UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                  For the quarterly period ended August 2, 1997



                         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




The registrant (1) 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 (or for such
shorter period that the registrant was required to file such reports) and(2) 
has been subject to such filing requirements for the past 90 days.

285,560,366 shares of the registrant's Common Stock were outstanding on
August 26, 1997.



<PAGE>



                                      INDEX


                                                                           PAGE

PART I - FINANCIAL INFORMATION

      Item 1. Financial Statements

              Condensed Consolidated Balance Sheets...........................2

              Condensed Consolidated Statements of Earnings...................3

              Condensed Consolidated Statements of Cash Flows.................4

              Notes to Condensed Consolidated Financial
              Statements......................................................5

      Item 2. Management's Discussion and Analysis of Results of Operations 
      and Financial Condition.................................................6

PART II - OTHER INFORMATION...................................................9

SIGNATURES...................................................................11


                                       1


<PAGE>
<TABLE>


                       TOYS "R" US, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                   (Unaudited)
                                  (In millions)
<CAPTION>


 ASSETS                                                August 2,     August 3,   February 1,
                                                        1997          1996         1997
<S>                                                     <C>           <C>          <C> 

Current Assets:
    Cash and cash equivalents .....................   $    226.5  $   319.5   $  760.9
    Accounts and other receivables ................        158.3      135.7      142.1
    Merchandise inventories .......................      2,972.4    2,710.9    2,214.6
    Prepaid expenses and other current assets .....         72.0      104.5       42.0
                                                                                 
          Total current assets ....................      3,429.2    3,270.6    3,159.6

Property and equipment, net and other assets ......      4,563.0    4,312.5    4,498.6
Goodwill, net .....................................        360.4     --          365.0

                                                      $  8,352.6  $ 7583.1   $ 8,023.2

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
    Short-term borrowings .........................   $    857.3  $ 1,151.5  $   303.5
    Accounts payable ..............................      1,675.6    1,534.5    1,346.5
    Accrued expenses and other current liabilities         382.2      345.1      720.0
    Income taxes payable ..........................         66.0        6.4      170.7
                                                                                  
           Total current liabilities ..............      2,981.1    3,037.5    2,540.7
                                                                    

Long-term debt ....................................        905.2      713.5      908.5
Deferred income taxes..............................        231.0      238.7      222.5
Other liabilities .................................        115.6      143.8      160.9
Stockholders' equity ..............................      4,119.7    3,449.6    4,190.6
                                                                    
                                                      $  8,352.6  $ 7,583.1  $ 8,023.2

<FN>


            See notes to condensed consolidated financial statements.

</FN>
</TABLE>

                                       2


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<TABLE>



                                    
                       TOYS "R" US, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

                                   (Unaudited)

                       (In millions except per share data)

<CAPTION>

                                                                  13 Weeks Ended                26 Weeks Ended
                                                            August 2,        August 3,       August 2,     August 3, 
                                                             1997             1996            1997          1996
<S>                                                          <C>              <C>             <C>           <C> 

Net sales .........................................       $   1,989.0     $   1,736.4      $   3,913.1      $   3,381.9


Costs and expenses:
     Cost of sales ................................           1,354.7         1,177.3          2,681.0          2,301.7
     Selling, advertising, general &
     administrative ...............................             501.7           444.7            980.8            867.3
     Depreciation and amortization ................              55.5            48.9            111.7             97.9
     Other charges ................................              --              55.0             --               55.0 
     Interest expense - net .......................              19.3            22.4             35.5             42.2

                                                              1,931.2         1,748.3          3,809.0          3,364.1

Earnings (loss) before taxes on income ............              57.8           (11.9)           104.1             17.8
Income tax expense (benefit) ......................              21.1            (4.4)            38.0              6.6
Net earnings (loss) ...............................         $    36.7     $      (7.5)       $    66.1       $     11.2

Earnings (loss) per share .........................         $      .13    $       (.03)      $      .23      $       .04

Weighted average number of common 
and common equivalent shares.......................             289.4           273.7            288.9            276.1

<FN>

           See notes to condensed consolidated financial statements.

</FN>
</TABLE>

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<TABLE>



                       TOYS "R" US, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                 (In millions)

<CAPTION>

                                                                  26 Weeks Ended
                                                                August 2,   August 3,
                                                                 1997        1996
<S>                                                              <C>         <C> 

Cash flows from operating activities:
Net earnings ................................................   $  66.1    $ 11.2
Adjustments to reconcile net earnings to net cash used in
operating activities:
   Depreciation and amortization                                  111.7      97.9
   Deferred income taxes                                            8.6       5.5
   Changes in operating assets and liabilities:
     Merchandise inventories ................................    (757.8)   (706.0)
     Accounts payable and other operating liabilities .......     (44.3)    110.7
     Other operating assets                                       (63.5)    (23.8)
   Net cash used in operating activities ....................    (679.2)   (504.5)

Cash flows used in investing activities:
Capital expenditures, net ...................................    (251.3)   (179.9)

Cash flow from financing activities:
Short-term borrowing, net ...................................     553.8     815.8
Long-term borrowings ........................................       8.7       --
Exercise of stock options ...................................      39.0      10.1
Long-term debt repayment ....................................    (130.9)    (11.9)
Share repurchase program ....................................     (88.1)      --
   Net cash provided by financing activities ................     382.5     814.0

Effect of exchange rate changes on cash and cash equivalents       13.6     (12.8)
Cash and cash equivalents:
(Decrease)/increase during period ...........................    (534.4)    116.8
Beginning of period .........................................     760.9     202.7
End of period ...............................................   $ 226.5  $  319.5

Supplemental disclosures of cash flow information:
Income taxes paid ...........................................   $ 122.1  $  129.2
Interest paid ...............................................   $  57.1  $   55.8


<FN>

            See notes to condensed consolidated financial statements.

</FN>
</TABLE>


                                        4


<PAGE>



                       TOYS "R" US, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.       Interim Reporting

         The  interim  financial  statements  are  unaudited  and are subject to
         year-end adjustments.  However, in the opinion of management, all known
         adjustments (which consist primarily of normal recurring accruals) have
         been made and the  interim  financial  statements  present  fairly  the
         consolidated   financial   condition  and  operating  results  for  the
         unaudited  periods.  Because of the  seasonal  nature of the  Company's
         business,  results for interim periods are not indicative of results to
         be expected for the fiscal year.

2.       Earnings Per Share

         In February  1997,  the  Financial  Accounting  Standards  Board issued
         Statement No. 128, Earnings per Share,  which is required to be adopted
         on January 31, 1998, the last day of the Company's fiscal year. At that
         time, the Company will be required to change the method  currently used
         to compute earnings per share and restate all prior periods.  Under the
         new  requirements  for  calculating  primary  earnings  per share,  the
         dilutive  effect of stock options will be excluded.  There is no impact
         on  primary  earnings  (loss)  per  share  for the  three and six month
         periods  ended  August  2,  1997 and  August  3,  1996.  The  impact of
         Statement No. 128 on the  calculation of fully diluted  earnings (loss)
         per share for these periods is not material.

3.       Other Charges

         On July 12,  1996,  an  arbitrator  rendered an award in favor of Yusuf
         Ahmed Alghanim & Sons, W.L.L.  ("Alghanim") and against the Company and
         awarded  Alghanim $46.4 million plus interest from December 1994.  This
         award was rendered in connection  with a dispute  between  Alghanim and
         the Company  involving  rights under a 1982 license  agreement  for toy
         store  operations  in the Middle  East.  Accordingly,  the  Company has
         recorded a provision of $59.5 million during fiscal 1996  representing
         all expected costs in connection with this matter. The Company believed
         that the findings of the  arbitrator were not supported by the evidence
         presented in the case and contested this award in the United States
         District  Court.  That motion was denied on December 13, 1996,  and the
         arbitration  award was confirmed.  The Company filed an appeal with
         the United States Court of Appeals for the Second Circuit. On September
         10, 1997, the Second Circuit affirmed the District Court's decision.

4.       Other Matters

         See Part II - Item 1. - Legal Proceedings - 1).


                                        5

<PAGE>




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

Results of Operations

Total sales increased 15% to $2.0 billion for the second quarter ended August 2,
1997 as compared with $1.7 billion for the second  quarter ended August 3, 1996.
For the first six months of 1997,  net sales  increased  16% to $3.9  billion as
compared  with $3.4  billion  for the first six  months of 1996.  Excluding  the
impact of foreign currency,  total sales increased 16% in the second quarter and
18% for the first six months of 1997,  as compared  with the same periods in the
prior  year.  The  increase in total sales is  attributable  to the  increase in
comparable  store sales during these periods and the Company's  continued  store
expansion, including the acquisition of Baby Superstore on February 3, 1997.

Comparable USA toy store sales increased by 4% and 6% for the second quarter and
first six months of 1997,  respectively,  as compared  with the same  periods in
1996. These increases were primarily driven by strong sales of video products as
well as action figures, plush and outdoor playsets. Internationally, the Company
experienced  a  comparable  toy store sales  increase in local  currency for the
second quarter and first six months of 1997 as compared with the same periods in
1996, including double digit comparable store sales increases in both Canada and
the United Kingdom. The sales increases internationally were primarily driven by
the  continued  strength  of the  video  game  business  as well  as  innovative
marketing  and  advertising  programs.   The  Company's  Kids  "R"  Us  division
experienced  a  comparable  store sales  increase in the second  quarter,  while
comparable  store sales  decreased for the first six months of 1997.  The Babies
"R" Us division  experienced  comparable  store sales  decreases  for the second
quarter and the first six months of 1997,  primarily due to the expected  impact
during the  transition  of the Baby  Superstore  locations to Babies "R" Us. The
transition of Baby Superstore locations to Babies "R" Us is now complete.

Cost of sales, as a percentage of sales, increased by .3% and .4% for the second
quarter and first six months of 1997,  respectively,  as compared  with the same
periods in 1996.  These  increases were due primarily to the negative  impact on
the  sales mix  caused by the  increased  sales of video  hardware  merchandise,
somewhat offset by lower sales of consumables.

Selling,  advertising,  general and  administrative  expenses as a percentage of
sales  decreased  by .4% and .5% for the second  quarter and first six months of
1997,  respectively,  as compared with the same periods in 1996,  primarily as a
result of continued expense control and sales leveraging.

Depreciation  and  amortization  increased by $6.6 million and $13.8 million for
the second quarter and first six months of 1997, respectively,  as compared with
the same periods in 1996, primarily as a result of the Company's continued store
expansion,  as well as goodwill amortization relating to the acquisition of Baby
Superstore.



                                        6


<PAGE>



          MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
                             AND FINANCIAL CONDITION
                                   (continued)

The arbitration  award (See footnote 3 to the condensed  consolidated  financial
statements)  had a material  effect on the  results of  operations  for both the
second  quarter  and the six  months  ended  August 3, 1996.  The award  reduced
earnings  per share by $.13 for both the second  quarter  and six  months  ended
August 3, 1996.  Excluding  the impact of the award,  earnings per share for the
second  quarter and the six months ended August 3, 1996 would have been $.10 and
$.17, respectively.

Net interest  expense  decreased by $3.1 million and $6.7 million for the second
quarter and first six months of 1997,  respectively,  as compared  with the same
periods  in 1996,  due in part to the  closing  of a  medium-term  $325  million
financing in the second half of 1996 which replaced  borrowings  carrying higher
interest  rates,  as well as the  benefits of the 1995  worldwide  restructuring
program.  Foreign  currency  exchange  did not  have a  material  effect  on net
earnings for the second quarter or the first six months of 1997.


Financial Condition

The Company's  1997  expansion  plans include adding 19 toy stores in the United
States, all utilizing the "Concept 2000" store design. The Company also plans to
add 3 new Kids "R" Us stores  and 20 new  Babies  "R" Us  stores  in the  United
States  this  year.  Internationally,  the  Company  will add 46 new toy  stores
including 16 franchise stores. In addition, the transition of Baby Superstore 
locations to Babies "R" Us is now complete.

In 1996, the Company remodeled 3 toy stores in the United States to its "Concept
2000" format.  In 1997, an additional 56 stores are being remodeled to this new 
store format.  Store remodeling plans for 1998 and beyond are being worked on 
but have not yet been finalized.

Short-term borrowings,  net of investments decreased by $201.2 million at August
2, 1997 as compared with the August 3, 1996 due primarily to the  refinancing of
short-term debt with a medium-term $325 million  financing in the second half of
1996.  Accordingly,  the  current  ratio has  improved to 1.15 to 1 at August 2,
1997, as compared with 1.08 to 1 at August 3, 1996.

Long-term  debt  repayments of $130.9  million in the first quarter of 1997 were
due primarily to the retirement of convertible debt assumed with the acquisition
of Baby Superstore.

The Company repurchased 3.1 million shares of its common stock through its share
repurchase  program for $88.1 million  during the first six months of 1997.  The
Company  repurchased  24.4  million  shares of its common stock for $782 million
since the $1 billion share repurchase program was announced in January 1994.





                                        7

<PAGE>



          MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
                             AND FINANCIAL CONDITION
                                   (continued)

Annual capital  expenditures for new and existing facilities are estimated to be
approximately  $600 million for 1997. Cash requirements for operations,  capital
expenditures,  lease  commitments and the share  repurchase  program will be met
primarily  through  operating  activities,   borrowings  under  the  $1  billion
revolving  credit  facility,  issuance of short-term  commercial  paper and bank
borrowings by foreign subsidiaries.

The Company's  restructuring  program action plan is substantially  complete and
all restructuring  reserves are considered adequate to cover all estimated costs
of the  restructuring  program.  The  Company  is  currently  working  with  its
franchisee in the Netherlands to meet the ownership requirements  established by
the Environmental Economic Union.

Weighted average common equivalent shares increased to 288.9 million for the six
month  period  ended August 2, 1997  compared  with 276.1  million from the same
period a year ago, due primarily to 13 million treasury shares of Company common
stock issued in connection with the Company's  acquisition of Baby Superstore on
February 3, 1997.

























                                        8


<PAGE>



                           PART II - OTHER INFORMATION

Item 1.           Legal Proceedings

                  1) 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.  A  decision  is
                  forthcoming.

                  Since the filing of the FTC complaint,  several class
                  action  suits have been filed  against the  Company,  alleging
                  that the Company has violated  certain state  competition laws
                  as a consequence of the behavior alleged in the FTC complaint.
                  These class action suits seek damages in  unspecified  amounts
                  and other relief under state law.

                  The Company  believes  that both its policy and its conduct in
                  connection  with the foregoing are within the law and plans to
                  contest  these actions  vigorously.  The Company also believes
                  that these actions will not have a material  adverse effect on
                  its financial condition or results of operations.

                  2) On July 12, 1996, an arbitrator  rendered an award in favor
                  of  Yusuf  Ahmed  Alghanim  & Sons,  W.L.L.  ("Alghanim")  and
                  against the Company and awarded  Alghanim  $46.4  million plus
                  interest  from  December  1994.  This  award was  rendered  in
                  connection  with a dispute  between  Alghanim  and the Company
                  involving rights under a 1982 license  agreement for toy store
                  operations  in the Middle East.  Accordingly,  the Company has
                  recorded a provision of $59.5 million during 1996 representing
                  all expected costs in connection with this matter. The Company
                  believed that the findings of the arbitrator were not 
                  supported by the evidence  presented in the case and contested
                  this award in the United  States  District  Court.  That 
                  motion was denied on December 13,  1996,  and the  arbitration
                  award was confirmed.  The  Company filed an appeal  with 
                  the United States Court of Appeals for the Second Circuit. On
                  September 10, 1997, the Second Circuit affirmed the District
                  Court's decision.



                                        9


<PAGE>


Item 4.           Submission of Matters to a Vote of Security Holders

                  At the Annual  Meeting of the Company's  stockholders
                  on June 4, 1997 all of management's nominees for director were
                  elected.

                  Management's   nominees  for  director  received  the
                  following votes:

                                               Number of Shares   Withheld Votes
                  Robert A. Bernhard ............232,531,059          21,079,182
                  RoAnn Costin ................. 232,661,312          20,949,929
                  Michael Goldstein ............ 232,658,439          20,952,802
                  Shirley Strum Kenney ..........232,667,154          20,944,056
                  Charles Lazarus ...............232,626,605          20,984,636
                  Norman S. Matthews ............232,655,621          20,955,620
                  Howard W. Moore ...............232,671,667          20,939,574
                  Robert C. Nakasone ........... 232,638,005          20,973,236
                  Arthur B. Newman ..............232,665,523          20,945,718

                  Also approved by the following votes were:

                  (i)      a proposal to approve the Amended and Restated Toys  
                  "R" Us, Inc. 1994 Stock Option and Performance Incentive Plan 
                  (the "1994 Plan").  235,308,817 shares were voted in favor of,
                  16,319,713 shares were voted against, and 939,450 shares      
                  abstained from, such proposal; and

                  (ii)  a  proposal   to  approve  the  1996  grant  of
                  Restoration Options to each of Michael Goldstein and Robert C.
                  Nakasone under the 1994 Plan. 227,441,090 shares were voted in
                  favor of,  24,126,126  shares were voted against,  and 994,764
                  shares abstained from, such proposal; and

                  (iii)    a proposal to approve the Amended and Restated Toys  
                  "R" Us, Inc. Management Incentive Compensation Plan.          
                  244,724,464 shares were voted in favor of, 6,911,498 shares   
                  were voted against, and 932,018 shares abstained from, such   
                  proposal; and

                  (iv)     a proposal to approve the Amended and Restated Toys  
                  "R" Us, Inc. Non-Employee Directors' Stock Option Plan.       
                  242,100,198 shares were voted in favor of, 9,525,155 shares   
                  were voted against, and 942,627 shares abstained from, such   
                  proposal.

Item 6.           Exhibits and Reports on Form 8-K

                  (a) Exhibit 27 - Financial Data Schedule.

                                       10


<PAGE>

                                   SIGNATURES



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











         Date:    September 12, 1997                Toys "R" Us, Inc.
                                                    -----------------
                                                    (Registrant)





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














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