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

                                    FORM 13F

                              FORM 13F COVER PAGE

Report  for  the  Calendar  Year  or  Quarter  Ended:  December  31,  2010

Check here if Amendment [ ]; Amendment Number:
  This Amendment (Check only one.):     [ ] is a restatement.
                                        [ ] adds new holdings entries.

Institutional  Investment  Manager  Filing  this  Report:

Name:      Lydian Asset Management L.P.
Address:   495 Post Road East
           Westport, CT 06880

Form  13F  File  Number:  028-06083

The  institutional  investment manager filing this report and the person by whom
it  is  signed hereby represent that the person signing the report is authorized
to  submit  it,  that  all  information  contained  herein  is true, correct and
complete,  and  that  it  is  understood  that  all  required items, statements,
schedules,  lists,  and  tables,  are  considered  integral  parts of this form.

Person  Signing  this  Report  on  Behalf  of  Reporting  Manager:

Name:      Richard Li
Title:      CFO / COO
Phone:      (203) 571-1309

Signature,  Place,  and  Date  of  Signing:

 /s/ Richard Li          Westport, CT          2/14/2011
- ---------------          ------------          ---------
  [Signature]            [City, State]          [Date]

Report  Type  (Check  only  one.):

[X]     13F  HOLDINGS  REPORT.  (Check  here  if  all holdings of this reporting
manager  are  reported  in  this  report.)

[ ]     13F NOTICE.  (Check here if no holdings reported are in this report, and
all  holdings  are  reported  by  other  reporting  manager(s).)

[  ]     13F  COMBINATION  REPORT.  (Check here if a portion of the holdings for
this  reporting  manager is reported in this report and a portion is reported by
other  reporting  manager(s).)






                                                                                                
                            TITLE OF                     VALUE      SHARES/    SH/PUT    INVSTMT   OTHER        VOTING AUTHORITY
NAME OF ISSUER              CLASS             CUSIP      x($1000)   PRN AMT    PRN CALL  DISCRETN  MANAGERS   SOLE     SHARED NONE
- --------------------------- ----------------  ---------   --------   --------  --- ----  --------  --------- -------   -----  ----
ADVANCED MICRO DEVICES INC  NOTE 6.000% 5/0   007903AL1      4,005  4,000,000  PRN       SOLE      N/A
ANIXTER INTL INC            NOTE 7/0          035290AG0      2,850  3,000,000  PRN       SOLE      N/A
ANIXTER INTL INC            NOTE 1.000% 2/1   035290AJ4      2,220  2,000,000  PRN       SOLE      N/A
BARCLAYS BK PLC             IPTH S&P VIX NEW  06740C261        752     20,000  SH        SOLE      N/A         20,000
E M C CORP MASS             NOTE 1.750%12/0   268648AK8      2,893  2,000,000  PRN       SOLE      N/A
E M C CORP MASS             NOTE 1.750%12/0   268648AM4      4,518  3,000,000  PRN       SOLE      N/A
FORD MTR CO DEL             COM PAR $0.01     345370860        390     23,240  SH        SOLE      N/A         23,240
GENERAL MTRS CO             COM               37045V209      2,706     50,000  SH        SOLE      N/A         50,000
GILEAD SCIENCES INC         NOTE 0.500% 5/0   375558AG8      2,563  2,500,000  PRN       SOLE      N/A
GILEAD SCIENCES INC         NOTE 0.625% 5/0   375558AH6      3,309  3,000,000  PRN       SOLE      N/A
HOLOGIC INC                 FRNT 2.000%12/1   436440AA9      2,816  3,000,000  PRN       SOLE      N/A
LIBERTY MEDIA CORP          DEB 3.500% 1/1    530715AN1      3,248  6,000,000  PRN       SOLE      N/A
LUCENT TECHNOLOGIES INC     DBCV 2.750% 6/1   549463AH0      1,880  2,000,000  PRN       SOLE      N/A
MICRON TECHNOLOGY INC       NOTE 1.875% 6/0   595112AH6      3,279  3,500,000  PRN       SOLE      N/A
NETAPP INC                  NOTE 1.750% 6/0   64110DAB0      4,447  2,500,000  PRN       SOLE      N/A
QIMONDA FIN LLC             NOTE 6.750% 3/2   74732WAA7         70  4,000,000  PRN       SOLE      N/A
SAKS INC                    NOTE 2.000% 3/1   79377WAL2      2,580  2,500,000  PRN       SOLE      N/A
SANDISK CORP                NOTE 1.000% 5/1   80004CAC5      5,282  5,500,000  PRN       SOLE      N/A
SANDISK CORP                NOTE 1.500% 8/1   80004CAD3      5,643  5,000,000  PRN       SOLE      N/A
STANDARD PAC CORP           NOTE 6.000%10/0   853763AA8      1,139  1,118,000  PRN       SOLE      N/A
STANLEY BLACK & DECKER INC  UNIT 99/99/9999   854502309      2,700     25,000  SH        SOLE      N/A         25,000

                                             21             59,289



                             FORM 13F SUMMARY PAGE

Report  Summary:

Number  of  Other  Included  Managers:            0
Form  13F  Information  Table  Entry  Total:      21
Form 13F Information Table Value Total:           59,289
                                                 (thousands)

List  of  Other  Included  Managers:

Provide  a  numbered  list  of  the  name(s)  and Form 13F file number(s) of all
institutional  investment  managers  with respect to which this report is filed,
other  than  the  manager  filing  this  report.

[If there are no entries in this list, state "NONE" and omit the column headings
and  list  entries.]

No.          Form 13F File Number          Name