UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                          Washington, D. C.  20549
                             _________________
                                 Form 10-Q

[X]Quarterly Report, Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

          For the Quarterly Period Ended September 30, 1997, or

[ ] Transition Report, Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

                  For the Transition Period _____ to_____

                       Commission File Number 2-88617
                             _________________

                     QUESTECH, INC.   
           (Exact name of registrant as specified in its charter)
                             __________________

           Virginia                                 54-0844913              
    (State of Incorporation)            (IRS Employer Identification Number)

7600A Leesburg Pike
Falls Church, Virginia                                 22043                
(Address of principal executive offices)             (Zip Code)

                               (703) 760-1000
             (Registrant's telephone no., including area code)

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 issuer's classes of
common stock, as of the latest practicable date:

          Common Stock, $0.05 par value                     1,617,257     
               Class                                     Outstanding as of
                                                         October 31, 1997


                      QuesTech, Inc. and Subsidiaries


                                 I N D E X

                             September 30, 1997



                                                            Page No.

PART I.   Financial Information

  Item 1  Financial Statements (Unaudited)

     CONDENSED CONSOLIDATED BALANCE SHEETS -
     September 30, 1997 and December 31, 1996                    2

     CONSOLIDATED STATEMENTS OF EARNINGS -
     Three Months ended September 30, 1997 and 1996;
     Nine Months ended September 30, 1997 and 1996               4

     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS -
     Nine Months ended September 30, 1997 and 1996               6

     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY -
     Nine Months ended September 30, 1997                        7

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
     September 30, 1997 and September 30, 1996                   8 

  Item 2  Management's Discussion and Analysis of
          Financial Condition and Results of Operations          9

PART II.  Other Information

  Item 1  Legal Proceedings                                     13

  Item 6  Exhibits and Reports on Form 8K                       13

Officers' Signatures                                            14

  Index to Exhibits                                             15

     EXHIBIT 11 - COMPUTATION OF EARNINGS PER SHARE             16

     EXHIBIT 27 - FINANCIAL DATA SCHEDULE                       17

<TABLE>

                      QuesTech, Inc. and Subsidiaries
   
                   CONDENSED CONSOLIDATED BALANCE SHEETS

                                   ASSETS


                                                  Sept. 30       Dec. 31
                                                     1997          1996 
                                                 (Unaudited)      (Note)
CURRENT ASSETS
  <S>                                           <C>           <C>  
  Cash and cash equivalents ................    $   157,300   $    54,300
  Accounts receivable ......................     11,339,200     9,625,400
  Inventories ..............................         60,400       170,400
  Prepaid expenses and other ...............        145,100       350,200
  Deferred income taxes ....................        900,300       900,300

       Total current assets ................    $12,602,300   $11,100,600


EQUIPMENT AND LEASEHOLD IMPROVEMENTS - at 
  cost less accumulated depreciation and
  amortization of $7,690,500 and $6,967,600,
  respectively .............................      5,404,700     4,952,600

GOODWILL LESS ACCUMULATED AMORTIZATION OF
  $1,687,600 and $1,571,600, respectively ..      1,249,000     1,365,000

DEFERRED INCOME TAXES, net of valuation
  allowance of $262,000 ....................      1,315,600     1,315,600

OTHER ASSETS ...............................      2,764,800     1,884,300

  TOTAL ASSETS                                  $23,336,400   $20,618,100

</TABLE>

The accompanying notes are an integral part of these statements.

NOTE:  The balance sheet at December 31, 1996 has been derived from the
audited financial statements at that date.









                      QuesTech, Inc. and Subsidiaries

                   CONDENSED CONSOLIDATED BALANCE SHEETS

                    LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
                                                  Sept. 30       Dec. 31
                                                    1997           1996 
                                                 (Unaudited)      (Note)
CURRENT LIABILITIES
  <S>                                           <C>           <C>
  Line of Credit ...........................    $ 2,426,900   $ 1,227,400
  Current maturities of long-term
    obligations payable ....................        850,700       374,000
  Accounts payable .........................      2,898,200     1,940,300
  Accrued liabilities ......................      5,361,500     5,627,300
  Income taxes currently payable ...........        233,500           -- 

       Total current liabilities ...........    $11,770,800   $ 9,169,000

LONG-TERM OBLIGATIONS ......................      1,224,000     1,721,800

INDEBTEDNESS TO RELATED PARTIES ............      1,514,100     1,417,100

ACCRUED POST-RETIREMENT BENEFIT COST .......      1,526,100     1,267,300

OTHER LONG-TERM OBLIGATIONS ................        832,600     1,010,500

       Total Liabilities ...................    $16,867,600   $14,585,700

STOCKHOLDERS' EQUITY
  Common stock - authorized 3,000,000
      shares of $.05 par value, issued
      1,656,104 and 1,649,904 shares,
      outstanding 1,617,257 shares and
      1,610,857 shares at September 30, 1997
      and December 31, 1996, respectively ..         82,800        82,500
  Additional paid in capital ...............      2,859,100     2,835,600
  Retained earnings ........................      4,062,900     3,652,000
  Less Treasury Stock at cost ..............       <191,400>     <193,100>
  Due from SECT ............................       <344,600>     <344,600>
       Total Stockholders' Equity ..........    $ 6,468,800   $ 6,032,400

  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $23,336,400   $20,618,100
</TABLE>
The accompanying notes are an integral part of these statements.

NOTE:  The balance sheet at December 31, 1996 has been derived from the
audited financial statements at that date.

                      QuesTech, Inc. and Subsidiaries

              CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

<TABLE>
                                              Three Months Ended Sept. 30,
                                                   1997          1996

<S>                                            <C>           <C>
Revenues ..................................    $19,812,700   $20,377,600

Operating expenses
  Salaries, wages and employee benefits ...     10,186,800     8,563,500
  Other operating expenses ................      9,275,400    11,479,000

        Total operating expenses ..........    $19,462,200   $20,042,500

        Income from operations ............        350,500       335,100
  Other expense ...........................            --            --
  Interest expense ........................       <139,500>     <131,600>

        Earnings before income taxes ......    $   211,000   $   203,500

Provision for income taxes ................        <89,400>      <89,500>

        Net earnings ......................    $   121,600   $   114,000


Earnings per share:

    Primary ...............................    $       .08   $       .08
    Fully diluted .........................    $       .08   $       .08

Weighted average number of common shares
  outstanding:

    Primary ...............................      1,522,791     1,514,753
    Fully diluted .........................      1,522,791     1,517,746

</TABLE>
The accompanying notes are an integral part of these statements.









                      QuesTech, Inc. and Subsidiaries

              CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

<TABLE>
                                              Nine Months Ended Sept. 30,
                                                   1997          1996

<S>                                            <C>           <C>
Revenues ..................................    $58,986,400   $54,718,500

Operating expenses
  Salaries, wages and employee benefits ...     30,844,000    25,023,000
  Other operating expenses ................     26,935,500    28,624,500

        Total operating expenses ..........    $57,779,500   $53,647,500

        Income from operations ............      1,206,900     1,071,000

  Other expense ...........................            --            --
  Interest expense ........................       <493,400>     <369,900>

        Earnings before income taxes ......    $   713,500   $   701,100

Provision for income taxes ................       <302,600>     <308,500>

        Net earnings ......................    $   410,900   $   392,600


Earnings per share:

    Primary ...............................    $       .27   $       .26
    Fully diluted .........................    $       .27   $       .26

Weighted average number of common shares
  outstanding:

    Primary ...............................      1,514,549     1,516,246
    Fully diluted .........................      1,536,361     1,519,542

</TABLE>
The accompanying notes are an integral part of these statements.


                       QuesTech, Inc. and Subsidiaries

        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>

                                                          Nine Months
                                                         Ended Sept. 30  
                                                       1997          1996
Increase <Decrease> in Cash and Cash Equivalents

Cash flows from operating activities:
<S>                                               <C>           <C> 
Net Earnings .................................... $   410,900   $   392,600
Adjustments to reconcile net earnings to
  net cash provided by operating activities:
     Depreciation and amortization ..............     904,400       658,300
     Increase in fund values of non-qualifying
       assets under deferred compensation plans .    <132,400>     <160,100>
     Changes in assets and liabilities ..........     227,500     1,771,400
     Net cash provided by
       operating activities ..................... $ 1,410,400   $ 2,662,200

Cash flows from investing activities:
  Capital expenditures ..........................  <1,656,000>   <2,759,200>
  Other assets ..................................    <492,900>          -- 

     Net cash used in investing activities ...... $<2,148,900>  $<2,759,200>

Cash flows from financing activities:
  Increase in Line of Credit borrowings .........   1,199,500        10,500
  Cash proceeds from exercise of stock options ..      25,600       153,600
  Treasury stock transactions ...................         --         34,200
  Repayment of long-term debt ...................    <303,200>      <42,700>
  Repayment of indebtedness to related parties ..        <600>      <43,400>
  Repayment of other long-term debt .............     <79,800>      <56,600>
    
     Net cash provided by
       financing activities ..................... $   841,500   $    55,600

Net <decrease> in cash .......................... $   103,000   $   <41,400>
Cash, Beginning of period .......................      54,300       178,300

Cash, End of period ............................. $   157,300   $   136,900

     Cash payments for:
       Interest ................................. $   360,900   $   162,500
       Income taxes .............................     133,000       678,900
</TABLE>
The accompanying notes are an integral part of these statements.

                       QuesTech, Inc. and Subsidiaries

        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
<TABLE>

                                                      Nine Months
                                                     Ended Sept. 30 
                                                   1997         1996
Common Stock issued:
  
  <S>                                           <C>          <C> 
  Balance at January 1 ......................   $   82,500   $   78,900
  Exercise of employee stock options ........          300        3,600
    Balance at September 30 .................       82,800       82,500

Additional paid in capital:

  Balance at January 1 ......................    2,835,600    2,720,100
  Exercise of employee stock options ........       23,500       85,500
    Balance at September ....................   $2,859,100   $2,805,600

Retained Earnings:

  Balance at January 1 ......................    3,652,000    2,833,700
  Net Earnings ..............................      410,900      392,600
    Balance at September 30 .................   $4,062,900   $3,226,300

Cost of Treasury Stock:

  Balance at January 1 ......................     <193,100>    <227,300>
  Exercise of employee stock options ........        1,700       34,200
    Balance at September 30 .................   $ <191,400>  $ <193,100> 

Due from SECT:
  Balance at January 1 ......................   $ <344,600>  $ <357,600>
  Exercise of employee stock options ........          --        13,000
    Balance at September 30 .................   $ <344,600>  $ <344,600>

Total Stockholders' Equity ..................   $6,468,800   $5,576,700


</TABLE>


The accompanying notes are an integral part of these statements.




                      QuesTech, Inc. and Subsidiaries

                 Notes to Consolidated Financial Statements
                        September 30, 1997 and 1996
                                (Unaudited)


Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements
have been prepared pursuant to the rules and regulations of the Securities
and Exchange Commission.  Certain information and note disclosures normally
included in the annual financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to those rules and regulations, although the company believes that
the disclosures made are adequate to make the information presented not
misleading.

     In the opinion of management, the accompanying condensed financial
statements reflect all necessary adjustments and reclassifications that are
necessary for fair presentation for the periods presented.  It is suggested
that these condensed financial statements be read in conjunction with the
consolidated financial statements and the notes thereto included in the
company's latest annual report to the Securities and Exchange Commission on
Form 10-K.  The results of operations for the three and nine-month periods
ended September 30, 1997, are not necessarily indicative of the results to
be expected for the full year.

     Certain portions of the 10-Q include forward looking statements within
the meaning of Section 27(a) of the Securities Act of 1933, as amended, and
Section 21(e) of the Securities Exchange Act of 1934, as amended.  Although
management believes that the expectations reflected in certain forward
looking statements contained in the Management's Discussion and Analysis are
based upon reasonable assumptions, it can give no assurance that its
expectations will be realized.

Inventories

     Inventories at September 30, 1997 consist of raw materials (plastics)
stored at the Company's packaging plant in Newports News, Virginia. 
Valuation is based on the lower of cost or market, determined by the use of
the first-in, first-out method.

Earnings Per Share

     Per share earnings are calculated based on weighted average shares.  
Dilutive common stock equivalents consist of previously granted stock
options, with exercise prices between $4.00 and $7.50 per share.  As of
September 30, 1997, a total of 237,000 shares are subject to outstanding
stock option agreements and if dilutive, are accounted for as common stock
equivalents under the treasury stock method.  The bid price of the Company's
stock at September 30, 1997 was $7.25 per share.  Shares held in the
Company's Stock Employee Compensation Trust (SECT), although outstanding,
are excluded from the base of the earnings per share.

Statement of Cash Flows

     For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents.


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


RESULTS OF OPERATIONS

     The following table sets forth the percentages of major items reflected
in the Unaudited Consolidated Statements of Earnings as a percentage of
revenue.
<TABLE>
                                                   Nine Months Ended
                                                     September 30   
                                                   1997         1996

<S>                                               <C>          <C>
Revenues                                          100.00%      100.00%
Operating Expenses                                 97.95        98.04

Income from operations                              2.05%        1.96%
Other Expense                                                      --
Interest                                            <.84>        <.68>
Provision for income taxes                          <.51>        <.56>

     Net Earnings                                    .70%         .72%


</TABLE>







<TABLE>

                                                   Three Months Ended
                                                     September 30   
                                                   1997         1996

<S>                                               <C>          <C>
Revenues                                          100.00%      100.00%
Operating Expenses                                 98.22        98.36

Income from operations                              1.78%        1.64%
Other Expense                                         --           --
Interest                                            <.71>        <.65>
Provision for income taxes                          <.45>        <.43>

     Net Earnings                                    .62%         .56%
</TABLE>

     For the nine months ended September 30, 1997, the Company's revenues
were $59 million, up 7.8% over the same period last year.  Most of the
growth was driven by continued funding on labor-intensive task order
contracts within the government contracting business units, QuesTech
Research Division ("QTRD") and QuesTech Service Company ("QTSC").  Revenues
from pass-through costs in proportion to total revenues declined, when
compared with the same period last year.  Although most of the revenues
continued to be provided by QTRD, QTSC's percentage share of revenues
doubled compared to the same period last year.  Sales from QuesTech
Packaging, Inc. ("QTPI") consisted primarily of reimbursements for product
development samples and were not material to the operations.  Recently, it
received an initial award of approximately $600,000 to perform on an Army
Dual Use Appropriation Program ("DUAP").  The contract calls for the design,
development and testing of a polymeric tray kit for the U.S. Army Soldier
Systems Command.  Sales are not expected to materialize until the fourth
quarter.  Additionally, QTPI was notified by a Fortune 500 company of the
availability of funding for a proposed production contract, which if
consummated, will generate additional sales in 1998.  Consolidated operating
expenses rose by 7.7% over the same period last year, primarily as a result
of increased direct labor performance on government contracts.  Income from
operations was $1.2 million, up 12.7% over the same period last year. 
Margins were favorably impacted by reduced losses at QTPI and contract cost
recoveries.

     For the quarter ended September 30, 1997, the Company had $19.8 million
in revenues, down 2.77% from last year's third quarter as a result of
reduced activities from materials-intensive contracts.  Within the
government contracting industry, revenues are commonly impacted by changes
in the customers' resource requirements.  Revenues and margins can fluctuate
based on the mix of direct labor and materials required on contracts. 
Operating expenses for the third quarter ended September 30, 1997, declined
2.9%, when compared with the same period last year, with most of the
decrease attributed to reduced contractual requirements for direct
subcontracts and materials.  At $350,500, income from operations for the
third quarter this year, reflected a modest 4.6% increase over last year's
quarter, as the Company benefited from improved margins on certain labor-
intensive task order contracts.

     Despite the increased interest costs associated with the long-term
financing of QTPI's plant equipment, pre-tax income showed some improvement
at $211,000 and $713,500 for the third quarter and the nine months ended
September 30, 1997, up 3.7% and 1.8% respectively when compared to the same
periods last year.

     Net earnings were $121,600 and $410,900 for the quarter and the nine-month
period, up 6.7% and 4.7%, respectively over comparable periods last
year.  Improved contract margins provided impetus to net earnings during the
three months just ended.

LIQUIDITY AND SOURCES OF CAPITAL

     The following table sets forth certain financial data with respect to
changes in the Company's liquidity and capital resources since December 31,
1996:
<TABLE>
                             9/30/97       12/31/96      NET CHANGES

<S>                          <C>           <C>             <C>
Working capital              $   831,500   $ 1,931,600     $<1,100,100>     
Current assets                12,602,300    11,100,600       1,501,700
Current liabilities           11,770,800     9,169,000      <2,601,800
Working capital ratio (1)           1.07          1.21            <.14>
</TABLE>

(1)  Current assets over current liabilities.

     During the nine months ended September 30, 1997, the Company's main
sources of cash were cash flows from operations and borrowings against its
line of credit facility.  Funds from these sources were used to pay down
long-term borrowings and to finance capital investments.  Capital
investments reflect the Company's continued commitment to leading edge
technology in connection with the development of its wide area network and
information systems.  Additionally, the Company has acquired certain real
estate associated with the recent relocation of certain of its key employees
to the New Jersey facility.  The relocation efforts were necessitated by the
closing of the Vint Hill Farms base and the Company's utilization of
available resources to support the follow-on Army contract ("TEFS") based at
Fort Monmouth.

     Subsequent to the date of the financial statements, the Company lost a
recompete of a major U. S. Army contract ("HTRD") which currently provides
10% of its total revenues.  Efforts on the subject contract are expected to
wind down by mid-year 1998.  During the third quarter, the Company has
stepped up B&P efforts and is actively pursuing large bids requiring its
core competencies.  Management is unable to provide assurance on the outcome
of its efforts.

     Currently, management is exploring more favorable financing terms to
reduce its interest cost on its borrowings.

     Forward looking statements contained in this report are made pursuant
to the safe harbor provisions of the Private Securities Litigation Report
Act of 1995.  Certain factors could cause actual results to differ
materially from the statements.  These factors include but are not limited
to: continuity of contract funding and customer relationships; retention of
key personnel, particularly those involved in technical efforts; interest
rates; changes in technology; and potential impact of industry
consolidation.

INFLATION

     The impact of inflation on the Company's costs should be minimal due to
the fact that increased costs of this type are normally included in the
pricing structure or otherwise recovered through reimbursement of contract
costs incurred.

BACKLOG

     The term "backlog" includes the aggregate contract revenues remaining
to be earned at the stated time, to the extent of the value of the
underlying contract award.  Virtually all of the Company's backlog is
expected to be completed within five years.  The following table reflects
the Company's funded and unfunded backlog as of September 30, 1997 and
September 30, 1996.

                Funded Backlog                 Unfunded Backlog
                 September 30                    September 30
              1997          1996              1997          1996

          $26,288,900   $38,837,400      $359,803,400  $389,387,500

The term "funded" refers to that portion of aggregate contract revenues
remaining to be earned which is covered by funding appropriations and
allotments to the contract by the procuring agency.  The term "unfunded"
refers to the excess of the value of the contract award over the funded
value.  Management does not provide any assurance that its customers will
authorize funding amounts in addition to funding commitments existing as of
the period just ended.




                                  PART II


Item 1.  Legal Proceedings

     The Company, including its subsidiaries, are not subject to any
material pending legal proceedings, and none of the assets of the Company or
its subsidiaries are subject to any such proceedings, other than routine
litigation, if any, incidental to the business and against which the Company
is either adequately insured, or which is not material.


Item 6.  Exhibits and Reports on Form 8-K.

         (a)   Exhibits required in connection with this quarterly report on
               Form 10-Q are listed in the Exhibit Index following the
               signature page.  Certain of such exhibits, which have
               heretofore been filed with the Securities and Exchange
               Commission and which are designated by reference to their
               exhibit numbers in prior filings, are incorporated herein as
               exhibits by such reference and made a part hereof.

         (b)   No reports on Form 8-K were filed during the quarter ended
               September 27, 1997.
                              
                              S.E.C. FORM 10-Q

                             September 30, 1997


     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.


                                               QUESTECH, INC.           
                                                (Registrant)
             



Date:  ______________________           ________________________________
                                          Vincent L. Salvatori 
                                          Chairman of the Board and
                                          Chief Executive Officer



Date:  ______________________           ________________________________
                                          Joseph P. O'Connell, Jr.
                                          Vice President and
                                          Chief Financial Officer





















                             INDEX TO EXHIBITS

                                                                Sequential  
Exhibit No.      Description                                    page numbers

 3.3           Articles of Incorporation and Bylaws,
               filed on December 27, 1983 with the Company's
               Registration Statement on Form S-1 are
               incorporated herein by reference.                      *

 3.4           None.                                                  *

 3.9           None.                                                  *

10.a           Stock Option Plans.                                    *

10.a.i         1996 Stock Option Plan.                                *

10.a.ii        Stock Option Plan for Non-employee Directors.          *

10.b           Agreement dated between Vincent L. Salvatori
               and QuesTech.                                          *

10.c           Agreement dated between Gerald F. Mayefskie
               and QuesTech.                                          *

10.d           Confidential Settlement Agreement dated
               February 2, 1994 between William E. Bigler, Jr.
               and Jerome M. Raffel and QuesTech, Inc.
               (redacted in part).                                    *

10.e           Confidential Settlement Agreement with Oscar E.
               Hayes, dated August, 1995.                             *

10.t           Amended Loan and Security Agreement between the
               Company and Signet Bank of Virginia dated
               May 31, 1997.                                          *

11             Statement Re: Computation of Earnings Per Share       17

27             Financial Data Schedule                               18




*Previously filed, incorporated herein by reference.