Ownership Submission
FORM 4
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
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(Print or Type Responses)
1. Name and Address of Reporting Person *
CHAGNON ANNA M
   2. Issuer Name and Ticker or Trading Symbol
BITSTREAM INC [BITS] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director _____ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
President and CEO
(Last)
(First)
(Middle)
C/O BITSTREAM INC., 245 FIRST STREET, 17TH FLOOR		 3. Date of Earliest Transaction (Month/Day/Year)
08/03/2006
(Street)

CAMBRIDGE, MA 02142-1270		 4. If Amendment, Date Original Filed(Month/Day/Year)
 6. Individual or Joint/Group Filing(Check Applicable Line)
_X_ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)		 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)		 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)		 5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4)		 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)		 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V Amount (A) or (D) Price

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)		 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)		 5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)		 6. Date Exercisable and Expiration Date
(Month/Day/Year)		 7. Title and Amount of Underlying Securities
(Instr. 3 and 4)		 8. Price of Derivative Security
(Instr. 5)		 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)		 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)		 11. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
ISO & NQ Stock Option (2) $ 4.45 08/03/2006   A   50,000     (2) 08/03/2016 Class A Common Stock 50,000 $ 4.45 354,500 (1) (2) (3) D  

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
CHAGNON ANNA M
C/O BITSTREAM INC.
245 FIRST STREET, 17TH FLOOR
CAMBRIDGE, MA 02142-1270		       President and CEO  

Signatures

 Anna M. Chagnon   08/07/2006
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) The reporting person beneficially owns the following options to purchase Class A Common Stock of the Company (i)an option granted on 11/06/1998 to purchase 7,101 shares at $1.56 per share, which option expires on 11/06/2008 and is fully vested;(ii)an option granted on 11/04/1999 to purchase 50,000 shares at $2.031 per share, which option expires on 11/04/2009 and is fully vested;(iii) an option granted on 12/11/2000 to purchase 42,899 shares at $2.0312 per share, which option expires 12/11/2010 and is fully vested;
(2) (iv)an option to purchase 40,000 shares at $3.96 per share, which option expires 11/05/2011 and is fully vested;(v)an option granted on 02/13/2004 to purchase 100,000 shares at $3.00 per share, which option expires on 02/13/2014, and of which 66,666 are vested, and 33,334 vest on 02/13/2007; (vi) an option granted on 08/02/2004 to purchase 60,000 shares at $1.59 per share, which option expires 08/02/2014 and of which 40,000 is vested and 20,000 vest on 08/02/2007; and (vii) an option granted on 08/03/2006 to purchase 50,000 at $4.45, which option expires on 08/03/2016 and of which 12,500 vest each on 08/03/07, 08/03/08, 08/03/09 and 08/03/10.
(3) included the reporting person's indirect ownership of the following options to purchase Class A Common Stock of the Company (i) an option granted on 01/25/1999 to purchase 750 shares at $1.59 per share, which option expires on 01/25/2009 and is fully vested; (ii) an option granted on 10/24/2000 to purchase 750 shares at $2.50 per share, which option expires on 10/24/2010 and is fully vested; and (iii)an option granted on 11/05/2001 to purchase 3,000 shares at $3.960 per share, which option expires on 11/05/2011 and is fully vested. Indirect ownership of options held of record by Michael Chagnon, an employee of the Company and Ms. Chagnon's spouse.

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