<PAGE>

SCHEDULE 14A

                                 (RULE 14a-101)

                     INFORMATION REQUIRED IN PROXY STATEMENT

                            SCHEDULE 14A INFORMATION
           PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

[X] Filed by the Registrant

[ ] Filed by a Party other than the Registrant

Check the appropriate box:

[ ] Preliminary Proxy Statement
    Confidential, For Use of the Commission Only (as permitted by
    Rule 14a-6(e)(2)

[X] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

                       BHA Group Holdings, Inc.
------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)


Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1)      Title of each class of securities to which transaction applies:

         ---------------------------------------------------------------------
(2)      Aggregate number of securities to which transaction applies:

         ---------------------------------------------------------------------
(3)      Per unit price or other underlying value of transaction computed
         pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
         filing fee is calculated and state how it was determined):

         ---------------------------------------------------------------------
(4)      Proposed maximum aggregate value of transaction:

         ---------------------------------------------------------------------
(5)      Total fee paid:

         ---------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials

    --------------------------------------------------------------------------
Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.

(1)      Amount previously paid:

(2)      Form, Schedule or Registration Statement no.:

(3)      Filing Party:

(4)      Date Filed:




<PAGE>



                            BHA GROUP HOLDINGS, INC.
                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                           TUESDAY, FEBRUARY 24, 2004



To the Stockholders of
BHA GROUP HOLDINGS, INC.

         NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of BHA
Group Holdings, Inc. (the "Company") will be held at the office of the Company,
Second (2nd) Floor, BHA Group Holdings, Inc. Corporate Headquarters, 8800 East
63rd Street, Kansas City, Missouri 64133, on Tuesday, February 24, 2004, at
11:30 a.m., Kansas City time, for the following purposes:

         1.   To elect directors for the ensuing year;

         2.   To ratify the selection of KPMG LLP as independent auditors of the
              Company for the fiscal year ending September 30, 2004; and

         3.   To transact such other business as may properly come before the
              meeting or any adjournment thereof.

         The close of business on January 5, 2004 has been designated as the
record date for the determination of stockholders entitled to notice of and to
vote at the Annual Meeting of Stockholders or any adjournments thereof.

         MANAGEMENT REQUESTS ALL STOCKHOLDERS TO SIGN AND DATE THE ENCLOSED FORM
OF PROXY AND RETURN IT IN THE POSTAGE PAID, SELF-ADDRESSED ENVELOPE PROVIDED FOR
YOUR CONVENIENCE. PLEASE DO THIS WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING OF STOCKHOLDERS. SHOULD YOU ATTEND, YOU MAY, IF YOU WISH, WITHDRAW YOUR
PROXY AND VOTE YOUR SHARES IN PERSON.

                                              By Order of the Board of Directors



                                              STANLEY D. BIGGS
                                              Secretary


Kansas City, Missouri
January 16, 2004


<PAGE>

                            BHA GROUP HOLDINGS, INC.


                            ------------------------
                                 PROXY STATEMENT
                            ------------------------

                             DATED JANUARY 16, 2004
                       FOR ANNUAL MEETING OF STOCKHOLDERS
                      TO BE HELD TUESDAY, FEBRUARY 24, 2004


         This Proxy Statement is furnished by the Board of Directors (the
"Board") of BHA Group Holdings, Inc. (the "Company") in connection with the
solicitation of proxies to be voted at the Annual Meeting of Stockholders of the
Company which will be held at the principal executive offices of the Company,
Second (2nd) Floor, BHA Group Holdings, Inc. Corporate Headquarters, 8800 East
63rd Street, Kansas City, Missouri 64133, on Tuesday, February 24, 2004 at 11:30
a.m., Kansas City time, and all adjournments thereof (the "Annual Meeting"). The
close of business on January 5, 2004 has been designated as the record date (the
"Record Date") for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting.

         Any proxy delivered pursuant to this solicitation may be revoked, at
the option of the person executing the proxy, at any time before it is
exercised, either by delivering a signed revocation to the Secretary of the
Company at any time prior to the Annual Meeting, or, at the Annual Meeting, by
delivering a signed revocation to the Chairman of the meeting at any time prior
to the commencement of the voting thereon. A duly executed proxy conferring
different authority than an earlier proxy of the same stockholder will
constitute a revocation of such earlier proxy.

         UNLESS OTHERWISE SPECIFIED IN THE PROXY (AND EXCEPT FOR "BROKER
NON-VOTES" DESCRIBED BELOW), STOCK REPRESENTED BY PROXIES WILL BE VOTED (I) FOR
THE ELECTION OF THE BOARD'S NOMINEES FOR DIRECTORS; (II) FOR THE RATIFICATION OF
THE SELECTION OF KPMG LLP AS INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL
YEAR ENDING SEPTEMBER 30, 2004 ("FISCAL 2004"); AND (III) IN THE DISCRETION OF
THE PROXY HOLDERS WITH RESPECT TO SUCH MATTERS AS MAY COME BEFORE THE ANNUAL
MEETING.

         The cost of soliciting proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited personally or by
telephone by some of the regular employees of the Company. The Company does not
expect to pay any compensation for the solicitation of proxies, but may
reimburse brokers and other persons holding stock in their names, or in the
names of nominees, for their expense incurred in sending proxy materials to
their principals and obtaining their proxies. On or about January 16, 2004, this
Proxy Statement and the accompanying form of proxy are to be mailed to each
stockholder of record as of the Record Date.

         As of December 31, 2003, the Company had outstanding 6,145,059 shares
of the Company's $.01 par value common stock (the "Common Stock"), the Company's
only class of voting securities outstanding. Each share of Common Stock
outstanding entitles the holder thereof to one vote. The majority of all the
outstanding shares of Common Stock constitutes a quorum at the Annual Meeting.
Shares of Common Stock represented by proxies that reflect abstentions and
"broker non-votes" (i.e. Common Stock represented at the Annual Meeting by
proxies held by brokers or nominees as to which (i) instructions have not been
received from the beneficial owners or persons entitled to vote and (ii) the
broker or nominee does not have the discretionary voting power on a particular
matter) will be counted as a vote represented and voted at the Annual Meeting
for purposes of determining the number of votes required to approve a proposal.
Shares of Common Stock represented by proxies that withhold authority to vote
for any proposal or for an individual nominee for election as a director and
broker non-votes will not be counted as a vote represented and voted at the
Annual Meeting for purposes of determining the number of votes required to
approve a proposal or to elect such nominee and effectively count as a vote
against such proposal or nominee.


<PAGE>



                              ELECTION OF DIRECTORS
                                (PROPOSAL NO. 1)

NOMINEES FOR ELECTION OF DIRECTORS

         Seven directors are to be elected at the Annual Meeting, each to hold
office until the next annual meeting of stockholders and until his successor is
duly elected and qualified. In voting for directors, for each share of Common
Stock held of record, such stockholder is entitled to cast one vote either in
favor of or against each candidate, or to abstain from voting on any or all
candidates. It is intended that shares represented by the enclosed form of proxy
will be voted in favor of the election of all of the nominees named below as
directors, all of whom are now directors of the Company, unless otherwise
specified in such proxy. If any of the nominees should become unavailable for
election, the shares represented by such proxies will be voted for such
substitute nominees as may be nominated by the Board. The election of directors
requires the affirmative vote of the holders of a plurality of the shares
present or represented and entitled to vote at the Annual Meeting.

         The following information is given with respect to the nominees:


<TABLE>
<CAPTION>
             NAME                                   PRINCIPAL OCCUPATION                          DIRECTOR
             ----                                   --------------------                           SINCE
                                                                                                   -----
<S>                              <C>                                                                <C>
Lamson Rheinfrank, Jr.......     Chairman of the Board of the Company(1)                            1986
James E. Lund...............     Chief Executive Officer and President of the Company(2)            1986
James J. Thome..............     Chief Operating Officer and Executive Vice President of            1990
                                 the Company(3)
Don H. Alexander............     President and Chief Executive Officer of Alexander &               1986
                                 Associates, Inc.(4)
Robert D. Freeland..........     Former Chairman of the Board of Havens Steel Company(5)            1988
Thomas A. McDonnell.........     President and Chief Executive Officer of DST Systems,              1993
                                 Inc.(6)
Robert J. Druten............     Executive Vice President and Chief Financial Officer of            2003
                                 Hallmark Cards Incorporated(7)
</TABLE>

----------------------------

(1)    Mr. Rheinfrank, age 63, has been Chairman of the Board of the Company
       since its inception in July 1986. He was the Chief Executive Officer and
       Chairman of the Board of Directors of Standard Havens, Inc. ("Standard
       Havens") from 1967 until May 1989 when Standard Havens, which had been an
       affiliate of the Company, was acquired by a subsidiary of Raytheon
       Company. Mr. Rheinfrank also serves as an Advisory Director of Commerce
       Bank of Kansas City and a Director of U.S. Engineering Co.

(2)    Mr. Lund, age 54, has been a Director of the Company since its inception
       in July 1986. He has been President and Chief Executive Officer of the
       Company since April 1993 and prior thereto, served as Executive Vice
       President. Mr. Lund joined Standard Havens in 1979 where he served in
       various capacities through 1986 including the position of Vice President
       and General Manager of the Baghouse Accessories Division.

(3)    Mr. Thome, age 48, has been Chief Operating Officer of the Company since
       May 1997 and Executive Vice President of the Company since April 1993. He
       has been a Director of the Company since February 1990. He joined the
       Company in 1986 as National Sales Manager and became Vice President of
       the Company in November 1988. Prior to his employment with the Company,
       Mr. Thome served in various positions with Standard Havens from 1979 to
       1986.

                                       2
<PAGE>

(4)    Mr. Alexander, age 65, has been a Director of the Company since its
       inception in July 1986. Mr. Alexander has been President and Chief
       Executive Officer of Alexander & Associates, Inc., a private investment
       group for more than five years. He is also Chairman of Tulsa Power LLC, a
       Tulsa-based manufacturer of machinery for the wire and cable industry;
       Chairman of CDI Industrial & Mechanical Contractors, Inc., of Kansas
       City, Kansas; and a Director of the Bank of Blue Valley, a commercial
       banking company in Overland Park, Kansas.

(5)    Mr. Freeland, age 66, has been a Director of the Company since November
       1988. He has recently retired as Chairman of the Board of Havens Steel
       Company of Kansas City, Missouri, ending his 43 year career with the
       global steel construction company. From 1983 to 1993, he was President
       and Chief Executive Officer and was a Director of Havens Steel Company
       from 1971 to 2003. Mr. Freeland is a past President and Board Member of
       the Central Fabricators Association of Chicago, Illinois, and is the past
       Chairman ExOfficio Board Member of the American Institute of Steel
       Construction of Chicago, Illinois after serving as Chairman in 1997 and
       1998 and as a Board Member for 15 years.

(6)    Mr. McDonnell, age 58, has been a Director of the Company since December
       1993. Mr. McDonnell is the President and Chief Executive Officer and a
       Director of DST Systems, Inc. ("DST"), a company providing information
       processing and computer software services primarily to mutual funds and
       financial service organizations. He has been employed by DST in various
       capacities since 1973. He is a Director of Commerce Bancshares, Inc.,
       Euronet Worldwide, Inc., Computer Sciences Corporation, Blue Valley Bank
       Corporation, Kansas City Southern, and Garmin Ltd.

(7)    Mr. Druten, age 56, has been a Director of the Company since July 2003.
       Since 1994, Mr. Druten has been Executive Vice President and Chief
       Financial Officer of Hallmark Cards Incorporated of Kansas City,
       Missouri, a greeting card manufacturer. He has been employed by Hallmark
       in various capacities since 1986. He also serves as the Chairman of the
       Board of Trustees of Entertainment Properties Trust, a destination based
       entertainment real estate company, as well as a Board Member of Crown
       Media Holdings, Inc., a cable and television network company.


COMMITTEES AND MEETINGS OF THE BOARD

         During the Company's fiscal year ended September 30, 2003 ("Fiscal
2003"), the Board held four regular and two special meetings. The Board has an
Audit Committee and a Compensation Committee. The Board does not maintain a
standing nominating committee. During the Company's fiscal year ended September
30, 2003, the Board appointed an Independent Search Committee comprised of the
independent directors, Messrs. Alexander, Freeland and McDonnell, to identify
candidates to fill the vacancy on the Board created by the resignation of
Richard C. Green, Jr. The Independent Search Committee conducted a search and
interviewed several candidates. The Independent Search Committee unanimously
recommended to the Board that Robert J. Druten be appointed to fill the vacancy.
The Board believes that the use of an Independent Search Committee as necessary
is an appropriate means for identifying suitable candidates for the Board. The
Board does not have a specific policy regarding the consideration of any
director candidates nominated by the stockholders. Stockholders may recommend
director candidates for consideration at the Company's annual meeting in 2005 by
following the process for submission of stockholder proposals described in this
Proxy.

         During Fiscal 2003, the Audit Committee met six times. The Audit
Committee is comprised of Messrs. Alexander, Druten, Freeland and McDonnell, all
of whom are independent directors as defined by the National Association of
Securities Dealers' listing standards and the SEC rules. This Committee reviews
and reports to the Board with respect to various auditing and accounting
matters, including the appointment of the Company's independent public
accountants, the scope of audit procedures, general accounting policy matters,
and the performance of the Company's independent public accountants.

         During Fiscal 2003, the Compensation Committee met two times. The
Compensation Committee is comprised of Messrs. Alexander, Druten, Freeland and
McDonnell. This Committee is responsible for the review and approval of the
annual corporate compensation guidelines, executive officer bonuses, executive
officer compensation, and the potential levels of contribution to or awards
under the

                                       3
<PAGE>

Company's Profit Sharing and Employee Stock Ownership Plans, 401(k) plan and the
Amended and Restated Incentive Stock Option Plan for the ensuing year.

         During Fiscal 2003, all of the directors attended at least 75% of the
meetings of the Board and committees of which they are members. Stockholders can
direct communication to the Company's directors by writing to the Company's
Secretary.

DIRECTORS' COMPENSATION

         Currently, each director who is not employed by the Company receives an
annual retainer together with a fee for each meeting of the Board or any
committee he attends. Each non-employee director makes an annual election to
receive his fees either in cash or in common stock of the Company. All of the
non-employee directors have elected to receive all or a portion of their
compensation in the form of stock for fiscal 2003 and for fiscal 2004. The
current fees include an annual retainer of $16,000 in cash or $18,000 in common
stock of the Company and meeting fees of $1,150 in cash or $1,250 in stock. Fees
for meetings conducted by teleconference are paid at a rate of $450 in cash or
$500 in stock. Additionally, non-employee directors receive an initial grant of
options to purchase 3,000 shares of the Company's common stock upon initial
appointment to the Board and each non-employee director receives an annual grant
of options to purchase 1,250 shares of the Company's common stock. All option
grants are at a share price equal to the fair market value on the date of such
grant.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         To the Company's knowledge, based solely on a review of copies of
Section 16(a) forms submitted to the Company during and with respect to fiscal
2003, all officers, directors and beneficial owners of more than 10% of Common
Stock of the Company filed timely reports under Section 16(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") during Fiscal 2003, with
the exception of the following transactions which were not reported within the
new two day reporting period following the adoption of the Sarbanes-Oxley Act of
2002: One set of transactions involving the grant of common stock to the
independent members of the Board of Directors (Messrs. Alexander, Freeland, and
McDonnell) in lieu of fees for the annual retainer and attendance at the
November 2002 Board Meeting, which were reported on January 2, 2003; and one
sale of common stock by Lamson Rheinfrank, Jr. on January 29, 2003, which was
reported on February 2, 2003. These officers, directors and beneficial owners
are identified in the table on pages 14 and 15 of the proxy statement.

         COMPANY OFFICERS AND SENIOR OFFICERS OF SUBSIDIARY CORPORATIONS

         Messrs. Rheinfrank, Lund and Thome are officers of the Company who are
listed above as nominees for director. The only officers of the Company and
senior officers of the Company's subsidiaries other than these individuals are
H. Torsten Andersch, James C. Shay, Robert B. O'Conor, and Stanley D. Biggs.

         H. Torsten Andersch, age 46, is a Vice President having joined the
Company's wholly-owned subsidiary, BHA Group GmbH as Sales Manager in September
1990. He became Assistant General Manager in December 1990 and was promoted to
General Manager of BHA Group GmbH in September 1992. He added responsibilities
of Director of BHA U.K. Ltd. and Vice Chairman of BHA Purfilter S.L. in November
1997. Prior to September 1990, he was employed as Sales Manager at Eastman
Christensen GmbH.

         James C. Shay, age 40, has been Senior Vice President and Chief
Financial Officer since August 1999. He had been Treasurer and Chief Financial
Officer since March 1994 and was the Corporate Secretary from May 1997 to August
1999. He joined the Company as Controller in June 1992. From 1986 to 1992, he
was employed at KPMG LLP as an Audit Manager and in various other positions.

                                       4
<PAGE>

         Robert B. O'Conor, age 46, has been the Senior Vice President of Sales
of the Company's principal operating subsidiary since July 1999. He was Vice
President of Sales from 1996 until 1999. From 1983, when he joined the Company,
through 1996, he held numerous positions in Sales and Product Management. Prior
to August 1983, he was employed in sales and engineering positions for
Owens-Corning Fiberglass Corporation.

         Stanley D. Biggs, age 45, joined the Company in August 1999 as Vice
President, Treasurer and Corporate Secretary. From 1988 until August 1999, he
was employed by The Rival Company as Vice President, Treasurer and Corporate
Secretary and various other positions.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


         In April 2003, the Company purchased 40,000 shares of the Company's
common stock from the BHA Group Holdings, Inc. Employee Stock Ownership Plan and
5,000 shares of the Company's common stock from the BHA Group Holdings, Inc.
401(k) Profit Sharing Plan. The shares were acquired in a private transaction at
a price of $21.37 per share, which was the market value on the date of the
transaction.




                                       5
<PAGE>



                             EXECUTIVE COMPENSATION

I.   SUMMARY COMPENSATION TABLE

     The following table shows, for the Company's Chief Executive Officer and
     each of the other four most highly compensated executive officers of the
     Company (collectively, the "named executive officers"), information
     concerning compensation earned for services in all capacities during Fiscal
     2003, as well as compensation earned by each such person for the two
     previous fiscal years.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                       ANNUAL COMPENSATION                   LONG-TERM COMPENSATION
                                 ----------------------------------- -------------------------------------
                                                                              AWARDS            PAYOUTS
                                                                     -------------------------------------
                                                           OTHER                   SECURITIES
                                                           ANNUAL     RESTRICTED   UNDERLYING
                                              ANNUAL      COMPEN-       STOCK       OPTIONS/      LTIP    ALL OTHER
  NAME AND PRINCIPAL     FISCAL    SALARY    BONUS(1)    SATION(2)    AWARDS(S)       SARS      PAYOUTS  COMPENSATION
       POSITION           YEAR      ($)         ($)         ($)          ($)          (#)         ($)         ($)
          (A)             (B)       (C)         (D)         (E)          (F)          (G)         (H)         (I)
---------------------------------------------------------------------------------------------------------------------
<S>                       <C>      <C>        <C>           <C>          <C>        <C>            <C>      <C>
James E. Lund,            2003     267,800    200,000        --           --           --          --       38,125(3)
Chief Executive           2002     258,750     52,000        --           --         36,000        --       24,639(4)
Officer and President     2001     250,000     50,400        --           --           --          --       24,894(5)
---------------------------------------------------------------------------------------------------------------------

Lamson Rheinfrank,        2003     191,200    100,000        --           --           --          --       43,556(3)
Jr., Chairman             2002     184,750     26,000        --           --         18,000        --       36,399(4)
                          2001     178,500     25,200        --           --           --          --       36,654(5)
---------------------------------------------------------------------------------------------------------------------

James J. Thome,           2003     267,800    200,000        --           --           --          --       31,596(3)
Executive Vice            2002     258,750     52,000        --           --         36,000        --       21,075(4)
President and Chief       2001     250,000     50,400        --           --           --          --       21,330(5)
Operating Officer
---------------------------------------------------------------------------------------------------------------------

James C. Shay,            2003     182,100    175,000        --           --           --          --       22,471(3)
Senior Vice President     2002     175,950     45,500        --           --         27,000        --       15,899(4)
and Chief Financial       2001     170,000     44,100        --           --           --          --       16,154(5)
Officer
---------------------------------------------------------------------------------------------------------------------
                                        (6)
Robert B. O'Conor,        2003     189,845     11,250        --           --         8,000         --       20,987(3)
Senior Vice President     2002     176,700     15,500        --           --           --          --       15,254(4)
of Sales                  2001     171,990     10,500        --           --           --          --       15,509(5)
---------------------------------------------------------------------------------------------------------------------
</TABLE>

------------------------
(1)  Annual bonus payments are based on the Company's financial performance for
     each fiscal year and were paid in the subsequent fiscal year (see
     "Compensation Committee Report on Executive Compensation - Annual Cash
     Incentives").

(2)  No amounts for perquisites and other personal benefits are shown because
     the aggregate dollar amount per executive is less than either $50,000 or
     10% of his annual salary and bonus.

(3)  Amounts of All Other Compensation for Fiscal 2003 include the following:

        (i)   Contributions by the Company under the ESOP and Profit Sharing
              Plans: each executive $12,132;

        (ii)  Contributions by the Company under the 401(k) plan: each executive
              $900;

        (iii) Premiums on life insurance for executives paid by the Company: Mr.
              Lund, $17,340; Mr. Rheinfrank, $29,100; Mr. Thome, $13,776; Mr.
              Shay, $8,600; Mr. O'Conor, $7,955; and;

        (iv)  Premiums on long-term disability for executives paid by the
              Company: Mr. Lund, $7,753; Mr. Rheinfrank, $1,424; Mr. Thome,
              $4,788; Mr. Shay, $839.

                                       6
<PAGE>

(4)  Amounts of All Other Compensation for Fiscal 2002 include the following:

        (i)   Contributions by the Company under the ESOP and Profit Sharing
              plans: each executive $6,399;

        (ii)  Contributions by the Company under the 401(k) plan: each executive
              $900; and,

        (iii) Premiums on life insurance for executives paid by the Company: Mr.
              Lund, $17,340; Mr. Rheinfrank, $29,100; Mr. Thome, $13,776; Mr.
              Shay, $8,600; Mr. O'Conor, $7,955.

(5)  Amounts of All Other Compensation for Fiscal 2001 include the following:

        (i)   Contributions by the Company under the ESOP and Profit Sharing
              Plans: each executive $6,654;

        (ii)  Contributions by the Company under the 401(k) plan: each executive
              $900; and,

        (iii) Premiums on life insurance for executives paid by the Company: Mr.
              Lund, $17,340; Mr. Rheinfrank, $29,100; Mr. Thome, $13,776; Mr.
              Shay, $8,600; Mr. O'Conor, $7,955.

(6)  Base salary for Mr. O'Conor also includes monthly incentives tied to sales
     results.

II.  OPTION/SAR GRANTS TABLE

     The following table sets forth information with respect to the named
executives concerning the grant of stock options during Fiscal 2003:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                 INDIVIDUAL GRANT AWARD
---------------------------- -------------- ---------------- ------------- --------------   POTENTIAL REALIZABLE
                               NUMBER OF      % OF TOTAL                                      VALUE AT ASSUMED
                              SECURITIES        OPTIONS        EXERCISE                     ANNUAL RATE OF STOCK
                              UNDERLYING      GRANTED TO       OR BASE                       PRICE APPRECIATION
                                OPTIONS      EMPLOYEES IN       PRICE       EXPIRATION           FOR OPTION
           NAME                 GRANTED       FISCAL YEAR       ($/SH)         DATE            5%           10%
            (A)                   (B)             (C)            (D)            (E)            (F)          (G)
---------------------------- -------------- ---------------- ------------- -------------- ------------ ------------
<S>                              <C>             <C>            <C>          <C>            <C>         <C>
     Robert B. O'Conor           8,000           4.8%           $16.82       11/1/2012      $84,624     $214,454
-------------------------------------------------------------------------------------------------------------------
</TABLE>

     The options represented above were granted by the Compensation Committee
during Fiscal 2003 and vest in four annual increments of 25%.




                                       7
<PAGE>



III. AGGREGATED OPTION EXERCISES IN FISCAL 2003 AND FISCAL YEAR-END
     OPTION VALUES

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                            SHARES                  UMBER OF SECURITIES UNDERLYING       VALUE OF UNEXERCISED
                         ACQUIRED ON      VALUE    N    UNEXERCISED OPTIONS AT         IN-THE MONEY OPTIONS AT
                           EXERCISE     REALIZED          SEPTEMBER 30, 2003              SEPTEMBER 30, 2003
          NAME              NUMBER       DOLLAR            NUMBER OF SHARES                DOLLAR VALUE (2)
          (A)                (B)           (C)                   (D)                             (E)
----------------------------------------------------
                                                     EXERCISABLE  UNEXERCISABLE (1)  EXERCISABLE  UNEXERCISABLE (1)
--------------------------------------------------------------------------------------------------------------------
<S>                         <C>          <C>            <C>             <C>           <C>              <C>
     James E. Lund             ---           ---       152,811          69,300        2,365,029        501,298
--------------------------------------------------------------------------------------------------------------------
 Lamson Rheinfrank, Jr.        ---           ---        22,500          55,800          286,605        424,773
--------------------------------------------------------------------------------------------------------------------
     James J. Thome         30,000       432,300        78,170          69,300        1,124,475        501,298
--------------------------------------------------------------------------------------------------------------------
     James C. Shay           7,986       121,307        46,182          62,550          571,543        473,036
--------------------------------------------------------------------------------------------------------------------
   Robert B. O'Conor            --            --         2,000          26,000           13,880        265,640
--------------------------------------------------------------------------------------------------------------------
</TABLE>

-----------------------

(1)    Includes options that have not met vesting requirements.

(2)    Based on a fair market value as of September 30, 2003 of $23.76 per
       share. Values are stated on a pre-tax basis.


COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         During Fiscal 2003, the Compensation Committee was comprised of Messrs.
Alexander, Freeland, McDonnell, and Druten upon election to the Board in July
2003. No such member of the Compensation Committee was at any time an officer or
employee of the Company or any of its subsidiaries.

EXECUTIVE EMPLOYMENT CONTRACTS AND CHANGE OF CONTROL PROVISIONS

         The Company has employment agreements with Messrs. Lund, Rheinfrank,
Thome, and Shay, each of whom serves on its Executive Committee (each, an
"Agreement" and collectively, the "Agreements"). The Agreements, which were most
recently amended effective February 19, 2002, are subject to one year automatic
extensions on each October 1, unless either party gives notice within 90 days of
such October 1 of his or its election to have such automatic extensions cease.
All of the Agreements have been automatically extended.

         Each Agreement prohibits the executive from competing with the Company
for the two-year period after the termination of such employment with the
Company. Each Agreement further provides that if the Company terminates the
Agreement without cause or if the executive terminates his Agreement for good
reason, the executive covered by such Agreement is entitled to receive one year
base salary together with a specified percentage of the executive's annual bonus
potential. If the Agreement is terminated for these reasons and the
circumstances relate to a change in control of the Company, then the
corresponding base salary and annual bonus payments will cover a two year
period. In the event such payments are subject to an excise tax imposed by
Section 4999 of the Code, the Company is required to make an additional gross-up
payment to the employee to offset the effect of the excise tax on the employee.

                        COMPENSATION COMMITTEE REPORT ON
                             EXECUTIVE COMPENSATION

         The Board believes that increasing the value of the Company to its
stockholders is the Board's most important objective and should be the key
measure of management performance. The Board also believes that executive
compensation should be objectively determined. For this reason, the Compensation
Committee, which is made up of directors who are not employees of the Company,
is responsible for determining the compensation packages of the Company's
executives.

                                       8
<PAGE>

         The Company is focused on achieving consistent earnings growth and
increasing returns to its stockholders. In previous filings, the Company has
stated that although it remains cautious about near term results due to
challenging business conditions, the following are its longer-term financial
goals:

    o    Achieve compounded sales growth of 8% to 10% annually over time.

    o    Improve operating margins as a percentage of sales across all business
         segments to 10% or greater over time.

    o    Increase compounded earnings per diluted share at a 12% to 15% annual
         rate over time.

    o    Increase return on average equity to 15% by fiscal 2004. Moving beyond
         fiscal 2004, the longer-term goal is a 20% return on average equity.

         The Compensation Committee's role in determining the compensation of
the executives of the Company is to assure that the Company's compensation
strategy is aligned with the above stated objectives and that executive
compensation is structured to provide fair, reasonable and competitive base
salary levels and the opportunity for the executives to earn incentive
compensation reflecting both the Company's and the individual's performance.

         The executive compensation program is designed to accomplish the
Board's objectives. The program is based upon the principles that: executive
performance should be judged and compensated primarily on the basis of the
Company's earnings and the strength of the Company's financial position;
long-term appreciation in stockholder value is an appropriate measure of the
Company's financial performance; and the most effective approach to promoting
the financial success of the Company is to align the stockholders' and the
executives' interests. This alignment is best accomplished through a
compensation strategy emphasizing long-term stock ownership. As a result, the
program is designed to increase the proportion of long-term compensation tied to
increases in the Company's earnings, financial position and appreciation in
stockholder value. The annual cash compensation for executive officers is
primarily in the form of base salary, which is being maintained at levels
consistent with competitive market compensation practices, and annual cash
incentives based on quantitative objectives tied to the Company's financial
performance. Annual cash compensation is supplemented with long-term incentive
compensation, primarily in the form of stock incentives, intended to link
executive compensation to changes in stockholders' value. The Compensation
Committee intends that the application of these principles will result in total
executive compensation and capital accumulation potential above competitive
levels for superior stockholder returns and below competitive levels for average
or lesser returns.

         There are three components to the Company's compensation program for
the officers that serve on its Executive Committee (Messrs. Lund, Rheinfrank,
Thome, and Shay): base salary, annual cash incentives and long-term stock
incentives. Each of these components is discussed in detail below.

BASE SALARY

         Base salaries for Fiscal 2003 were established under the Agreements for
each officer that serves on the Executive Committee. Factors considered in
setting these salaries include the responsibilities of the position,
compensation of executives in companies of similar size or in the same industry
and external market conditions.

                                       9
<PAGE>

ANNUAL CASH INCENTIVES

         The stated goal of the Compensation Committee is to structure executive
compensation that focuses the efforts of senior management on achieving the
above stated business goals of the Company. An annual cash incentive matrix
covering multiple years is utilized to compensate senior management for
achieving consistent and increasing earnings growth over several periods. The
annual cash payments for each executive under this program are fixed for each of
the multiple years covered by the matrix. The matrix determines the amount of
annual cash incentive for each executive based on each individual's maximum
potential award and the Company's earnings per diluted share (EPS) for that
year. During fiscal 2001, 2002, and 2003, each of the Company's executive
officers earned a cash incentive under this program.

LONG-TERM STOCK INCENTIVES

         The Committee believes that long-term changes in stockholder value are
an important measure of the Company's performance. The Committee uses stock
incentives (primarily stock options) to align the interests of the Company's
stockholders and executives.

         With respect to stock incentives, the Compensation Committee has
expressed its desire that the executives increase their ownership in the Company
by retaining ownership of a substantial portion of the shares of the Company's
Common Stock acquired through the stock incentive awards. The Compensation
Committee has advised the executive officers that they should retain a majority
(less shares forfeited or used to pay the option exercise price or taxes) of all
restricted stock and stock acquired through the exercise of options previously
awarded. Since 1994, the executives of the Company have exercised certain stock
options and have retained the maximum number of shares possible after using a
portion of the shares to pay the option exercise price and income taxes. The
Company's executive officers were awarded stock options during fiscal 2000 and
2002. The award made in fiscal 2002 is intended to satisfy the Long-Term
Incentive component of the executive compensation program for a three-year
period through fiscal 2005.

                     COMPENSATION OF CHIEF EXECUTIVE OFFICER

         Mr. Lund received total compensation amounting to $505,925 in Fiscal
2003. He earned a cash incentive payment of 100% of his approved bonus potential
based on the Company's financial performance against the requirements of the
three-year annual cash incentive matrix currently in place. The Compensation
Committee considers Mr. Lund's compensation to be in line with industry and
market size standards and to be consistent with Company performance objectives.

         This report was presented to and approved by the Board.


         Thomas A. McDonnell
         Don H. Alexander
         Robert D. Freeland
         Robert J. Druten


                                       10
<PAGE>

                          REPORT OF THE AUDIT COMMITTEE


The following Report of the Audit Committee shall not be deemed to be
"soliciting material" or to be "filed" with the SEC nor shall this information
be incorporated by reference into ay future filing under the 33 Act or the 34
Act, except to the extent that BHA specifically incorporates it by reference
into such filing.

The Company has a separately designated standing audit committee established by
the Board for the purpose of overseeing the accounting and financial reporting
processes of the Company and the audits of the financial statements of the
Company. The Audit Committee currently consists of Robert J. Druten, Chairman,
Donald H. Alexander, Robert D. Freeland and Thomas A. McDonnell ("Committee").
All members of the Committee meet the independence and experience requirements
of the National Association of Securities Dealers' listing standards and the SEC
rules. Additionally, the Board has determined that each of the members of the
Committee is an "audit committee financial expert" as defined in the rules
issued by the SEC.

The Board of Directors has adopted a written charter for the Committee that is
attached as Appendix A to this proxy statement. This charter was amended at the
November 7, 2003 meeting of the Board of Directors in response to new regulatory
requirements, including the Sarbanes-Oxley Act of 2002 and related rules and
regulations proposed or issued by the SEC and the NASDAQ National Market.

The Committee is responsible for overseeing the Company's accounting and
financial reporting processes and audits of the Company's financial statements.
As set forth in its charter, the Committee acts only in an oversight capacity
and relies on the work and assurances of both management, which has primary
responsibilities for the Company's financial statements and reports, as well as
the independent auditors who are responsible for expressing an opinion on the
conformity of the Company's audited financial statements to generally accepted
accounting principles.

The Committee met six times either in person or by telephone during fiscal year
2003. In the course of these meetings, the Committee met with management, the
Director of Internal Audit and the Company's independent auditors and reviewed
the results of the internal and external audit examinations, evaluations of the
Company's internal controls and the overall quality of the Company's financial
reporting.

The Committee believes that an ongoing dialogue with the Company's independent
and internal auditors is an important part of its oversight responsibilities. As
such, the Committee periodically meets with the Director of Internal Audit and
the independent auditors without management present. These meetings include
candid discussions regarding areas of potential concern such as the auditors'
opinions regarding the competence and integrity of financial management, the
adequacy of internal controls, the reasonableness of accounting judgments and
estimates made by management in preparing the financial statements and the
overall accuracy, completeness and clarity of the quarterly and annual financial
statements prepared by management for filing with the Securities and Exchange
Commission.

The Committee selected KPMG LLP as the Company's independent auditors for fiscal
year 2003 and reviewed with the independent auditors their overall audit scope
and plans. In reaching its recommendation, the Committee considered the
qualifications of KPMG LLP and discussed with KPMG LLP their independence,
including a review of the audit and non-audit services provided by them to the
Company. The Committee also discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61, as amended,
and by the Sarbanes-Oxley Act of 2002, and it received and discussed with the
independent auditors their written report required by Independence Standards
Board Standard No. 1.

Management has reviewed the audited financial statements for fiscal year 2003
with the Committee, including a discussion of the quality and acceptability of
the financial reporting, the reasonableness of significant accounting judgments
and estimates and the clarity of disclosures in the financial statements. In
connection with this review and discussion, the Committee asked a number of
follow-up questions of

                                       11
<PAGE>

management and the independent auditors to help give the Committee comfort in
connection with its review.

In reliance on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors (and the Board has approved) that the
audited financial statements be included in the Annual Report on Form 10-K for
the fiscal year ended September 30, 2003, for filing with the SEC.

Submitted by the Audit Committee Board
Robert J. Druten, Chairman
Donald H. Alexander
Robert D. Freeland
Thomas A. McDonnell

                            AUDIT AND NON-AUDIT FEES

The following table sets forth fees for services KPMG LLP provided during fiscal
years 2003 and 2002:

                                                       2003         2002
                                                       ----         ----
      Audit fees (1) ...........................     $190,965     $125,575
      Audit-related fees (2) ...................       14,000       70,050
      Tax fees (3) .............................       75,445       83,980
      All other fees (4) .......................         --           --
                                                     --------     --------
          Total ................................     $280,410     $279,605
                                                     ========     ========

--------------
(1)   Represents fees for professional services provided in connection with the
      audit of the Company's annual financial statements and review of its
      quarterly financial statements together with advice on accounting matters
      that arose during these engagements.

(2)   Represents fees for services in connection with audits of the Company's
      benefit plans. The fiscal 2002 amount also includes fees for an
      information risk management review related to the Company's enterprise
      resource management system implementation.

(3)   Represents fees for services provided in connection with the Company's
      domestic and international tax planning and compliance.

(4)   Represents fees for services provided to the Company not otherwise
      included in the categories above.

The Audit Committee has determined that the provision of non-audit services by
KPMG LLP is compatible with maintaining KPMG LLP's independence. In accordance
with its charter, the Audit Committee approves, in advance, all audit and
non-audit services to be provided by KPMG LLP.


                                       12
<PAGE>


                COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
                             PERFORMANCE GRAPHS FOR
                            BHA GROUP HOLDINGS, INC.


         The following graph reflects a comparison of the cumulative total
stockholder return (change in stock price plus reinvested dividends) of an
initial $100 investment on September 30, 1998 in the Company's Common Stock, the
Standard & Poors 500 Stock Index and a Peer Group consisting of the following
companies: Donaldson Company, Inc., CLARCOR, Inc., MFRI, Inc., Flanders Corp.,
Met-Pro Corp. and Lydall, Inc. In prior years, the Company has used the First
Analysis Environmental Index in our comparison of cumulative total returns.
First Analysis discontinued its preparation and tracking of the Environmental
Index during the past year. The Company has selected the above Peer Group as a
replacement. The comparisons in this table are required by the Securities and
Exchange Commission. The stock price performance shown on the graph is not
intended to forecast or be indicative of future price performance.



                              [LINECHART OMITTED]


                  COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
                       ASSUMES INITIAL INVESTMENT OF $1000
                                 SEPTEMBER 2003

                      1998       1999      2000      2001     2002      2003
                      ----       ----      ----      ----     ----      ----
BHA Group Hldgs      $100.00    $83.41   $124.27   $131.88   $138.31   $210.82
S & P 500            $100.00   $127.81   $144.78   $106.24    $84.48   $105.09
Peer Group Only      $100.00   $124.10   $126.51   $151.36   $190.01   $278.63



                                       13
<PAGE>



                COMPARISON OF LONG-TERM CUMULATIVE TOTAL RETURNS
                             PERFORMANCE GRAPHS FOR
                            BHA GROUP HOLDINGS, INC.


         The following graph reflects a comparison of the cumulative total
stockholder return (change in stock price plus reinvested dividends) of an
initial $100 investment on November 30, 1986 (which corresponds to the month in
which the Company's stock first traded) in the Company's Common Stock, the
Standard & Poors 500 Stock Index and a Peer Group consisting of the following
companies: Donaldson Company, Inc., CLARCOR, Inc., MFRI, Inc., Flanders Corp.,
Met-Pro Corp. and Lydall, Inc. In prior years, the Company has used the First
Analysis Environmental Index in our comparison of cumulative total returns.
First Analysis discontinued its preparation and tracking of the Environmental
Index during the past year. The Company has selected the above Peer Group as a
replacement. The stock price performance shown on the graph is not intended to
forecast or be indicative of future price performance.



                             [LINECHART OMITTED]

                            CUMULATIVE TOTAL RETURN
                         ASSUMES INITIAL VALUE OF $100
                         AND REINVESTMENT OF DIVIDENDS
                  NOVEMBER 30, 1986 THROUGH SEPTEMBER 30, 2003


                     BHA Group Holdings    S&P 500           Peer Group
                     ------------------    -------           ----------
        Year            Cum Val $100     Cum Val $100       Cum Val $100
        ----            ------------     ------------       ------------
        1986               $100.00          $100.00            $100.00
        1987               $207.41          $132.37            $128.38
        1988               $266.71          $115.99            $121.01
        1989               $625.06          $154.28            $159.77
        1990               $558.43          $140.02            $156.82
        1991               $475.04          $183.66            $221.38
        1992               $508.42          $203.95            $253.72
        1993               $468.89          $230.47            $281.81
        1994               $440.39          $238.97            $358.37
        1995               $461.60          $310.05            $430.62
        1996               $550.16          $373.09            $457.75
        1997               $724.94          $524.00            $627.62
        1998               $546.87          $571.40            $406.45
        1999               $456.20          $730.26            $504.40
        2000               $679.63          $827.28            $514.24
        2001               $721.27          $607.05            $615.23
        2002               $756.47          $482.70            $772.36
        2003             $1,153.09          $600.48          $1,132.59




                                       14
<PAGE>



                COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
                             PERFORMANCE GRAPHS FOR
                            BHA GROUP HOLDINGS, INC.


         The following graph reflects a comparison of the cumulative total
stockholder return (change in stock price plus reinvested dividends) of an
initial $100 investment on September 30, 1997 in the Company's Common Stock, the
First Analysis Environmental Index and a Peer Group consisting of the following
companies: Donaldson Company, Inc., CLARCOR, Inc., MFRI, Inc., Flanders Corp.,
Met-Pro Corp. and Lydall, Inc. In prior years, the Company has used the First
Analysis Environmental Index in our comparison of cumulative total returns.
First Analysis discontinued its preparation and tracking of the Environmental
Index during the past year. The Company has selected the above Peer Group as a
replacement. The comparisons in this table are required by the Securities and
Exchange Commission. The stock price performance shown on the graph is not
intended to forecast or be indicative of future price performance.

                               [LINECHART OMITTED]

                              COMPARISON OF 5 YEAR
                            CUMULATIVE TOTAL RETURN
                       ASSUMES INITIAL INVESTMENT OF $100
                                 SEPTEMBER 2002

<TABLE>
<CAPTION>
                                           1997      1998      1999      2000      2001       2002
                                           ----      ----      ----      ----      ----       ----
<S>                                      <C>        <C>       <C>       <C>       <C>       <C>
BHA Group Hldgs                          $100.00    $75.44    $62.93    $93.74    $99.49    $104.34
First Analysis Environmental Index       $100.00    $91.51    $91.22    $98.45    $85.71     $68.16
Peer Group Only                          $100.00    $64.76    $80.36    $81.93    $98.02    $123.05
</TABLE>


                                       15
<PAGE>


        SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         As of December 31, 2003, the Company had outstanding and entitled to
vote 6,145,059 shares of Common Stock. As of December 31, 2003, the trustee of
the ESOP was the registered holder of 735,388 shares of Common Stock, 660,957 of
which have vested in participant accounts. Participants in the ESOP are entitled
to vote both the vested and unvested shares, which are in their account.

         The following table sets forth, as of December 31, 2003, certain
information with respect to (a) each person known by the Company to own
beneficially five percent or more of the outstanding Common Stock, (b) each of
the directors and nominees for director of the Company, (c) each of the
executive officers named in the Summary Compensation Table, and (d) all
directors, executive and senior officers of the Company and its subsidiaries as
a group:


<TABLE>
<CAPTION>
                  NAME AND ADDRESS                            AMOUNT AND NATURE                 PERCENT OF
                OF BENEFICIAL OWNER                      OF BENEFICIAL OWNERSHIP(1)            COMMON STOCK
                -------------------                      --------------------------            ------------
<S>                                                                <C>                            <C>
Kern Capital Management LLC......................                  907,700                        14.8%
     114 West 47th Street, Suite 1926
     New York, New York  10036

Royce & Associates, Inc..........................                  838,689                        13.6%
     1414 Avenue of the Americas, 9th Floor
     New York, New York 10019-2578

T. Rowe Price Associates.........................                  661,000                        10.8%
     100 East Pratt Street, 7th Floor
     Baltimore, Maryland 21202-1090

Lamson Rheinfrank, Jr............................                  472,092(2)                      7.7%
     BHA Group Holdings, Inc.
     8800 East 63rd Street
     Kansas City, Missouri 64133

James E. Lund....................................                  174,020(3)                      2.8%
     BHA Group Holdings, Inc.
     8800 East 63rd Street
     Kansas City, Missouri  64133

James J. Thome...................................                  158,541(4)                      2.6%
     BHA Group Holdings, Inc.
     8800 East 63rd Street
     Kansas City, Missouri 64133

Thomas A. McDonnell..............................                   79,316(5)                      1.3%
     DST Systems, Inc.
     333 W. 11th Street, 5th Floor
     Kansas City, Missouri 64105

James C. Shay....................................                   63,054(6)                      1.0%
     BHA Group Holdings, Inc.
     8800 East 63rd Street
     Kansas City, Missouri 64133

Don H. Alexander.................................                   33,715(7)                      *
     Alexander & Associates, Inc.
     408 Miami
     Kansas City, KS  66105

Robert B. O'Conor................................                   23,445(8)                      *
     BHA Group, Inc.
     8800 East 63rd Street
     Kansas City, MO  64133

                                       16
<PAGE>
                  NAME AND ADDRESS                            AMOUNT AND NATURE                 PERCENT OF
                OF BENEFICIAL OWNER                      OF BENEFICIAL OWNERSHIP(1)            COMMON STOCK
                -------------------                      --------------------------            ------------

Robert D. Freeland...............................                   18,663(9)                      *
     3500 Northeast Lacewood Court
     Lee's Summit, Missouri  64064

Robert J. Druten.................................                      180(10)                     *
     Hallmark Cards, Inc.
     2501 McGee
     Kansas City, Missouri  64108

All directors, named executive and senior
officers as a group (11 people) (11).............                1,152,707                        18.8%
</TABLE>

---------------------------
* Less than 1%

(1)    All information is as of December 31, 2003 and was determined in
       accordance with Rule 13d-3 under the Exchange Act, based upon information
       furnished by the persons listed or contained in filings made by them with
       the Securities and Exchange Commission. Unless otherwise indicated,
       beneficial ownership disclosed consists of sole voting and dispositive
       power.

(2)    Consists of 30,833 shares of Common Stock held of record by Mr.
       Rheinfrank, 155,404 shares of Common Stock held by irrevocable family
       trusts of which Mr. Rheinfrank is the co-trustee, 16,120 shares of Common
       Stock held by his daughters (as to which shares he disclaims any
       beneficial interest), 32,490 shares of Common Stock owned by Mr.
       Rheinfrank's wife (as to which shares he disclaims any beneficial
       interest), 19,200 shares of Common Stock in the Rheinfrank Foundation,
       187,550 shares of Common Stock in the Rheinfrank Family Limited
       Partnership, options to purchase 22,500 shares of Common Stock under the
       Plan, which are exercisable within 60 days of December 31, 2003, and
       7,995 shares of Common Stock held of record by the trustee of the ESOP
       for Mr. Rheinfrank who is entitled to vote such shares by virtue of the
       allocation under the ESOP.

(3)    Consists of 106,022 shares of Common Stock held of record by Mr. Lund,
       5,058 shares of Common Stock owned by Mr. Lund's wife (as to which shares
       he disclaims any beneficial interest), options to purchase 45,000 shares
       of Common Stock under the Plan which are exercisable within 60 days of
       December 31, 2003, and 17,940 shares of Common Stock held of record by
       the trustee of the ESOP for Mr. Lund who is entitled to vote such shares
       by virtue of the allocation under the ESOP.

(4)    Consists of 64,296 shares of Common Stock held of record by Mr. Thome,
       options to purchase 78,170 shares of Common Stock under the Plan which
       are exercisable within 60 days of December 31, 2003, 15,782 shares of
       Common Stock held of record by the trustee of the ESOP for Mr. Thome who
       is entitled to vote such shares by virtue of the allocation under the
       ESOP, and 293 shares held in account under the BHA Group Holdings, Inc.
       401(K) Plan.

(5)    Consists of 79,003 shares of Common Stock held of record by Mr. McDonnell
       and options to purchase 313 shares under the Plan, which are exercisable
       within 60 days of December 31, 2003.

(6)    Consists of 11,008 shares of Common Stock held of record by Mr. Shay,
       options to purchase 46,182 shares of Common Stock under the Plan which
       are exercisable within 60 days of December 31, 2003, 4,123 shares of
       Common Stock held of record by the trustee of the ESOP for Mr. Shay who
       is entitled to vote such shares by virtue of the allocation under the
       ESOP, and 1,741 shares held in account under the BHA Group Holdings, Inc.
       401(K) Plan.

(7)    Consists of 33,402 shares of Common Stock held of record by Mr. Alexander
       and options to purchase 313 shares under the Plan, which are exercisable
       within 60 days of December 31, 2003.

(8)    Consists of 13,279 shares of Common Stock held of record by Mr. O'Conor,
       options to purchase 2,000 shares of Common Stock under the Plan, which
       are exercisable within 60 days of December 31, 2003, 8,066 shares of
       Common Stock held of record by the trustee of the ESOP for Mr. O'Conor
       who is entitled to vote such shares by virtue of the allocation under the
       ESOP, and 100 shares held in account under the BHA Group Holdings, Inc.
       401(K) Plan.

                                       17
<PAGE>

(9)    Consists of 18,350 shares of Common Stock held of record by Mr. Freeland
       and options to purchase 313 shares of Common Stock under the Plan, which
       are exercisable within 60 days of December 31, 2003.

(10)   Consists of 180 shares of common stock held of record by Mr. Druten.

(11)   Total beneficial ownership of all directors, named executives and senior
       officers as a group as reported is 1,152,707 shares or 18.8% of common
       shares currently outstanding. Excluding unexercised stock options, such
       ownership is 831,105 shares or 13.5% of the total common shares
       outstanding.

                                       18
<PAGE>



                    INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
                                (PROPOSAL NO. 2)

         KPMG LLP is the accounting firm which examined and reported on the
Company's financial statements for Fiscal 2003. KPMG LLP has been selected by
the Board to serve as the Company's accounting firm for Fiscal 2004.
Representatives of KPMG LLP are expected to attend the Annual Meeting. The
representatives of KPMG LLP will have the opportunity to make a statement if
they desire to do so and will be available to respond to appropriate questions.

         The Board is seeking stockholder approval of its selection of KPMG LLP.
Stockholder approval requires the affirmative vote of the holders of a majority
of the shares present or represented and entitled to vote at the Annual Meeting.
THE BOARD RECOMMENDS A VOTE FOR THE RATIFICATION OF THE SELECTION OF KPMG LLP
AND IT IS INTENDED THAT SHARES REPRESENTED BY THE ENCLOSED FORM OF PROXY WILL BE
VOTED IN FAVOR OF THE RATIFICATION OF THE SELECTION OF KPMG LLP UNLESS OTHERWISE
SPECIFIED IN SUCH PROXY. If stockholders do not ratify the appointment of KPMG
LLP as the auditors of the Company for Fiscal 2004 at the Annual Meeting, the
Board, on recommendation of its Audit Committee, may reconsider the selection.



                 TIME FOR SUBMISSION OF PROPOSAL OF STOCKHOLDERS

         Any stockholder who intends to present a proposal to be included in the
Company's proxy statement for action at the Company's Annual Meeting of
Stockholders scheduled to be held on February 22, 2005, must comply with and
meet the requirements of Regulation 14a-8 of the Exchange Act. That regulation
requires, among other things, that a proposal to be included in the Company's
proxy statement for its annual meeting in 2005, must be received by the Company
at its principal executive office, 8800 East 63rd Street, Kansas City, Missouri
64133, by September 15, 2004. In addition, if a stockholder presents a matter
for action at the Company's next annual meeting without providing the Company
with notice of such matter by November 26, 2004, stock represented at such
meeting by proxies solicited by the Board of Directors may be voted in the
discretion of such proxy holders against the matter proposed by such
stockholder.



                            GENERAL AND OTHER MATTERS

         Management knows of no matter other than the matters described above
which will be presented to the Annual Meeting. However, if any other matters
properly come before the meeting, or any of its adjournments, the person or
persons voting the proxies will vote them in accordance with his or their best
judgment on such matters. You are urged to sign and return your proxy to make
certain your shares will be voted at the Annual Meeting


                                              By Order of the Board of Directors



                                              STANLEY D. BIGGS
                                              Secretary


Kansas City, Missouri
January 16, 2004




                                       19
<PAGE>




                                   APPENDIX A



                      CHARTER OF THE AUDIT COMMITTEE OF THE

                               BOARD OF DIRECTORS

                           OF BHA GROUP HOLDINGS, INC.



I.     AUDIT COMMITTEE PURPOSE AND GENERAL AUTHORITY


The Audit Committee is appointed by the Board of Directors to assist the Board
with the oversight of the following:

    o  The integrity of the financial statements of the Company.

    o  The adequacy of the Company's systems of internal accounting and
       financial controls.

    o  The accounting and financial reporting processes and the audits of the
       financial statements of the Company.

    o  The independence and performance of the Company's independent auditors.

    o  The performance of the Company's internal audit function.

    o  The Company's compliance with ethics policies and legal and regulatory
       requirements.

    o  Communication among the independent auditors, management and the Board of
       Directors (including resolution of disagreements between management and
       the independent auditor regarding financial reporting).

    o  Areas of potential significant financial risk to the Company.

    o  Such other duties consistent with this Charter, the Company's By-laws and
       governing law or as the Audit Committee or the Board deems necessary or
       appropriate.

The Audit Committee shall be directly responsible and have the sole authority
for the appointment, compensation and oversight of the work of the independent
auditor for the purpose of preparing or issuing an audit report or related work.
The independent auditor shall report directly to the Audit Committee. The Audit
Committee shall also be responsible for the termination of the independent
auditor.

The Audit Committee shall pre-approve all auditing services and permitted
non-audit services (including the fees and terms thereof) to be performed for
the Company by its independent auditor, subject to the de minimus exceptions for
non-audit services described in Section 10A(i)(1)(B) of the Securities Exchange
Act of 1934, as amended. Any such de minimis non-audit services not pre-approved
by the Audit Committee shall be approved by the Audit Committee prior to the
completion of the audit. The Audit Committee may form and delegate authority,
including the authority to grant pre-approvals of audit and permitted non-audit
services, to subcommittees consisting of one or more members, provided that
decisions of such subcommittee to grant pre-approvals shall be presented to the
full Audit Committee at its next scheduled meeting. The Audit Committee shall

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<PAGE>

promptly report the approval of any permitted non-audit services to management
for disclosure in the Company's periodic reports.

The Audit Committee has the authority to conduct any investigation appropriate
to fulfilling its responsibilities and it has direct access to the independent
auditors, as well as anyone in the organization. The Audit Committee has the
ability to retain and determine funding for special legal, accounting or other
consultants or experts it deems necessary in the performance of its duties. The
Company must provide adequate funding, as determined by the Audit Committee, for
payment of: (i) compensation of the independent auditor, (ii) compensation of
any advisors employed by the Audit Committee in accordance with this Charter,
and (iii) ordinary administrative expenses of the Audit Committee that are
necessary or appropriate in carrying out its duties.

While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Company's financial statements and disclosures are
complete and accurate and are in accordance with generally accepted accounting
principles or applicable laws, rules and regulations. These are the
responsibilities of management and the independent auditor. Nor is it the duty
of the Audit Committee to conduct investigations or to assure compliance with
laws and regulations.

II.    AUDIT COMMITTEE COMPOSITION AND MEETINGS

Audit Committee members shall meet the requirements of the NASDAQ National
Market ("NASDAQ") listing standards, Section 10A(m)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and the rules and
regulations of the United States Securities and Exchange Commission (the
"Commission"). The Audit Committee shall be comprised of three or more directors
as determined by the Board, each of whom shall be independent non-executive
directors, free from any relationship that would interfere with the exercise of
his or her independent judgment. A director will not be considered "independent"
for purposes of serving on the Audit Committee if, among other things, he/she
has:

    o  been employed by the Company or its affiliates in the current or past
       three years;

    o  accepted any payment from the Company or its affiliates in excess of
       $60,000 during the current or any of the previous three fiscal years
       (except for Board service, retirement plan benefits or non-discretionary
       compensation and other exceptions in the NASDAQ listing standards);

    o  a family member who is, or has been in the past three years, employed by
       the Company or its affiliates as an executive officer;

    o  been, or has a family member who has been, a partner, controlling
       shareholder or an executive officer of any organization to which the
       Company made, or from which it received, payments for properties or
       services in the current or any of the past three fiscal years that exceed
       five percent of the organization's consolidated gross revenues for that
       year, or $200,000, whichever is more (with the exceptions set forth in
       the NASDAQ listing standards);

    o  been, or has a family member who has been, employed as an executive
       officer of another entity where, at any time during the past three fiscal
       years, any of the Company's executives serve on that entity's
       compensation committee; or

    o  is, or has a family member who is, a current partner of the Company's
       independent auditor, or was a partner or employee of the Company's
       independent auditor who worked on the Company's audit at any time during
       any of the past three years.

All members of the Committee shall have a basic understanding of finance and
accounting and be able to read and understand fundamental financial statements,
and at least one member of the Committee shall have sufficient accounting or
related financial management background to fulfill the requirements of NASDAQ,
the Exchange Act and the Commission.

                                       21
<PAGE>


Audit Committee members shall be appointed by the Board. If an Audit Committee
Chair is not designated or present, the members of the Committee may designate a
Chair by majority vote of the Committee membership.

The Committee shall meet at least quarterly. Such meetings may be conducted by
conference calls and may be supplemented by additional meetings to discuss
interim financial reporting or other issues as circumstances dictate. The Audit
Committee Chair shall prepare and/or approve an agenda in advance of each
meeting. The Committee should meet privately in executive session periodically,
but at least annually, with management, the internal auditor and the independent
auditors and as a committee to discuss any matters that the Committee or each of
these groups believe should be discussed. In addition, members of the Committee
should communicate with management quarterly to review the Company's financial
statements and significant findings based upon the auditors' limited review
procedures. The Audit Committee shall present regular reports to the Board and
submit to the Board the minutes of all meetings of the Audit Committee or
otherwise communicate to the Board the matters discussed at each of the Audit
Committee's meetings.


III.   AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES

FINANCIAL STATEMENT AND DISCLOSURE MATTERS

The Audit Committee, as required by applicable law, rules or regulations and
otherwise to the extent it deems necessary or appropriate, shall:

1.     Review with management, the internal auditor and the independent auditor
       the financial statements (and related footnotes) and disclosures made in
       Management's Discussion and Analysis of Financial Condition and Results
       of Operations ("MD&A") to be included in the Company's Annual Report on
       Form 10-K (or the annual report to shareholders if distributed prior to
       the filing of the Form 10-K) and the Company's quarterly reports on Form
       10-Q, including management's and the independent auditor's judgment about
       the quality, not just the acceptability, of accounting principles, the
       reasonableness of significant judgments, and the clarity of the
       disclosures in the financial statements.

2.     Discuss with management, the internal auditor and the independent auditor
       the results of the annual audit of the Company's financial statements by
       the independent auditor and any other matters required to be communicated
       to the Audit Committee by the independent auditor under generally
       accepted auditing standards including matters relating to the conduct of
       the audit, any significant change in the independent auditor's audit
       plan, any difficulties or disputes with management or the internal
       auditors during the course of the audit work, any restrictions on the
       scope of activities or access to requested information, and any
       significant disagreements with management.

3.     Recommend to the Board whether the audited financial statements should be
       included in the Company's Annual Report on Form 10-K.

4.     Issue the report required by the rules of the Commission to be included
       in the Company's annual proxy statement.

5.     Discuss with management and the independent auditor significant financial
       reporting issues and judgments made in connection with the preparation of
       the Company's financial statements, including any significant changes in
       the Company's selection or application of accounting principles, any
       major issues as to the adequacy of the Company's internal controls and
       any special steps adopted in light of material control deficiencies.

                                       22
<PAGE>

6.     Review and discuss regular reports from the independent auditors on:

       (a)    all critical accounting policies and practices to be used;

       (b)    all alternative treatments of financial information within
              generally accepted accounting principles that have been discussed
              with management, the ramifications of the use of such alternative
              disclosures and treatments, and the treatment preferred by the
              independent auditor; and

       (c)    other material written communications between the independent
              auditor and management, such as any management letter or schedule
              of unadjusted differences.

7.     Prior to their release to the public, discuss with management the
       Company's earnings press releases, including the use of "pro forma" or
       "adjusted" non-GAAP information, as well as financial information and
       earnings guidance provided to analysts and rating agencies. Such
       discussion may be done generally (consisting of discussing the types of
       information to be disclosed and the types of presentations to be made).

8.     Discuss with management, the internal auditor and the independent auditor
       the effect of regulatory and accounting initiatives on the Company's
       financial statements.

9.     Discuss with management, the internal auditor and the independent
       auditor, the Company's major financial risk exposures and the steps
       management has taken to monitor and control such exposures, including the
       Company's risk assessment and risk management policies.

10.    Review disclosures by the Company's CEO and CFO during their
       certification process for their respective filings under Sections 302 and
       906 under the Sarbanes-Oxley Act about any significant deficiencies in
       the design or operation of internal controls or material weaknesses
       therein and any fraud involving management or other employees who have a
       significant role in the Company's internal controls.

11.    Review management's assessment of the effectiveness of the Company's
       internal controls as of the end of the most recent fiscal year at such
       time as required by the SEC, and the independent auditor's report on
       management's assessment.

12.    Review with management and the independent auditors any significant
       changes to GAAP or other accounting standards.


INDEPENDENT AUDITORS

The Audit Committee, as required by applicable law, rules or regulations and
otherwise to the extent it deems necessary or appropriate, shall:

1.     Obtain and review a report from the independent auditor at least annually
       regarding:

       (a)    the independent auditor's internal quality control procedures;

       (b)    any material issues raised by the most recent internal quality
              control review, or peer review, of the firm or by any inquiry or
              investigation by governmental or professional authorities within
              the preceding five years respecting one or more independent audits
              carried out by the firm;

                                       23
<PAGE>

       (c)    any steps taken to deal with any such issues;

       (d)    all relationships between the independent auditor and the Company;
              and

       (e)    the Company's critical accounting policies.

2.     Evaluate the qualifications, performance and independence of the
       independent auditor, including whether the provision of permitted
       non-audit services is compatible with maintaining the auditor's
       independence, and taking into account the opinions of management and
       internal auditors. The Audit Committee shall present its conclusions with
       respect to the independent auditor to the Board.

3.     Obtain and review the written disclosures and the letter from the
       independent auditor required by Independence Standards Board Standard No.
       1 (Independence Discussions with Audit Committees) and discuss with the
       independent auditor the independent auditor's independence.

4.     Ensure the rotation of the lead (or coordinating) audit partner having
       primary responsibility for the audit and the audit partner responsible
       for reviewing the audit as required by law.

5.     Meet with the independent auditor and financial management of the Company
       prior to the audit to discuss the planning and staffing of the audit, the
       scope of the prospective audit and the audit procedures to be utilized,
       the estimated fees therefore and such other matters pertaining to the
       audit as the Audit Committee may deem appropriate, and, at the conclusion
       thereof, review the audit, including any comments or recommendations made
       by the independent auditor.

6.     Review the independent auditor's non-audit services and related fees to
       the Company and disclose to management for inclusion on the Company's
       periodic reports.

INTERNAL AUDIT FUNCTION

The Audit Committee, as required by applicable law, rules or regulations and
otherwise to the extent it deems necessary or appropriate, shall:

1.     Review the appointment and/or replacement of the internal auditor.

2.     Review the internal audit function when appropriate.

3.     Review any significant reports to management prepared by or on behalf of
       the internal auditor and management's responses.

4.     Discuss with management the responsibilities, fees and staffing of the
       internal audit department or the firm performing the internal auditing
       function and any recommended changes in the planned scope of the internal
       audit.

COMPLIANCE OVERSIGHT

The Audit Committee, as required by applicable law, rules or regulations and
otherwise to the extent it deems necessary or appropriate, shall:

1.     Obtain from the independent auditor assurance that during the course of
       conducting the audit the auditor did not detect or otherwise become aware
       of information indicating that an illegal act has or may have occurred
       and that Section 10A(b) of the Exchange Act has not been implicated.

2.     Review and approve all related party transactions in accordance with the
       listing standards of NASDAQ or any other exchange on which the Company's
       securities are listed.

                                       24
<PAGE>

3.     Establish procedures for the receipt, retention and treatment of
       complaints received by the Company regarding accounting, internal
       accounting controls or auditing matters, and the confidential, anonymous
       submission by employees of concerns regarding questionable accounting or
       auditing matters.

4.     Review and approve any waivers under the Code of Conduct as it relates to
       the executive officers, Corporate Counsel and the members of the Board of
       Directors.

5.     Discuss with management and the independent auditor any correspondence
       with regulators or governmental agencies and any published reports which
       raise material issues regarding the Company's financial statements or
       accounting policies.

6.     On at least an annual basis, review with the Company's counsel any legal
       matters that could have a significant impact on the organization's
       financial statements, the Company's compliance with applicable laws and
       regulations, inquiries received from regulators or governmental agencies.



Audit Committee Charter 11-03-03


                                       25
<PAGE>



PROXY

                            BHA GROUP HOLDINGS, INC.
               8800 EAST 63RD STREET, KANSAS CITY, MISSOURI 64133

           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

               ANNUAL MEETING OF STOCKHOLDERS - FEBRUARY 24, 2004

         The undersigned hereby appoints James E. Lund and Stanley D. Biggs, or
either of them, as Proxy or Proxies of the undersigned with full power of
substitution to attend and to represent the undersigned at the Annual Meeting of
Stockholders of BHA Group Holdings, Inc. (the "Company") to be held on February
24, 2004, and at any adjournments thereof, and to vote thereat the number of
shares of stock of the Company the undersigned would be entitled to vote if
personally present, in accordance with the instructions set forth on this proxy
card. Any proxy heretofore given by the undersigned with respect to such stock
is hereby revoked.



         Dated:  _____________________________, ___________
                                Month/Day                  Year



         ------------------------------------------------------------------



         ------------------------------------------------------------------

         PLEASE SIGN EXACTLY AS NAME APPEARS ABOVE. FOR JOINT ACCOUNTS, EACH
         JOINT OWNER MUST SIGN. PLEASE GIVE FULL TITLE IF SIGNING IN A
         REPRESENTATIVE CAPACITY.


[ ] PLEASE CHECK IF YOU PLAN TO ATTEND THE MEETING



PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE



1.       ELECTION OF DIRECTORS

         NOMINEES: Don H. Alexander, Robert J. Druten, Robert D. Freeland, James
         E. Lund, Thomas A. McDonnell, Lamson Rheinfrank, Jr., and James J.
         Thome.

         [ ] FOR ALL nominees listed above.

         [ ] FOR ALL nominees listed above EXCEPT:

         -----------------------------------------------------------------------
         (INSTRUCTION: To withhold authority to vote on any individual nominee,
         write the name above.)

         [ ] WITHHOLD AUTHORITY to vote for all nominees listed above.

                                       26
<PAGE>

2.       RATIFICATION OF KPMG LLP AS INDEPENDENT AUDITORS OF THE COMPANY FOR THE
         FISCAL YEAR ENDING SEPTEMBER 30, 2004.

         [ ] FOR the ratification of KPMG LLP.

         [ ] AGAINST the ratification of KPMG LLP.

         [ ] ABSTAIN


3.       ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.

         If no specification is made, this proxy will be voted FOR Proposals 1
and 2 listed above.






                                       27

