-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
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 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 TbB84z97pdeWY6uB00JWgECq4aBQGyHJOvHyR7cugS7+u7ei2SETOxka6QzMkBrA
 TiMP++S4DNekpDi6gu+2lQ==

<SEC-DOCUMENT>0001179110-04-002199.txt : 20040202
<SEC-HEADER>0001179110-04-002199.hdr.sgml : 20040202
<ACCEPTANCE-DATETIME>20040202185854
ACCESSION NUMBER:		0001179110-04-002199
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20040130
FILED AS OF DATE:		20040202

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			LOE GERALD E
		CENTRAL INDEX KEY:			0001110630

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-26820
		FILM NUMBER:		04560542

	BUSINESS ADDRESS:	
		STREET 1:		411 FIRST AVE SOUTH
		STREET 2:		SUITE 600
		CITY:			SEATTLE
		STATE:			WA
		ZIP:			98104

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CRAY INC
		CENTRAL INDEX KEY:			0000949158
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC COMPUTERS [3571]
		IRS NUMBER:				930962605
		STATE OF INCORPORATION:			WA
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		411 FIRST AVE SOUTH
		STREET 2:		SUITE 600
		CITY:			SEATTLE
		STATE:			WA
		ZIP:			98104-2860
		BUSINESS PHONE:		2067012000

	MAIL ADDRESS:	
		STREET 1:		411 FIRST AVE SOUTH
		STREET 2:		SUITE 600
		CITY:			SEATTLE
		STATE:			WA
		ZIP:			98104-2860

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	TERA COMPUTER CO \WA\
		DATE OF NAME CHANGE:	19950809
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>edgar.xml
<DESCRIPTION>FORM 4 -
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0201</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2004-01-30</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0000949158</issuerCik>
        <issuerName>CRAY INC</issuerName>
        <issuerTradingSymbol>CRAY</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001110630</rptOwnerCik>
            <rptOwnerName>LOE GERALD E</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>411 FIRST AVENUE SOUTH</rptOwnerStreet1>
            <rptOwnerStreet2>SUITE 600</rptOwnerStreet2>
            <rptOwnerCity>SEATTLE</rptOwnerCity>
            <rptOwnerState>WA</rptOwnerState>
            <rptOwnerZipCode>98104-2860</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>VICE PRESIDENT</officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2004-01-30</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>M</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>2200</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>1.76</value>
                    <footnoteId id="F1"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>50336</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2004-01-30</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>M</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>7795</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>2.21</value>
                    <footnoteId id="F2"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>58131</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
    </nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Stock Option Exercise</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>1.76</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2004-01-30</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>M</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>2200</value>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F1"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>1998-03-03</value>
            </exerciseDate>
            <expirationDate>
                <value>2004-03-03</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>2200</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>668000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
        <derivativeTransaction>
            <securityTitle>
                <value>Stock Option Exercise</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>2.21</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2004-01-30</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>M</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>7795</value>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F2"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2004-01-02</value>
            </exerciseDate>
            <expirationDate>
                <value>2012-04-02</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>7795</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>660205</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Exercise of nonqualified stock option.</footnote>
        <footnote id="F2">Exercise of an incentive stock option.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>GERALD E LOE BY KENNETH W JOHNSON, ATTORNEY-IN-FACT</signatureName>
        <signatureDate>2004-02-02</signatureDate>
    </ownerSignature>
</ownershipDocument>

</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----