United States
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549



                                    FORM 8-K



                                 CURRENT REPORT


                     Pursuant to Section 13 or 15 (d) of the
                         Securities Exchange Act of 1934


                        Date of Report: January 10, 2008


                    PROVIDENCE AND WORCESTER RAILROAD COMPANY
--------------------------------------------------------------------------------

              (Exact name of registrant as specified in its charter

  Rhode Island                      0-16704                  05-0344399
--------------------------------------------------------------------------------
 (State of incorporation         (Commission                (IRS Employer Iden-
  or organization)                File Number)                tification No.)

  75 Hammond Street, Worcester, Massachusetts                             01610
--------------------------------------------------------------------------------
  (address of principal executive offices)                           (Zip Code)

  Registrant's telephone number:  508-755-4000
--------------------------------------------------------------------------------


                                       N/A
--------------------------------------------------------------------------------
          (Former name or former address, if changed since last report)

<PAGE>

ITEM 1.01. Entry Into Material Definitive Agreement
           ----------------------------------------

          On January 10, 2008 (the  "Closing  Date"),  Providence  and Worcester
          Railroad  Company (the  "Company")  sold 239,523  shares of its common
          stock,  par value $0.50 per share (the "Shares"),  to GATX Corporation
          ("GATX"),  for a total  purchase  price of  $5,509,029,  pursuant to a
          Common  Stock  Purchase  Agreement by and between the Company and GATX
          (the "Stock Purchase Agreement").  The Shares represent  approximately
          five  percent  (5%) of the  Company's  issued and  outstanding  common
          stock. The Stock Purchase Agreement provides that the Company must use
          the proceeds from the sale of the Shares for capital  improvements  to
          enhance the Company's  railroad lines.  Pursuant to the Stock Purchase
          Agreement,  GATX is entitled  to  designate a person to be placed upon
          the slate of individuals nominated to serve as members of the Board of
          Directors  of the  Company,  to be  elected  at the  Company's  Annual
          Meeting. In connection with the Stock Purchase Agreement,  the Company
          and GATX also entered into a Registration Rights Agreement pursuant to
          which GATX is granted the right to demand  registration  of the Shares
          beginning  180  days  following  the  Closing  Date,  by  means  of an
          underwritten   public  offering,   and  certain  piggyback  rights  in
          connection  with the  registration by the Company of any of its common
          stock.

          Simultaneous  with  the  parties'  execution  of  the  Stock  Purchase
          Agreement,  the  parties  entered  into an  Exclusive  Railcar  Supply
          Agreement (the "ERSA")  pursuant to which the Company granted GATX the
          exclusive  right to supply the Company with  railcars for certain rail
          traffic, on market-competitive  terms to be determined by the parties.
          The ERSA  further  provides  that the Company and GATX will review the
          Company's existing rail traffic and evaluate the possible  replacement
          of non-GATX railcars with GATX-provided  railcars.  Railcars leased by
          the  Company  pursuant  to the  ERSA  will  be  supplied  pursuant  to
          fixed-rate,  structured utilization, or other lease arrangements,  the
          terms  of  which  may  guarantee  payment  to  GATX  of any  projected
          shortfall in acceptable risk-adjusted return to GATX.

          Pursuant  to the ERSA,  the  Company  and GATX also  entered  into two
          separate purchase agreements whereby GATX acquired from the Company 72
          mill gondolas in exchange for 137 open-top  hoppers.  Such exchange of
          mill gondolas for open-top  hoppers was  conducted  through a tax-free
          exchange  pursuant to Section  1031 of the  Internal  Revenue  Code of
          1986, as amended.  Simultaneous  with the  execution of the ERSA,  the
          parties also entered into a transaction  for the lease of certain mill
          gondolas.  The ERSA further  provides that at such time as manufacture
          is  completed,  the Company will  sponsor at least 200 new  GATX-owned
          bi-level automobile-carrying railcars for use in common with railroads
          engaged in the transportation of motor vehicles.

          The  initial  term of the ERSA is a period of five  years,  which term
          automatically  renews  for  successive  one-year  periods  thereafter,
          unless either party provides prior timely written notice of its intent
          not to renew.


Item 9.01 Financial Statements and Exhibits
          ---------------------------------

(c)      Exhibits

         99.1     Press Release dated January 10, 2008

<PAGE>



                                    Signature

Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereto duly authorized.

                                    Providence and Worcester
                                      Railroad Company

                                    By: /s/ Robert J. Easton
                                        --------------------
                                    Robert J. Easton, Treasurer and
                                    Chief Financial Officer

Date: January 16, 2008
                                       2
<PAGE>
                                                                    Exhibit 99.1
                                                                    ------------

                                       -----------------------------------------
                                       Providence and Worcester Railroad Company
                                       -----------------------------------------


Contact:   Marie A. Angelini

75   Hammond Street
Worcester, MA  01610

Phone(508) 755-4000, ext. 365
Fax  (508) 795-0748


Press Release
                    Providence and Worcester Railroad Company
                   Announces Transaction With GATX Corporation

Worcester,  MA,  January 10, 2008,  Providence  and Worcester  Railroad  Company
("P&W", AMEX: PWX) today announced that pursuant to certain  agreements between
the Company and GATX Corporation ("GATX"; NYSE: GMT), GATX has purchased 239,523
newly-issued shares of P&W's common stock, or approximately five percent (5%) of
its outstanding  common stock, for  $5,509,029.00.  Under the terms of the Stock
Purchase  Agreement,  GATX  will be  entitled  to one  seat on  P&W's  Board  of
Directors.

In addition,  GATX has become P&W's exclusive  provider of substantially  all of
P&W's rail car needs. As part of these  arrangements,  P&W and GATX have entered
into various  transactions  covering  approximately  400 railcars of three major
types.

P. Scott Conti, P&W's President,  said, "We are excited about GATX's involvement
with P&W and,  particularly,  the  potential  growth  opportunities  for the two
organizations through this unique partnership."

P&W is a regional  freight  railroad  operating in the states of  Massachusetts,
Rhode  Island,  Connecticut  and New York.  P&W  transports  a wide  variety  of
commodities,  including  automobiles,  construction  aggregate,  iron and  steel
products,  chemicals,  lumber,  scrap  metals,  plastic  resins,  cement,  coal,
construction and demolition debris, processed foods and edible foodstuffs,  such
as frozen foods,  corn syrup and animal and vegetable  oils. By agreement with a
private operator, P&W also operates two approved custom-bonded  intermodal yards
in Worcester,  MA, primarily for the movement of container  traffic from the Far
East destined for points in New England.

--------------------- This release contains "forward-looking  statements" within
the  meaning of section  21E of the  Securities  and  Exchange  Act of 1934,  as
amended.  These  forward-looking  statements  represent  the  Company's  present
expectations or beliefs concerning future events. The Company cautions that such
statements are  necessarily  based on certain  assumptions  which are subject to
risks and  uncertainties,  including,  but not  limited  to,  changes in general
economic condition, and changing competition which could cause actual results to
differ materially from those indicated herein. Further information on these risk
factors is included in the Company's  filings with the  Securities  and Exchange
Commission.


Contact Person: P&W: Marie A. Angelini
                     (508) 755-4000 (x365)
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{"company-data": {"conformed-name": "PROVIDENCE & WORCESTER RAILROAD CO/RI/", "cik": "0000831968", "assigned-sic": "4011", "irs-number": "050344399", "state-of-incorporation": "RI", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-12761", "film-number": "08532589"}, "business-address": {"street1": "75 HAMMOND ST", "city": "WORCESTER", "state": "MA", "zip": "01610", "phone": "5087554000"}, "mail-address": {"street1": "PROVIDENCE & WORCESTER RAILROAD CO", "street2": "75 HAMMOND STREET", "city": "WORCESTER", "state": "MA", "zip": "01610"}}
United States
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15 (d) of the
                         Securities Exchange Act of 1934

                        Date of Report: January 10, 2008

                    PROVIDENCE AND WORCESTER RAILROAD COMPANY
--------------------------------------------------------------------------------

              (Exact name of registrant as specified in its charter

  Rhode Island                      0-16704                  05-0344399
--------------------------------------------------------------------------------
 (State of incorporation         (Commission                (IRS Employer Iden-
  or organization)                File Number)                tification No.)

  75 Hammond Street, Worcester, Massachusetts                             01610
--------------------------------------------------------------------------------
  (address of principal executive offices)                           (Zip Code)

  Registrant's telephone number:  508-755-4000
--------------------------------------------------------------------------------

                                       N/A
--------------------------------------------------------------------------------
          (Former name or former address, if changed since last report)
ITEM 1.01. Entry Into Material Definitive Agreement
           ----------------------------------------

          On January 10, 2008 (the  "Closing  Date"),  Providence  and Worcester
          Railroad  Company (the  "Company")  sold 239,523  shares of its common
          stock,  par value $0.50 per share (the "Shares"),  to GATX Corporation
          ("GATX"),  for a total  purchase  price of  $5,509,029,  pursuant to a
          Common  Stock  Purchase  Agreement by and between the Company and GATX
          (the "Stock Purchase Agreement").  The Shares represent  approximately
          five  percent  (5%) of the  Company's  issued and  outstanding  common
          stock. The Stock Purchase Agreement provides that the Company must use
          the proceeds from the sale of the Shares for capital  improvements  to
          enhance the Company's  railroad lines.  Pursuant to the Stock Purchase
          Agreement,  GATX is entitled  to  designate a person to be placed upon
          the slate of individuals nominated to serve as members of the Board of
          Directors  of the  Company,  to be  elected  at the  Company's  Annual
          Meeting. In connection with the Stock Purchase Agreement,  the Company
          and GATX also entered into a Registration Rights Agreement pursuant to
          which GATX is granted the right to demand  registration  of the Shares
          beginning  180  days  following  the  Closing  Date,  by  means  of an
          underwritten   public  offering,   and  certain  piggyback  rights  in
          connection  with the  registration by the Company of any of its common
          stock.

          Simultaneous  with  the  parties'  execution  of  the  Stock  Purchase
          Agreement,  the  parties  entered  into an  Exclusive  Railcar  Supply
          Agreement (the "ERSA")  pursuant to which the Company granted GATX the
          exclusive  right to supply the Company with  railcars for certain rail
          traffic, on market-competitive  terms to be determined by the parties.
          The ERSA  further  provides  that the Company and GATX will review the
          Company's existing rail traffic and evaluate the possible  replacement
          of non-GATX railcars with GATX-provided  railcars.  Railcars leased by
          the  Company  pursuant  to the  ERSA  will  be  supplied  pursuant  to
          fixed-rate,  structured utilization, or other lease arrangements,  the
          terms  of  which  may  guarantee  payment  to  GATX  of any  projected
          shortfall in acceptable risk-adjusted return to GATX.

          Pursuant  to the ERSA,  the  Company  and GATX also  entered  into two
          separate purchase agreements whereby GATX acquired from the Company 72
          mill gondolas in exchange for 137 open-top  hoppers.  Such exchange of
          mill gondolas for open-top  hoppers was  conducted  through a tax-free
          exchange  pursuant to Section  1031 of the  Internal  Revenue  Code of
          1986, as amended.  Simultaneous  with the  execution of the ERSA,  the
          parties also entered into a transaction  for the lease of certain mill
          gondolas.  The ERSA further  provides that at such time as manufacture
          is  completed,  the Company will  sponsor at least 200 new  GATX-owned
          bi-level automobile-carrying railcars for use in common with railroads
          engaged in the transportation of motor vehicles.

          The  initial  term of the ERSA is a period of five  years,  which term
          automatically  renews  for  successive  one-year  periods  thereafter,
          unless either party provides prior timely written notice of its intent
          not to renew.

Item 9.01 Financial Statements and Exhibits
          ---------------------------------

(c)      Exhibits

         99.1     Press Release dated January 10, 2008
Signature

Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereto duly authorized.

                                    Providence and Worcester
                                      Railroad Company

                                    By: /s/ Robert J. Easton
                                        --------------------
                                    Robert J. Easton, Treasurer and
                                    Chief Financial Officer

Date: January 16, 2008
                                       2
Exhibit 99.1
                                                                    ------------

                                       -----------------------------------------
                                       Providence and Worcester Railroad Company
                                       -----------------------------------------

Contact:   Marie A. Angelini

75   Hammond Street
Worcester, MA  01610

Phone(508) 755-4000, ext. 365
Fax  (508) 795-0748

Press Release
                    Providence and Worcester Railroad Company
                   Announces Transaction With GATX Corporation

Worcester,  MA,  January 10, 2008,  Providence  and Worcester  Railroad  Company
("P&W", AMEX: PWX) today announced that pursuant to certain  agreements between
the Company and GATX Corporation ("GATX"; NYSE: GMT), GATX has purchased 239,523
newly-issued shares of P&W's common stock, or approximately five percent (5%) of
its outstanding  common stock, for  $5,509,029.00.  Under the terms of the Stock
Purchase  Agreement,  GATX  will be  entitled  to one  seat on  P&W's  Board  of
Directors.

In addition,  GATX has become P&W's exclusive  provider of substantially  all of
P&W's rail car needs. As part of these  arrangements,  P&W and GATX have entered
into various  transactions  covering  approximately  400 railcars of three major
types.

P. Scott Conti, P&W's President,  said, "We are excited about GATX's involvement
with P&W and,  particularly,  the  potential  growth  opportunities  for the two
organizations through this unique partnership."

P&W is a regional  freight  railroad  operating in the states of  Massachusetts,
Rhode  Island,  Connecticut  and New York.  P&W  transports  a wide  variety  of
commodities,  including  automobiles,  construction  aggregate,  iron and  steel
products,  chemicals,  lumber,  scrap  metals,  plastic  resins,  cement,  coal,
construction and demolition debris, processed foods and edible foodstuffs,  such
as frozen foods,  corn syrup and animal and vegetable  oils. By agreement with a
private operator, P&W also operates two approved custom-bonded  intermodal yards
in Worcester,  MA, primarily for the movement of container  traffic from the Far
East destined for points in New England.

--------------------- This release contains "forward-looking  statements" within
the  meaning of section  21E of the  Securities  and  Exchange  Act of 1934,  as
amended.  These  forward-looking  statements  represent  the  Company's  present
expectations or beliefs concerning future events. The Company cautions that such
statements are  necessarily  based on certain  assumptions  which are subject to
risks and  uncertainties,  including,  but not  limited  to,  changes in general
economic condition, and changing competition which could cause actual results to
differ materially from those indicated herein. Further information on these risk
factors is included in the Company's  filings with the  Securities  and Exchange
Commission.

Contact Person: P&W: Marie A. Angelini
                     (508) 755-4000 (x365)