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                       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 30, 1999

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                         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. [X]

At April 12, 1999, the aggregate market value of voting stock held by
non-affiliates was $4,722,000,612 based on the 248,526,348 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 30, 1999 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 9, 1999, are incorporated by reference into Part
III of this Form 10-K.

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<PAGE>

                                      INDEX

                                                                            PAGE
                                                                            ----
PART I.

Item 1.   Business........................................................     2
Item 2.   Properties......................................................     7
Item 3.   Legal Proceedings...............................................     8
Item 4.   Submission of Matters to a Vote of Security Holders.............     9
                                                                               
PART II.                                                                       

Item 5.   Market for the Registrant's Common Stock and                         
            Related Stockholder Matters...................................     9
Item 6.   Selected Financial Data.........................................     9
Item 7.   Management's Discussion and Analysis of Results of Operations        
            and Financial Condition.......................................     9
Item 7a.  Qualitative and Quantitative Disclosures About Market Risk......     9
Item 8.   Financial Statements and Supplementary Data.....................     9
Item 9.   Changes in and Disagreements with Accountants                
            on Accounting and Financial Disclosure........................    10

PART III.

Item 10.  Directors and Executive Officers of the Registrant..............    11
Item 11.  Executive Compensation..........................................    13
Item 12.  Security Ownership of Certain Beneficial
            Owners and Management.........................................    14
Item 13.  Certain Relationships and Related Transactions..................    14

PART IV.

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


                                       1
<PAGE>

                                     PART I

ITEM 1.   BUSINESS

      Toys "R" Us, Inc. and its  subsidiaries  (the  "Company") is the worldwide
authority on kids,  families and fun,  bringing toys,  apparel and baby needs to
children and their families.  As of January 30, 1999, the Company was engaged in
the operation of 1,481 children's  specialty  retail stores  consisting of 1,029
United  States  locations  comprised  of 704 toy stores under the name "Toys "R"
Us," 212  children's  clothing  stores  under  the name  "Kids  "R" Us," and 113
infant-toddler  stores  under the name  "Babies  "R" Us".  Internationally,  the
Company operates 452 toy stores,  including  franchise and joint venture stores,
under  the name  "Toys  "R" Us." The  Company  is  incorporated  in the state of
Delaware.

(a)      General Development of the Business

Restructuring and other charges

         During 1998, the Company announced strategic  initiatives to reposition
its worldwide  business.  These strategic  initiatives consist of, amongst other
matters,  the  reformatting  of its toy  stores in the  United  States  into the
Company's new C-3 format, the closing of nine  underperforming toy stores in the
United States and the restructuring of the Company's  International  operations,
including  the  closing  and/or  disposition  of  approximately  50 toy  stores,
primarily in Continental  Europe. The Company plans to convert  approximately 28
existing  toy stores in the United  States  into Toys "R"  Us/Kids  "R" Us combo
stores  in  the  C-3  format.  This  step  will  permit  the  Company  to  close
approximately 31 nearby Kids "R" Us stores.  Additionally,  the Company plans to
close several distribution centers and administrative offices worldwide and have
their functions  absorbed within the existing support  structure.  Finally,  the
Company  recorded  certain  changes in accounting  estimates and  provisions for
legal  settlements.  All of the  foregoing  resulted in charges of $353  million
($279 million net of tax benefits, or $1.05 per share).

         In 1998, the Company also announced markdowns and other charges of $345
million ($229 net of tax benefits,  or $.86 per share). A significant portion of
these  charges  relate to  markdowns  required to clear  excess  inventory  from
stores.  These  markdowns  should  enable the  Company to  achieve  its  optimal
inventory  assortment and streamline systems so that it can proceed with the C-3
conversions on an accelerated basis. In addition, the Company recorded markdowns
relating  to the store  closings  discussed  above and  charges to cost of sales
relating to inventory system refinements and changes in accounting estimates.

         The  implementation of the strategic  initiatives,  markdowns and other
charges  described  above are expected to have a significant  positive effect on
the Company's Economic Value Added or "EVA(R)".  EVA(R) is the management system
adopted  by the  Company to  determine  whether  its  business  initiatives  and
investments provide an adequate return on investment. The strategic initiatives,
markdowns and other charges are also expected to improve the Company's free cash
flow and increase operating  earnings.  Details on the components of the charges
mentioned  above  are  described  in the  Notes  to the  Consolidated  Financial
Statements on pages 21 and 22 of the Company's 1998 Annual Report, as well as in
Management's  Discussion  and Analysis of Results of  Operations  and  Financial
Position  on pages


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<PAGE>

21 and 22 of the  Company's  1998  Annual  Report,  as well  as in  Management's
Discussion and Analysis of Results of Operations and Financial Position on pages
9  through  12  of  the  Company's  1998  Annual  Report,   which  sections  are
incorporated herein by reference.

      At January 30, 1999, the Company had approximately $45 million of reserves
remaining for its restructuring program announced in 1995 which relate primarily
to long-term lease obligations.

      The  Company   believes   that  reserves  are  adequate  to  complete  the
restructuring and other programs described above.

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."

(b) Financial Information About Geographic Segments

      Information  about geographic  segments,  as set forth in the Notes to the
Consolidated  Financial  Statements  on page  21 of the  Company's  1998  Annual
Report, is incorporated herein by reference.

(c) Narrative Description of the Business

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 and  electronics,  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. Toys "R" Us introduced a state of the art centralized distribution system
in Lees  Summit,  Missouri in 1997.  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.
Furthermore,  the Company has accelerated the  


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<PAGE>

implementation of its major initiative to improve its supply chain management,
which is aimed at optimizing its inventory assortment and presentation. In
addition, the Company is expanding its automated replenishment system to
maximize inventory turnover.

      Currently,  most Toys "R" Us stores conform to a traditional 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 the 703 stores currently  operated by Toys "R" Us, 597 are in the traditional
format,  nine are in the  Company's  new C-3 format and 97 are  designed  in the
Company's "Concept 2000" format.

      The  Company's  new C-3 store design  concept  conforms to a 46,000 square
feet prototype.  The Company's strategic initiative to convert existing Toys "R"
Us stores  into C-3  format  stores is  intended  to make the Toys "R" Us stores
easier to shop and present  merchandise in a more dynamic  selling  environment.
The C-3 store  layout  creates  wider  aisles,  more feature  opportunities  and
end-caps,  more shops,  and logical  category  adjacencies  to improve  customer
shopping  patterns as compared with the traditional Toys "R" Us format.  The C-3
sales floor is extended by 20% and has a one-third  reduction in the size of the
backroom.  The Company is planning to roll out the new C-3 store design  concept
to approximately 200 existing toy stores in the United States in 1999 and to 325
more stores in 2000.  In 1999,  the Company also plans to implement  some of the
high potential elements of the C-3 concept in about 125 of the 325 stores slated
for  conversion  in 2000.  In addition,  all new toy stores in the United States
will be formatted in the C-3 store concept.

      The Company is also planning to introduce the merchandise  "world" concept
in Toys "R" Us stores in 1999. Each "world" has a unique customer franchise from
juvenile to R Zone  electronics and video products.  Each "world" will establish
its own  business  plan and has a complete  support team to develop its business
from  product  sourcing to customer  advertising  and  promotion.  The  "worlds"
presently being developed are:

  o  R Zone (video, electronics, computer software, related products)
  o  Action and Adventure (action figures, diecast cars, etc.) 
  o  Girls (dolls, collectibles, accessories, lifestyle products) 
  o  Outdoor Fun (bikes, sports, playsets) 
  o  Pre-School (toys, accessories)
  o  Seasonal (Christmas, Halloween, Summer, etc.) 
  o  Juvenile (baby products and 0-4 apparel) 
  o  Learning Center (educational and developmental products)
  o  Family Fun (games and puzzles)

The  Company  is  planning  to  include a majority  of the new  "world"  product
selection and merchandising in the C-3 rollouts in 1999.

         Toys "R" Us opened five new toy stores while closing one store in 1998.
The Company  utilizes  demographic  data to determine which markets to enter and
plans to open  approximately 10 new toy stores in the United States in 1999. The
Company is also planning to close approximately nine  underperforming toy stores
(two of which  have  been  closed  to date) as part of the  Company's  strategic
initiatives to reposition its worldwide business.


                                       4
<PAGE>

Toys "R" Us - International

      Toys "R" Us - International  ("International")  operates or franchises toy
stores in 25 countries outside the United States. These stores generally conform
to  traditional  prototypical  designs  similar  to  those  used by Toys "R" Us.
International  owns  and  maintains  its own  fleet of  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.  International added
28 new toy stores,  including 10 franchise  stores while closing three stores in
1998.  Utilizing  demographic  data to  determine  which  markets to enter,  the
Company  plans  to add  approximately  25 new  toy  stores  in  1999,  including
approximately 10 franchise stores. The Company terminated a franchise  agreement
for 14 toy  stores in Italy in January  1999.  The  Company  also plans to close
approximately 50 underperforming International toy stores in 1999 (four of which
have  been  closed  to date) as part of the  Company's  strategic  restructuring
initiatives to reposition its worldwide business.

      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.  In 1998, Kids "R" Us
closed three  underperforming  stores as outlined in the  Company's  most recent
restructuring  program and plans to close  approximately 28 additional stores in
1999.  These  stores  will be  replaced by  converting  approximately  28 nearby
existing Toys "R" Us stores into Toys "R" Us/Kids "R" Us combo stores.

      Babies "R" Us

      The Company  launched its newest  division,  Babies "R" Us, with its first
six store openings 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 to specialty
name brand and  private  label  clothing  and a wide range of feeding  supplies,
health and beauty aids and infant care  products.  In addition,  a  computerized
baby registry service is offered. The Babies "R" Us stores are 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 utilizes
demographic data to determine which markets to enter and opened 15 Babies "R" Us
stores in 1998 and  currently  operates  118  Babies "R" Us stores in the United
States.  As part of the  


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<PAGE>

Company's long range growth plan of its Babies "R" Us division, approximately 20
new Babies  "R" Us stores  are  planned to open in 1999 (five of which have been
opened to date).

      TRU Direct

      TRU  Direct  is  the  newest  division  to  the  "R"  Us  family,  selling
merchandise  directly  to the public via the  internet  at  www.toysrus.com  and
through mail order catalogs.  The Company opened its virtual doors to the public
in June 1998,  offering a broad  selection of toys,  games,  computer  software,
video systems,  video software,  and more.  Approximately  2,000 unique products
were offered in 1998  representing  over 200 vendors.  The Company  believes the
internet poses  substantial  opportunities  as a medium for retail  commerce and
therefore  plans to  continue  the growth of the online  business.  This will be
achieved through various site enhancements,  increased product  availability and
differentiation.  In addition,  the  recognition  of the TRU name along with the
ability to leverage existing Company assets will lend a competitive advantage to
the online business.

      The  Company   entered  the  mail  order   business  this  year  with  the
introduction  of two  catalogs,  "Differently  Abled" and  "Holiday  Toys".  The
catalogs are also posted on the website, allowing customers the ability to place
an order either over the phone or via the  internet.  The Company  plans to mail
several catalogs in 1999, branching into the juvenile and collectible markets.

(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 section,  "Quarterly Financial Data",  contained on page 26 of the
Company's 1998 Annual Report, which section is incorporated herein by reference.

(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 9 through 12 of the Company's  1998 Annual  Report,  which
section is incorporated herein by reference.


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<PAGE>

(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  30,  1999,   the  Company   employed   approximately   70,000
individuals.  Due to the seasonality of the Company's business,  employment rose
to approximately 114,000 during the 1998 Holiday Season.

ITEM 2.  PROPERTIES

      See the Note,  "Leases," in the Company's Notes to Consolidated  Financial
Statements  included on page 18 of the Company's 1998 Annual Report,  which note
is incorporated  herein by reference.  Also see the section "Store Locations" on
page 26 of the  Company's  1998 Annual  Report,  which  section is  incorporated
herein by reference.  The following  information  related to properties is as of
April 12, 1999:

      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 703 toy
stores,  439 of which are owned and 264 are leased and 15 distribution  centers,
13 of which  are  owned  and 2 are  leased.  The  distribution  centers  average
approximately  427,000  square feet each in size and are  strategically  located
throughout the United States to efficiently service these stores.

      The Company  leases  corporate  offices in Paramus and Rochelle  Park, New
Jersey and owns a data center in Parsippany, New Jersey. The Rochelle Park lease
expires in 1999.  In November  1998,  the Company  moved from its Rochelle  Park
location to a newly purchased office building in Montvale, New Jersey.

      Toys "R" Us - International

      International  operates  385 stores,  excluding  16 joint  ventures and 52
franchised stores, 111 of which are owned and 274 are leased. International also
operates 15 distribution centers, 6 of which are owned and 9 are leased.


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<PAGE>

      Kids "R" Us

      Kids "R" Us operates  212  children's  clothing  stores,  105 of which are
owned and 107 are leased. Kids "R" Us operates 4 distribution  centers, of which
2 are owned and 2 are leased. These distribution  centers average  approximately
158,000 square feet each in size.

      Babies "R" Us

      Babies "R" Us operates 118 juvenile  retail stores,  25 of which are owned
and 93 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 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.  On October 13, 1998, the FTC
issued a final  Order and  Opinion  upholding  the FTC's  complaint  against the
Company.

      The Company has appealed the FTC's  decision to the United States Court of
Appeals for the Seventh Circuit.

      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 forty-four 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 it has  always  acted  fairly and in the best
interests  of its  customers  and  that  both  its  policy  and its  conduct  in
connection  with the  foregoing  have been and are within the law.  However,  to
avoid the cost and uncertainty of protracted litigation, the Company has reached
an agreement in principle to settle all of the class action and attorney general
lawsuits  in a manner  which  will not have a  material  adverse  effect  on its
financial condition, results of operations or cash flow. The Company has accrued
all anticipated costs related to this matter as of January 30, 1999.


                                       8
<PAGE>

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  1998
Annual Report.

ITEM 6. SELECTED FINANCIAL DATA

      Selected  financial data is hereby  incorporated by reference to page 3 of
the Company's 1998 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 9 through 12 of
the Company's 1998 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 11 of the Company's 1998 Annual Report.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The  following  financial  statements  and  supplementary  data are hereby
incorporated by reference to pages 13 to 23 of the Company's 1998 Annual Report.

(a) Consolidated Balance Sheets as of January 30, 1999 and January 31, 1998

(b)  Consolidated  Statements  of  Earnings  for each of the three  years in the
period ended January 30, 1999

(c)  Consolidated  Statements  of Cash Flows for each of the three  years in the
period ended January 30, 1999


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<PAGE>

(d) Consolidated Statements of Stockholders' Equity for each of the three years
in the period ended January 30, 1999

(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  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.


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<PAGE>

                                    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 1998 Proxy Statement.

Executive Officers of the Company

      (a) The following persons are the Executive  Officers of the Company as of
April 12, 1999, 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
      ----              ---             -------------------------
Michael Goldstein       57     Chairman of the Board

Robert C. Nakasone      51     Chief Executive Officer and Director

Louis Lipschitz         54     Executive Vice President and Chief Financial 
                                 Officer

Michael J. Madden       50     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

Michael G. Shannon      47     Executive Vice President and President of U.S. 
                                 Toy Store Division

Gregory R. Staley       51     Executive Vice President - President of Toys "R" 
                                 Us International Division

Keith C. Van Beek       52     Executive Vice President - President of
                                 Merchandising and Marketing of U.S. 
                                 Toy Store Division

Francesca L. Brockett   39     Senior Vice President - Strategic Planning and 
                                 Business Development

Roger C. Gaston         43     Senior Vice President - Human Resources

Raymond L. Arthur       40     Vice President - Controller


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<PAGE>

      (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.  Goldstein  has been employed by the Company for more than five years.
Effective February 1998, he retired from the position of Chief Executive Officer
and was elected  Chairman of the Board.  From February 1994 to February 1998, he
was Vice Chairman of the Board and Chief Executive  Officer. 

      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. 

      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 prior to 1994 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  prior  to 1994 to March  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 prior to 1994, as well as
President of Babies "R" Us Division since its inception in September 1995.

      Mr. Shannon has been employed by the Company since October 1998. Effective
March 1999, he became  Executive  Vice President of the Company and President of
U.S. Toy Store Division.  From October 1998 to March 1999, he was Executive Vice
President and Chief Administrative  Officer.  From January 1995 to October 1998,
he was President and Chief Executive Officer of  Gayfer's/Maison  Blanche.  From
February 1994 to January 1995, he was President and Chief  Executive  Officer of
Gayfer's/J.B. White.

      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 1994 to July  1995,  he was  Senior  Vice  President  -  General
Merchandise Manager for Toys "R" Us International Division.


                                       12
<PAGE>

      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. From August
1995 to February  1998,  he was President - Toys "R" Us (Canada) Ltd. From prior
to 1994 to August 1995, he was Vice President - Business Development of Toys "R"
Us International Division.

      Ms.  Brockett has been  employed by the Company  since  September  1998 as
Senior Vice President - Strategic Planning and Business Development. From August
1997 to September  1998, she was Senior Vice  President - Strategic  Planning of
Tricon  Global  Restaurants.  From  October  1995 to August  1997,  she was Vice
President - Business Development of Taco Bell Corporation. From prior to 1994 to
October 1995, she was Vice President - Corporate Development of PepsiCo.

      Mr. Gaston has been employed by the Company since  December 1996 as Senior
Vice  President - Human  Resources.  From prior to 1994 to November 1996, he was
Executive Vice President - Human Resources of Carson, Pirie, Scott and Company.

      Mr.  Arthur has been  employed by the Company  since  January 1999 as Vice
President - Controller. From March 1997 to October 1998, he was Vice President -
Controller of General  Signal  Corporation.  From June 1996 to February 1997, he
was Assistant Vice  President  -Director of Compliance of American Home Products
Corporation.  From May 1995 to May 1996, he was Assistant Controller of American
Cyanamid  Company.  From December  1994 to April 1995, he was Senior  Director -
Operations Support Finance of Wyeth Ayerst.  From prior to 1994 to November 1994
he was Plant Controller of Lederle Laboratories.

      Information   with  respect  to  compliance  with  Section  16(a)  of  the
Securities  Exchange Act of 1934, as amended is hereby incorporated by reference
to the section  "Compliance with Section 16(a)" in the Company's Proxy Statement
for the Annual  Meeting of  Stockholders  to be held June 9, 1999  ("1999  Proxy
Statement").

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",  "Long-Term Incentive Plans - Awards in Last
Fiscal Year" and "Employment  Agreements" in the Company's 1999 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 1999 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.


                                       13
<PAGE>

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  1999
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.

(b) Cautionary Statement Regarding Forward Looking Information

    This Form 10-K  contains  certain  "forward-looking"  statements  within the
    meaning  of Section  27A of the  Securities  Act of 1933,  as  amended,  and
    Section 21E of the  Securities  Exchange Act of 1934, as amended,  which are
    intended to be covered by the safe harbors created thereby.  The Company may
    also make  forward-looking  statements  in other  documents  filed  with the
    Securities and Exchange Commission,  its annual report to shareholders,  its
    proxy  statement  and  in  press  releases.  All  statements  that  are  not
    historical  facts,  including  statements  about the  Company's  beliefs  or
    expectations,  are forward-looking statements. Such statements involve risks
    and  uncertainties  that  exist in the  Company's  operations  and  business
    environment  that  could  render  actual  outcomes  and  results  materially
    different than predicted. The Company's forward-looking statements are based
    on assumptions  about many factors,  including,  but not limited to, ongoing
    competitive pressures in the retail industry,  changes in consumer spending,
    general economic  conditions in the United States and other jurisdictions in
    which the 


                                       14
<PAGE>

    Company conducts  business (such as interest rates and consumer  confidence)
    and  normal  business  uncertainty.  While  the  Company  believes  that its
    assumptions are reasonable at the time forward-looking statements were made,
    it cautions that it is impossible to predict the actual  outcome of numerous
    factors  and,  therefore,  readers  should not place undue  reliance on such
    statements.  Forward-looking  statements  speak only as of the date they are
    made, and the Company  undertakes no obligation to update such statements in
    light of new information or future events.

(c) Reports on Form 8-K

    On September 17, 1998,  the Company filed a Form 8-K in connection  with the
    repositioning of its worldwide business.

    On October 16, 1998,  the Company  filed a Form 8-K in  connection  with the
    initial decision upheld by the Federal Trade Commission.


                                       15
<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 /s/ Louis Lipschitz
                                                ----------------------------
                                                Louis Lipschitz
                                                Executive Vice President and 
                                                   Chief Financial Officer

Date: April 28, 1999

      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 28th day of April, 1999.

     Signature                                 Title
     ---------                                 -----

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

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

        *                 Vice President - Controller (Principal Accounting 
--------------------        Officer)
Raymond L. Arthur         

        *                 Chairman of the Board
-------------------- 
Michael Goldstein         

        *                 Director
-------------------- 
Robert A. Bernhard

        *                 Director
-------------------- 
RoAnn Costin

        *                 Director
-------------------- 
Calvin Hill


                                       16
<PAGE>

        *                 Director
-------------------- 
Shirley Strum Kenny

        *                 Director, Chairman Emeritus
-------------------- 
Charles Lazarus

        *                 Director
-------------------- 
Norman S. Matthews

        *                 Director
-------------------- 
Howard W. Moore

        *                 Director
-------------------- 
Arthur B. Newman

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

* By /s/ Louis Lipschitz
---------------------------------
Louis Lipschitz, Attorney-In-Fact


                                       17
<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. Incorporated herein by reference to Exhibit
                 3B to registrant's Annual Report on Form 10-K for the year
                 ended January 31, 1998.

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.


                                       18
<PAGE>

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

4          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.

            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)
                 commercial paper (ii) industrial revenue bonds issued by
                 industrial development authorities and guaranteed by
                 registrant, (iii) mortgages held by third parties on real
                 estate owned by registrant, (iv) stepped coupon guaranteed
                 bonds held by a third party and guaranteed by registrant and
                 (v) 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*             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).

10B*             Amendment dated as of June 10, 1998 to Employment Agreement
                 between registrant and Charles Lazarus.

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.

* 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
-----------                                 --------
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).

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.

*   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>

Exhibit No.                                 Document
-----------                                 --------
10H*             Non-Employee Director's Stock Unit Plan, effective as of May 1,
                 1997.

10I*             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.

10J*             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.

10K*             Amended and Restated Toys "R" Us, Inc. 1994 Stock Option and
                 Performance Incentive Plan effective November 1, 1993.
                 Incorporated herein by reference to Exhibit A to registrant's
                 Proxy Statement for the year ended February 1, 1997.

10L*             Amended and Restated Toys "R" Us, Inc. Management Incentive
                 Compensation Plan, effective beginning with the registrant's
                 fiscal year ending January 28, 1995. Incorporated herein by
                 reference to Exhibit B to registrant's Proxy Statement for the
                 year ended February 1, 1997.

10M*             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.

10N*             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.

10O*             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.

*   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.


                                       21
<PAGE>

Exhibit No.                                 Document
-----------                                 --------
10P*             Toys "R" Us, Inc. Grantor Trust Agreement dated as of April 1,
                 1996 between registrant and Allmerica Trust Company, N.A.
                 Amendment No. 1 to Grantor Trust Agreement, effective as of
                 April 1, 1996. Amendment No. 2 to Grantor Trust Agreement,
                 effective as of April 1, 1996.

10Q              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").

10R*             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.

* 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.


                                       22
<PAGE>

Exhibit No.                                 Document
-----------                                 --------
10S              Amended and Restated Rights Agreement, dated as of April 16,
                 1999, 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 April 16,
                 1999).

10T*             Retention Agreement between Toys "R" Us, Inc. and Michael
                 Goldstein dated as of February 25, 1998. Incorporated herein by
                 reference to Exhibit 10R to registrant's Annual Report on Form
                 10-K for the year ended January 31, 1998.

10U*             Retention Agreement between Toys "R" Us, Inc. and Robert C.
                 Nakasone dated as of February 25, 1998. Incorporated herein by
                 reference to Exhibit 10S to registrant's Annual Report on Form
                 10-K for the year ended January 31, 1998.

10V*             Retention Agreement between Toys "R" Us, Inc. and Keith Van
                 Beek dated as of February 25, 1998. Incorporated herein by
                 reference to Exhibit 10T to registrant's Annual Report on Form
                 10-K for the year ended January 31, 1998.

10W*             Retention Agreement between Toys "R" Us, Inc. and Bruce W.
                 Krysiak dated as of February 12, 1998. Incorporated herein by
                 reference to Exhibit 10U to registrant's Annual Report on Form
                 10-K for the year ended January 31, 1998.

10X*             Separation agreement between Toys "R" Us, Inc. and Bruce
                 Krysiak dated as of March 25, 1999.

10Y*             Retention Agreement between Toys "R" Us, Inc. and Michael G.
                 Shannon dated October 12, 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.


                                       23
<PAGE>

Exhibit No.                                 Document
-----------                                 --------
13               Registrant's Annual Report to Stockholders for the year ended
                 January 30, 1999. 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.

24.1             Power of Attorney, dated in April 1999.

24.2             Certified copy of resolution of the Board of Directors of Toys
                 "R" Us, Inc. authorizing signatures pursuant to Power of
                 Attorney.

27               Financial Data Schedule for the year ended January 30, 1999.


*   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.


                                       24