-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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MIC-Info: RSA-MD5,RSA,
 K0dIcYIshTrk9ULu5d8q0KPzW6O+KoTdpxUIWacFkBEru1B2gev7o4iLUZnZZ14T
 vodCPaEkQfcnXSD0dM/sJQ==

<SEC-DOCUMENT>0000005272-07-000106.txt : 20071217
<SEC-HEADER>0000005272-07-000106.hdr.sgml : 20071217
<ACCEPTANCE-DATETIME>20071217115548
ACCESSION NUMBER:		0000005272-07-000106
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20071213
FILED AS OF DATE:		20071217
DATE AS OF CHANGE:		20071217

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AMERICAN INTERNATIONAL GROUP INC
		CENTRAL INDEX KEY:			0000005272
		STANDARD INDUSTRIAL CLASSIFICATION:	FIRE, MARINE & CASUALTY INSURANCE [6331]
		IRS NUMBER:				132592361
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		70 PINE ST
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10270
		BUSINESS PHONE:		2127707000

	MAIL ADDRESS:	
		STREET 1:		70 PINE STREET
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10270

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMERICAN INTERNATIONAL ENTERPRISES INC
		DATE OF NAME CHANGE:	19700507

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			FRENKEL JACOB A
		CENTRAL INDEX KEY:			0001237418

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-08787
		FILM NUMBER:		071309287

	BUSINESS ADDRESS:	
		STREET 1:		C/O LUMENIS LTD
		STREET 2:		PO BOX 240
		CITY:			YOKNEAM
		STATE:			L3
		ZIP:			00000
		BUSINESS PHONE:		2127707000

	MAIL ADDRESS:	
		STREET 1:		AMERICAN INTERNATIONAL GROUP, INC.
		STREET 2:		70 PINE STREET
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10270
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>fre1280.xml
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2007-12-13</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0000005272</issuerCik>
        <issuerName>AMERICAN INTERNATIONAL GROUP INC</issuerName>
        <issuerTradingSymbol>(AIG)</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001237418</rptOwnerCik>
            <rptOwnerName>FRENKEL JACOB A</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>AMERICAN INTERNATIONAL GROUP, INC.</rptOwnerStreet1>
            <rptOwnerStreet2>70 PINE STREET</rptOwnerStreet2>
            <rptOwnerCity>NEW YORK</rptOwnerCity>
            <rptOwnerState>NY</rptOwnerState>
            <rptOwnerZipCode>10270</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>Vice Chairman</officerTitle>
        </reportingOwnerRelationship>
    </reportingOwner>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Employee Stock Option (Right to Buy)</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>57.0500</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2007-12-13</value>
            </transactionDate>
            <deemedExecutionDate></deemedExecutionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>45085</value>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F1"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F1"/>
            </exerciseDate>
            <expirationDate>
                <value>2017-12-13</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>45085.0000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>45085.0000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value></value>
                </natureOfOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">These options were granted under the American International Group, Inc. Amended and Restated 2007 Stock Incentive Plan.  Pursuant to the terms of the plan, 25% of the option becomes exercisable on the anniversary date of the grant in each of the four years following the grant.</footnote>
    </footnotes>

    <remarks></remarks>

    <ownerSignature>
        <signatureName>By: /s/ Kathleen E. Shannon, by power of attorney for</signatureName>
        <signatureDate>2007-12-17</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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