Exhibit 99.1

FOR IMMEDIATE RELEASE                                               MAY 14, 2001

CONTACT:          Donald L. Rich, President & CEO             408-852-8000


Castelle Reports First Quarter 2001 Results

MORGAN HILL,  Calif.,  May 14, 2001 - CASTELLE  (Nasdaq:  CSTL) today  announced
financial results for the first fiscal quarter ended March 30, 2001.

Net sales for the first fiscal  quarter of 2001 were $2.3  million,  compared to
$4.1 million for the same period in fiscal 2000. The Company recorded a net loss
for the first  fiscal  quarter of 2001 of $408,000  or $0.09 per diluted  share,
compared to a net profit of $169,000 or earnings of $0.03 per diluted  share for
the same period in fiscal 2000.

The loss in the first fiscal quarter of 2001 included a restructuring  charge to
income of $180,000,  or $0.04 per diluted  share.  Excluding  this  charge,  the
results  would have been a loss of  $228,000,  or $0.05 per diluted  share.  The
restructuring  charge  included the  write-down  of surplus  assets and expenses
associated with worldwide consolidations.

Donald L. Rich,  President and CEO, stated, "Our first quarter financial results
were impacted by the abrupt  decline of the economy and weakened  demand for our
products.  While it is  difficult  to  predict  the scope and  duration  of this
economic  uncertainty,  we believe it is  prudent to take  appropriate  steps to
reduce  our  expenses  worldwide.  In April,  we  reduced  our  workforce  by 17
positions,  or 25%,  consolidated  excess  facilities and  restructured  certain
business functions.  Our actions will result in another  restructuring charge in
the second quarter of approximately $100,000.  Consequently, we are committed to
an operating model that will enable us to return to profitability at the current
revenue level."

About Castelle
Founded  in  1987,   Castelle   develops  and  markets   products   that  enable
organizations to easily  implement  Internet and  Intra-office  messaging,  data
storage and printing over local area  networks.  Castelle is one of the pioneers
of application  server appliances and has developed  expertise to integrate most
complex  functions into very  easy-to-use and maintain,  "plug-&-forget"  shared
devices. Castelle believes that its products are more economical than comparable
software-only  solutions,  as they do not  require  a large  technical  staff to
install,  operate  and  maintain.  Castelle  products  are  utilized by industry
leaders  including  Fortune 1000  companies  and also by small and  medium-sized
business   worldwide   and  are  available   through  a  worldwide   network  of
distributors,  value-added resellers, systems integrators, e-commerce retailers,
and the  Castelle  On-Line  Store.  Castelle is  headquartered  in Morgan  Hill,
California   and  can  be  reached  at   408-852-8000,   fax   408-852-8100   or
www.castelle.com.

Forward-Looking Statements
This press release  contains  forward-looking  statements that involve risks and
uncertainties,  relating  to the future  events,  including  the  ability of the
Company to (i) develop,  introduce and achieve acceptance of new products,  (ii)
be profitable, (iii) be cash flow positive, (iv) improve on working capital, and
(iv) deliver quality customer  support.  Actual events or the Company's  results
may  differ   materially   from  the  events  or   results   discussed   in  the
forward-looking   statements  for  a  number  of  reasons   including,   without
limitation,  the timely development,  acceptance and pricing of new products and
the general  economic  conditions  as they affect the Company's  customers.  The
Company  assumes  no  obligation  to  update  the  forward-looking  information.
Investors  are  referred  to the  full  discussion  of risks  and  uncertainties
associated with forward-looking statements as contained in the Company's reports
to the Securities and Exchange Commission, including the Company's Form 10-K and
Form 10-K/A for the fiscal year ended December 31, 2000.


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