PROSPECTUS SUPPLEMENT NO. 1                     Filed Pursuant to Rule 424(b)(3)

(TO PROSPECTUS DATED JANUARY 19, 2006)               Registration No. 333-126854


                         WESTERN POWER & EQUIPMENT CORP.

                        37,916,026 SHARES OF COMMON STOCK


     This prospectus supplement supplements information contained in that
certain prospectus dated January 19, 2006 of Western Power & Equipment Corp.
(the "Company"), relating to the offer and sale from time to time of up to
37,916,026 shares of the Company's outstanding common stock, of which 18,994,874
shares are issuable upon conversion of the Series A and B Debentures, 8,500,218
shares are issuable upon exercise of warrants issued to the debenture holders
and 8,248,528 shares which relates to an additional 30% of the maximum number of
shares, which are held by certain stockholders. This supplement is not complete
without, and may not be delivered or utilized except in connection with, the
prospectus, including any amendments or supplements thereto.

     The following table amends and supplements the information set forth in the
prospectus under the caption "Selling Stockholders" with respect to the selling
stockholders named below and the respective shares of common stock beneficially
owned by such selling stockholders that may be offered pursuant to the
prospectus:


Currently               Shares        Shares underlying    Shares issuable    Maximum Shares    Percentage      Shares owned
Issued Shares           underlying    warrants or          as interest        Offered hereby    beneficially    after offering
                        debentures    options              payments                             owned
                                                                                                    
Omicron Master
Trust(1)                        0         1,645,496                   0          1,645,496         12.30%              0

Portside Growth &
Opportunity Fund(2)     2,384,023                 0             464,563          2,848,586         19.54%              0

Rockmore Investment
Master Fund Ltd(3)      1,105,472           762,899             215,418          2,083,789         15.08%              0


     (1) Omicron Capital, L.P., a Delaware limited partnership ("Omicron
Capital"), serves as investment manager to Omicron Master Trust, a trust formed
under the laws of Bermuda ("Omicron"), Omicron Capital, Inc., a Delaware
corporation ("OCI"), serves as general partner of Omicron Capital, and
Winchester



Global Trust Company Limited ("Winchester") serves as the trustee of Omicron. By
reason of such relationships, Omicron Capital and OCI may be deemed to share
dispositive power over the shares of our common stock owned by Omicron, and
Winchester may be deemed to share voting and dispositive power over the shares
of our common stock owned by Omicron. Omicron Capital, OCI and Winchester
disclaim beneficial ownership of such shares of our common stock. As of the date
of this prospectus supplement, Mr. Olivier H. Morali, an officer of OCI, and Mr.
Bruce T. Bernstein, a consultant to OCI, have delegated authority from the board
of directors of OCI regarding the portfolio management decisions with respect to
the shares of our common stock owned by Omicron. By reason of such delegated
authority, Messrs. Morali and Bernstein may be deemed to share dispositive power
over the shares of our common stock owned by Omicron. Messrs. Morali and
Bernstein disclaim beneficial ownership of such shares of our common stock and
neither of such persons has any legal right to maintain such delegated
authority. No other person has sole or shared voting or dispositive power with
respect to the shares of our common stock being offered by Omicron, as those
terms are used for purposes under Regulation 13D-G of the Securities Exchange
Act of 1934, as amended. Omicron and Winchester are not "affiliates" of one
another, as that term is used for purposes of the Exchange Act or of any other
person named in this prospectus as a selling stockholder. No person or "group"
(as that term is used in Section 13(d) of the Exchange Act or the SEC's
Regulation 13D-G) controls Omicron and Winchester. The agreements prohibit the
selling stockholder from exercising or converting an amount of securities if the
result would be the ownership of more than 4.99% of the Company's common stock.

     (2) Ramius Capital Group, L.L.C. ("Ramius Capital") is the investment
adviser of Portside Growth and Opportunity Fund ("Portside") and consequently
has voting control and investment discretion over securities held by Portside.
Ramius Capital disclaims beneficial ownership of the shares held by Portside.
Peter A. Cohen, Morgan B. Stark, Thomas W. Strauss and Jeffrey M. Solomon are
the sole managing members of C4S & Co., L.L.C., the sole managing member of
Ramius Capital. As a result, Messrs. Cohen, Stark, Strauss and Solomon may be
considered beneficial owners of any shares deemed to be beneficially owned by
Ramius Capital. Messrs. Cohen, Stark, Strauss and Solomon disclaim beneficial
ownership of these shares. An affiliate of Ramius Capital Group, L.L.C. is a
NASD member. However, this affiliate will not sell any shares offered by
Portside Growth and Opportunity Fund through this prospectus and will receive no
compensation whatsoever in connection with sales of shares by Portside Growth
and Opportunity Fund. The agreements prohibit the selling stockholder from
exercising or converting an amount of securities if the result would be the
ownership of more than 4.99% of the Company's common stock.

     (3) Rockmore Capital, LLC ("Rockmore Capital") and Rockmore Partners, LLC
("Rockmore Partners"), each a limited liability company formed under the laws of
the State of Delaware, serve as the investment manager and general partner,
respectively, to Rockmore Investments (US) LP, a Delaware limited partnership,
which invests all of its assets through Rockmore Investment Master Fund Ltd, an
exempted company formed under the laws of Bermuda ("Rockmore Master Fund"). By



reason of such relationships, Rockmore Capital and Rockmore Partners may be
deemed to share dispositive power over the shares of the Company's common stock
owned by Rockmore Master Fund Rockmore Capital and Rockmore Partners disclaim
beneficial ownership of such shares of the Company's common stock. Rockmore
Partners has delegated authority to Rockmore Capital regarding the portfolio
management decisions with respect to the shares of common stock owned by
Rockmore Master Fund and, as of the date of prospectus supplement to this
prospectus dated January 19, 2006. Mr Bruce T Bernstein and Mr. Brian Daly, as
officers of Rockmore Capital, and whose business address is 150 East 58th
Street, 28'1h Floor, New York, New York 10155, are responsible for the portfolio
management decisions of the shares of common stock owned by Rockmore Master
Fund. By reason of such authority, Messrs. Bernstein and Daly may be deemed to
share dispositive power over the shares of the Company's common stock owned by
Rockmore Master Fund. Messrs Bernstein and Daly disclaim beneficial ownership of
such shares of the Company's common stock and neither of such persons has any
legal right to maintain such authority. No other person has sole or shared
voting or dispositive power with respect to the shares of the Company's common
stock as those terms are used for purposes under Regulation 13D-G of the
Securities Exchange Act of 1934, as amended. No person or "group" (as that term
is used in Section 13(d) of the Securities Exchange Act of 1934, as amended, or
the SEC's Regulation 13D-G controls Rockmore Master Fund. Omicron Master Trust
assigned certain of its warrants subject to this prospectus to Rockmore Master
Fund in August 2006. The agreements prohibit the selling stockholder from
exercising or converting an amount of securities if the result would be the
ownership of more than 4.99% of the Company's common stock.

     All information in this prospectus supplement is as of October 11, 2006

           The date of this prospectus supplement is October 11, 2006