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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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MIC-Info: RSA-MD5,RSA,
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 5443qjISoy/gLa5sB8PJ0Q==

<SEC-DOCUMENT>0001179110-06-023879.txt : 20061219
<SEC-HEADER>0001179110-06-023879.hdr.sgml : 20061219
<ACCEPTANCE-DATETIME>20061219145151
ACCESSION NUMBER:		0001179110-06-023879
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20061211
FILED AS OF DATE:		20061219
DATE AS OF CHANGE:		20061219

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NETLIST INC
		CENTRAL INDEX KEY:			0001282631
		STANDARD INDUSTRIAL CLASSIFICATION:	SEMICONDUCTORS & RELATED DEVICES [3674]
		IRS NUMBER:				954812784
		STATE OF INCORPORATION:			DE

	MAIL ADDRESS:	
		STREET 1:		475 GODDARD
		CITY:			IRVINE
		STATE:			CA
		ZIP:			92618

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			Bhakta Jayesh
		CENTRAL INDEX KEY:			0001379752

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-33170
		FILM NUMBER:		061286217

	BUSINESS ADDRESS:	
		BUSINESS PHONE:		949-435-0025

	MAIL ADDRESS:	
		STREET 1:		C/O NETLIST, INC.
		STREET 2:		475 GODDARD
		CITY:			IRVINE
		STATE:			CA
		ZIP:			92618
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>edgar.xml
<DESCRIPTION>FORM 4 -
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2006-12-11</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0001282631</issuerCik>
        <issuerName>NETLIST INC</issuerName>
        <issuerTradingSymbol>NLST</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001379752</rptOwnerCik>
            <rptOwnerName>Bhakta Jayesh</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>C/O NETLIST, INC.</rptOwnerStreet1>
            <rptOwnerStreet2>475 GODDARD</rptOwnerStreet2>
            <rptOwnerCity>IRVINE</rptOwnerCity>
            <rptOwnerState>CA</rptOwnerState>
            <rptOwnerZipCode>92618</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>Vice President of Engineering</officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2006-12-11</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>93750</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>7.00</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>906250</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
    </nonDerivativeTable>

    <derivativeTable></derivativeTable>

    <footnotes></footnotes>

    <ownerSignature>
        <signatureName>/s/ David Kuo, by Power of Attorney</signatureName>
        <signatureDate>2006-12-19</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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