-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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MIC-Info: RSA-MD5,RSA,
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<SEC-DOCUMENT>0001179110-04-018662.txt : 20040924
<SEC-HEADER>0001179110-04-018662.hdr.sgml : 20040924
<ACCEPTANCE-DATETIME>20040924104832
ACCESSION NUMBER:		0001179110-04-018662
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20040922
FILED AS OF DATE:		20040924
DATE AS OF CHANGE:		20040924

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ARCH CAPITAL GROUP LTD
		CENTRAL INDEX KEY:			0000947484
		STANDARD INDUSTRIAL CLASSIFICATION:	FIRE, MARINE & CASUALTY INSURANCE [6331]
		IRS NUMBER:				061424716
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		20 HORSENECK LANE
		CITY:			GREENWICH
		STATE:			CT
		ZIP:			06830
		BUSINESS PHONE:		2038624300

	MAIL ADDRESS:	
		STREET 1:		20 HORSENECK LANE
		CITY:			GREENWICH
		STATE:			CT
		ZIP:			06830

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	RISK CAPITAL HOLDINGS INC
		DATE OF NAME CHANGE:	19950816

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	RISK CAPITAL RE INC
		DATE OF NAME CHANGE:	19950703

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			CLEMENTS ROBERT
		CENTRAL INDEX KEY:			0001181609

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-16209
		FILM NUMBER:		041044046

	BUSINESS ADDRESS:	
		STREET 1:		ARCH CAPITAL GROUP LTD
		STREET 2:		20 HORSENECK LANE
		CITY:			GREENWICH
		STATE:			CT
		ZIP:			06830
		BUSINESS PHONE:		2038624343

	MAIL ADDRESS:	
		STREET 1:		ARCH CAPITAL GROUP LTD
		STREET 2:		20 HORSENECK LANE
		CITY:			GREENWICH
		STATE:			CT
		ZIP:			06830
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>edgar.xml
<DESCRIPTION>FORM 4 -
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2004-09-22</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0000947484</issuerCik>
        <issuerName>ARCH CAPITAL GROUP LTD</issuerName>
        <issuerTradingSymbol>ACGL</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001181609</rptOwnerCik>
            <rptOwnerName>CLEMENTS ROBERT</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>ARCH CAPITAL GROUP (U.S.) INC.</rptOwnerStreet1>
            <rptOwnerStreet2>20 HORSENECK LANE</rptOwnerStreet2>
            <rptOwnerCity>GREENWICH</rptOwnerCity>
            <rptOwnerState>CT</rptOwnerState>
            <rptOwnerZipCode>06830</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>1</isOther>
            <officerTitle></officerTitle>
            <otherText>Chairman of the Board of Direc</otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Shares, $.01 par value per share</value>
            </securityTitle>
            <transactionDate>
                <value>2004-09-22</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>1600</value>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F1"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>826221</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeHolding>
            <securityTitle>
                <value>Common Shares, $.01 par value per share</value>
            </securityTitle>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>375708</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                    <footnoteId id="F2"/>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>see footnote 2</value>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeHolding>
        <nonDerivativeHolding>
            <securityTitle>
                <value>Common Shares, $.01 par value per share</value>
            </securityTitle>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>49380</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                    <footnoteId id="F3"/>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>see footnote 3</value>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeHolding>
        <nonDerivativeHolding>
            <securityTitle>
                <value>Common Shares, $.01 par value per share</value>
            </securityTitle>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>2725</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                    <footnoteId id="F4"/>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>see footnote 4</value>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeHolding>
    </nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Stock Option (right to buy)</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>39.00</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2004-09-22</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>10000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F5"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F5"/>
            </exerciseDate>
            <expirationDate>
                <value>2014-09-22</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common shares, $.01 par value per share</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>10000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>10000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Represents restricted shares that vest in three equal annual installments on September 22 in each of 2004, 2005 and 2006.</footnote>
        <footnote id="F2">Reflects Common Shares held the Reporting Person's spouse.  The Reporting Person disclaims beneficial ownership of these securities.</footnote>
        <footnote id="F3">Reflects Common Shares held by a grantor retained annuity trust established by the Reporting Person and his spouse, as trustees.</footnote>
        <footnote id="F4">Reflects Common Shares held by Sound View Partners, L.P. (&quot;Sound View&quot;).  The Reporting Person does not have a pecuniary interest in, and disclaims beneficial ownership of, approximately 98% of the securities held by Sound View, which repreents the ownership percentage of Sound View partners other than the Reporting Person, but excluding that portion of Sound View held by Taracay Investors (&quot;Taracay&quot;) to the extent of the Reporting Person's beneficial ownership of Taracay.  Taracay owns approximately 50% of Sound View.  Taracay is a general partnership, the general partners of which consist of the Reporting Person and members of his family and the managing partner of which is the Reporting Person.</footnote>
        <footnote id="F5">The stock option will become exercisable in three equal installments, with the first installment exercisable on September 22, 2004 and the next two installments on September 22, 2005 and September 22, 2006.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>/s/ Louis T. Petrillo by Power of Attorney Previously Filed on September 18, 2002</signatureName>
        <signatureDate>2004-09-24</signatureDate>
    </ownerSignature>
</ownershipDocument>

</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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