SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               ------------------



                                    FORM 8-K

                                 CURRENT REPORT



                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                          Date of Report: MAY 12, 2004
                        (Date of earliest event reported)





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


       DELAWARE                       1-16725                    42-1520346
(State or other jurisdiction    Commission file number        (I.R.S. Employer
  of incorporation)                                       Identification Number)


                     711 HIGH STREET, DES MOINES, IOWA 50392
                    (Address of principal executive offices)


                                 (515) 247-5111
              (Registrant's telephone number, including area code)

                               ------------------



<PAGE>

ITEM 7.  EXHIBITS

99       Press Release of Principal Financial Group, Inc. dated May 12, 2004.

ITEM 9.  REGULATION FD DISCLOSURE

On May 12,  2004,  Principal  Financial  Group,  Inc.  issued  a  press  release
announcing it had entered into a definitive agreement for the sale of its entire
mortgage banking business to Citigroup.  A copy of the press release is attached
hereto as Exhibit 99.









                                    SIGNATURE

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


                                    PRINCIPAL FINANCIAL GROUP, INC.


                                    By:    /S/ NORA EVERETT
                                           -------------------------------------
                                    Name:  Nora Everett
                                    Title: Senior Vice President and Deputy
                                           General Counsel



Date:  May 12, 2004



                                       2
<PAGE>

RELEASE:          On receipt
MEDIA CONTACT:    Jeff Rader, 515-247-7883, RADER.JEFF@PRINCIPAL.COM
                  Eva Quinn, 515-247-7468, quinn.eva@principal.com
INVESTOR CONTACT: Tom Graf, 515-235-9500, investor-relations@principal.com

             THE PRINCIPAL FINANCIAL GROUP TO SELL MORTGAGE BANKING
                              BUSINESS TO CITIGROUP
       POSITIONS THE PRINCIPAL FOR CONTINUED GROWTH IN CORE BUSINESSES --
  RETIREMENT AND EMPLOYEE BENEFIT SOLUTIONS FOR SMALL & MEDIUM SIZED COMPANIES

Des Moines,  IA (May 12, 2004) - Principal  Financial  Group,  Inc. (NYSE:  PFG)
today announced that it has entered into a definitive  agreement for the sale of
its entire mortgage banking business to Citigroup (NYSE: C). Estimated  proceeds
from the  transaction  of  approximately  $1.26 billion  include $290 million of
value in excess of the net book value of assets and  liabilities  transferred of
approximately $970 million.1

Under the terms of the agreement,  Citigroup will acquire the stock of Principal
Residential  Mortgage,   Inc.  Principal  Residential  Mortgage  employees  will
transfer to Citigroup at the close.  The  transaction  has been  approved by the
Principal  Financial  Group board of directors and is expected to close in third
quarter, 2004, subject to regulatory approval.

"This is a great outcome for The  Principal,  mortgage  customers and employees,
and for  Citi,"  said  J.  Barry  Griswell,  chairman,  president  and CEO - the
Principal Financial Group. "The Principal intensifies its strategic focus on its
core retirement and risk protection  businesses;  customers  continue to receive
high  quality  and  responsive  service;  and  Principal   Residential  Mortgage
employees join a respected consumer financial services organization.

"It's also a positive move for our shareholders," said Griswell. "In addition to
greater  focus on our core  businesses,  we go forward from an improved  capital
position, with better financial flexibility and greater stability of earnings."

The  Company  expects  that the  transaction  will  initially  reduce  operating
earnings  per diluted  share by  approximately  eight to ten cents per  quarter,
based on estimated  normalized  quarterly  earnings  for the mortgage  business.


                                       3
<PAGE>

"Over the coming months,  we will  effectively  deploy sales proceeds and reduce
corporate expenses currently allocated to the mortgage business, which will have
a positive impact on earnings per share," said Griswell.

The Principal expects after-tax net proceeds of approximately $710 million.  The
Company  intends to use  proceeds  from the  transaction  primarily  for organic
growth of its core businesses,  strategic acquisitions, and share repurchase. As
announced in a separate  release dated May 12, 2004,  the Board of Directors has
authorized  the  repurchase of up to $700 million of the  company's  outstanding
common stock. The company has completed  approximately  $253 million of the $300
million  share  repurchase  program  authorized by the Board of Directors in May
2003.

"Principal Residential Mortgage has been an important part of our history and we
greatly value the contributions  made by the people and the business,"  Griswell
said. "While this was not an easy decision to make, we are now better positioned
to focus  our  resources  on our core  growth  businesses,  and to  achieve  our
longer-term financial objectives."

The Principal was advised on this transaction by Lehman Brothers.

ABOUT THE PRINCIPAL FINANCIAL GROUP
The Principal  Financial  Group(R) (The Principal  (R))2 is a leader in offering
businesses,  individuals  and  institutional  clients a wide range of  financial
products and services,  including retirement and investment  services,  life and
health  insurance and mortgage  banking  through its diverse family of financial
services  companies.  More employers  choose the Principal  Financial  Group for
their 401(k) plans than any other bank, mutual fund, or insurance company in the
United States3.  A member of the Fortune 500, the Principal  Financial Group has
$149.8  billion  in assets  under  management4  and  serves  some  15.6  million
customers worldwide from offices in Asia,  Australia,  Europe, Latin America and
the United States.  Principal  Financial  Group,  Inc. is traded on the New York
Stock  Exchange  under  the  ticker  symbol  PFG.  For more  information,  visit
WWW.PRINCIPAL.COM.


--------

1    All figures are as of April 30, 2004.  Proceeds  from the  transaction  are
     based on a formula,  a portion of which is sensitive to interest rates. The
     Principal will attempt to hedge this portion of the formula.  Book value of
     assets  and  liabilities  transferred  equals  the sum of the  GAAP  equity
     allocated to the mortgage banking  business of  approximately  $527 million
     plus  approximately  $443 million of income tax  liability  retained by The
     Principal.

2    "The Principal  Financial  Group(R)" and "The  Principal(R)" are registered
     service  marks of  Principal  Financial  Services,  Inc.,  a member  of the
     Principal Financial Group.

3    CFO  Magazine,  April/May  2003,  based on total  plans  served  in 2002 by
     insurance companies, banks and investment firms.

4    As of March 31, 2004

                                       4
<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               ------------------

                                    FORM 8-K

                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                          Date of Report: MAY 12, 2004
                        (Date of earliest event reported)

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

       DELAWARE                       1-16725                    42-1520346
(State or other jurisdiction    Commission file number        (I.R.S. Employer
  of incorporation)                                       Identification Number)

                     711 HIGH STREET, DES MOINES, IOWA 50392
                    (Address of principal executive offices)

                                 (515) 247-5111
              (Registrant's telephone number, including area code)

                               ------------------
ITEM 7.  EXHIBITS

99       Press Release of Principal Financial Group, Inc. dated May 12, 2004.

ITEM 9.  REGULATION FD DISCLOSURE

On May 12,  2004,  Principal  Financial  Group,  Inc.  issued  a  press  release
announcing it had entered into a definitive agreement for the sale of its entire
mortgage banking business to Citigroup.  A copy of the press release is attached
hereto as Exhibit 99.

                                    SIGNATURE

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

                                    PRINCIPAL FINANCIAL GROUP, INC.

                                    By:    /S/ NORA EVERETT
                                           -------------------------------------
                                    Name:  Nora Everett
                                    Title: Senior Vice President and Deputy
                                           General Counsel

Date:  May 12, 2004

                                       2
RELEASE:          On receipt
MEDIA CONTACT:    Jeff Rader, 515-247-7883, RADER.JEFF@PRINCIPAL.COM
                  Eva Quinn, 515-247-7468, quinn.eva@principal.com
INVESTOR CONTACT: Tom Graf, 515-235-9500, investor-relations@principal.com

             THE PRINCIPAL FINANCIAL GROUP TO SELL MORTGAGE BANKING
                              BUSINESS TO CITIGROUP
       POSITIONS THE PRINCIPAL FOR CONTINUED GROWTH IN CORE BUSINESSES --
  RETIREMENT AND EMPLOYEE BENEFIT SOLUTIONS FOR SMALL & MEDIUM SIZED COMPANIES

Des Moines,  IA (May 12, 2004) - Principal  Financial  Group,  Inc. (NYSE:  PFG)
today announced that it has entered into a definitive  agreement for the sale of
its entire mortgage banking business to Citigroup (NYSE: C). Estimated  proceeds
from the  transaction  of  approximately  $1.26 billion  include $290 million of
value in excess of the net book value of assets and  liabilities  transferred of
approximately $970 million.1

Under the terms of the agreement,  Citigroup will acquire the stock of Principal
Residential  Mortgage,   Inc.  Principal  Residential  Mortgage  employees  will
transfer to Citigroup at the close.  The  transaction  has been  approved by the
Principal  Financial  Group board of directors and is expected to close in third
quarter, 2004, subject to regulatory approval.

"This is a great outcome for The  Principal,  mortgage  customers and employees,
and for  Citi,"  said  J.  Barry  Griswell,  chairman,  president  and CEO - the
Principal Financial Group. "The Principal intensifies its strategic focus on its
core retirement and risk protection  businesses;  customers  continue to receive
high  quality  and  responsive  service;  and  Principal   Residential  Mortgage
employees join a respected consumer financial services organization.

"It's also a positive move for our shareholders," said Griswell. "In addition to
greater  focus on our core  businesses,  we go forward from an improved  capital
position, with better financial flexibility and greater stability of earnings."

The  Company  expects  that the  transaction  will  initially  reduce  operating
earnings  per diluted  share by  approximately  eight to ten cents per  quarter,
based on estimated  normalized  quarterly  earnings  for the mortgage  business.

                                       3
"Over the coming months,  we will  effectively  deploy sales proceeds and reduce
corporate expenses currently allocated to the mortgage business, which will have
a positive impact on earnings per share," said Griswell.

The Principal expects after-tax net proceeds of approximately $710 million.  The
Company  intends to use  proceeds  from the  transaction  primarily  for organic
growth of its core businesses,  strategic acquisitions, and share repurchase. As
announced in a separate  release dated May 12, 2004,  the Board of Directors has
authorized  the  repurchase of up to $700 million of the  company's  outstanding
common stock. The company has completed  approximately  $253 million of the $300
million  share  repurchase  program  authorized by the Board of Directors in May
2003.

"Principal Residential Mortgage has been an important part of our history and we
greatly value the contributions  made by the people and the business,"  Griswell
said. "While this was not an easy decision to make, we are now better positioned
to focus  our  resources  on our core  growth  businesses,  and to  achieve  our
longer-term financial objectives."

The Principal was advised on this transaction by Lehman Brothers.

ABOUT THE PRINCIPAL FINANCIAL GROUP
The Principal  Financial  Group(R) (The Principal  (R))2 is a leader in offering
businesses,  individuals  and  institutional  clients a wide range of  financial
products and services,  including retirement and investment  services,  life and
health  insurance and mortgage  banking  through its diverse family of financial
services  companies.  More employers  choose the Principal  Financial  Group for
their 401(k) plans than any other bank, mutual fund, or insurance company in the
United States3.  A member of the Fortune 500, the Principal  Financial Group has
$149.8  billion  in assets  under  management4  and  serves  some  15.6  million
customers worldwide from offices in Asia,  Australia,  Europe, Latin America and
the United States.  Principal  Financial  Group,  Inc. is traded on the New York
Stock  Exchange  under  the  ticker  symbol  PFG.  For more  information,  visit
WWW.PRINCIPAL.COM.

--------

1    All figures are as of April 30, 2004.  Proceeds  from the  transaction  are
     based on a formula,  a portion of which is sensitive to interest rates. The
     Principal will attempt to hedge this portion of the formula.  Book value of
     assets  and  liabilities  transferred  equals  the sum of the  GAAP  equity
     allocated to the mortgage banking  business of  approximately  $527 million
     plus  approximately  $443 million of income tax  liability  retained by The
     Principal.

2    "The Principal  Financial  Group(R)" and "The  Principal(R)" are registered
     service  marks of  Principal  Financial  Services,  Inc.,  a member  of the
     Principal Financial Group.

3    CFO  Magazine,  April/May  2003,  based on total  plans  served  in 2002 by
     insurance companies, banks and investment firms.

4    As of March 31, 2004

                                       4