UNITED STATES

SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Item 1.

Security and Issuer

This Amendment No. 1 to amends the statement on Schedule 13D (“Schedule 13D”) filed with the Securities and Exchange Commission on December 14, 2006 and is being filed by William E. Greehey (the “Reporting Person”).  This Amendment No. 1 relates to the units representing limited liability company interests (the “Units”) of Valero GP Holdings, LLC, a Delaware limited liability company (the “Company”), which has its principal executive offices at One Valero Way, San Antonio, Texas 78249.   This Amendment No. 1 amends and restates the statement on Schedule 13D in its entirety in order to report the pricing information for the acquisition of Units by the Reporting Person pursuant to the Unit Purchase Agreement, dated December 5, 2006, by and between Diamond Shamrock Refining and Marketing Company and the Reporting Person (the “Unit Purchase Agreement”).

Item 2.

Identity and Background

(a)           The name of the Reporting Person is William E. Greehey.

(b)           The Reporting Person’s address is P.O. Box 696000, San Antonio, Texas 78269-6000.

(c)           The Reporting Person serves as Chairman of the Board of the Company as well as Chairman of the Boards of Valero GP, LLC and Valero Energy Corporation (“Valero Energy”).

(d)           During the last five years, the Reporting Person has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e)           During the last five years, the Reporting Person has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f)            The Reporting Person is a citizen of Texas.

Item 3.

Source and Amount of Funds or Other Consideration

The Reporting Person initially purchased 455,000 Units in connection with the Company’s initial public offering on July 19, 2006.

The Reporting Person was subsequently granted 962 “Restricted Units” pursuant to a Restricted Unit and distribution equivalent right award Agreement, dated August 22, 2006, by and between Valero GP Holdings, LLC and the Reporting Person (the “Restricted Unit Award Agreement”).  The Restricted Unit Award Agreement is attached hereto as Exhibit C. The “Restricted Units” are phantom units which entitle the holder to receive Units upon vesting and are granted in tandem with distribution equivalent rights. The “Restricted Units” will vest annually in equal increments over a three-year period beginning August 2007.

On December 5, 2006, the Reporting Person signed a Unit Purchase Agreement with Diamond Shamrock Refining and Marketing Company, pursuant to which the Reporting Person has purchased 4,700,000 unregistered Units at $21.62 per Unit, which price was equal to the price paid by the public unitholders in the offering of Units pursuant to the registration statement on Form S-1 (File No. 333-138810), as amended (the “Offering”).  The closing of this private sale (the “Private Sale”) occurred simultaneous to the closing of the Offering on December 22, 2006.  The Unit Purchase Agreement is incorporated by reference to this Schedule 13D.

Item 4.

Purpose of Transaction

The Reporting Person acquired the Units reported herein solely for the purpose of investment.  The Reporting Person may make additional purchases of Units, either in the open market or in private transactions, depending on the Company’s business, prospects and financial condition, the market for the Units, general economic conditions, money and stock market conditions and other future developments.

Item 5.

Interest in Securities of the Issuer

After giving effect to the transactions described above, including the vesting of the Restricted Units:

(a)           There were 42,500,000 Units outstanding as of December 1, 2006.  The Reporting Person is deemed to be the beneficial owner of 5,155,962 Units, which based on calculations made in accordance with Rule 13d-3 (“Rule 13d-3”) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), represents 12.13% of the total issued and outstanding Units.   The above amount includes 962 “Restricted Units” which are phantom units which entitle the holder to receive Units upon vesting and are granted in tandem with distribution equivalent rights. The “Restricted Units” will vest annually in equal increments over a three-year period beginning August 2007.

The Reporting Person acquired beneficial ownership of the 5,155,962 Units as a result of the transactions described in Item 3.

(b)          The Reporting Person has the sole power to vote, or to direct the vote, and the sole power to dispose, or to direct the disposition over 5,155,000 Units.

(c)           There have been no reportable transactions with respect to the Units within the last 60 days by the Reporting Person except for the acquisition of Units by the Reporting Person being reported on this Schedule 13D.

(d)          The Reporting Person will have the right to receive distributions from, the power to direct the receipt of distributions from and the right to receive the proceeds from the sale of the Units reported by such person on the cover page of this Statement on Schedule 13D.

(e)           Not applicable.

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

The Restricted Units acquired by the Reporting Person pursuant to the Restricted Unit Award Agreement are subject to vesting, which will occur annually in equal increments over a three-year period beginning August 2007.  Until such time as the restricted Units are fully vested, the Reporting Person will not receive distributions relating to such Units and may not vote with respect to such Units.

Certain additional transfer restrictions and  voting rights applicable to the Reporting Person and certain rights granted by the Company and to which the Company is entitled are set forth in the Second Amended and Restated Limited Liability Company Agreement of the Company, which is incorporated by reference to this Schedule 13D.

Item 7.

Material to Be Filed as Exhibits

Exhibit A

Second Amended and Restated Limited Liability Company Agreement of Valero GP Holdings, LLC (incorporated by reference to Exhibit 2.1 of Valero GP Holdings, LLC’s Registration Statement on Form S-1 (File No. 333-132917)).

Exhibit B

Unit Purchase Agreement, dated December 5, 2006, by and between Valero GP Holdings, LLC and William E. Greehey (incorporated by reference to Exhibit 10.52 of Valero GP Holdings, LLC’s Registration Statement on Form S-1 (File No. 333-138810)).

Exhibit C

Restricted Unit Award Agreement, dated August 22, 2006, by and between Valero GP, LLC and William E. Greehey (previously filed as Exhibit C to Schedule 13D filed on December 14, 2006). 

January 4, 2007

Date

/s/ William E. Greehey

Signature

William E. Greehey

Name/Title