SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                         Date of Report: March 18, 2002
                        (Date of earliest event reported)


                              POTLATCH CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)





           Delaware                   1-5313                   82-0156045
- ----------------------------       ------------          ----------------------
(State or Other Jurisdiction       (Commission             (I.R.S. Employer
      of Incorporation)            File Number)          Identification Number)


    601 W. Riverside Avenue, Suite 1100, Spokane WA,              99201
    ------------------------------------------------            ----------
        (Address of principal executive offices)                (Zip Code)


                                  509-835-1500
                                  ------------
                         (Registrant's telephone number,
                              including area code)









Item 5.  Other Events.
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On March 18, 2002, Potlatch Corporation issued the following news release:

"Spokane, WA -Potlatch Corporation (NYSE:PCH) today announced that the company
has signed a definitive agreement for the sale of Potlatch's Cloquet, Minnesota,
pulp and printing papers facilities and associated assets to a subsidiary of
Sappi Limited for $480 million in cash. Sappi is a leading producer of coated
[woodfree] printing papers.

"The sale is subject to customary closing conditions, including regulatory
approvals, and is expected to be completed in the second quarter.

"In conjunction with the sale, Potlatch said it will close its remaining
printing papers mill in Brainerd, Minnesota, and exit the coated printing papers
business. Potlatch expects to take an after-tax charge of roughly $150 million
in the first quarter to cover costs associated with the write-down of the book
value of the assets and the closure costs. Approximately 10 percent of the
after-tax charge will be cash costs associated with the closure of the Brainerd
mill and other costs associated with exiting the coated papers business. The
remaining 90 percent of the after-tax charge will be a non-cash charge resulting
from a book loss on sale of the Cloquet assets and the closure of the Brainerd
mill.

"In 2001, Potlatch's printing papers segment reported a loss of $36.7 million on
revenues of $464 million.

"Potlatch Chairman and Chief Executive Officer L. Pendleton Siegel emphasized
that the sale of the company's coated printing papers assets are part of a
strategic realignment of company resources to increase shareholder value by
focusing on businesses with greatest potential for growth. Siegel explained that
Potlatch will concentrate on the company's natural resource, wood products and
consumer tissue businesses, which have demonstrated potential for long-term
growth. He said that the company's paperboard business is currently resolving
cost issues and improving product quality at its Lewiston, Idaho, mill to be
consistent with the low cost and high quality at its Cypress Bend, Arkansas,
operation.

"Siegel added that proceeds from the sale will be used to pay down debt,
strengthen the company's balance sheet and ultimately provide capital for
high-return investments in its other business lines.

"Siegel added that the company's actions also reflect recent changes in the
dynamics of the global market for coated printing papers. "The continuing
strength of the dollar in relation to other currencies in recent years and the
ongoing industry consolidation have



created a challenging competitive environment in the coated printing papers
business, particularly for smaller domestic producers," he said. "Potlatch has
tremendous assets and a skilled workforce dedicated to meeting the needs of our
customers in our key businesses," Siegel continued. "For example, our
private-label consumer tissue business has performed well in recent years and
has continued to benefit from our strategy of providing high-quality products to
our customers, which are large retail store chains. During the 1990s we
modernized and expanded our tissue operations in Lewiston, added a new
converting plant in Las Vegas and just last year leased an additional converting
facility near Chicago to supply our customers as they move into mid-western and
eastern markets. We expect to continue to grow with our private label tissue
customers. We expect our consumer tissue business will be a primary growth
engine in the coming decade," he explained.

"Our primary asset -- 1.5 million acres of timberland -- has been managed for
long-term sustainable production of wood fiber and is in the process of becoming
third-party certified to demonstrate our commitment to responsible stewardship
and to enhance the marketability of our fiber. We also have highly competitive
lumber and panel manufacturing facilities, many of which have been recently
modernized. We believe there are more high-return investment opportunities in
wood products," Siegel added.

"Siegel also noted that the company's paperboard business has the relative scale
to be competitive and the company is currently pursuing a program to reduce
costs and improve product quality at its Lewiston, Idaho, pulp and paperboard
facility. He emphasized that the company's pulp and paperboard operation in
Cypress Bend, Arkansas, is a consistent low-cost producer and was recently
upgraded to provide the quality required for high-end packaging.

"This news release contains, in addition to historical information, certain
forward-looking statements, including with respect to the future prospect of our
consumer tissue, resource, wood products and paperboard businesses. These
forward-looking statements are based on management's best estimates and
assumptions regarding future events, and are therefore subject to known and
unknown risks and uncertainties and are not guarantees of future performance.
These risks and uncertainties include changes in general economic conditions and
interest rates, competitive conditions and prices in our markets, supply and
demand conditions, changes in currency exchange rates, manufacturing
difficulties and other risks and uncertainties identified from time to time in
our reports filed with the SEC, including our Form 10-Q for the quarter ended
September 30, 2001. The company's actual results could differ materially from
those expressed or implied by forward-looking statements. The company disclaims
any intent or obligation to update these forward-looking statements."

"Additional information is available on the Potlatch Corporation website at
www.potlatchcorp.com. Access "Financial Information" and then the menu item
entitled, "Major speeches and presentations."

"Information about Sappi Limited can be found at www.sappi.com"



                                    SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

     Dated: March 18, 2002


                              POTLATCH CORPORATION


By /s/ Malcolm A. Ryerse
   -----------------------
   Malcolm A. Ryerse
   Corporate Secretary