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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

SCHEDULE 13D


Under the Securities Exchange Act of 1934
(Amendment No. 5)

USG CORPORATION
(Name of Issuer)


Common Stock, par value $.10 per share
(Title of Class of Securities)


0009032931          
(CUSIP Number)


James B. McHugh, Esq.
The Goldman Sachs Group, L.P.
85 Broad Street
New York, NY  10004
(212) 902-1000
(Name, Address and Telephone Number of Person Authorized to 
Receive Notices and Communications)


March 22, 1994          
(Date of Event which Requires Filing of this Statement)


If the filing person has previously filed a statement on 
Schedule 13G to report the acquisition which is the subject 
of this Schedule 13D, and is filing this schedule because of 
Rule 13d-1(b)(3) or (4), check the following box. [ ]


Check the following  box if a fee is being paid with the 
statement.[ ] (A fee is not required, only if the reporting 
person: (1) has a previous statement on file reporting 
beneficial ownership of more than five percent of the class 
of securities described in Item 1; and (2) has filed no 
amendment subsequent thereto reporting beneficial ownership 
of five percent or less of such class.) (See Rule 13d-7.)

Note:  Six copies of this statement, including all exhibits, 
should be filed with the Commission.  See Rule 13d-1(a) for 
other parties to whom copies are to be sent.

The remainder of this cover page shall be filled out for a 
reporting person's initial filing on this form with respect 
to the subject class of securities, and for any subsequent 
amendment containing information which would alter 
disclosures provided in a prior cover page.

The information required on the remainder of this cover page 
shall not be deemed to be "filed" for the purpose of 
Section 18 of the Securities Exchange Act of 1934 ("Act") or 
otherwise subject to the liabilities of that section of the 
Act but shall be subject to all other provisions of the Act 
(however, see the Notes).





<PAGE>


1

Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person

Water Street Corporate Recovery Fund I, L.P.





2

Check the Appropriate Box if a Member of a Group* 

(a) [ ]
(b) [ ]





3

SEC Use Only





4

Source of Funds

00-WC





5

Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(E)
	
[ ]




6

Citizenship or Place of Organization

Delaware


Number of
Shares
Beneficially
Owned By
Each
Reporting
Person
With


7


Sole Voting Power
9,534,301 shares of Common Stock



8


Shared Voting Power
- - 0 -


9


Sole Dispositive Power
9,534,301 shares of Common Stock



10


Shared Dispositive Power
- - 0 -

11

Aggregate Amount Beneficially Owned by Each Reporting Person
9,534,301 shares of Common Stock


12

Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares* [ ]


13

Percent of Class Represented by Amount in Row (11)

21.1%


14

Type of Reporting Person*

  PN




<PAGE>

1

Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Goldman, Sachs & Co.




2

Check the Appropriate Box if a Member of a Group* 
(a) [ ]
(b) [ ]




3

SEC Use Only





4

Source of Funds

00-WC




5

Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(E) [ ]





6

Citizenship or Place of Organization

New York


Number of
Shares
Beneficially
Owned By
Each
Reporting
Person
With


7


Sole Voting Power
9,630,840 shares of Common Stock




8


Shared Voting Power
- - 0 -


9


Sole Dispositive Power
9,630,840 shares of Common Stock



10


Shared Dispositive Power
- - 0 -

11

Aggregate Amount Beneficially Owned by Each Reporting Person
9,630,840  shares of Common Stock


12

Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares* [ ]



13

Percent of Class Represented by Amount in Row (11)

21.3%


14

Type of Reporting Person*

HC-BD-PN




<PAGE>

1

Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
The Goldman Sachs Group, L.P.





2

Check the Appropriate Box if a Member of a Group* 
(a) [ ]
(b) [ ]




3

SEC Use Only





4

Source of Funds

00




5

Check Box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(d) or 2(E) [ ]





6

Citizenship or Place of Organization

Delaware


Number of
Shares
Beneficially
Owned By
Each
Reporting
Person
With




7


Sole Voting Power
9,630,840 shares of Common Stock





8


Shared Voting Power
- - 0 -



9


Sole Dispositive Power
9,630,840 shares of Common Stock




10


Shared Dispositive Power
- - 0 -

11

Aggregate Amount Beneficially Owned by Each Reporting Person
9,630,840 shares of Common Stock


12

Check Box if the Aggregate Amount in Row (11)
Excludes Certain Shares* [ ]



13

Percent of Class Represented by Amount in Row (11)
21.3%


14

Type of Reporting Person*
HC-PN



<PAGE>


	This statement constitutes Amendment No. 5 
("Amendment No. 5") to the Statement on Schedule 13D, dated 
May 17, 1993, as amended by Amendment No. 1, dated 
January 10, 1994, Amendment No. 2, dated February 22, 1994, 
Amendment No. 3, dated March 14, 1994 and Amendment No. 4, 
dated March 17, 1994 (collectively, the "Schedule 13D"), 
filed by Water Street Corporate Recovery Fund I, L.P. 
("Water Street"), Goldman, Sachs & Co. ("Goldman Sachs") and 
The Goldman Sachs Group, L.P. ("GS Group" and together with 
Water Street and Goldman Sachs, the "Reporting Persons") in 
respect of the beneficial ownership by the Reporting Persons 
of shares of the common stock, par value $.10 per share (the 
"Common Stock"), of USG Corporation, a Delaware corporation 
(the "Company").  Capitalized terms used but otherwise not 
defined herein shall have the meaning ascribed to them in 
the Schedule 13D.

	Item 4 is hereby amended as follows:


	Item 4.	Purpose of the Transaction.

		On March 17, 1994, the underwriters in the 
Offering of Common Stock exercised in full their 
overallotment options to purchase an additional 900,000 
shares of Common Stock from the Company and 975,000 shares 
of Common Stock from Water Street, in each case, at the 
public offering price per share of $29.875.  The closing of 
that offering (the "Additional Offering") was consummated on 
March 22, 1994.

	Item 5 is hereby amended as follows:


	Item 5.	Interest in Securities of the Issuer.

		On March 22, 1994, the Additional Offering 
was consummated resulting in the sale of 900,000 shares of 
Common Stock by the Company and 975,000 shares of Common 
Stock by Water Street. Water Street received aggregate 
proceeds of approximately $28 million, net of the 
underwriting discount (but before payment of Water Street's 
other expenses), or $28.531 per share.

	As of the date hereof, Water Street 
beneficially owns 9,418,231 shares of Common Stock and 
Warrants to purchase 116,070 shares of Common Stock.  As of 
the date hereof, Goldman Sachs beneficially owns 96,539 
shares of Common Stock and, as the general partner of Water 
Street, may be deemed to be the beneficial owner of the 
9,418,231 shares of Common Stock and Warrants to purchase 
116,070 shares of Common Stock held by Water Street.  In 
addition, GS Group may be deemed to be the beneficial owner 
of (i) the 9,418,231 shares of Common Stock and Warrants to 
purchase 116,070 shares of Common Stock held by Water Street 
and (ii) the 96,539 shares of Common Stock held by Goldman 
Sachs.  Accordingly, Water Street, Goldman Sachs and GS 
Group beneficially own (without giving effect to the 
Warrants owned by Water Street) 21% of the outstanding 
shares of Common Stock.  Assuming that Water 

<PAGE>
Street exercises all of its Warrants, but that no other Warrants 
are exercised, Water Street, Goldman Sachs and GS Group 
would beneficially own 21% of the outstanding shares of 
Common Stock.


<PAGE>

SIGNATURE


	Each of the undersigned certifies, after reasonable 
inquiry and to the best of its knowledge and belief, that 
the information set forth in this statement is true, 
complete and correct.


		WATER STREET CORPORATE RECOVERY FUND I, L.P.

			By:	GOLDMAN, SACHS & CO.
				General Partner

				By:  /s/ Richard A. Friedman
				Name: Richard A. Friedman
				Title:  General Partner



			GOLDMAN, SACHS & CO.

				By:  /s/ Richard A. Friedman
				Name: Richard A. Friedman
				Title:  General Partner


			THE GOLDMAN SACHS GROUP, L.P.

				By:  /s/ Richard A. Friedman
				Name:  Richard A. Friedman
				Title:  General Partner


Dated:  March 23, 1994