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

    <schemaVersion>X0306</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2013-09-30</periodOfReport>

    <issuer>
        <issuerCik>0000005272</issuerCik>
        <issuerName>AMERICAN INTERNATIONAL GROUP INC</issuerName>
        <issuerTradingSymbol>AIG</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001236614</rptOwnerCik>
            <rptOwnerName>WINTROB JAY S</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>1 SUNAMERICA CENTER</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>LOS ANGELES</rptOwnerCity>
            <rptOwnerState>CA</rptOwnerState>
            <rptOwnerZipCode>90067</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isOfficer>1</isOfficer>
            <officerTitle>Executive Vice President</officerTitle>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable></nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Dividend Equivalent</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <footnoteId id="F1"/>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2013-09-30</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>M</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>4.6465</value>
                    <footnoteId id="F2"/>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F4"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F3"/>
            </exerciseDate>
            <expirationDate>
                <footnoteId id="F3"/>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>4.6465</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>25.4243</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
        <derivativeTransaction>
            <securityTitle>
                <value>Long-Term Performance Units</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>39.1000</value>
                <footnoteId id="F1"/>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2013-09-30</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>M</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>356.1156</value>
                    <footnoteId id="F5"/>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F4"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F3"/>
            </exerciseDate>
            <expirationDate>
                <footnoteId id="F3"/>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>356.1156</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>0.0000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
        <derivativeTransaction>
            <securityTitle>
                <value>Restricted Stock Unit</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>33.5400</value>
                <footnoteId id="F1"/>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2013-09-30</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>M</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>1941.6030</value>
                    <footnoteId id="F5"/>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F4"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F3"/>
            </exerciseDate>
            <expirationDate>
                <footnoteId id="F3"/>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>1941.6030</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>0.0000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
        <derivativeTransaction>
            <securityTitle>
                <value>Restricted Stock Unit</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>32.7900</value>
                <footnoteId id="F1"/>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2013-09-30</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>M</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>2191.6780</value>
                    <footnoteId id="F6"/>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F4"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F3"/>
            </exerciseDate>
            <expirationDate>
                <footnoteId id="F3"/>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>2191.6780</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>0.0000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
        <derivativeTransaction>
            <securityTitle>
                <value>Restricted Stock Unit</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>21.9500</value>
                <footnoteId id="F1"/>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2013-09-30</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>M</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>3274.0377</value>
                    <footnoteId id="F7"/>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F4"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F3"/>
            </exerciseDate>
            <expirationDate>
                <footnoteId id="F3"/>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>3274.0377</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>0.0000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Represents AIG's share price on the date of grant; these securities do not carry a conversion or exercise price.</footnote>
        <footnote id="F2">Represents the payment in cash of $225.96, before applicable taxes, in settlement of the dividend equivalent in shares of common stock with respect to LTPUs (both the portion originally granted as common stock and the hybrid portion converted into common stock on April 14, 2011).</footnote>
        <footnote id="F3">These securities do not have an exercisable date or expiration date.</footnote>
        <footnote id="F4">These securities do not carry a conversion or exercise price.</footnote>
        <footnote id="F5">Represents the payment in cash of an aggregate amount of $111,738.05, before applicable taxes, in settlement of fully vested LTPUs (both the portion originally granted as common stock and the hybrid portion converted into common stock on April 14, 2011).</footnote>
        <footnote id="F6">Represents the payment in cash of $106,581.30, before applicable taxes, in settlement of stock salary based on AIG's share price on September 30, 2013.</footnote>
        <footnote id="F7">Represents the payment in cash of $159,216.45, before applicable taxes, in settlement of stock salary based on AIG's share price on September 30, 2013.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>/s/ Patricia M. Carroll, by POA for Jay S. Wintrob</signatureName>
        <signatureDate>2013-10-02</signatureDate>
    </ownerSignature>
</ownershipDocument>
