<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                    FORM 8-K
                             CURRENT REPORT PURSUANT
                          TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

       Date of report (Date of earliest event reported): December 28, 2005

                       INTERACTIVE SYSTEMS WORLDWIDE INC.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

                                    Delaware
--------------------------------------------------------------------------------
                 (State or Other Jurisdiction of Incorporation)

          000-21831                                      22-3375134
--------------------------------------------------------------------------------
   (Commission File Number)                  (IRS Employer Identification No.)

        2 Andrews Drive, West Paterson, NJ                         07424
--------------------------------------------------------------------------------
     (Address of Principal Executive Offices)                    (Zip Code)

                                 (973) 256-8181
--------------------------------------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)


--------------------------------------------------------------------------------
          (Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):


 |_| Written communications pursuant to Rule 425 under the Securities Act
     (17 CFR 230.425)

 |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
     (17 CFR 240.14a-12)

 |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

 |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))

<PAGE>

ITEM 5.02   DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
            APPOINTMENT OF PRINCIPAL OFFICERS

         At a December 28, 2005 meeting of the Board of Directors of Interactive
Systems Worldwide Inc. (the "Company"), Barry Mindes, the Company's founder,
Chairman of the Board and Chief Executive Officer, informed the Board that he
has decided not to renew his employment agreement when it expires on December
31, 2005. Accordingly, he will thereafter no longer be the Company's principal
executive officer. Mr. Mindes, who is 74 years old, will continue as a director
and Chairman of the Board in a non-executive capacity. At its December 28
meeting the Board elected Bernard Albanese Chief Executive Officer of the
Company, effective on January 1, 2006. Mr. Albanese is currently President of
the Company.

         Mr. Albanese, who is 58 years old, has served as President of the
Company since September 1996, as Treasurer between July 1995 and March 2002, as
Vice President--Systems from July 1995 until August 1996, and as a director
since October 1996. From 1993 to 1995, Mr. Albanese was Vice
President--Operations of Advanced Data Systems Inc., a provider of
medical-related computer systems, in which position he was a responsible for all
installation, training and telephone support for an installed base of over 1,000
customers.

         The Company's existing employment agreement, dated as of June 22, 2005
with Mr. Albanese, for the period from June 22, 2005 through June 30, 2006,
continues unchanged. Pursuant to the employment agreement, Mr. Albanese receives
a base salary of not less than $300,000 per annum; such salary increases,
bonuses or other incentive compensation as may be approved by the Board; and
other benefits. Under certain circumstances upon the termination of his
employment with the Company, Mr. Albanese will also receive severance payments
equal to one year's base salary and continuation of other benefits for one year.
Further, the employment agreement permits Mr. Albanese to retire at any time
during the term of the agreement upon 60 days notice, and if he elects to do so
he is entitled to receive the same severance benefits described above. The
preceding employment agreement summary is not intended to be complete and is
qualified in its entirety by reference to the detailed provisions in the
employment agreements which is incorporated by reference in Exhibit 10.1 hereto.

ITEM 5.03   AMENDMENT TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN
            FISCAL YEAR

         On December 28, 2005 the Board of Directors amended the Company's
By-Laws, effective immediately, to eliminate the requirement that the Chairman
of the Board be the Company's Chief Executive Officer.

<PAGE>

ITEM 9.01   FINANCIAL STATEMENTS AND EXHIBITS

Exhibit Number               Description of Document
--------------               -----------------------

3.2                          By-Laws of the Company, as amended, incorporated by
                             reference to Exhibit 3.2 contained in the Company's
                             Annual Report on Form 10-KSB for the year ended
                             September 30, 2005, dated and filed December 29,
                             2005.

10.1                         Employment Agreement, dated as of June 22, 2005,
                             between the Company and Bernard Albanese,
                             incorporated by reference to Exhibit 10.1 contained
                             in the Company's Current Report on Form 8-K dated
                             and filed June 24, 2005.
<PAGE>

                                   SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                             INTERACTIVE SYSTEMS WORLDWIDE INC.
                                             (Registrant)

Date: January 3, 2006                        By: /s/ Bernard Albanese
                                                 -----------------------------
                                                 Bernard Albanese
                                                 President
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UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                    FORM 8-K
                             CURRENT REPORT PURSUANT
                          TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

       Date of report (Date of earliest event reported): December 28, 2005

                       INTERACTIVE SYSTEMS WORLDWIDE INC.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

                                    Delaware
--------------------------------------------------------------------------------
                 (State or Other Jurisdiction of Incorporation)

          000-21831                                      22-3375134
--------------------------------------------------------------------------------
   (Commission File Number)                  (IRS Employer Identification No.)

        2 Andrews Drive, West Paterson, NJ                         07424
--------------------------------------------------------------------------------
     (Address of Principal Executive Offices)                    (Zip Code)

                                 (973) 256-8181
--------------------------------------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

--------------------------------------------------------------------------------
          (Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

 |_| Written communications pursuant to Rule 425 under the Securities Act
     (17 CFR 230.425)

 |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
     (17 CFR 240.14a-12)

 |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

 |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))
ITEM 5.02   DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
            APPOINTMENT OF PRINCIPAL OFFICERS

         At a December 28, 2005 meeting of the Board of Directors of Interactive
Systems Worldwide Inc. (the "Company"), Barry Mindes, the Company's founder,
Chairman of the Board and Chief Executive Officer, informed the Board that he
has decided not to renew his employment agreement when it expires on December
31, 2005. Accordingly, he will thereafter no longer be the Company's principal
executive officer. Mr. Mindes, who is 74 years old, will continue as a director
and Chairman of the Board in a non-executive capacity. At its December 28
meeting the Board elected Bernard Albanese Chief Executive Officer of the
Company, effective on January 1, 2006. Mr. Albanese is currently President of
the Company.

         Mr. Albanese, who is 58 years old, has served as President of the
Company since September 1996, as Treasurer between July 1995 and March 2002, as
Vice President--Systems from July 1995 until August 1996, and as a director
since October 1996. From 1993 to 1995, Mr. Albanese was Vice
President--Operations of Advanced Data Systems Inc., a provider of
medical-related computer systems, in which position he was a responsible for all
installation, training and telephone support for an installed base of over 1,000
customers.

         The Company's existing employment agreement, dated as of June 22, 2005
with Mr. Albanese, for the period from June 22, 2005 through June 30, 2006,
continues unchanged. Pursuant to the employment agreement, Mr. Albanese receives
a base salary of not less than $300,000 per annum; such salary increases,
bonuses or other incentive compensation as may be approved by the Board; and
other benefits. Under certain circumstances upon the termination of his
employment with the Company, Mr. Albanese will also receive severance payments
equal to one year's base salary and continuation of other benefits for one year.
Further, the employment agreement permits Mr. Albanese to retire at any time
during the term of the agreement upon 60 days notice, and if he elects to do so
he is entitled to receive the same severance benefits described above. The
preceding employment agreement summary is not intended to be complete and is
qualified in its entirety by reference to the detailed provisions in the
employment agreements which is incorporated by reference in Exhibit 10.1 hereto.

ITEM 5.03   AMENDMENT TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN
            FISCAL YEAR

         On December 28, 2005 the Board of Directors amended the Company's
By-Laws, effective immediately, to eliminate the requirement that the Chairman
of the Board be the Company's Chief Executive Officer.
ITEM 9.01   FINANCIAL STATEMENTS AND EXHIBITS

Exhibit Number               Description of Document
--------------               -----------------------

3.2                          By-Laws of the Company, as amended, incorporated by
                             reference to Exhibit 3.2 contained in the Company's
                             Annual Report on Form 10-KSB for the year ended
                             September 30, 2005, dated and filed December 29,
                             2005.

10.1                         Employment Agreement, dated as of June 22, 2005,
                             between the Company and Bernard Albanese,
                             incorporated by reference to Exhibit 10.1 contained
                             in the Company's Current Report on Form 8-K dated
                             and filed June 24, 2005.
SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                             INTERACTIVE SYSTEMS WORLDWIDE INC.
                                             (Registrant)

Date: January 3, 2006                        By: /s/ Bernard Albanese
                                                 -----------------------------
                                                 Bernard Albanese
                                                 President