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



                         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 July 29, 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 [ ]

204,037,079  shares of the registrant's  Common Stock were outstanding on August
28, 2000.


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


<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......................8


PART II - OTHER INFORMATION..................................................14


SIGNATURES...................................................................16





                                            1


<PAGE>
<TABLE>





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

<S>


ASSETS                                       July 29,      July 31,  January 29,
------                                         2000           1999         2000
                                         ------------ ------------- -----------
                                              <C>            <C>         <C>
Current Assets:
 Cash and cash equivalents                   $  430        $  259      $  584
 Accounts and other receivables                 181           172         182
 Merchandise inventories                      2,303         2,304       2,027
 Prepaid expenses and other current assets       81           108          80
                                         ------------  ------------ ------------
  Total current assets                        2,995         2,843       2,873

Property and equipment, net and other assets  4,487         5,026       5,106
Investment in Toys "R" Us - Japan, Ltd.
  (market value of $723 at July 29, 2000)        94            -          -
Goodwill, net                                   367           342         374

                                         ------------ ------------- -----------
                                             $7,943       $8,211       $8,353
                                         ============ ============= ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
 Short-term borrowings                       $  779       $  802      $  278
 Accounts payable                             1,216        1,413       1,617
 Accrued expenses and other current liabilities 530          523         836
 Income taxes payable                           242          137         107
                                         ------------ ------------- -----------
  Total current liabilities                    2,767       2,875       2,838


Long-term debt                                 1,131       1,221       1,230
Deferred income taxes                            352         333         362
Other liabilities                                191         222         243
Minority interest in Toysrus.com                  55          -           -

Stockholders' equity                           3,447       3,560       3,680
                                         ------------ ------------- -----------
                                           $   7,943   $   8,211    $  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 EARNINGS
                                     (Unaudited)
                ===================================================
                         (In millions except per share data)


<CAPTION>

                                          13 Weeks Ended       26 Weeks Ended
                                          --------------       --------------
                                        July 29,  July 31,   July 29,  July 31,
                                          2000     1999        2000     1999

                                        -------   -------    --------  ---------
<S>                                       <C>       <C>         <C>      <C>

Net sales                              $ 1,994  $ 2,204      $ 4,313   $ 4,370
Cost of sales                            1,358    1,522        2,959     3,027
                                       --------  --------    --------  ---------

  Gross profit                             636      682        1,354     1,343

Selling, general and
   administrative expenses                 547      574        1,146     1,126
Depreciation and amortization               67       66          139       132
Equity in net earnings of
   Toys "R" Us - Japan, Ltd.                (5)      -            (5)       -
                                       --------  ---------   ---------  --------

     Operating earnings                     27       42           74        85

Other income (expense):
     Gain from IPO of
        Toys "R" Us - Japan, Ltd.            -        -          315        -
     Interest expense - net                (23)     (23)         (46)      (39)

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


Earnings before taxes on income              4       19          343        46
Taxes on income                              1        7          125        17


                                       --------- ---------   ---------  --------
Net earnings                              $ 3      $ 12        $ 218      $ 29
                                       ========= =========   ========= =========


Basic earnings per share                $ 0.01    $ 0.05      $ 0.98    $ 0.12
                                       ========= =========   ========= ========
Weighted average basic shares
outstanding                              214.7     246.9       222.3     248.1
                                       ========= =========   ========= ========

Diluted earnings per share              $ 0.01    $ 0.05      $ 0.97    $ 0.12
                                       ========= =========   ========= ========
Weighted average diluted shares
outstanding                              217.9     248.8       224.6     249.1
                                       ========= =========   ========= ========

<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>


                                                          26 Weeks Ended
                                                   ----------------------------
                                                        July 29,       July 31,
                                                          2000            1999
                                                      -----------    ----------

<S>                                                      <C>              <C>


Cash flows from operating activities:
Net earnings                                             $  218          $  29
Adjustments to reconcile net earnings
to net cash used in operating activities:
      Depreciation and amortization                         139            132
      Deferred income taxes                                  33              1
      Minority interest in Toysrus.com                       (5)             -
      Equity in net earnings of Toys "R" Us - Japan, Ltd.    (5)             -
      Gain from initial public offering of
         Toys "R" Us - Japan, Ltd.                         (315)             -
      Changes in operating assets and liabilities:
         Merchandise inventories                           (470)          (411)
         Accounts payable and
         other operating liabilities                       (211)          (269)
         Other operating assets                             (78)           (19)
                                                         ---------     --------
      Net cash used in operating activities                (694)          (537)
                                                         ---------     --------
Cash flows from investing activities:
Capital expenditures, net                                  (103)          (198)
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         149           (198)
                                                         ---------     --------
Cash flows from financing activities:
Short-term borrowings, net                                  610            647
Long-term borrowings                                        147             -
Long-term debt repayment                                    (17)           (5)
Proceeds received from investors in Toysrus.com              60              -
Issuance of stock warrants                                   10              -
Exercise of stock options                                     -             17
Share repurchase program                                   (449)          (104)
                                                         ---------     --------
      Net cash provided by financing activities             361            555
                                                         ---------     --------

Effect of exchange rate changes on cash
and cash equivalents                                         30             29
Cash and cash equivalents:
Decrease during period                                     (154)          (151)
Beginning of period                                         584            410
                                                          --------     --------
End of period                                             $ 430          $ 259
                                                          ========     ========

Supplemental disclosures of cash flow information:
Income tax (refunds) payments, net                        $ (47)          $ 104
                                                          =========    ========

Interest paid                                             $  58           $  41
                                                          =========    ========

<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)
            ==========================================================
                                  (In millions)


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
         $760 million and $487 million are included in short-term  borrowings at
         July 29, 2000 and July 31, 1999, respectively.

3.       Comprehensive income
         Comprehensive  income was $24  million  and $5  million  for the second
         quarter  ended  July 29,  2000 and July 31,  1999,  respectively,  as a
         result of the change in  foreign  currency  translation.  Comprehensive
         income was $184  million  and $23  million as a result of the change in
         foreign  currency  translation for the 26 weeks ended July 29, 2000 and
         July 31, 1999, respectively.

4.       Gain from initial public offering of Toys - 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)
                                   (continued)
            ==========================================================
                                  (In millions)


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 July  29,  2000  the  market  value of the
         company's  investment  in Toys - Japan  was $723  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 second quarter and six months ended
         July 29, 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,  until the
         expiration  date of February  24, 2010.  As of July 29,  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 and a co-branded baby products on-line  store.  Under
         this alliance each company will be  responsible  for specific  aspects
         of the on-line stores.  Also on  August  9,  2000,  Amazon.com  was
         granted a warrant entitling  it to acquire 5% of the capital of
         Toysrus.com  at the then market  value.  The  transition  to the
         co-branded  on-line  store and related changes in the Toysrus.com
         operational structure will result in significant  short-term  expenses
         and additional  charges.  These costs will be recorded in the current
         fiscal year.

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.       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.


                                        6

<PAGE>
<TABLE>


                       TOYS "R" US, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
            ==========================================================
                                  (In millions)
                                   (continued)
<CAPTION>

9.       Segments
         Information related to the various company segments is as follows:

        -----------------------------------------------------------------------
                                           13 Weeks Ended      26 Weeks Ended
                                          ----------------     --------------
                                          July 29, July 31,   July 29, July 31,
                                            2000     1999       2000     1999
<S>                                          <C>      <C>        <C>      <C>
        -----------------------------------------------------------------------
          Net sales
            Toys "R" Us - USA            $ 1,238   $ 1,251    $ 2,480  $  2,454
            Toys "R" Us - International      321       356        626       671
            Toys "R" Us - Japan               -        222        277       430
            Babies "R" Us                    311       246        638       512
            Toysrus.com                        9         2         17         2
            Kids "R" Us                      115       127        275       301
         ----------------------------------------------------------------------
         Total                           $ 1,994   $ 2,204    $ 4,313  $  4,370
         ----------------------------------------------------------------------
         Operating earnings
            Toys "R" Us - USA            $    41   $    45    $    83  $     86
            Toys "R" Us - International        1       (12)       (23)      (44)
            Toys "R" Us - Japan,
             net of minority interest          -        11         17        23
            Babies "R" Us                     23        16         53        37
            Toysrus.com,
             net of minority interest        (20)       (5)       (34)       (5)
            Other                            (18)      (13)       (22)      (12)
                                       -----------------------------------------
         Operating earnings                   27        42         74        85

         Interest expense, net               (23)      (23)       (46)      (39)
         Gain from IPO
           of Toys "R" Us - Japan             -         -         315        -
                                       -----------------------------------------
         Earnings before income taxes      $   4     $  19      $ 343   $    46
         ----------------------------------------------------------------------

<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 "R" Us - Japan, as well as other corporate related items.

10.      Restructuring and other charges
         In 1998, the company  recorded  restructuring  and other  non-recurring
         charges of $698 ($508 net of tax benefits) to strategically  reposition
         its worldwide  business.  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.

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



                                        7


<PAGE>


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

Results of Operations
Net sales were $2.0 billion  compared with $2.2 billion  reported for the second
quarter  of 1999.  For the first six  months of 2000,  sales  were $4.3  billion
versus $4.4 billion in the same period last year.  Total sales,  excluding sales
of Toys "R" Us - Japan,  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 six months ended July 29, 2000, respectively,  as compared with the same
period in 1999.

Foreign   currency   exchange  had  an  unfavorable   impact  on  net  sales  of
approximately $25 million and $17 million,  respectively, for the second quarter
and six months ended July 29, 2000, as compared with the same periods in 1999.

On a consolidated basis, comparable store sales, in local currencies,  increased
by 1% for the second  quarter of 2000,  and 2% for the six months ended July 29,
2000, as compared with the same periods in 1999.  Comparable store sales for the
Toys "R" Us - USA  division  decreased  2% for the  second  quarter  of 2000 and
remained  flat for the  first  six  months of 2000,  as  compared  with the same
periods in 1999, reflecting the strength of Furby and Star Wars related products
in the prior year.  Internationally,  the company's overall comparable toy store
sales, on a local currency  basis,  increased 3% for the second quarter of 2000,
and 5% for the six months ended July 29, 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 second  quarter and first six 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  1% for the second  quarter  of 2000,  and 0.7% for the six months
ended July 29, 2000,  respectively,  as compared  with the same periods in 1999.
Cost of sales  for the Toys "R" Us - USA  division,  as a  percentage  of sales,
decreased  by 0.8% for the second  quarter of 2000,  and 0.9% for the six months
ended July 29, 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 2.6% for the
second  quarter  of 2000,  and  0.5% for the six  months  ended  July 29,  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 hot
products.  Cost of sales,  as a  percentage  of  sales,  for the  Babies  "R" Us
division  decreased by 0.5% for the second  quarter of 2000,  and 1% for the six
months ended July 29, 2000,  respectively,  as compared with the same periods in
1999, largely due to a more favorable sales mix.









                                        8


<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 1.4% for the second quarter of 2000 and 0.8%
for the six months of 2000, as compared with the same periods in 1999.  SG&A for
Toys "R" Us - USA,  as a  percentage  of  sales,  increased  by 1.5%  and  1.4%,
respectively,  for the second  quarter and six months  ended July 29,  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.  SG&A  for  the  International  division,  as  a
percentage of sales,  excluding the impact of Toys "R" Us - Japan, remained flat
for the second  quarter and six months ended July 29, 2000, as compared with the
same  period  in 1999.  SG&A as a  percentage  of sales  for the  Babies  "R" Us
division decreased 1% and 0.3%, respectively, for the second quarter of 2000 and
six months ended July 29, 2000, as compared with the same periods in 1999.

Included in the  company's  results for the second  quarter and six months ended
July 29, 2000 is $13 million and $22  million,  respectively,  representing  the
company's share of the net losses of Toysrus.com, its internet subsidiary.

Depreciation and  amortization  increased by $7 million for the six months ended
July 29, 2000,  as compared  with 1999.  This  increase is primarily  due to the
company's continued store expansion, 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  $7 million for the six months  ended July 29,
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 second quarter or six months ended July 29, 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:







                                        9


<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       @ 7/29/00
-------------------------------------------------------------------------------

<S>                                       <C>           <C>             <C>

Closings/downsizings:
    Lease commitments                     $62           $13              $49
    Severance and other closing costs      14             4               10
    Other                                  11             -               11
-------------------------------------------------------------------------------
Total restructuring                       $87           $17              $70
-------------------------------------------------------------------------------
Provisions for legal settlements          $30           $13              $17
-------------------------------------------------------------------------------

<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.

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 July 29, 2000, the company
had remaining markdown reserves of $9 million for store closings.

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
















                                       10



<PAGE>



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


Financial Condition
By February 3, 2001, the company expects to operate  approximately 1,576 stores,
consisting of: 707 toy stores in the United States; 486 International toy stores
(including 210 franchise and joint venture  stores);  196 Kids "R" Us children's
clothing stores; 148 Babies "R" Us stores and 39 Imaginarium stores. The company
expects to convert  more than 90 existing USA toy stores to the C-3 combo stores
by the end of fiscal 2000. In addition,  the company is continuing its C-3 store
refinement program in its test stores,  aimed to find the optimal  configuration
of fixturing,  better  segmentation  and ultimate  presentation  of  merchandise
concepts.  The company has  substantially  completed  refining an  additional 49
stores in the second quarter of 2000 in addition to the 17 test stores mentioned
above.  The  company  plans to complete  approximately  another 100 stores to be
ready  for the  2000  holiday  season.  In  addition,  the  company  also  sells
merchandise    through   its    internet    sites   at    www.toysrus.com    and
www.imaginarium.com and through mail order catalogs.

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

Total borrowings,  net of cash and cash equivalents,  decreased by approximately
$294 million at July 29, 2000, as compared with July 31, 1999,  due primarily to
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 31 million shares of its common stock through its share
repurchase  program for $449 million  during the first six months ended July 29,
2000, as compared with 6 million shares for approximately  $104 million in 1999.
The company  expects to continue  repurchasing  shares during the second half of
the year  and is  currently  forecasting  its  total  debt to  capital  ratio to
determine the rate of share repurchase.

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.





                                       11


<PAGE>


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

Weighted-average  diluted shares  outstanding  decreased to 224.6 million during
the first six months  ended  July 29,  2000 from  249.1  million  during the six
months ended July 31, 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 $694 million for the
six months  ended July 29, 2000 from $537  million for the six months ended July
31, 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.

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 second quarter and six months ended July 29, 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, until the expiration  date of February 24, 2010. As
of July 29, 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 and a
co-branded baby products on-line store. Under this alliance each company will be
responsible for specific aspects of the on-line stores.  Also on August 9, 2000,
Amazon.com was granted a warrant  entitling it to acquire 5% of the capital of
Toysrus.com at the then market value.  The  transition  to the  co-branded
on-line  store and related  changes  in  the  Toysrus.com  operational
structure  will  result  in significant  short-term  expenses and  additional
charges.  These costs will be recorded in the current fiscal year.

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.



                                       12


<PAGE>


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


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.





















                                      13



<PAGE>



                           PART II - OTHER INFORMATION


 Item 1.      Legal Proceedings

              In the Matter of Toys "R" Us, Inc.; In Re: Toys "R" Us
              Antitrust Litigation.
              -----------------------------------------------------------------

              As previously  reported in the  company's  report on Form 10-K for
              the fiscal year ended  January 29, 2000,  the Staff of the Federal
              Trade Commission (the "FTC") issued a final Order and Opinion (the
              "Order")  upholding the FTC's complaint  against the company.  The
              company  appealed the Order to the United  States Court of Appeals
              for the Seventh Circuit. The Seventh Circuit affirmed the Order on
              August 1, 2000.

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

              In August 2000,  eleven purported class action lawsuits were filed
              (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),  against the
              company and its affiliates Toysrus.com, Inc. and Toysrus.com, LLC.
              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 lawsuits 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 federal law. The Company
              believes  that it has  substantial  defenses  to these  claims and
              plans to vigorously defend these lawsuits.











                                       14


<PAGE>


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

                  At the  company's  Annual  Meeting  on  June  7,  2000  all of
                  management's nominees for director were elected.

                  Management's  nominees  for director  received  the  following
                  votes:

                                           Number of Shares      Withheld Votes
                  RoAnn Costin               194,738,201            4,656,815
                  John H. Eyler, Jr.         194,740,941            4,656,075
                  Michael Goldstein          194,416,569            4,978,447
                  Calvin Hill                194,741,419            4,653,597
                  Shirley Strum Kenny        194,738,982            4,656,034
                  Charles Lazarus            194,617,177            4,777,839
                  Norman S. Matthews         194,595,138            4,799,878
                  Arthur B. Newman           194,741,264            4,653,752

                  The following proposals received the following votes:

                  (i)       a proposal to approve the  Stockholder  Proposal
                            No. 1 - Maximize Value Resolution,  147,620,895
                            shares were voted against, 14,890,046 shares were
                            voted in favor of, and 2,663,842 shares abstained
                            from, such proposal; and

                 (ii)       a proposal to approve the Stockholder Proposal No. 2
                            - Golden Parachute  Resolution,  100,920,803  shares
                            were voted against,  61,924,391 shares were voted in
                            favor of, and 2,329,592  shares abstained from, such
                            proposal; and

                (iii)       a proposal to approve the Stockholder Proposal No. 3
                            -  to  redeem  the  stockholder   rights  agreement,
                            144,917,274   shares   were   voted  in  favor   of,
                            18,967,259 shares were voted against,  and 1,290,253
                            shares abstained from, such proposal.

Item 6.           Exhibits and Reports on Form 8-K

                  (a)      Exhibits:

                           Financial  Data  Schedule for the quarter  ended
                           July 29, 2000.

                  (b)      Report on Form 8-K

                           On August 10, 2000, the company announced a strategic
                           alliance  between  its  majority  owned   subsidiary,
                           Toysrus.com,  LLC,  and a subsidiary  of  Amazon.com,
                           Inc.


                                       15

<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 11, 2000       Toys "R" Us, Inc.
                                        ---------------------------------------
                                         (Registrant)






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
















                                       16