-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 HAEhlwSS3t2RhvN6smT9bJj2U/H/jBp9YXgbA2c5G0U9behSgiT3f2XRf0JUkHwv
 uyMR9KO1WDDi5BiyFUkVfQ==

<SEC-DOCUMENT>0001005477-06-004617.txt : 20060912
<SEC-HEADER>0001005477-06-004617.hdr.sgml : 20060912
<ACCEPTANCE-DATETIME>20060912202859
ACCESSION NUMBER:		0001005477-06-004617
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20060908
FILED AS OF DATE:		20060912
DATE AS OF CHANGE:		20060912

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KANA SOFTWARE INC
		CENTRAL INDEX KEY:			0001089907
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-BUSINESS SERVICES, NEC [7389]
		IRS NUMBER:				770435679
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		181 CONSTITUTION DRIVE
		CITY:			MENLO PARK
		STATE:			CA
		ZIP:			94025
		BUSINESS PHONE:		6506148300

	MAIL ADDRESS:	
		STREET 1:		181 CONSTITUTION DRIVE
		CITY:			MENLO PARK
		STATE:			CA
		ZIP:			94025

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	KANA COMMUNICATIONS INC
		DATE OF NAME CHANGE:	19990702

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			Nemelka John Fritzen
		CENTRAL INDEX KEY:			0001341163

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-27163
		FILM NUMBER:		061087385

	BUSINESS ADDRESS:	
		BUSINESS PHONE:		(801) 805-1300

	MAIL ADDRESS:	
		STREET 1:		3311 NORTH UNIVERSITY AVENUE
		STREET 2:		SUITE 200
		CITY:			PROVO
		STATE:			UT
		ZIP:			84604
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>edgar123.xml
<DESCRIPTION>FORM 4
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2006-09-08</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0001089907</issuerCik>
        <issuerName>KANA SOFTWARE INC</issuerName>
        <issuerTradingSymbol>KANA.PK</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001341163</rptOwnerCik>
            <rptOwnerName>Nemelka John Fritzen</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>C/O KANA SOFTWARE, INC.</rptOwnerStreet1>
            <rptOwnerStreet2>181 CONSTITUTION DRIVE</rptOwnerStreet2>
            <rptOwnerCity>MENLO PARK</rptOwnerCity>
            <rptOwnerState>CA</rptOwnerState>
            <rptOwnerZipCode>94025</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
        </reportingOwnerRelationship>
    </reportingOwner>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>NON QUALIFIED STOCK OPTION (RIGHT TO BUY)</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>2.95</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2006-09-08</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>40000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0.00</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F1"/>
            </exerciseDate>
            <expirationDate>
                <value>2016-09-07</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>COMMON STOCK</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>40000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>40000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">THE OPTION IS IMMEDIATELY EXERCISABLE, BUT WILL BE SUBJECT TO THE ISSUER'S RIGHT TO REPURCHASE UNVESTED SHARES UPON MR. NEMELKA'S CESSATION OF SERVICE PRIOR TO VESTING OF THE SHARES PURCHASED UNDER THIS GRANT.  SUCH RIGHT OF REPURCHASE SHALL LAPSE, AND THE SHARES SHALL VEST AS TO 1/8TH OF THE SHARES IN EIGHT (8) SUCCESSIVE SEMI-ANNUAL INSTALLMENTS UPON MR. NEMELKA'S COMPLETION OF EACH SIX (6)-MONTH PERIOD OF SERVICE AS A BOARD MEMBER, COMMENCING ON OCTOBER 4, 2005.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>/S/ John F. Nemelka</signatureName>
        <signatureDate>2006-09-12</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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