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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1. Name and Address of Reporting Person * IRVINE DIANE M   2. Issuer Name and Ticker or Trading Symbol BLUE NILE INC [NILE] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner __X__ Officer (give title below) _____ Other (specify below) Former CEO (Last) (First) (Middle) C/O BLUE NILE, INC., 411 FIRST AVENUE S, STE 700 3. Date of Earliest Transaction (Month/Day/Year) 02/07/2012 (Street) SEATTLE, WA 98104 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 02/07/2012   M   18,500 A $ 32.97 66,989 D   Common Stock 02/07/2012   S(1)   18,500 D $ 41.74 (2) 48,489 D   Common Stock 02/07/2012   S(1)   10,000 D $ 42.29 (3) 38,489 D   Common Stock 02/08/2012   S(1)   7,102 D $ 43.25 (4) 31,387 D   Common Stock               1,160 I By Son Common Stock               1,160 I By Daughter Common Stock               1,160 I By Daughter

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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

Stock Options (Right to Buy)

$ 32.97

02/07/2012

M

18,500

(5)

08/30/2015(6)

Common Stock

18,500

(7)

28,830

D

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
IRVINE DIANE M C/O BLUE NILE, INC. 411 FIRST AVENUE S, STE 700 SEATTLE, WA 98104			Former CEO

Signatures

/s/ Lauren Neiswender, Power of Attorney		02/09/2012
**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)	Any short-swing profits will be paid to the company as required by Rule 16(b) of the Securities and Exchange Act of 1934.
(2)	Represents the weighted average sale price. The highest price at which shares were sold was $42.39 and lowest price at which shares were sold was $40.75.
(3)	Represents the weighted average sale price. The highest price at which shares were sold was $42.49 and lowest price at which shares were sold was $42.15.
(4)	Represents the weighted average sale price. The highest price at which shares were sold was $43.40 and lowest price at which shares were sold was $43.20.
(5)	25% of the option shares vested on August 26, 2006 and one-forty-eighth of the option shares vested in equal monthly installments over the following thirty-six months. As of November 11, 2011, all unvested options were canceled.
(6)	Ms. Irvine resigned on November 11, 2011. Her vested and exercisable options will expire on May 11, 2012.
(7)	Not applicable.

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