As filed with the Securities and Exchange Commission on October 25, 2004

Registration No. 333-____

SECURITIES AND EXCHANGE COMMISSION

FORM S-3

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

COMMUNITY BANK SYSTEM, INC.

5790 Widewaters Parkway
Dewitt, New York
(Address of Principal Executive Offices)

Sanford A. Belden
President and Chief Executive Officer
5790 Widewaters Parkway
DeWitt, New York 13214
(Name and Address of Agent For Service)

(315) 445-2282
(Telephone Number, Including Area Code, of Agent for Service)

George J. Getman, Esq.
Bond, Schoeneck & King, PLLC
One Lincoln Center
Syracuse, New York 13202
(315) 218-8000

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.

If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: n

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

EXPLANATORY NOTE

     This Registration Statement relates to the registration of an additional 200,000 shares of common stock to be offered under the Registrant’s Dividend Reinvestment and Direct Stock Purchase and Sale Plan, with respect to which a Registration Statement on Form S-3 (Registration No. 333-40808) covering an aggregate of 600,000 shares is effective.

Prospectus

COMMUNITY BANK SYSTEM, INC.

Dividend Reinvestment and Direct Stock Purchase and Sale Plan

     This prospectus relates to up to an aggregate of 800,000 shares of common stock, $1.00 par value, of Community Bank System, Inc., or the Company, that may be offered in connection with our Dividend Reinvestment and Direct Stock Purchase and Sale Plan, or the Plan. The Plan provides both existing shareholders of our common stock and interested new investors with a convenient and cost effective method to purchase shares of our common stock.

     All of the shares that may be offered pursuant to the Plan will be purchased on the open market by American Stock Transfer & Trust Company, the Plan’s administrator. We will not receive any of the proceeds from the sale of the shares offered under the Plan.

     You may purchase shares of our common stock under the Plan as follows:

     The Plan administrator will pool together cash dividends payable to the participants of the Plan and cash payments from participants of the Plan to purchase shares of our common stock on the open market. Therefore, the price of each share you purchase with cash dividends or cash investments will be based upon the average price upon which the Plan administrator purchases shares in the open market for a particular investment. Purchases with dividend funds will be made commencing on the applicable dividend payment date. Purchase with cash payments from the participants will be made at least once a week, depending on investment volume.

     We will pay the costs for administration of the Plan, except that you will be responsible for the small fees described in this prospectus.

     Our common stock is traded on the New York Stock Exchange under the symbol “CBU.” The last reported sale price of our common stock on October 22, 2004, as reported on the New York Stock Exchange, was $25.10 per share.

     This prospectus describes the provisions of the Plan and you should retain this prospectus for future reference.

     Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is October 25, 2004

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To the Shareholders and Investors of Community Bank System, Inc.

     The Company has established “Investors Choice”, a Dividend Reinvestment and Direct Stock Purchase and Sale Plan, for convenience to our shareholders and potential investors. This Plan offers you an affordable alternative for buying and selling our common stock, which is traded on the New York Stock Exchange under the symbol “CBU”. You do not need to be a current shareholder to participate in this Plan and buy our common stock for the first time. If you participate in the Plan, you may also reinvest your cash dividends, if any, and make periodic supplemental cash payments to purchase additional shares. Shares that are held in the Plan may be sold directly without having to obtain physical certificates or becoming involved with a broker. The certificates that you currently hold in physical form at home may be deposited directly into the Plan for safekeeping or sale. You may also withdraw or transfer all or a portion of your stock held in the Plan at anytime. Although the Company pays for most all of the brokerage and administrative costs, there are small fees associated with certain features of the Plan. The fees are outlined within this booklet.

     This booklet provides you with a summary and the complete details of the Plan. If you have additional questions after reading through this material, please contact the Plan Administrator, American Stock Transfer & Trust Company, at:

American Stock Transfer & Trust Company
Dividend Reinvestment Department
P.O. Box 922
Wall Street Station
New York, NY 10269-0860
Tel: (800) 278-4353

     To enroll in the Plan, simply fill out the Enrollment Application and mail it to American Stock Transfer & Trust Company. Our purpose in providing the Plan is to promote long-term investment in our common stock.

     Thank you for your continued interest in the Company.

Sincerely,

/s/ Sanford A. Belden

SANFORD A. BELDEN
President and Chief
Executive Officer

     Our stock is not FDIC insured, not a deposit or other obligation of Community Bank, N.A., or the Bank, and is not guaranteed by the Bank. If you participate in the Plan, you will be purchasing shares of our common stock and should consider carefully the investment risks, including the possible loss of the investment and the other risk factors identified on page 3.

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Investors Choice

Community Bank System, Inc.
Dividend Reinvestment and Direct Stock
Purchase and Sale Plan

     Our Investors Choice Dividend Reinvestment and Direct Stock Purchase and Sale Plan, or the Plan, offers you the ability to:

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Community Bank System, Inc.

Investors Choice
Dividend Reinvestment and Direct Stock
Purchase and Sale Plan

Table of Contents

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Plan Purpose

     The purpose of the Plan is to provide our shareholders and other interested investors with a convenient and economical way of purchasing shares of our common stock and reinvesting cash dividends in additional shares of our common stock. American Stock Transfer & Trust Company will administer the Plan, purchase and hold shares acquired for you under the Plan, keep records, send statements of account activity and perform other duties related to the Plan. Any person is eligible to participate in the Plan by taking the steps described under How to Get Started and Enroll on page 4.

KEY PLAN FEATURES SUMMARY

Enrollment

Plan Account

Dividends

Additional Purchases

Selling Shares from your Plan Account

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Safekeeping of Certificates

Transferring Shares

Statements and Forms

Contacting the Plan Administrator for Information

Automated Telephone Transaction System: 1-877-253-6847

Internet: www.amstock.com

     Note:      If you need to contact American Stock Transfer & Trust Company regarding other matters, you may do so by calling 1-800-937-5449 or visiting American Stock Transfer & Trust Company’s website at www.amstock.com.

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Summary of Fees:

Please read this prospectus in full as this segment is a summary and does not contain all information.

COMPANY

     We are the parent company of Community Bank, N.A. and are a bank holding company registered under the Bank Holding Company Act of 1956. At June 30, 2004, we had on a consolidated basis approximately $4.4 billion in assets, $2.3 billion in loans and $2.9 billion in deposits. Community Bank is a community retail bank headquartered in Upstate New York, with approximately 130 customer facilities stretching diagonally from Northern New York to the Southern Tier and west to Lake Erie, and in Northeastern Pennsylvania. Community Bank and its subsidiaries offer a range of commercial and retail banking and financial services in their market areas to business, individual, agricultural and government customers.

RISK FACTORS

     Before choosing to invest in our common stock through the Plan, we urge you to carefully consider the following factors, each of which could affect our financial condition and results of operation and the performance of our common stock, as well as the information contained in the rest of this prospectus:

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HOW THE PLAN WORKS

a. If you already own at least one share of our common stock and it is registered in your name on the stock transfer books maintained for us by our transfer agent, simply fill out and sign the Enrollment Application and mail it to the Plan Administrator using the postage pre-paid envelope supplied with this prospectus.

b. If you do not currently own any shares of our common stock and are investing for the first time, fill out the enclosed Enrollment Application and mail it to the Plan Administrator using the postage pre-paid envelope supplied with this prospectus. The initial purchase must be at least $250 and not more than $10,000. A registration fee of $2.50 and a brokerage fee of $0.10 per share would be charged by the Plan Administrator for the initial purchase.

c. If you own shares of our common stock and it is held by a broker or bank in their firm name, request that broker or bank to transfer your shares into your name. You may not reinvest dividends through the Plan on shares held in a “street name,” which means that shares are held in the name of the broker or bank. If you do not wish to transfer shares into your name, you can still enroll and buy shares as instructed in “b” above.

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TECHNICAL INFORMATION
ABOUT THE PLAN

Stock Distribution:

Voting:

Other Terms:

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Changes in the Plan:

Additional Information about Us:

     Corporate Headquarters:

Community Bank System, Inc.
5790 Widewaters Parkway
DeWitt, New York 13214
800/724-2262
315/445-2282
315/445-7347 (fax)

     Web Site:

www.communitybankna.com

     Stock Listing:

Our common stock is listed on the New York Stock Exchange under the symbol CBU.

USE OF PROCEEDS

     Because all of the shares being offered under the Plan will be purchased by the Plan Administrator on the open market, we will not receive any proceeds from the sale of those shares.

LEGAL MATTERS

     The validity of the issuance of the common stock offered under the Plan will be passed upon for us by Bond, Schoeneck & King, PLLC, Syracuse, New York.

EXPERTS

     The financial statements incorporated in this prospectus by reference to our Annual Report on Form 10-K for the year ended December 31, 2003 have been so incorporated in reliance on the report of

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PricewaterhouseCoopers LLP, independent accountants, given on the authority of that firm as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

     We file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission, or the SEC. You may read and copy any document we file at the SEC’s public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. You may also obtain copies of those documents from the SEC at prescribed rates for the cost of copying by writing to the Public Reference Section of the SEC at the same address. You may call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public at the SEC’s web site at http://www.sec.gov.

     We filed a registration statement of Form S-3 to register with the SEC the offer and sale of our common stock under the Plan. This prospectus is a part of that registration statement. As allowed by SEC rules, this prospectus does not contain all of the information you can find in the registration statement or the exhibits to the registration statement. You may obtain a copy of the registration statement and exhibits by using one of the methods described in the preceding paragraph.

INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE

     The SEC allows us to “incorporate by reference” the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and later information filed with the SEC will update and supersede this information. We incorporate by reference the documents listed below and any future filings we will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act File No. 001-13695) prior to the termination of this offering:

          1.      Our Annual Report on Form 10-K for the fiscal year ended December 31, 2003, filed with the SEC on March 12, 2004;

          2.      Our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004, filed with the SEC on May 7, 2004;

          3.      Our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004, filed with the SEC on August 4, 2004;

          4.     Our Current Report on Form 8-K, filed with the SEC on January 26, 2004;

          5.      Our Current Report on Form 8-K, filed with the SEC on April 22, 2004;

          6.      Our Current Report on Form 8-K, filed with the SEC on May 6, 2004;

          7.      Our Current Report on Form 8-K, filed with the SEC on July 23, 2004;

          8.      Our Proxy Statement on Schedule 14A for our 2004 Annual Meeting of Shareholders filed with the SEC on April 15, 2004; and

          9.      The descriptions of the common stock and associated share purchase rights contained in our registration statements on Form 8-A (File No. 001-13695) each filed on December 9, 1997.

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     You may request a copy of these filings at no cost by writing or telephoning:

Community Bank System, Inc.
5790 Widewaters, Parkway
DeWitt, New York 13214-1883
(315) 445-2282
Attn: Donna J. Drengel, Corporate Secretary

     You should rely on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have authorized no one to provide you different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of the document.

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Part II
Information Not Required in the Prospectus

Item 14. Other Expenses of Issuance and Distribution

     The expenses in connection with the distribution of the securities being registered hereby are as follows:

* Estimated

Item 15. Indemnification of Officers and Directors

     The Registrant is a Delaware corporation. Section 145 of the General Corporation Law of the State of Delaware (“DGCL”) provides that a Delaware corporation has the power to indemnify its officers and directors in certain circumstances.

     Subsection (a) of Section 145 of the DGCL empowers a corporation to indemnify any director or officer, or former director or officer, who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding, provided that such director or officer acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, provided that such director or officer had no reasonable cause to believe his or her conduct was unlawful.

     Subsection (b) of Section 145 of the DGCL empowers a corporation to indemnify any director of officer, or former director or officer, who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person acted in any of the capacities set forth above, against expenses (including attorneys’ fees) actually and reasonably incurred in connection with the defense or settlement of such action or suit, provided that such director or officer acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall made in respect of any claim, issue or matter as to which such director or officer shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action was brought shall determine that despite the adjudication of liability but in view of all the circumstances, such director or officer is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper.

     Section 145 of the DGCL further provides that to the extent a director of officer of a corporation has been successful in the defense of any action, suit or proceeding referred to in subsections (a) and (b) or in the defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection therewith; that indemnification provided for by Section 145 shall not be deemed exclusive of any other rights to which the indemnified party may be entitled; and that the corporation shall have power to purchase and maintain insurance on behalf of a director or officer of the corporation against any liability asserted against him or her or incurred by him or her in any such capacity or arising out of his or

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her status as such whether or not the corporation would have the power to indemnify him or her against such liabilities under Section 145.

     Article 9 of the Registrant’s Certificate of Incorporation provides that the Registrant’s directors shall not be liable to the Registrant or its shareholders for monetary damages as a result of breach of fiduciary duty, except for liability for breach of a director’s duty of loyalty, for acts not undertaken in good faith, for a transaction from which a director derives a personal benefit, or for liability arising under Section 174 of the DGCL.

     Article 8 of the Bylaws of the Registrant provide that the Registrant shall indemnify any person made, or threatened to be made, a party to an action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he is or was a director or officer of the Registrant, to the fullest extent and in the manner set forth in and permitted by the DGCL, and any other applicable law, as from time to time in effect.

     In addition, as permitted under Delaware law, the Registrant maintains liability insurance covering directors and officers of the Registrant and its subsidiaries.

Item 16. Exhibits.

Item 17. Undertakings.

     The undersigned Registrant hereby undertakes:

     (1)      (a)     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 Securities Act of 1933;

(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 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) under the Securities Act 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; and

(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 (1)(a)(i) and (1)(a)(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 with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this Registration Statement.

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     (b)      That, for the purpose of determining any liability under the Securities Act of 1933, 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.

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

2.     That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) 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.

3.     Insofar as indemnification for liabilities arising under the Securities Act of 1933 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 its 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.

SIGNATURES

     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-3, and has duly caused the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in DeWitt, New York on the 20th day of October, 2004.

POWER OF ATTORNEY

     Each person whose signature appears below hereby appoints each of Sanford A. Belden and Mark E. Tryniski, severally, acting alone and without the other, his or her true and lawful attorney-in-fact with the authority to execute in the name of each such person, any and all amendments (including without limitation, post-effective amendments) to this Registration Statement on Form S-3, to sign any and all additional registration statements relating to the same offering of securities as this Registration Statement that are filed pursuant to Rule 462(b) of the Securities Act, and to file such registration statements with the Securities and Exchange Commission, together with any exhibits thereto and other documents therewith, necessary or advisable to enable the registrant to comply with the Securities Act, and any rules, regulations and requirements of the Securities and Exchange Commission in respect thereof, which amendments may make such other changes in the Registration Statement as the aforesaid attorney-in-fact executing the same deems appropriate.

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

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