Ownership Submission
FORM 4
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
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(Print or Type Responses)
1. Name and Address of Reporting Person *
Keane Martin J III
   2. Issuer Name and Ticker or Trading Symbol
BLUEFLY INC [BFLY] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director _____ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
SVP of E-Commerce
(Last)
(First)
(Middle)
C/O BLUEFLY, INC., 42 WEST 39TH STREET		 3. Date of Earliest Transaction (Month/Day/Year)
02/23/2007
(Street)

NEW YORK, NY 10018		 4. If Amendment, Date Original Filed(Month/Day/Year)
 6. Individual or Joint/Group Filing(Check Applicable Line)
_X_ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)		 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)		 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)		 5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4)		 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)		 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V Amount (A) or (D) Price
Common Stock 02/23/2007   A   24,833 (1) A (2) 24,833 D  

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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)		 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)		 5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)		 6. Date Exercisable and Expiration Date
(Month/Day/Year)		 7. Title and Amount of Underlying Securities
(Instr. 3 and 4)		 8. Price of Derivative Security
(Instr. 5)		 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)		 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)		 11. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Option (Right to Buy) $ 15.09 02/23/2007   D     25,000   (3) 01/22/2009 Common Stock 25,000 (4) 0 D  
Option (Right to Buy) $ 9.28 02/23/2007   D     5,000   (3) 05/31/2009 Common Stock 5,000 (4) 0 D  
Option (Right to Buy) $ 9.19 02/23/2007   D     20,000   (3) 08/31/2009 Common Stock 20,000 (4) 0 D  
Option (Right to Buy) $ 11.22 02/23/2007   D     20,000   (3) 12/02/2009 Common Stock 20,000 (4) 0 D  
Option (Right to Buy) $ 2.78 02/23/2007   D     30,000   (3) 10/12/2010 Common Stock 30,000 (4) 0 D  
Option (Right to Buy) $ 1.54 02/23/2007   D     20,000   (5) 09/30/2015 Common Stock 20,000 (4) 0 D  
Deferred Stock Units (6) 02/23/2007   A   10,278     (7)   (7) Common Stock 10,278 (8) 10,278 D  

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
Keane Martin J III
C/O BLUEFLY, INC.
42 WEST 39TH STREET
NEW YORK, NY 10018		       SVP of E-Commerce  

Signatures

 /s/ Martin Keane J III   02/26/2007
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) Represents shares of restricted stock, which vest in full on February 23, 2008.
(2) Restricted stock granted to the reporting person pursuant to the Offer to Exchange, dated January 25, 2007, in exchange for the reporting person forfeiting his right to certain fully vested options to purchase an aggregate of 104,583 shares of Common Stock.
(3) Fully vested.
(4) Disposed of pursuant to the reporting person's forfeiture of options as described in footnote (2) above and footnote (7) below.
(5) 4,583 fully vested. 15,417 vest in monthly installments.
(6) Not applicable.
(7) The deferred stock units vest as follows: (a) 3,333 will vest in substantially equal quarterly installments over 2 years beginning on the date of grant; and (b) 6,945 will vest in substantially equal quarterly installments over 3 years beginning on the date of grant. There is no expiration date.
(8) Deferred stock units granted to the reporting person pursuant to the Offer to Exchange, dated January 25, 2007, in exchange for the reporting person forfeiting his right to certain unvested options to purchase an aggregate of 15,417 shares of Common Stock.

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