SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C.  20549



                                   FORM 10-Q



                  Quarterly Report Under Section 13 or 15(d)
                    of the Securities Exchange Act of 1934




For Quarter Ended June 30, 1997                  Commission File Number 0-13318



                            STAR TECHNOLOGIES, INC.
            (Exact name of registrant as specified in its charter)



            Delaware                                            93-0794452
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)


                                 515 Shaw Road
                           Sterling, Virginia  20166
                   (Address of principal executive offices)
                                  (Zip Code)


                                (703) 689-4400
             (Registrant's telephone number, including area code)

                                Not Applicable
             (Former name, former address and former fiscal year,
                         if changed since 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     



    19,872,884 shares of Common Stock were outstanding as of June 30, 1997.
<PAGE>
PART I.  FINANCIAL INFORMATION

     Item 1.  Financial Statements
<TABLE>

                          STAR TECHNOLOGIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF OPERATIONS

                                        (Unaudited)
                           (In thousands, except per share data)
<CAPTION>
                                                                     Three Months Ended
                                                                          June 30,     

                                                                      1997        1996 

<S>                                                                  <C>         <C>
Revenue                                                              $  169      $  715
Cost of revenue                                                         137         205
                                                                     ------      ------
Gross margin                                                             32         510
                                                                     ------      ------
Operating expenses
  Research and development                                              227         375
  Selling, general and administrative                                   573         787
                                                                     ------      ------
    Total operating expenses                                            800       1,162
                                                                     ------      ------
Operating loss                                                         (768)       (652)

Interest and other income, net                                           66          61
                                                                     ------      ------
Net loss before provision for income taxes                             (702)       (591)

Provision for income taxes                                                -           -
                                                                     ------      ------
Net loss                                                             $ (702)     $ (591)
                                                                     ======      ======




Net loss                                                             $ (702)     $ (591)
Preferred stock dividend requirement                                    (50)       (348)
                                                                     ------      ------
  Net loss applicable to common shares                               $ (752)     $ (939)
                                                                     ======      ======

Earnings (loss) per share:
  Per common and common equivalent share                             $ (.04)     $ (.05)
                                                                     ======      ======
  Assuming full dilution                                             $ (.04)     $ (.05)
                                                                     ======      ======
</TABLE>

                See accompanying notes to consolidated financial statements.


                                            -1-

<PAGE>
<TABLE>
                          STAR TECHNOLOGIES, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                        (Unaudited)
                             (In thousands, except share data)
<CAPTION>
                                                                     June 30,    March 31,
Assets                                                                 1997        1997   
Current assets
  <S>                                                                <C>         <C>
  Cash                                                               $    43     $    69
  Short-term investments                                               4,799       5,474
  Accounts receivable, net                                                85          35
  Other current assets, net                                              117         147
                                                                     -------     -------
    Total current assets                                               5,044       5,725

Property and equipment, net                                              245         271
Other assets                                                              35          35
                                                                     -------     -------
    Total assets                                                     $ 5,324     $ 6,031
                                                                     =======     =======
Liabilities and Stockholders' Equity
Current liabilities
  Accounts payable                                                   $   152     $   161
  Accrued payroll and related benefits                                   248         245
  Other accrued liabilities                                              225         225
                                                                     -------     -------
    Total current liabilities                                            625         631
                                                                     -------     -------
Commitments and contingencies                                              -           -

Stockholders' equity
  Preferred stock; $.01 par value; 1,000,000 shares authorized
    Series A convertible; 500,000 shares designated; 13,200 and
      17,500 shares issued; 13,200 and 17,500 shares outstanding;
      aggregate liquidation preference of $475 and $630                    1           1
    Series B convertible; 120,117 shares designated; 11,917
      shares issued and outstanding; aggregate liquidation
      preference of $1,192                                                 1           1
    Series C convertible; 80,079 shares designated; 7,945
      shares issued and outstanding; aggregate liquidation
      preference of $795                                                   1           1
  Common stock; $.01 par value; 60,000,000 shares authorized;
    19,968,075 and 19,937,115 shares issued; 19,872,884 and
    19,841,924 shares outstanding                                        200         199
  Additional paid-in capital                                          61,011      61,011
  Treasury stock, at cost; 95,191 shares                                (209)       (209)
  Retained deficit                                                   (56,306)    (55,604)
                                                                     -------     -------
    Total stockholders' equity                                         4,699       5,400
                                                                     -------     -------
    Total liabilities and stockholders' equity                       $ 5,324     $ 6,031
                                                                     =======     =======
</TABLE>
                See accompanying notes to consolidated financial statements.



                                            -2-
<PAGE>
<TABLE>
                          STAR TECHNOLOGIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        (Unaudited)
                                       (In thousands)

<CAPTION>
                                                                     Three Months Ended
                                                                          June 30,     
  
                                                                       1997        1996 

Cash flows from (used for) operating activities
  <S>                                                                <C>         <C>
  Net loss                                                           $ (702)     $ (591)

Adjustments to reconcile net loss to net cash
  from (used for) operating activities
    Depreciation and amortization                                        30          54
    Increase in accounts receivable                                     (50)       (395)
    Decrease in other current assets                                     30          63
    Decrease in accounts payable                                         (9)       (160)
    Increase (decrease) in accrued liabilities                            3         (72)
                                                                     ------      ------
Net cash used for operating activities                                 (698)     (1,101)
                                                                     ------      ------
Cash flows used for investing activities
    Capital expenditures                                                 (3)        (35)
                                                                     ------      ------
Net cash used for investing activities                                   (3)        (35)
                                                                     ------      ------
Cash flows from (used for) financing activities                           -           -
                                                                     ------      ------
Net decrease in cash and equivalents                                   (701)     (1,136)

Cash and equivalents, beginning of period                             5,543       5,035
                                                                     ------      ------
Cash and equivalents, end of period                                  $4,842      $3,899
                                                                     ======      ======

</TABLE>
                See accompanying notes to consolidated financial statements.

















                                            -3-
<PAGE>
                  STAR TECHNOLOGIES, INC. AND SUBSIDIARIES
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Star Technologies, Inc. ("Star" or the "Company") recently completed a 
transition from providing performance-enhancing computing products and 
solutions for the medical imaging market to providing imaging solutions for 
the document imaging market.  In July 1997, the Company, through a 
newly-created operating subsidiary, PowerScan, Inc. ("PowerScan"), acquired 
document imaging and processing technology and the Company sold its medical 
imaging technology as part of the Company's long-term growth strategy to 
refocus its business from the medical imaging archival market to the broader 
document imaging market.  (See Note 4 and Management's Discussion and 
Analysis.)  With these transactions, Star is becoming a provider of imaging 
software solutions, principally high-speed, high-volume document capture and 
processing software.  The consolidated statements of operations and 
statements of financial position presented herein do not reflect either of 
these transactions.

     The Company anticipates filing, as an amendment to its Current Report on 
Form 8-K which is being filed with the Securities and Exchange Commission on 
August 14, 1997, pro-forma financial statements that reflect the occurrence 
of the above two transactions as soon as practicable but no later than 
October 13, 1997.  Revenue generated from the acquired technologies during 
the 1996 calendar year totaled $4.1 million.


NOTE 1 - Financial Information

     The interim consolidated financial statements presented herein are 
unaudited.  They reflect all adjustments that, in the opinion of management, 
are necessary to fairly present the Company's financial position and results 
of operations for the interim periods presented.  All such adjustments are of 
a normal, recurring nature.  The results of operations for the three-month 
period ended June 30, 1997 are not necessarily indicative of the results to 
be expected for the entire fiscal year.  (See Note 4.)

     The interim consolidated financial information should be read in 
conjunction with the Company's Annual Report on Form 10-K, Commission file 
number 0-13318, for the fiscal year ended March 31, 1997.

     Certain fiscal 1997 amounts have been reclassified for comparative 
purposes.


NOTE 2 - Short-Term Investments

     The Company's short-term investments consist entirely of commercial 
paper.  These investments, which are held to maturity (less than three months 
from the date of purchase), are carried at cost which approximates their 
market value.


NOTE 3 - Accounts Receivable

     Accounts receivable are shown net of an allowance for doubtful accounts 
of $12,000 and $15,000 at June 30, 1997 and March 31, 1997, respectively.

                                     -4-
<PAGE>
NOTE  4 - Subsequent Events

     On July 30, 1997, PowerScan acquired from Intrafed, Inc. ("Intrafed"), 
intellectual property related to the PowerScan (R) and StageWorks (R) 
software products, and certain related fixed assets, inventory, contracts and 
licenses, and assumed certain liabilities, including those under customer 
maintenance contracts.  PowerScan will  further develop and market the 
document capture and processing products acquired from Intrafed.

     The consideration for the acquisition was $1.9 million in cash and up to 
2.6 million shares of Star common stock.  A portion of the stock 
consideration will be issued to Intrafed based upon the future performance of 
PowerScan.  The 1.3 million shares of the Company's common stock issued at 
the closing of the acquisition are being held in escrow to secure Intrafed's 
indemnification obligations to PowerScan under the Asset Purchase Agreement 
between PowerScan and Intrafed.

     Also on July 30, 1997, the Company sold its Medical Image Management 
Systems technology, including the Image Management Server and Film Image Scan 
System software, to CompuRAD, Inc. ("CompuRAD"), a publicly-traded company.  
The selling price included 100,000 shares of CompuRAD stock, valued at 
approximately $575,000, and future payments of up to approximately $850,000 
on software sales by CompuRAD of the MIMS technology for a five-year period 
commencing July 30, 1997.  The Company retains the rights to use the 
technology in non-medical imaging markets.
































                                     -5-
<PAGE>
     Item 2. Management's Discussion and Analysis of Results of
             Operations and Financial Condition

     Certain statements in the financial discussion and analysis by 
management contain "forward-looking" information (as defined in the Private 
Securities Litigation Reform Act of 1995) that involve risks and 
uncertainties.  Actual future results and trends may differ materially 
depending on a variety of factors, including the Company's ability to 
successfully complete strategic mergers and acquisitions; the ability to 
bring new products to market; risks of early stages of product development 
including problems, delays, expenses and difficulties, some of which may be 
beyond the Company's control; risks associated with products being 
successfully developed or successfully marketed; product demand and market 
acceptance risks; technological difficulties; the impact of competitive 
products and pricing; and the market strength of the document imaging 
industry.

Corporate Repositioning

     Star Technologies, Inc. ("Star" or the "Company") recently completed a 
transition from providing performance-enhancing computing products and 
solutions for the medical imaging market to providing imaging solutions for 
the document imaging market.  In July 1997, the Company, through a 
newly-created operating subsidiary, PowerScan, Inc. ("PowerScan"), acquired 
document imaging and processing technology and the Company sold its medical 
imaging technology as part of the Company's long-term growth strategy to 
refocus its business from the medical imaging archival market to the broader 
document imaging market.  (See Note 4 to Consolidated Financial Statements.)  
With these transactions, Star is becoming a provider of imaging software 
solutions, principally high-speed, high-volume document capture and 
processing software.  The consolidated statements of operations and 
statements of financial position presented herein do not reflect either of 
these transactions.

     The Company anticipates filing, as an amendment to its Current Report on 
Form 8-K which is being filed with the Securities and Exchange Commission on 
August 14, 1997, pro-forma financial statements that reflect the occurrence 
of the above two transactions as soon as practicable but no later than 
October 13, 1997.  Revenue generated from the acquired technologies during 
the 1996 calendar year totaled $4.1 million.

Results of Operations

     Revenue for the first quarter of fiscal 1998 decreased 76% from the same 
quarter a year ago.  The decrease is primarily attributable to the final 
settlement on a claim, under a long-term subcontract under the U.S. Navy's 
SH-60 program, payment of which was received and recognized as revenue in the 
first quarter of fiscal 1997.

     In June 1997, the Company reduced its workforce by 32%, affecting 
engineering, sales and marketing, customer service and administrative 
departments.  Certain costs associated with the reduction are reflected in 
the first quarter of fiscal 1998.  Resultant cost reductions will be 
reflected beginning in the second quarter of fiscal 1998.

     Research and development ("R&D") expense for the first quarter of fiscal 
1998 decreased 39% from the prior year quarter.  The decrease is primarily 
attributable to reduced staff levels.  Due to the nature of the document 
imaging business, the Company expects R&D expense as a percentage of revenue 
to continue to be a significant operating expense.

                                     -6-
<PAGE>
     Selling, general and administrative ("SG&A") expense for the first 
quarter of fiscal 1998 decreased 27% from the same quarter a year ago 
primarily due to lower legal fees associated with the General Electric 
Medical Systems arbitration.  The Company expects SG&A expense to increase 
over current levels due to the recent technology acquisition.  (See Note 4 to 
Consolidated Financial Statements.)

     During the three-month period ended June 30, 1997 and 1996, the Company 
earned $65,000 and $61,000, respectively, of interest income on its 
short-term investments.  

Liquidity and Capital Resources

     The Company had a net cash outflow from operating activities of $-
698,000 for the quarter ended June 30, 1997, primarily as a result of lower 
levels of revenue.

     The Company does not currently have a line of credit nor has it borrowed 
under any bank agreement since December 1993.  The Company has had sufficient 
cash reserves for its operating needs since that time.  Although the Company 
does not currently need borrowing availability to meet its anticipated 
operating requirements, the Company is beginning discussions with several 
banks regarding potential credit agreement arrangements.  The Company expects 
to have sufficient cash, through its current cash and short-term investment 
position and from operations, to meet its fiscal 1998 operating requirements.  
In the event that the Company requires more funds, there can be no assurance 
that the Company would be successful in raising new capital from external 
sources.

     The Series B and Series C Senior Preferred Stock (the "Preferred Stock") 
currently accrues dividends at a rate of 10% per annum.  To the extent 
declared, such dividends would be payable quarterly in the amount of $50,000 
in cash.  Unpaid cumulative dividends in arrears on the Preferred Stock total 
$175,000 as of June 30, 1997.

Recent Accounting Pronouncement

     In February 1997, the Financial Accounting Standards Board issued 
Statement No. 128, "Earnings per Share" ("Statement 128").  Statement 128 
supersedes Accounting Principles Board Opinion No. 15, "Earnings per Share" 
("APB 15"), and its related interpretations, and promulgates new accounting 
standards for the computation and manner of presentation of earnings (loss) 
per share data.  The Company is required to adopt the provisions of Statement 
128 for the year ending March 31, 1998.  Earlier application is not 
permitted; however, upon adoption the Company will be required to restate the 
previously reported earnings (loss) per share data in accordance with the 
provisions of Statement 128.  The Company does not believe that the adoption 
of Statement 128 will have a material impact on the computation or manner of 
presentation of earnings (loss) per share data.








                                     -7-
<PAGE>

PART II.  OTHER INFORMATION

     Item 1.  Legal Proceedings

     None.

     Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits.

         The exhibits filed herewith or incorporated by reference are set 
         forth on the Exhibit Index immediately preceding the exhibits.

     (b) Reports on Form 8-K.

         No reports on Form 8-K were filed by the Company during the quarter 
         ended June 30, 1997.







































                                     -8-
<PAGE>
                                 SIGNATURES

     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.

                                       STAR TECHNOLOGIES, INC.


Dated:  August 14, 1997                /s/ Brenda A. Potosnak       
                                       Brenda A. Potosnak
                                       Vice President of Finance and
                                       Administration, Secretary, Treasurer,
                                       and Chief Financial Officer











































                                          -9-
<PAGE>
                                EXHIBIT INDEX

    Exhibit
      No.  

      3.1*       Restated Certificate of Incorporation of the Company, as 
                 amended, incorporated by reference from the Company's Annual 
                 Report on Form 10-K for the fiscal year ended March 31, 1988 
                 (Registration No. 0-13318) filed with the Commission on June 
                 29, 1988.

      3.2*       Certificate of Designation, Preferences and Rights of Series 
                 B Senior Preferred Stock and Series C Senior Preferred Stock 
                 ("Certificate of Designation"), incorporated by reference 
                 from the exhibit filing to the Company's Annual Report on 
                 Form 10-K for the fiscal year ended March 31, 1990 
                 (Registration No. 0-13318) filed with the Commission on June 
                 29, 1990.

      3.3*       Certificate of Amendment of Restated Certificate of 
                 Incorporation of the Company, dated August 29, 1994, 
                 incorporated by reference from the Company's Annual Report 
                 on Form 10-K for the fiscal year ended March 31, 1995 
                 (Registration No. 0-13318) filed with the Commission on June 
                 29, 1995.

      3.4*       Certificate of Amendment of Restated Certificate of 
                 Incorporation of the Company, dated August 23, 1996, 
                 incorporated by reference from the exhibit filing to the 
                 Company's Quarterly Report on Form 10-Q for the Quarter 
                 ended September 30, 1996 (Registration No. 0-13318) filed 
                 with the Commission on November 14, 1996.

      3.5*       By-Laws of the Company, as amended and restated on February 
                 24, 1994, and as further amended on August 22, 1996, 
                 incorporated by reference from the exhibit filing to the 
                 Company's Quarterly Report on Form 10-Q for the Quarter 
                 ended September 30, 1996 (Registration No. 0-13318) filed 
                 with the Commission on November 14, 1996.

      4.1*       Restated Certificate of Incorporation, as amended (see 
                 Exhibit 3.1).

      4.2*       Certificate of Amendment of Restated Certificate of 
                 Incorporation (see Exhibit 3.2).

      4.3*       Certificate of Designation (see Exhibit 3.3).

      4.4*       Certificate of Amendment of Restated Certificate of 
                 Incorporation (see Exhibit 3.4).

     10.14*      Asset Purchase Agreement dated July 30, 1997 between 
                 PowerScan, Inc. and Intrafed, Inc., incorporated by 
                 reference from the exhibit filing to the Company's Current 
                 Report on Form 8-K (Registration No. 0-13318) filed with the 
                 Commission on August 14, 1997.

*Incorporated by reference.
                                    -10-

<PAGE>
     10.15*      Employment Agreement dated July 30, 1997 between Star 
                 Technologies, Inc., PowerScan, Inc. and John R. Meshinsky, 
                 incorporated by reference from the exhibit filing to the 
                 Company's Current Report on Form 8-K  (Registration No. 
                 0-13318) filed with the Commission on August 14, 1997.

     10.16*      Technology Purchase Agreement dated July 30, 1997 between 
                 Star Technologies, Inc. and CompuRAD, Inc., incorporated by 
                 reference from the exhibit filing to the Company's Current 
                 Report on Form 8-K (Registration No. 0-13318) filed with the 
                 Commission on August 14, 1997.

      11         Statement Regarding Computation of Per Share Earnings.

      27         Financial Data Schedule.







































*Incorporated by reference.


                                    -11-