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

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2006-06-09</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0000833795</issuerCik>
        <issuerName>HOMEFED CORP</issuerName>
        <issuerTradingSymbol>HOFD</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0000924255</rptOwnerCik>
            <rptOwnerName>STEINBERG JOSEPH S</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>C/O LEUCADIA NATIONAL CORP</rptOwnerStreet1>
            <rptOwnerStreet2>315 PARK AVENUE SOUTH</rptOwnerStreet2>
            <rptOwnerCity>NEW YORK</rptOwnerCity>
            <rptOwnerState>NY</rptOwnerState>
            <rptOwnerZipCode>10010</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>1</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>Chairman</officerTitle>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock, Par Value $.01</value>
            </securityTitle>
            <transactionDate>
                <value>2006-06-09</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>M</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>100</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>9.30</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>81546</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeHolding>
            <securityTitle>
                <value>Common Stock, Par Value $.01</value>
            </securityTitle>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>3174500</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>See Explanation.</value>
                    <footnoteId id="F1"/>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeHolding>
    </nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Stock Options (Right to Buy)</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>9.39</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2006-06-09</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>M</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>100</value>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F3"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F2"/>
            </exerciseDate>
            <expirationDate>
                <value>2006-07-10</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>100</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>0</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Consists of (a) 3,676 shares of HomeFed common stock beneficially owned by the Reporting Person's wife and daughter (b)
 61,793 shares held in a family trust for which the reporting person is a trustee and has sole power to vote and sell the
 shares (c) 634,805 shares transfered to a grantor retained annuity trust (GRAT) of which the Reporting Person is a
 beneficiary and (d) 2,474,226 shares of HomeFed common stock held by Leucadia National Corporation, a public company
 (&quot;Leucadia&quot;).  The Reporting Person is a significant shareholder, President and Director of Leucadia.  The reporting person
 disclaims beneficial ownership of the HomeFed common stock owned by Leucadia, except to the extent of his pecuniary
 interest, if any.</footnote>
        <footnote id="F2">The stock options were granted on July 10, 2001.  Pursuant to their terms, these options became exercisable at the rate of
 25% per year commencing one year after the grant date.</footnote>
        <footnote id="F3">Not applicable.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>/s/ Joseph S. Steinberg</signatureName>
        <signatureDate>2006-06-09</signatureDate>
    </ownerSignature>
</ownershipDocument>
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X0202
4
2006-06-09
0
0000833795
HOMEFED CORP
HOFD
0000924255
STEINBERG JOSEPH S
C/O LEUCADIA NATIONAL CORP
315 PARK AVENUE SOUTH
NEW YORK
NY
10010
1
1
1
0
Chairman
Common Stock, Par Value $.01
2006-06-09
4
M
0
100
9.30
A
81546
D
Common Stock, Par Value $.01
3174500
I
See Explanation.
Stock Options (Right to Buy)
9.39
2006-06-09
4
M
0
100
D
2006-07-10
Common Stock
100
0
D
Consists of (a) 3,676 shares of HomeFed common stock beneficially owned by the Reporting Person's wife and daughter (b)
 61,793 shares held in a family trust for which the reporting person is a trustee and has sole power to vote and sell the
 shares (c) 634,805 shares transfered to a grantor retained annuity trust (GRAT) of which the Reporting Person is a
 beneficiary and (d) 2,474,226 shares of HomeFed common stock held by Leucadia National Corporation, a public company
 ("Leucadia").  The Reporting Person is a significant shareholder, President and Director of Leucadia.  The reporting person
 disclaims beneficial ownership of the HomeFed common stock owned by Leucadia, except to the extent of his pecuniary
 interest, if any.
The stock options were granted on July 10, 2001.  Pursuant to their terms, these options became exercisable at the rate of
 25% per year commencing one year after the grant date.
Not applicable.
/s/ Joseph S. Steinberg
2006-06-09