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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

(Amendment No.     )

Filed by the Registrant  x

Filed by a Party other than the Registrant  ¨

Check the appropriate box:

Wal-Mart Stores, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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702 Southwest 8^th Street

Bentonville, Arkansas 72716-0215

(479) 273-4000

NOTICE OF 2006 ANNUAL SHAREHOLDERS’ MEETING

To Be Held June 2, 2006

Please join us for the 2006 Annual Shareholders’ Meeting of Wal-Mart Stores, Inc. The meeting will be held on Friday, June 2, 2006, at 7:00 a.m. in Bud Walton Arena, University of Arkansas, Fayetteville, Arkansas.

The purposes of the 2006 Annual Shareholders’ Meeting are:

You must own shares of Wal-Mart Stores, Inc. common stock at the close of business on April 5, 2006, to vote at the 2006 Annual Shareholders’ Meeting. If you plan to attend, please bring the Admittance Slip on the back cover and a picture I.D. Regardless of whether you will attend, please vote as described on pages 3-4 of the proxy statement. Voting in any of these ways will not prevent you from attending the 2006 Annual Shareholders’ Meeting.

By Order of the Board of Directors

Thomas D. Hyde

Secretary

Bentonville, Arkansas

April 14, 2006

Admittance Requirements on Back Cover

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702 Southwest 8^th Street

Bentonville, Arkansas 72716-0215

(479) 273-4000

PROXY STATEMENT

This proxy statement and accompanying proxy card are being mailed beginning April 14, 2006, in connection with the solicitation of proxies by the Board of Directors of Wal-Mart Stores, Inc., a Delaware corporation, for use at the 2006 Annual Shareholders’ Meeting. The meeting will be held in Bud Walton Arena, University of Arkansas, Fayetteville, Arkansas, on Friday, June 2, 2006, at 7:00 a.m.

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TABLE OF ABBREVIATIONS

The following abbreviations are used in this proxy statement:

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Your proxy is solicited by the Board. The Company pays the cost of soliciting your proxy and reimburses brokers and others for forwarding you the proxy statement, proxy card, and Annual Report to Shareholders.

VOTING INFORMATION

Who may vote?    You may vote if you owned Shares at the close of business on April 5, 2006. You are entitled to one vote on each matter presented at the 2006 Annual Shareholders’ Meeting for each Share you owned on that date. As of March 31, 2006, Wal-Mart had 4,167,369,745 Shares outstanding.

What am I voting on?    You are voting on:

Who counts the votes?    Computershare will count the votes. The Board appointed two employees of Computershare as independent inspectors of the election.

Is my vote confidential?    Yes, your proxy card or ballot and voting records will not be disclosed to Wal-Mart unless the law requires disclosure, you request disclosure, or your vote is cast in a contested election. If you write comments on your proxy card or ballot, your comments will be provided to Wal-Mart, but how you voted will remain confidential.

What vote is required to pass an item of business at the 2006 Annual Shareholders’ Meeting?    The holders of a majority of the outstanding Shares must be present in person or represented by proxy for the 2006 Annual Shareholders’ Meeting to be held. The vote of the holders of a plurality of the Shares present in person or represented by proxy and entitled to vote in the election of directors is required to elect any director. Each Share may be voted for as many nominees as there are seats on the Board, but no Share may be voted more than once for any particular nominee.

The vote of the holders of a majority of the Shares present in person or represented by proxy at the meeting and entitled to vote is required for ratification of the appointment of E&Y as Wal-Mart’s independent accountants and the shareholder proposals.

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Abstentions and broker non-votes are not relevant to the election of directors. Abstentions will have the effect of a vote against any of the other proposals. Broker non-votes will have no effect on the vote for any of the other proposals. A “broker non-vote” occurs if your Shares are not registered in your name and you do not provide the record holder of your Shares (usually a bank, broker, or other nominee) with voting instructions on a matter and the holder is not permitted to vote on the matter without instructions from you under applicable NYSE rules.

Unless you indicate otherwise on your proxy card, the persons named as your proxies in the proxy card will vote your Shares: FOR all of the nominees for director named in this proxy statement, FOR the ratification of E&Y as Wal-Mart’s independent accountants, and AGAINST the six shareholder proposals.

How do I vote?    The process for voting your Shares depends on how your Shares are held. Generally, you may hold Shares in your name as a “record holder” or in “street name,” through a nominee, such as a broker or bank.

If you are a record holder, you may vote by proxy or you may vote in person at the 2006 Annual Shareholders’ Meeting. If you are a record holder and would like to vote your Shares by proxy prior to the 2006 Annual Shareholders’ Meeting, there are three ways for you to vote:

Please note that telephone and internet voting will close at 11:00 p.m. (CT) on June 1, 2006.

If your Shares are held through the Profit Sharing/401(k) Plan or the Wal-Mart Puerto Rico Profit Sharing and 401(k) Plan and you do not vote your Shares in one of the methods described above, your Shares will be voted by the Retirement Plans Committee of the Company in accordance with the rules of the applicable plan.

If you plan to attend the 2006 Annual Shareholders’ Meeting and wish to vote in person, the Company will give you a ballot at the 2006 Annual Shareholders’ Meeting. Please note that you may vote by proxy prior to June 2, 2006, and still attend the 2006 Annual Shareholders’ Meeting.

If your Shares are held in the name of a broker, bank, or other nominee, you should receive separate instructions from the holder of your Shares describing how to vote. Nonetheless, if your Shares are held in the name of a broker, bank, or other nominee and you want to vote in person, you will need to obtain (and bring with you to the 2006 Annual Shareholders’ Meeting) a legal proxy from the holder of your Shares indicating that you were a beneficial owner of Shares on April 5, 2006, which is the record date for voting at the 2006 Annual Shareholders’ Meeting, as well as the number of Shares you were the beneficial owner of on the record date.

Can I revoke my proxy?    Yes, you can revoke your proxy if you are a record holder by:

If your Shares are held in street name through a broker, bank, or other nominee, you need to contact the holder of your Shares regarding how to revoke your proxy.

INFORMATION ABOUT THE BOARD

Wal-Mart’s directors are elected at each annual shareholders’ meeting and hold office until the next election. All nominees are presently directors of Wal-Mart, except for Aida M. Alvarez and James I. Cash, Jr. Assuming shareholders elect all the director nominees at the 2006 Annual Shareholders’ Meeting, Wal-Mart will have 13 directors. The Board has authority under the Bylaws to fill vacancies and to increase or, upon the occurrence of a vacancy, decrease the Board’s size between annual shareholders’ meetings.

Your proxy holder will vote your Shares for the Board’s nominees unless you instruct otherwise. If a nominee is unable to serve as a director, your proxy holder may vote for any substitute nominee proposed by the Board.

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PROPOSAL NO. 1

NOMINEES FOR ELECTION TO THE BOARD

The following candidates are nominated by the Board based on the recommendation of the CNGC. They have held the positions shown for at least five years unless otherwise noted. They were selected on the basis of outstanding achievement in their professional careers; broad experience; wisdom; personal and professional integrity; ability to make independent, analytical inquiries; experience with and understanding of the business environment; and willingness to devote adequate time to Board duties. The Board is committed to diversified membership. In selecting nominees, the Board does not discriminate on the basis of race, color, national origin, gender, religion, disability, or sexual preference.

		Aida M. Alvarez, 56 Ms. Alvarez is the former Administrator of the U. S. Small Business Administration and was a member of President Clinton’s Cabinet from 1997 to 2001. She was the founding Director of the Office of Federal Housing Enterprise Oversight, the financial regulator of Fannie Mae and Freddie Mac, from 1993 to 1997. Ms. Alvarez was a vice president in public finance at First Boston and Bear Stearns prior to 1993. She is presently a director for UnionBanCal Corporation and a former director for Pacificare Health Systems, Inc. Ms. Alvarez also serves on the diversity advisory board for Deloitte & Touche LLP.
		James W. Breyer, 44 Mr. Breyer is a Managing Partner of Accel Partners, a venture capital firm. He also serves as a director of RealNetworks, Inc. and several private companies. Mr. Breyer has been a member of the Board since 2001.
		M. Michele Burns, 48 Ms. Burns is the Executive Vice President and CFO of Marsh and McLennan Companies, Inc., a global professional services and consulting firm, which she joined in March 2006. She is the former Executive Vice President, CFO, and Chief Restructuring Officer of Mirant Corporation, an energy company, where she served from April 2004 to December 2005. She served as the Executive Vice President and CFO of Delta Air Lines, Inc., an air carrier, from August 2000 through April 2004. She also serves as a director of Cisco Systems, Inc. Ms. Burns has been a member of the Board since 2003.
		James I. Cash, Jr., Ph.D., 58 Dr. Cash is the retired James E. Robison Professor of Business Administration at Harvard Business School, where he served from July 1976 to October 2003. Dr. Cash also served as the Senior Associate Dean and Chairman of HBS Publishing while at the Harvard Business School. Dr. Cash serves as a director of The Chubb Corporation, General Electric Company, Phase Forward Inc., and Microsoft Corporation.
		Douglas N. Daft, 63 Mr. Daft is the retired Chairman and CEO of The Coca-Cola Company, a beverage manufacturer, where he served in that capacity from February 2000 until May 2004 and in various other capacities since 1969. Mr. Daft serves as a director of The McGraw Hill Companies, Inc. Mr. Daft has been a member of the Board since January 2005.
		David D. Glass, 70 Mr. Glass is the Chairman of the Executive Committee of the Board and has served in this position since February 2000. Mr. Glass served as Wal-Mart’s President and CEO from January 1988 to January 2000. Mr. Glass has been a member of the Board since 1977.

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		Roland A. Hernandez, 48 Mr. Hernandez is the retired Chairman and CEO of Telemundo Group, Inc., a Spanish-language television station company, where he served from August 1998 to December 2000. From March 1995 to August 1998, he served as President and CEO of Telemundo Group, Inc. He serves as a director of MGM Mirage, Lehman Brothers Holdings, Inc., The Ryland Group, Inc., and Vail Resorts, Inc. Mr. Hernandez has been a member of the Board since 1998.
		H. Lee Scott, Jr., 57 Mr. Scott is the President and CEO of Wal-Mart and has served in that position since January 2000. Prior to this appointment, he held other positions with Wal-Mart since joining the Company in September 1979, including: Vice Chairman and Chief Operating Officer, from January 1999 to January 2000, and Executive Vice President and President and CEO, Wal-Mart Stores Division, from January 1998 to January 1999. He has been a member of the Board since 1999.
		Jack C. Shewmaker, 68 Mr. Shewmaker is the President of J-COM, Inc., a consulting company, and he is a rancher. He is also a former Wal-Mart executive who retired in 1988. Mr. Shewmaker has been a member of the Board since 1977.
		Jim C. Walton,* 58 Mr. Walton is the Chairman and CEO of Arvest Bank Group, Inc., a group of banks operating in the states of Arkansas, Missouri, and Oklahoma. Mr. Walton also serves as Chairman of Community Publishers, Inc. which operates newspapers in Arkansas, Missouri, and Oklahoma. Mr. Walton has been a member of the Board since September 28, 2005.
		S. Robson Walton,* 61 Mr. Walton is the Chairman of Wal-Mart and has been a member of the Board since 1978.
		Christopher J. Williams, 48 Mr. Williams is the Chairman and CEO of The Williams Capital Group, L.P., an investment bank. Since 2002, he has also served as the Chairman and CEO of Williams Capital Management, LLC, an investment management firm. He also serves as a director of Harrah’s Entertainment, Inc. Mr. Williams has been a member of the Board since 2004.
		Linda S. Wolf, 58 Ms. Wolf is the former Chairman and CEO of Leo Burnett Worldwide, Inc., an advertising agency and division of Publicis Groupe S.A. Ms. Wolf served in various positions with Leo Burnett Worldwide, Inc. and its predecessors from 1978 to April 2006. She serves as a trustee for investment companies advised by the Janus Capital Group, Inc. Ms. Wolf has been a member of the Board since 2005.

The Board recommends that the shareholders vote FOR all nominees for election to the Board.

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DIRECTOR INDEPENDENCE

Pursuant to the NYSE Listed Company Manual, Wal-Mart is required to have a majority of independent directors on its Board. In addition, the Audit Committee and CNGC must be composed solely of Independent Directors. The NYSE Listed Company Manual defines specific relationships that would disqualify a director from being independent and further requires that for a director to qualify as “independent” the Board must affirmatively determine that the director has no material relationship with the Company.

As permitted by the NYSE Listed Company Manual, the Board determined categorically that one or more of the relationships within the Categorical Standards described below will not be considered to be material relationships that impair a director’s independence:

(1) The director, an entity with which a director is affiliated, or one or more members of the director’s immediate family, purchased property or services from Wal-Mart in retail transactions on terms generally available to other Associates during Wal-Mart’s last fiscal year;

(2) The director or one or more members of the director’s immediate family owns or has owned during the entity’s last fiscal year, directly or indirectly, 5 percent or less of an entity that has a business relationship with Wal-Mart;

(3) The director or one or more members of the director’s immediate family owns or has owned during the entity’s last fiscal year, directly or indirectly, more than 5 percent of an entity that has a business relationship with Wal-Mart so long as the amount paid to or received from Wal-Mart during the entity’s last fiscal year accounts for less than $1,000,000 or, if greater, 1 percent of the entity’s consolidated gross revenues for that entity’s last fiscal year;

(4) The director or one or more members of the director’s immediate family, is a director or trustee or was a director or trustee of an entity during the entity’s last fiscal year that has a business or charitable relationship with Wal-Mart and that made payments to, or received from, Wal-Mart during the entity’s last fiscal year an amount representing less than $5,000,000 or, if greater, 5 percent of the entity’s consolidated gross revenues for that entity’s last fiscal year;

(5) Wal-Mart paid to, employed, or retained one or more members of the director’s immediate family for compensation not exceeding $60,000 during Wal-Mart’s last fiscal year;

(6) The director or a member of the director’s immediate family is, or has been during the entity’s last fiscal year, an executive officer or employee of an entity that made payments to, or received payments from, Wal-Mart during the entity’s last fiscal year that account for less than $1,000,000 or, if greater, 1 percent of the entity’s consolidated gross revenues for that entity’s last fiscal year; or

(7) The director or one or more members of the director’s immediate family received from Wal-Mart, during Wal-Mart’s last fiscal year, personal benefits having an aggregate value of less than $5,000.

In developing the Categorical Standards, the Board considered that: 1) directors (or their immediate family members) regularly purchase items at Wal-Mart’s stores, Neighborhood Markets, and SAM’S CLUBs; 2) directors (or their immediate family members) may hold minor investments in companies that do business with Wal-Mart; 3) directors (or their immediate family members) may hold more than a minor investment in companies that do business with Wal-Mart, but the amount of business done with Wal-Mart is immaterial; 4) directors (or their immediate family members) may serve on the board of commercial or charitable entities with immaterial relationships with Wal-Mart; 5) directors may have immediate family members employed by Wal-Mart in positions earning $60,000 per year or less; 6) directors (or their immediate family members) may be officers or employees of companies that receive payments from Wal-Mart or its affiliates that account for less than $1,000,000 or, if greater, 1 percent of such company’s gross revenues; and 7) that former officers who are directors (or their immediate family members) may continue to receive from Wal-Mart certain residual benefits from their service with the Company.

Our Board has determined that the following directors are Independent Directors under the independence standards set forth by the NYSE Listed Company Manual: James W. Breyer, M. Michele Burns, Douglas N. Daft, Roland A. Hernandez, John D. Opie, J. Paul Reason, Jack C. Shewmaker, José H. Villarreal, Christopher J. Williams, and Linda S. Wolf. Furthermore, the Board determined that director-nominees, Aida M. Alvarez and James I. Cash, Jr., are independent under the NYSE Listed Company Manual independence standards. In making these determinations, the Board found that the current Independent Directors standing for election, Ms. Alvarez, and Dr. Cash do not have a material or other disqualifying relationship with Wal-Mart.

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COMPENSATION OF THE NON-MANAGEMENT DIRECTORS

Annual Director Compensation

The base compensation for Non-Management Directors upon their election to the Board on June 3, 2005, consisted of a Share award and an annual retainer. The award of Shares with a market value on the date of grant of $140,000 was paid upon election either in Shares or deferred in stock units under the Director Compensation Plan, as elected by the Non-Management Director. The annual retainer of $60,000 was payable in arrears in equal quarterly installments commencing after the 2005 Annual Shareholders’ Meeting and was taken in cash, Shares, deferred in stock units under the Director Compensation Plan, or deferred to an interest-credited account under the Director Compensation Plan, as elected by the director. The interest rate on the interest bearing account was approved by the CNGC based on the mid-term rate on ten-year Treasury notes plus 270 basis points and was 6.95 percent for the calendar year ended December 31, 2005 and increased to 7.07 percent for calendar year ending December 31, 2006, based on the formula provided in the Director Compensation Plan.

The Board committee chairs also received a chair retainer for the additional time required for Board committee business. The retainer for the Audit Committee chair was $25,000, the retainer for the CNGC chair was $15,000, and the retainer for the SPFC chair was $15,000. The chair retainers were payable in arrears in equal quarterly installments, and were taken in cash, Shares, deferred in stock units under the Director Compensation Plan, or deferred in an interest-credited account under the Director Compensation Plan, as elected by the Board committee chair.

Pursuant to the CNGC charter, director compensation is reviewed annually by the CNGC, which recommends to the Board the annual compensation for the directors. Consistent with Wal-Mart’s Executive Officer compensation philosophy, the total compensation for the directors and Board committee chairs upon election in fiscal 2006 placed them in the top quartile of the Peer Group Survey and mid-way between the median to the top quartile for the Top 50. Despite an increase in director compensation in the Peer Group Survey and the Top 50, the total compensation approved by the Board for directors upon their election on June 2, 2006, will remain at $200,000 and will be granted to directors in the same composition as described above. The committee chair retainers will also remain at the amounts described above.

The compensation paid to the Non-Management Directors during fiscal 2006 is described in the table below.

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Director Stock Ownership Guidelines

On June 5, 2003, the Board adopted stock ownership guidelines for the Non-Management Directors. Each Non-Management Director must own, within five years from election or appointment to the Board, an amount of Shares, restricted stock, or stock units having a value equal to five times the annual retainer component of the Non-Management Director’s compensation approved by the Board in the year the director was elected or appointed. Non-Management Directors who began serving prior to June 5, 2003, are required to own, within five years from June 5, 2003, $300,000 worth of Shares, restricted stock, or stock units.

BOARD MEETINGS

The Board held four regular meetings and three telephonic meetings during fiscal 2006 to review significant developments affecting the Company, engage in strategic planning, and act on matters requiring Board approval. For fiscal 2006, each director attended at least 75 percent of the Board meetings and the meetings of Board committees on which he or she served.

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BOARD COMMITTEES