-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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MIC-Info: RSA-MD5,RSA,
 L30ie2z6Je9xWZLyGD0KuQcT4Hf/WSh05fvd8aRF9e4pw1ZulQ7cdLl8Rl4COto/
 1837fMjSy5cmJ9UZy97fGQ==

<SEC-DOCUMENT>0001182489-06-000842.txt : 20060830
<SEC-HEADER>0001182489-06-000842.hdr.sgml : 20060830
<ACCEPTANCE-DATETIME>20060830191138
ACCESSION NUMBER:		0001182489-06-000842
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20060828
FILED AS OF DATE:		20060830
DATE AS OF CHANGE:		20060830

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CERADYNE INC
		CENTRAL INDEX KEY:			0000018937
		STANDARD INDUSTRIAL CLASSIFICATION:	MISCELLANEOUS MANUFACTURING INDUSTRIES [3990]
		IRS NUMBER:				330055414
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		3169 RED HILL AVENUE
		CITY:			COSTA MESA
		STATE:			CA
		ZIP:			92626
		BUSINESS PHONE:		7145490421

	MAIL ADDRESS:	
		STREET 1:		3169 RED HILL AVENUE
		CITY:			COSTA MESA
		STATE:			CA
		ZIP:			92626

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			EDELSTEIN FRANK
		CENTRAL INDEX KEY:			0001195761

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-13059
		FILM NUMBER:		061066452

	BUSINESS ADDRESS:	
		STREET 1:		STONECREEK CAPITAL
		STREET 2:		18500 VON KARMAN AVE #450
		CITY:			IRVINE
		STATE:			CA
		ZIP:			92612
		BUSINESS PHONE:		9497524580

	MAIL ADDRESS:	
		STREET 1:		1 POINT CATALINA
		CITY:			LAGUNA NIGUEL
		STATE:			CA
		ZIP:			92677
</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>2006-08-28</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0000018937</issuerCik>
        <issuerName>CERADYNE INC</issuerName>
        <issuerTradingSymbol>CRDN</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001195761</rptOwnerCik>
            <rptOwnerName>EDELSTEIN FRANK</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>41 MONTPELLIER</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>NEWPORT BEACH</rptOwnerCity>
            <rptOwnerState>CA</rptOwnerState>
            <rptOwnerZipCode>92660</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle></officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable></nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Stock Option (right to buy)</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>10.53</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2006-08-28</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>D</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
                <footnoteId id="F1"/>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>11250</value>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F1"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2004-03-10</value>
            </exerciseDate>
            <expirationDate>
                <value>2013-09-10</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>11250</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>0</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
        <derivativeTransaction>
            <securityTitle>
                <value>Stock Option (right to buy)</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>16.89</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2006-08-28</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
                <footnoteId id="F1"/>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>11250</value>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F1"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2004-03-10</value>
            </exerciseDate>
            <expirationDate>
                <value>2013-09-10</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>11250</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>11250</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">The transactions reported in rows 1 and 2 involved an amendment to an outstanding option, resulting in the deemed cancellation of the &quot;old&quot; option and the grant of a replacement option. The option was originally granted on September 10, 2003 and vested in full on March 10, 2004.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>Jerrold J. Pellizzon, Attorney-in-Fact</signatureName>
        <signatureDate>2006-08-30</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----