ANNUAL REPORT ON FORM 10-K

                       GREAT NORTHERN IRON ORE PROPERTIES

                               DECEMBER 31, 1998

<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1998         Commission File Number 1-701
                          -----------------                                -----

                       GREAT NORTHERN IRON ORE PROPERTIES
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                    Minnesota                                41-0788355
----------------------------------------------       ---------------------------
         (State or Other Jurisdiction of                  (I.R.S. Employer
         Incorporation or Organization)                  Identification No.)

     W-1290 First National Bank Building
             332 Minnesota Street
             Saint Paul, Minnesota                           55101-1361
----------------------------------------------       ---------------------------
   (Address of Principal Executive Offices)                  (Zip Code)

Registrant's Telephone Number, Including Area Code         651 / 224-2385
                                                           --------------

Securities registered pursuant to Section 12(b) of the Act:

                                                      Name of Each Exchange on
             Title of Each Class                          Which Registered
             -------------------                     ---------------------------

Trustees' Certificates of Beneficial Interest          New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act--None

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months and (2) has been subject to such filing requirements
for the past 90 days. Yes _X_ No ___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. _X_

The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of January 31, 1999 - None

The number of shares of beneficial interest outstanding as of the close of the
period covered by this report:

            Trustees' Certificates of Beneficial Interest--1,500,000

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the annual report to certificate holders for the year ended December
31, 1998 are incorporated by reference into Part II.

<PAGE>


PART I

Item 1.   BUSINESS

          The Registrant ("Trust") owns in fee, mineral and nonmineral lands on
          the Mesabi Iron Range of Minnesota. Income is derived through
          royalties on iron ore minerals (principally taconite) taken from these
          properties by lessees. The Registrant is presently involved solely
          with the leasing and care of these properties. There have been no
          significant changes in these functions since the beginning of the
          fiscal year.

          The raw materials essential to the business of the Registrant are the
          minerals contained in properties owned and leased by the Registrant.
          Since the Registrant leases its properties to mining interests which
          control the amount of ore production, the Registrant itself has no
          control over the tonnage mined from its properties but is solely
          involved with administering the leases on the properties. Since
          operating companies insist on freedom to move from property to
          property as mining requirements dictate, such changes in production
          cannot be reduced to financial forecasts.

          Registrant owns mineral interests in 12,033 acres on the Mesabi Iron
          Formation, including approximately 7,443 acres which are wholly owned,
          1,080 acres in which Registrant is a tenant in common with a 91%
          interest, 3,350 acres in tenancy in common with a 50% interest and 160
          acres in tenancy in common with other fractional interests. Of said
          total, 7,152 acres are under lease and 4,881 acres are unleased.

          Registrant cannot estimate at this time any tonnage for nonmagnetic
          taconite because of lack of drilling, testing and of any established
          commercial treatment method for Mesabi Iron Range nonmagnetic
          taconite. To give a better perspective on magnetic taconite,
          Registrant's engineers estimate that the magnetic taconite under lease
          as of January 1, 1999 was equivalent to 396,000,000 tons of pellets.

          Present leases provide for minimum payments (advance royalties)
          aggregating approximately $2,360,000 for the year 1999 even if no
          taconite is mined. All of this amount is attributable to long-term
          taconite leases.

          None of the Registrant's leases provide for any right of renewal by
          the lessees upon expiration, even though unmined minerals might
          remain. Any extension of any such terminating lease would have to be
          negotiated in the same manner as unleased properties.


                                       1


<PAGE>


Item 1.   BUSINESS--Continued

          All leases granted by the Registrant, except some covering remnants of
          natural ore, have provisions for escalation of royalty rates. Most of
          the taconite royalty rates are escalated on the basis of the price of
          pellets, the iron content, the Producers Price Index (PPI) (All
          Commodities), the PPI (Iron and Steel subgroup) or certain
          combinations of the above.

          Firm data on competitive conditions in the iron ore industry are not
          available. Iron ore is also available from a number of other sources.
          The Registrant's non-taconite shipments have ceased as a source of
          income because the ore deposits have, for practical purposes, been
          exhausted. The mining of taconite by lessees is the most important
          part of the Registrant's business. Future development depends, to a
          large part, on the demand for taconite from the Registrant's
          properties by mining companies.

          The Registrant's royalty income is dependent on the number of tons of
          taconite shipped from its properties by the lessees, royalty rates,
          advance royalties collected and liquidation of advance royalties
          collected. Following is a summary of shipments by lessee during 1998,
          1997 and 1996:

                                                            TONS SHIPPED
                                                 -------------------------------
                                                   1998       1997       1996
                                                 -------------------------------

          United States Steel Corporation (USX)  2,833,531  2,376,940  2,739,614
          Hibbing Taconite Company               2,739,779  2,607,332  1,890,509
          National Steel Corporation               656,164    349,842  1,349,404
          LTV Steel Mining Company                 154,752     29,120         --
                                                 -------------------------------
                                                 6,384,226  5,363,234  5,979,527
                                                 ===============================

          At December 31, 1998, the Registrant employed 11 persons. The
          Registrant has been engaged in only one line of business, namely the
          leasing and maintenance of its mineral properties. The business of the
          Registrant is not seasonal, but income depends upon production by
          mining companies which lease its properties. The Registrant has no
          operations in foreign countries and has no customers or lessees in
          foreign countries.


                                       2

<PAGE>


Item 1.   BUSINESS--Continued

          As previously reported, Section 646 of the Tax Reform Act of 1986, as
          amended, provided a special elective provision under which the Trust
          was allowed to convert from taxation as a corporation to that of a
          grantor trust. Pursuant to an Order of the Ramsey County District
          Court, the Trustees filed the Section 646 election with the Internal
          Revenue Service on December 30, 1988. On January 1, 1989, the Trust
          became exempt from federal and Minnesota corporate income taxes. For
          years 1989 and thereafter, certificate holders are taxed on their
          allocable share of the Trust's income whether or not the income is
          distributed. For certificate holder tax purposes, the Trust's income
          is determined on an annual basis, one-fourth then being allocated to
          each quarterly record date.

          The Trustees provided annual tax information in January 1999 to
          certificate holders of record with holdings on any of the four
          quarterly record dates during 1998. This information included a:

          Substitute Form 1099-MISC - This form reported one's 1998 allocable
          share of income from the Trust, distributions declared and any taxes
          withheld. (Foreign certificate holders received a Form 1042S.)

          Trust Supplemental Statement - This statement reported the number of
          units (shares) held on any of the four quarterly record dates in 1998.

          Tax Return Guide - This guide instructed the certificate holders as to
          the preparation of their income tax returns with respect to income
          allocated from the Trust and various deductions allowable.


                                       3

<PAGE>


Item 1.   BUSINESS--Continued

          The following is a listing of the Registrant's current leases:

<TABLE>
<CAPTION>
                                                                                                                          LESSEE
                                                NUMBER OF    GNIOP                                                      TERMINATION
                           LEASE              LEASED ACRES  INTEREST    COUNTY LOCATION                   TERM           PROVISION
          -------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>          <C>      <C>                     <C>                         <C>
          Bennett Annex                            237        100%     St. Louis               1/1/1965 to 12/31/2039      1 year
          Carmi-Campbell                         1,597        100      St. Louis               7/1/1959 to 12/31/2010      1 year

          Enterprise-Mississippi
             (incl. Stevenson, Sect. 18 mines)     776        100      St. Louis and Itasca    1/1/1961 to 12/31/2010      6 months
          Hanna Taconite #1                         40        100      Itasca                  4/1/1962 to 12/31/2010      6 months
          Gray Annex                                40         50      St. Louis               1/1/1974 to 1/1/2049        1 year

          Ontario                                1,397         50      St. Louis and Itasca    7/1/1978 to 12/31/2016      1 year
          Ontario                                  400        100      St. Louis and Itasca    7/1/1978 to 12/31/2016      1 year
          Ontario #3                                80         25      St. Louis               1/2/1993 to 12/31/2016      1 year
          Mahoning                                 980        100      St. Louis and Itasca    1/1/1979 to 12/31/2026      1 year
          Russell Annex                            120         50      Itasca                  1/1/1966 to 12/31/2040      1 year

          South Stevenson                          180        100      St. Louis               4/1/1966 to 4/1/2041        1 year
          Minntac                                1,725        100      St. Louis               1/1/1959 to 12/31/2057      6 months
          Wentworth                                160        100      St. Louis               7/1/1965 to 6/30/2040       1 year
          Atkins                                   160         91      St. Louis               8/1/1984 to 7/31/2009       6 months
</TABLE>


                                       4

<PAGE>


Item 2.   PROPERTIES

          The Registrant owns in fee, mineral and nonmineral lands on the Mesabi
          Iron Range of Minnesota, most of which are leased to mining companies
          who extract taconite. Taconite deposits are substantial.

Item 3.   LEGAL PROCEEDINGS

          In proceedings commenced in 1972, the Minnesota Supreme Court
          determined that while by the terms of the Trust, the Trustees are
          given discretionary powers to convert Trust assets to cash and to
          distribute the proceeds to certificate holders, they are limited in
          their exercise of those powers by the legal duty imposed by well
          established law of trusts to serve the interests of both term
          beneficiaries and the reversionary beneficiary with impartiality.
          Thus, the Trustees have no duty to exercise the powers of sale and
          distribution unless required to do so to serve both term and
          reversionary interests; and if the need arises, the Trustees may
          petition the District Court of Ramsey County, Minnesota, for further
          instructions defining what is required in a particular case to balance
          the interests of certificate holders and reversioner. Also, the Court,
          in effect, held that the Trust is a conventional trust, rather than a
          business trust, and must operate within the framework of well
          established trust law.

          By a letter dated April 1, 1998, certificate holders of record as of
          March 31, 1998 and the reversioner were notified of a hearing on April
          29, 1998 in Ramsey County Courthouse, Saint Paul, Minnesota, for the
          purpose of settling and allowing the Trust accounts for the year 1997.
          By Court Order signed and dated May 1, 1998, the said accounts were
          settled and allowed in all respects. By previous Orders, the Court
          settled and allowed the accounts of the Trustees for preceding years
          of the Trust.

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF CERTIFICATE HOLDERS

          None.


                                       5

<PAGE>


PART II

Item 5.   MARKET FOR THE REGISTRANT'S SHARES OF BENEFICIAL INTEREST AND RELATED
          SECURITY HOLDER MATTERS

          Shares of Beneficial Interest, Market Prices and Distributions on
          pages 3 and 4 of the annual report to certificate holders for the year
          ended December 31, 1998 are incorporated herein by reference.

Item 6.   SELECTED FINANCIAL DATA

          Selected Financial Data on page 2 of the annual report to certificate
          holders for the year ended December 31, 1998 is incorporated herein by
          reference.

Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

          Management's Discussion and Analysis of Financial Condition and
          Results of Operations on page 2 of the annual report to certificate
          holders for the year ended December 31, 1998 are incorporated herein
          by reference.

Item 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

          The following financial statements of the Registrant, included in the
          annual report to certificate holders for the year ended December 31,
          1998, are incorporated herein by reference:

            Balance Sheets--December 31, 1998 and 1997.

            Statements of Income--Years ended December 31, 1998, 1997 and 1996.

            Statements of Beneficiaries' Equity--Years ended December 31, 1998,
            1997 and 1996.

            Statements of Cash Flows--Years ended December 31, 1998, 1997 and
            1996.

            Notes to Financial Statements--December 31, 1998.

          Quarterly Results of Operations on page 4 of the annual report to
          certificate holders for the year ended December 31, 1998 are
          incorporated herein by reference.

Item 9.   DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

          None.


                                       6

<PAGE>


PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

          The Registrant, being a trust, has no directors as such. The
          management of the Trust is vested in the following trustees and
          officers whose terms of office are not fixed for a specified time:

                                                                        YEARS OF
                        NAME AND POSITION                        AGE    SERVICE
          ----------------------------------------------------------------------

          Harry L. Holtz*         President of the Trustees       80    27 years
          Joseph S. Micallef*     Trustee                         65    22
          Roger W. Staehle        Trustee                         65    17
          Robert A. Stein         Trustee                         60    17
          Thomas A. Janochoski    Vice President and Secretary    40     7

          Principal occupations of Trustees and officers during the last five
          years:

          HARRY L. HOLTZ
            President and Chief Executive Officer, Great Northern Iron Ore
               Properties until December 31, 1998.

          JOSEPH S. MICALLEF
            Consultant and Director, Fiduciary Counselling, Inc., St. Paul,
               Minnesota until December 31, 1998;
            Advisory Director, First Trust National Association until February
               27, 1996;
            President and Chief Executive Officer, Fiduciary Counselling, Inc.,
               St. Paul, Minnesota until December 31, 1995.

          ROGER W. STAEHLE
            Adjunct Professor, Institute of Technology, University of Minnesota;
            Industrial Consultant.

          ROBERT A. STEIN
            Executive Director and Chief Operating Officer, American Bar
               Association;
            Dean of the Law School, University of Minnesota until
               December 31, 1994.

          THOMAS A. JANOCHOSKI
            Vice President and Secretary, Chief Financial Officer, Great
               Northern Iron Ore Properties.

          *Mr. Joseph S. Micallef has been elected by the Board of Trustees to
          succeed Mr. Harry L. Holtz as President and Chief Executive Officer
          effective January 1, 1999.


                                       7

<PAGE>


Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT--Continued

          Executive employees in addition to those listed above include Roger P.
          Johnson, Manager of Mines and Chief Engineer.

          There are no family relationships among any of the above persons.

Item 11.  EXECUTIVE COMPENSATION

          SUMMARY COMPENSATION TABLE

                                                       ANNUAL COMPENSATION
                                                 -------------------------------
               NAME AND PRINCIPAL POSITION        YEAR       SALARY       BONUS
          ----------------------------------------------------------------------

          Harry L. Holtz, CEO and President
             of the Trustees                      1998       $90,000     $35,000
                                                  1997        80,000      35,000
                                                  1996        80,000      35,000

          The Trust Agreement (as modified by Court Orders) provides for 1997
          and 1996 annual compensation to the President of the Trustees of
          $80,000 and, in addition, a sum equal to one percent of the excess of
          the gross income of the Trust over $5,000,000 for that year until his
          annual compensation shall reach $115,000. By Court Order effective
          January 1, 1998, annual compensation to the President of the Trustees
          is $90,000 and, in addition, a sum equal to one percent of the excess
          of gross income of the Trust over $5,000,000 for that year until his
          annual compensation shall reach $125,000. No other executive's
          compensation exceeds $100,000. The Trustees, including the President,
          are not eligible to receive retirement benefits based on their
          services as Trustees. There are no options, SARs, long-term
          performance-based incentive plans or retirement benefits applicable to
          the CEO or the Trustees and, accordingly, disclosure tables with
          respect to such benefits have been omitted.

          COMPENSATION OF TRUSTEES

          The Trust Agreement (as modified by Court Orders) provides for 1997
          and 1996 annual compensation to each Trustee (other than the
          President) of $30,000, without any additional amounts payable for
          committee participation or special assignments. By Court Order
          effective January 1, 1998, annual compensation to each Trustee (other
          than the President) is $40,000, without any additional amounts payable
          for committee participation or special assignments. There are no other
          arrangements pursuant to which any Trustee was compensated for any
          services provided as a Trustee during the year.


                                       8

<PAGE>


Item 11.  EXECUTIVE COMPENSATION--Continued

          COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

          Because the compensation of the Trustees and the Chief Executive
          Officer is established by the Trust Agreement (as modified by Court
          Orders), there is no compensation committee for the Trustees and there
          is no Trustee compensation committee report on executive compensation.
          The Board of Trustees, as a whole, determines the compensation of
          executive officers other than the President and Chief Executive
          Officer.

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

          (a)  The only authorized securities of the Registrant are Trustees'
               Certificates of Beneficial Interest and the holders of these
               securities do not have voting rights. There were no entities
               holding more than 5% of the Certificates of Beneficial Interest
               outstanding, of record and/or beneficially, as of December 31,
               1998.

          (b)  There were no securities owned by the Trustees or officers as of
               December 31, 1998.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          None.

PART IV

Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

          (a)  (1) and (2)--The response to this portion of Item 14 is submitted
               as a separate section of this report.

               (3)  Listing of Exhibits:

                    Exhibit 13--Annual Report to Certificate Holders

                    Exhibit 23--Consent of Independent Auditors

                    Exhibit 27--Financial Data Schedule (only filed
                    electronically via EDGAR)

                    Exhibit 99--Tax Return Guide


                                       9

<PAGE>


Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
          8-K--Continued

          (b)  Report on Form 8-K--None.

          (c)  Exhibits--The response to this portion of Item 14 is submitted as
               a separate section of this report.

          (d)  Financial Statement Schedules--The response to this portion of
               Item 14 is submitted as a separate section of this report.


                                       10

<PAGE>


SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) 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.

                  GREAT NORTHERN IRON ORE PROPERTIES
                  ----------------------------------
                             (Registrant)



                  /s/ Joseph S. Micallef                       February 22, 1999
                  ------------------------------------------   -----------------
                  Joseph S. Micallef, Chief Executive                Date
                     Officer, Trustee and President of the
                     Trustees as of January 1, 1999

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.



                  /s/ Harry L. Holtz                           February 19, 1999
                  ------------------------------------------   -----------------
                  Harry L. Holtz,  Chief Executive  Officer,         Date
                     Trustee and President of the Trustees
                     through December 31, 1998



                  /s/ Roger W. Staehle                         February 18, 1999
                  ------------------------------------------   -----------------
                  Roger W. Staehle, Trustee                          Date



                  /s/ Robert A. Stein                          February 11, 1999
                  ------------------------------------------   -----------------
                  Robert A. Stein, Trustee                           Date



                  /s/ Thomas A. Janochoski                     February 22, 1999
                  ------------------------------------------   -----------------
                  Thomas A. Janochoski, Vice President               Date
                     and Secretary, Chief Financial Officer


                                       11

<PAGE>


                           ANNUAL REPORT ON FORM 10-K

                      ITEM 14(a)(1) and (2) and ITEM 14(d)

              LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
                                    SCHEDULES

                          FINANCIAL STATEMENT SCHEDULES

                          YEAR ENDED DECEMBER 31, 1998



                       GREAT NORTHERN IRON ORE PROPERTIES

                       W-1290 First National Bank Building
                              332 Minnesota Street
                        Saint Paul, Minnesota 55101-1361

<PAGE>


FORM 10-K--Item 14(a)(1) and (2)
GREAT NORTHERN IRON ORE PROPERTIES

LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES




The following financial statements of Great Northern Iron Ore Properties,
included in the annual report of the Registrant to its certificate holders for
the year ended December 31, 1998, are incorporated by reference in Item 8:

   Balance Sheets--December 31, 1998 and 1997

   Statements of Income--Years ended December 31, 1998, 1997 and 1996

   Statements of Beneficiaries' Equity--Years ended December 31, 1998, 1997 and
   1996

   Statements of Cash Flows--Years ended December 31, 1998, 1997 and 1996

   Notes to Financial Statements--December 31, l998

All Item 14(d) schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable and therefore have been
omitted.


                                      F-1