Ownership Submission
FORM 3
 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

INITIAL STATEMENT OF 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 *
  Reilly James T
 2. Date of Event Requiring Statement (Month/Day/Year)
05/30/2006		 3. Issuer Name and Ticker or Trading Symbol
PEGASYSTEMS INC [PEGA]
(Last)
(First)
(Middle)
101 MAIN STREET		 4. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director _____ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
Chief Accounting Officer
 5. If Amendment, Date Original Filed(Month/Day/Year)
(Street)

CAMBRIDGE, MA 02142		 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 Beneficially Owned
1.Title of Security
(Instr. 4)		 2. Amount of Securities Beneficially Owned
(Instr. 4)		 3. Ownership Form: Direct (D) or Indirect (I)
(Instr. 5)		 4. Nature of Indirect Beneficial Ownership
(Instr. 5)
Common Stock 12,898
D
 
Common Stock 1,000
I
UGMA Account

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. SEC 1473 (7-02)
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Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 4)		 2. Date Exercisable and Expiration Date
(Month/Day/Year)		 3. Title and Amount of Securities Underlying Derivative Security
(Instr. 4)		 4. Conversion or Exercise Price of Derivative Security 5. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 5)		 6. Nature of Indirect Beneficial Ownership
(Instr. 5)
Date Exercisable Expiration Date Title Amount or Number of Shares
Stock Option 12/05/2000(1) 09/05/2010 Common Stock 35,000 $ 4.48 D  
Stock Option 06/08/2001(2) 03/08/2011 Common Stock 7,800 $ 4.38 D  
Stock Option 03/08/2002(3) 03/08/2011 Common Stock 3,400 $ 4.38 D  
Stock Option 11/22/2001(4) 08/22/2011 Common Stock 10,000 $ 3.23 D  
Stock Option 07/18/2003(5) 04/18/2013 Common Stock 20,000 $ 4.11 D  
Stock Option 02/11/2005(6) 11/11/2014 Common Stock 24,000 $ 7.33 D  
Stock Option 12/08/2005(7) 12/08/2015 Common Stock 12,000 $ 8.67 D  

Reporting Owners

Reporting Owner Name / Address Relationships
Director 10% Owner Officer Other
Reilly James T
101 MAIN STREET
CAMBRIDGE, MA 02142		       Chief Accounting Officer  

Signatures

/s/ Shawn Hoyt, as Attorney-in-Fact 06/01/2006
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 5(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) All options vest on a four year quarterly vesting schedule beginning on the date of grant, with the first vesting date occuring on December 5, 2000.
(2) All options vest on a four year quarterly versting schedule beginning on the date of grant, with the first vesting date occurring on June 8, 2001.
(3) All options vested on March 8, 2002.
(4) All options vest on a four year quarterly vesting schedule beginning on the date of grant, with the first vesting date occurring on November 22, 2001.
(5) All options vest on a five year quarterly vesting schedule beginning on the date of grant, with the first vesting date occurring on July 18, 2003.
(6) All options vest on a five year quarterly vesting schedule beginning on the date of grant, with the first vesting date occurring on February 11, 2005. On April 6, 2005, the Board of Directors voted to accelerate all outstanding options held by employees that had an exercise price greater than the fair market value of the company's common stock on that date, which resulted in these options vesting in full.
(7) All options were fully vested on the grant date. The strike price represents a 20% premium to the fair market value of the issuer's common stock on the grant date, measured as the average of the high and low trading prices of the common stock on such date.

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