-----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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 yi7oRuvznhPYJ+JQ7r+zvQ==

<SEC-DOCUMENT>0001179110-05-010964.txt : 20050611
<SEC-HEADER>0001179110-05-010964.hdr.sgml : 20050611
<ACCEPTANCE-DATETIME>20050525163718
ACCESSION NUMBER:		0001179110-05-010964
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20050523
FILED AS OF DATE:		20050525
DATE AS OF CHANGE:		20050525

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

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			HENRY BRIAN C
		CENTRAL INDEX KEY:			0001238247

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-26820
		FILM NUMBER:		05857191

	MAIL ADDRESS:	
		STREET 1:		1100-112TH AVE. N.E.
		CITY:			BELLEVUE
		STATE:			WA
		ZIP:			98004
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>edgar.xml
<DESCRIPTION>FORM 4 -
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2005-05-23</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

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

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001238247</rptOwnerCik>
            <rptOwnerName>HENRY BRIAN C</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>411 FIRST AVENUE S., SUITE 600</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>SEATTLE</rptOwnerCity>
            <rptOwnerState>WA</rptOwnerState>
            <rptOwnerZipCode>98104</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>Executive Vice President &amp; CFO</officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable></nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Stock Option (Right to Buy)</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>1.48</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2005-05-23</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>500000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F2"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2005-12-31</value>
                <footnoteId id="F1"/>
            </exerciseDate>
            <expirationDate>
                <value>2015-05-23</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>500000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>500000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Options for 125,000 shares become exercisable 90 days after issuance, options for 125,000 shares become exercisable 150 days after issuance, and the remaining options for 250,000 shares become exercisable on 12/31/05.</footnote>
        <footnote id="F2">Of these options, 67,567 are incentive stock options and 432,433 are non-qualified stock options.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>Brian C. Henry by Kenneth W. Johnson, Attorney-in-Fact</signatureName>
        <signatureDate>2005-05-25</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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