-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 MHoa84HXCzdJPLjCvmsuTw8W9WpHU7T5ZgfhT8XIUxVIRlftSt13sVXtMdPYRtOJ
 hwwAtZSysrMokGUpM3QQiQ==

<SEC-DOCUMENT>0001179110-06-015269.txt : 20060718
<SEC-HEADER>0001179110-06-015269.hdr.sgml : 20060718
<ACCEPTANCE-DATETIME>20060718163701
ACCESSION NUMBER:		0001179110-06-015269
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20060714
FILED AS OF DATE:		20060718
DATE AS OF CHANGE:		20060718

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KKR Financial Corp
		CENTRAL INDEX KEY:			0001301508
		STANDARD INDUSTRIAL CLASSIFICATION:	REAL ESTATE INVESTMENT TRUSTS [6798]
		IRS NUMBER:				201426618

	BUSINESS ADDRESS:	
		STREET 1:		FOUR EMBARCADERO CENTER
		STREET 2:		SUITE 2050
		CITY:			SAN FRANCISCO
		STATE:			CA
		ZIP:			94111
		BUSINESS PHONE:		(415) 315-3620

	MAIL ADDRESS:	
		STREET 1:		FOUR EMBARCADERO CENTER
		STREET 2:		SUITE 2050
		CITY:			SAN FRANCISCO
		STATE:			CA
		ZIP:			94111

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			Fanlo Saturnino Sixto
		CENTRAL INDEX KEY:			0001329297

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-32542
		FILM NUMBER:		06967436

	BUSINESS ADDRESS:	
		BUSINESS PHONE:		(415) 315-3692

	MAIL ADDRESS:	
		STREET 1:		FOUR EMBARCADERO CENTER, SUITE 2050
		CITY:			SAN FRANCISCO
		STATE:			CA
		ZIP:			94111
</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>2006-07-14</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0001301508</issuerCik>
        <issuerName>KKR Financial Corp</issuerName>
        <issuerTradingSymbol>KFN</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001329297</rptOwnerCik>
            <rptOwnerName>Fanlo Saturnino Sixto</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>C/O KKR FINANCIAL CORP.</rptOwnerStreet1>
            <rptOwnerStreet2>555 CALIFORNIA STREET, 50TH FLOOR</rptOwnerStreet2>
            <rptOwnerCity>SAN FRANCISCO</rptOwnerCity>
            <rptOwnerState>CA</rptOwnerState>
            <rptOwnerZipCode>94104</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>President and CEO</officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
                <footnoteId id="F1"/>
            </securityTitle>
            <transactionDate>
                <value>2006-07-14</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>J</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
                <footnoteId id="F2"/>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>625000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>2045911</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>See Note</value>
                    <footnoteId id="F3"/>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2006-07-14</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>J</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
                <footnoteId id="F4"/>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>136777</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>430154</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
    </nonDerivativeTable>

    <derivativeTable></derivativeTable>

    <footnotes>
        <footnote id="F1">Shares of restricted common stock.</footnote>
        <footnote id="F2">The shares of common stock were transferred for no consideration to KKR KFC Investments LLC, the Reporting Person, David A. Netjes, Jeffrey Brian Van Horn and other employees of KKR Financial Advisors LLC or its affiliates by KKR Financial Advisors LLC.  The shares of common stock are vested shares of restricted common stock that were previously granted to KKR Financial Advisors LLC by the Issuer.  The Reporting Person has an ownership interest in KKR Financial LLC which is the sole member of KKR Financial Advisors LLC.</footnote>
        <footnote id="F3">The shares of restricted common stock are held by KKR Financial Advisors LLC.  The Reporting Person has an ownership interest in KKR Financial LLC, the sole member of KKR Financial Advisors LLC, and may be deemed to be the beneficial owner of such shares of restricted stock held by KKR Financial Advisors LLC.  However, the Reporting Person disclaims that he is the beneficial owner of such shares of restricted common stock, except to the extent of his pecuniary interest in such shares of restricted common stock.  The filing of this statement shall not be deemed an admission that, for purposes of Section 16 of the Securities Exchange Act of 1934 or otherwise, the Reporting Person is the beneficial owner of all such shares of restricted common stock covered by this statement.</footnote>
        <footnote id="F4">As discussed in Note 2, the shares of common stock were transferred for no consideration to the Reporting Person by KKR Financial Advisors LLC.  The shares of common stock are vested shares of restricted common stock that were previously granted to KKR Financial Advisors LLC by the Issuer.  The Reporting Person has an ownership interest in KKR Financial LLC which is the sole member of KKR Financial Advisors LLC.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>Saturnino S. Fanlo</signatureName>
        <signatureDate>2006-07-18</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----