-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 TvnJSgcFbyJCHxBPI1IfMawnPOHVNaw59PPc4v1EMdHBrXCx82fSl8Q9/IAqQusA
 4Pxoz0TkDuEUjQ2YcIXAhw==

<SEC-DOCUMENT>0000902664-06-002114.txt : 20060818
<SEC-HEADER>0000902664-06-002114.hdr.sgml : 20060818
<ACCEPTANCE-DATETIME>20060818174920
ACCESSION NUMBER:		0000902664-06-002114
CONFORMED SUBMISSION TYPE:	3
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20060801
FILED AS OF DATE:		20060818
DATE AS OF CHANGE:		20060818

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			GENDELL JEFFREY L ET AL
		CENTRAL INDEX KEY:			0000948904

	FILING VALUES:
		FORM TYPE:		3
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-08520
		FILM NUMBER:		061044461

	BUSINESS ADDRESS:	
		STREET 1:		31 WEST 52ND ST
		STREET 2:		17TH FLOOR
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10019

	MAIL ADDRESS:	
		STREET 2:		200 PARK AVENUE SUITE 3900
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10166

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TERRA INDUSTRIES INC
		CENTRAL INDEX KEY:			0000722079
		STANDARD INDUSTRIAL CLASSIFICATION:	AGRICULTURE CHEMICALS [2870]
		IRS NUMBER:				521145429
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		600 FOURTH ST
		STREET 2:		PO BOX 6000
		CITY:			SIOUX CITY
		STATE:			IA
		ZIP:			51102-6000
		BUSINESS PHONE:		7122771340

	MAIL ADDRESS:	
		STREET 1:		600 FOURTH STREET
		STREET 2:		PO BOX 6000
		CITY:			SIOUX CITY
		STATE:			IA
		ZIP:			51102-6000

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	INSPIRATION RESOURCES CORP
		DATE OF NAME CHANGE:	19920517
</SEC-HEADER>
<DOCUMENT>
<TYPE>3
<SEQUENCE>1
<FILENAME>form3_ex.xml
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>3</documentType>

    <periodOfReport>2006-08-01</periodOfReport>

    <noSecuritiesOwned>0</noSecuritiesOwned>

    <issuer>
        <issuerCik>0000722079</issuerCik>
        <issuerName>TERRA INDUSTRIES INC</issuerName>
        <issuerTradingSymbol>TRA</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0000948904</rptOwnerCik>
            <rptOwnerName>GENDELL JEFFREY L ET AL</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1></rptOwnerStreet1>
            <rptOwnerStreet2>55 RAILROAD AVENUE</rptOwnerStreet2>
            <rptOwnerCity>GREENWICH</rptOwnerCity>
            <rptOwnerState>CT</rptOwnerState>
            <rptOwnerZipCode>06830</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>1</isTenPercentOwner>
            <isOther>0</isOther>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeHolding>
            <securityTitle>
                <value>Common Stock, no par value</value>
            </securityTitle>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>9452600</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>See Footnotes</value>
                    <footnoteId id="F1"/>
                    <footnoteId id="F2"/>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeHolding>
    </nonDerivativeTable>

    <footnotes>
        <footnote id="F1">The Reporting Person is the managing member of Tontine  Capital Management, L.L.C. (&quot;TCM&quot;), a Delaware limited liability
 company, the general partner of Tontine  Capital Partners, L.P. (&quot;TCP&quot;), a Delaware limited partnership.  The Reporting
 Person is also the managing member of Tontine  Overseas Associates, L.L.C., a Delaware limited liability company (&quot;TOA&quot;),
 the investment adviser to Tontine Capital  Overseas Master Fund, L.P., a Cayman Islands partnership (&quot;TCO&quot;) .</footnote>
        <footnote id="F2">The Reporting Person directly owns 0 shares of the Common Stock.  TP directly owns 0 shares of Common Stock.  TCP directly
 owns 8,387,500 shares of Common Stock.  TCO owns 1,065,100 shares of Common Stock.  All of the foregoing shares of Common
 Stock may be deemed to be beneficially owned  by the Reporting Person.  The Reporting Person disclaims beneficial ownership
 of the Issuer's securities reported herein for  purposes of Section 16(a) under the Securities Exchange Act of 1934, as
 amended, or otherwise, except as to securities  directly owned by the Reporting Person or representing the Reporting
 Person's pro rata interest in, and interest in the  profits of, TCP, TCM, TOA and TCO.</footnote>
    </footnotes>

    <remarks>This Form 3 is being filed as a result of the issuer's repurchase of shares, as disclosed in the issuer's Form 10Q filed on
 August 1, 2006 and not as a result of any acquisition of shares by the reporting persons.</remarks>

    <ownerSignature>
        <signatureName>By: /s/ Jeffrey L. Gendell</signatureName>
        <signatureDate>2006-08-18</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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