UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 13D/A

Under the Securities Exchange Act of 1934

(Amendment No. 2)*

(Name of Issuer)

(Title of Class of Securities)

(CUSIP Number)

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box.  ¨

Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

* See Instructions

* See Instructions

* See Instructions

* See Instructions

* See Instructions

This Amendment No. 2 amends and supplements the Schedule 13D filed with the Securities and Exchange Commission (the “SEC”) on August 15, 2011, as amended by Amendment No. 1 thereto, filed with the SEC on October 11, 2011, (together, this “Schedule 13D”), by (i) Red Mountain Capital Partners LLC, a Delaware limited liability company (“RMCP LLC”), (ii) Red Mountain Capital Partners II, L.P., a Delaware limited partnership (“RMCP II”), (iii) RMCP GP LLC, a Delaware limited liability company (“RMCP GP”), (iv) Red Mountain Capital Management, Inc., a Delaware corporation (“RMCM”), and (v) Willem Mesdag, a natural person and citizen of the United States of America, with respect to the common stock, par value $0.01 per share (the “Common Stock”), of STR Holdings, Inc., a Delaware corporation (“STRI”). RMCP LLC, RMCP II, RMCP GP, RMCM and Mr. Mesdag are sometimes collectively referred to herein as the “Reporting Persons.” The filing of any amendment to this Schedule 13D (including the filing of this Amendment No. 2) shall not be construed to be an admission by the Reporting Persons that a material change has occurred in the facts set forth in this Schedule 13D or that such amendment is required under Rule 13d-2 of the Securities Exchange Act of 1934, as amended.

Item 4 of this Schedule 13D is hereby amended by adding the following:

On January 31, 2012, RMCP LLC sent a letter (the “Letter to Management”) to Dennis L. Jilot, the Executive Chairman of the Board of Directors of STRI. In the Letter to Management, RMCP LLC called for, among other things, the addition of J. Christopher Teets to STRI’s Board of Directors and the retirement of up to three of the current directors that had been appointed by DLJ Merchant Banking Partners. The foregoing description of the Letter to Management is qualified in its entirety by reference to the full text of the Letter to Management, a copy of which is attached hereto as Exhibit 2 and is incorporated herein by reference.

Item 7 of this Schedule 13D is hereby amended to include the following information:

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: February 1, 2012

EXHIBIT INDEX

Exhibit 2

January 31, 2012

SENT VIA FEDEX AND EMAIL

Dennis L. Jilot

Executive Chairman

STR Holdings, Inc.

1699 King Street, Suite 400

Enfield, CT 06082

Dear Den,

As you know, Red Mountain Partners, L.P., and its affiliates own 9.9% of the outstanding shares of STR Holdings, Inc. (“STR”). Red Mountain Capital Partners LLC (“Red Mountain”) previously filed a Schedule 13D indicating that we expect to maintain a dialogue with STR’s management regarding its operations, strategic direction, capital structure and corporate governance, and may seek representation on its Board of Directors.

As you and I have discussed, the solar module industry is in the midst of a major restructuring, and STR’s position as a supplier of encapsulants is under severe competitive pressure. STR’s third quarter solar revenue dropped 18% year-over-year; operating income margins shrunk from 31% to 11%; and net income from continuing operations fell by 73%. The company’s stock price followed suit, declining 62% from $28.16 on November 9, 2010, to $10.69 on January 31, 2012. In order to recover STR’s lost revenues, earnings and market value, management must take near-term actions with respect to inventory and receivables management and capacity utilization and a long-term view on research and development and industry structure. This may require substantial capital investment and strategic repositioning.

In these challenging times, we believe that STR would benefit from a fresh shareholder perspective and would like you to invite Christopher Teets to join the Board as a new independent director. Mr. Teets has been a partner of Red Mountain for seven years and has broad experience as a public company director. He is currently a director of Air Transport Services Group, Inc. (NASDAQ:ATSG), Encore Capital Group, Inc. (NASDAQ:ECPG) and Marlin Business Services, Inc. (NASDAQ:MRLN). He serves on the Audit Committees of ECPG and MRLN and the Compensation Committees of ATSG and ECPG, where he is the Chairman. He also serves on the Nominating and Governance Committee of ATSG. He can provide references from the directors and officers of these companies and those he has served in the past. Prior to joining Red Mountain, Mr. Teets was a Vice President of Goldman, Sachs & Co. and provided investment banking services to energy, consumer, industrial and financial services companies. He is a graduate of the London School of Economics and Occidental College, where he was elected to the Phi Beta Kappa academic honor society. As demonstrated in his dialogue with your Chief Executive Officer and Chief Financial Officer over the past six months, Mr. Teets has a deep understanding of the solar industry and its current challenges and is able to provide thoughtful advice while exercising sound judgment.

We would also like you to re-evaluate the Board’s diversity and independence in accordance with STR’s Corporate Governance Guidelines (the “Guidelines”) and to consider the retirement of certain directors. As you know, DLJ Merchant Banking Partners (“DLJ”) acquired STR in June 2007, and took the company

10100 SANTA MONICA BOULEVARD, SUITE 925, LOS ANGELES, CA 90067 · MAIN 310-432-0200 · FAX 310-432-0201

public in November 2009. While DLJ has reduced its ownership position to 26.3% of the company’s outstanding shares, it continues to dominate the Board with four directors appointed in 2007. These directors control the Nominating and Corporate Governance Committee and the Compensation Committee. However, none of them are independent under Rule 10A-3(b)(1) of the Securities Exchange Act of 1934 (the “Exchange Act”) and able to serve on the Audit Committee. Two of them serve on no committees at all, notwithstanding the Guidelines’ suggestion that each director should serve on two. The Guidelines also suggest that committee membership should rotate after three to five years. With only three directors qualified to serve on the Audit Committee, there is no capacity for such rotation. Finally, the Guidelines require each director to represent the interests of all of the shareholders of STR. We believe that the continued service of four directors appointed by DLJ before STR went public conflicts with (or creates the perception of a conflict with) the objective that the interests of all shareholders must be appropriately represented.

STR’s Board is also deficient from a diversity perspective. The Guidelines state that “the Board seeks members with diverse business and professional backgrounds.” Two directors have had virtually identical careers, working at the same six companies at the same times over the course of the last thirty years – including a three-year period during which they jointly advised DLJ on its private equity investments. Two other directors worked together at DLJ for fourteen years. One of them recently left DLJ to launch a private equity fund which, under the Guidelines, gave the Board the opportunity to review the appropriateness of his continued membership under the circumstances. Rather than seek a new independent director, the Board allowed him to remain. Notably, another STR director serves on the advisory board of the new private equity fund.

The addition of Mr. Teets as a new independent director and the retirement of up to three DLJ directors would enhance the diversity and independence of STR’s Board. Mr. Teets is qualified to serve as an independent director under the requirements of the NYSE and the Exchange Act and to take on Audit and Compensation Committee assignments. As noted above, he currently serves on three public company boards and is active on five committees (one of which he chairs), and is well positioned to share best board practices with the directors of STR – who collectively serve on only three other U.S. public company boards, two of which have market caps of less than $100 million. Mr. Teets understands the fiduciary duties of a public company director and, with the explicit acknowledgement of Red Mountain, will represent the interests of all shareholders.

We are suggesting improved governance at a uniquely challenging time in STR’s short history as a public company. If our suggestions are implemented, the Board would be more diverse, more independent and more dynamic, and would benefit from a fresh shareholder perspective with respect to the company’s strategic options and value enhancement opportunities.

Thank you for your consideration.

Sincerely yours,

/s/ Willem Mesdag

Willem Mesdag

Managing Partner

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