**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-K**




(Mark
      One)




(x)
            ANNUAL
                REPORT PURSUANT TO SECTION13
                OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934


**For
                the fiscal year ended February 28,
                2007.**


or




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





**333-132357-03**


(Commission
      file number for the Issuing Entity)





**CARMAX
      AUTO OWNER TRUST** **2007-1**


(Exact
      name of the Issuing Entity as specified in its charter)





**333-132357**


(Commission
      file number for the Depositor)





**CARMAX
      AUTO FUNDING LLC**


(Exact
      name of the Depositor as specified in its charter)





**CARMAX
      BUSINESS SERVICES, LLC**


(Exact
      name of the Sponsor as specified in its charter)





**Delaware**


(State
      or
      other jurisdiction of incorporation or organization for the Issuing Entity
      and
      the Depositor)





**32-6053504**


(I.R.S.
      Employer Identification No. for the Issuing Entity)





**01-0794037**


(I.R.S.
      Employer Identification No. for the Depositor)





**12800
      Tuckahoe Creek Parkway, Suite 400, Richmond, VA 23238**


(Address
      of principal executive offices, Zip Code)





**(804)
      935-4512**


(Registrant's
      telephone number, including area code)





Securities
      registered pursuant to Section 12(b) of the Act: **None**





Securities
      registered pursuant to Section 12(g) of the Act: **None**








Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act.


Yes
      (  ) No (X)





Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Act.


Yes
      (  ) No (X)





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 ( )





Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
      be contained, to the best of registrant's knowledge, in definitive proxy or
      information statements incorporated by reference in Part III of this Form 10-K
      or any amendment to this Form 10-K. (X)





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of "accelerated
      filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
      one):





Large
                accelerated Filer ( )
            Accelerated
                Filer ( )
            Non-accelerated
                Filer (X)





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Act). Yes ( ) No (X)





State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      last sold, or the average bid and asked price of such common equity, as of
      the
      last business day of the registrant's most recently completed second fiscal
      quarter: **Not
      applicable.**





Indicate
      the number of shares outstanding of each of the registrant's classes of common
      stock, as of the latest practicable date. **Not
      applicable.**





Documents
      incorporated by reference: **See
      Item 15(b).**











**PART
      I**


**ITEM
      1.**  **BUSINESS**





Not
      applicable.




**ITEM
      1A. RISK FACTORS**




Not
      applicable.




**ITEM
      1B. UNRESOLVED STAFF COMMENTS**




Not
      applicable.




**ITEM
      2.**  **PROPERTIES**




Not
      applicable.





**ITEM
      3.**  **LEGAL
      PROCEEDINGS**





Not
      applicable.





**ITEM
      4.**  **SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS**





Not
      applicable.





**SUBSTITUTE
      INFORMATION PROVIDED IN ACCORDANCE WITH GENERAL INSTRUCTION J TO FORM
      10-K**





**Item
      1112(b) of Regulation AB. Significant Obligors of Pool Assets (Financial
      Information).**





No
      single
      obligor represents 10% or more of the pool assets held by CarMax Auto Owner
      Trust 2007-1 (the "Issuing Entity").





**Item
      1114(b)(2) of Regulation AB. Credit Enhancement and Other Support, Except for
      Certain Derivatives Instruments (Information Regarding Significant Enhancement
      Providers).**





No
      entity
      or group of affiliated entities provides any external credit enhancement or
      other support with respect to either payment on the pool assets held by the
      Issuing Entity or payments on the asset-backed notes (the "Notes") issued by
      the
      Issuing Entity.





**Item
      1115(b) of Regulation AB. Certain Derivatives Instruments (Financial
      Information).**





No
      entity
      or group of affiliated entities provides any derivative instruments that are
      used to alter the payment characteristics of cash flows from the Issuing
      Entity.





**Item
      1117 of Regulation AB. Legal Proceedings.**




There
      are
      no legal proceedings pending, or any proceedings known to be contemplated by
      governmental authorities, against CarMax Business Services, LLC (the "Sponsor"
      and, in its role as the servicer, the "Servicer"), CarMax Auto Funding LLC
      (the
      "Depositor"), Wells Fargo Bank, National Association (the "Indenture Trustee"),
      The Bank of New York (the "Owner Trustee"), the Issuing Entity, or of which
      any
      property of the foregoing is the subject, that are or would be material to
      holders of the Notes.











**PART
      II**





**ITEM
      5.**  **MARKET
      FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
      OF EQUITY SECURITIES**





Not
      applicable.





**ITEM
      6.**  **SELECTED
      FINANCIAL DATA**





Not
      applicable.





**ITEM
      7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OF**


**OPERATIONS**





Not
      applicable.





**ITEM
      7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK**





Not
      applicable.





**ITEM
      8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**





Not
      applicable.





**ITEM
      9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE**





Not
      applicable.





**ITEM
      9A. CONTROLS AND PROCEDURES**





Not
      applicable.





**ITEM
      9B. OTHER INFORMATION**





None.





**PART
      III**





**ITEM
      10.**  **DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE**





Not
      applicable.





**ITEM
      11.**  **EXECUTIVE
      COMPENSATION**





Not
      applicable.





**ITEM
      12.**  **SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
      MATTERS**





Not
      applicable.





**ITEM
      13.**  **CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDENPENDENCE**





Not
      applicable.





**ITEM
      14.**  **PRINCIPAL
      ACCOUNTING FEES AND SERVICES**





Not
      applicable.





**SUBSTITUTE
      INFORMATION PROVIDED IN ACCORDANCE WITH GENERAL INSTRUCTION J TO FORM
      10-K**





**Item
      1119 of Regulation AB. Affiliations and Certain Relationships and Related
      Transactions.**





Information
      required by Item 1119 of Regulation AB has been omitted from this report on
      Form
      10-K in reliance on the Instruction to Item 1119.





**Item
      1122 of Regulation AB. Compliance with Applicable Servicing
      Criteria.**





The
      following documents are filed as part of this report:





Exhibit
                Number
            Description
                of Exhibit33.1
            Report
                on Assessment of Compliance with Applicable Servicing Criteria of
                CarMax
                Business Services, LLC.34.1
            Report
                of Independent Registered Public Accounting Firm.





The
      Servicer has been identified by the registrant as a party participating in
      the
      servicing function with respect to the asset pool held by the Issuing Entity.
      The Servicer has completed a report on an assessment of compliance with the
      servicing criteria applicable to it (the "Servicing Report"), which Servicing
      Report is attached as an exhibit to this report on Form 10-K. In addition,
      the
      Servicer has provided an attestation report under Item 1122 of Regulation AB
      (the "Attestation Report") by a registered public accounting firm, which report
      is also attached as an exhibit to this report on Form 10-K. Neither the
      Servicing Report nor the Attestation Report identifies any material instance
      of
      noncompliance with the servicing criteria applicable to the
      Servicer.





A
      report
      on an assessment of compliance with the servicing criteria applicable to it
      and
      a related attestation report under Item 1122 of Regulation AB by a registered
      public accounting firm with respect to the Indenture Trustee has been omitted
      from this report on Form 10-K in reliance on Interpretation 17.01 of the SEC
      Division of Corporation Finance Manual of Publicly Available Telephone
      Interpretations.












**Item
      1123 of Regulation AB. Servicer Compliance Statement.**





The
      following document is filed as part of this report:





Exhibit
                Number
            Description
                of Exhibit35.1
            Annual
                Servicer Compliance Statement of CarMax Business Services,
                LLC.





The
      Servicer has been identified by the registrant as a servicer with respect to
      the
      asset pool held by the Issuing Entity. The Servicer has completed a statement
      of
      compliance (a "Compliance Statement") signed by an authorized officer of the
      Servicer. The Compliance Statement is attached as an exhibit to this report
      on
      Form 10-K.








**PART
      IV**





**ITEM
      15.**  **EXHIBITS
      AND FINANCIAL STATEMENT SCHEDULES**





(a)(1)  Not
      applicable.




(a)(2)  Not
      applicable




(a)(3)  The
      exhibits filed in response to Item 601 of Regulation S-K are listed in the
      Exhibit Index.




(b)  The
      exhibits filed in response to Item 601 of Regulation S-K are listed in the
      Exhibit Index.




(c)  Not
      applicable.












**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) 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:
      May
      25, 2007





CARMAX
      AUTO OWNER TRUST 2007-1





By:
      CarMax Business Services, LLC,


as
      Servicer on behalf of CarMax Auto Owner Trust 2007-1





By:
      /s/ Keith D. Browning


Name:
      Keith D. Browning


Title:
      Executive Vice President and Chief Financial Officer


(Senior
      officer in charge of the servicing function)














**EXHIBIT
      INDEX**





Exhibit
                Number
            Description
                of Exhibit3.1
            Certificate
                of Formation of CarMax Auto Funding LLC.*3.2
            Amended
                and Restated Limited Liability Company Agreement of CarMax Auto Funding
                LLC dated as of December 1, 2004.**4.1
            Amended
                and Restated Trust Agreement dated as of February 1, 2007 among CarMax
                Auto Funding LLC, as depositor, The Bank of New York (Delaware),
                as
                Delaware trustee, and The Bank of New York, as owner
                trustee.***4.2
            Indenture
                dated as of February 1, 2007 between the Issuing Entity and Wells
                Fargo
                Bank, National Association, as indenture trustee (including forms
                of the
                Notes).***10.1
            Sale
                and Servicing Agreement dated as of February 1, 2007 among the Issuing
                Entity, CarMax Auto Funding LLC, as depositor, and CarMax Business
                Services, LLC, as servicer.***10.2
            Administration
                Agreement dated as of February 1, 2007 among the Issuing Entity,
                CarMax
                Business Services, LLC, as administrator, and Wells Fargo Bank, National
                Association, as indenture trustee.***10.3
            Receivables
                Purchase Agreement dated as of February 1, 2007 between CarMax Business
                Services, LLC, as seller, and CarMax Auto Funding LLC, as
                purchaser.***31.1
            Certification
                of CarMax Auto Funding LLC pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.33.1
            Report
                on Assessment of Compliance with Applicable Servicing Criteria of
                CarMax
                Business Services, LLC.34.1
            Report
                of Independent Registered Public Accounting Firm.35.1
            Annual
                Servicing Compliance Statement of CarMax Business Services,
                LLC.


_______________________________





*
            Incorporated
                by reference from the registration statement on Form S-3 of CarMax
                Auto
                Funding LLC originally filed on August 13, 2003 (File No.
                333-107925).





**
            Incorporated
                by reference from the registration statement on Form S-3 of CarMax
                Auto
                Funding LLC originally filed on August 4, 2005 (File No.
                333-127189).





***
            Incorporated
                by reference from the current report on Form 8-K of CarMax Auto Funding
                LLC and the Issuing Entity filed on February 2, 2007 (File No. 333-132357
                and File No. 333-132357-03).