<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2005-05-02</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0001080359</issuerCik>
        <issuerName>ALLOY  INC</issuerName>
        <issuerTradingSymbol>ALOY</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001003947</rptOwnerCik>
            <rptOwnerName>FESHBACH MATTHEW L</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>2401 WEST BAY DRIVE</rptOwnerStreet1>
            <rptOwnerStreet2>SUITE 124</rptOwnerStreet2>
            <rptOwnerCity>LARGO</rptOwnerCity>
            <rptOwnerState>FL</rptOwnerState>
            <rptOwnerZipCode>33770</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>1</isTenPercentOwner>
            <isOther>0</isOther>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock, $.01 par value</value>
            </securityTitle>
            <transactionDate>
                <value>2005-05-02</value>
            </transactionDate>
            <deemedExecutionDate></deemedExecutionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>10799</value>
                    <footnoteId id="F1"/>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0.0100</value>
                    <footnoteId id="F1"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>10799</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                    <footnoteId id="F1"/>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value></value>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeHolding>
            <securityTitle>
                <value>Common Stock, $.01 par value</value>
            </securityTitle>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>7439082</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>Managing Member of MLF Investments, LLC</value>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeHolding>
    </nonDerivativeTable>

    <footnotes>
        <footnote id="F1">10,799 shares granted as Restricted Stock under the Company's Amended and Restated 1997 Employee, Director and Consultant Stock Option and Stock Incentive Plan. Pursuant to the Restricted Stock Agreement, under which the grant was made, the Company has the right to repurchase the shares if the grantee leaves the Company's Board of Directors, which repurchase rights will lapse with respect to one-third of the shares on each February 1, 2006, February 1, 2007 and February 1, 2008.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>By: /s/ Matthew L. Feshbach</signatureName>
        <signatureDate>2005-05-04</signatureDate>
    </ownerSignature>
</ownershipDocument>
