SEQUOIA FUND, INC.

                        Supplement dated August 28, 2007
                       to the Prospectus dated May 1, 2007

The  fourth  bullet  point  under  "Purchase  and Sale of Shares - How to Redeem
Shares - By Mail" is deleted in its entirety and replaced with the following:

o    If your  shares are  represented  by a  Stockholder's  Open  Account,  your
     redemption  request  must  include  a  signature  guarantee.   A  signature
     guarantee may be obtained from a domestic  bank or trust  company,  broker,
     dealer,   clearing  agency,   savings   association,   or  other  financial
     institution.

The  paragraph  under  "Purchase  and Sale of Shares - How to Redeem Shares - By
Telephone" is deleted in its entirety and replaced with the following:

You may make an oral  redemption  request  of  $25,000  or less,  which does not
require a signature  guarantee,  unless your  address has changed  within the 60
days prior to the request.  All other  redemption  requests must have  signature
guarantees. Certain shareholders, such as corporations,  trusts and estates, may
be required to submit additional documents.

The section  "Purchase  and Sale of Shares - How to Redeem  Shares - Payment" is
deleted in its entirety and replaced with the following:

o    The  Fund,  at the  discretion  of the  Board  of  Directors,  may  pay the
     redemption  price to you in cash or in portfolio  securities,  or partly in
     cash and partly in portfolio securities.

o    The Fund has adopted a policy under which the Fund may limit cash  payments
     in connection with  redemption  requests to $250,000 during any ninety (90)
     day period.  As a result,  the Fund may pay you in  securities or partly in
     securities  if the  amount  of Fund  shares  that you  redeem  is more than
     $250,000.

o    It is highly  likely that the Fund will pay you in  securities or partly in
     securities  if you make a redemption  (or series of  redemptions)  for more
     than $250,000.

o    When satisfying  redemption  requests with portfolio  securities,  the Fund
     will deliver  portfolio  securities to you regardless of whether you have a
     brokerage  or  bank  account  into  which  you  can  take  delivery  of the
     securities.

o    If  your  redemption  request  involves  more  than  $250,000  (or if  your
     redemption  request,  together with other  redemption  requests  during any
     ninety (90) day period,  is more than $250,000) and you have a brokerage or
     bank account into which the portfolio securities can be delivered, you must
     provide the Fund with  information  about the  brokerage  or bank  account,
     including the name of the broker or bank,  their  Depository  Trust Company
     (DTC) participant account number and your brokerage or bank account number,
     and your telephone number at the time of your redemption request.

o    If  your  redemption  request  involves  more  than  $250,000  (or if  your
     redemption  request,  together with other  redemption  requests  during any
     ninety  (90)  day  period,  is more  than  $250,000)  and you do not have a
     brokerage  or bank  account  into  which the  portfolio  securities  can be
     delivered, the Fund will determine the value of the portfolio securities to
     be delivered to you in redemption as of the date of redemption and:

     >    If the portfolio  securities are certificated,  the Fund will send you
          by registered  mail a certificate  or  certificates  representing  the
          securities   promptly   upon  its  receipt  of  the   certificate   or
          certificates from the issuer or issuers.  The issuer or issuers of the
          portfolio  securities  may  not  send  certificates  representing  the
          securities to the Fund for a period of days. You may be unable to sell
          certificated  portfolio  securities  registered in your name until you
          have received the certificates evidencing the securities; or

     >    If the portfolio  securities are not certificated,  the Fund will send
          you  a  letter  by  registered  mail  confirming  that  the  portfolio
          securities  have been registered in your name by the transfer agent of
          the issuer.

o    As noted above,  the Fund may take up to seven days to satisfy a redemption
     request.  To avoid delays in  receiving  portfolio  securities,  you should
     establish a brokerage  or bank  account  into which the  securities  can be
     delivered  and, as set forth above,  provide the Fund with the brokerage or
     bank account information at the time of your redemption request.

o    You should  understand  that you will incur  brokerage  and other  costs in
     connection  with the sale of any portfolio  securities  that you receive in
     connection with a redemption request. You should also understand that, as a
     result of subsequent market volatility,  the net proceeds from the ultimate
     sale of any securities that you receive upon a redemption may vary,  either
     positively or negatively,  and perhaps  significantly,  from the redemption
     value of your Fund  shares.  If  provided  with  notice in  advance of your
     chosen redemption date, the Fund's management will assist you to the extent
     possible to minimize  this  potential  market  exposure by providing you in
     advance with a list of the  approximate  number and value of the  portfolio
     securities that you will receive.



             THIS SUPPLEMENT SHOULD BE RETAINED FOR FUTURE REFERENCE





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