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

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2007-11-02</periodOfReport>

    <notSubjectToSection16>1</notSubjectToSection16>

    <issuer>
        <issuerCik>0000914024</issuerCik>
        <issuerName>SHAW GROUP INC</issuerName>
        <issuerTradingSymbol>SGR</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0000948904</rptOwnerCik>
            <rptOwnerName>GENDELL JEFFREY L ET AL</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1></rptOwnerStreet1>
            <rptOwnerStreet2>55 RAILROAD AVE.</rptOwnerStreet2>
            <rptOwnerCity>GREENWICH, CT</rptOwnerCity>
            <rptOwnerState></rptOwnerState>
            <rptOwnerZipCode>06830</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>1</isOther>
            <otherText>Former 10% Owner</otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock, no par value</value>
            </securityTitle>
            <transactionDate>
                <value>2007-11-02</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>6840</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>75.15</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                    <footnoteId id="F3"/>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>8292327</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>See Footnotes</value>
                    <footnoteId id="F1"/>
                    <footnoteId id="F2"/>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock, no par value</value>
            </securityTitle>
            <transactionDate>
                <value>2007-11-05</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>13540</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>74.27</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                    <footnoteId id="F4"/>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>8278787</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>See Footnotes</value>
                    <footnoteId id="F1"/>
                    <footnoteId id="F2"/>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock, no par value</value>
            </securityTitle>
            <transactionDate>
                <value>2007-11-06</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>170000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>74.53</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                    <footnoteId id="F4"/>
                    <footnoteId id="F5"/>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>8108787</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>See Footnotes</value>
                    <footnoteId id="F1"/>
                    <footnoteId id="F2"/>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
    </nonDerivativeTable>

    <footnotes>
        <footnote id="F1">The Reporting Person is the managing member of Tontine Management, L.L.C. (&quot;TM&quot;), a Delaware limited liability company, the
 general partner of Tontine Partners, L.P. (&quot;TP&quot;), a Delaware limited partnership.  The Reporting Person is also the managing
 member of Tontine Capital Management, L.L.C. (&quot;TCM&quot;), a Delaware limited liability company, the general partner of Tontine
 Capital Partners, L.P. (&quot;TCP&quot;), a Delaware limited partnership.  The Reporting Person is also the managing member of Tontine
 Overseas Associates, L.L.C. (&quot;TOA&quot;), a Delaware limited liability company, the investment adviser to Tontine Capital
 Overseas Master Fund, L.P., a Cayman Islands partnership (&quot;TCO&quot;), Tontine Overseas Fund, Ltd., a Cayman Islands corporation
 (&quot;TOF&quot;) and certain managed accounts.</footnote>
        <footnote id="F2">The Reporting Person directly owns 0 shares of the Common Stock.  TP directly owns 3,278,425 shares of Common Stock.  TCP
 directly owns 2,250,000 shares of Common Stock.  TCO owns 308,400 shares of Common Stock.  TOF and certain managed accounts
 directly own 2,271,962 shares of Common Stock.  All of the foregoing shares of Common Stock may be deemed to be beneficially
 owned by the Reporting Person.  The Reporting Person disclaims beneficial ownership of the Issuer's securities reported
 herein for purposes of Section 16(a) under the Securities Exchange Act of 1934, as amended, or otherwise, except as to
 securities directly owned by the Reporting Person or representing the Reporting Person's pro rata interest in, and interest
 in the profits of, TP, TM, TCP, TCM, TOA, TCO and TOF.</footnote>
        <footnote id="F3">Common Stock sold  by TP and TOF.</footnote>
        <footnote id="F4">Common Stock sold  by TP.</footnote>
        <footnote id="F5">Common Stock sold  by TP, TOF and TCP.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>/s/ Jeffrey L. Gendell</signatureName>
        <signatureDate>2007-11-06</signatureDate>
    </ownerSignature>
</ownershipDocument>
