Ownership Submission
FORM 3
 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
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(Print or Type Responses)
1. Name and Address of Reporting Person *
  MUGLIA ROBERT L
 2. Date of Event Requiring Statement (Month/Day/Year)
10/27/2005		 3. Issuer Name and Ticker or Trading Symbol
MICROSOFT CORP [MSFT]
(Last)
(First)
(Middle)
C/O MICROSOFT CORPORATION, ONE MICROSOFT WAY		 4. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director _____ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
Senior Vice President
 5. If Amendment, Date Original Filed(Month/Day/Year)
(Street)

REDMOND, WA 98052-6399		 6. Individual or Joint/Group Filing(Check Applicable Line)
_X_ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Beneficially Owned
1.Title of Security
(Instr. 4)		 2. Amount of Securities Beneficially Owned
(Instr. 4)		 3. Ownership Form: Direct (D) or Indirect (I)
(Instr. 5)		 4. Nature of Indirect Beneficial Ownership
(Instr. 5)
Common Stock 108,212 (1)
D
 
Common Stock 63,024 (2)
I
By 401(k)
Common Stock 5,760
I
By Spouse
Common Stock 19,288
I
By Spouse 401(k)
Common Stock 7,200
I
By IRA
Common Stock 14,000 (3)
I
By Family Foundation

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. SEC 1473 (7-02)
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Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 4)		 2. Date Exercisable and Expiration Date
(Month/Day/Year)		 3. Title and Amount of Securities Underlying Derivative Security
(Instr. 4)		 4. Conversion or Exercise Price of Derivative Security 5. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 5)		 6. Nature of Indirect Beneficial Ownership
(Instr. 5)
Date Exercisable Expiration Date Title Amount or Number of Shares
Employee Stock Option (right to buy) #0171066 03/06/2005 03/06/2010 Common Stock 4,444,444 $ 40.7813 D  
Employee Stock Option (right to buy) #0203526 04/24/2005 04/24/2010 Common Stock 2,222,222 $ 29.9813 D  
Employee Stock Option (right to buy) #0285244 08/20/2005(4) 02/20/2011 Common Stock 2,222,222 $ 25.1438 D  
Performance Rights 08/31/2006(5) 08/31/2008 Common Stock 73,333 (6) $ 0 (7) D  

Reporting Owners

Reporting Owner Name / Address Relationships
Director 10% Owner Officer Other
MUGLIA ROBERT L
C/O MICROSOFT CORPORATION
ONE MICROSOFT WAY
REDMOND, WA 98052-6399		       Senior Vice President  

Signatures

Keith R. Dolliver, Attorney-in-fact for Robert L. Muglia 11/07/2005
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 5(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) Includes an aggregate of 47,113 shares represented by unvested stock awards, of which 3,022 shares will vest on July 31, 2006, 3,023 shares will vest on July 31, 2007, 2,667 shares will vest on each of August 29, 2006, 2007, 2008 and on each of August 31, 2006, 2007, 2008, 2009, 10,200 shares will vest over 5 years at the rate of 20% each year beginning August 31, 2006 and 15,000 shares will vest over 3 years at the rate of 33% each year beginning September 30, 2006.
(2) Balance as of October 31, 2005.
(3) The reporting person disclaims beneficial ownership of these securities, and this report shall not be deemed an admission that the reporting person is the beneficial owner of such securities for purposes of Section 16 or for any other purpose.
(4) 1,944,444 shares are vested and immediately exercisable and 277,778 shares vest and become exercisable on February 20, 2006.
(5) One-third of the number of shares of common stock ultimately awarded under a shared performance stock award ("SPSA") will be distributed to the reporting person on or about August 31, 2006 (the "initial vest date"), an additional one-third shall vest and be distributed to the reporting person on each of the first and second anniversaries of the initial vest date, provided that the reporting person remains continuously employed through the applicable vesting date.
(6) Represents the minimum number of shares of common stock issuable under the SPSA for the fiscal 2004-2006 performance period. The number of shares ultimately received depends on the company's performance against specified performance targets. At the end of the performance period, the number of shares of stock and stock awards will be determined by adjusting upward or downward from a target in a range between 33% and 150%. The number reported herein is based on the 33% minimum. The final performance percentage on which the payout will be based, considering company performance metrics established for the performance period, will be determined by the board or a board committee in its sole discretion. Shares of stock are issued at the end of the performance period and as the stock awards vest over the following two years, provided that the reporting person remains continuously employed through the applicable vest date.
(7) 1-for-1

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