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

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2006-03-13</periodOfReport>

    <issuer>
        <issuerCik>0000778423</issuerCik>
        <issuerName>ARLINGTON HOSPITALITY INC</issuerName>
        <issuerTradingSymbol>HOST.PK</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001230344</rptOwnerCik>
            <rptOwnerName>SHAPIRO ANDREW E</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>C/O LAWNDALE CAPITAL MANAGEMENT, LLC</rptOwnerStreet1>
            <rptOwnerStreet2>591 REDWOOD HIGHWAY, #2345</rptOwnerStreet2>
            <rptOwnerCity>MILL VALLEY</rptOwnerCity>
            <rptOwnerState>CA</rptOwnerState>
            <rptOwnerZipCode>94941</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2005-09-30</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>D</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>1875</value>
                    <footnoteId id="F1"/>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0.00</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>20625</value>
                    <footnoteId id="F1"/>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2006-03-13</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>408700</value>
                    <footnoteId id="F2"/>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0.0015</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>0</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>As Manager of General Partner and Investment Advisor to Investment Limited Partnerships</value>
                    <footnoteId id="F2"/>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
    </nonDerivativeTable>

    <derivativeTable></derivativeTable>

    <footnotes>
        <footnote id="F1">These 1,875 restricted shares were granted to Mr. Shapiro in 2005, however, relinquished on September 30, 2005 prior to their vesting.</footnote>
        <footnote id="F2">These securities were sold by an investment limited partnership of which Lawndale Capital Management, LLC (&quot;LCM&quot;) serves as the general partner and investment advisor of the limited partnership.  The reporting person, Mr. Andrew E. Shapiro, is the Managing Member of LCM.  LCM has only a pro rata interest in these shares and disclaims beneficial ownership in such shares except to the extent of its pecuniary interest.  The reporting person, Mr. Shapiro, disclaims beneficial ownership of these shares except to the extent of his pecuniary interest. Both LCM and Mr. Shapiro disclaim membership in any &quot;group&quot; in connection with the ownership of these securities.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>/s/ Andrew E. Shapiro</signatureName>
        <signatureDate>2006-03-15</signatureDate>
    </ownerSignature>
</ownershipDocument>
