-----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,
 SD+61Orb7S0+E8r4gnIr0NOTEQUyOOG3X6+PmSxPGlWRzMi9m1EMNRbt+HXqeidv
 qMdbUjDTgEi9t9k2wxIdnA==

<SEC-DOCUMENT>0001179110-06-019865.txt : 20061013
<SEC-HEADER>0001179110-06-019865.hdr.sgml : 20061013
<ACCEPTANCE-DATETIME>20061013162707
ACCESSION NUMBER:		0001179110-06-019865
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20061013
FILED AS OF DATE:		20061013
DATE AS OF CHANGE:		20061013

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			Finigan Vincent Paul JR
		CENTRAL INDEX KEY:			0001358156

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-32542
		FILM NUMBER:		061144488

	BUSINESS ADDRESS:	
		BUSINESS PHONE:		(415) 315-6515

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

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:		555 CALIFORNIA STREET
		STREET 2:		50TH FLOOR
		CITY:			SAN FRANCISCO
		STATE:			CA
		ZIP:			94104
		BUSINESS PHONE:		(415) 315-3620

	MAIL ADDRESS:	
		STREET 1:		555 CALIFORNIA STREET
		STREET 2:		50TH FLOOR
		CITY:			SAN FRANCISCO
		STATE:			CA
		ZIP:			94104
</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>2006-10-13</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

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

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001358156</rptOwnerCik>
            <rptOwnerName>Finigan Vincent Paul JR</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>0</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle></officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable></nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Phantom Stock</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <footnoteId id="F1"/>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2006-10-13</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>858.47</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>23.45</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F1"/>
            </exerciseDate>
            <expirationDate>
                <footnoteId id="F1"/>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>858.47</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>1125.84</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Each share of phantom stock is the economic equivalent of one share of common stock. The shares of phantom stock become payable, in cash or common stock, at the election of the Company, upon the earlier of (i) the first day of January following the reporting person's termination of service as a director or (ii) an election date pre-selected by the reporting person, and in any event in cash or common stock, at the election of the reporting person, upon the occurrence of a change in control of the Company.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>Vincent Paul Finigan, Jr.</signatureName>
        <signatureDate>2006-10-13</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----