8-K

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

                                    FORM 8-K
                                 CURRENT REPORT

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

       Date of Report (Date of earliest event reported): February 2, 2010


                           JEFFERSON BANCSHARES, INC.
                           --------------------------
             (Exact name of registrant as specified in its charter)

      Tennessee                        0-50347                 45-0508261
      ---------                        ---------               ----------
(State or other jurisdiction of       (Commission             (IRS Employer
         incorporation)               File Number)         Identification No.)

        120 Evans Avenue, Morristown, Tennessee                37814
        ---------------------------------------               ------
        (Address of principal executive offices)              (Zip Code)

       Registrant's telephone number, including area code: (423) 586-8421
                                                            --------------

                                 Not Applicable
                                 --------------
          (Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act
    (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
    (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
    Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
    Exchange Act (17 CFR 240.13e-4(c))

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ITEM 8.01   OTHER EVENTS.
            ------------

      On February 2, 2010, Jefferson Bancshares, Inc. (the "Company") issued a
press release announcing that the Company's Board of Directors has voted to
suspend the quarterly cash dividend on the Company's common stock in an effort
to conserve capital. For more information, reference is made to the Company's
press release dated February 2, 2010, a copy of which is attached to this Report
as Exhibit 99.1 and is furnished herewith.


ITEM 9.01   FINANCIAL STATEMENTS AND EXHIBITS.
            ---------------------------------

      (d)   Exhibits

            Number            Description
            ------            -----------

            99.1              Press Release dated February 2, 2010

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                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                      JEFFERSON BANCSHARES, INC.


Dated: February 3, 2010               By: /s/ Jane P. Hutton
                                          -----------------------------------
                                          Jane P. Hutton
                                          Chief Financial Officer and Treasurer

EX-99.1

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FOR IMMEDIATE RELEASE

Contact:    Anderson L. Smith
            President and Chief Executive Officer
            (423) 586-8421

                      JEFFERSON BANCSHARES, INC. ANNOUNCES
                      SUSPENSION OF QUARTERLY CASH DIVIDEND

      Morristown, Tennessee -- February 2, 2010 -- Jefferson Bancshares, Inc.
(NASDAQ: "JFBI") (the "Company"), the parent company of Jefferson Federal Bank
(the "Bank"), announced today that the Company's Board of Directors has voted to
suspend the payment of the quarterly cash dividend on the Company's common stock
in an effort to conserve capital. President and Chief Executive Officer Anderson
L. Smith stated, "While the Company and the Bank remain well-capitalized under
all applicable regulatory requirements, the Company's Board of Directors has
determined that the suspension of the Company's dividend at this point in time
is prudent to preserve capital in light of these uncertain economic times." Mr.
Smith further stated that the Company's Board of Directors intends to reevaluate
the payment of a quarterly dividend on a quarter-by-quarter basis in the future.

      Jefferson Bancshares, Inc. is the holding company for Jefferson Federal
Bank, a Tennessee-chartered savings bank headquartered in Morristown, Tennessee.
Jefferson Federal Bank is a community-oriented financial institution offering
traditional financial services with offices in Hamblen, Knox, Sullivan and
Washington Counties, Tennessee. The Company's stock is listed on the NASDAQ
Global Market under the symbol "JFBI." More information about the Company and
Jefferson Federal Bank can be found online at www.jeffersonfederal.com.
                                              ------------------------

      Statements contained in this news release which are not historical facts,
are forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risk and uncertainties which could cause actual results to differ materially
from those currently anticipated due to a number of factors, which include, but
are not limited to, factors discussed in documents filed by the Company with the
Securities and Exchange Commission from time to time.

      The Company does not undertake, and specifically disclaims any obligation,
to publicly release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events.