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

    <schemaVersion>X0306</schemaVersion>

    <documentType>5</documentType>

    <periodOfReport>2014-02-01</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <form3HoldingsReported>0</form3HoldingsReported>

    <form4TransactionsReported>0</form4TransactionsReported>

    <issuer>
        <issuerCik>0000795212</issuerCik>
        <issuerName>TRANS WORLD ENTERTAINMENT CORP</issuerName>
        <issuerTradingSymbol>TWMC</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001181131</rptOwnerCik>
            <rptOwnerName>MORONE JOSEPH G</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>38 CORPORATE CIRCLE</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>ALBANY</rptOwnerCity>
            <rptOwnerState>NY</rptOwnerState>
            <rptOwnerZipCode>12203</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle></officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeHolding>
            <securityTitle>
                <value>Common Stock, par value $0.01 per share</value>
            </securityTitle>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>24088</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeHolding>
    </nonDerivativeTable>

    <derivativeTable></derivativeTable>

    <footnotes></footnotes>

    <ownerSignature>
        <signatureName>/s/ Joseph Morone</signatureName>
        <signatureDate>2014-02-25</signatureDate>
    </ownerSignature>
</ownershipDocument>
