations before income taxes		347,278			8,206			231,582			112,253
Income tax expense		(303,558	)		(1,830	)		(281,090	)		(25,594	)
Income (loss) from discontinued operations		43,720			6,376			(49,508	)		86,659
Net income (loss)	$	(207,937	)	$	359,059		$	(28,083	)	$	434,576
Basic income (loss)  per common share
Income (loss) from continuing operations	$	(0.07	)	$	0.11		$	0.01		$	0.10
Income (loss) from discontinued operations		0.01			--			( 0.02	)		0.03
Net income (loss)	$	(0.06	)	$	0.11		$	( 0.01	)	$	0.13
Diluted  income (loss) per common share
Income (loss) from continuing operations	$	(0.07	)	$	0.11		$	0.01		$	0.10
Income (loss) from discontinued operations		0.01			--			(0.02	)		0.03
Net income (loss)	$	(0.06	)	$	0.11		$	(0.01	)	$	0.13
Weighted average number of common shares (basic)		3,284,641			3,252,320			3,271,358			3,249,743
Weighted average number of common shares (diluted)		3,284,641			3,313,677			3,272,981			3,310,690