EXHIBIT 99.1



                                                                                   
SpectRx, Inc. (770) 242-8723              Financial Relations Board (212) 445-8000

Bill Wells-- Media                        Alison Ziegler         Julie Tu                   Judith Sylk-Siegel
Thomas H. Muller, Jr.-- Financial         General Contact        Analyst Information        Media Contact


                SpectRx, Inc. Announces Settlement of Arbitration


         NORCROSS, GA (December 31, 2001) -- SpectRx, Inc. (NASDAQ: SPRX) today
         announced that an arbitration dispute with Altea Technologies, Inc. has
         been resolved and that all claims made against SpectRx by Altea have
         been withdrawn. In exchange for Altea dropping the claims, agreeing to
         limit any future disputes, reducing future minimum royalty payments and
         other considerations, SpectRx has agreed to make changes in the timing
         of its royalty payments to Altea.
         SpectRx and Altea have cross-licensed technology, which is used in the

         SpectRx continuous glucose monitoring product and in Altea's drug
delivery products. The SpectRx product is currently under development with
Abbott Laboratories (NYSE: ABT).

         "Putting this distraction behind us is significant for SpectRx as we
work with Abbott Labs to bring this important continuous glucose monitoring
product to market," said Mark A. Samuels, SpectRx Chairman and CEO. "This
settlement is in the best interest of the Company as we settle several
outstanding issues. It also allows both companies to put more focus on
delivering products to improve the lives of people with diabetes."
         Under terms of the settlement, Altea has agreed to: withdraw all claims
against SpectRx; reduce minimum royalty payments after December 31, 2004; keep
separate any future intellectual property; limit royalty payments to product
sales; and limit any potential future disputes to a streamlined resolution
process. In exchange, SpectRx will pay an advance on future royalties of up to
$2.0 million over the minimum royalty otherwise due in 2002.

         The arbitration had involved interpretation of language involving a
joint development program, assignment of certain patent rights and the
definition of commercialization, each as applied to SpectRx's existing license
with Altea.

                                   ###MORE###




         SPECTRX/ALTEA
         DECEMBER 31, 2001
         PAGE 2

         SpectRx, a specialty point-of-care medical technology company, develops
and manufactures non-invasive and minimally invasive diagnostic and monitoring
systems. The company employs leading-edge biophotonics, or the use of light and
spectral energies, to develop painless point-of-care alternatives to blood- and
tissue-based procedures. Through internal product development and partnerships
with major health care companies, SpectRx focuses on key niche and large
diagnostic markets, primarily oncology, endocrinology and neonatology. The
Company's handheld, FDA-cleared BiliChek(TM) (sold internationally as
BiliCheck(TM)) is the first commercially available noninvasive painless monitor
for infant jaundice. Under development are products for the noninvasive
detection of cervical cancer and Type II diabetes, and a consumer device for
continuous glucose monitoring. For more information, visit SpectRx's web sites
at www.spectrx.com and www.bilicheck.com, or use Internet keyword spectrx.

         "Safe Harbor" Statement under the Private Securities Litigation Reform
         Act of 1995. A number of the matters and subject areas discussed in
         this press release that are not historical or current facts deal with
         potential future circumstances and developments. The discussion of such
         matters and subject areas is qualified by the inherent risks and
         uncertainties surrounding future expectations generally and also may
         materially differ from SpectRx's actual future experience involving any
         of or more of such matters and subject areas. SpectRx has attempted to
         identify, in context, certain of the factors that they currently
         believe may cause actual future experience and results to differ from
         SpectRx's current expectations regarding the relevant matter or subject
         area. Such risks and uncertainties include: the early stage of its
         products in development, its dependence on collaborative arrangements,
         its dependence on licensed intellectual property, the uncertainty of
         market acceptance of its products, the uncertainty of regulatory
         approval of its products, the uncertainty of capital to develop
         products, as well as those that are more fully described from time to
         time in SpectRx's reports under the heading "Risk Factors" filed with
         the SEC, including SpectRx's Annual Report on Form 10-K for the fiscal
         year ended December 31, 2000 and in the Forms 10-Q for the first
         quarter, second quarter and third quarter of 2001 filed by SpectRx.

                                    ###END###