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
OMB APPROVAL
OMB Number: 3235-0287
Expires: January 31, 2005
Estimated average burden hours per response... 0.5

(Print or Type Responses)
1. Name and Address of Reporting Person *
OSHMAN M KENNETH
  2. Issuer Name and Ticker or Trading Symbol
ECHELON CORP [ELON]
5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
__X__ Director __X__ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
Chairman of the Board & CEO
(Last)
(First)
(Middle)
550 MERIDIAN AVE, 
3. Date of Earliest Transaction (Month/Day/Year)
01/02/2007
(Street)

SAN JOSE, CA 95126
4. If Amendment, Date Original Filed(Month/Day/Year)
6. Individual or Joint/Group Filing(Check Applicable Line)
___ Form filed by One Reporting Person
_X_ 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
Common Stock 01/02/2007   M   36,928 A (5) 36,928 D  
Common Stock 01/02/2007   J(6)   14,026 D $ 7.94 22,902 D  
Common Stock 01/04/2007   G V 22,902 D $ 0 0 D  
Common Stock 01/04/2007   G V 22,902 A $ 0 3,595,735 I By Trust (1)
Common Stock               600,000 I By Trust (2)
Common Stock               600,000 I By Trust (3)
Common Stock               488,428 I By Partnership (4)

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. SEC 1474 (9-02)

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
Performance Shares (5) 01/02/2007   M     36,928 01/02/2007 01/02/2007 Common Stock 36,928 $ 0 0 D  

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
OSHMAN M KENNETH
550 MERIDIAN AVE
SAN JOSE, CA 95126
  X   X   Chairman of the Board & CEO  
OSHMAN TRUST DATED 7 10 1979
C/O M KENNETH OSHMAN
ECHELON CORP., 550 MERIDIAN AVE
SAN JOSE, CA 95126
    X    
O S VENTURES
C/O M KENNETH OSHMAN
ECHELON CORP., 550 MERIDIAN AVE
SAN JOSE, CA 95126
    X    

Signatures

 /s/ M. Kenneth Oshman   01/04/2007
**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 shares are held by the Oshman Trust dated July 10, 1979 (the "Oshman Trust"), of which the Reporting Person and his spouse, Barbara S. Oshman, serve as co-trustees.
(2) The shares are held by the M. Kenneth Oshman Annuity Trust dated February 14, 2006.
(3) The shares are held by the Barbara S. Oshman Annuity Trust dated February 14, 2006.
(4) The shares are held by O-S Ventures, a general partnership, of which the Reporting Person is general partner.
(5) Each performance share represents the right to receive one share of the Issuer's Common Stock.
(6) The shares were disposed of in payment of federal and state income tax and medicare tax payments due resulting from the vesting and issuance of the performance shares.

Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.

Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB number.