SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                       Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

     Date of report (Date of earliest event reported): January 27, 2005

                                  ASHLAND INC.
           (Exact name of registrant as specified in its charter)

                                  Kentucky
               (State or other jurisdiction of incorporation)


              1-2918                                         61-0122250
       (Commission File Number)                          (I.R.S. Employer
                                                        Identification No.)


   50 E. RiverCenter Boulevard, Covington, Kentucky          41012-0391
           (Address of principal executive offices)          (Zip Code)


           P.O. Box 391, Covington, Kentucky                 41012-0391
                    (Mailing Address)                        (Zip Code)


        Registrant's telephone number, including area code (859) 815-3333

Check the  appropriate  box below if the Form 8-K  filing  is  intended  to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act
   (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
   (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
    Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
    Exchange Act (17 CFR 240.13e-4(c))



Item 8.01.  Other Events

     On January 27,  2005,  Ashland  Inc.  announced  that it has reached a
settlement  with  the  plaintiff,  Central  Labors'  Pension  Fund,  in the
shareholder  derivative  lawsuit  brought in August  2002  against  certain
former and  current  directors  and  officers of  Ashland.  The  settlement
agreement is subject to approval by the Kenton County Court in Kentucky.
     In  settling   the  action,   Ashland  has  agreed  to  make   certain
modifications  to  its  corporate   governance   policies  and  procedures,
including  heightening the standard for determining  director  independence
and requiring that  two-thirds of the company's  Board be comprised of only
independent  directors.  Further,  Ashland  has agreed to solicit  from its
major  shareholders   director  candidates  and  to  nominate  a  qualified
candidate for election to the Board.







                                   SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                               ASHLAND INC.
                                  -------------------------------------------
                                              (Registrant)



Date:  January 27, 2005                   /s/ J. Marvin Quin
                                 --------------------------------------------
                                 Name:     J. Marvin Quin
                                 Title:    Senior Vice President and
                                           Chief Financial Officer