Diboll, Texas Signs 2-Year Contract With Nestor Traffic Systems, Inc. for Automated Red Light Solution
The First Nestor Traffic Systems Red Light Program in Texas

PROVIDENCE, RI -- (MARKET WIRE) -- January 30, 2007 -- Nestor Traffic Systems, Inc., a subsidiary of Nestor, Inc. (NASDAQ: NEST), a leading provider of advanced automated traffic enforcement solutions and services, announced that Diboll, Texas has entered into a 2-year contract to employ Nestor Traffic Systems' CrossingGuard® red light enforcement solution and all related services.

As the City web site states, "Diboll is going high-tech," with plans to install red light enforcement systems at 6 approaches at up to 3 intersections.

"Diboll represents Nestor's first CrossingGuard® red light enforcement customer in Texas. With Nestor's advanced tracking technology and multiple synchronized videos, Diboll will be utilizing the most complete evidence package anywhere in the state. No other system shows infractions more clearly to violators, police officers and judges," said Nestor Chief Executive Officer William B. Danzell. "We are very pleased to be integrating this unique solution into the City's ongoing public safety program."

Nestor Traffic Systems provides automated traffic enforcement solutions to state and municipal governments. Nestor Traffic Systems is the exclusive North American distributor for the Vitronic PoliScanSpeed™ scanning LiDAR, capable of tracking multiple vehicles in multiple lanes simultaneously. Our CrossingGuard® red light enforcement system uses patented multiple, time-synchronized videos to capture comprehensive evidence of red light and speed violations. In addition, CrossingGuard® offers customers a unique Collision Avoidance™ safety feature that can help prevent intersection collisions. CrossingGuard® is a registered trademark of Nestor Traffic Systems, Inc. PoliScanSpeed™ is a trademark of Vitronic. For more information, call (401) 274-5658 or visit www.nestor.com.

Statements in this press release about future expectations, plans and prospects for Nestor, including statements containing the words "expects," "will," and similar expressions, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. We may not meet the expectations disclosed in our forward-looking statements and investors should not place undue reliance on those statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various factors, including: market acceptance of our products, competition, legal and legislative challenges to automated traffic enforcement, our ability to operate with reduced staff and capitalization, and other factors discussed in Risk Factors in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the SEC. Investors are advised to read Nestor's Annual Report, quarterly reports on Form 10-Q and current reports on Form 8-K filed after our most recent annual or quarterly report. The forward-looking statements in this letter represent our current views and we disclaim any obligation to update these forward-looking statements.