Ownership Submission
FORM 4
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN 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 *
KELLY RICHARD K
   2. Issuer Name and Ticker or Trading Symbol
POTLATCH CORP [PCH] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director _____ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
Vice President
(Last)
(First)
(Middle)
601 W. RIVERSIDE AVENUE, SUITE 1100		 3. Date of Earliest Transaction (Month/Day/Year)
11/10/2004
(Street)

SPOKANE, WA 99201		 4. If Amendment, Date Original Filed(Month/Day/Year)
 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 Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)		 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)		 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)		 5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4)		 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)		 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V Amount (A) or (D) Price

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)		 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)		 5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)		 6. Date Exercisable and Expiration Date
(Month/Day/Year)		 7. Title and Amount of Underlying Securities
(Instr. 3 and 4)		 8. Price of Derivative Security
(Instr. 5)		 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)		 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)		 11. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Employee Stock Option (right to buy) $ 41.25 11/10/2004   D(1)     3,350   (1) 12/07/2005 Common Stock 3,350 (2) 0 D  
Employee Stock Option (right to buy) $ 39.2939 11/10/2004   A(1)   3,517     (1) 12/07/2005 Common Stock 3,517 (2) 3,517 D  
Employee Stock Option (right to buy) $ 44.375 11/10/2004   D(1)     4,500   (1) 12/05/2006 Common Stock 4,500 (2) 0 D  
Employee Stock Option (right to buy) $ 42.2707 11/10/2004   A(1)   4,724     (1) 12/05/2006 Common Stock 4,724 (2) 4,724 D  
Employee Stock Option (right to buy) $ 48.25 11/10/2004   D(1)     3,450   (1) 12/04/2007 Common Stock 3,450 (2) 0 D  
Employee Stock Option (right to buy) $ 45.9619 11/10/2004   A(1)   3,622     (1) 12/04/2007 Common Stock 3,622 (2) 3,622 D  
Employee Stock Option (right to buy) $ 37.75 11/10/2004   D(1)     5,800   (1) 12/03/2008 Common Stock 5,800 (2) 0 D  
Employee Stock Option (right to buy) $ 35.9599 11/10/2004   A(1)   6,089     (1) 12/03/2008 Common Stock 6,089 (2) 6,089 D  
Employee Stock Option (right to buy) $ 41.375 11/10/2004   D(1)     13,000   (1) 12/02/2009 Common Stock 13,000 (2) 0 D  
Employee Stock Option (right to buy) $ 39.413 11/10/2004   A(1)   13,647     (1) 12/02/2009 Common Stock 13,647 (2) 13,647 D  
Employee Stock Option (right to buy) $ 24.88 11/10/2004   D(1)     6,500   (1) 12/05/2012 Common Stock 6,500 (2) 0 D  
Employee Stock Option (right to buy) $ 23.7002 11/10/2004   A(1)   6,823     (1) 12/05/2012 Common Stock 6,823 (2) 6,823 D  
Employee Stock Option (right to buy) $ 33.18 11/10/2004   D(1)     4,000   (1) 12/04/2013 Common Stock 4,000 (2) 0 D  
Employee Stock Option (right to buy) $ 31.6066 11/10/2004   A(1)   4,199     (1) 12/04/2013 Common Stock 4,199 (2) 4,199 D  

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
KELLY RICHARD K
601 W. RIVERSIDE AVENUE, SUITE 1100
SPOKANE, WA 99201		       Vice President  

Signatures

 Malcolm A. Ryerse, Attorney-in-fact   11/12/2004
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(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) On October 25, 2004, the Board of Directors of Potlatch Corporation (the "Company") declared a special cash dividend to stockholders of record on November 10, 2004. The Company's applicable stockholder-approved stock incentive plans require proportionate adjustment of the exercise price and the number of shares of common stock covered by outstanding awards under such plans in a manner determined by the Executive Compensation and Personnel Policies Committee of the Company's Board of Directors to reflect the declaration of the special cash dividend. The adjustment of the outstanding award is being reported as a deemed cancellation and regrant of the original stock option to clarify the change in the exercise price and number of shares covered by the subject stock option. The original option provided for vesting in two equal annual installments following the date of grant.
(2) The option has no purchase or sale price, therefore Column 8 has been left blank.

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