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UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-K/A


Amendment No. 1


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|x          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|           |  | For the fiscal year ended December 31, 2004                                                 
|           |  | OR                                                                                          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|           |  | For the transition period
    from                 to                                       



INTERNET SECURITY SYSTEMS, INC.




|                                                                                |  |                                     
|------------------------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                                        |  | 58-2362189                          
|(State or other jurisdiction of
    incorporation or organization)              |  | (I.R.S. Employer Identification No.)
|                                                                               
|6303 Barfield Road
    Atlanta, Georgia(Address of principal executive offices) |  | 30328(Zip code)                     

(404) 236-2600






Common Stock, $0.001 par value


Preferred Stock Purchase Rights


(Title of Class)






|                             | 
|---------------------------- | 
|Yes    x             No    o | 

x


x o














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|                                             |                                                                                                                         |  |  |  |  |  |  | 
|-------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|EXPLANATORY NOTE                            
|PART II                                     
|                                             | Item 5. Market for Registrants Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities
|PART IV                                     
|                                             | Item 15. Exhibits and Financial Statement Schedules                                                                    
|SIGNATURES                                  
|EX-31.1 SECTION 302 CERTIFICATION OF THE CEO
|EX-31.2 SECTION 302 CERTIFICATION OF THE CFO
|EX-32.1 SECTION 906 CERTIFICATION OF THE CEO
|EX-32.2 SECTION 906 CERTIFICATION OF THE CFO



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EXPLANATORY NOTE







PART II







|        |                                                                                                                        
|------- | -----------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity and Related
    Stockholder Matters and Issuer Purchases of Equity
    Securities



|               |  |      |       |  |     |   |       | 
|-------------- |  | ---- | ----- |  | --- | - | ----- | 
|2004:          |  | High |       |  | Low |  
|               |  |      |       |  |     |  
|First Quarter  |  | $    | 21.21 |  |     | $ | 15.65 | 
|Second Quarter |  |      | 19.25 |  |     |   | 12.98 | 
|Third Quarter  |  |      | 17.25 |  |     |   | 12.60 | 
|Fourth Quarter |  |      | 25.76 |  |     |   | 16.86 | 

|               |  |      |       |  |     |   |       | 
|-------------- |  | ---- | ----- |  | --- | - | ----- | 
|2003:          |  | High |       |  | Low |  
|               |  |      |       |  |     |  
|First Quarter  |  | $    | 24.20 |  |     | $ | 9.89  | 
|Second Quarter |  |      | 17.23 |  |     |   | 9.85  | 
|Third Quarter  |  |      | 15.69 |  |     |   | 10.84 | 
|Fourth Quarter |  |      | 19.07 |  |     |   | 12.41 | 









Purchases of Equity Securities




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|                 |  |                  |         |  |                |                     |       |                 |                  |  |                    |  |  |   |            | 
|---------------- |  | ---------------- | ------- |  | -------------- | ------------------- | ----- | --------------- | ---------------- |  | ------------------ |  |  | - | ---------- | 
|                 |  |                  |         |  |                |                     |       | Approximate     |                 
|                 |  |                  |         |  |                | Total Number of     |       |                 | Dollar Value of  | 
|                 |  |                  |         |  |                | Shares Purchased    |       |                 | Shares that May  | 
|                 |  |                  |         |  |                | as Part of Publicly |       |                 | Yet Be Purchased | 
|                 |  | Total Number of  |         |  | Average Price  |                     |       | Announced Plans |                  |  | Under the Plans or | 
|Period           |  | Shares Purchased |         |  | Paid Per Share |                     |       | or Programs     |                  |  | Programs           | 
|                 |  |                  |         |  |                |                     |       |                 |                  |  |                    | 
|10/1/04-10/31/04 |  |                  |        |  |                |                     |      |                 |                  |  |                   |  |  | $ | 29,489,000 | 
|11/1/04-11/30/04 |  |                  | 160,000 |  |                | $                   | 23.65 |                 |                  |  | 160,000            |  |  | $ | 25,705,000 | 
|12/1/04-12/31/04 |  |                  | 110,000 |  |                | $                   | 24.29 |                 |                  |  | 110,000            |  |  | $ | 23,033,000 | 

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PART IV







|         |                                           
|-------- | ------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules





| |                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. Consolidated Financial Statements. See Index to
    Financial Statements on page 27 of the original filing of
    this Report.                                                                                                                                                                                                                
|
| | 2. Financial Statement Schedules. See Index to
    Financial Statements on page 27 of the original filing of
    this Report.                                                                                                                                                                                                                    
|
| | 3. Exhibits. The exhibits to this Annual Report on
    Form 10-K have been included only with the copy of this
    Annual Report on Form 10-K filed with the Securities and
    Exchange Commission. Copies of individual exhibits will be
    furnished to stockholders upon written request to the Company
    and payment of a reasonable fee.

|        |    |     |  |                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------- | -- | --- |  | ---------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |     |  |                       
|Number  |    |     |  | Description of Exhibit
|        |    |     |  |                       
|        | 2  | .1  |  |                       |  | Agreement and Plan of Merger by and among Internet Security
    Systems, Inc., ISS Acquisition Corp. II, Network ICE
    Corporation and certain selling shareholders of Network ICE
    Corporation (filed as Exhibit 2.1 to the Companys
    Quarterly Report on Form 10-Q dated May 11, 2001 and
    incorporated by reference herein).                                                                                                                              
|        | 3  | .1  |  |                       |  | Restated Certificate of Incorporation (filed as Exhibit 3.1
    to the Companys Quarterly Report on Form 10-Q, dated
    November 14, 2000 and incorporated by reference herein).                                                                                                                                                                                                                                                                                       
|        | 3  | .2  |  |                       |  | Bylaws (filed as Exhibit 3.2 to the Companys
    Registration Statement on Form S-1, Registration
    No. 333-44529 (the Form S-1) and
    incorporated by reference herein).                                                                                                                                                                                                                                                                                         
|        | 3  | .3  |  |                       |  | Certificate of Designations of Series A Junior
    Participating Preferred Stock dated July 24, 2002 facility
    (filed as Exhibit 3.3 to the Companys Annual Report
    on Form 10-K, dated March 28, 2003 and incorporated by
    reference herein).                                                                                                                                                                                                                 
|        | 4  | .1  |  |                       |  | Specimen Common Stock certificate (filed as Exhibit 4.3 to
    the Companys Registration Statement on Form S-8,
    Registration No. 333-100954, dated November 1, 2002
    and incorporated by reference herein).                                                                                                                                                                                                                                                      
|        | 4  | .2  |  |                       |  | Form of Rights Certificate (filed as Exhibit 4.2 to the
    Companys Current Report on Form 8-K dated
    July 24, 2002 and incorporated by reference herein).                                                                                                                                                                                                                                                                                                          
|        | 4  | .3  |  |                       |  | See Exhibits 3.1 and 3.2 for provisions of the Certificate
    of Incorporation and Bylaws of the Company defining the rights
    of holders of the Companys Common Stock.                                                                                                                                                                                                                                                                                              
|        | 4  | .4+ |  |                       |  | 1999 Network ICE Stock Option Plan (filed as Exhibit 4.1 to
    the Companys Registration Statement on Form S-8,
    Registration No. 333-62658 (the Form S-8),
    filed on June 8, 2001 and incorporated by reference herein).                                                                                                                                                                                                                                      
|        | 4  | .5+ |  |                       |  | Restated 1995 Stock Incentive Plan (as amended and restated as
    of May 23, 2001) (filed as Exhibit 4.2 to the
    Form S-8 filed June 8, 2001 and incorporated by
    reference herein). Form of Notice of Grant and Stock Option
    Agreement and Form of Restricted Stock Issuance Agreement (filed
    as Exhibits 99.1 and 99.2, respectively, to the
    Companys Current Report on Form 8-K, filed
    January 27, 2005 and incorporated by reference herein).
|        | 4  | .6+ |  |                       |  | Netrex, Inc. 1998 Stock Plan (filed as Exhibit 99.15 to the
    Companys Registration Statement on Form S-8,
    Registration Statement No. 333-89563, filed
    October 22, 1999 and incorporated by reference herein).                                                                                                                                                                                                                                                
|        | 4  | .7+ |  |                       |  | vCIS, Inc. 2001 Stock Plan (filed as to Exhibit 4.1 to the
    Companys Registration Statement on Form S-8,
    Registration Statement No. 333-100954, filed
    November 1, 2002 and incorporated by reference herein).                                                                                                                                                                                                                                                
|        | 10 | .1  |  |                       |  | Stock Exchange Agreement dated December 9, 1997 (filed as
    Exhibit 10.4 to the Form S-1 and incorporated by
    reference herein).                                                                                                                                                                                                                                                                                                                                    

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|        |      |       |  |   |                        |                                                                                                                                                                                                                                                                                                          
|------- | ---- | ----- |  | - | ---------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |       |  |   |                       
|Number  |      |       |  |   | Description of Exhibit
|        |      |       |  |   |                       
|        | 10   | .2    |  |  |                        | Forms of Non-Employee Director Compensation Agreement, Notice of
    Stock Option Grants and Stock Option Agreement (filed as
    Exhibit 10.6 to the Form S-1 and incorporated by
    reference herein).                                                                                                
|        | 10   | .3    |  |  |                        | Form of Indemnification Agreement for directors and certain
    officers (filed as Exhibit 10.8 to the Form S-1 and
    incorporated by reference herein).                                                                                                                                               
|        | 10   | .4    |  |  |                        | Lease for Atlanta headquarters and research and development
    facility (filed as Exhibit 10.10 to the Companys
    Annual Report on Form 10-K, dated March 30, 2000 and
    incorporated by reference herein).                                                                                        
|        | 10   | .5(a) |  |  |                        | Amendments to Lease for Atlanta headquarters facility (filed as
    Exhibit 10.5 to the Companys Annual Report on Form
    10-K, dated March 28, 2003 and incorporated by reference
    herein).                                                                                                        
|        | (b)  |       |  |   |                        | Third Amendment to Lease Agreement made and entered into as of
    this February 23, 2004, by and between Wells Operating
    Partnership, L.P. and the Company (filed as Exhibit 10.1 to
    the Companys Quarterly Report on Form 10-Q, filed
    May 10, 2004, and incorporated by reference herein).
|        | 10   | .6    |  |  |                        | Letter Agreement dated August 18, 2000 with Lawrence
    Costanza (filed as Exhibit 10.14 to the Companys
    Annual Report on Form 10-K, dated March 30, 2001 and
    incorporated by reference herein).                                                                                               
|        | 10   | .7    |  |  |                        | Rights Agreement dated July 18, 2002 with SunTrust Bank, as
    Rights Agent, regarding Preferred Share Purchase Rights (filed
    as Exhibit 4.1 to the Companys Current Report on
    Form 8-K dated July 24, 2002 and incorporated by
    reference herein).                                         
|        | 10   | .8+   |  |  |                        | Form of Retention Agreement (filed as Exhibit 10.1 to the
    Companys Quarterly Report on Form 10-Q filed
    November 5, 2003 and incorporated by reference herein).                                                                                                                                  
|        | 10   | .10+  |  |   |                        | Form of Executive Incentive Plan (filed as Exhibit 10.1 to
    the Companys Current Report on Form 8-K, filed
    February 3, 2005, and incorporated by reference herein).                                                                                                                              
|        | 11** |       |  |  |                        | Computation of Per Share Earnings.                                                                                                                                                                                                                                                                       
|        | 21   | .1*   |  |  |                        | Subsidiaries of the Company.                                                                                                                                                                                                                                                                             
|        | 23   | .1*   |  |  |                        | Consent of Ernst & Young LLP.                                                                                                                                                                                                                                                                            
|        | 24   | .1*   |  |  |                        | Power of Attorney, pursuant to which amendments to this Annual
    Report on Form 10-K may be filed, is included on the signature
    page contained in Part IV of the Form 10-K.                                                                                                                        
|        | 31   | .1#   |  |  |                        | Certification of principal executive officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                              
|        | 31   | .2#   |  |  |                        | Certification of principal financial officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                              
|        | 32   | .1#   |  |  |                        | Certification Pursuant to 18 U.S.C. Section 1350. as
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.                                                                                                                                                                          
|        | 32   | .2#   |  |  |                        | Certification Pursuant to 18 U.S.C. Section 1350. as
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.                                                                                                                                                                          






|   |  |                                                                                                                                                                   
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*  |  | Filed with the original filing of this Report.                                                                                                                    
|  
|+  |  | Management contract or compensatory plan.                                                                                                                         
|  
|** |  | Data required by SFAS No. 128, Earnings Per
    Share, is provided in Note 4 to the consolidated
    financial statements in the original filing of this Report.
|  
|#  |  | Filed with this Amendment No. 1.                                                                                                                                  

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SIGNATURES






| |                                
| | -------------------------------
| | INTERNET SECURITY SYSTEMS, INC.



| |     |                    
| | --- | -------------------
| | By: | /s/ RICHARD MACCHIA

| |                                                  
| | -------------------------------------------------
| |                                                  
| | Richard Macchia                                  
| | Senior Vice President and Chief Financial Officer





|                                       |  |                                                                             |  |                |  | 
|-------------------------------------- |  | --------------------------------------------------------------------------- |  | -------------- |  | 
|Name                                   |  | Title                                                                       |  | Date          
|                                       |  |                                                                             |  |               
|                                      
|*Thomas
    E. Noonan                  |  | Chairman, President and Chief Executive (Principal Executive
    Officer)   |  | March 24, 2005
|                                      
|*Christopher
    W. Klaus              |  | Secretary, Security Adviser and Director                                    |  | March 24, 2005
|                                      
|/s/ RICHARD MACCHIARichard
    Macchia |  | Senior Vice President and Chief Financial Officer                           |  | March 24, 2005
|                                      
|*Maureen
    Richards                  |  | Vice President, Corporate Controller and (Principal Accounting
    Officer) |  | March 24, 2005
|                                      
|*Richard
    S. Bodman                 |  | Director                                                                    |  | March 24, 2005
|                                      
|*Robert
    E. Davoli                  |  | Director                                                                    |  | March 24, 2005
|                                      
|*Steven
    J. Heyer                   |  | Director                                                                    |  | March 24, 2005
|                                      
|*Sam
    Nunn                          |  | Director                                                                    |  | March 24, 2005
|                                      
|*Kevin
    J. OConnor                 |  | Director                                                                    |  | March 24, 2005
|                                      
|*David
    N. Strohm                   |  | Director                                                                    |  | March 24, 2005
|                                      
|*By:                                   |  | /s/ RICHARD MACCHIARichard
    Macchia,as Attorney-in-Fact                  |  |                |  | 

5