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CORRESP
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      12/16/05 response to 11/29/05 comment letter

    December
      16,
      2005

    Filed
      via EDGAR

    Cecilia
      D. Blye,
      Chief

    Office
      of Global
      Security Risk

    Division
      of
      Corporation Finance

    Securities
      and
      Exchange Commission

    100
      F Street,
      N.E.

    Washington,
      DC
      20549-5546

              Re:

              Caterpillar
                Inc.

              Form
                10-K for
                the fiscal year ended December 31, 2004
File
                No.
                1-00768

    Dear
      Ms.
      Blye:

    Caterpillar
      Inc.
      (“Caterpillar”) wishes to provide supplemental information to address the issues
      raised in your follow-up letter of November 29, 2005. For your convenience,
      we
      have included your comments in this response in italics.

    General

    1.
      We note your
      response to our comment in our letter dated September 26, 2005. With respect
      to
      your statements concerning “identifiable” product sales, please tell us whether
      you believe there have been non-identifiable sales of your products in Iran.
      To
      the extent you believe that non-identifiable sales may have occurred, advise
      us
      of the reasons you believe some sales may not be identifiable. To the best
      of
      your knowledge and belief, describe for us such possible additional sales of
      your products into Iran, including the nature and probable magnitude of such
      sales, probable purchasers of the products sold, and whether those products
      or
      any of their component parts can be used for military purposes, including the
      development and production of advanced technologies. If the basis for your
      belief that there may be non-identifiable sales is that you do not have
      information regarding all re-sales by independently owned and operated dealers,
      please advise us whether there are any terms in your subsidiaries’ sales
      agreements with such dealers that would prohibit or limit the sale of any of
      your products to agencies or instrumentalities of, or entities controlled by,
      the government of Iran.

      Page
        1

    By
      “identifiable” sales, Caterpillar means all sales through authorized channels,
i.e.,
      direct sales by
      foreign subsidiaries or indirect sales by independently owned and operated
      dealers. Caterpillar is not aware of sales through unauthorized channels but
      cannot be certain that such sales do not exist. The sales agreements between
      Caterpillar foreign subsidiaries and their authorized dealers do not prohibit
      or
      limit the sale of Caterpillar products to agencies or instrumentalities of,
      or
      entities controlled by, the government of Iran.

    2.
      We note your
      belief concerning whether your products or their component parts that are sold
      into Iran are used for military purposes, including the development and
      production of advanced technologies. Please tell us, to the best of your
      knowledge, information and belief, whether any of your products sold or slated
      for sale to or in Iran, or any of their component parts, can be used for
      military purposes, including the development and production of advanced
      technologies.

    Neither
      the
      Caterpillar products that are sold directly or indirectly to Iran, nor their
      component parts, are specifically designed, developed, configured, adapted,
      or
      modified for military applications. Such Caterpillar products are used in
      civilian applications. Thus, to the best of our knowledge, information and
      belief, these Caterpillar products cannot be used for military purposes,
      including the development and production of advanced technologies.

    3.
      We note your
      materiality analysis describes “nominal” sales in Iran and a “very small market
      for Caterpillar products” in Iran. To the extent reasonably practical, please
      quantify the approximate dollar amount of annual sales in Iran.

    Caterpillar’s
      foreign subsidiaries have indicated that the approximate unaudited total value
      of direct sales and sales by independently owned and operated dealers into
      Iran
      in 2004 was less than US$50 million, or 0.16 percent of Caterpillar’s total
      sales and revenues, which were US$30.25 billion for the fiscal year. Sales
      in
      prior years were approximately the same and are not expected to increase
      significantly in future years.

    Acknowledgement:

    On
      behalf of the company, the undersigned acknowledges that:

            ·

              Caterpillar
                is responsible for the adequacy and accuracy of the disclosures it
                has
                made in its filings, including its Form 10-K for the fiscal year
                ended
                December 31, 2004;

            ·

              Staff
                comments or changes to disclosure in response to staff comments do
                not
                foreclose the Commission from taking any action with respect to
                Caterpillar’s filings; and

            ·

              Caterpillar
                may not assert staff comments as a defense in any proceeding initiated
                by
                the Commission or any person under the federal securities laws of
                the
                United States.

      Page
        2

    Please
      contact the
      undersigned if you need any further information.

    Respectfully
      submitted,

    /s/
      James B.
      Buda

    James
      B.
      Buda

    Vice
      President and
      General Counsel

    Caterpillar
      Inc.

    100
      NE Adams
      Street

    Peoria,
      IL
      61629

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