UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

    X    Quarterly report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

For the quarterly period ended December 31, 1995

         Transition report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934


For the transition period from                       to

Commission File Number 0-12944

                                Zygo Corporation
             (Exact name of registrant as specified in its charter)

           Delaware                                     06-0864500
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
 incorporation or organization)

Laurel Brook Road, Middlefield, Connecticut                           06455
(Address of principal executive offices)                            (Zip Code)


                                 (860) 347-8506
               Registrant's telephone number, including area code

                                       N/A
        (Former name, former address, and former fiscal year, if changed
                               from last report)

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 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                               YES   X        NO  ____

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

       4,782,636 shares, Common Stock, $.10 Par Value, at January 25, 1996


<PAGE>


                                     PART I

Item 1. Financial Statements

Company or group of companies for which report is filed:  Zygo Corporation

                       CONSOLIDATED STATEMENTS OF EARNINGS
                      (Thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                      For the Three Months                  For the Six Months
                                                       Ended December 31,                    Ended December 31,
                                                 ---------------------------           ---------------------------
                                                   1995               1994               1995               1994
                                                 --------           --------           --------           --------
<S>                                              <C>                <C>                <C>                <C>     
Net sales                                        $ 12,654           $  7,097           $ 23,994           $ 12,955
Cost of goods sold                                  6,859              3,852             13,195              7,306
                                                 --------           --------           --------           --------
         Gross profit                               5,795              3,245             10,799              5,649

Selling, general and administrative
     expenses                                       2,024              1,641              3,985              3,141
Research, development and
     engineering expenses                           1,320                793              2,746              1,462
                                                 --------           --------           --------           --------
         Operating profit                           2,451                811              4,068              1,046
                                                 --------           --------           --------           --------
Other income (expense):
     Interest income                                  142                 88                244                176
     Interest expense                                   0                (11)                 0                (23)
     Miscellaneous, net                               (89)               (44)              (130)              (107)
                                                 --------           --------           --------           --------
                                                       53                 33                114                 46
                                                 --------           --------           --------           --------
Earnings before income taxes                        2,504                844              4,182              1,092
Income tax expense                                    876                311              1,464                403
                                                 --------           --------           --------           --------
Net earnings                                     $  1,628           $    533           $  2,718           $    689
                                                 ========           ========           ========           ========
Net earnings per share                           $    .33           $    .13           $    .57           $    .17
                                                 ========           ========           ========           ========
Weighted average common shares
     and common dilutive equivalents
     outstanding                                    4,879              4,068              4,786              4,019
                                                 ========           ========           ========           ========
</TABLE>


<PAGE>

                                       -2-

                           CONSOLIDATED BALANCE SHEETS
                   As of December 31, 1995, and June 30, 1995
                             (Thousands of dollars)
<TABLE>
<CAPTION>
                                                                                 December 31,            June 30,
                        ASSETS                                                       1995                  1995
                        ------                                                     --------              --------
<S>                                                                               <C>                   <C>     
Current Assets:
    Cash and cash equivalents                                                     $ 27,373              $  2,428
    Marketable securities                                                            7,008                 7,746

    Receivables                                                                      6,080                 6,296

    Inventories:
         Raw materials and manufactured parts                                        3,020                 2,863
         Work in process                                                             3,027                 2,281
         Finished goods                                                                305                   499
                                                                                  --------              --------
                  Total inventories                                                  6,352                 5,643
                                                                                  --------              --------

    Prepaid expenses and taxes                                                         683                   581
    Deferred income taxes                                                            1,093                 1,043
                                                                                  --------              --------
                  Total current  assets                                             48,589                23,737
                                                                                  --------              --------
Property, plant and equipment, at cost                                              16,714                16,644
         Less accumulated depreciation                                             (11,055)              (11,381)
                                                                                  --------              --------
              Net property, plant and equipment                                      5,659                 5,263

Other assets, net                                                                      724                   666
                                                                                  --------              --------
                  Total assets                                                    $ 54,972              $ 29,666
                                                                                  ========              ========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
    Accounts payable                                                              $  2,300              $  2,515
    Accrued expenses and customer progress
              payments                                                               4,095                 3,497
    Federal and state income taxes                                                    --                     653
                                                                                  --------              --------
                  Total current liabilities                                          6,395                 6,665
                                                                                  --------              --------
Deferred income taxes                                                                  665                   668

Stockholders' Equity:
    Common stock, $.10 par value per share:
         15,000,000 shares authorized; 4,882,686
         shares issued (4,030,786 at June 30, 1995)                                    488                   403
    Additional paid-in capital                                                      33,490                10,726
    Retained earnings                                                               14,226                11,508
    Net unrealized gain (loss) on marketable securities                                  9                    (3)
                                                                                  --------              --------
                                                                                    48,213                22,634
    Less treasury stock, at cost; 103,800 shares                                       301                   301
                                                                                  --------              --------
                  Total stockholders' equity                                        47,912                22,333
                                                                                  --------              --------
                  Total liabilities and stockholders' equity                      $ 54,972              $ 29,666
                                                                                  ========              ========

</TABLE>

<PAGE>

                                       -3-

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Six Months ended December 31, 1995, and 1994
                             (Thousands of dollars)
<TABLE>
<CAPTION>
                                                                                     1995                 1994
                                                                                   --------             --------
<S>                                                                                <C>                  <C>     
Cash provided by (used for) operating activities:
         Net earnings                                                              $  2,718             $    689
         Adjustments to reconcile net earnings
           to cash provided by (used for) operating activities:
              Depreciation and amortization                                             684                  582
              Deferred income taxes                                                     (63)                --
              Loss on disposal of assets                                                 98                  209
              Intangible and other assets                                              --                   (162)
              Changes in operating accounts:
                  Receivables                                                           236                 (923)
                  Inventories                                                          (709)                (617)
                  Prepaid expenses and taxes                                           (102)                 184
                  Accounts payable and accrued expenses                                (270)                 487
                                                                                   --------             --------
              Net cash provided by operating activities                               2,592                  449
                                                                                   --------             --------
Cash provided by (used for) investing activities:
         Additions to property, plant and equipment                                  (1,165)                (772)
         Investment in marketable securities                                           (400)              (1,229)
         Investment in other assets                                                     (95)                --
         Proceeds from maturity of marketable securities                              1,160                1,465
         Proceeds from sale of assets                                                     4                    3
                                                                                   --------             --------
             Net cash (used for) investing activities                                  (496)                (533)
                                                                                   --------             --------
Cash provided by (used for) financing activities:
         Repayment of long-term debt                                                   --                   (131)
         Net proceeds from issuance of common stock                                  22,826                 --
         Exercise of stock options                                                       23                   16
                                                                                   --------             --------
             Net cash provided by (used for) financing activities                    22,849                 (115)
                                                                                   --------             --------
Net increase (decrease) in cash and cash equivalents                                 24,945                 (199)
Cash and cash equivalents,
     beginning of year                                                                2,428                2,530
                                                                                   --------             --------
Cash and cash equivalents,
     end of period                                                                 $ 27,373             $  2,331
                                                                                   ========             ========
</TABLE>

The interim  financial  statements  furnished  herein  reflect all  adjustments,
consisting  only of  normal  closing  entries,  which  are,  in the  opinion  of
management, necessary to a fair statement of the results for the interim periods
presented. These interim financial statements should be read in conjunction with
the consolidated  financial  statements and notes included in the Company's June
30, 1995 Annual Report on Form 10-K.

The  foregoing  interim results are not necessarily indicative of the results of
operations for the full fiscal year ending June 30, 1996.


<PAGE>

                                       -4-

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

Financial Condition

At  December  31,  1995,  working  capital  was  $42,194,000,   an  increase  of
$25,122,000 from $17,072,000 at June 30, 1995. At December 31, 1995, the Company
had cash and cash  equivalents  of  $27,373,000  and  marketable  securities  of
$7,008,000 for a total of $34,381,000. The $24,207,000 increase in cash and cash
equivalents and marketable  securities from the amount at June 30, 1995, was due
primarily to the secondary  offering of 1,300,000 shares of the Company's common
stock, of which 845,000 shares were sold by the Company generating approximately
$23 million in net proceeds to the Company.  As of December 31, 1995, there were
no borrowings  outstanding  under the Company's  $3,000,000 bank line of credit.
Unused  amounts under the line of credit are available  for  short-term  working
capital needs.

Results of Operations

Net sales of $12,654,000 for the three months and $23,994,000 for the six months
ended  December 31, 1995,  increased by $5,557,000 or 78.3% and  $11,039,000  or
85.2%,  respectively,  from the net sales in the comparable  prior year periods.
The  percentages  of net sales  attributed to  electro-optical  instruments  and
accessories amounted to 84.7% and 86.8%,  respectively,  in the three months and
six months  ended  December  31,  1995.  The  increases in net sales in both the
three-month and six-month  periods were principally due to increased demand from
manufacturers  of data  storage and  semiconductor  products  for the  Company's
instruments and systems. Net sales of the Company's electro-optical  instruments
and  accessories  in the three- and six-month  periods  ended  December 31, 1995
increased  by 78.5% and  98.3%,  respectively,  from the same  periods  the year
earlier.  Net sales of precision optical  components also increased by 77.2% and
29.2%,  respectively,  for the three  months and six months  ended  December 31,
1995.

Gross  profit for the three  months  and six months  ended  December  31,  1995,
amounted to $5,795,000 and $10,799,000,  respectively, an increase of $2,550,000
and  $5,150,000  from the  comparable  prior  year  periods.  Gross  profit as a
percentage  of sales for the quarter and six months  ended  December  31,  1995,
amounted to 45.8% and 45.0%, respectively, an increase of 0.1 and 1.4 percentage
points,  respectively,  from gross profit as a percentage  of sales of 45.7% and
43.6%,  respectively,  for the three  months and six months  ended  December 31,
1994.  Gross profit dollars and gross profit as a percentage of sales  increased
principally  due to the  increased  volume of sales and  certain  volume-related
manufacturing efficiencies.

Selling,  general and  administrative  expenses of  $2,024,000  and  $3,985,000,
respectively,  in the three  months  and six months  ended  December  31,  1995,
increased by $383,000 or 23.3%, and $844,000, or 26.9%,  respectively,  from the
same periods the year earlier.  In the three-month  and six-month  periods ended
December  31,  1995,  volume-related  expenses  accounted  for 59.0% and  53.1%,
respectively,  of the total  dollar  increases  from the  comparable  prior year
periods. As a percentage of sales, selling,  general and administrative expenses
declined in the three  months and six months ended  December 31, 1995,  to 16.0%
and 16.6%, respectively,  as compared to 23.1% and 24.2%,  respectively,  in the
comparable prior year period.

Research and development  expenses  amounted to $1,320,000 or 10.4% of sales and
$2,746,000 or 11.4% of sales, respectively,  for the three months and six months
ended December 31, 1995. In the comparable  three- and six-month  periods in the
prior year,  R&D expenses  totaled  $793,000 or 11.2% of sales and $1,462,000 or
11.3% of sales, respectively. The significant increase in R&D expenses primarily
resulted  from  spending  on  personnel  and  materials  at both  the  Company's
principal R&D center in Middlefield,  Connecticut,  and its R&D facility in Simi
Valley, California, which was formed in the quarter ended March 31, 1995.


<PAGE>

                                       -5-

Other income in the quarter and six months ended December 31, 1995,  amounted to
$53,000  and  $114,000,  respectively,  as  compared  to  $33,000  and  $46,000,
respectively,  in the same periods last year. Other income  increased  primarily
due to an increase in interest income relating to the Company's  secondary stock
offering  and  the  elimination  of  interest   expense,   partially  offset  by
miscellaneous expense of a nonrecurring nature.

The Company's backlog at December 31, 1995 was a record level of $16,766,000, an
increase of  $6,884,000  or 69.7% over the  $9,882,000  backlog at December  31,
1994,  and an increase of  $2,772,000 or 19.8% from the backlog at September 30,
1995. Stronger demand for the Company's  electro-optical  instrument systems and
accessories  and  precision  optical  components  accounted  for the increase in
backlog from the year earlier period.

                                     PART II

Item 4.  Submission of Matters to a Vote of Security Holders

The Annual Meeting of Stockholders  was held on November 16, 1995. The following
matters were submitted to a vote of the Company's stockholders:

       Proposal No. 1 - Election of Board of Directors
               To elect eight  directors  for the ensuing  year.  The  following
               individuals,  all of whom  were  Company  directors,  immediately
               prior to the vote,  were  elected  as a result  of the  following
               vote:

                                                        For             Against
                                                        ---             -------
               Michael R. Corboy                     3,556,048          12,780
               Paul F. Forman                        3,555,876          12,952
               Seymour E. Liebman                    3,555,876          12,952
               Robert G. McKelvey                    3,555,876          12,952
               Paul W. Murrill                       3,556,048          12,780
               Robert B. Taylor                      3,556,048          12,780
               Gary K. Willis                        3,556,048          12,780
               Carl A. Zanoni                        3,556,048          12,780

       Proposal No. 2 - Adoption  of  an  amendment  to  the  Company's Restated
       Certificate of Incorporation
               To adopt an amendment to the Company's  Articles of Incorporation
               to increase the number of authorized  shares of Common Stock from
               10,000,000 to 15,000,000  shares.  The amendment to the Company's
               Articles of  Incorporation  was adopted,  as written in the proxy
               statement  dated  October 10, 1995,  as a result of the following
               vote:

                    Votes For                         3,540,679
                    Votes Against                        18,681
                    Abstentions                           9,468

       Proposal No. 3 - Adoption  of  an  amendment to the Company's Amended and
       Restated Non- Qualified Stock Option Plan 
               To adopt an  amendment  to the  Company's  Amended  and  Restated
               Non-Qualified  Stock Option Plan to increase the number of shares
               of  Common  Stock  authorized  for  issuance  under the Plan from
               975,000 to  1,425,000  shares.  The  amendment  to the  Company's
               Amended and Restated Non-Qualified Stock Option Plan was adopted,
               as written in the proxy  statement  dated  October 10, 1995, as a
               result of the following vote:

                    Votes For                         2,329,816
                    Votes Against                       211,118
                    Broker Non-Votes                  1,012,395
                    Abstentions                          15,499


<PAGE>

                                       -6-

       Proposal No. 4 -  Approval  of  the  Company's  entering  into  indemnity
       agreements with its directors and officers 
               To approve the Company's entering into indemnity  agreements with
               its directors and officers.  The action of the Company's entering
               into  indemnity  agreements  with its officers and  directors was
               approved,  as written in the proxy  statement  dated  October 10,
               1995, as a result of the following vote:

                    Votes For                         3,522,006
                    Votes Against                        29,625
                    Abstentions                          17,197

       There  were  no  other  matters  submitted  to  a  vote  of the Company's
       stockholders.

Item 5. Other Information
               On December 13, 1995, the Company  commenced a public offering of
               1,300,000  shares of Common Stock,  of which 845,000  shares were
               sold by the Company,  and 455,000  shares were sold by certain of
               the Company's  stockholders.  The Company generated approximately
               $23  million in net  proceeds,  which is  expected to be used for
               working  capital  associated  with expanded  sales,  research and
               development  and  other  general  corporate  purposes,   and  for
               potential acquisitions.

Item 6.    Exhibits and Reports on Form 8-K

(a)        Exhibit 27.  Financial Data Schedule.

(b)        The  Company  did not file any reports on  Form 8-K during the period
            covered by this Form 10-Q.


<PAGE>

                                       -7-

                                    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.

                                              /S/  Zygo Corporation
                                    --------------------------------------------
                                                    (Registrant)

                                               /S/  GARY K. WILLIS
                                    --------------------------------------------
                                    Gary K. Willis
                                    President and Chief Executive Officer

                                               /S/  MARK J. BONNEY
                                    --------------------------------------------
                                    Mark J. Bonney
                                    Vice President, Finance and Administration,
                                    Treasurer, and Chief Financial Officer

Date:  February 5, 1996