===============================================================================



               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 October 28, 2000




                           ============

                   Commission file number 1-11609

                          TOYS "R" US, INC.
            Incorporated pursuant to the Laws of Delaware

                           ============



      Internal Revenue Service - Employer Identification No. 22-3260693
                   225 Summit Avenue, Montvale, New Jersey 07645
                                (201) 802-5000

Indicate by check mark whether the registrant (1) has filed all reports required
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.  Yes [X] No [ ]

197,357,964 shares of the registrant's Common Stock were outstanding on December
4, 2000.



 ==============================================================================




<PAGE>





                                  INDEX



                                                                           PAGE

PART I - FINANCIAL INFORMATION


         Item 1. Financial Statements


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


                  Condensed Consolidated Statements of Operations.............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........................9


PART II - OTHER INFORMATION..................................................15


SIGNATURES...................................................................17





                                           1



<PAGE>
<TABLE>

                            TOYS "R" US, INC. AND SUBSIDIARIES
                          CONDENSED CONSOLIDATED BALANCE SHEETS
                                          (Unaudited)
                        ==========================================
                                         (In millions)
<CAPTION>
<S>

ASSETS                                     October 28,  October 30, January 29,
                                               2000         1999         2000
                                         ------------ ------------- -----------
                                               <C>          <C>          <C>
Current Assets:
 Cash and cash equivalents                  $  452         $  297        $  584
 Accounts and other receivables                145            170           182
 Merchandise inventories                     3,296          3,101         2,027
 Prepaid expenses and other current assets      85            132            80
                                         ------------ ------------- -----------
   Total current assets                      3,978          3,700         2,873

Property and equipment, net and other assets 4,491          5,147         5,106
Investment in Toys "R" Us - Japan, Ltd.
 (market value of $772 at October 28, 2000)     96             -              -
Goodwill, net                                  364            377           374
                                         ------------ ------------- -----------
                                           $ 8,929      $   9,224      $  8,353
                                         ============ ============= ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
 Short-term borrowings                    $  1,495      $   1,130       $   278
 Accounts payable                            1,848          2,132         1,617
 Accrued expenses and other
  current liabilities                          531            586           836
 Income taxes payable                          154            121           107
                                         ------------ ------------- -----------
  Total current liabilities                  4,028          3,969         2,838


Long-term debt                               1,141          1,240         1,230
Deferred income taxes                          351            334           362
Other liabilities                              204            204           243
Minority interest in Toysrus.com                53             -              -

Stockholders' equity                         3,152          3,477         3,680
                                         ------------ ------------- -----------
                                           $ 8,929      $   9,224      $  8,353
                                         ============ ============= ===========
<FN>

              See notes to condensed consolidated financial statements.


</FN>
</TABLE>


                                                     2



<PAGE>
<TABLE>


                             TOYS "R" US, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                        (Unaudited)
                  ===================================================
                            (In millions except per share data)
<CAPTION>

                                  13 Weeks Ended            39 Weeks Ended
                                -----------------          ---------------
                              October 28,  October 30,  October 28, October 30,
                                   2000        1999         2000        1999
                            -----------   -----------   ----------- -----------
<S>                                <C>         <C>           <C>         <C>

Net sales                      $  2,220     $  2,465     $  6,533        $6,835
Cost of sales                     1,522        1,704        4,481         4,731
                             -----------   ------------   ---------   ---------
 Gross profit                       698          761        2,052         2,104

Selling, general and
  administrative expenses           707          641        1,853         1,767
Depreciation and amortization        68           71          207           203
Equity in net earnings of
   Toys "R" Us - Japan, Ltd.         (4)          -            (9)            -
                             -----------    -----------   ----------  ---------
     Operating (loss) earnings      (73)          49            1           134

Other income (expense):
     Gain from IPO of
       Toys "R" Us - Japan, Ltd.      -            -           315            -
     Interest expense - net         (29)         (25)          (75)        (64)
                             -----------   -----------   ----------- ----------

(Loss) earnings before
   taxes on income                 (102)          24            241          70
Taxes on income                     (37)           9             88          26
                             -----------   -----------   -----------  ---------
Net(loss)earnings               $   (65)      $   15       $    153       $  44
                             ===========   ============  =========== ==========

Basic (loss)earnings per share  $ (0.32)     $  0.06       $   0.70       $0.18
                             ===========   ============  =========== ==========
Weighted average basic shares
 outstanding                     202.6        243.3          215.7        246.5
                             ===========   =============  =========== ==========

Diluted (loss) earnings
 per share                     $  (0.32)   $    0.06     $     0.70     $  0.18
                             ===========   =============  =========== =========
Weighted average diluted
 shares outstanding              202.6        243.4          219.6        247.2
                             ===========   =============  =========== =========
<FN>


</FN>
</TABLE>

                  See notes to condensed consolidated financial statements.








                                            3


<PAGE>
<TABLE>

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



<CAPTION>

                                                        39 Weeks Ended
                                               ---------------  ---------------
                                                 October 28,        October 30,
                                                     2000               1999

<S>                                                   <C>                <C>
                                               ---------------- ---------------
Cash flows from operating activities:
Net earnings                                        $   153            $     44

Adjustments to reconcile net earnings
to net cash used in operating activities:
  Depreciation and amortization                         207                 203
  Deferred income taxes                                  33                   -
  Minority interest in Toysrus.com                      (25)                  -
  Equity in net earnings of Toys "R" Us - Japan, Ltd.    (9)                  -
  Gain from initial public offering of
     Toys "R" Us - Japan, Ltd.                         (315)                  -
  Toysrus.com related non-cash costs and charges         81                   -
  Changes in operating assets and liabilities:
    Merchandise inventories                          (1,492)             (1,186)
    Accounts payable and
     other operating liabilities                        355                 473
    Other operating assets                              (65)                (51)
                                               ---------------   --------------
      Net cash used in operating activities          (1,077)               (517)
                                               ---------------   --------------
Cash flows from investing activities:
Capital expenditures, net                              (245)               (364)
Purchase of Imaginarium, net of cash acquired            -                  (43)
Net proceeds from sale of
  Toys "R" Us - Japan, Ltd. common stock                267                   -
Reduction in cash due to deconsolidation
   of Toys "R" Us - Japan, Ltd.                         (15)                  -
                                                --------------   --------------
      Net cash provided by
       (used in) investing activities                     7                (407)
                                                --------------   --------------
Cash flows from financing activities:
Short-term borrowings, net                            1,326                 989
Long-term borrowings                                    147                   -
Long-term debt repayment                                (37)                 (8)
Proceeds received from investors in Toysrus.com          77                   -
Issuance of stock warrants                               10                   -
Exercise of stock options                                 -                  17
Share repurchase program                               (618)               (179)
                                                ---------------   -------------
     Net cash provided by financing activities          905                 819
                                                ---------------   -------------

Effect of exchange rate changes on cash
 and cash equivalents                                    33                  (8)

Cash and cash equivalents:
Decrease during period                                 (132)               (113)
Beginning of period                                     584                 410
                                                ---------------   -------------
End of period                                       $   452            $    297
                                                ===============   =============

Supplemental disclosures of cash flow information:
Income tax (refunds) payments, net                  $   (22)           $    123
                                                ===============   =============
Interest paid                                       $    94            $     71
                                                ===============   =============

<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 condensed  consolidated  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.

     The financial  statements  and notes are  presented in accordance  with the
     rules and regulations of the Securities and Exchange  Commission and do not
     contain  certain  information  included  in the  company's  annual  report.
     Therefore,  the interim  statements  should be read in conjunction with the
     company's annual report for the fiscal year ended January 29, 2000.

2.   Commercial paper
     Commercial  paper of $368  million is  classified  as long-term  debt.  The
     company  maintains  long-term  committed credit agreements to support these
     borrowings  and  intends to  refinance  them on a long-term  basis  through
     commercial  paper  borrowings.  Additionally,  commercial  paper of  $1,464
     million and $800 million are included in  short-term  borrowings at October
     28, 2000 and October 30, 1999, respectively.

3.   Comprehensive income
     Comprehensive  loss was $132  million and $1 million for the third  quarter
     ended October 28, 2000 and October 30, 1999,  respectively,  as a result of
     the change in foreign currency  translation.  Comprehensive  income was $52
     million  and $22  million  as a result of the  change in  foreign  currency
     translation  for the 39 weeks ended  October 28, 2000 and October 30, 1999,
     respectively.

4.   Gain from initial public offering of Toys "R" Us - Japan, Ltd.
     The company recorded a non-operating gain of $315 million ($200 million net
     of taxes)  resulting from the initial public offering of shares of Toys "R"
     Us - Japan,  Ltd. ("Toys - Japan"),  which was completed on April 24, 2000.
     Of this gain,  $91 million  resulted from an adjustment to the basis of the
     company's  investment in Toys - Japan and $224 million  related to the sale
     of a portion of  company-owned  common stock of Toys - Japan. In connection
     with this  transaction  the company also received net cash proceeds of $267
     million and  recorded a provision  for current  income taxes of $82 million
     and a provision for deferred income taxes of $33 million,  respectively. As
     a result of this  transaction,  the company's  ownership  percentage in the
     common stock of Toys - Japan was reduced from 80% to 48%. Toys - Japan is a
     licensee of the company.






                                                5

<PAGE>

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


5.  Investment  in Toys - Japan
The company  accounts for its  investment in the common stock of Toys - Japan on
the "equity method" of accounting since the Toys - Japan initial public offering
on April 24,  2000.  Prior to this  event,  the  company  had  consolidated  the
financial  statements of Toys - Japan for all periods presented.  At October 28,
2000 the  market  value of the  company's  investment  in Toys - Japan  was $772
million based on the quoted closing market price at that date.

6. Toysrus.com
On February 24, 2000,  the company  entered into a  partnership  agreement  with
SOFTBANK  Venture  Capital  and  affiliates   ("SOFTBANK")   which  included  an
investment  by  SOFTBANK  of $60  million  in  Toysrus.com  for a 20%  ownership
interest.  Accordingly,  the company has recorded a 20% minority interest in the
net losses of Toysrus.com in selling,  general and  administrative  expenses for
the third quarter and nine months ended October 28, 2000.

In connection with the partnership with SOFTBANK, the company issued 1.2 million
stock purchase warrants  ("warrants") for $8.33 per warrant.  Each warrant gives
the holder  thereof the right to purchase  one share of Toys "R" Us common stock
at an exercise price of $13 per share, until the expiration date of February 24,
2010. As of October 28, 2000, none of these warrants have been exercised.

On August 9, 2000,  Toysrus.com  entered into a 10-year strategic  alliance with
Amazon.com to create a co-branded toy and video games on-line  store,  which was
launched in the third quarter 2000 and a co-branded baby products on-line store,
which will  begin  early in 2001.  Under  this  alliance  each  company  will be
responsible  for specific  aspects of the on-line  stores.  Toysrus.com  will be
responsible  for  merchandising  and content for the  co-branded  store and will
identify,  buy,  own and manage  the  inventory.  Amazon.com  will  handle  site
development,   order   fulfillment,   customer  service,   and  the  housing  of
Toysrus.com's  inventory in  Amazon.com's  U.S.  distribution  centers.  Also on
August 9, 2000,  Amazon.com was granted a warrant  entitling it to acquire up to
5%  (subject  to  dilution under  certain  circumstances)  of  the  capital  of
Toysrus.com at the then market value.  As of October 28, 2000,  this warrant has
not been exercised.

As a result of the transition to the co-branded site, the company's  Toysrus.com
subsidiary incurred  non-recurring costs and charges totaling approximately $118
million, $10 million of which were included in cost of sales and $108 million of
which were included in selling, general and administrative  expenses,  primarily
relating to the closure of three distribution centers, the write-off of web site
assets, as well as other costs associated with migrating data and merchandise to
the new site and  facilities.  These  costs and  charges  were  recorded  in the
quarter ended October 28, 2000.

In  October  2000,  Toysrus.com  received  an  additional  $17  million  capital
contribution  from SOFTBANK  representing  its appropriate  share of the funding
required for the operations of Toysrus.com.





                                              6

<PAGE>
<TABLE>

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


<CAPTION>


7.   Replacement of certain stock option grants with restricted stock
     On March 24, 2000,  the company  authorized  the exchange of certain  stock
     options,  having an exercise price above $22 per share, for an economically
     equivalent grant of restricted  stock.  The exchange,  which was voluntary,
     replaced  approximately 14.4 million options with approximately 1.7 million
     restricted  shares.  Shares of restricted stock resulting from the exchange
     vest over a period of three years,  with  one-half of the grant  vesting on
     April 1, 2002 and the remainder vesting on April 1, 2003. Accordingly,  the
     company recognizes compensation expense on a straight-line basis throughout
     the vesting period of the restricted stock.

8.   Segments
     Information related to the various company segments is as follows:
     (In millions)
     --------------------------------------------------------------------------
                                   13 Weeks Ended          39 Weeks Ended
                                  ----------------        ---------------
                               October 28,  October 30, October 28, October 30,
                                   2000         1999         2000       1999
<S>                                <C>         <C>           <C>        <C>

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

    Net sales
    Toys "R" Us - USA        $    1,323    $  1,336   $   3,803   $   3,790
    Toys "R" Us - International     339         383         965       1,055
    Toys "R" Us - Japan              -          269         277         698
    Babies "R" Us                   337         263         975         775
    Toysrus.com                      23           5          40           7
    Kids "R" Us                     198         209         473         510
    ---------------------------------------------------------------------------
    Total                    $    2,220    $  2,465   $   6,533   $   6,835
    ---------------------------------------------------------------------------

   Operating (loss) earnings
   Toys "R" Us - USA          $      8      $    28     $    91    $    114
   Toys "R" Us - International       6           (2)        (17)        (46)
   Toys "R" Us - Japan, net of
     minority interest               -           14          17          37
   Babies "R" Us                    30           19          83          56
   Toysrus.com,
    net of minority interest      (124)         (17)       (158)        (22)
   Other                             7            7         (15)         (5)
                                 ----------------------------------------------
   Operating (loss) earnings       (73)          49           1         134

   Interest expense, net           (29)         (25)        (75)        (64)
   Gain from IPO of
     Toys "R" Us - Japan             -            -         315           -
    ---------------------------------------------------------------------------
   (Loss) earnings before
      income taxes           $    (102)     $    24    $    241     $    70
    ---------------------------------------------------------------------------
<FN>
</FN>
</TABLE>

     Included in the category  classified as "Other" are the operating
     results  of the  Kids  "R" Us  division  and  equity  in the  net
     earnings  of Toys -  Japan,  as well as other  corporate  related
     items.





                                             7


<PAGE>

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

9.   Long term debt
     On July 21, 2000, the company  borrowed the yen equivalent of $147 million.
     This  borrowing is repayable in  semi-annual  installments,  with the final
     installment due on August 17, 2005. The effective cost of this borrowing is
     2.32% and is secured by expected  future  cash flows from the license  fees
     due from Toys - Japan.

10.  Loss related to store closing
     During the third  quarter of 2000,  the company  announced its intention to
     open a new flagship  store in Times  Square,  New York City during 2001. In
     conjunction with this plan, the company has committed to close and exit its
     store in  Herald  Square,  New York  City,  which is  expected  to close in
     mid-2001.  Accordingly,  the  company has accrued $11 million as of October
     28, 2000, representing anticipated costs to exit this location.

11.  Restructuring and other charges
     In 1998, the company recorded restructuring and other non-recurring charges
     of  $698  million  ($508  million  net of tax  benefits)  to  strategically
     reposition  its worldwide  business.  During the third quarter of 2000, the
     company  determined that an excess $11 million reserve existed with respect
     to  restructuring  initiatives  which have been  completed  in its Far East
     operations.  Accordingly,  the company has reversed this  reserve.  See the
     company's  annual report for the year ended January 29, 2000 for details on
     these charges. Also see the section  "Management's  Discussion and Analysis
     of Results of  Operations  and  Financial  Condition" in this report for an
     update on the initiatives and the status of related reserves.

12.  Commitments and contingencies
     See Part II - Item I - Legal Proceedings.















                                            8

<PAGE>


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


     Results of  Operations
     Net sales were $2.2 billion  compared  with $2.5  billion  reported for the
     third quarter of 1999.  For the first nine months of 2000,  sales were $6.5
     billion  versus $6.8  billion in the same period  last year.  Total  sales,
     excluding  sales of Toys "R" Us - Japan in each period,  which is accounted
     for on the "equity  method" since its initial public  offering on April 24,
     2000, increased 1% and 2% for the quarter and the nine months ended October
     28, 2000, respectively, as compared with the same period in 1999.

     Foreign  currency  exchange  had an  unfavorable  impact  on net  sales  of
     approximately  $45 million  and $63  million,  respectively,  for the third
     quarter and nine months ended  October 28, 2000,  as compared with the same
     periods in 1999. Net sales,  excluding sales of Toys "R" Us - Japan in each
     period and the impact of currency  translation,  increased  3% for both the
     quarter and nine months.

     On a  consolidated  basis,  comparable  store sales,  in local  currencies,
     increased  by 2% for both the  third  quarter  and the  nine  months  ended
     October 28, 2000,  as compared  with the same  periods in 1999.  Comparable
     store sales for the Toys "R" Us - USA  division  decreased 1% for the third
     quarter  of 2000 and were  flat  for the  first  nine  months  of 2000,  as
     compared  with the same  periods  in 1999.  The sales  performance  for the
     quarter is built on top of a 13% comparable toy store increase in the third
     quarter  of  1999  primarily  due  to  last  year's   Pokemon   phenomenon.
     Internationally,  the company's  overall  comparable toy store sales,  on a
     local  currency  basis,  increased 2% for the third quarter of 2000, and 4%
     for the nine months  ended  October  28,  2000,  as compared  with the same
     periods in 1999. The company's Babies "R" Us division reported double-digit
     comparable  store sales increases for both the third quarter and first nine
     months of this year,  as  compared  with the same  periods  in 1999.  These
     increases were driven by strong sales in most categories.

     On a consolidated  basis,  cost of sales as a percentage of sales decreased
     by  approximately  0.6%  for both the  third  quarter  of 2000 and the nine
     months ended  October 28, 2000,  as compared with the same periods in 1999.
     On a consolidated basis,  excluding  non-recurring cost of sales related to
     the alliance between Toysrus.com and Amazon.com ("Amazon  Alliance"),  cost
     of sales,  as a  percentage  of sales,  decreased 1% and 0.8% for the third
     quarter and the nine months ended October 28, 2000,  respectively.  Cost of
     sales  for the  Toys  "R" Us - USA  division,  as a  percentage  of  sales,
     decreased by 1.2% for the third quarter of 2000, and 1% for the nine months
     ended October 28, 2000, respectively,  as compared with the same periods in
     1999.  This decrease is primarily due to the change in sales mix from lower
     margin video products to higher margin products. Cost of sales for the Toys
     "R" Us -  International  division,  as a percentage of sales,  decreased by
     2.2% for the  third  quarter  of 2000,  and 1% for the  nine  months  ended
     October 28 2000,  respectively,  as compared with the same periods in 1999.
     This decrease was largely due to higher  initial  markup due to a favorable
     sales shift in product.  Cost of sales,  as a percentage of sales,  for the
     Babies "R" Us division were flat for the quarter and decreased 0.7% for the
     nine months ended October 28, 2000, respectively, as compared with the same
     periods in 1999.





                                            9


<PAGE>


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

On a consolidated basis, selling, general and administrative expenses (SG&A), as
a percentage of sales,  increased by 5.8% for the third quarter of 2000 and 2.5%
for the nine  months  of 2000,  as  compared  with  the  same  periods  in 1999.
Non-recurring  costs and charges  related to the Amazon  Alliance  accounted for
3.8% and 1.4% of the  consolidated  increase in SG&A,  as a percentage of sales,
for the third quarter and the nine months ended October 28, 2000,  respectively.
SG&A for Toys"R" Us - USA,  as a  percentage  of sales,  increased  by 2.9% and
1.9%,  respectively,  for the third  quarter and nine months  ended  October 28,
2000, as compared with the same periods in 1999.  These  increases are primarily
due to increased  payroll costs related to the  implementation  of the company's
new  customer-focused  initiatives and rising  distribution  center costs due to
higher inventory levels. SG&A for the International division, as a percentage of
sales,  excluding the impact of Toys "R" Us - Japan,  decreased by 0.6% and 1.5%
for the third  quarter and nine months ended  October 28, 2000, as compared with
the same period in 1999. These  improvements are a result of the strategic store
closures  in  Central  Europe  and  France,  which  have  improved  the  overall
profitability of this division. SG&A as a percentage of sales for the Babies "R"
Us division decreased 1.7% and 0.8%, respectively, for the third quarter of 2000
and nine months  ended  October 28, 2000,  as compared  with the same periods in
1999.

Included in the  company's  results for the third  quarter and nine months ended
October 28, 2000 is $80 million and $102 million, respectively, representing the
company's share of the net losses of Toysrus.com.

Depreciation and amortization  increased by $4 million for the nine months ended
October 28, 2000, as compared  with 1999.  This increase is primarily due to the
company's  continued  store  expansion,  remodels  and  front  end  conversions,
strategic investments to improve management information systems and amortization
of goodwill relating to its acquisition of Imaginarium Toy Centers,  Inc. in the
second half of 1999.

Net interest expense increased $11 million for the nine months ended October 28,
2000, as compared with 1999. This increase is mainly attributable to the funding
of the company's stock repurchase program, higher interest rates, and the mix of
currencies in which the company borrowed.

Foreign  currency  exchange  did not have a material  effect on net earnings for
either the third quarter or nine months ended October 28, 2000.

Restructuring and Other Charges
During 1998,  the company  announced  strategic  initiatives  to reposition  its
worldwide business and other charges including the customer-focused reformatting
of its toy stores into the new C-3 format,  as well as the  restructuring of its
International  operations,  which  resulted  in a charge of $353  million  ($279
million net of tax benefits,  or $1.05 per share).  Details on the components of
the  company's  strategic  initiatives  and other  charges are  described in the
company's  annual  report for the year  ended  January  29,  2000;  the  reserve
balances and subsequent utilization are as follows:




                                         10


<PAGE>
<TABLE>
<CAPTION>

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

                                    Reserve Balance              Reserve Balance
Description                          @ 1/29/00        Utilized *      @ 10/28/00
--------------------------------------------------------------------------------
<S>                                     <C>              <C>             <C>

Closings/downsizings:
    Lease commitments                   $62              $13             $49
    Severance and other closing costs    14                2              12
Other                                    11               11               -
--------------------------------------------------------------------------------
Total restructuring                     $87              $26             $61
--------------------------------------------------------------------------------
Provisions for legal settlements        $30              $13             $17
--------------------------------------------------------------------------------
* Includes the reversal of an $11 million reserve, as described below.

<FN>
</FN>
</TABLE>


The company continues to aggressively  negotiate the  closing/downsizing  of the
remaining stores and distribution centers included in its repositioning  program
and intends to execute the remainder of the initiatives included in the program.

During the third  quarter of 2000,  the  company  determined  that an excess $11
million reserve  existed with respect to  restructuring  initiatives  which have
been completed in its Far East operations. Accordingly, the company has reversed
this reserve.

In 1998, the company also announced  markdowns and other charges of $345 million
($229 million net of tax benefits,  or $.86 per share).  As of January 29, 2000,
the  company  had  remaining  markdown  reserves  of $2 million to clear  excess
inventories and $12 million for store closings. At October 28, 2000, the company
had remaining markdown reserves of $8 million for store closings.

The company  believes all  reserves  are adequate to complete its  restructuring
program.
















                                       11


<PAGE>

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

Financial Condition
By February 3, 2001,  the company  expects to be operating  approximately  1,579
stores,  consisting of: 707 toy stores in the United States;  487  International
toy stores  (including 211 franchise and joint venture stores);  198 Kids "R" Us
children's  clothing stores; 148 Babies "R" Us stores and 39 Imaginarium stores.
The  company  now has 180  combo  stores,  108 of which are in the  refined  C-3
format.  The company is continuing  its C-3 store  refinement  program in its 17
test  stores,  aimed to find the  optimal  configuration  of  fixturing,  better
segmentation and ultimate presentation of merchandise concepts.  The company has
substantially  completed  refining 166 stores and expects all U.S. toy stores to
be updated by Holiday 2002. In addition,  the company sells merchandise  through
its internet sites at www.toysrus.com, www.babiesrus.com and www.imaginarium.com
and through mail order catalogues.

For 2000,  capital  requirements  for the company's  expansion  plans  mentioned
above, as well as other capital  requirements  are estimated to be approximately
$500 to $550 million.

Total borrowings,  net of cash and cash equivalents,  increased by approximately
$97 million at October  28,  2000,  as compared  with  October  30,  1999.  This
increase is due to the increased share repurchase  program,  increased inventory
levels to  support  in-stock  positions  in key items for  Holiday  2000 and the
funding of Toysrus.com,  offset by the  deconsolidation  of the balance sheet of
Toys - Japan.

On July 21, 2000, the company borrowed the yen equivalent of $147 million.  This
borrowing is repayable in semi-annual  installments,  with the final installment
due on August 17, 2005.  The  effective  cost of this  borrowing is 2.32% and is
secured by  expected  future  cash flows from the  license  fees due from Toys-
Japan.

The company  repurchased 41 million shares of its common stock through its share
repurchase  program for $618 million  during the first nine months ended October
28, 2000, as compared with 11 million shares for  approximately  $179 million in
the same period in 1999.

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
commercial paper and bank borrowings by foreign subsidiaries.

Weighted-average  diluted shares  outstanding  decreased to 219.6 million during
the first nine months ended October 28, 2000 from 247.2 million  during the nine
months ended October 30, 1999, due primarily to the impact of shares repurchased
by the company under its share repurchase program.

The company's cash outflows from operations  increased to $1,077 billion for the
nine months  ended  October 28, 2000 from $517 million for the nine months ended
October 30, 1999, primarily due to increases in merchandise  inventories as well
as lower accrued  expenses and other  liabilities.  The increase in  merchandise
inventory is a result of the company's strategy to improve its in-stock position
for the upcoming holiday season.
                                      12


<PAGE>

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

On February 24, 2000,  the company  entered into a  partnership  agreement  with
SOFTBANK  Venture  Capital  and  affiliates   ("SOFTBANK")   which  included  an
investment  by  SOFTBANK  of $60  million  in  Toysrus.com  for a 20%  ownership
interest.  Accordingly,  the company has recorded a 20% minority interest in the
net losses of Toysrus.com in selling,  general and  administrative  expenses for
the third quarter and nine months ended October 28, 2000.

In connection with the partnership with SOFTBANK, the company issued 1.2 million
stock purchase warrants  ("warrants") for $8.33 per warrant.  Each warrant gives
the holder  thereof the right to purchase  one share of Toys "R" Us common stock
at an exercise price of $13 per share, until the expiration date of February 24,
2010. As of October 28, 2000, none of these warrants have been exercised.

On August 9, 2000,  Toysrus.com  entered into a 10-year strategic  alliance with
Amazon.com to create a co-branded toy and video games on-line  store,  which was
launched in the third quarter 2000 and a co-branded baby products on-line store,
which will  begin  early in 2001.  Under  this  alliance  each  company  will be
responsible  for specific  aspects of the on-line  stores.  Toysrus.com  will be
responsible  for  merchandising  and content for the  co-branded  store and will
identify,  buy,  own and manage  the  inventory.  Amazon.com  will  handle  site
development,   order   fulfillment,   customer  service,   and  the  housing  of
Toysrus.com's  inventory in  Amazon.com's  U.S.  distribution  centers.  Also on
August 9, 2000,  Amazon.com was granted a warrant  entitling it to acquire up to
5%  (subject  to  dilution under  certain  circumstances)  of  the  capital  of
Toysrus.com at the then market value.  As of October 28, 2000,  this warrant has
not been exercised.

As a result of the transition to the co-branded site, the company's  Toysrus.com
subsidiary incurred  non-recurring costs and charges totaling approximately $118
million, $10 million of which were included in cost of sales and $108 million of
which were included in selling, general and administrative  expenses,  primarily
relating to the closure of three distribution centers, the write-off of web site
assets, as well as other costs associated with migrating data and merchandise to
the new site and  facilities.  These  costs and  charges  were  recorded  in the
quarter ended October 28, 2000.

In  October  2000,  Toysrus.com  received  an  additional  $17  million  capital
contribution  from SOFTBANK  representing  its appropriate  share of the funding
required for the operation of Toysrus.com.

The company  recorded a non-operating  gain of $315 million ($200 million net of
taxes)  resulting  from the initial  public  offering of shares of Toys "R" Us -
Japan,  Ltd.  ("Toys - Japan"),  which was  completed on April 24, 2000. Of this
gain,  $91 million  resulted  from an  adjustment  to the basis of the company's
investment in Toys - Japan and $224 million  related to the sale of a portion of
company-owned  common stock of Toys - Japan. In connection with this transaction
the company  also  received  net cash  proceeds of $267  million and  recorded a
provision  for current  income taxes of $82 million and a provision for deferred
income taxes of $33 million,  respectively. As a result of this transaction, the
company's  ownership  percentage in the common stock of Toys - Japan was reduced
from 80% to 48%. Toys - Japan is a licensee of the company.


                                           13



<PAGE>

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



Recent Accounting Pronouncements
In June 1999, the Financial  Accounting Standards Board approved the deferral of
Statement No. 133 ("SFAS No. 133") - Accounting for Derivatives  Instruments and
Hedging  Activities,  which the  company is required to adopt in its fiscal year
beginning  February 2001. SFAS No. 133 requires that all derivative  instruments
be  recorded on the  balance  sheet at fair value.  Changes in the fair value of
derivatives are recorded each period in current earnings or other  comprehensive
income,  depending  on whether a  derivative  is  designated  as part of a hedge
transaction and the type of hedge  transaction.  The ineffective  portion of all
hedges will be recognized in earnings. The company does not believe the adoption
of SFAS No.  133 will  have a  material  effect  on the  consolidated  financial
position, results of operations and cash flows of the company.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin 101 ("SAB 101"), "Revenue Recognition in Financial  Statements",  which
is effective  beginning in the company's  fourth  quarter 2000. The company does
not  believe  the  adoption  of SAB  101  will  have a  material  impact  on the
consolidated  financial  position,  results of operations  and cash flows of the
company.

Forward-Looking Statements
This Form 10-Q  contains  "forward-looking"  statements  within  the  meaning of
Section 27A of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the safe  harbors  created  thereby.  The company may also make  forward-looking
statements in other documents filed with the Securities and Exchange Commission,
its annual report to  shareholders,  its proxy  statement and in press releases.
All statements that are not historical  facts,  including  statements  about the
company's  beliefs  or  expectations,   are  forward-looking   statements.  Such
statements   involve  risks  and  uncertainties  that  exist  in  the  company's
operations  and  business  environment  that could  render  actual  outcomes and
results  materially  different  than  predicted.  The company's  forward-looking
statements  are based on  assumptions  about many  factors,  including,  but not
limited to, ongoing  competitive  pressures in the retail  industry,  changes in
consumer  spending,  general economic  conditions in the United States and other
jurisdictions in which the company conducts business (such as interest rates and
consumer confidence) and normal business uncertainty. While the company believes
that its assumptions are reasonable at the time forward-looking  statements were
made,  it  cautions  that it is  impossible  to predict  the  actual  outcome of
numerous factors and, therefore, readers should not place undue reliance on such
statements.  Forward-looking statements speak only as of the date they are made,
and the company  undertakes no obligation to update such  statements in light of
new information or future events that involve inherent risks and  uncertainties.
Actual results may differ materially from those contained in any forward-looking
statement.




                                          14



<PAGE>

                            PART II - OTHER INFORMATION


 Item 1.      Legal Proceedings

              Class Action Suits against Toys "R" Us, Inc., et al.

               As previously  reported in the company's  Report on Form 10-Q for
               the quarter ended July 29, 2000,  the company and its  affiliates
               Toysrus.com,  Inc. and Toysrus.com,  LLC are defendants in eleven
               purported  class  action  lawsuits  (six  in  the  United  States
               District  Court  for the  District  of New  Jersey,  three in the
               United  States  District  Court  for  the  Northern  District  of
               California,  one in the  United  States  District  Court  for the
               Western  District of Texas and one in the  Superior  Court of the
               State of  California,  County of San  Bernardino).  In  September
               2000, three additional purported class action lawsuits were filed
               (two in the United States  District Court for the District of New
               Jersey  and  one in the  United  States  District  Court  for the
               Western District of Texas).  These actions  generally  purport to
               bring  claims on behalf of all  persons  who have  visited one or
               more of the company's websites and either made an online purchase
               or allegedly had information about them unlawfully "intercepted,"
               "monitored,"  "transmitted"  or "used." All of the suits  (except
               one filed in the United States District Court for the District of
               New  Jersey)  also name  Coremetrics,  Inc.  ("Coremetrics"),  an
               internet  marketing company,  as a defendant.

               These suits assert various  claims under the federal  privacy and
               computer  fraud  statutes,  as well as under state  statutory and
               common law,  arising out of an agreement  between the Company and
               Coremetrics,  alleging that the Company tracks its website users'
               activities  online and shares that information with third parties
               in violation of the law.  These suits seek damages in unspecified
               amounts and other relief under state and/or federal law.

               The Company and Coremetrics  filed a joint  application  with the
               Multidistrict  Litigation  Panel (the "MDL Panel") to have all of
               the federal actions  consolidated and transferred to the Northern
               District of California. A hearing on that application was held on
               November  17, 2000,  and the Company is awaiting a decision  from
               the MDL Panel.  All of the actions  (including  the state action)
               are currently stayed pending that decision.

               The Company  believes that it has  substantial  defenses to these
               claims and plans to vigorously defend these lawsuits.

               FAO Schwarz, et al. v. Toys "R" Us, Inc., et al.

               As previously  reported in the company's  Report on Form 10-K for
               the fiscal  year ended  January  29, 2000 and Report on Form 10-Q
               for the quarter ended April 29, 2000,  the company is a defendant
               in  litigation  pending in the Supreme  Court of the State of New
               York, New York County.

               On September 25, 2000, the parties reached an agreement to settle
               this action.  On October 4, 2000, the parties filed a stipulation
               of  dismissal  pursuant to which this action was  dismissed  with
               prejudice.

                                             15




<PAGE>

Item 5.             Other Information

                    Stockholder Proposals

                    Sec.  2.1(b)  of the  company's  By-Laws  provides  for  the
                    company to provide  notice of an upcoming  Annual Meeting of
                    Stockholders  at least 100 days in advance of such  meeting.
                    Notice  is  hereby  given  that the  company's  2001  Annual
                    Meeting of  Stockholders  is  expected to be held on June 6,
                    2001.  Pursuant to Sec.  2.1(b) of the By-Laws,  stockholder
                    nominations   of  persons  for  election  to  the  Board  of
                    Directors  of the company must be received by the company at
                    its executive  office,  461 From Road,  Paramus,  New Jersey
                    07652,   Attention:   Christopher  K.  Kay,  Executive  Vice
                    President  - General  Counsel and  Secretary,  no later than
                    March 8, 2001 in order to be considered timely.

Item 6.             Exhibits and Reports on Form 8-K

                  (a) Exhibits:

                      Financial  Data  Schedule for the quarter  ended
                      October 28, 2000.

                  (b) Report on Form 8-K

                      None.























                                          16



<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:  December 12, 2000          Toys "R" Us, Inc.
                                                ------------------
                                                    (Registrant)






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


















                                      17