<?xml version="1.0"?><ownershipDocument>
    <schemaVersion>X0201</schemaVersion>

    <documentType>4</documentType><periodOfReport>2004-01-02</periodOfReport><notSubjectToSection16>0</notSubjectToSection16>
    <issuer>
        <issuerCik>0001123313</issuerCik>
        <issuerName>KYPHON INC</issuerName>
        <issuerTradingSymbol>KYPH</issuerTradingSymbol></issuer><reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001210230</rptOwnerCik>
            <rptOwnerName>RECUPERO ANTHONY J</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>KYPHON INC.</rptOwnerStreet1>
            <rptOwnerStreet2>1350 BORDEAUX DRIVE</rptOwnerStreet2>
            <rptOwnerCity>SUNNYVALE</rptOwnerCity>
            <rptOwnerState></rptOwnerState>
            <rptOwnerZipCode>94089</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
            <reportingOwnerRelationship>
<isDirector>0</isDirector><isOfficer>1</isOfficer><isTenPercentOwner>0</isTenPercentOwner><isOther>0</isOther><officerTitle>Vice President, Sales</officerTitle></reportingOwnerRelationship></reportingOwner><nonDerivativeTable><nonDerivativeTransaction><securityTitle><value>Common Stock</value></securityTitle><transactionDate><value>2004-01-02</value></transactionDate><transactionCoding><transactionFormType>4</transactionFormType><transactionCode>S</transactionCode><equitySwapInvolved>0</equitySwapInvolved><footnoteId id="F1"/></transactionCoding><transactionAmounts><transactionShares><value>1247</value></transactionShares><transactionPricePerShare><value>24.8920</value></transactionPricePerShare><transactionAcquiredDisposedCode><value>D</value></transactionAcquiredDisposedCode></transactionAmounts><postTransactionAmounts><sharesOwnedFollowingTransaction><value>24491</value><footnoteId id="F2"/></sharesOwnedFollowingTransaction></postTransactionAmounts><ownershipNature><directOrIndirectOwnership><value>D</value></directOrIndirectOwnership></ownershipNature></nonDerivativeTransaction></nonDerivativeTable><footnotes><footnote id="F1">Sale made pursuant to a 10b5-1 Trading Plan.</footnote><footnote id="F2">Total includes 171 shares purchased by Reporting Person under Issuer's Employee Stock Purchase Plan in February 2003.</footnote></footnotes><ownerSignature><signatureName>Jeffrey L. Kaiser, Attorney-In-Fact</signatureName><signatureDate>2004-01-06</signatureDate></ownerSignature></ownershipDocument>



