SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               -------------------
                                    FORM 10-K
                               -------------------

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                     For the fiscal year ended January 31, 1998

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

                          Commission file number 1-11609
                                 TOYS "R" US, INC.
                  Incorporated pursuant to the Laws of Delaware

         Internal Revenue Service - Employer Identification No. 22-3260693
                    461 From Road, Paramus, New Jersey 07652
                                 (201) 262-7800
            Securities Registered Pursuant to Section 12(b) of the Act:
          Title of each class       Name of each exchange on which registered
          -------------------       -----------------------------------------  
     Common Stock, $.10 par value           New York Stock Exchange

 Registrant  has  filed  all  reports  to be filed by Section 13 or 15(d) of the
 Securities  Exchange  Act  of  1934 during the preceding 12 months and has been
 subject to such filing requirements for the past 90 days.

 Indicate by check mark if disclosure of delinquent filers pursuant to  Item 405
 of  Regulation  S-K  is not contained herein, and will not be contained, to the
 best  of  registrant's knowledge, in definitive proxy or information statements
 incorporated  by  reference  in  Part III of this Form 10-K or any amendment to
 this Form 10-K.        [    ]

 At  April  13,  1998, the  aggregate  market  value  of  voting  stock  held by
 non-affiliates  was  $8,092,191,726  based  on the 279,041,094 shares of Common
 Stock which were outstanding at that date.

                    DOCUMENTS INCORPORATED BY REFERENCE
 Portions  of the Registrant's Annual Report to Stockholders for the fiscal year
 ended  January  31,  1998  are incorporated by reference into Parts I and II of
 this Form 10-K.

 Portions  of  the  Registrant's  Proxy  Statement  for  the  Annual  Meeting of
 Stockholders  to  be held June 3, 1998, are incorporated by reference into Part
 III of this Form 10-K.

<PAGE>

                                      INDEX
                                      -----

                                                                        PAGE
                                                                        ----
PART I.

Item 1.  Business......................................................   2
Item 2.  Properties....................................................   5
Item 3.  Legal Proceedings.............................................   6
Item 4.  Submission of Matters to a Vote of Security Holders...........   7

PART II.

Item 5.  Market for the Registrant's Common Stock
                and Related Stockholder Matters........................   7
Item 6.  Selected Financial Data.......................................   7
Item 7.  Management's Discussion and Analysis of
                Financial Condition and Results of Operations..........   7
Item 7a. Qualitative and Quantitative Disclosures About Market Risk....   7
Item 8.  Financial Statements and Supplementary Data...................   8
Item 9.  Changes in and Disagreements with Accountants
                on Accounting and Financial Disclosure.................   8


PART III.

Item 10. Directors and Executive Officers of the Registrant............   8
Item 11. Executive Compensation........................................  11
Item 12. Security Ownership of Certain Beneficial
                Owners and Management..................................  11
Item 13. Certain Relationships and Related Transactions................  11

PART IV.

Item 14. Exhibits, Financial Statement Schedules, and Reports
                on Form 8-K............................................  11

                                        1
<PAGE>




                                     PART I
                                     ------

ITEM 1.   BUSINESS

         Toys "R" Us, Inc. and its  subsidiaries  (the "Company") is the world's
premier retailer of children's  products,  bringing toys, apparel and baby needs
to children and their families.  As of January 31, 1998, the Company was engaged
in the operation of 1,454 children's specialty retail stores consisting of 1,013
United  States  locations  comprised  of 698 toy stores under the name "Toys "R"
Us",  215  children's   clothing  stores  under  the  name  "Kids  "R"  Us,"  98
infant-toddler  stores  under  the name  "Babies  "R" Us",  and two  superstores
combining all of the "R" Us" formats mentioned above under the name "Toys "R" Us
KidsWorld".  Internationally,  the Company  operates  441 toy stores,  including
franchise  stores,  under the name "Toys "R" Us." The Company is incorporated in
the state of Delaware.

(a)      General Development of the Business

         Merger with Baby Superstore

         On February 3, 1997, the Company acquired Baby Superstore,  Inc. ("Baby
Superstore") in a tax-free exchange of common stock valued at approximately $376
million.  The Baby  Superstore  acquisition  was accounted for as a purchase for
financial reporting purposes as of February 1, 1997. For a further discussion of
Baby Superstore, see "Item 1. Business - Narrative Description of the Business -
Babies "R" Us."

         Worldwide Restructuring

         The Company has substantially completed  its 1995 restructuring program
action plan, including the strategic inventory repositioning,  the closing  of 3
toy  stores and 7 Kids "R" Us stores in the United States and the franchising of
9 Toys "R" Us  stores in the Netherlands, pending certain regulatory  approvals.
In  addition,  the  Company  consolidated  3  distribution  centers  and various
administrative facilities in the United States and Europe.  At January 31, 1998,
the Company had  approximately  $62 million of  liabilities  remaining  for  its
restructuring  program  primarily  relating  to  long-term lease obligations and
other commitments.  The Company believes these reserves are adequate to complete
the restructuring program.

(b)      Financial Information About Geographic Segments

         Information about geographic segments, as set forth in the notes to the
Consolidated  Financial  Statements  on  page  22  of  the Company's 1997 Annual
Report, is incorporated herein by reference.

(c)      Narrative Description of the Business

         See the section  "Store  Locations"  on page 27 of the  Company's  1997
Annual Report, which section is incorporated herein by reference.

                                        2
<PAGE>      

         Toys "R" Us - United States

         Toys "R" Us - United  States  ("Toys "R" Us") operates in 49 states and
Puerto  Rico and sells  both  children's  and  adult's  toys,  games,  bicycles,
sporting goods, VHS video tapes, electronic and video games, small pools, books,
infant and juvenile  furniture and similar  items,  as well as  educational  and
entertainment   computer  software  for  children.   The  overall  merchandising
philosophy of Toys "R" Us is the development of strong consumer  recognition and
acceptance  of its name by the use of mass media  advertising  that promotes its
broad selection.
         Toys   "R"   Us   believes    the    flexibility    afforded   by   its
warehouse/distribution  system  and by  ownership  of its own  fleet  of  trucks
provides  maximum  efficiency  and  capacity,   particularly  in  light  of  the
seasonality  of its  business.  Toys "R" Us  utilizes a  computerized  inventory
system which allows  management to constantly  monitor the current  activity and
inventory in each region and in each store.  This system  permits  management to
allocate merchandise to each store and keep the stores adequately stocked at all
times.  In 1996, an improved replenishment system was installed in approximately
one-third of the United States toy  stores.  This  system  pinpoints  the  exact
location of merchandise  throughout  the  store.  Ninety-two  additional  United
States toy stores  have  installed  this  system  in  1997.  Furthermore, during
1997 Toys "R" Us introduced a state of the art centralized  distribution  system
in Lees Summit,  Missouri.  Substantially  all  video game and computer software
merchandise are nationally  distributed through this  facility  for all domestic
divisions.  This  facility  has  enabled  Toys  "R"  Us  to improve its in-stock
position  and  timeliness  of  replenishments  of  these  products  through this
facility.
         Most Toys "R" Us  stores  conform  to a 46,000  square  feet  prototype
design, with 30,000 and 20,000 square feet stores opened in smaller markets, and
are generally freestanding units or located in strip  malls.  Of its 698 stores,
609 are in the traditional format and 89  are  designed  in  its  "Concept 2000"
format.  In addition, there are 2 KidsWorld superstores incorporating the  "Toys
"R" Us, "Babies "R" Us" and "Kids "R" Us store  concepts  all  under  one  roof,
averaging approximately 90,000 square feet.
         Toys "R" Us opened 19 new toy stores  and  closed 1 store in 1997.  The
Company will continue its long range growth plan by opening  approximately 5 new
toy stores in the United States in 1998. The Company  utilizes  demographic data
to determine which markets to enter.
         
         Toys "R" Us - International

         Toys "R" Us  -  International ("International")  operates or franchises
toy stores in 26 countries  outside the United  States.  These stores  generally
conform  to  prototypical  designs  similar  to  those  used  by  Toys  "R"  Us.
International  owns and maintains its own fleet of tractors and trailers in most
of the  countries  in which  it  operates  stores.  International  also  employs
computerized inventory systems similar to those utilized by Toys "R" Us. As part
of the  Company's  long range growth plans,  International  added 45 toy stores,
including  18  franchise  stores in 1997.  The  Company  plans to  continue  its
International  expansion with approximately 35 new toy stores in 1998, including
approximately  15 franchise  stores.  The Company  utilizes  demographic data to
determine which markets to enter.

                                        3
<PAGE>
         
         Kids "R" Us

         Kids "R" Us children's  clothing  stores feature brand name and private
label first quality  children's  clothing.  These stores conform to prototypical
designs  consisting  of  approximately  15,500  to  21,500  square  feet and are
typically freestanding units or located in strip centers. Using demographic data
to determine  which markets to enter,  Kids "R" Us opened 3 children's  clothing
stores in 1997.

         Babies "R" Us

         The Company  launched  its new Babies "R" Us  division  with six stores
opened in 1996.  These stores target the newborn to preschool market in a 38,000
to 42,000 square feet  prototype  that offers up to 40 room settings of juvenile
furniture  such as cribs and dressers as well as playards,  bumper  seats,  high
chairs,  strollers,  car seats, infant toddler and preschool toys, infant plush,
and gifts. These stores devote  over  5,000 square feet  of specialty name brand
and private label clothing and a wide  range  of  feeding  supplies,  health and
beauty  aides  and  infant care  products.  In  addition,  a  computerized  baby
registry  service  is  offered.  Babies "R" Us  is  designed  with  low  profile
merchandise displays in the center of the stores  providing  a sweeping  view of
the entire merchandise selection.
         The Company  accelerated  the growth of the Babies "R" Us division with
the acquisition of Baby Superstore,  a leading large format retailer of  newborn
to preschool products  in  the  United  States. At the date of acquisition, Baby
Superstore  operated  76 stores in 23 states,  primarily  in the  southeast  and
midwest.  The Company  has converted  substantially  all  of  the  existing Baby
Superstore stores to the Babies "R" Us operating format.  The Company opened  19
Babies  "R" Us  stores  and  closed 3 of the  acquired Baby Superstore stores in
1997, and plans on opening approximately 15 to 20 stores  in  1998. The  Company
utilizes demographic data to determine which markets to enter.

(d)      Trademarks

         "TOYS "R" US",  "KIDS "R" US",  and "BABIES "R" US", as well as various
of the  Company's  family of "R" Us marks either have been  registered,  or have
trademark  applications  pending,  with the United  States  Patent and Trademark
Office and with the trademark registries of many foreign countries.  The Company
believes that its rights to these properties are adequately protected.

(e)      Seasonality

         Retail sales of toy and toy related products are highly seasonal,  with
a majority of retail sales  occurring  during the period from September  through
December.  Consequently,  a large  portion of the  Company's  sales and earnings
occur during its fourth quarter.
         See the quarterly  financial data contained on page 26 of the Company's
1997 Annual Report,  which section is incorporated herein by reference.

                                        4
<PAGE>

(f)      Working Capital

         For a discussion of the Company's  working  capital  requirements,  see
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  on pages  12 and 13 of the  Company's  1997  Annual  Report,  which
section is incorporated herein by reference.

(g)      Competition

         All aspects of the retailing  industry are highly  competitive.  All of
the merchandise sold by the Company,  in markets in which the Company  operates,
is  available  from various  retailers  at  competitive  prices.  The  Company's
competitors  consist of other  specialty  retailers of toy and children  related
products, department stores and discount and supercenter type retail stores.

(h)      Employees

         At  January  31,  1998,  the total  number of persons  employed  by the
Company was approximately  68,000. The number of persons employed by the Company
increased to approximately 116,000 during the 1997 Holiday Season.

ITEM 2.  PROPERTIES

         See  the  Note,  "Leases,"  in  the  Company's  Notes  to  Consolidated
Financial  Statements  included on page 19 of the Company's  1997 Annual Report,
which note is  incorporated  herein by  reference.  Also see the section  "Store
Locations"  on page 27 of the  Company's  1997 Annual  Report,  which section is
incorporated herein by reference.

         Toys "R" Us - United States

         A  significant  portion of the  properties  operated by Toys "R" Us are
owned.  Toys "R" Us either  purchases  or  leases  properties  depending  on the
economic terms available. Where properties are leased, Toys "R" Us generally has
long-term  leases with multiple  renewal  options.  Toys "R" Us operates 698 toy
stores,  438 of which are owned and 260 are leased.  Toys "R" Us also operates 2
KidsWorld  stores, 1 of which is owned and 1 is leased.  Toys "R" Us operates 17
distribution centers, 14 of which are owned and 3 are leased. These distribution
centers  average  approximately  443,000  square  feet  each  in  size  and  are
strategically  located throughout the United States to efficiently service these
stores.
         The Company also leases corporate offices in Paramus and Rochelle Park,
New  Jersey  and owns a data  center in  Parsippany,  New  Jersey.  The  Company
recently  purchased a new office  building in  Montvale,  New Jersey  which will
replace the Rochelle Park office.

         Toys "R" Us - International

         International  operates 367 stores,  excluding 16 joint ventures and 58
franchised stores, 111 of which are owned and 256 are leased. International also
operates 12 distribution centers, 4 of which are owned and 8 are leased.

                                        5
<PAGE>

         Kids "R" Us

         Kids "R" Us operates 215 children's  clothing  stores,  99 of which are
owned and 116 are leased. Kids "R" Us operates 4 distribution centers, including
a new center in  Lawrenceville,  Georgia,  3 of which are owned and 1 is leased.
These  distribution  centers average  approximately  281,000 square feet each in
size.

         Babies "R" Us

         Babies "R" Us operates 98 juvenile retail stores, 10 of which are owned
and 88 are leased. Babies "R" Us stores are serviced by existing Toys "R" Us and
Kids "R" Us distribution centers discussed above.

ITEM 3. LEGAL PROCEEDINGS

         On July 12,  1996,  an  arbitrator  rendered an award in favor of Yusuf
Ahmed Alghanim & Sons,  W.L.L.  ("Alghanim") and against the Company and awarded
Alghanim $46 million  plus  interest from December 1994. This award was rendered
in connection with a dispute between  Alghanim and the Company  involving rights
under a 1982  license  agreement  for toy store  operations  in the Middle East.
Accordingly,  the  Company  recorded  a   provision  of  $60  million  in   1996
representing  all expected  costs in  connection  with this matter.  The Company
contested this award in the United States District Court. That motion was denied
on December 13, 1996 and the arbitration  award was confirmed.  On September 10,
1997, the Second Circuit  affirmed the District  Court's  decision.  The Company
sought review in the Supreme Court of the United States.  On February 23,  1998,
the Supreme Court denied review.  The  Company paid the judgment on February 26,
1998.
         On May 22, 1996, the Staff of the Federal Trade  Commission (the "FTC")
filed an administrative  complaint against the Company alleging that the Company
is in  violation  of  Section  5 of the  Federal  Trade  Commission  Act for its
practices  relating to warehouse clubs.  The complaint  alleges that the Company
reached  understandings  with various  suppliers that such suppliers not sell to
the clubs the same  items  that they sell to the  Company.  The  complaint  also
alleges that the Company  "facilitated  understandings"  among the manufacturers
that such manufacturers not sell to clubs. The complaint seeks an order that the
Company  cease and desist  from this  practice.  The matter was tried  before an
administrative  law judge in the  period  from  March  through  May of 1997.  On
September  30,  1997,  the  administrative  law judge filed an Initial  Decision
upholding the FTC's complaint against the Company.
         The Company has appealed the Initial  Decision to the  Commissioners of
the FTC.  That  appeal was argued on February  19,  1998.  The  Company  will be
entitled to have the United States Court of Appeals review any adverse  decision
by the FTC.

                                        6
<PAGE>

         After the filing of the FTC complaint,  several class action suits were
filed  against the Company in State courts in Alabama and  California,  alleging
that the Company has violated certain state competition laws as a consequence of
the behavior alleged in the FTC complaint. After the Initial Decision was handed
down,  more than thirty  purported class actions were filed in federal and state
courts in various  jurisdictions  alleging  that the  Company has  violated  the
federal  antitrust  laws as a  consequence  of the  behavior  alleged in the FTC
complaint.  In addition,  the  attorneys  general of  thirty-eight  states,  the
District  of Columbia  and Puerto Rico have filed a suit  against the Company in
their  capacity as  representatives  of the consumers of their states,  alleging
that the Company has violated  federal and state antitrust laws as a consequence
of the  behavior  alleged in the FTC  complaint.  These  suits  seek  damages in
unspecified amounts and other relief under state and/or federal law.
         The Company believes that both its policy and its conduct in connection
with the  foregoing  are within the law.  The Company also  believes  that these
actions  will not have a material  adverse  effect on its  financial  condition,
results of operations or cash flow.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

                                     PART II
                                     -------

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

         Market  prices and other  information  with  respect  to the  Company's
common stock are hereby  incorporated  by reference to page 26 of the  Company's
1997 Annual Report.

ITEM 6. SELECTED FINANCIAL DATA

         Selected financial data is hereby incorporated by reference to page 3 
of the Company's 1997 Annual Report.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
 FINANCIAL CONDITION

         Management's  discussion  and  analysis of results of  operations  and
financial condition is hereby incorporated by reference to pages 12 and 13
of the Company's 1997 Annual Report.

ITEM 7a. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

         Qualitative and quantitative disclosures about market risk is hereby
incorporated by reference to page 13 of the Company's 1997 Annual Report.

                                        7
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The following  financial  statements and supplementary data are hereby
incorporated by reference to pages 14 to 23 of the Company's 1997 Annual Report.

(a) Consolidated Balance Sheets as of January 31, 1998 and February 1, 1997

(b) Consolidated Statements of Earnings for each of the three years in the
 period ended January 31, 1998

(c) Consolidated Statements of Cash Flows for each of the three years in the
 period ended January 31, 1998

(d) Consolidated Statements of Stockholders' Equity for each of the three years
 in the period ended January 31, 1998

(e) Notes to Consolidated Financial Statements; and

(f) Report of Ernst & Young LLP.

         Individual  financial  statements of the registrant's  subsidiaries are
not furnished  because  consolidated  financial  statements are  furnished.  The
registrant is primarily a holding company, the expenses and obligations of which
are paid by its  consolidated  subsidiaries  through  a fee  based  on  expenses
incurred  for  its  consideration  for  management  services  provided  to  such
subsidiaries by the registrant.  All subsidiaries of the registrant are at least
80% owned.
         Financial  statements  of  50%-owned  joint  ventures are not submitted
because  such  companies,  considered  in  the  aggregate,  are not considered a
significant subsidiary as defined in Regulation S-X.

ITEM 9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
 FINANCIAL DISCLOSURE

              None.

                                    PART III
                                    --------

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Information  with  respect to the  directors  of the  Company is hereby
incorporated herein by reference to the section, "Election of Directors", in the
Company's 1997 Proxy Statement.

                                        8
<PAGE>
Executive Officers of the Company

     (a)  The  following persons are the executive officers of the Company as of
          April  15,  1998,  having  been elected to their respective offices by
          the Board of Directors of the Company to  serve until the election and
          qualification of their respective successors:

               Name             Age             Position with the Company
               ----             ---             -------------------------

   Robert C. Nakasone           50          Chief Executive Officer


   Bruce W. Krysiak             47          President and Chief Operating
                                            Officer, and President of U.S.
                                            Toy Store Division


   Louis Lipschitz              53          Executive Vice President and 
                                            Chief Financial Officer


   Michael J. Madden            49          Executive Vice President - 
                                            President of Operations of
                                            U.S. Toy Store Division


   Richard L. Markee            45          Executive Vice President -
                                            President of Kids "R" Us and
                                            Babies "R" Us Divisions


   Gregory R. Staley            50          Executive Vice President -
                                            President of Toys "R" Us
                                            International Division


    Keith Van Beek              51          Executive Vice President -
                                            President of Merchandising and
                                            Marketing of U.S. Toy Store Division


   Roger Gaston                 42          Senior Vice President -
                                            Human Resources


   Joseph J. Lombardi           36          Vice President - Controller


     (b) The following is a brief account of the business  experience during the
past five years for each of the executive officers of the Company:

     Mr.  Nakasone  has been  employed  by the Company for more than five years.
Effective February 1998, he became Chief Executive  Officer.  From February 1994
to February 1998, he was President and Chief  Operating  Officer.  From prior to
1993 to  February  1994,  he was Vice  Chairman  of the Board and  President  of
Worldwide Toy Stores.

                                        9
<PAGE>

     Mr.  Krysiak has been employed by the Company since April 1998 as President
and Chief  Operating  Officer and  President  of U.S. Toy Store  Division.  From
January  1997  to  April  1998,  he was President and Chief Operating Officer of
Dollar General Corporation. From April 1995 to June 1996, he was Chief Operating
Officer of Circle K  Corporation.  From prior to 1993 to December  1994,  he was
Chairman of Giant Joint Venture.

     Mr.  Lipschitz  has been  employed by the Company for more than five years.
Effective  February 1996, he became Executive Vice President and Chief Financial
Officer.  From February  1993 to January  1996,  he was Senior Vice  President -
Finance and Chief Financial Officer.

     Mr.  Madden has been  employed  by the  Company  for more than five  years.
Effective  February 1996, he became  Executive Vice President of the Company and
President of Operations of U.S. Toy Store  Division.  From March 1995 to January
1996, he was Group Vice President of Store Operations - U.S. Toy Store Division.
From February  1993 to February  1995,  he was Senior Vice  President,  Regional
Operations and Distribution - U.S. Toy Store Division.

     Mr.  Markee has been  employed  by the  Company  for more than five  years.
Effective  February 1996, he became  Executive Vice President of the Company and
has served as President of Kids "R" Us Division  since March 1993 and Babies "R"
Us Division since its inception in September 1995.

     Mr.  Staley has been  employed  by the  Company  for more than five  years.
Effective  February 1996, he became  Executive Vice President of the Company and
has served as President of Toys "R" Us International Division since August 1995.
From  prior  to 1993 to July  1995,  he was  Senior  Vice  President  -  General
Merchandise Manager for Toys "R" Us International Division.

     Mr. Van Beek has been  employed  by the  Company  for more than five years.
Effective  February 1998, he became  Executive Vice President of the Company and
President of Merchandising  and Marketing of U.S. Toy Store Division.  Effective
August 1995, he became  President - Toys "R" Us (Canada) Ltd. From prior to 1993
to August  1995,  he was Vice  President - Business  Development  of Toys "R" Us
International Division.

     Mr. Gaston has been  employed by the Company since  December 1996 as Senior
Vice President - Human  Resources.  From September 1993 to November 1996, he was
Executive Vice President - Human Resources of Carson,  Pirie, Scott and Company.
From prior to 1993 to August 1993, he was Group Vice President - Human Resources
and Administration of Finest Supermarkets-AHOLD, USA.

     Mr.  Lombardi  has been  employed by the Company  since August 1995 as Vice
President -  Controller.  From October 1994 to July 1995,  he was a Partner with
Ernst & Young LLP, a public accounting firm, and was a Senior Manager with Ernst
& Young LLP, since prior to 1993 to September 1994.

                                        10
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

         Information   with   respect  to  executive   compensation   is  hereby
incorporated  herein by reference  to the  sections,  "Election  of  Directors",
"Compensation of Directors",  "Executive  Compensation",  "Summary  Compensation
Table",  "Option Grants in Last Fiscal Year",  "Aggregated  Option  Exercises in
Last Fiscal Year and Fiscal  Year-End  Option Values" and  "Long-Term  Incentive
Plans - Awards in Last Fiscal Year" in the Company's 1997 Proxy  Statement.  The
sections,  "Report of the Management  Compensation and Stock Option Committee on
Executive  Compensation" and "Five-Year  Stockholder Return Comparison",  in the
Company's 1997 Proxy Statement are not  incorporated by reference  herein.  Such
sections  are  furnished  solely for  information  and shall not be deemed to be
soliciting material or to be "filed" as a part of this report.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND  MANAGEMENT

         Information  with respect to security  ownership of certain  beneficial
owners and  management  is hereby  incorporated  by reference  to the  sections,
"Principal  Stockholders"  and "Election of  Directors",  in the Company's  1997
Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         None.

                                     PART IV
                                     -------

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)      Financial Statements

         (1) The  response  to this portion of Item 14 is set forth in Item 8 of
Part II of this report on Form 10-K.

         (2) Financial  Statement  Schedules have been omitted  because they are
inapplicable,  not required,  or the  information  is included  elsewhere in the
financial statements or notes thereto.

         (3) See accompanying Index to Exhibits. The Company will furnish to any
stockholder,  upon written request, any exhibit listed in the accompanying Index
to  Exhibits  upon  payment  by such  stockholder  of the  Company's  reasonable
expenses in furnishing any such exhibit.

                                        11
<PAGE>

(b)  Cautionary Statement Regarding Forward Looking Information

     All of the statements made on this Form 10-K, other than historical  facts,
     are  forward  looking  statements  made  in  reliance  on the  safe  harbor
     provisions  of the Private  Securities  Litigation  Reform Act of 1995.  As
     such, they involve risks and uncertainties  that could cause actual results
     to differ materially. The Company's forward looking statements are based on
     assumptions about many important  factors,  including  ongoing  competitive
     pressures in the retail  industry,  changes in consumer  spending,  general
     United  States  economic  conditions  (such as  higher  interest  rates and
     consumer  confidence),  the  anticipated  decline  in credit  results  from
     historical  levels  and  normal  business  uncertainty.  While the  Company
     believes  that its  assumptions  are  reasonable,  it  cautions  that it is
     impossible  to predict  the impact of certain  factors  which  could  cause
     actual results to differ materially from expected  results.
     
(c) Reports on Form 8-K

     On  January  8,  1998, the  Company filed a Form 8-K in connection with the
     Company's announced adoption of a Stockholder Rights Plan.

                                        12
<PAGE>

                                   SIGNATURES
                                   ----------

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
                                  TOYS "R" US, INC.
                                  (Registrant)
                                  By Louis Lipschitz,  Executive  Vice President
                                  and Chief Financial Officer
 Date: April 24, 1998

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities indicated on the 24th day of April, 1998.
        Signature                                   Title
        ---------                                   -----
Michael Goldstein                          Chairman of the Board

Robert C. Nakasone                         Director and Chief Executive Officer
                                           (Principal Executive Officer)

Bruce W. Krysiak                           Director, President and Chief
                                           Operating Officer

Louis Lipschitz                            Executive Vice President and Chief
                                           Financial Officer
                                           (Principal Financial Officer)

Joseph J. Lombardi                         Vice President - Controller
                                           (Principal Accounting Officer)

Robert A. Bernhard                         Director

RoAnn Costin                               Director

Calvin Hill                                Director

Shirley Strum Kenny                        Director

Charles Lazarus                            Director, Chairman Emeritus

Norman S. Matthews                         Director

Howard W. Moore                            Director

Arthur B. Newman                           Director

The  foregoing  constitute  all of the  Board  of  Directors  and the  Principal
Executive, Financial and Accounting Officers of the Registrant.

                                        13
<PAGE>

INDEX TO EXHIBITS
-----------------

The following is a list of all exhibits filed as part of this Report:

   Exhibit No.                                Document
   -----------                                --------

2A                        Agreement and Plan of Merger,  dated as of December 8,
                          1995, by and among registrant, Toys "R" Us - Delaware,
                          Inc.  (f/k/a Toys "R" Us, Inc.) and TRU Interim,  Inc.
                          Incorporated  herein by  reference  to Exhibit  2.1 to
                          registrant's  Registration  of  Securities  of Certain
                          Successor  Issuers  on Form 8-B dated  January 3, 1996
                          (the "Form 8-B").

2B                        Agreement  and Plan of Merger, dated as of October  1,
                          1996,  and as amended  and restated as of December 26,
                          1996, among  registrant, BSST Acquisition Corp.,  Baby
                          Superstore,  Inc. and  Jack P. Tate.  Incorporated  by
                          reference to Annex A to the Proxy Statement/Prospectus
                          Statement No. 333-18863.

3A                        Restated Certificate of  Incorporation  of  registrant
                          (filed  on  January 2, 1996).  Incorporated  herein by
                          reference to Exhibit 3.1 to the Form 8-B.

3B                        Amended  and  Restated  By-Laws of  registrant  (as of
                          January 1, 1996).  Incorporated herein by reference to
                          Exhibit 3.2 to the Form 8-B. An amendment  dated March
                          11,  1997 to  Amended  and  Restated  By-Laws is filed
                          herewith.

4                 i)      Form of Indenture dated as of  January 1, 1987 between
                          registrant   and   United  Jersey  Bank,  as  Trustee,
                          pursuant to which  securities in one or more series in
                          an  unlimited  amount  may  be  issued  by registrant.
                          Incorporated  herein  by  reference to Exhibit 4(a) to
                          Registration Statement No. 33-11461.

                  Ii)     Form   of   the   registrant's   8 1/4%  Sinking  Fund
                          Debentures due 2017.  Incorporated herein by reference
                          to Exhibit 4(a) to Registration Statement No.33-11461.

                  Iii)    Form of Indenture between registrant and United Jersey
                          Bank, as Trustee, pursuant to which one or more series
                          of debt  securities  up to  $300,000,000  in principal
                          amount  may  be  issued  to  registrant.  Incorporated
                          herein  by  reference  to  Exhibit  4 to  registrant's
                          Registration Statement No. 33-42237.

                  Iv)     Form  of  registrant's  8 3/4%  Debentures  due  2021.
                          Incorporated  herein  by  reference  to  Exhibit  4 to
                          registrant's Report on Form 8-K dated August 29, 1991.

                                        14
<PAGE>

   Exhibit No.                                Document
   -----------                                --------

4                  v)      Substantially  all other long-term debt of registrant
                           (which  other  debt  does  not exceed on an aggregate
                           basis 10% of the total assets  of  the registrant and
                           its   subsidiaries   on   a  consolidated  basis)  is
                           evidenced  by,  among  other  things,  (i) industrial
                           revenue  bonds  issued  by   industrial   development
                           authorities   and   guaranteed  by  registrant,  (ii)
                           mortgages held by third parties  on real estate owned
                           by registrant, (iii) stepped  coupon guaranteed bonds
                           held by a third  party  and  guaranteed by registrant
                           and   (iv)   an   agreement  under  which  registrant
                           guaranteed  certain  yen-denominated  loans made by a
                           third party subsidiary of registrant. Registrant will
                           file with the Securities and Exchange Commission (the
                           "Commission")copies of constituent documents relating
                           to such upon request of the Commission.

10A*                       Stock Option Plan of the registrant, as amended as of
                           April 22, 1993.  Incorporated  herein by reference to
                           Exhibit  10A to  registrant's  Annual  Report on Form
                           10-K for the year ended January 30, 1993.

10B*                       Employment  Agreement  dated  March 14,  1978 between
                           registrant  and  Charles  Lazarus  and  an  amendment
                           thereto dated  November 20, 1979 (incorporated herein
                           by  reference  to  Exhibit  2  in  Schedule 13D dated
                           February  1,  1980 filed by Charles  Lazarus, et al).
                           An amendment dated March 23, 1982  to such employment
                           agreement  (incorporated  herein  by   reference   to
                           Exhibit 10B  to  registrant's  Annual  Report on Form
                           10-K for the year ended January 31, 1982,  Commission
                           File Number 1-1117).  An amendment dated  December 7,
                           1982   to  such  employment  agreement  (incorporated
                           herein  by  reference  to Exhibit 10B to registrant's
                           Annual Report on Form 10-K for the year ended January
                           30,  1983,   Commission   File   Number 1-1117).   An
                           amendment  dated  April  10,  1984 to such employment
                           agreement (incorporated  herein   by   reference   to
                           Exhibit  10B  to  registrant's  Annual Report on Form
                           10-K for the year  ended January 29, 1989, Commission
                           File Number 1-1117).


* Management  contract or compensatory plan or arrangement  required to be filed
as an exhibit to this Form 10-K pursuant to Item 14(c) hereof.

                                        15
<PAGE>

   Exhibit No.                               Document
   -----------                               --------

10C*                          Form   of   Indemnification    Agreement   between
                              registrant and each director.  Incorporated herein
                              by reference to Exhibit 10F to registrant's Annual
                              Report on Form 10-K for the year ended February 1,
                              1987, Commission File Number 1-1117.

10D*                          Stock  Option  Agreement  dated  as of February 1,
                              1988   between  registrant  and  Robert  Nakasone.
                              Incorporated herein by reference to Exhibit 10G to
                              registrant's Annual Report on  Form  10-K  for the
                              year  ended  January  31,  1988,  Commission  File
                              Number  1-117.   The  first  amendment dated as of
                              April  1,  1989  to  such  agreement (incorporated
                              herein by reference to Exhibit 10G to registrant's
                              Annual  Report  on  Form  10-K  for the year ended
                              January 29,  1989, Commission File Number 1-1117).
                              The second amendment dated  as  of  September  19,
                              1989  to  such  agreement  (incorporated herein by
                              reference  to  Exhibit  10G to registrant's Annual
                              Report on Form 10-K for the year ended January 28,
                              1990, Commission File Number 1-1117).

10E*                          Stock  Option  Agreement  dated  as of February 1,
                              1988  between  registrant  and  Michael  Goldstein
                              (incorporated  herein  by reference to Exhibit 10H
                              to registrant's Annual Report on Form 10-K for the
                              year  ended  January  31,  1988,  Commission  File
                              Number 1-1117).  The  first  amendment dated as of
                              April  1,  1989  to  such  agreement (incorporated
                              herein by reference to Exhibit 10H to registrant's
                              Annual  Report  on  Form  10-K  for the year ended
                              January 29, 1989,  Commission File Number 1-1117).
                              The  second  amendment  dated  as of September 19,
                              1989  to  such  agreement  (incorporated herein by
                              reference  to  Exhibit  10H to registrant's Annual
                              Report on Form 10-K for the year ended January 28,
                              1990, Commission File Number 1-1117).


* Management  contract or compensatory plan or arrangement  required to be filed
as an exhibit to this Form 10-K pursuant to Item 14(c) hereof.

                                        16
<PAGE>

   Exhibit No.                            Document
   -----------                            --------

10F*                          Stock Option Plan and Agreement  dated as of March
                              14, 1989 between  registrant and Charles  Lazarus,
                              and  a  First   Amendment   thereto  dated  as  of
                              September 19, 1989.  Incorporated  by reference to
                              Exhibit 10I to registrant's  Annual Report on Form
                              10-K  for  the  year  ended   January  28,   1990,
                              Commission File Number 1-1117.

10G*                          Non-Employee   Directors'  Stock  Option  Plan  as
                              adopted by the Board of Directors on September 19,
                              1990 and approved by the registrant's stockholders
                              on June 3, 1991,  and amended  and  restated as of
                              December 6, 1995. Incorporated herein by reference
                              to Exhibit 10A to registrant's Proxy Statement for
                              the year ended February 3, 1996.

10H*                          Stock  Option  Plan  and  Agreement  dated  as  of
                              December 2, 1992 between the registrant and Robert
                              C. Nakasone.  Incorporated  herein by reference to
                              Exhibit 10I to registrant's Annual Report  on Form
                              10-K for the year ended January 30, 1993.

10I*                          Stock  Option  Plan  and  Agreement  dated  as  of
                              December  2,  1992  between  the   registrant  and
                              Michael   Goldstein.    Incorporated   herein   by
                              reference  to Exhibit 10J to  registrant's  Annual
                              Report on Form 10-K for the year ended January 30,
                              1993.

10J*                          Toys  "R"  Us,  Inc.   1994   Stock   Option   and
                              Performance Incentive Plan  effective  November 1,
                              1993,   as   amended.   Incorporated   herein   by
                              reference   to   Exhibit   4.1   to   registrant's
                              Registration Statement No. 33-64315.

10K*                          Toys   "R"   Us,   Inc.    Management    Incentive
                              Compensation   Plan   adopted   March   28,   1994
                              (incorporated  herein by  reference to Exhibit 10L
                              to registrant's Annual Report on Form 10-K for the
                              year ended January 29, 1994).  The first amendment
                              to  such   plan   adopted   on  April   20,   1995
                              (incorporated herein by reference to Exhibit 10.11
                              to the Form 8-B).


* Management  contract or compensatory plan or arrangement  required to be filed
as an exhibit to this Form 10-K pursuant to Item 14(c) hereof.

                                        17
<PAGE>

   Exhibit No.                                Document
   -----------                                --------

10L*                              Toys "R" Us, Inc.  Partnership  Group Deferred
                                  Compensation  Plan  effective  as  of  May 17,
                                  1995.  Incorporated  herein  by  reference  to
                                  Exhibit 10.13 to the Form 8-B.

10M*                              Toys "R" Us,  Inc.  Grantor   Trust  Agreement
                                  dated as of October 1, 1995 between registrant
                                  and    American    Express   Trust    Company.
                                  Incorporated  herein  by  reference to Exhibit
                                  10.14 to the Form 8-B.

10N*                              Toys  "R"  Us,  Inc.  Supplemental   Executive
                                  Retirement  Plan,  effective as of December 6,
                                  1995. Incorporated by reference to Exhibit 10N
                                  to registrant's Annual Report on Form 10-K for
                                  the year ended February 3, 1996.

10O                               Shareholders Agreement, dated October 1, 1996,
                                  by and among registrant, Jack P.Tate and Linda
                                  M. Robertson.  Incorporated  by  reference  to
                                  Exhibit   A   to  Exhibit 2   to  registrant's
                                  Quarterly Report  on Form 10-Q for the quarter
                                  ended November 2, 1996,  File No. 1-11609 (the
                                  "Form 10-Q").




* Management  contract or compensatory plan or arrangement  required to be filed
as an exhibit to this Form 10-K pursuant to Item 14(c) hereof.

                                        18
<PAGE>

   Exhibit No.                               Document
   -----------                               --------

10P*                              Retention Agreements
                                  --------------------

                                  -  Retention  Agreement  between  Toys "R" Us,
                                  Inc. and Roger Gaston dated as of May 1, 1997.

                                  -  Retention  Agreement  between  Toys "R" Us,
                                  Inc.  and  Louis  Lipschitz dated as of May 1,
                                  1997.

                                  -  Retention  Agreement  between  Toys "R" Us,
                                  Inc. and Michael J. Madden dated  as of May 1,
                                  1997.

                                  -  Retention  Agreement  between  Toys "R" Us,
                                  Inc.  and Richard L. Markee dated as of May 1,
                                  1997.

                                  -  Retention  Agreement  between  Toys "R" Us,
                                  Inc.  and Gregory R. Staley dated as of May 1,
                                  1997.

                                  Each  incorporated   herein  by  reference  to
                                  Exhibit 10P to registrant's  Quarterly  Report
                                  on Form 10-Q for the  quarterly  period  ended
                                  May 3, 1997.

10Q                               Form of Rights Agreement,  dated as of January
                                  7,  1998,   between  Toys  "R"  Us,  Inc.  and
                                  American Stock Transfer & Trust Company, which
                                  includes  as  Exhibit  A the  Form  of  Rights
                                  Certificate  and, as Exhibit B, the Summary of
                                  Rights to Purchase Common Stock  (incorporated
                                  herein   by   reference   to   Exhibit   1  to
                                  registrant's  Report on Form 8-K dated January
                                  7, 1998).

10R*                              Retention  Agreement between Toys "R" Us, Inc.
                                  and Michael Goldstein dated as of February 25,
                                  1998.

10S*                              Retention  Agreement between Toys "R" Us, Inc.
                                  and  Robert  C.  Nakasone dated as of February
                                  25, 1998.

* Management  contract or compensatory plan or arrangement  required to be filed
as an exhibit to this Form 10-K pursuant to Item 14 (c) hereof.

                                        19

<PAGE>


   Exhibit No.                             Document
   -----------                             --------

10T*                              Retention  Agreement between Toys "R" Us, Inc.
                                  and  Keith  Van  Beek dated as of February 25,
                                  1998.

10U*                              Retention  Agreement between Toys "R" Us, Inc.
                                  and  Bruce W. Krysiak dated as of February 12,
                                  1998.

13                                Registrant's Annual Report to Stockholders for
                                  the year ended  January 31,  1998.  Except for
                                  the  portions   thereof  that  are   expressly
                                  incorporated  by  reference  into this report,
                                  such Annual Report is furnished solely for the
                                  information of the Commission and is not to be
                                  deemed "filed" as part of this report.

21                                Subsidiaries of registrant.

23                                Consent of Independent Auditors, Ernst & Young
                                  LLP.

27.1                              Financial Data Schedule for the year ended 
                                  January 31, 1998. 

27.2                              Financial Data Schedule for the year ended
                                  February 1, 1997 - Restated.

27.3                              Financial Data Schedule for the year ended
                                  February 3, 1996 - Restated.


* Management  contract or compensatory plan or arrangement  required to be filed
as an exhibit to this Form 10-K pursuant to Item 14 (c) hereof.

                                        20
<PAGE>