-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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MIC-Info: RSA-MD5,RSA,
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 8g0CRIS0XegjKtTuOgHhDw==

<SEC-DOCUMENT>0001179110-07-023086.txt : 20071210
<SEC-HEADER>0001179110-07-023086.hdr.sgml : 20071210
<ACCEPTANCE-DATETIME>20071210173233
ACCESSION NUMBER:		0001179110-07-023086
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20071206
FILED AS OF DATE:		20071210
DATE AS OF CHANGE:		20071210

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			TROY JOSEPH J
		CENTRAL INDEX KEY:			0001215701

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-13711
		FILM NUMBER:		071296720

	BUSINESS ADDRESS:	
		BUSINESS PHONE:		8138714811

	MAIL ADDRESS:	
		STREET 1:		C/O WALTER INDUSTRIES INC
		STREET 2:		4211 W BOY SCOUT BLVD
		CITY:			TAMPA
		STATE:			FL
		ZIP:			33607

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			WALTER INDUSTRIES INC /NEW/
		CENTRAL INDEX KEY:			0000837173
		STANDARD INDUSTRIAL CLASSIFICATION:	BITUMINOUS COAL & LIGNITE MINING [1220]
		IRS NUMBER:				133429953
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		4211 W. BOY SCOUT BLVD.
		CITY:			TAMPA
		STATE:			FL
		ZIP:			33607
		BUSINESS PHONE:		8138714811

	MAIL ADDRESS:	
		STREET 1:		4211 W. BOY SCOUT BLVD.
		STREET 2:		4211 W. BOY SCOUT BLVD.
		CITY:			TAMPA
		STATE:			FL
		ZIP:			33607

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	HILLSBOROUGH HOLDINGS CORP
		DATE OF NAME CHANGE:	19910814
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>edgar.xml
<DESCRIPTION>FORM 4 -
<TEXT>
<XML>
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<ownershipDocument>

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        <issuerName>WALTER INDUSTRIES INC /NEW/</issuerName>
        <issuerTradingSymbol>WLT</issuerTradingSymbol>
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            <rptOwnerName>TROY JOSEPH J</rptOwnerName>
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            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>TAMPA</rptOwnerCity>
            <rptOwnerState>FL</rptOwnerState>
            <rptOwnerZipCode>33607</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
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        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>Executive Vice President &amp; CFO</officerTitle>
            <otherText></otherText>
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                <value>Common Stock</value>
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            <transactionDate>
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                <transactionFormType>4</transactionFormType>
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                <equitySwapInvolved>0</equitySwapInvolved>
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            <transactionAmounts>
                <transactionShares>
                    <value>635</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>35.83</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
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                <sharesOwnedFollowingTransaction>
                    <value>100218.72</value>
                    <footnoteId id="F2"/>
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                <directOrIndirectOwnership>
                    <value>D</value>
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        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2007-12-06</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>10700</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>35.75</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
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            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
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                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
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            <transactionAmounts>
                <transactionShares>
                    <value>300</value>
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                <transactionPricePerShare>
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                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
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                <transactionCode>S</transactionCode>
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                <transactionShares>
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                <transactionPricePerShare>
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                <sharesOwnedFollowingTransaction>
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                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
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            <transactionAmounts>
                <transactionShares>
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                </transactionShares>
                <transactionPricePerShare>
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                <transactionFormType>4</transactionFormType>
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            <transactionAmounts>
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                <directOrIndirectOwnership>
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                </directOrIndirectOwnership>
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    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Non Qualified Stock Option</value>
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            <conversionOrExercisePrice>
                <value>6.10</value>
            </conversionOrExercisePrice>
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                <value>2007-12-06</value>
            </transactionDate>
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            <transactionAmounts>
                <transactionShares>
                    <value>14935</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0.00</value>
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                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F3"/>
            </exerciseDate>
            <expirationDate>
                <value>2014-02-19</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>14935</value>
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                <sharesOwnedFollowingTransaction>
                    <value>15000</value>
                </sharesOwnedFollowingTransaction>
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                <directOrIndirectOwnership>
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    </derivativeTable>

    <footnotes>
        <footnote id="F1">In connection with the spin-off of Mueller Water Products, Inc. on December 14, 2006 and under the anti-dilution provisions of the Company's 2002 Long-Term Incentive Award Plan, these options were modified on December 15, 2006 to preserve the intrinsic value of the awards.  The number of shares of the modified awards was determined by multiplying the number of outstanding shares underlying the equity awards by 1.9426 and by dividing the stock option exercise price by the same adjustment ratio.  This adjustment ratio was obtained by dividing the closing price of the Company's Common Stock in the &quot;regular way&quot; market on December 14, 2006 ($49.05) by the &quot;ex-dividend&quot; opening price of the Company's Common Stock on the New York Stock Exchange on December 15, 2006 ($25.25).</footnote>
        <footnote id="F2">Includes shares held by Reporting Person under Employee Stock Purchase Plan.</footnote>
        <footnote id="F3">Options vest in 3 equal annual installments beginning 02/19/2005.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>Catherine C. Bona, by power of attorney</signatureName>
        <signatureDate>2007-12-10</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----