<PAGE>   1

  As filed with the Securities and Exchange Commission on August 5, 1998

                                               Registration No. 333-____________




                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8

                             Registration Statement
                                      Under
                           The Securities Act of 1933

                               BORDERS GROUP, INC.
             (Exact name of registrant as specified in its charter)

          Michigan                                        38-3196915
  (State or other jurisdiction              (I.R.S. Employer Identification No.)
of incorporation or organization)

                           500 East Washington Street
                            Ann Arbor, Michigan 48104
               (Address of principal executive offices) (Zip Code)

                      BORDERS GROUP, INC. STOCK OPTION PLAN
                           FOR INTERNATIONAL EMPLOYEES
                            (Full title of the plan)

                             Thomas D. Carney, Esq.
                  Vice President, Secretary and General Counsel
                               Borders Group, Inc.
                           500 East Washington Street
                            Ann Arbor, Michigan 48104
                                 (734) 913-1977
(Name, address and telephone number, including area code, of agent for service)


<TABLE>
<CAPTION>                     
                              
                                CALCULATION OF REGISTRATION FEE
======================== ====================== ====================== ======================= ======================
                                                  Proposed Maximum        Proposed Maximum
Title of Securities to   Amount of Securities    Offering Price Per      Aggregate Offering          Amount of
     be Registered         to be Registered           Share (1)                Price             Registration Fee
======================== ====================== ====================== ======================= ======================
<S>                      <C>                    <C>                    <C>                     <C>
Common Stock             850,000  shares           $  30.625                $ 26,031,250             $ 7,680
======================== ====================== ====================== ======================= ======================

</TABLE>
(1)      Based upon market price on August 3, 1998.


<PAGE>   2


                                     PART II
               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Certain Documents by Reference

         Borders Group, Inc. (the "Company") hereby incorporates by reference in
this Registration Statement the following documents previously filed with the
Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"):

         1. The Company's Annual Report on Form 10-K for the year ended January
            25, 1998.

         2. The Company's Quarterly Report on Form 10-Q for the quarter ended
            April 26, 1998.

         3. The description of the Common Stock of the Company set forth in
            the Form 8-B of the Company dated August 28, 1996.

         All documents subsequently filed with the Commission by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining unsold
shall be deemed to be incorporated herein by reference and to be a part hereof
from the dates of filing of such documents.

Item 6.  Indemnification of Directors and Officers.

         Article IX of the Company's Articles of Incorporation provides that the
Company shall indemnify to the fullest extent permitted by the Business
Corporation Act of Michigan the ("MBCA") any director or officer. In addition,
the Company may, by action by the Board of Directors, provide rights to
indemnification to employees and agents similar to the foregoing indemnification
of directors and officers.

         Under Sections 561, et seq. of the MBCA, a corporation may indemnify a
director, officer, employee or agent of the corporation (or other entity if such
person is serving in such capacity at the corporation's request) who was or is a
party or is threatened to be made a party to a threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal, other than an action by or in the
right of the corporation, by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation (or such other entity)
against expenses (including attorneys' fees), judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the corporation or its shareholders and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. In the case of an action brought by or in the right of a
corporation, the corporation may indemnify a director, officer, employee or
agent of the corporation (or other entity if such person is serving in such
capacity at the corporation's request) against expenses (including attorneys'
fees) and amounts paid in settlement, actually and reasonably incurred by him if
he acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation or its shareholders, except
that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable to the corporation
unless a court determines that, despite the adjudication of liability but in
view of all the relevant circumstances, such person is fairly and reasonably
entitled to indemnification for such expenses as the court shall deem proper.
Expenses (including attorneys' fees) incurred by an officer, director, employee
or agent in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of a written
undertaking by or on behalf of such person to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
corporation and a written affirmation of such person of his good faith belief
that he is entitled to indemnification under the standards of conduct of the
statute.

         Policies of insurance will be maintained by the Company under which
directors and officers of the Company will be insured, within the limits and
subject to the limitations of the policies, against certain expenses in



<PAGE>   3


connection with the defense of actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been a
director or officer.

         Article VIII of the Company's Articles of Incorporation provides that,
to the fullest extent permitted by the MBCA, no director shall be personally
liable to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Company or its stockholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) pursuant to Section 551(l) of the MBCA or (iv) for any
transaction from which the director derived an improper personal benefit.


Item 8.  Exhibits

        5.1       Opinion of Thomas D. Carney regarding the validity and
                  offering of the Common Stock being registered.

       23.1       Consent of PricewaterhouseCoopers LLP.


Item 9.  Undertakings.

         (a)      The undersigned registrant hereby undertakes:

         1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

                (i) To include any prospectus required by Section 10(a)(3) of 
the Act;

                (ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.

                (iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;

         Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this registration statement.

         2. That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

         3. To remove from registration by means of post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.


                                     -2-

<PAGE>   4


         (b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

         (c) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.


                                     -3-

<PAGE>   5


                                   SIGNATURES
         The Registrant. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Ann Arbor, State of Michigan, on this 5th day of
August, 1998.

                                          BORDERS GROUP, INC.

                                          By:     /s/ Robert F. DiRomualdo
                                              --------------------------------- 
                                                    Robert F. DiRomualdo
                                                    Chairman and Chief Executive
                                                    Officer

                                POWER OF ATTORNEY
         We, the undersigned officers and directors of Borders Group, Inc.,
hereby severally and individually constitute and appoint Robert F. DiRomualdo
and Thomas D. Carney, and each of them, the true and lawful attorneys and agents
of each of us to execute in the name, place and stead of each of us
(individually and in any capacity stated below) any and all amendments to this
Registration Statement on Form S-8, and all instruments necessary or advisable
in connection therewith, and to file the same with the Securities and Exchange
Commission, each of said attorneys and agents to have power to act with or
without the other and to have full power and authority to do and perform in the
name and on behalf of each of the undersigned every act whatsoever necessary or
advisable to be done in the premises as fully and to all intents and purposes as
any of the undersigned might or could do in person, and we hereby ratify and
confirm our signatures as they may be signed by our said attorneys and agents
and each of them to any and all such amendments and other instruments.

         Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on August 5, 1998.



<TABLE>
<CAPTION>

                    Name                                           Title                           Date
                    -----                                          -----                           ----

<S>                                               <C>                                           <C>    

/s/      Robert F. DiRomualdo                     Chairman, Chief Executive Officer and         August 5, 1998
------------------------------------              Director (Principal Executive Officer)
Robert F. DiRomualdo                                   
 



/s/      George R. Mrkonic                              Vice Chairman and Director              August 5, 1998
------------------------------------
George R. Mrkonic                                                  
 



/ s/     Kenneth E. Scheve                 Senior Vice President and Chief Financial
------------------------------------       Officer (Principal Financial and Accounting          August 5, 1998
Kenneth E. Scheve                                             Officer)                     
 


                                  
------------------------------------                          Director                          August 5, 1998
Peter R. Formanek                                            



/s/      Amy B. Lane
------------------------------------                          Director                          August 5, 1998
Amy B. Lane                                                     




/s/      Victor L. Lund
------------------------------------                          Director                          August 5, 1998
Victor L. Lund                                                   
 



/s/      Larry Pollock
------------------------------------                          Director                          August 5, 1998
Larry Pollock                                                   
 


/s/      Leonard A. Schlesinger
------------------------------------                          Director                          August 5, 1998
Leonard A. Schlesinger                                           


</TABLE>

<PAGE>   6


                                  EXHIBIT INDEX

Exhibit No.      Description

      5.1        Opinion of Thomas D. Carney

     23.1        Consent of PricewaterhouseCoopers LLP
[{"type": "S-8", "sequence": "1", "description": "S-8", "secsgml_size_bytes": 16961}]
{"company-data": {"conformed-name": "BORDERS GROUP INC", "cik": "0000940510", "assigned-sic": "5940", "irs-number": "383196915", "state-of-incorporation": "DE", "fiscal-year-end": "0126"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-60711", "film-number": "98677581"}, "business-address": {"street1": "500 E WASHINGTON ST", "city": "ANN ARBOR", "state": "MI", "zip": "48104", "phone": "3139131100"}}
1

  As filed with the Securities and Exchange Commission on August 5, 1998

                                               Registration No. 333-____________

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8

                             Registration Statement
                                      Under
                           The Securities Act of 1933

                               BORDERS GROUP, INC.
             (Exact name of registrant as specified in its charter)

          Michigan                                        38-3196915
  (State or other jurisdiction              (I.R.S. Employer Identification No.)
of incorporation or organization)

                           500 East Washington Street
                            Ann Arbor, Michigan 48104
               (Address of principal executive offices) (Zip Code)

                      BORDERS GROUP, INC. STOCK OPTION PLAN
                           FOR INTERNATIONAL EMPLOYEES
                            (Full title of the plan)

                             Thomas D. Carney, Esq.
                  Vice President, Secretary and General Counsel
                               Borders Group, Inc.
                           500 East Washington Street
                            Ann Arbor, Michigan 48104
                                 (734) 913-1977
(Name, address and telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
======================== ====================== ====================== ======================= ======================
                                                  Proposed Maximum        Proposed Maximum
Title of Securities to   Amount of Securities    Offering Price Per      Aggregate Offering          Amount of
     be Registered         to be Registered           Share (1)                Price             Registration Fee
======================== ====================== ====================== ======================= ======================
Common Stock             850,000  shares           $  30.625                $ 26,031,250             $ 7,680
======================== ====================== ====================== ======================= ======================
(1)      Based upon market price on August 3, 1998.
2

                                     PART II
               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Certain Documents by Reference

         Borders Group, Inc. (the "Company") hereby incorporates by reference in
this Registration Statement the following documents previously filed with the
Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"):

         1. The Company's Annual Report on Form 10-K for the year ended January
            25, 1998.

         2. The Company's Quarterly Report on Form 10-Q for the quarter ended
            April 26, 1998.

         3. The description of the Common Stock of the Company set forth in
            the Form 8-B of the Company dated August 28, 1996.

         All documents subsequently filed with the Commission by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining unsold
shall be deemed to be incorporated herein by reference and to be a part hereof
from the dates of filing of such documents.

Item 6.  Indemnification of Directors and Officers.

         Article IX of the Company's Articles of Incorporation provides that the
Company shall indemnify to the fullest extent permitted by the Business
Corporation Act of Michigan the ("MBCA") any director or officer. In addition,
the Company may, by action by the Board of Directors, provide rights to
indemnification to employees and agents similar to the foregoing indemnification
of directors and officers.

         Under Sections 561, et seq. of the MBCA, a corporation may indemnify a
director, officer, employee or agent of the corporation (or other entity if such
person is serving in such capacity at the corporation's request) who was or is a
party or is threatened to be made a party to a threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal, other than an action by or in the
right of the corporation, by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation (or such other entity)
against expenses (including attorneys' fees), judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the corporation or its shareholders and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. In the case of an action brought by or in the right of a
corporation, the corporation may indemnify a director, officer, employee or
agent of the corporation (or other entity if such person is serving in such
capacity at the corporation's request) against expenses (including attorneys'
fees) and amounts paid in settlement, actually and reasonably incurred by him if
he acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation or its shareholders, except
that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable to the corporation
unless a court determines that, despite the adjudication of liability but in
view of all the relevant circumstances, such person is fairly and reasonably
entitled to indemnification for such expenses as the court shall deem proper.
Expenses (including attorneys' fees) incurred by an officer, director, employee
or agent in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of a written
undertaking by or on behalf of such person to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
corporation and a written affirmation of such person of his good faith belief
that he is entitled to indemnification under the standards of conduct of the
statute.

         Policies of insurance will be maintained by the Company under which
directors and officers of the Company will be insured, within the limits and
subject to the limitations of the policies, against certain expenses in
3

connection with the defense of actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been a
director or officer.

         Article VIII of the Company's Articles of Incorporation provides that,
to the fullest extent permitted by the MBCA, no director shall be personally
liable to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Company or its stockholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) pursuant to Section 551(l) of the MBCA or (iv) for any
transaction from which the director derived an improper personal benefit.

Item 8.  Exhibits

        5.1       Opinion of Thomas D. Carney regarding the validity and
                  offering of the Common Stock being registered.

       23.1       Consent of PricewaterhouseCoopers LLP.

Item 9.  Undertakings.

         (a)      The undersigned registrant hereby undertakes:

         1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

                (i) To include any prospectus required by Section 10(a)(3) of 
the Act;

                (ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.

                (iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;

         Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this registration statement.

         2. That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

         3. To remove from registration by means of post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

                                     -2-
4

         (b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

         (c) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

                                     -3-
5

                                   SIGNATURES
         The Registrant. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Ann Arbor, State of Michigan, on this 5th day of
August, 1998.

                                          BORDERS GROUP, INC.

                                          By:     /s/ Robert F. DiRomualdo
                                              --------------------------------- 
                                                    Robert F. DiRomualdo
                                                    Chairman and Chief Executive
                                                    Officer

                                POWER OF ATTORNEY
         We, the undersigned officers and directors of Borders Group, Inc.,
hereby severally and individually constitute and appoint Robert F. DiRomualdo
and Thomas D. Carney, and each of them, the true and lawful attorneys and agents
of each of us to execute in the name, place and stead of each of us
(individually and in any capacity stated below) any and all amendments to this
Registration Statement on Form S-8, and all instruments necessary or advisable
in connection therewith, and to file the same with the Securities and Exchange
Commission, each of said attorneys and agents to have power to act with or
without the other and to have full power and authority to do and perform in the
name and on behalf of each of the undersigned every act whatsoever necessary or
advisable to be done in the premises as fully and to all intents and purposes as
any of the undersigned might or could do in person, and we hereby ratify and
confirm our signatures as they may be signed by our said attorneys and agents
and each of them to any and all such amendments and other instruments.

         Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on August 5, 1998.
Name                                           Title                           Date
                    -----                                          -----                           ----
/s/      Robert F. DiRomualdo                     Chairman, Chief Executive Officer and         August 5, 1998
------------------------------------              Director (Principal Executive Officer)
Robert F. DiRomualdo                                   
 

/s/      George R. Mrkonic                              Vice Chairman and Director              August 5, 1998
------------------------------------
George R. Mrkonic                                                  
 

/ s/     Kenneth E. Scheve                 Senior Vice President and Chief Financial
------------------------------------       Officer (Principal Financial and Accounting          August 5, 1998
Kenneth E. Scheve                                             Officer)                     
 

                                  
------------------------------------                          Director                          August 5, 1998
Peter R. Formanek                                            

/s/      Amy B. Lane
------------------------------------                          Director                          August 5, 1998
Amy B. Lane                                                     

/s/      Victor L. Lund
------------------------------------                          Director                          August 5, 1998
Victor L. Lund                                                   
 

/s/      Larry Pollock
------------------------------------                          Director                          August 5, 1998
Larry Pollock                                                   
 

/s/      Leonard A. Schlesinger
------------------------------------                          Director                          August 5, 1998
Leonard A. Schlesinger
6

                                  EXHIBIT INDEX

Exhibit No.      Description

      5.1        Opinion of Thomas D. Carney

     23.1        Consent of PricewaterhouseCoopers LLP