|   | þ | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | ¨ | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|--------|--------|----------------------------------------------------------------------------------------------------|

| Illinois                      | 36-1924025                                |
|-------------------------------|-------------------------------------------|
| (State      of Incorporation) | (I.R.S.      Employer Identification No.) |

| 200 Wilmot Road, Deerfield,      Illinois     | 60015           |
|-----------------------------------------------|-----------------|
| (Address      of principal executive offices) | (Zip      Code) |

|   | Yes      þ        No      ¨ |
|--------|-------------------------------------------------------------------------------|

| Large      accelerated filer þ                      Accelerated Filer ¨                  Non-accelerated      filer¨ |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Yes      ¨        No      þ |
|--------|-------------------------------------------------------------------------------|

PART I.  FINANCIALINFORMATION

| Item      1. | Consolidated Condensed Financial Statements      (Unaudited)                                     |
|--------------|--------------------------------------------------------------------------------------------------|
|         | a)                                                                                               | Balance Sheets |      4 |
|         | b)                                                                                               | Statements of Earnings |             5 |
|         | c)                                                                                               | Statements of Cash Flows |        6 |
|         | d)                                                                                               | Notes to Financial Statements |        7 |
| Item      2. | Management’s Discussion and Analysis of Results of      Operations and Financial Condition |           10 |
| Item      3. | Qualitative and Quantitative Disclosure about Market      Risk                                   |           17 |
| Item      4. | Controls and Procedures                                                                          |           17  |

PART II.  OTHER INFORMATION

| Item      1. | Legal Proceedings                                                |           17 |
|--------------|------------------------------------------------------------------|----------------------------------|
| Item      2. | Unregistered Sales of Equity Securities and Use of      Proceeds |      18 |
| Item      6. | Exhibits                                                         |           18 |

PART 1. FINANCIAL INFORMATION

| Item 1. | WALGREEN      CO. AND SUBSIDIARIES CONSOLIDATED CONDENSED FINANCIAL      STATEMENTS |
|---------|-------------------------------------------------------------------------------------|

| WALGREEN CO. AND SUBSIDIARIES                                                                                                                                                        |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED      CONDENSED BALANCE SHEETS                                                                                                                                           |   |
| (UNAUDITED)                                                                                                                                                                          |   |
| (In      Millions, except shares and per share amounts)                                                                                                                              |   |
|                                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                 |   | May      31, |   |   | August      31, |   |   | May      31, |   |
|                                                                                                                                                                                 |   | 2008 |   |   | 2007 |   |   | 2007 |   |
| Assets                                                                                                                                                                               |   |   |   |   |   |   |   |   |   |
| Current      Assets:                                                                                                                                                                 |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents                                                                                                                                                       |   | $ | 471.8 |   |   | $ | 254.8 |   |   | $ | 567.4 |   |
| Short-term      investments - available for sale                                                                                                                                     |   |   | - |   |   |   | - |   |   |   | 190.7 |   |
| Accounts      receivable, net                                                                                                                                                        |   |   | 2,395.1 |   |   |   | 2,236.5 |   |   |   | 2,003.6 |   |
| Inventories                                                                                                                                                                          |   |   | 7,063.8 |   |   |   | 6,790.5 |   |   |   | 6,455.7 |   |
| Other      current assets                                                                                                                                                            |   |   | 252.8 |   |   |   | 228.7 |   |   |   | 200.3 |   |
| Total      Current Assets                                                                                                                                                            |   |   | 10,183.5 |   |   |   | 9,510.5 |   |   |   | 9,417.7 |   |
| Non-Current      Assets:                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Property      and equipment, at cost, less accumulated depreciation and amortization of      $3,081.7 at May 31, 2008, $2,776.6 at August 31, 2007 and $2,706.3 at May      31, 2007 |   |   | 9,307.7 |   |   |   | 8,199.9 |   |   |   | 7,753.8 |   |
| Goodwill                                                                                                                                                                             |   |   | 1,418.2 |   |   |   | 1,060.2 |   |   |   | 398.2 |   |
| Other      non-current assets                                                                                                                                                        |   |   | 678.2 |   |   |   | 543.0 |   |   |   | 374.6 |   |
| Total      Non-Current Assets                                                                                                                                                        |   |   | 11,404.1 |   |   |   | 9,803.1 |   |   |   | 8,526.6 |   |
| Total      Assets                                                                                                                                                                    |   | $ | 21,587.6 |   |   | $ | 19,313.6 |   |   | $ | 17,944.3 |   |
| Liabilities      & Shareholders' Equity                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Current      Liabilities:                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Short-term      borrowings                                                                                                                                                           |   | $ | 1,136.3 |   |   | $ | 878.5 |   |   | $ | - |   |
| Trade      accounts payable                                                                                                                                                          |   |   | 4,173.3 |   |   |   | 3,733.3 |   |   |   | 3,709.0 |   |
| Accrued      expenses and other liabilities                                                                                                                                          |   |   | 2,169.5 |   |   |   | 2,104.4 |   |   |   | 1,942.3 |   |
| Income      taxes                                                                                                                                                                    |   |   | 23.2 |   |   |   | 28.1 |   |   |   | 51.2 |   |
| Total      Current Liabilities                                                                                                                                                       |   |   | 7,502.3 |   |   |   | 6,744.3 |   |   |   | 5,702.5 |   |
| Non-Current      Liabilities:                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred      income taxes                                                                                                                                                           |   |   | 149.6 |   |   |   | 158.2 |   |   |   | 114.3 |   |
| Other      non-current liabilities                                                                                                                                                   |   |   | 1,400.7 |   |   |   | 1,306.8 |   |   |   | 1,226.1 |   |
| Total      Non-Current Liabilities                                                                                                                                                   |   |   | 1,550.3 |   |   |   | 1,465.0 |   |   |   | 1,340.4 |   |
| Shareholders'      Equity:                                                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred      stock $.0625 par value; authorized 32 million shares, none      issued                                                                                                |   |   | - |   |   |   | - |   |   |   | - |   |
| Common      stock $.078125 par value; authorized 3.2 billion shares; issued      1,025,400,000 at May 31, 2008, August 31, 2007 and May 31,      2007                                |   |   | 80.1 |   |   |   | 80.1 |   |   |   | 80.1 |   |
| Paid-in      capital                                                                                                                                                                 |   |   | 573.4 |   |   |   | 558.8 |   |   |   | 562.8 |   |
| Employee      stock loan receivable                                                                                                                                                  |   |   | (44.4 | ) |   |   | (51.6 | ) |   |   | (59.1 | ) |
| Retained      earnings                                                                                                                                                               |   |   | 13,460.0 |   |   |   | 12,026.8 |   |   |   | 11,724.5 |   |
| Accumulated      other comprehensive loss                                                                                                                                            |   |   | (4.3 | ) |   |   | (3.9 | ) |   |   | - |   |
| Treasury      stock, at cost; 35,516,560 shares at May 31, 2008, 34,258,643 at August      31, 2007 and 32,055,845 at May 31, 2007                                                   |   |   | (1,529.8 | ) |   |   | (1,505.9 | ) |   |   | (1,406.9 | ) |
| Total      Shareholders' Equity                                                                                                                                                      |   |   | 12,535.0 |   |   |   | 11,104.3 |   |   |   | 10,901.4 |   |
| Total      Liabilities & Shareholders' Equity                                                                                                                                    |   | $ | 21,587.6 |   |   | $ | 19,313.6 |   |   | $ | 17,944.3 |   |

| WALGREEN CO. AND SUBSIDIARIES                      |   |
|----------------------------------------------------|--------|
| CONSOLIDATED      CONDENSED STATEMENTS OF EARNINGS |   |
| (UNAUDITED)                                        |   |
| (In      Millions, except per share amounts)       |   |
|                                               |   |
|                                               |   | Three      Months Ended May 31, |   |   | Nine      Months Ended May 31, |   |
|                                               |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      sales                                     |   | $ | 15,015.7 |   |   | $ | 13,698.3 |   |   | $ | 44,437.2 |   |   | $ | 40,340.5 |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs      and Deductions:                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost      of sales                                 |   |   | 10,776.8 |   |   |   | 9,821.1 |   |   |   | 31,848.9 |   |   |   | 28,851.9 |   |
| Selling,      general and administrative expenses  |   |   | 3,325.1 |   |   |   | 3,022.4 |   |   |   | 9,858.5 |   |   |   | 8,941.4 |   |
|                                               |   |   | 14,101.9 |   |   |   | 12,843.5 |   |   |   | 41,707.4 |   |   |   | 37,793.3 |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      (expense) income, net                |   |   | (1.5 | ) |   |   | 11.2 |   |   |   | (3.6 | ) |   |   | 32.0 |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      before income tax provision          |   |   | 912.3 |   |   |   | 866.0 |   |   |   | 2,726.2 |   |   |   | 2,579.2 |   |
| Income      tax provision                          |   |   | 340.0 |   |   |   | 304.8 |   |   |   | 1,012.5 |   |   |   | 934.4 |   |
| Net      earnings                                  |   | $ | 572.3 |   |   | $ | 561.2 |   |   | $ | 1,713.7 |   |   | $ | 1,644.8 |   |
| Net      earnings per common share:                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                              |   | $ | .58 |   |   | $ | .56 |   |   | $ | 1.73 |   |   | $ | 1.64 |   |
| Diluted                                            |   | $ | .58 |   |   | $ | .56 |   |   | $ | 1.72 |   |   | $ | 1.63 |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends      declared                            |   | $ | .0950 |   |   | $ | .0775 |   |   | $ | .2850 |   |   | $ | .2325 |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average      shares outstanding                    |   |   | 990.2 |   |   |   | 995.8 |   |   |   | 990.9 |   |   |   | 1,000.5 |   |
| Dilutive      effect of stock options              |   |   | 3.8 |   |   |   | 7.6 |   |   |   | 5.2 |   |   |   | 7.8 |   |
| Average      shares outstanding assuming dilution  |   |   | 994.0 |   |   |   | 1,003.4 |   |   |   | 996.1 |   |   |   | 1,008.3 |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| WALGREEN CO. AND SUBSIDIARIES                                                                  |   |
|------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED      CONDENSED STATEMENTS OF CASH FLOWS                                           |   |
| (UNAUDITED)                                                                                    |   |
| (In      Millions)                                                                             |   |
|                                                                                           |   |   |   |   |   |   |
|                                                                                           |   | Nine      Months Ended May 31, |   |
|                                                                                           |   | 2008 |   |   | 2007 |   |
|                                                                                           |   |   |   |   |   |   |
| Cash      flows from operating activities:                                                     |   |   |   |   |   |   |
| Net      earnings                                                                              |   | $ | 1,713.7 |   |   | $ | 1,644.8 |   |
| Adjustments      to reconcile net earnings to net cash provided by operating activities      - |   |   |   |   |   |   |   |   |
| Depreciation      and amortization                                                             |   |   | 607.7 |   |   |   | 495.9 |   |
| Deferred      income taxes                                                                     |   |   | (58.5 | ) |   |   | (16.6 | ) |
| Stock      compensation expense                                                                |   |   | 56.0 |   |   |   | 62.4 |   |
| Income      tax savings from employee stock plans                                              |   |   | 1.0 |   |   |   | 4.8 |   |
| Other                                                                                          |   |   | 6.6 |   |   |   | 3.1 |   |
| Changes      in operating assets and liabilities -                                             |   |   |   |   |   |   |   |   |
| Accounts      receivable, net                                                                  |   |   | (273.1 | ) |   |   | 58.1 |   |
| Inventories                                                                                    |   |   | (232.6 | ) |   |   | (377.4 | ) |
| Other      assets                                                                              |   |   | (19.9 | ) |   |   | (17.3 | ) |
| Trade      accounts payable                                                                    |   |   | 430.1 |   |   |   | (116.5 | ) |
| Accrued      expenses and other liabilities                                                    |   |   | 42.8 |   |   |   | 215.7 |   |
| Income      taxes                                                                              |   |   | 166.9 |   |   |   | 48.5 |   |
| Other      non-current liabilities                                                             |   |   | 50.3 |   |   |   | 78.4 |   |
| Net      cash provided by operating activities                                                 |   |   | 2,491.0 |   |   |   | 2,083.9 |   |
|                                                                                           |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                     |   |   |   |   |   |   |   |   |
| Purchases      of short-term investments - available for sale                                  |   |   | - |   |   |   | (5,892.8 | ) |
| Proceeds      from sale of short-term investments - available for sale                         |   |   | - |   |   |   | 6,129.5 |   |
| Additions      to property and equipment                                                       |   |   | (1,652.6 | ) |   |   | (1,252.1 | ) |
| Proceeds      from sale of assets                                                              |   |   | 13.9 |   |   |   | 31.3 |   |
| Business      and intangible asset acquisitions, net of cash received                          |   |   | (527.4 | ) |   |   | (315.6 | ) |
| Net      proceeds from corporate-owned life insurance policies                                 |   |   | 11.8 |   |   |   | 5.7 |   |
| Net      cash used for investing activities                                                    |   |   | (2,154.3 | ) |   |   | (1,294.0 | ) |
|                                                                                           |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                     |   |   |   |   |   |   |   |   |
| Net      proceeds from short-term borrowings                                                   |   |   | 262.5 |   |   |   | - |   |
| Payments      of debt                                                                          |   |   | (28.5 | ) |   |   | - |   |
| Stock      purchases                                                                           |   |   | (220.1 | ) |   |   | (895.8 | ) |
| Proceeds      related to employee stock plans                                                  |   |   | 160.9 |   |   |   | 205.1 |   |
| Cash      dividends paid                                                                       |   |   | (282.5 | ) |   |   | (233.2 | ) |
| Bank      overdrafts                                                                           |   |   | - |   |   |   | (213.9 | ) |
| Other                                                                                          |   |   | (12.0 | ) |   |   | (4.6 | ) |
| Net      cash used for financing activities                                                    |   |   | (119.7 | ) |   |   | (1,142.4 | ) |
|                                                                                           |   |   |   |   |   |   |   |   |
| Changes      in cash and cash equivalents:                                                     |   |   |   |   |   |   |   |   |
| Net      increase (decrease) in cash and cash equivalents                                      |   |   | 217.0 |   |   |   | (352.5 | ) |
| Cash      and cash equivalents at beginning of year                                            |   |   | 254.8 |   |   |   | 919.9 |   |
| Cash      and cash equivalents at end of period                                                |   | $ | 471.8 |   |   | $ | 567.4 |   |

WALGR

|                                                        |   | Three      Months Ended |   |   | Nine      Months Ended |   |
|-------------------------------------------------------------|--------|-------------------------|--------|--------|------------------------|--------|
|                                                        |   | May      31,            |   |   | May      31,           |   |   | May      31, |   |   | May      31, |   |
| Components of Net Periodic Benefit Costs (In      Millions) |   | 2008                    |   |   | 2007                   |   |   | 2008 |   |   | 2007 |   |
| Service      cost                                           |   | $                       | 3.5    |   |                   | $      | 3.4 |   |   | $ | 10.4 |   |   | $ | 10.2 |   |
| Interest      cost                                          |   |                    | 5.9    |   |                   |   | 5.5 |   |   |   | 17.8 |   |   |   | 16.5 |   |
| Amortization      of actuarial loss                         |   |                    | 1.4    |   |                   |   | 1.4 |   |   |   | 4.2 |   |   |   | 4.2 |   |
| Amortization      of prior service cost                     |   |                    | (1.1   | )      |                   |   | (1.0 | ) |   |   | (3.3 | ) |   |   | (3.1 | ) |
| Total      postretirement benefit cost                      |   | $                       | 9.7    |   |                   | $      | 9.3 |   |   | $ | 29.1 |   |   | $ | 27.8 |   |

|                                      |   | May      31, 2008 |    |   | May      31, 2007 |   |
|-------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
| Balance      outstanding                  |   | $                 | 1,136.3 |   |              |   | - |   |
| Maximum      outstanding at any month-end |   |              | 1,166.5 |   |              |   | - |   |
| Average      daily short-term borrowings  |   |              | 743.3   |   |              |   | - |   |
| Weighted-average      interest rate       |   |              | 2.21    | %      |              |   | - | % |

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTSOF OPERATIONS AND FINANCIAL CONDITION

|                                              |   | Percentage      Increases       |   |
|---------------------------------------------------|--------|---------------------------------|--------|
|                                              |   | Three      Months Ended May 31, |   |   | Nine      Months Ended May 31, |   |
|                                              |   | 2008                            |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
| Net      Sales                                    |   |                            | 9.6    |   |   |   | 12.5 |   |   |   | 10.2 |   |   |   | 14.5 |   |
| Net      Earnings                                 |   |                            | 2.0    |   |   |   | 19.6 |   |   |   | 4.2 |   |   |   | 22.9 |   |
| Comparable      Drugstore Sales                   |   |                            | 3.4    |   |   |   | 7.8 |   |   |   | 4.5 |   |   |   | 8.7 |   |
| Prescription      Sales                           |   |                            | 8.9    |   |   |   | 13.8 |   |   |   | 10.3 |   |   |   | 16.2 |   |
| Comparable      Drugstore Prescription Sales      |   |                            | 2.7    |   |   |   | 9.0 |   |   |   | 4.5 |   |   |   | 10.6 |   |
| Front-End      Sales                              |   |                            | 11.1   |   |   |   | 11.7 |   |   |   | 9.9 |   |   |   | 12.4 |   |
| Comparable      Drugstore Front-End Sales         |   |                            | 4.6    |   |   |   | 5.6 |   |   |   | 4.4 |   |   |   | 5.7 |   |
| Gross      Profit                                 |   |                            | 9.3    |   |   |   | 16.0 |   |   |   | 9.6 |   |   |   | 17.2 |   |
| Selling,      General and Administrative Expenses |   |                            | 10.0   |   |   |   | 14.7 |   |   |   | 10.3 |   |   |   | 15.6 |   |

|                                              |   | Percent      to Sales      |   |
|---------------------------------------------------|--------|----------------------------|--------|
|                                              |   | Three Months Ended May 31, |   |   | Nine Months Ended May 31, |   |
|                                              |   | 2008                       |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
| Gross      Margin                                 |   |                       | 28.2   |   |   |   | 28.3 |   |   |   | 28.3 |   |   |   | 28.5 |   |
| Selling,      General and Administrative Expenses |   |                       | 22.1   |   |   |   | 22.1 |   |   |   | 22.2 |   |   |   | 22.2 |   |

|                                                            |   | Other      Statistics      |        |
|-----------------------------------------------------------------|--------|----------------------------|-------------|
|                                                            |   | Three Months Ended May 31, |        |   | Nine Months Ended May 31, |   |
|                                                            |   | 2008                       |        |   | 2007 |   |   | 2008 |   |   | 2007 |   |
|  Prescription      Sales as a % of Net Sales               |   |                       | 65.5   |   |   |   | 65.9  |   |   |   | 64.7  |   |   |   | 64.6  |   |
|  Third      Party Sales as a % of Total Prescription Sales |   |                       | 95.5   |   |   |   | 94.8  |   |   |   | 95.2  |   |   |   | 94.7  |   |
|  Total      Number of Prescriptions (in millions)          |   |                       | 157.5  |   |   |   | 150.0  |   |   |   | 465.9  |   |   |   | 437.9  |   |
|  Total      Number of Locations                            |   |                       |        |   |   |   |   |   |   |   | 6,727  |   |   |   | 5,751  |   |

| Goodwill      and other intangible asset impairment - |
|-------------------------------------------------------|
|                                                  | Goodwill      and other indefinite-lived intangible assets are not amortized, but are      evaluated for impairment annually or whenever events or changes in      circumstances indicate that the value of a certain asset may be      impaired.  The process of evaluating goodwill for impairment      involves the determination of fair value.  Inherent in such fair      value determinations are certain judgments and estimates, including the      interpretation of economic indicators and market valuations and      assumptions about our business plans.  We have not made any      material changes to the method of evaluating goodwill and intangible asset      impairments during the last three years.  Based on current      knowledge, we do not believe there is a reasonable likelihood that there      will be a material change in the estimate or assumptions used to determine      impairment. |
| Allowance      for doubtful accounts -                |
|                                                  | The      provision for bad debt is based on both specific receivables and historic      write-off percentages.  We have not made any material changes to      the method of estimating our allowance for doubtful accounts during the      last three years.  Based on current knowledge, we do not believe      there is a reasonable likelihood that there will be a material change in      the estimate or assumptions used to determine the    allowance. |
| Vendor      allowances -                              |
|                                                  | Vendor      allowances are principally received as a result of purchase levels, sales      or promotion of vendors' products.   Allowances are      generally recorded as a reduction of inventory and are recognized as a      reduction of cost of sales when the related merchandise is      sold.  Those allowances received for promoting vendors' products      are offset against advertising expense and result in a reduction of      selling, general and administrative expenses to the extent of advertising      incurred, with the excess treated as a reduction of inventory      costs.  We have not made any material changes to the method of      estimating our vendor allowances during the last three      years.  Based on current knowledge, we do not believe there is a      reasonable likelihood that there will be a material change in the estimate      or assumptions used to determine vendor allowances. |
| Liability      for closed locations -                 |
|                                                  | The      liability is based on the present value of future rent obligations and      other related costs (net of estimated sublease rent) to the first lease      option date.  We have not made any material changes to the      method of estimating our liability for closed locations during the last      three years.  Based on current knowledge, we do not believe      there is a reasonable likelihood that there will be a material change in      the estimate or assumptions used to determine the    liability. |
| Liability      for insurance claims -                 |
|                                                  | The      liability for insurance claims is recorded based on estimates for claims      incurred.  The provisions are estimated in part by considering      historical claims experience, demographic factors and other actuarial      assumptions and are not discounted.  We have not made any      material changes to the method of estimating our liability for insurance      claims during the last three years.  Based on current knowledge,      we do not believe there is a reasonable likelihood that there will be a      material change in the estimate or assumptions used to determine the      liability. |
| Cost      of sales -                                  |
|                                                  | Drugstore      cost of sales is derived based on point-of-sale scanning information with      an estimate for shrinkage and adjusted based on periodic      inventories.  Inventories are valued at the lower of cost or      market determined by the LIFO method.  We have not made any      material changes to the method of estimating cost of sales during the last      three years.  Based on current knowledge, we do not believe      there is a reasonable likelihood that there will be a material change in      the estimate or assumptions used to determine cost of    sales. |

| Rating      Agency         | Long-Term      Debt Rating | Outlook  | Commercial      Paper Rating | Outlook |
|----------------------------|----------------------------|----------|------------------------------|---------|
| Moody's                    | Aa3                        | Negative | P-1                          | Stable  |
| Standard      & Poor's | A+                         | Stable   | A-1                          | Stable  |

|                                                             |   | Payments      Due by Period (In Millions) |     |
|------------------------------------------------------------------|--------|------------------------------------------------|----------|
|                                                             |   | Total                                          |     |   | Less      than 1 Year |   |   | 1-3      Years |   |   | 3-5      Years |   |   | Over      5 Years |   |
| Operating      leases (1)                                        |   | $                                              | 31,907.3 |   |   | $ | 1,754.2 |   |   | $ | 3,725.4 |   |   | $ | 3,643.2 |   |   | $ | 22,784.5 |   |
| Purchase      obligations (2):                                   |   |                                           |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Open      inventory purchase orders                              |   |                                           | 1,558.5  |   |   |   | 1,558.5 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Real      estate development                                     |   |                                           | 1,033.8  |   |   |   | 1,022.1 |   |   |   | 11.7 |   |   |   | - |   |   |   | - |   |
| Other      corporate obligations                                 |   |                                           | 519.9    |   |   |   | 188.9 |   |   |   | 259.5 |   |   |   | 35.1 |   |   |   | 36.4 |   |
| Insurance*                                                       |   |                                           | 495.9    |   |   |   | 158.2 |   |   |   | 153.8 |   |   |   | 89.1 |   |   |   | 94.8 |   |
| Retiree      health*                                             |   |                                           | 392.5    |   |   |   | 9.4 |   |   |   | 22.4 |   |   |   | 27.6 |   |   |   | 333.1 |   |
| Closed      location obligations*                                |   |                                           | 66.9     |   |   |   | 16.7 |   |   |   | 20.5 |   |   |   | 11.5 |   |   |   | 18.2 |   |
| Capital      lease obligations *(1)                              |   |                                           | 42.1     |   |   |   | 2.0 |   |   |   | 4.3 |   |   |   | 3.4 |   |   |   | 32.4 |   |
| Other      long-term liabilities reflected on the balance sheet* |   |                                           | 644.2    |   |   |   | 54.6 |   |   |   | 100.7 |   |   |   | 91.6 |   |   |   | 397.3 |   |
| Total                                                            |   | $                                              | 36,661.1 |   |   | $ | 4,764.6 |   |   | $ | 4,298.3 |   |   | $ | 3,901.5 |   |   | $ | 23,696.7 |   |

| (1) | Amounts      for operating leases and capital leases do not include certain operating      expenses under the leases such as common area maintenance, insurance and      real estate taxes.  These expenses for the company's most recent      fiscal year were $255.6 million. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | The      purchase obligations include agreements to purchase goods or services that      are enforceable and legally binding and that specify all significant      terms, including open purchaseorders.                                                                                  |

| Insurance                    |  $      270.7                            |
|------------------------------|-----------------------------------------------|
| Inventory      obligations   |    114.4                       |
| Real      estate development | 14.0                                          |
| Other                        |        8.1 |
| Total                        | $407.2                                        |

QUALITATIVE AND QUANTITATIVE 

CONTROLS AND 

| PART      II.  OTHER    INFORMATION |
|-----------------------------------------------|

LEGAL PROCEEDINGS

| Item      2.  UNREGISTERED SALES OF EQUITY      SECURITIES AND USE OF PROCEEDS |
|------------------------------------------------------------------------------------------|

|   | (c) | The      following table provides information about purchases by the company during      the quarter ended May 31, 2008 of equity securities that are registered by      the company pursuant to Section 12 of the Exchange  Act: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ISSUER      PURCHASES OF EQUITY SECURITIES |   |
|--------------------------------------------|--------|
| Period                                     |   | Total      Number of Shares Purchased      (1) |   |   | Average      Price Paid per Share |   |   | Total      Number of Shares Purchased as Part of Publicly Announced Plans or Programs |   |   | Approximate      Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) |   |
| 3/1/2008      - 3/31/2008                  |   |   | - |   |   |   | - |   |   |   | - |   |   | $ | 655,123,821 |   |
| 4/1/2008      - 4/30/2008                  |   |   | 1,000,000 |   |   | $ | 36.7855990 |   |   |   | - |   |   | $ | 655,123,821 |   |
| 5/1/2008      - 5/31/2008                  |   |   | 1,000,000 |   |   | $ | 35.6398800 |   |   |   | - |   |   | $ | 655,123,821 |   |
| Total                                      |   |   | 2,000,000 |   |   | $ | 36.2127395 |   |   |   | - |   |   | $ | 655,123,821 |   |

| (1) | The      company repurchased an aggregate of 2,000,000 shares of its common stock      in open-market transactions to satisfy the requirements of the company's      employee stock purchase and option plans, as well as the company's      Nonemployee Director Stock Plan.                                                                                                                                                                                                                                                   |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | On      January 10, 2007, the Board of Directors approved a stock repurchase      program ("2007 repurchase program"), pursuant to which up to $1 billion of      the company's common stock may be purchased prior to the expiration date      of the program on January 20, 2011.  This program was announced      in the company's report on Form 8-K, which was filed on January 11,      2007.  The total remaining authorization under the repurchase      program as $655,123,821 as of May 31,2008. |

EXHIB

| (a)   | Exhibits |
|-----------------|----------|

|   | 3.     | (a)                                                                                                                                                                                                                                                                                                                                                                | Articles      of Incorporation of the company, as amended, filed with the Securities and      Exchange Commission as Exhibit 3(a) to the company's Quarterly Report on      Form 10-Q for the quarter ended February 28, 1999, and incorporated by      reference herein.        |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                               |
|   |   | (b)                                                                                                                                                                                                                                                                                                                                                                | By-Laws      of the company, as amended and restated effective as of October 7, 2007,      filed with the Securities and Exchange Commission as Exhibit 3(b) to the      company's Current Report on Form 8-K dated October 15, 2007, and      incorporated by reference herein. |
|   |   |                                                                                                                                                                                                                                                                                                                                                               |
|   | 10.1   | Separation      and Release Agreement entered into between Walgreen Co. and Trent E.      Taylor, dated February 27, 2008, filed with the Securities and      Exchange Commission on March 4, 2008 as Exhibit 99.1 to the company's      Current Report on Form 8-K (File No. 1-00604), and incorporated by      reference herein.                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                               |
|   | 10.2   | Agreement      and Plan of Merger entered into among Walgreen Co., Putter Acquisition      Sub, Inc. and I-trax, Inc. dated March 14, 2008, filed with the      Securities and Exchange Commission on March 17, 2008 as Exhibit 2.1      to the company's Current Report on Form 8-K (File No. 1-00604), and      incorporated by reference herein. |
|   |   |                                                                                                                                                                                                                                                                                                                                                               |
|   | 31.1   | Certification      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002.                                                                                                                                                                                                                                                      |
|   |
|   | 31.2   | Certification      of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002.                                                                                                                                                                                                                                                      |
|   |
|   | 32.1   | Certification      of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley      Act of 2002,18      U.S.C. Section 1350.                                                                                                                                                                                                                          |
|   |
|   | 32.2   | Certification      of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley      Act of 2002,18      U.S.C. Section 1350.                                                                                                                                                                                                                          |

|                           | WALGREEN CO.                    |
|--------------------------------|---------------------------------|
|                           | (Registrant)                    |
|                           |                            |
| Dated:       July 1, 2008 | /s/ W.D. Miquelon               |
|                           | W.D.      Miquelon              |
|                           | Senior      Vice President      |
|                           | (Chief      Financial Officer)  |
|                           |                            |
| Dated:       July 1, 2008 | /s/ M.M. Scholz                 |
|                           | M.M.      Scholz                |
|                           | Controller                      |
|                           | (Chief      Accounting Officer) |
|                           |                            |
|                           |                            |
|                           |                            |