Registration Statement No. 33-59107
                                    Filed Pursuant to Rules 424(b)(3) and 424(c)


                            STERLING SOFTWARE, INC.
                         SUPPLEMENT TO PROSPECTUS DATED
                                  MAY 25, 1995

     With respect to the Prospectus covering 3,873,203 shares of Common Stock of
Sterling Software, Inc. (the "Company") filed with the Form S-3 Registration
Statement No. 33-59107:

     The section entitled "Selling Stockholders" is hereby amended in its
entirety to include the following information:

                              SELLING STOCKHOLDERS

     This Prospectus covers the purchase from the Company of up to 3,873,203
Shares in the aggregate, by the holders of the Options upon the exercise thereof
in accordance with their terms and the subsequent offer and resale of Shares by
certain stockholders who hold Shares acquired upon the exercise of Options upon
the exercise thereof.

     Subject to the provisions of the Plan, a Stock Option Committee (the
"Committee") appointed by the Board of Directors of the Company will determine
from time to time the individuals from among the Company's key employees and
advisors, including officers and directors (other than non-employee directors)
of the Company, to whom Options will be granted and the number of shares of
Common Stock to be covered by each Option.  The purchase price of Common Stock
subject to any Option granted pursuant to the Plan may not be less than the fair
market value of the Common Stock on the date of grant.  Unless the Committee
exercises its discretionary powers set forth below, Options will not be
transferable other than by will or the laws of descent and distribution, or
pursuant to a qualified domestic relations order, as defined by the Internal
Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income
Security Act, or the rules thereunder.  With respect to any participant who is a
director or executive officer of the Company (an "Insider"), other than a non-
employee director, the Committee has the power, in its sole discretion, to
include in (or amend to include in) such participant's Option agreement a
provision permitting the Option to be transferred by the participant to members
of the participant's immediate family, trusts for the benefit of such immediate
family members and partnerships in which such immediate family members are the
only partners, provided that there cannot be any consideration for the transfer.
With respect to any participant who is not an Insider, the Committee has the
power to include in (or amend to include in) such participant's Option
agreement, such provisions regarding transferability of the Option as the
Committee, in its sole discretion, deems to be appropriate.  The Committee also
has the power to include in each Option agreement such provisions regarding
exercisability following termination of a participant's employment or service as
a director (other than a non-employee director) or advisor for any reason
(including termination due to death or disability)

 
as the Committee, in is sole discretion, deems to be appropriate.  Unless sooner
terminated by action of the Board, the Plan will terminate on December 31, 2011,
and no Options may be granted pursuant to the Plan after such date.

     The table below sets forth information concerning the Common Stock owned by
the following Selling Stockholders, none of whom has, or within the past three
years has had, any position, office or other material relationship with the
Company, except as noted herein:


 
                                                                      COMMON STOCK       AMOUNT
                                                                       OFFERED FOR         AND
                                                      OWNERSHIP OF       SELLING       PERCENTAGE
                                                      COMMON STOCK    STOCKHOLDERS'    OF CLASS OF
                              POSITION WITH             PRIOR TO      ACCOUNT UPON       AFTER
NAME                           THE COMPANY            OFFERING (1)      EXERCISE      OFFERING (2)
- ----------------------  --------------------------  ----------------  -------------  ---------------
 
                                                                         
Warner C. Blow          Executive Vice President         257,600            256,250        1,350*
Richard Connelly        Vice President and                30,688(3)          20,000       10,688(3)*
                        Controller
Robert J. Donachie      Director                          61,100             61,000          100*
George H. Ellis         Executive Vice President         296,250(4)         223,250       73,000(4)*
                        and Chief Financial
                        Officer
Werner L. Frank         Executive Vice President,        303,187(5)         302,000        1,187(5)*
                        Business Development
Michael C. French       Director                          95,800(6)          65,000       30,800(6)
M. Gene Konopik         Executive Vice President         148,024(7)         108,000       40,024(7)*
Jeannette P. Meier      Executive Vice President,        225,525(8)         171,150       54,375(8)*
                        Secretary and General
                        Counsel
Donald R. Miller, Jr.   Director                          70,000(9)          30,000       40,000(9)*
Phillip A. Moore        Executive Vice President,        189,399(10)        144,250       45,149(10)*
                        Chief Technology Officer
                        and Director
A. Maria Smith          Executive Vice President         225,000(11)        165,000       60,000(11)*
Clive A. Smith          Executive Vice President         207,076(12)        168,100       38,976(12)*
Geno P. Tolari          Executive Vice President         195,313(13)         95,313      100,000(13)*
Anne Vahala             Vice President, Investor          65,876(14)         41,000       24,876(14)*
                        Relations
Sterling L. Williams    President, Chief               1,154,000(15)        200,000      954,000(15)
                        Executive                                                               (3.8%)
                        Officer and Director
 

 


 
                                                                      COMMON STOCK       AMOUNT
                                                                       OFFERED FOR         AND
                                                      OWNERSHIP OF       SELLING       PERCENTAGE
                                                      COMMON STOCK    STOCKHOLDERS'    OF CLASS OF
                              POSITION WITH             PRIOR TO      ACCOUNT UPON       AFTER
NAME                           THE COMPANY            OFFERING (1)      EXERCISE      OFFERING (2)
- ----------------------  --------------------------  ----------------  -------------  ---------------
 
                                                                         
Evan A. Wyly            Vice President and               152,754(16)         40,000     112,754(16)*
                        Director

- ------------------ 
*  Indicates shares held are less than 1% of class.
 
(1)  Based on ownership as of June 30, 1995.  Includes shares to be acquired
     upon exercise of Options granted under the Plan, some of which are not
     exercisable within 60 days of the date of this Prospectus Supplement.
(2)  Assumes the exercise of all Options granted under the Plan and the sale of
     the Common Stock acquired thereby.
(3)  Includes 10,688 shares purchasable pursuant to options not granted under
     the Plan, some of which are not exercisable within 60 days of the date of
     this Prospectus Supplement.
(4)  Includes 73,000 shares purchasable pursuant to options not granted under
     the Plan, some of which are not exercisable within 60 days of the date of
     this Prospectus Supplement.
(5)  Includes 90 shares held in escrow in connection with the Company's
     acquisition of KnowledgeWare, Inc.
(6)  Includes 30,000 shares purchasable pursuant to options not granted under
     the Plan, none of which are exercisable within 60 days of the date of this
     Prospectus Supplement.
(7)  Includes 34,900 shares purchasable pursuant to options not granted under
     the Plan, some of which are not exercisable within 60 days of the date of
     this Prospectus Supplement, and 1,324 shares held in escrow in connection
     with the Company's acquisition of KnowledgeWare, Inc.
(8)  Includes 49,600 shares purchasable pursuant to options not granted under
     the Plan, some of which are not exercisable within 60 days of the date of
     this Prospectus Supplement.
(9)  Includes 40,000 shares purchasable pursuant to options not granted under
     the Plan, some of which are not exercisable within 60 days of the date of
     this Prospectus Supplement.
(10) Includes 150 shares directly held by Mr. Moore's son and 13,000 shares
     purchasable pursuant to options not granted under the Plan, none of which
     are exercisable within 60 days of the date of this Prospectus Supplement.
(11) Includes 60,000 shares purchasable pursuant to options not granted under
     the Plan, some of which are not exercisable within 60 days of the date of
     this Prospectus Supplement.
(12) Includes 38,976 shares purchasable pursuant to options not granted under
     the Plan, some of which are not exercisable within 60 days of the date of
     this Prospectus Supplement.
(13) Includes 100,000 shares purchasable pursuant to options not granted under
     the Plan, some of which are not exercisable within 60 days of the date of
     this Prospectus Supplement.
(14) Includes 24,876 shares purchasable pursuant to options not granted under
     the Plan, some of which are not exercisable within 60 days of the date of
     this Prospectus Supplement.
(15) Includes 950,000 shares purchasable pursuant to options not granted under
     the Plan, all of which are immediately exercisable.
(16) Includes 60,000 shares purchasable pursuant to options not granted under
     the Plan, none of which are exercisable within 60 days of this Prospectus
     Supplement.

            The date of this Prospectus Supplement is July 14, 1995