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

                                    FORM 10-K

            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

     For the fiscal year ended June 30, 2005Commission file number: 1-10434

                      The Reader's Digest Association, Inc.
             (Exact name of registrant as specified in its charter)

                     Delaware                       13-1726769
         (State or other jurisdiction of         (I.R.S. Employer
          incorporation or organization)        Identification No.)

             Pleasantville, New York                  10570
     (Address of principal executive offices)       (Zip Code)


      Registrant's telephone number, including area code: (914) 238-1000

Securities registered pursuant to Section 12(b) of the Act:

                                            Name of each exchange
            Title of each class              on which registered
                Common Stock               New York Stock Exchange
          par value $.01 per share



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


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 is not contained herein, and will not be contained, to
the best of the 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.  [  ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).  Yes [X]  No [   ]

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

The aggregate market value of registrant's voting and non-voting equity held
by non-affiliates of registrant, as of December 31, 2004, the last business
day of the registrant's most recently completed second fiscal quarter, was
approximately $1,384,670,000 based on the closing price of registrant's
Common Stock on the New York Stock Exchange--Composite Transactions on such
date.

At July 31, 2005, 99,146,516 shares of the registrant's Common Stock were
outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

Annual Report to Stockholders of The Reader's Digest Association, Inc. for
the fiscal year ended June 30, 2005.  Certain information therein is
incorporated by reference into Part I and Part II hereof.

Proxy Statement for the Annual Meeting of Stockholders of The Reader's Digest
Association, Inc. to be held on November 18, 2005.  Certain information
therein is incorporated by reference into Part III hereof.



<PAGE>



                               TABLE OF CONTENTS

                                                                         Page
PART I

    ITEM 1.BUSINESS....................................................    1
      Reportable Segments..............................................    1
        Reader's Digest North America..................................    1
        Reader's Digest International..................................    1
        Consumer Business Services.....................................    2
      Books and Home Entertainment and Reiman Books....................    2
        Select Editions................................................    2
        Reader's Digest Young Families.................................    2
        Series Books...................................................    3
        General Books..................................................    3
        Reiman Books...................................................    3
        Music..........................................................    3
        Video..........................................................    4
        Production and Fulfillment.....................................    4
      Reader's Digest Magazine, Reiman Magazines and Special
       Interest Magazines..............................................    5
        Circulation and Advertising....................................    6
        Reader's Digest and Reiman Magazine Editorial..................    7
        Internet Initiatives...........................................    7
        Complementary Reiman Businesses................................    7
        Reader's Digest Trade Publishing...............................    8
        Production and Fulfillment.....................................    8
      Consumer Business Services.......................................    9
        Books Are Fun, Ltd.............................................    9
        QSP............................................................   10
      Marketing........................................................   10
      Information Technology and Customer Database Enhancement.........   11
      Competition and Trademarks.......................................   12
      Employees........................................................   12
      Executive Officers...............................................   13
      Available Information............................................   14

    ITEM 2.PROPERTIES..................................................   15

    ITEM 3.LEGAL PROCEEDINGS...........................................   15

    ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.........   15


PART II

    ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED
           STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
           SECURITIES..................................................   16
      Purchases of Equity Securities by the Issuer and
       Affiliated Purchasers...........................................   16
      Recent Sales of Unregistered Securities..........................   16

    ITEM 6.SELECTED FINANCIAL DATA.....................................   16

    ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATION..........................   17


<PAGE>


                               TABLE OF CONTENTS
                                  (Continued)

                                                                        Page

    ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
             MARKET RISK..............................................   18

    ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA..............   18

    ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
             ON ACCOUNTING AND FINANCIAL DISCLOSURE...................   18

    ITEM 9A. CONTROLS AND PROCEDURES..................................   19
      Disclosure Controls and Procedures..............................   19
      Internal Control Over Financial Reporting.......................   19

    ITEM 9B. OTHER INFORMATION........................................   19

PART III

    ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.......   20
      Code of Ethics..................................................   20

    ITEM 11. EXECUTIVE COMPENSATION...................................   20

    ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
             AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS...........   21
      Equity Compensation Plan Information............................   21
      Security Ownership Information..................................   21

    ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...........   21

    ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES...................   21


PART IV

    ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES...............   22

    SIGNATURES........................................................   28

    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS........................   29


  Unless the context otherwise requires, references in this Annual Report on
   Form 10-K to "Reader's Digest," "we," "us" and "our" are to The Reader's
                Digest Association, Inc. and its subsidiaries.


<PAGE>



                                    PART I
ITEM 1. BUSINESS

      We are a global leader in publishing and direct marketing, and we create
and deliver products that inform, enrich, entertain and inspire, including
magazines, books, recorded music collections and home videos.

      We are a Delaware corporation, originally incorporated in New York in
1926 and then reincorporated in Delaware in 1951.  The mailing address of our
principal executive offices is Pleasantville, New York 10570, and our
telephone number is (914) 238-1000.

      We are best known for publishing our flagship, Reader's Digest
magazine.  DeWitt and Lila Acheson Wallace founded Reader's Digest magazine
in 1922.  Today, Reader's Digest has a worldwide circulation of about 19
million and about 80 million readers each month.  Reader's Digest is
published in 48 editions and 19 languages.


Reportable Segments

      Our internal management organization reflects three reportable segments:
Reader's Digest North America, Reader's Digest International and Consumer
Business Services.

   Reader's Digest North America

      This segment comprises our operations in the United States and Canada
that:

   -  publish and market (primarily through direct marketing) Reader's Digest
      magazine, Our Canada magazine and several special interest magazines
   -  publish and market (primarily through direct marketing) the magazines
      and books of, and operate the complementary businesses of, our Reiman
      Media Group, Inc. subsidiary
   -  publish and market (primarily through direct marketing) books and home
      entertainment products, which include Select Editions, Reader's Digest
      Young Families, music and video products, and  series and general books
      related to some or all of the following affinities: reading, home and
      health, and entertainment
   -  publish and market (primarily through retail and direct marketing
      channels) books and home entertainment products of Children's Publishing

   Reader's Digest International

      This segment comprises our operations outside of the United States and
Canada that:

   -  publish and market (primarily through direct marketing) books and home
      entertainment products (described above), Reader's Digest magazine in
      numerous editions and languages and special interest magazines, and
      include the results of financial services marketing alliances
   -  establish and develop the operations of other new business development
      initiatives, including entering new geographic markets, developing new
      products, acquiring customers through new channels and expanding U.S.
      business models into markets outside North America



<PAGE>




   Consumer Business Services

      This segment comprises our operations that:

   -  sell books and gift items by display marketing products on-site through
      independent sales representatives at schools and businesses through
      Books Are Fun, Ltd. in the United States and Canada
   -  sell our magazines and other publishers' magazines and other products
      through youth fundraising campaigns of QSP, Inc. in the United States
      and Quality Service Programs, Inc. in Canada (QSP Canada)

      Financial information about each of our reportable segments is included
in Note 14 to our consolidated financial statements, which are incorporated
by reference into this report.


Books and Home Entertainment and Reiman Books

      Our books and home entertainment products consist of Reader's Digest
Select Editions, Reader's Digest Young Families, series books, general books,
recorded music collections and series, and home video products and series.
We market these products principally by direct mail through our Reader's
Digest North America and Reader's Digest International reportable segments.
Consumer Business Services also sells Reader's Digest books and home
entertainment products by display marketing those products on-site at schools
and businesses through Books Are Fun and through the youth fundraising
campaigns of QSP, Inc.  For more information about how we market our books
and home entertainment products, please refer to the section of this report
captioned "Marketing."


   Select Editions

      Reader's Digest Select Editions, which were formerly called "Condensed
Books" in many markets, are a continuing series of condensed versions of
current popular fiction.  A condensed work reduces the length of an existing
text while retaining the author's style, integrity and purpose.  We publish
Select Editions in 14 languages and sell them in the United States, Canada
and 27 other countries.  We generally publish six volumes of Select Editions
a year.  Some of our international subsidiaries publish four or five volumes
a year.

      International editions of Select Editions generally include some
material from the U.S. edition or from other international editions,
translated and edited as appropriate.  International editions also include
some condensed versions of locally published works.  Each local editorial
staff determines whether existing Select Editions selections are appropriate
for their local market.


   Reader's Digest Young Families

      Reader's Digest Young Families sells products for children up to age
eight, primarily through direct mail and telemarketing.  The division's
products include interactive books, such as Sesame Street ABCs, and videos,
such as The Country Mouse and the City Mouse.  Young Families sells its
products principally in the United States.




<PAGE>



   Series Books

      We market two types of series books--reading series and illustrated
series.  These book series may be either open-ended and continuing or
closed-ended, consisting of a limited number of volumes.  We publish reading
series books in four languages and sell them in the United States, Canada and
10 other countries.  One of our reading series is The World's Best Reading,
which consists of full-length editions of classic works of literature.  We
publish six volumes of The World's Best Reading each year in the United
States, Canada and two other countries and in two languages.  We publish
illustrated series, which are generally closed-ended, in six languages and
sell them in 11 countries.


   General Books

      Our general books consist primarily of reference books, cookbooks,
"how-to" and "do-it-yourself" books, and children's books, some of which we
publish in series.  We also publish books on subjects such as history,
travel, religion, health, nature, home, computers and puzzles.  We publish
general books in 21 languages and sell them in the United States, Canada and
39 other countries.

      New general books are usually original Reader's Digest books, but may
also be books acquired from other publishers.  During the development period
for an original Reader's Digest book, we conduct extensive research and
prepare an appropriate marketing strategy for the book.

      We sell most copies of general books through initial bulk promotional
mailings.  We also sell substantial additional copies through subsequent
promotions, through catalog sales and through the use of sales inserts in
mailings for other Reader's Digest products.  We also distribute our general
books for retail sale in stores through independent distributors and through
Books Are Fun and QSP.


   Reiman Books

        Reiman leverages its magazine brand equity, reader loyalty and
editorial capability by publishing and marketing books that complement its
magazines.  Reiman principally markets annual editions of books, which are
created primarily from magazine content from the prior year, and single sales
products.  In fiscal 2005, Reiman published and sold 4.0 million books.
Reiman has 13 annual book programs (including one program that was launched
in fiscal 2005) that are marketed on a continuity basis, with customers
agreeing to receive future editions of the books unless they respond to an
annual prepublication notice.  Annual books constitute about 90% of unit
volume, of which about 63% are renewals.  Reiman markets most of its books
through solo direct mail in which Reiman sends a promotion featuring one book
to names from its customer database and outside lists.  Reiman sells its
books by offering a free preview period during which the customer agrees to
examine the book before purchasing it.  If they do not wish to purchase the
book, they can return it without further obligation.


   Music

      Our music collections, released on compact discs and cassettes in the
United States and 34 other countries, span a broad range of musical styles,
ranging from classical to pop and from local folk to "relaxation" music.  We
offer both international and local repertoires, which reflect our customers'
tastes and expectations.  In most markets, we also sell music series in
various musical genres.

      We license existing recordings from major record companies and sponsor
our own recordings with the world's most renowned orchestras and with
international and local artists.  We also continue to acquire rights to
master recordings.  Our music vault consists of approximately 10,000
selections, which we use in our music collections around the world.  We have
digitized a major part of these selections for online access.  We also
license our selections to third parties for retail sales or for movie
synchronization.

      We are a member of the Recording Industry Association of America in the
United States, and we have been recognized with 51 gold, platinum and
multi-platinum certificates.  In several other countries, we are a member of
the International Federation of the Phonographic Industry.


   Video

      Our single sales and series home video products reflect the core
interests of our global customers--travel, natural history, history and
children's animated programs.  We market a range of video products through
direct response channels in the United States and 25 other countries.  In
some countries, we also sell our home video products through retail outlets.

      We are working with award-winning production companies in the United
States, Europe and Australia to create original programs with very high
editorial and production standards--programs that are intended to stand out in
a competitive marketplace.  Most of our original documentary programs are
also being licensed to broadcasters worldwide.  We are creating an archive of
valuable footage for potential use in future productions and are creating
multi-lingual DVDs of our programs for customers in markets worldwide.


   Production and Fulfillment

      We hire independent contractors to print and bind the various editions
of Select Editions.  We have an agreement through 2007 with a printing
company for printing the English-language Select Editions distributed in the
United States and Canada.  The majority of all other U.S. book products we
produce are printed by several independent contractors.  We usually hire
independent contractors to produce and manufacture our music and video
products.

      Paper is the principal raw material necessary for production of our
Select Editions, series books and general books.  Our exclusive agreement
with a major supplier to supply paper for Select Editions globally expires in
December 2006.  We purchase paper for series books and general books for each
printing.  We believe that our existing contractual arrangements and other
available sources of paper provide us with an adequate supply of paper at
competitive prices.  We use independent contractors in arranging for us to
acquire some of the necessary raw materials to manufacture music and video
products.

      We hire independent contractors to handle our fulfillment, warehousing,
customer service and payment processing.  We have an agreement with a single
independent contractor to handle order and payment processing for most of our
U.S. Books and Home Entertainment business.  That agreement expires in August
2006.  The printers or suppliers of our products generally package and
deliver those products directly to the postal service.  For information about
postal rates and postal services, please refer to the section of this report
captioned "Marketing."

      Our European operations use several manufacturing companies for the
production of books.  The majority of our Home Entertainment products are
produced throughout Europe by three major manufacturers.

      It is our direct marketing policy that a customer may return any book or
home entertainment product to us, either before or after payment, and receive
a refund of the amount paid.  We believe that our returned goods policy is
essential to our reputation and that it elicits a greater number of orders.
Many of those orders are not returned because a high number of consumers are
satisfied with our products.

      Sales of books and home entertainment products are seasonal.  In the
direct marketing industry as a whole, more consumers respond in the fall and
winter months than during the rest of the year.  Also, sales are typically
higher during the pre-Christmas season than in spring and summer.


Reader's Digest Magazine, Reiman Magazines and Special Interest Magazines

      Reader's Digest magazine is a monthly, general interest magazine
consisting of original articles, previously published articles in condensed
form, and a condensed version of a previously published or soon-to-be
published full-length book.  Reader's Digest also contains monthly humor
columns, such as "Laughter, The Best Medicine(R)," "Life in These United
States(R)" and "All In A Day's Work(R)," and other regular features, including
"Quotable Quotes(R)," "Word Power(R)," "Only in America," "Everyday Heroes,"
"That's Outrageous!(R)" and "RD Living."  The international editions of Reader's
Digest include similar features.

      We publish Reader's Digest in the United States and Canada.  Globally,
Reader's Digest is published in 48 editions and 19 languages.  We license
independent contractors to publish Reader's Digest in India, Italy, Korea,
Denmark, Norway, South Africa and Indonesia.  These magazines are sold
primarily through direct marketing.  In addition, we sell Reader's Digest and
other publishers' magazines and products in the United States and in Canada
through youth fundraising campaigns of our subsidiaries, QSP, Inc. in the
United States and Quality Service Programs, Inc. in Canada.

      We publish Reader's Digest in several editions in the United States,
including an English-language edition, a Spanish-language edition entitled
Selecciones and Reader's Digest Large Print for Easier Reading.  We license
independent contractors to publish a braille edition and a recorded edition
in the United States.

      Reiman publishes 13 bi-monthly magazines and 1 quarterly magazine in the
United States and Canada, including Cooking for 2, launched in the third
quarter of fiscal 2005, and Birds and Blooms Extra, launched in the fourth
quarter of fiscal 2005.

      We publish several special interest magazines that we believe are
consistent with our image, editorial philosophy and market expertise.  In the
United States, we publish The Family Handyman(R) and American Woodworker(R). The
Family Handyman provides instructions and guidance for "do-it-yourself" home
improvement projects.  American Woodworker(R) provides information, instruction
and guidance for professional and serious amateur woodworkers.
Internationally, we publish Receptar, a leading Czech do-it-yourself and
gardening monthly magazine, The Family Handyman in Australia and Our Canada,
a bi-monthly general interest magazine with principally reader-contributed
content.

      We promote our special interest magazines to our Reader's Digest
customer list.  We also promote other products to each magazine's customer
list, as appropriate.  This strategy helps us to expand the customer base for
all of our products.  Reiman markets its magazines principally through direct
mail and cross-promotion of titles within its magazine group.  Reiman markets
products to its customer database of approximately 40 million current and
former customers, combined with selective rental of outside customer lists.
Through reader involvement, Reiman seeks to identify and address customer
interest in existing and new publications.  New magazine ideas and titles,
also created using reader-submitted editorial content, are test marketed to
subscribers of existing magazines and selected outside lists.  This has
enabled Reiman to more accurately measure the potential for new products and
launch new magazines at relatively low start-up costs.  Reiman does not use
cash-prize sweepstakes in connection with its marketing.

      We also publish other limited-edition special interest publications in
the United States and internationally.  These include a special homeowners'
edition of The Family Handyman that is used by real estate brokers in the
United States and special holiday-themed editions of Reader's Digest in
Mexico.  In addition, we publish a series of monthly check-out counter
magazines branded as RD Specials that consist primarily of repurposed content
from our books and magazines relating to the topics of home, health and food.


   Circulation and Advertising

      The following table shows fiscal 2005 circulation and advertising
information for our portfolio of magazines in our reportable segments (this
includes Reader's Digest magazine, Reiman magazines and our special interest
magazines):

<TABLE>

                                                                       Advertising
                                                                          Pages
            Reportable Segment                         Circulation       Carried

<S>                                                     <C>                <C>
Reader's Digest North America
  Reader's Digest magazine - U.S. and Canada(1) ....    11,183,000         2,630
  Reiman magazines(2) ..............................    13,972,466            --
  Special interest magazines - U.S. and Canada .....     2,575,000         1,653

Reader's Digest International
  Reader's Digest magazine(1) ......................     7,491,689         7,731
  Special interest magazines .......................       157,000           521
</TABLE>

(1)   In Canada and international markets, Reader's Digest magazine is
      published in multiple editions and languages.  Circulation for these
      editions constitutes a rate base.
(2)   Reiman magazines do not have a guaranteed circulation rate base and are
      not audited by the Audit Bureau of Circulation.  The amount indicated
      in the table above represents their average circulation for the year
      for all of their publications.

      Approximately 70% of total U.S. fiscal 2005 revenues for Reader's Digest
were generated by circulation and 30% by advertising.  Circulation levels for
all Reiman titles fluctuate throughout the year.  The overall circulation
level is managed in total to maximize the profitability of the entire
portfolio, which may cause year-over-year increases or decreases in the
average circulation for individual titles.  Reiman magazines do not accept
on-page advertising and rely on subscriptions for over 90% of their revenue,
with newsstand sales supplying the balance.  "Savings Packs" of coupons are
poly-bagged with the food magazines.

      We have determined that the U.S. edition of Reader's Digest has the
largest paid circulation of any U.S. magazine, other than those automatically
distributed to all members of the American Association of Retired Persons.
Our determination is based on the most recent audit report issued by the
Audit Bureau of Circulation, Inc., a not-for-profit organization that
monitors circulation in the United States and Canada.  Approximately 95% of
the U.S. paid circulation of Reader's Digest consists of subscriptions.  The
balance consists of single copy sales at newsstands and in supermarkets and
similar retail establishments.  We also sell our special interest magazines
by subscription and at newsstands.

      We maintain the circulation rate base for Reader's Digest through annual
subscription renewals and new subscriptions.  In fiscal 2005, we sold
approximately 3.9 million new subscriptions in the United States and
approximately 1.8 million new international Reader's Digest subscriptions to
maintain the current circulation rate base.  We sell new subscriptions in the
United States through a variety of direct response marketing techniques, and
we sell new subscriptions in international markets primarily by direct mail.
We sell the largest percentage of subscriptions between July and January of
each fiscal year.  Subscribers to Reader's Digest may cancel their
subscriptions at any time and we will refund the unused balance of the
subscription price.  For additional information regarding direct marketing of
subscriptions, please refer to the section of this report captioned
"Marketing."

      We believe that many international editions of Reader's Digest have the
largest paid circulation for monthly magazines both in the individual
countries and in the regions in which they are published.  For most
international editions of Reader's Digest, subscriptions comprise over 90% of
circulation.  The balance is attributable to newsstand and other retail
sales.  Approximately 80% of total international fiscal 2005 revenues for
Reader's Digest were generated by circulation revenues and 20% by advertising
revenues.

      The U.S. editions and the larger international editions of Reader's
Digest offer advertisers different regional editions, major market editions
and demographic editions.  These editions, which usually contain the same
editorial material, permit advertisers to concentrate their advertising in
specific markets or to target specific audiences.  Reader's Digest sells
advertising principally through an internal advertising sales force.  We sell
advertisements in multiple Reader's Digest editions worldwide and offer
discounts for placing advertisements in more than one edition.


   Reader's Digest and Reiman Magazine Editorial

      Reader's Digest is a reader-driven, family magazine.  Its editorial
content is, therefore, crucial to the loyal subscriber base that constitutes
the cornerstone of our operations.  The editorial mission of Reader's Digest
is to inform, enrich, entertain and inspire.  The articles, book section and
features included in Reader's Digest cover a broad range of contemporary
issues and reflect an awareness of traditional values.

      A substantial portion of the selections in Reader's Digest are original
articles written by freelance writers or staff writers.  The balance is
selected from existing published sources and is condensed or excerpted by
Reader's Digest editors.  We employ a professional staff to research and
fact-check all published pieces.

      The international editions of Reader's Digest contain content and follow
editorial procedures similar to the U.S. editions.  Each international
edition has a local editorial staff responsible for the editorial content of
the edition.  The mix of locally generated editorial material, material taken
from the U.S. edition and material taken from other international editions
varies greatly among editions.  In general, our larger international
editions, for example, those in France, Germany, Mexico and the United
Kingdom, carry more original or locally adapted material than do smaller
editions.

      Reiman editorial philosophy includes the following core principles: (1)
concentration on positive aspects of people and their lifestyles; (2)
encouragement of reader involvement; (3) maintenance of low editorial costs;
and (4) emphasis on product quality.  As a result, about 80% of the editorial
content of Reiman magazines is contributed by readers.


   Internet Initiatives

      We have created our rd.com website to extend the experience of reading
Reader's Digest through audio, graphic, text and video enhancements,
interactive discussions and reader involvement, and additional content
relating to Reader's Digest.  We are also utilizing rd.com to market our
products through e-mail and the Internet, as well as to communicate with and
service our customers online.  For more information about rd.com, please
refer to the section of this report captioned "Marketing."


   Complementary Reiman Businesses

      Reiman operates four businesses that complement its core magazine and
book publishing operations:

           Country Store sells a broad selection of products, including Reiman
      books, calendars, collectors' items, memorabilia, small kitchen
      appliances, gardening tools, apparel and other country lifestyle
      products, through a catalog that is distributed to those who request and
      to those who have purchased in the past.

           World Wide Country Tours offers motor coach and river barge tours
      to experience the lives of people in various parts of the United States
      and the world.  World Wide Country Tours utilizes direct marketing
      through Reiman magazines and its own stand-alone brochures to attract
      potential travelers.

           Reiman Advertising & Promotion offers Savings Packs of coupons and
      promotional advertising to subscribers in conjunction with recipes and
      other information.  Its customers are primarily food and consumer
      product companies, which purchase advertising space in the Savings Packs.

           Taste of Home Cooking Schools provide cooking school demonstrations
      by professional home economists in small- and medium-size communities
      throughout the United States.  Revenues are generated from attendance
      fees paid by local news media that sponsor individual shows and from
      portions of fees that Reiman Advertising & Promotion receives from
      national sponsors of the Taste of Home Cooking Schools.


   Reader's Digest Trade Publishing

      This division sells books and products for both children and adults and
is comprised of two divisions: Reader's Digest Children's Publishing and
Adult Trade Publishing.  Reader's Digest Children's Publishing produces
books, games and other products under the Reader's Digest Children's
Publishing imprint for children up to age 12.  Its products are sold through
retail channels as well as through our other businesses (including display
marketing and catalogs) and other channels, including the Internet.  The
products represent such popular brands as Barbie, Disney (classic Disney and
Pixar characters), Nickelodeon, Hasbro, Fisher-Price and NASCAR.  The book
products have been translated into 29 languages and are marketed in the
United States, Canada, Europe, South America, Australia and Asia.

      Our Adult Trade Publishing group originates books in many illustrated
reference categories, including gardening, crafts, do-it-yourself, history,
and family reference.  These books are sold through retail channels,
catalogs, book clubs, Books Are Fun, QSP, television, and through our
domestic and international divisions.


   Production and Fulfillment

      We hire independent contractors to print all editions of Reader's Digest
and our special interest magazines.  We have an exclusive contract with a
U.S. printer to print the U.S. editions of Reader's Digest.  The contract is
scheduled to expire in December 2008.  We have two printers to print our
Reiman magazines under contracts expiring in 2008.  We believe that,
generally, there is an adequate supply of alternative printing services
available to us at competitive prices should the need arise.  Nevertheless,
significant short-term disruption could occur.  We have contingency plans to
minimize recovery time should our current contract printers be unable to meet
our production requirements.

      Lightweight coated and uncoated papers are the principal raw materials
used in the production of Reader's Digest and special interest magazines.
Our global paper supply contract for Reader's Digest and Reiman magazines
expired in June 2005.  We are currently negotiating a multi-year contract
with this provider to continue to supply paper at competitive prices.  Until
a new contract is signed, we continue to operate under the terms of the
previous contract with this provider.  We believe that our supply contracts
will continue to provide an adequate supply of paper for our needs and that,
in any event, alternative sources are available at competitive prices.  A
variety of factors affect paper prices, including demand, capacity, pulp
supply and general economic conditions.

      We have agreements with a single independent contractor to handle order
and payment processing for Reader's Digest, the U.S. special interest
magazines and the Reiman magazines.  The agreement for Reader's Digest
expires in August 2006.  The agreement for the Reiman magazines expires in
December 2005 and the agreement for the U.S. special interest magazines
expired in June 2005.  We are currently negotiating a new contract with this
provider.  Until a new contract is signed, we continue to operate under the
terms of the previous agreement.  The same contractor also handles these
matters for most of our U.S. Books and Home Entertainment operations.

      We deliver subscription copies of the U.S. edition of Reader's Digest,
the special interest magazines and the Reiman magazines through the United
States Postal Service as "periodicals" class mail.  Subscription copies of
international editions of Reader's Digest are delivered through the postal
service in each country of publication.  For additional information about
postal rates and service, please refer to the section of this report
captioned "Marketing."

      In the United States, a distribution network handles newsstand and other
retail distribution.  We have also contracted in each country with a
newsstand magazine distributor for the distribution of Reader's Digest.

      In Europe, we have several multi-country agreements with independent
contractors as well as in-country independent contractors to handle our
fulfillment, warehousing, customer service, and payment and order
processing.  We have two primary printing companies for printing Reader's
Digest magazine in Europe.


Consumer Business Services

   Books Are Fun, Ltd.

      Our Books Are Fun, Ltd. subsidiary sells premium-quality books and gift
items, including Reader's Digest books and home entertainment products, at
discount prices.  It display markets those products on-site at schools and
businesses in all 50 states of the United States and across Canada through
book fairs and other displays.  Book categories sold by Books Are Fun include
best-selling novels, cookbooks, children's books and education, sports,
hobby, nature, travel and self-help titles.  Non-book categories include bath
and beauty products, music, videos and gift items, such as jewelry and art.
Books Are Fun's products are sold by more than 800 independent sales
representatives, who service approximately 70,000 schools, 15,000 large
corporations and institutions, 14,000 daycare centers and 50,000 small
businesses.  Since many individuals purchase these products for gift giving,
Books Are Fun's sales cycle is largely seasonal, reflecting substantial
volume in the second quarter of our fiscal year.

      Books Are Fun purchases book titles, gifts and other products from more
than 500 publishers and vendors worldwide.  Many of its top titles are
purchased in quantities exceeding 100,000 copies, affording Books Are Fun
substantial purchasing power.  Most products are test marketed by the
purchase of a modest number of units in advance of purchasing larger
quantities.  Books Are Fun uses an extensive network of independent public
warehousing facilities and carriers to store and transport products.

      The Books Are Fun business model is being rolled out in a number of
international markets.  Commercial operations are under way in Mexico and
Spain, and the concept is in market testing and early development phases in
Italy and Germany.




<PAGE>


   QSP

      QSP markets and sells subscriptions to Reader's Digest, the Reiman
magazines, the special interest magazines and other publishers' magazines in
the United States, as well as music and video products, books, food and
gifts.  QSP works directly with schools and youth groups on fundraising
campaigns in which participants sell those products.  QSP derives its
revenues through services rendered in connection with fundraising events.  A
substantial majority of QSP's sales occurs during the first half of our
fiscal year, which coincides with the fall school semester.  QSP currently
has approximately 440 sales representatives.

      QSP is party to a licensing agreement with World's Finest Chocolate,
Inc. that requires QSP to purchase annual minimum amounts of World's Finest
Chocolate products and gives QSP the exclusive right to sell those products
for fundraising purposes and through other channels, under specified
circumstances, through 2020.

      Quality Service Programs, Inc., our Canadian subsidiary, conducts
operations substantially similar to those conducted by QSP in the United
States.

      In the United States, operations at QSP, Inc. are supplemented by
eFundraising.com, which uses the Internet to enhance fundraising activities.
eFundraising.com uses proprietary software that enables e-mail messages to be
sent on behalf of students about their school or youth group's fundraising
activities to family and friends.  The e-mail directs the recipients to the
school or youth group's website, where they may purchase magazine
subscriptions and a variety of gift and food products.  eFundraising.com also
provides fundraising products, mainly scratch cards and chocolate, to
organizations conducting fundraisers.

      Several hundred other publishers make magazine subscriptions available
to QSP at competitive discounted prices.  QSP also obtains music products
from a large music publisher.  A substantial portion of QSP's chocolate food
products are obtained from World's Finest Chocolate.  QSP engages an
independent contractor to process gift, food, magazine, music and book
orders.


Marketing

      We sell magazine subscriptions, Select Editions, series books, general
books, music and video products, and certain other products principally
through direct mail solicitations to households on our customer lists, as
well as to customer lists rented or purchased from third parties.  Our books
and home entertainment products and product offers and many international
magazine subscription offers are often accompanied by sweepstakes entries
and, in some cases, premium merchandise offers.

      As part of our growth strategy and to better manage distribution and
customer acquisition costs, we are increasing the sale of our products
through direct-response channels other than direct mail.  These other
distribution channels include direct-response television, package inserts,
telemarketing, the Internet, display marketing and other direct sales, and
catalogs.  Reader's Digest magazine obtains the vast majority of its new
subscribers in the United States from non-sweepstakes sources.  Moreover,
since the acquisition of our Reiman operations, we have significantly reduced
our reliance on large cash-prize sweepstakes marketing throughout the
remainder of our direct marketing businesses.

      We are adapting the editorial content and the marketing methods of our
magazines and books and home entertainment products to new technologies.  Our
website--rd.com--links to our many international and domestic web sites and to
our multiple online stores for shopping and information about our products.
In fiscal 2005, rd.com, including changeone.com, had over 15.8 million
visitors from around the world.  We are using rd.com and our local
international websites to market subscriptions to our products.  We are also
utilizing electronic direct marketing to offer magazine subscriptions through
one-click e-mail.

      To promote the sale of our books and home entertainment products in the
United States, we usually offer a sweepstakes in our promotional mailings.
Prizes totaled about $2.9 million for the 2005 edition of the sweepstakes.
Generally, each of our international subsidiaries sponsors its own
sweepstakes.  The mechanics of the sweepstakes vary from jurisdiction to
jurisdiction, depending upon local law.

      From time to time we are involved in legal, regulatory and investigative
proceedings concerning our sweepstakes and other direct marketing practices.
Also, from time to time jurisdictions in which we do business consider more
restrictive laws or regulations governing sweepstakes or direct marketing.
Although some of these proceedings may have negatively affected our direct
marketing business, we do not believe that these proceedings or proposed laws
and regulations will have a material adverse effect on our direct marketing
business.

      In 2001, we entered into a voluntary comprehensive agreement with
attorneys general for 32 states (and subsequently with four additional
states) and the District of Columbia regarding standards for direct mail
sweepstakes promotions.  Pursuant to the agreement, we are promoting consumer
education and have adopted standards for promotions in the United States
similar to those agreed to by other direct marketing and publishing companies.

      We are subject to postal rate increases, which affect our product
deliveries, promotional mailings and billings.  Postage is one of the largest
expenses in our promotional and billing activities.  In the past, we have had
sufficient advance notice of most increases in postal rates so that we could
factor the higher rates into our pricing strategies and operating plans.
Higher postal rates or other delivery charges usually increase the total cost
to the customer, which may have a negative effect on sales.  As a result, we
may strategically determine the extent, if any, to which we will pass these
cost increases on to our customers.

      We rely on postal delivery service for timely delivery of most of our
products and promotional mailings.  In the United States and most
international markets, delivery service is generally satisfactory.  Some
international jurisdictions, however, experience periodic work stoppages in
postal delivery service or less than adequate postal efficiency.

      In some states in the United States and in some international
jurisdictions, some or all of our products are subject to sales tax or value
added tax.  Taxes, like delivery costs, are generally stated separately on
bills, where permitted by applicable law.  Higher taxes increase the total
cost to the customer, which may have a negative effect on sales.  In
jurisdictions where applicable tax must be included in the purchase price, we
may be unable to fully recover from customers the amount of any tax increase
or new tax.


Information Technology and Customer Database Enhancement

      The size and quality of our computerized customer database of current
and prospective customers in each country where we operate contributes
significantly to our business.  We are constantly striving to improve our
customer databases.  We believe that our U.S. database of over 70 million
households--over half the total number of households in the country--is one of
the largest direct response databases in the United States.  Our
international databases include a total of almost 50 million households.

      We continue to make significant investments in our database management
and related information technology to improve our operating efficiencies, to
increase the level of service we provide to our customer base and to
facilitate globalization of our operations.

      Some international jurisdictions, particularly in Europe, have data
protection laws or regulations prohibiting or limiting the exchange of
information of the type that we maintain.  Some jurisdictions also prohibit
the retention of information, other than certain basic facts, about
noncurrent customers.  Although these regulations may hinder our ability to
collect, retain and use customer information, we believe that current laws
and regulations do not prevent us from engaging in activities necessary to
operate our current businesses.


Competition and Trademarks

      Although Reader's Digest is a unique and well-established institution in
the magazine publishing industry, it competes with other magazines for
subscribers and with magazines and all other media, including television,
radio and the Internet, for advertising.  We believe that the extensive and
longstanding international operations of Reader's Digest provide us with a
significant advantage over competitors seeking to establish a global
publication.

      We own numerous trademarks that we use in our businesses worldwide.  Two
of our most important trademarks are "Reader's Digest" and the "Pegasus"
logo.  In addition, our significant trademarks include "QSP", "Books Are
Fun", "Taste of Home" and the names of many of our magazines, features and
other products.  We believe that the name recognition, reputation and image
that we have developed in each of our markets significantly enhance customer
response to our direct marketing sales promotions.  For these reasons,
trademarks are important to our business, and we aggressively defend our
trademarks.

      We believe that our company names, image and reputation, as well as the
quality of our customer databases, provide a significant competitive
advantage over many other direct marketers.  However, our books and home
entertainment businesses and Books Are Fun compete with companies selling
similar products at retail as well as by direct marketing through various
channels, including display marketing and the Internet.  Because tests show
that consumers' responses to direct marketing promotions can be adversely
affected by the overall volume of direct marketing promotions, we also
compete with all other direct marketers, regardless of whether their products
are similar to our products.  Our books and home entertainment businesses
compete principally on the basis of direct marketing customer service,
product popularity and price.

      Reader's Digest magazine and our special interest magazines compete with
other magazines of similar respective genres for readers and advertising and
our Reiman magazines compete for readers in their respective genres.  QSP
competes with other sellers of products similar to those sold by QSP, whether
through fundraising services, direct marketing or retail.  Nearly all of our
products are in competition with other products and services that compete for
a potential purchaser's leisure activity time and disposable income.


Employees

      As of June 30, 2005, we employed about 4,200 people worldwide.  We
employed about 2,300 in the United States and about 1,900 in our
international subsidiaries.  Our relationship with our employees is generally
satisfactory.




<PAGE>


Executive Officers

      The following is information about our executive officers.

Name and Age                 Positions With Reader's Digest and Recent
                             Business Experience

Thomas O. Ryder (61)         Mr. Ryder has been Chairman of the Board
                             and Chief Executive Officer and a Director
                             of Reader's Digest since he joined
                             Reader's Digest in April 1998.

Michael A. Brennan (58)      Mr. Brennan has been President, Latin
                             America and Asia-Pacific, and a Senior
                             Vice President of Reader's Digest since
                             March 2002.  He was Vice President and
                             General Manager, Developing Markets,
                             before March 2002.  Mr. Brennan joined
                             Reader's Digest in January 1990.

Michael A. Brizel (48)       Mr. Brizel has been Senior Vice President
                             and General Counsel of Reader's Digest
                             since July 2002.  Before July 2002, he was
                             Vice President and General Counsel of
                             Reader's Digest.  Mr. Brizel joined
                             Reader's Digest in July 1989.

Richard E. Clark (41)        Mr. Clark has been Senior Vice President,
                             Investor Relations and Global
                             Communications, since November 2004.  He
                             joined Reader's Digest as Vice President,
                             Investor Relations, in March 2000.

Giovanni di Vaio (51)        Mr. di Vaio became Vice President, Human
                             Resources International, of Reader's
                             Digest and a chief human resources officer
                             with responsibility for international
                             operations, as well as global compensation
                             and benefits, leadership and management
                             development, in January 2004.  Prior to
                             January 2004, he was Vice President,
                             International Human Resources.  Mr. di
                             Vaio joined Reader's Digest in May 1999.

Clifford H.R. DuPree (54)    Mr. DuPree has been Vice President,
                             Corporate Secretary and Associate General
                             Counsel of Reader's Digest since July
                             1998.  He joined Reader's Digest in May
                             1992.

Thomas D. Gardner (47)       Mr. Gardner has been President, Reader's
                             Digest International, since February 2003
                             and has been a Senior Vice President of
                             Reader's Digest since July 1998.  He was
                             also President, North America Books and
                             Home Entertainment, from January 2001 to
                             February 2003 and was Senior Vice
                             President, U.S. New Business Development,
                             of Reader's Digest prior to January 2001.
                             Mr. Gardner joined Reader's Digest in
                             February 1992.

Michael S. Geltzeiler (46)   Mr. Geltzeiler joined Reader's Digest as
                             Senior Vice President and Chief Financial
                             Officer in September 2001.  In August 2004
                             Mr. Geltzeiler's responsibilities were
                             expanded to include oversight of Global
                             Operations and Information Technology.



<PAGE>



Name and Age                 Positions With Reader's Digest and Recent
                             Business Experience

Francoise Hanonik (45)       Ms. Hanonik has been Vice President, Human
                             Resources North America of Reader's Digest
                             and a chief human resources officer with
                             responsibility for North American
                             operations and global talent review and
                             organization, since January 2004.  She
                             joined Reader's Digest as Vice President,
                             Human Resources, in January 2000.

Albert L. Perruzza (57)      Mr. Perruzza has been Senior Vice
                             President, Global Operations and Business
                             Redesign, since February 2002.  He was
                             Senior Vice President, Global Operations,
                             of Reader's Digest before February 2002
                             and was Vice President, Database
                             Management Operations, before October
                             1999.  Mr. Perruzza joined Reader's Digest
                             in 1972.

Gary S. Rich (44)            Mr. Rich has been President, Global QSP,
                             and a Senior Vice President since February
                             2002.  He was Senior Vice President, Human
                             Resources of Reader's Digest from August
                             1998, when he joined Reader's Digest, to
                             February 2002.

Eric W. Schrier (53)         Mr. Schrier has been President, Reader's
                             Digest North America, since February
                             2003.  He has also been Senior Vice
                             President and Global Editor-in-Chief since
                             joining Reader's Digest in January 2000
                             and served as President, U.S. Magazines,
                             from February 2002 to February 2003.

Jeffrey S. Spar (40)         Mr. Spar has been Senior Vice President
                             and Chief Information Officer of Reader's
                             Digest since July 2002.  He was Vice
                             President and Chief Information Officer
                             from November 1998, when he joined
                             Reader's Digest, to July 2002.


      Our By-Laws state that officers serve at the pleasure of our board of
directors. We elect our officers annually and they serve until their
successors are elected and qualified.

Available Information

      We file annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K, proxy statements and other documents with the
U.S. Securities and Exchange Commission (the "SEC").  The public may read and
copy any materials we file with the SEC at the SEC's Public Reference Room at
450 Fifth Street, NW, Washington, DC 20549.  The public may obtain
information on the operation of the Public Reference Room by calling the SEC
at 1-800-SEC-0330.  The SEC maintains an Internet site at http://www.sec.gov
that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC.

      We make available free of charge on or through our Internet
website--http://www.rd.com--our annual report on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K, and amendments to those reports filed
or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 as soon as reasonably practicable after we electronically file
such material with, or furnish it to, the SEC.



<PAGE>


      Copies of the following Reader's Digest documents are also available on
our website.

      Corporate Governance Guidelines
      Audit Committee Charter
      Compensation and Nominating Committee Charter
      Corporate Governance Committee Charter
      Finance Committee Charter
      Ethical, Legal and Business Conduct Policies

      Information contained on our website and the SEC's website is not a part
of this report.

      Copies of any of the information referred to above are also available in
print to any stockholder who requests.  Requests for printed or electronic
copies should be addressed to The Reader's Digest Association, Inc.,
Attention: Investor Relations, Reader's Digest Road, Pleasantville, NY
10570-7000 or via e-mail to: carlos_jimenez@rd.com.

ITEM 2. PROPERTIES

      The table below shows our headquarters and other properties that we own
or lease.  These locations house our executive, administrative, editorial,
advertising sales and operational offices and warehouse and other facilities.

Location                   Area (sq. ft.)

Westchester County, NY     445,193 leased
Greendale, WI              164,800 owned
Fairfield, IA              105,393 owned
New York, NY               99,200 leased
Various U.S. cities        45,358 leased
International              369,440 owned; 458,941 leased

      In December 2004, we completed the sale and partial leaseback of our
headquarters in Westchester County, New York.  Also, during fiscal 2005 we
sold buildings in Australia and Portugal.

      We believe that our current facilities, together with expansions and
upgrades of facilities presently underway or planned, are adequate to meet
our present and reasonably foreseeable needs.  We also believe that adequate
space will be available to replace any leases that expire in the near future.


ITEM 3. LEGAL PROCEEDINGS

      We and our subsidiaries are defendants in various lawsuits and claims
arising in the regular course of business.  Based on the opinions of
management and counsel for these matters, we believe that recoveries, if any,
by plaintiffs and claimants would not materially affect our financial
position or results of operations.


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

      No matter was submitted to a vote of our security holders during the
fourth quarter of the fiscal year ended June 30, 2005.


<PAGE>


                                    PART II


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

      The information contained under the captions "Selected Quarterly
Financial Data and Dividend and Market Information" and "Corporate and
Shareholder Information" in Exhibit 13 to this report is incorporated into
this Item by reference.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

<TABLE>

                                                    (c) Total Number of
                     (a) Total                        Shares (or Units)      (d) Approximate Dollar
                     Number of       (b) Average      Purchased as Part        Value of Shares that
                     Shares (or       Price Paid        of Publicly            May Yet Be Purchased
                       Units)          per Share       Announced Plans          Under the Plans or
   Period            Purchased         (or Unit)         or Programs                 Programs

<S>                   <C>                <C>               <C>                     <C>
April 1-30, 2005      1,447 (1)          16.95                  --                 $100,000,000
May 1-31, 2005           -- (1)             --             130,000                  $97,769,832
June 1-30, 2005       4,284 (1)          17.18             280,000                  $93,010,861
                      -----                                -------
        Total         5,731                                410,000
</TABLE>

(1)   The shares purchased in April, May and June 2005 include 1,447, zero and
      4,284 shares, respectively, of the Company's Common Stock surrendered to
      the Company by employees in order to fulfill tax withholding obligations
      of employees upon vesting of restricted stock.

Recent Sales of Unregistered Securities

      Shown in the table below are securities of the registrant that were not
registered under the Securities Act of 1933 and were sold by the registrant
during the fiscal year ended June 30, 2005.  The securities were sold to
employees of subsidiaries of the Company located outside of the United States
pursuant to international employee stock purchase plans that permitted the
participants to purchase shares of the Company's Common Stock, generally at a
purchase price of 85% of the lower of the fair market value of the stock on
the first or the last day of a six-month period.  These sales were made
outside of the United States in reliance on the safe harbor under Regulation
S under the Securities Act of 1933.

<TABLE>

Class of security      Date of sale      Number of shares sold      Aggregate purchase price

<S>                 <C>                         <C>                       <C>
Common Stock        December 31, 2004           114,608                   $1,362,540
Common Stock        June 30, 2005                82,098                     $971,705

</TABLE>

ITEM 6. SELECTED FINANCIAL DATA

      The information contained under the caption "Selected Quarterly
Financial Data and Dividend and Market Information" and "Selected Financial
Data" in Exhibit 13 to this report is incorporated into this Item by
reference.


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

      The information contained under the caption "Management's Discussion and
Analysis" in Exhibit 13 to this report is incorporated into this Item by
reference.

      This report contains or incorporates by reference "forward-looking
statements" within the meaning of the U.S. federal securities laws.
Forward-looking statements include any statements that address future results
or occurrences.  These forward-looking statements inherently involve risks
and uncertainties that could cause actual future results and occurrences to
differ materially from the forward-looking statements.  Some of these risks
and uncertainties include factors relating to:

-  the effects of potentially more restrictive privacy and other
   governmental regulation relating to our marketing methods;

-  the effects of modified and varied promotions;

-  our ability to identify customer trends;

-  our ability to continue to create and acquire a broadly appealing mix of
   new products;

-  our ability to attract and retain new and younger magazine subscribers
   and product customers in view of the maturing of an important portion of
   our customer base;

-  our ability to attract and retain subscribers and customers in an
   economically efficient manner;

-  the effects of selective adjustments in pricing;

-  our ability to expand and more effectively utilize our customer database;

-  our ability to expand into new international markets and to introduce
   new product lines into new and existing markets;

-  our ability to expand into new channels of distribution;

-  our ability to negotiate and implement productive acquisitions,
   strategic alliances and joint ventures;

-  our ability to successfully integrate newly acquired and newly formed
   businesses;

-  the strength of relationships of newly acquired and newly formed
   businesses with their employees, suppliers and customers;

-  the accuracy of the basis of forecasts relating to newly acquired and
   newly formed businesses;

-  our ability to achieve financial savings related to restructuring
   programs;

-  our ability to contain and reduce costs, especially through global
   efficiencies;

-  the cost and effectiveness of our reengineering of business processes
   and operations;

-  the accuracy of our management's assessment of the current status of our
   business;

-  the evolution of our organizational and structural capabilities;

-  our ability to respond to competitive pressures within and outside the
   direct marketing and direct sales industries, including the Internet;

-  our ability to recruit, train and retain effective sales personnel;

-  the effects of worldwide paper and postage costs;

-  the effects of possible postal disruptions on deliveries of promotions,
   products and payments;

-  the effects of foreign currency fluctuations;

-  the accuracy of our management's assessment of the future effective tax
   rate and the effects of initiatives to reduce the rate;

-  the adequacy of our financial resources;

-  the effects of the terms of, and increased leverage resulting from
   additional borrowings under, our credit facilities;

-  the effects of interest rate fluctuations;

-  the effects of downgrades of our credit ratings;

-  the effects of economic and political changes in the markets where we
   compete;

-  the effects of weather in limiting access to consumers; and

-  the economic effects of terrorist activity and related events,
   especially those limiting access to consumers and otherwise affecting the
   direct marketing and direct sales industries.

We do not undertake to update any forward-looking statements.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
         MARKET RISK

      The information contained under the caption "Management's Discussion and
Analysis" in the section entitled "Currency Risk Management" in Exhibit 13 to
this report is incorporated into this Item by reference.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      Our Consolidated Financial Statements, together with the reports of KPMG
LLP in Exhibit 13 to this report, are incorporated into this Item by
reference.


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

      None.




<PAGE>


ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

      Our management evaluated, with the participation of our principal
executive officer and principal financial officer, the effectiveness of our
disclosure controls and procedures (as defined in rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934) as of June 30, 2005.
Based on that evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures were sufficient
to provide reasonable assurances that the information required to be
disclosed by us in the reports that we file or submit under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules
and forms.

Internal Control Over Financial Reporting

      The information contained under the captions "Report of Management" and
"Reports of Independent Registered Public Accounting Firm" in Exhibit 13 to
this report is incorporated into this Item by reference. There has been no
change in the Company's internal control over financial reporting during the
fiscal quarter ended June 30, 2005, that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.


ITEM 9B. OTHER INFORMATION

      None.






<PAGE>


                                   PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      Certain information required by this Item with respect to our directors
under the captions "Proposal 1: Election of Directors" and "Governance
Information" in the Proxy Statement for our Annual Meeting of Stockholders to
be held on November 18, 2005, is incorporated into this Item by reference.

      Information with respect to our executive officers appears under the
caption "Executive Officers" in Item 1 of Part I of this report and is
incorporated into this Item by reference.

      Information with respect to compliance with Section 16 of the Securities
Exchange Act of 1934 appears under the caption "Section 16(a) Beneficial
Ownership Reporting Compliance" in the Proxy Statement for our Annual Meeting
of Stockholders to be held on November 18, 2005, and is incorporated into
this Item by reference.

Code of Ethics

      Our Ethical, Legal and Business Conduct Policies, which are a "code of
ethics" within the meaning of Item 406 of the Securities and Exchange
Commission's Regulation S-K, apply to all of our Directors and employees,
including our principal executive officer, principal financial officer and
principal accounting officer, or persons performing similar functions.  These
Policies are available on our Internet website at www.rd.com.  We intend to
post on our website (or disclose by any other means permitted under SEC
rules) any amendment to, or waiver from, any provision of the Policies that
applies to our principal executive officer, principal financial officer or
principal accounting officer, or persons performing similar functions.


ITEM 11. EXECUTIVE COMPENSATION

      Information with respect to executive compensation under the captions
"Executive Compensation," "Report of the Compensation and Nominating
Committee" and "Performance Graph" in the Proxy Statement for our Annual
Meeting of Stockholders to be held on November 18, 2005, is incorporated into
this Item by reference.




<PAGE>


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

Equity Compensation Plan Information

      The following  table sets forth  information  as of June 30,  2005,  with
respect to  compensation  plans  under  which  equity  securities  of  Reader's
Digest may be issued.  The equity  securities  to be issued under the plans are
Reader's Digest Common Stock.

<TABLE>

                                                                          Number of securities
                       Number of securities     Weighted-average     remaining available for future
                        to be issued upon       exercise price of        issuance under equity
                           exercise of             outstanding             compensation plans
                       outstanding options,     options, warrants    (excluding securities reflected
                        warrants and rights        and rights                in column (a))
   Plan category                (a)                    (b)                        (c)

<S>                          <C>                     <C>                      <C>
Equity compensation
  plans approved by
  security holders           15,170,282              $19.99                   2,552,206(1)
Equity compensation
  plans not approved
  by security holders                --                  --                          --
                             ----------              ------                   ---------
        Total                15,170,282              $19.99                   2,552,206
</TABLE>

(1) Includes 1,894,340 shares available for future grants under the
    Company's 2002 Key Employee Long Term Incentive Plan.  This plan provides
    for the grant of stock options, stock appreciation rights, restricted
    stock, performance shares, performance units and other stock-based awards.
    Includes 123,400 shares available for future grant under the Company's
    Director Compensation Program.  Includes 345,730 shares available for
    issuance under the Company's Employee Stock Purchase Plan, which permits
    U.S. employees to purchase shares from Reader's Digest at a discount.
    Includes 188,736 shares available for issuance under the Company's
    International Employee Stock Ownership Plan, which comprises our
    international employee stock purchase plans for non-U.S. employees and our
    U.K. Share Incentive Plan, which provides for compensatory share awards to
    U.K. employees.

Security Ownership Information

      Information with respect to security ownership of certain beneficial
owners and management under the caption "Equity Security Ownership" in the
Proxy Statement for our Annual Meeting of Stockholders to be held on November
18, 2005, is incorporated into this Item by reference.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

           Information with respect to certain relationships and related
transactions under the caption "Transactions with Management and Other
Related Parties" in the Proxy Statement for our Annual Meeting of
Stockholders to be held on November 18, 2005, is incorporated into this Item
by reference.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

      Information with respect to principal accountant fees and services under
the captions "Audit Committee Report" and "Ratification of Independent
Registered Public Accounting Firm" in the Proxy Statement for our Annual
Meeting of Stockholders to be held on November 18, 2005, is incorporated into
this Item by reference.



<PAGE>


                                    PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) 1 Financial Statements
      An index of our Consolidated Financial Statements appears on page 29 of
      this report.

    2 Financial Statement Schedules
      All schedules have been omitted since the information required to be
      submitted has been included in the Consolidated Financial Statements or
      Notes thereto or has been omitted as not applicable or not required.

    3 Exhibits

3.1   Restated Certificate of Incorporation of The Reader's Digest
      Association, Inc. filed with the State of Delaware on July 8, 2003,
      filed as Exhibit 4.1 to our Registration Statement on Form S-3
      (Registration No. 333-107278) filed on July 23, 2003, is incorporated
      herein by reference.

3.2   Amended and Restated By-Laws of The Reader's Digest Association, Inc.,
      effective December 13, 2002, filed as Exhibit 3.2 to Amendment No. 1 to
      our Registration Statement on Form 8-A/A (Registration No. 001-10434)
      filed on December 13, 2002, is incorporated herein by reference.*

10.1  The Reader's Digest Association, Inc. Management Incentive Compensation
      Plan (Amendment and Restatement as of July 1, 1994), filed as Exhibit
      10.1 to our Annual Report on Form 10-K for the year ended June 30, 1994,
      is incorporated herein by reference.*

10.2  The Reader's Digest Association, Inc. 1989 Key Employee Long Term
      Incentive Plan, as amended effective April 13, 2001, filed as Exhibit
      10.29 to our Quarterly Report on Form 10-Q for the quarter ended March
      31, 2001, is incorporated herein by reference.*

10.3  The Reader's Digest Association, Inc. Deferred Compensation Plan
      (Amendment and Restatement as of July 8, 1994) filed as Exhibit 10.4 to
      our Annual Report on Form 10-K for the year ended June 30, 1994, is
      incorporated herein by reference.*

10.4  Excess Benefit Retirement Plan of The Reader's Digest Association, Inc.
      (Amendment and Restatement as of July 1, 1994), filed as Exhibit 10.7 to
      our Annual Report on Form 10-K for the year ended June 30, 1994, is
      incorporated herein by reference.*

10.5  The Reader's Digest 1992 Executive Retirement Plan (Amendment and
      Restatement as of October 10, 1996), filed as Exhibit 10.12 to our
      Annual Report on Form 10-K for the year ended June 30, 1997, is
      incorporated herein by reference.*

10.6  The Reader's Digest Association, Inc. Executive Cash Balance Retirement
      Plan, filed as Exhibit 10.7 to our Annual Report on Form 10-K for the
      year ended June 30, 2000, is incorporated herein by reference.*

10.7  Amendment No. 1 to The Reader's Digest Association, Inc. Management
      Incentive Compensation Plan (effective as of April 11, 1996) filed as
      Exhibit 10.1.1 to our Quarterly Report on Form 10-Q for the quarter
      ended March 31, 1996, is incorporated herein by reference.*


      *Management contract or compensatory contract, plan or arrangement.


<PAGE>


10.8  Amended and Restated Five-Year Revolving Credit and Competitive Advance
      Facility Agreement dated as of May 20, 2002, among The Reader's Digest
      Association, Inc., the Borrowing Subsidiaries, and the Lenders (as
      defined therein), etc., filed as Exhibit 10.2 to our Current Report on
      Form 8-K dated June 3, 2002, is incorporated herein by reference.

10.9  Amended and Restated Term Loan Agreement, dated as of May 21, 2004,
      among The Reader's Digest Association, Inc., the Borrowing Subsidiaries,
      and the Lenders (as defined therein), etc., filed as Exhibit 10.37 to
      our Current Report on Form 8-K dated May 24, 2004, is incorporated
      herein by reference.

10.10 The Reader's Digest Association, Inc. Deferred Compensation Plan for
      Directors, amended and restated as of January 1, 2003 filed as Exhibit
      10.10 to our Annual Report on Form 10-K for the year ended June 30,
      2003, is incorporated herein by reference.*

10.11 Employment Agreement dated as of April 28, 1998, between The Reader's
      Digest Association, Inc. and Thomas O. Ryder, filed as Exhibit 10.33 to
      our Quarterly Report on Form 10-Q for the quarter ended March 31, 1998,
      is incorporated herein by reference.*

10.12 The Reader's Digest Association, Inc. 2001 Income Continuation Plan for
      Senior Management, filed as Exhibit 10.21 to our Quarterly Report on
      Form 10-Q for the quarter ended March 31, 2001, is incorporated herein
      by reference.*

10.13 Termination Agreement dated as of April 23, 2001, between The Reader's
      Digest Association, Inc. and Eric W. Schrier, filed as Exhibit 10.18 to
      our Annual Report on Form 10-K for the year ended June 30, 2001, is
      incorporated by reference.*

10.14 Termination Agreement dated as of December 18, 2001, between The
      Reader's Digest Association, Inc. and Michael S. Geltzeiler filed as
      Exhibit 10.14 to our Annual Report on Form 10-K for the year ended June
      30, 2003, is incorporated herein by reference.*

10.15 Termination Agreement dated as of April 23, 2001, between The Reader's
      Digest Association, Inc. and Thomas D. Gardner, filed as Exhibit 10.17
      to our Annual Report on Form 10-K for the year ended June 30, 2002, is
      incorporated herein by reference.*

10.16 Termination Agreement dated as of April 23, 2001, between The Reader's
      Digest Association, Inc. and Gary S. Rich filed as Exhibit 10.16 to our
      Annual Report on Form 10-K for the year ended June 30, 2003, is
      incorporated herein by reference.*

10.17 The Reader's Digest Association, Inc. Senior Management Incentive Plan,
      filed as Exhibit 10.27 to our Annual Report on Form 10-K for the year
      ended June 30, 1999, is incorporated herein by reference.*

10.18 Assurance of Voluntary Compliance or Discontinuance dated February 26,
      2001, by and among the State Attorneys General and the registrant, filed
      as Exhibit 99.2 to our Current Report on Form 8-K dated March 9, 2001,
      is incorporated herein by reference.

10.19 The Reader's Digest Association, Inc. 1994 Key Employee Long Term
      Incentive Plan, amended and restated as of September 18, 2002, filed as
      Exhibit 10.24 to our Annual Report on Form 10-K for the year ended June
      30, 2002, is incorporated herein by reference.*

10.20 The Reader's Digest Association, Inc. 2002 Key Employee Long Term
      Incentive Plan, filed as Exhibit 10.25 to our Annual Report on Form 10-K
      for the year ended June 30, 2002, is incorporated herein by reference.*

      *Management contract or compensatory contract, plan or arrangement.


<PAGE>



10.21 The Reader's Digest Association, Inc. Director Compensation Program,
      amended and restated as of January 1, 2003 filed as Exhibit 10.23 to our
      Annual Report on Form 10-K for the year ended June 30, 2003, is
      incorporated herein by reference.*

10.22 Form of Indemnification Agreement between The Reader's Digest
      Association, Inc. and individual directors and officers of The Reader's
      Digest Association, Inc., filed as Exhibit 10.27 to our Quarterly Report
      on Form 10-Q for the quarter ended March 31, 2003, is incorporated
      herein by reference.*

10.23 Form of First Amendment, dated as of June 26, 2003, to the Term Loan
      Agreement dated as of May 20, 2002, among The Reader's Digest
      Association, Inc., the Borrowing Subsidiaries and the Lenders (as
      defined therein), etc., filed as Exhibit 10.29 to our Current Report on
      Form 8-K dated June 26, 2003, is incorporated herein by reference.

10.24 Form of First Amendment, dated as of June 26, 2003, to the Amended and
      Restated Five-Year Revolving Credit and Competitive Advance Facility
      Agreement dated as of May 20, 2002, among The Reader's Digest
      Association, Inc., the Borrowing Subsidiaries, and the Lenders (as
      defined therein), etc., filed as Exhibit 10.30 to our Current Report on
      Form 8-K dated June 26, 2003, is incorporated herein by reference.

10.25 FlexNet Program summary description filed as Exhibit 10.28 to our Annual
      Report on Form 10-K for the year ended June 30, 2003, is incorporated
      herein by reference.*

10.26 Financial counseling plan summary description filed as Exhibit 10.29 to
      our Annual Report on Form 10-K for the year ended June 30, 2003, is
      incorporated herein by reference.*

10.27 Form of Second Amendment, dated as of January 27, 2004, to the Amended
      and Restated Five-Year Revolving Credit and Competitive Advance Facility
      Agreement dated as of May 20, 2002, among The Reader's Digest
      Association, Inc., the Borrowing Subsidiaries, and the Lenders (as
      defined therein), etc., filed as Exhibit 10.33 to our Current Report on
      Form 8-K dated March 3, 2004, is incorporated herein by reference.

10.28 Form of Third Amendment, dated as of February 12, 2004, to the
      Amended and Restated Five-Year Revolving Credit and Competitive Advance
      Facility Agreement dated as of May 20, 2002, among The Reader's Digest
      Association, Inc., the Borrowing Subsidiaries, and the Lenders (as
      defined therein), etc., filed as Exhibit 10.35 to our Current Report on
      Form 8-K dated March 3, 2004, is incorporated herein by reference.

10.29 Form of Amendment Agreement, dated as of May 24, 2004, among The
      Reader's Digest Association, Inc., the Borrowing Subsidiaries, and the
      Lenders (as defined therein), etc., filed as Exhibit 10.33 to our
      Current Report on Form 8-K dated March 3, 2004, is incorporated herein
      by reference.

10.30 Form of Fourth Amendment, dated as of May 24, 2004, to the Amended and
      Restated Five-Year Revolving Credit and Competitive Advance Facility
      Agreement dated as of May 20, 2002, among The Reader's Digest
      Association, Inc., the Borrowing Subsidiaries, and the Lenders (as
      defined therein), etc., filed as Exhibit 10.38 to our Current Report on
      Form 8-K dated May 24, 2004, is incorporated herein by reference.

10.31 Amendment to Employment Agreement dated as of November 21, 2003, between
      The Reader's Digest Association, Inc. and Thomas O. Ryder, filed as
      Exhibit 10.31 to our Quarterly Report on Form 10-Q for the quarter ended
      December 31, 2003, is incorporated herein by reference.*

      *Management contract or compensatory contract, plan or arrangement.


<PAGE>



10.32 Form of stock option award terms and conditions under The Reader's
      Digest Association, Inc. 1994 and 2002 Key Employee Long Term Incentive
      Plans, filed as Exhibit 10.34 to our Quarterly Report on Form 10-Q for
      the quarter ended September 30, 2004, is incorporated herein by
      reference.*

10.33 Form of restricted stock award terms and conditions under The Reader's
      Digest Association, Inc. 1994 and 2002 Key Employee Long Term Incentive
      Plans, filed as Exhibit 10.35 to our Quarterly Report on Form 10-Q for
      the quarter ended September 30, 2004, is incorporated herein by
      reference.*

10.34 Form of performance share award letter under The Reader's Digest
      Association, Inc. 1994 and 2002 Key Employee Long Term Incentive Plans,
      filed as Exhibit 10.36 to our Quarterly Report on Form 10-Q for the
      quarter ended September 30, 2004, is incorporated herein by reference.*

10.35 Form of deferred stock award terms and conditions under The Reader's
      Digest Association, Inc. Director Compensation Program, filed as Exhibit
      10.37 to our Quarterly Report on Form 10-Q for the quarter ended
      September 30, 2004, is incorporated herein by reference.*

10.36 Form of First Amendment, dated as of September 9, 2004, to the Amended
      and Restated Term Loan Agreement dated as of May 24, 2004, among The
      Reader's Digest Association, Inc., the Borrowing Subsidiaries, and the
      Lenders (as defined therein), etc., filed as Exhibit 10.38 to our
      Quarterly Report on Form 10-Q for the quarter ended September 30, 2004,
      is incorporated herein by reference.

10.37 Form of Fifth Amendment, dated as of September 9, 2004, to the Amended
      and Restated Five-Year Revolving and Competitive Advance Facility
      Agreement dated as of May 20, 2002, among The Reader's Digest
      Association, Inc., the Borrowing Subsidiaries, and the Lenders (as
      defined therein), etc., filed as Exhibit 10.39 to our Quarterly Report
      on Form 10-Q for the quarter ended September 30, 2004, is incorporated
      herein by reference.

10.38 Addendum effective January 1, 2005 to The Reader's Digest Association,
      Inc. Director Compensation Program, filed as Exhibit 10.34 to our
      Current Report on Form 8-K dated November 18, 2004, is incorporated
      herein by reference.*

10.39 Amended and Restated Sale Purchase Agreement between The Reader's Digest
      Association, Inc. and GAP III Properties LLC and Summit Development, LLC
      dated as of November 18, 2004, but effective as of September 10, 2004,
      filed as Exhibit 10.35 to our Current Report on Form 8-K dated November
      18, 2004, is incorporated herein by reference.

10.40 Description of operation of the executive incentive program of The
      Reader's Digest Association, Inc., including the Senior Management
      Incentive Plan (fiscal 2006 awards), the Management Incentive
      Compensation Plan (fiscal 2006 awards) and the 2002 Key Employee Long
      Term Incentive Plan (fiscal 2005 and 2006 awards), included in Item 1.01
      of our Current Report on Form 8-K dated March 11, 2005, is incorporated
      herein by reference.*

10.41 Five-Year Revolving Credit Agreement, dated as of April 14, 2005, among
      The Reader's Digest Association, Inc., as Borrower and Guarantor, Books
      Are Fun, Ltd., QSP, Inc. and Reiman Media Group, Inc., as Borrowing
      Subsidiaries and Subsidiary Guarantors, the Lenders party thereto, filed
      as Exhibit 10.1 to our Current Report on Form 8-K dated April 14, 2005,
      is incorporated herein by reference.

      *Management contract or compensatory contract, plan or arrangement.


<PAGE>



10.42 Description of operation of the Senior Management Incentive Plan (Fiscal
      2005), the Management Incentive Compensation Plan (Fiscal 2005) and the
      Long-Term Incentive Plan (Fiscal 2004-2005 Performance Shares) of The
      Reader's Digest Association, Inc, filed as Exhibit 10.44 to our
      Quarterly Report on Form 10-Q for the quarter ended March 31, 2005, is
      incorporated herein by reference.*

10.43 Salary compensation information, included in Item 1.01 of our Current
      Report on Form 8-K dated August 12, 2005, is incorporated herein by
      reference.*

10.44 The Reader's Digest Association, Inc. 2005 Key Employee Long Term
      Incentive Plan, filed as Exhibit 10.6 to our Current Report on
      Form 8-K dated August 12, 2005, is incorporated herein by reference.*

10.45 Director Phantom Stock Option Plan.*

10.46 Form of award letter and terms and conditions of fiscal 2006 stock
      option grants under The Reader's Digest Association, Inc. 2002 Key
      Employee Long Term Incentive Plan (including amendments to previous
      awards under The Reader's Digest Association, Inc. 1989 and 1994 Key
      Employee Long Term Incentive Plans), filed as Exhibit 10.1 to our
      Current Report on Form 8-K dated August 12, 2005, is incorporated herein
      by reference.*

10.47 Form of award letter and terms and conditions of fiscal 2006 restricted
      stock grants under The Reader's Digest Association, Inc. 2002 Key
      Employee Long Term Incentive Plan (including amendments to previous
      awards under The Reader's Digest Association, Inc. 1989 and 1994 Key
      Employee Long Term Incentive Plans), filed as Exhibit 10.2 to our
      Current Report on Form 8-K dated August 12, 2005, is incorporated herein
      by reference.*

10.48 Form of award letter and terms and conditions of fiscal 2006 deferred
      stock grants under The Reader's Digest Association, Inc. 2002 Key
      Employee Long Term Incentive Plan (including amendments to previous
      awards under The Reader's Digest Association, Inc. 1989 and 1994 Key
      Employee Long Term Incentive Plans), filed as Exhibit 10.3 to our
      Current Report on Form 8-K dated August 12, 2005, is incorporated herein
      by reference.*

10.49 Form of award letter and terms and conditions of fiscal 2005-2007
      restricted stock unit grants under The Reader's Digest Association, Inc.
      2002 Key Employee Long Term Incentive Plan, filed as Exhibit 10.4 to our
      Current Report on Form 8-K dated August 12, 2005, is incorporated herein
      by reference.*

10.50 Form of award letter and terms and conditions of fiscal 2006-2008
      restricted stock unit grants to under The Reader's Digest Association,
      Inc. 2002 Key Employee Long Term Incentive Plan, filed as Exhibit 10.5
      to our Current Report on Form 8-K dated August 12, 2005, is incorporated
      herein by reference.*

10.51 Description of performance criteria for fiscal 2005-2007 and 2006-2008
      restricted stock units awarded to executive officers of The Reader's
      Digest Association, Inc., included in Item 1.01 of our Current Report on
      Form 8-K dated August 12, 2005, is incorporated herein by reference.*

10.52 Description of funding of bonus pools for fiscal 2006 under The Reader's
      Digest Association, Inc. Senior Management Incentive Plan and Management
      Incentive Compensation Plan, included in our Current Report on Form 8-K
      dated August 12, 2005, is incorporated herein by reference.*


      *Management contract or compensatory contract, plan or arrangement.


<PAGE>



13    Financial information to be included in our 2005 Annual Report to
      Stockholders (furnished for the information of the Securities and
      Exchange Commission only and not to be deemed filed as part of this
      Annual Report on Form 10-K, except for the portions thereof that are
      specifically incorporated herein by reference).

14    Ethical, Legal and Business Conduct Policies, effective September 30,
      2004, filed as Exhibit 14 to our Quarterly Report on Form 10-Q for the
      quarter ended September 30, 2004, is incorporated herein by reference.

16.1  Letter of KPMG LLP to the Securities and Exchange Commission dated
      August 29, 2005, filed as Exhibit 16.1 to our Current Report on
      Form 8-K dated August 23, 2005, is incorporated herein by reference.

21    Subsidiaries of The Reader's Digest Association, Inc.

23    Consent of independent registered public accounting firm.

24    Power of attorney.

31.1  Certification of Chief Executive Officer of registrant pursuant to rule
      13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.

31.2  Certification of Chief Financial Officer of registrant pursuant to rule
      13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.

32    Certifications of Chief Executive Officer and Chief Financial Officer of
      registrant pursuant to rule 13a-14(b)/15d-14(b) of the Securities
      Exchange Act of 1934.



<PAGE>


                                  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.

                                          THE READER'S DIGEST ASSOCIATION, INC.

                                             By:    /s/THOMAS O. RYDER
                                                     (Thomas O. Ryder)
                                           Chairman and Chief Executive Officer
Date:  August 29, 2005

      Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

          Signature                     Title                          Date

    /s/THOMAS O. RYDER          Chairman and Chief Executive    August 29, 2005
       Thomas O. Ryder          Officer and a Director

    /s/MICHAEL S. GELTZEILER    Senior Vice President and       August 29, 2005
       Michael S. Geltzeiler    Chief Financial Officer

    /s/THOMAS D. BARRY          Vice President and Corporate    August 29, 2005
       Thomas D. Barry          Controller (chief accounting
                                officer)

    /s/JONATHAN B. BULKELEY*    Director                        August 29, 2005
       Jonathan B. Bulkeley

    /s/ HERMAN CAIN*            Director                        August 29, 2005
       Herman Cain

    /s/ LEE CAUDILL*            Director                        August 29, 2005
       Lee Caudill

    /s/WALTER ISAACSON*         Director                        August 29, 2005
       Walter Isaacson

    /s/WILLIAM E. MAYER*        Director                        August 29, 2005
       William E. Mayer

    /s/JAMES E. PRESTON*        Director                        August 29, 2005
       James E. Preston

    /s/JOHN T. REID*           Director                        August 29, 2005
       John T. Reid

    /s/LAWRENCE R. RICCIARDI*   Director                        August 29, 2005
       Lawrence R. Ricciardi

    /s/WILLIAM J. WHITE*        Director                        August 29, 2005
       William J. White

    /s/ED ZSCHAU*               Director                        August 29, 2005
       Ed Zschau

*By:   /s/ C.H.R. DUPREE
       (C.H.R. DuPree)
       Attorney in Fact


<PAGE>


                     THE READER'S DIGEST ASSOCIATION, INC.

                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                       Page


Management's Discussion and Analysis..................................   *

Financial Statements:

      Consolidated Statements of Operations--For the Years Ended
         June 30, 2005, 2004 and 2003.................................   *

      Consolidated Balance Sheets--June 30, 2005 and 2004.............   *

      Consolidated Statements of Cash Flows--For the Years Ended
         June 30, 2005, 2004 and 2003.................................   *

      Consolidated Statements of Changes in Stockholders' Equity--For
         the Years Ended June 30, 2005, 2004 and  2003................   *

Notes to Consolidated Financial Statements............................   *

Reports of Independent Registered Public Accounting Firm..............   *

Report of Management..................................................   *

Changes in Registrant's Certifying Accountant.........................   *

Selected Financial Data...............................................   *

Selected  Quarterly  Financial  Data and  Dividend  and Market
Information (Unaudited)...............................................   *



      *This financial information is incorporated by reference to our 2005
Annual Report to Stockholders.  For additional information, please refer to
Item 8 of this report.