<PAGE 1>

              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 April 30, 1997

                                    OR

 (   )    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 1-9618

                 NAVISTAR  INTERNATIONAL  CORPORATION
                 ------------------------------------
      (Exact name of registrant as specified in its charter)
  
             Delaware                                  36-3359573
  ------------------------------                 ------------------- 
  (State or other jurisdiction of                 (I.R.S. Employer
  incorporation or organization)                 Identification No.)

455 North Cityfront Plaza Drive, Chicago, Illinois       60611
--------------------------------------------------     ---------
 (Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code (312) 836-2000

     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
and (2) has been subject to such filing requirements
for the past 90 days.  Yes   X    No
                           -----     -----

               APPLICABLE ONLY TO ISSUERS INVOLVED
                IN BANKRUPTCY PROCEEDINGS DURING
                    THE PRECEDING FIVE YEARS:

     Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes          No
    -----       -----

              APPLICABLE ONLY TO CORPORATE ISSUERS:

     As of June 9, 1997, the number of shares outstanding of the
registrant's common stock was 49,335,410 and the Class B Common 
was 23,674,846.
<PAGE>
         <PAGE 2>




                    NAVISTAR INTERNATIONAL CORPORATION
                      AND CONSOLIDATED SUBSIDIARIES
                      -----------------------------


                                  INDEX
                                  -----
                                                             Page
                                                           Reference
                                                           ---------

Part I.  Financial Information:

  Item 1.  Financial Statements:

  Statement of Income --
    Three Months and Six Months
      Ended April 30, 1997 and 1996 ......................        3

  Statement of Financial Condition --
      April 30, 1997, October 31, 1996 and April 30, 1996.        4

  Statement of Cash Flow --
      Six Months Ended April 30, 1997 and 1996 ...........        5

  Notes to Financial Statements ..........................        6

  Item 2.  Management's Discussion and Analysis
           of Results of Operations and Financial Condition      12

Part II. Other Information:

  Item 1.  Legal Proceedings ..............................      18

  Item 6.  Exhibits and Reports on Form 8-K ...............      18

  Signature ...............................................      19

Exhibit 11 ................................................     E-1
<PAGE>
         <PAGE 3>
                       PART I - FINANCIAL INFORMATION
                       ------------------------------
 <TABLE>
 <CAPTION>
 ITEM 1.  Financial Statements
 
 STATEMENT OF INCOME (Unaudited)
 ------------------------------------------------------------------
 Millions of dollars, except per share data
 ------------------------------------------------------------------
                         Navistar International Corporation
                             and Consolidated Subsidiaries
                    -----------------------------------------------
                     Three Months Ended            Six Months Ended
                         April 30                      April 30
                    -------------------            ----------------
                     1997         1996              1997      1996
                    ------       ------            ------    ------
<S>                 <C>          <C>               <C>       <C>
Sales and revenues
Sales of
  manufactured
  products .......  $1,493       $1,423            $2,733    $2,785
Finance and
  insurance
  revenue ........      43           46                88       101
Other income .....      15           11                26        26
                    ------       ------            ------    ------
  Total sales
    and revenues.    1,551        1,480             2,847     2,912
                    ------       ------            ------    ------
Costs and expenses 
Cost of products
  and services sold  1,292        1,230             2,368     2,429
Postretirement
  benefits ......       57           54               108       111
Engineering and
  research expense      32           35                62        64
Marketing and
  administrative
  expense .......       87           75               170       148
Interest expense.       20           23                37        41
Financing charges
  on sold
  receivables ...        5            7                12        16
Insurance claims
  and underwriting
  expense .......        9           14                17        26
                    ------       ------            ------    ------
  Total costs
    and expenses.    1,502        1,438             2,774     2,835
                    ------       ------            ------    ------
    Income before
      income taxes      49           42                73        77
    Income tax
      expense ...       19           16                28        29
                    ------       ------            ------    ------
Net income ......       30           26                45        48

Less dividends
  on Series G
  Preferred stock        7            7                14        14
                    ------       ------            ------    ------
Net income
  applicable to
  common stock ..   $   23       $   19            $   31    $   34
                    ======       ======            ======    ======
Net income
  per common share  $  .31       $  .26            $  .41    $  .46
                    ======       ======            ======    ======
Average number
  of common and
  dilutive
  common
  equivalent
  shares
  outstanding
  (millions) ..       73.7         73.8             73.7       73.8
<FN>
See Notes to Financial Statements.
</TABLE>
<PAGE>
         <PAGE 4>
<TABLE>
<CAPTION>
STATEMENT OF FINANCIAL CONDITION (Unaudited)
-------------------------------------------------------------------
Millions of dollars
-------------------------------------------------------------------
                               Navistar International Corporation
                                  and Consolidated Subsidiaries
                            ---------------------------------------
                               April 30     October 31     April 30
                                 1997          1996          1996
-------------------------------------------------------------------
<S>                           <C>             <C>            <C>
ASSETS
----------------------------
Cash and cash equivalents ..  $  237          $  487         $  223
Marketable securities ......     533             394            528
                              ------          ------         ------
                                 770             881            751
Receivables, net ...........   1,618           1,655          1,805
Inventories ................     473             463            600
Property, net of accumulated
  depreciation and
  amortization of $869, $842
  and $803 .................     748             770            703
Investments and other assets     333             213            235
Intangible pension assets ..     267             314            284
Deferred tax asset, net ....     995           1,030          1,065
                              ------          ------         ------
Total assets ...............  $5,204          $5,326         $5,443
                              ======          ======         ======
LIABILITIES AND
  SHAREOWNERS' EQUITY
----------------------------
Liabilities
Accounts payable,
  principally trade ........  $  907          $  820         $  870
Debt:
  Manufacturing operations .     109             115            125
  Financial services
    operations .............   1,213           1,305          1,379
Postretirement benefits
  liability ................   1,200           1,351          1,300
Other liabilities...........     816             819            871
                              ------          ------         ------
    Total liabilities ......   4,245           4,410          4,545
                              ------          ------         ------
Commitments
  and contingencies

Shareowners' equity
Series G convertible
  preferred stock
  (liquidation
   preference
  $240 million) ............      240            240            240
Series D convertible junior
  preference stock
  (liquidation
  preference $4 million) ...        4              4              4
Common stock
  (51.0 million shares
   issued) .................    1,642           1,642         1,641
Class B Common stock
  (24.3 million shares
   issued) .................      491             491           491
Retained earnings (deficit)-
  balance accumulated after
  the deficit
  reclassification
  as of October 31, 1987 ...   (1,388)         (1,431)       (1,448)
Common stock held in
  treasury, at cost ........      (30)            (30)          (30)
                               ------          ------        ------
    Total shareowners'
      equity ...............      959             916           898
                               ------          ------        ------
Total liabilities
  and shareowners' equity ..   $5,204          $5,326        $5,443
                               ======          ======        ======
<FN>
See Notes to Financial Statements.
</TABLE>
<PAGE>
          <PAGE 5>
 <TABLE>
 <CAPTION> 
 STATEMENT OF CASH FLOW (Unaudited)
 ------------------------------------------------------------------
 For the Six Months Ended April 30 (Millions of dollars)
 ------------------------------------------------------------------
                                           Navistar International
                                              Corporation and
                                          Consolidated Subsidiaries
                                          -------------------------
                                            1997             1996
                                           ------           ------
<S>                                        <C>             <C>   
Cash flow from operations
Net income ............................    $   45          $   48
Adjustments to reconcile net income
  to cash used in operations:
  Depreciation and amortization .......        60              55
  Deferred income taxes ...............        26              26
  Other, net ..........................       (18)             (4)
Change in operating assets
  and liabilities:
    Receivables .......................       (63)             63
    Inventories .......................       (18)           (184)
    Prepaid and other current assets ..        (4)            (22)
    Accounts payable ..................        93             (59)
    Other liabilities .................      (126)           (143)
                                           ------          ------
Cash used in operations ...............        (5)           (220)
                                           ------          ------
Cash flow from investment programs
Purchase of retail notes
  and lease receivables ...............      (445)           (576)
Collections/sales of retail notes
   and lease receivables ..............       518             561
Purchase of marketable securities .....      (332)           (378)
Sales or maturities of
  marketable securities ...............       195             399
Capital expenditures ..................       (58)            (55)
Other investment programs, net ........       (12)            (13)
                                           ------          ------
Cash used in investment programs ......      (134)            (62)
                                           ------          ------
Cash flow from financing activities
Issuance of debt ......................        79               -
Principal payments on debt ............       (18)             (8)
Net increase (decrease) in notes
  and debt outstanding under bank
  revolving credit facility and
  asset-backed and other commercial
  paper programs ......................      (158)             42   
Dividends paid ........................       (14)            (14)
                                           ------          ------
Cash provided by (used in)
  financing activities ................      (111)             20
                                           ------          ------
Cash and cash equivalents
  Decrease during the period ..........      (250)           (262)
  At beginning of the year ............       487             485
                                           ------          ------
Cash and cash equivalents
  at end of the period.................    $  237          $  223
                                           ======          ======
<FN>
See Notes to Financial Statements.
</TABLE>
<PAGE>
         <PAGE 6>

    Navistar International Corporation and Consolidated Subsidiaries
              Notes to Financial Statements  (Unaudited)

Note A.  Summary of Accounting Policies

     Navistar International Corporation is a holding company whose
principal operating subsidiary is Navistar International
Transportation Corp. (Transportation).  As used hereafter, "company"
refers to Navistar International Corporation and its consolidated
subsidiaries.  The consolidated financial statements include the
results of Transportation's manufacturing operations and its wholly
owned financial services subsidiaries.  The effects of transactions
between the manufacturing and financial services operations have
been eliminated to arrive at the consolidated totals.

     The accompanying unaudited financial statements have been
prepared in accordance with accounting policies described in the
1996 Annual Report on Form 10-K and should be read in conjunction
with the disclosures therein. 

     In the opinion of management, these interim financial
statements reflect all adjustments, consisting of normal recurring
accruals, necessary to present fairly the financial position,
results of operations and cash flow for the periods presented. 
Interim results are not necessarily indicative of results for the
full year.  Certain 1996 amounts have been reclassified to conform
with the presentation used in the 1997 financial statements. 

Note B.  Supplemental Cash Flow Information

     Consolidated interest payments during the first six months of
1997 and 1996 were $37 million and $40 million, respectively.  No
consolidated tax payments were made during the first six months of
1997 and $3 million were made during the first six months of  1996.

Note C.  Income Taxes

     The benefit of Net Operating Loss (NOL) carryforwards is
recognized as a deferred tax asset in the Statement of Financial
Condition, while the Statement of Income includes income taxes
calculated at the statutory rate.  The amount reported does not
represent cash payment of income taxes except for certain state
income, foreign withholding and federal alternative minimum taxes
which are not material.  In the Statement of Financial Condition,
the deferred tax asset is reduced by the amount of deferred tax
expense or increased by a deferred tax benefit recorded during the
year.  Until the company has utilized its significant NOL
carryforwards, the cash payment of federal income taxes will be
minimal. 

Note D.  Receivables

     On January 1, 1997, the company adopted Statement of Financial
Accounting Standards No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities"
for all applicable transactions.  As a result, certain 1997 balance
sheet items have been reclassified.  Restatement of prior periods is
not permitted.  The new standard did not have a material effect on
the company's net income or financial position.
<PAGE>
         <PAGE 7>

   Navistar International Corporation and Consolidated Subsidiaries
             Notes to Financial Statements  (Unaudited)

Note E.  Inventories

     Inventories are as follows: 

                               April 30     October 31     April 30
Millions of dollars              1997          1996          1996
-------------------------------------------------------------------
Finished products ........      $   238       $   242       $   295
Work in process ..........          101            97           148
Raw materials and supplies          134           124           157
                                -------       -------       -------
Total inventories ........      $   473       $   463       $   600 
                                =======       =======       =======

Note F.  Financial Instruments

     The company purchases collateralized mortgage obligations
(CMOs) that have predetermined fixed-principal payment patterns
which are relatively certain.  These instruments totaled $33 million
at April 30, 1997.

     During March through April 1997, Navistar Financial Corporation
(NFC) entered into $500 million of forward interest rate lock
agreements on a U.S. Treasury security maturing in 1999 related to
NFC's May 1997 sale of retail receivables. These hedge agreements
were closed in conjunction with the pricing of the sale.  The loss,
which was not material, was deferred at April 30, 1997, and included
in the gain on the sale of $500 million of retail notes in May 1997.

     In April 1997, NFC entered into a $100 million forward interest
rate lock agreement on a U.S. Treasury security maturing in 2002
related to NFC's May 1997 subordinated debt issue.  The hedge
agreement was closed in conjunction with the pricing of the
subordinated debt, and the loss, which was not material, will be
amortized over the life of the subordinated debt.

     In May 1997, NFC entered into a $50 million forward starting
swap agreement on a U.S. Treasury security maturing in 1999 related
to NFC's anticipated November 1997 sale of retail receivables.  This
swap agreement starts on October 31, 1997.  NFC  intends to sell
this position in October 1997 on the pricing date of the sale.  The
gain or loss which will result from the swap transaction will be
included in the gain or loss recognized on the sale of receivables. 

     During May 1997, NFC sold $100 million of Senior Subordinated
Notes due 2002. NFC used the net proceeds to repurchase $6 million
of its outstanding 1998 Notes and to reduce outstanding indebtedness
under the Bank Revolving Credit Facility. 
<PAGE>
         <PAGE 8>

    Navistar International Corporation and Consolidated Subsidiaries
              Notes to Financial Statements  (Unaudited)

Note G.  Environmental Matters

     In the fourth quarter of 1994, Transportation recorded a charge
for potential clean-up costs related to two formerly owned
businesses, Wisconsin Steel and Solar Turbines, Inc. (Solar), as
disclosed in Note 4 to the company's Annual Report on Form 10-K.

     In March 1997, the U.S. Department of Justice and
Transportation approved the final consent decree in settlement of a
dispute related to the Wisconsin Steel property.  In June 1997, the
company paid  $11 million  to the Economic Development
Administration in settlement of various commercial issues and past
environmental costs which is consistent with the company's estimate
of the anticipated clean-up costs of the Wisconsin Steel and Solar
sites reported at October 31, 1996.

Note H.  New Pronouncements

     In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128,
"Earnings Per Share."  This statement specifies the computation,
presentation and disclosure requirements for earnings per share and
is effective for financial statements issued for periods ending
after December 15, 1997, including interim periods.  The standard is
not expected to have a material effect on the company's net income
per common share computation. 
<PAGE>
         <PAGE 9>

    Navistar International Corporation and Consolidated Subsidiaries
              Notes to Financial Statements  (Unaudited)

Note I.  Supplemental Financial Information
      
<TABLE>
<CAPTION>
Navistar International Corporation
(with financial services operations on an equity basis)
in millions of dollars:

                     Three Months Ended            Six Months Ended
                         April 30                      April 30
                    -------------------           ------------------
<S>                 <C>           <C>             <C>         <C>
Condensed
Statement
of Income            1997         1996             1997        1996
---------------     ------       ------           ------      ------
Sales of
  manufactured
  products .....    $1,493       $1,423           $2,733      $2,785
Other income ...        14            8               24          23
                    ------       ------           ------      ------
Total sales
  and revenues .     1,507        1,431            2,757       2,808
                    ------       ------           ------      ------
Cost of
  products sold      1,287        1,228            2,358       2,424
Postretirement
  benefits  ....        57           54              108         111
Engineering and
  research expense      32           35               62          64
Marketing and
  administrative
  expense               78           67              154         132
Other expenses ..       20           21               41          43
                    ------       ------           ------      ------
Total costs
  and expenses ..    1,474        1,405            2,723       2,774
                    ------       ------           ------      ------
Income before
  income taxes
    Manufacturing
    operations ..       33           26               34          34
    Financial
    services
    operations          16           16               39          43
                    ------       ------           ------      ------
    Income before
      income taxes      49           42               73          77
Income tax expense      19           16               28          29
                    ------       ------           ------      ------

Net income .......  $   30       $   26           $   45      $   48
                    ======       ======           ======      ======
</TABLE>
<PAGE>
         <PAGE 10>

    Navistar International Corporation and Consolidated Subsidiaries
              Notes to Financial Statements  (Unaudited)

Note I.  Supplemental Financial Information (continued)
      
<TABLE>
<CAPTION>
Navistar International Corporation
(with financial services operations on an equity basis)
in millions of dollars:


Condensed Statement            April 30     October 31     April 30
of Financial Condition           1997          1996          1996
-------------------------------------------------------------------
<S>                            <C>           <C>           <C>  
Cash, cash equivalents
  and marketable
  securities ...............   $   610       $   707       $   589
Receivables, net ...........       264           181           178
Inventories ................       473           463           600
Property and equipment, net.       637           666           647
Equity in financial
  services subsidiaries ....       306           306           297
Other assets ...............       516           462           464
Deferred tax asset, net ....       995         1,030         1,065
                               -------       -------       -------
     Total assets ..........   $ 3,801       $ 3,815       $ 3,840
                               -------       -------       -------

Accounts payable,
  principally trade ........   $   862       $   771       $   806
Debt .......................       109           115           125
Postretirement benefits
  liabilities ..............     1,192         1,344         1,293
Other liabilities ..........       679           669           718
Shareowners' equity ........       959           916           898
                               -------       -------       -------
     Total liabilities
       and shareowners'
       equity ..............   $ 3,801       $ 3,815       $ 3,840
                               =======       =======       =======
</TABLE>
<PAGE>
         <PAGE 11>

    Navistar International Corporation and Consolidated Subsidiaries
              Notes to Financial Statements  (Unaudited)

Note I.  Supplemental Financial Information (continued)
      
<TABLE>
<CAPTION>
Navistar International Corporation
(with financial services operations on an equity basis)
in millions of dollars:

                                                Six Months Ended
                                                    April 30
                                              --------------------
Condensed Statement of Cash Flow                1997        1996
-------------------------------------------   --------    --------
<S>                                           <C>         <C>  
Cash flow from operations
Net income ................................   $     45    $     48
Adjustments to reconcile net income
  to cash provided by (used in) operations:
     Depreciation and amortization ........         49          47
     Equity in earnings of nonconsolidated
       companies, net of dividends received          6         (17)
     Deferred income taxes  ...............         26          26
     Other, net ...........................         (6)          4
Change in operating assets and liabilities.        (44)       (290)
                                              --------    --------
Cash provided by (used in) operations .....         76        (182)
                                              --------    --------

Cash flow from investment programs
Purchase of marketable securities .........       (280)       (332)
Sales or maturities of marketable securities       134         349
Capital expenditures ......................        (58)        (55)
Advance to Navistar Financial Corporation .        (98)        (29)
Other investment programs, net ............          4           6
                                              --------    --------

Cash used in investment programs ..........       (298)        (61)
                                              --------    --------
 
Cash flow used in financing activities ....        (21)        (22)
                                              --------    --------

Cash and cash equivalents
Decrease during the period ................       (243)       (265)
At beginning of the year ..................        452         461
                                              --------    --------

Cash and cash equivalents
   at end of the period ...................   $    209    $    196
                                              ========    ========
</TABLE>
<PAGE>
         <PAGE 12>

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
        OF OPERATIONS AND FINANCIAL CONDITION

RESULTS OF OPERATIONS

     Certain statements under this caption constitute "forward-
looking statements" under the Reform Act, which involve risks and
uncertainties.  Navistar International Corporation's actual results
may differ significantly from the results discussed in such forward-
looking statements.  Factors that might cause such a difference
include, but are not limited to, those discussed under the heading
"Business Environment."

     Second Quarter Ended April 30, 1997
     -----------------------------------

     The company reported net income of $30 million, or $0.31 per
common share for the second quarter ended April 30, 1997, compared
with net income of  $26 million, or $0.26 per common share for the
comparable quarter last year.

     The company's manufacturing operations reported income before
income taxes of $33 million compared with pretax income of $26
million in the second quarter of 1996 reflecting continued strong
demand for mid-range diesel engines.  The financial services
operations' pretax income for the second quarter of 1997 was $16
million, unchanged from the same period in 1996.

Sales and Revenues.  Second quarter 1997 industry retail sales of
Class 5 through 8 trucks totaled 86,800 units, equal to the number
of units sold during this period in 1996.  Class 8 heavy truck sales
of 48,500 units during the second quarter of 1997 were two percent
lower than the 1996 level of 49,700 units.  Industry sales of Class
5, 6 and 7 medium trucks, including school buses, increased three
percent to 38,300 units.  Industry sales of school buses, which
accounted for 18 percent of the medium truck market, decreased four
percent.

     Sales and revenues for the second quarter of 1997 totaled
$1,551 million, five percent higher than the $1,480 million reported
for the comparable quarter in 1996.  Sales of trucks, mid-range
diesel engines and service parts for the second quarter of 1997
totaled $1,493 million compared with $1,423 million reported for the
same period in 1996.

     The company maintained its position as sales leader in the
combined United States and Canadian Class 5 through 8 truck market
with a 27.1 percent market share for the second quarter of 1997, a
slight decrease from the market share reported in 1996.  (Sources:
American Automobile Manufacturer's Association, the United States
Motor Vehicle Manufacturer's Association and R.L. Polk & Company.)
<PAGE>
         <PAGE 13>

     Shipments of mid-range diesel engines by the company to other
original equipment manufacturers during the second quarter of 1997
totaled 48,300 units, a 19 percent increase from the same period of
1996.  Higher shipments to a domestic automotive manufacturer to
meet consumer demand for the light trucks and vans which use this
engine was the primary reason for the increase.

     Service parts sales of $203 million in the second quarter of
1997 increased four percent from the prior year's level.

     Finance and insurance revenue was $43 million in the second
quarter of 1997 slightly lower than in 1996 primarily as a result of
a decline in wholesale note revenue.

Costs and expenses.  Manufacturing gross margin was 13.8 percent of
sales for the second quarter of 1997 compared with 13.7 percent for
the same period in 1996.  Consolidated marketing and administrative
expense increased to $87 million in 1997 from $75 million in the
second quarter of 1996 reflecting investment in the implementation
of the company's strategy to reduce costs and complexity in its
manufacturing processes.

     Six Months Ended April 30, 1997
     -------------------------------

     Pretax income for the first six months of 1997 was $73 million
compared with $77 million reported for the same period of 1996.  The
company's manufacturing operations reported income before income
taxes of $34 million during this period, equal to the amount
reported in 1996.  The financial services operations' pretax income
for the first six months of 1997 was $39 million, a decline from the
$43 million reported in 1996.  This change is a result of lower
income on sales of retail receivables and a lower volume of
wholesale financing.

     Manufacturing operations' sales and revenues during this period
totaled $2,757 million, slightly lower than in 1996.  During the
first six months of 1997, sales of trucks declined six percent while
sales of diesel engines to original equipment manufacturers
increased ten percent. Service parts sales were five percent higher
than in the same period of 1996.  Finance and insurance revenue was
$88 million during the first two quarters of 1997 compared with $101
million in 1996.

     Industry retail sales of Class 5 through 8 trucks during the
first six months of 1997 totaled 159,000 units, a decrease from the
167,600 units sold during this period in 1996.  The company remained
the sales leader in the combined United States and Canadian Class 5
through 8 truck market for the first two quarters of the year with a
26.8 percent market share, an increase over the 26.2 percent market
share reported for the same period last year.
<PAGE>
         <PAGE 14>

     Manufacturing gross margin for the first six months of 1997 was
13.7 percent compared with 13.0 percent in 1996.  The increase in
gross margin reflects improved operating performance and pricing. 
Consolidated marketing and administrative expense was $170 million
during this period compared with $148 million during the first two
quarters of 1996.  The factors which influenced this expense during
the second quarter of 1997 were also responsible for the change
during the first half of the year.

Liquidity and Capital Resources

     Cash flow is generated from the manufacture and sale of trucks,
mid-range diesel engines and service parts as well as product
financing and insurance coverage provided to the company's dealers
and retail customers by the financial services operations.

     Historically, funds to finance the company's products are
obtained from a combination of commercial paper, short- and long-
term bank borrowings, medium- and long-term debt issues, sales of
finance receivables and equity capital.  NFC's current debt ratings
have made bank borrowings and sales of finance receivables the most
economic sources of cash.  Insurance operations are funded through
internal operations.

     Total cash, cash equivalents and marketable securities of the
company amounted to $770 million at April 30, 1997, $881 million at
October 31, 1996 and $751 million at April 30, 1996.

     Cash used in operations during the first six months of 1997
totaled $5 million primarily from a net change in operating assets
and liabilities of $118 million offset by net income of $45 million
and $68 million of other noncash items, principally depreciation. 
The net change in operating assets and liabilities includes a $93
million increase in payables offset by a slight increase in
inventory, a $63 million increase in receivables and a $126 million
decline in other liabilities.  The change in other liabilities
includes the company's contribution of $109 million to its hourly
and salaried pension plans in the second quarter.  This contribution
is in addition to the $105 million that the company contributed in
the first quarter of 1997.

     Investment programs used $134 million in cash reflecting a net
increase in marketable securities of $137 million and a net decrease
in retail notes and lease receivables of $73 million. In addition,
$58 million was used to fund capital expenditures for construction
of a truck assembly facility in Mexico, to increase mid-range diesel
engine capacity, and for truck product improvements.

     Financing activities used cash to reduce notes and debt
outstanding under the bank revolving credit facility and asset-
backed and other commercial paper program by $158 million offset by
a $79 million increase in debt and to pay $14 million in dividends
on the Series G Preferred shares.
<PAGE>
         <PAGE 15>

     Receivable sales were a significant source of funding in 1997
and 1996.  During the first six months of 1997 and of 1996, NFC sold
$487 million and $525 million, respectively, of retail notes through
Navistar Financial Retail Receivables Corporation (NFRRC).  NFRRC
has filed registration statements with the Securities and Exchange
Commission which provide for the issuance of up to $5,000 million of
asset-backed securities.  At April 30, 1997, the remaining shelf
registration available to NFRRC was $1,973 million.

     During March through April 1997, NFC entered into $500 million
of forward interest rate lock agreements on a U.S. Treasury security
maturing in 1999 related to the May 1997 sale of retail receivables.
These hedge agreements were closed in conjunction with the pricing
of the sale.

     During May 1997, NFC sold $500 million of retail notes,
realizing net proceeds of $499 million which were used for general
working capital purposes.  A gain of approximately $6 million was
recognized on the sale.

     In May 1997, NFC entered into a $50 million forward starting
swap agreement on a U.S. Treasury security maturing in 1999 related
to the anticipated November 1997 sale of retail receivables.  This
swap agreement starts on October 31, 1997 and NFC  intends to sell
this position in October 1997 on the pricing date of the sale. 

     NFC also utilizes a $400 million revolving wholesale note trust
that provides for the continuous sale of eligible wholesale notes on
a daily basis.  The trust is comprised of two $100 million tranches
of investor certificates maturing serially from 1997 to 1999 and a
$200 million tranche maturing in 2004. 

     At April 30, 1997, available funding under NFC's amended and
restated credit facility and the asset-backed commercial paper
facility was $440 million, of which $145 million was used to back
short-term debt at April 30, 1997.  The remaining $295 million, when
combined with unrestricted cash and cash equivalents made $298
million available to fund the general business purposes of NFC at
April 30, 1997.

     In April 1997, NFC entered into a $100 million forward interest
rate lock agreement on a U.S. Treasury security maturing in 2002
related to the May 1997 subordinated debt issue.  The hedge
agreement was closed in conjunction with the pricing of the
subordinated debt.

     During May 1997, the NFC sold $100 million of Senior
Subordinated Notes due 2002. NFC used the net proceeds to repurchase
$6 million of its outstanding 1998 Notes and to reduce outstanding
indebtedness under the Bank Revolving Credit Facility.
<PAGE>
         <PAGE 16>

     The company had outstanding capital commitments of $128 million
at April 30, 1997, which consist of truck and engine development,
ongoing facility maintenance programs and construction of a plant in
Mexico. In November 1996, the company announced plans to spend $167
million, over the next two years, to construct this new truck
assembly facility in Mexico.

     It is the opinion of management that, in the absence of
significant unanticipated cash demands, current and forecasted cash
flow will provide a basis for financing operating requirements,
capital expenditures and anticipated payments of preferred
dividends. Management also believes that collections on the
outstanding receivables portfolios as well as funds available from
various funding sources will permit the financial services
operations to meet the financing requirements of the company's
dealers and customers.

Business Environment

     Sales of Class 5 through 8 trucks are cyclical, with demand
affected by such economic factors as industrial production,
construction, demand for consumer durable goods, interest rates and
the earnings and cash flow of dealers and customers.  Although the
general economy remains stable, demand for new trucks in 1997 is
anticipated to be lower than in 1996.  An improvement in the number
of new orders has increased the company's order backlog to 34,900
units at April 30, 1997 from 26,700 units at April 30, 1996.  Retail
deliveries during the remainder of 1997 continue to be highly
dependent on the rate at which new truck orders are received.  The
company will evaluate order receipts and backlog throughout the year
and will balance production with demand as appropriate.
<PAGE>
         <PAGE 17>

     The company currently projects 1997 United States and Canadian
Class 8 heavy truck demand to be 180,000 units, an eight percent
decrease from 1996.  Class 5, 6 and 7 medium truck demand, excluding
school buses, is forecast at 112,000 units, a slight decrease from
1996.  Demand for school buses is expected to decline slightly in
1997 to 31,500 units.  Mid-range  diesel engine shipments by the
company to original equipment manufacturers in 1997 are expected to
be 178,100 units, nine percent higher than in 1996.  The company's
service parts sales are projected to grow eight  percent  to $817
million.

New Pronouncements

     In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128,
"Earnings Per Share."  This statement specifies the computation,
presentation and disclosure requirements for earnings per share and
is effective for financial statements issued for periods ending
after December 15, 1997, including interim periods.  The standard is
not expected to have a material effect on the company's net income
per common share computation.
<PAGE>
         <PAGE 18>


    Navistar International Corporation and Consolidated Subsidiaries

                      PART II - OTHER INFORMATION
                      ---------------------------

 Item 1.  Legal Proceedings

          Incorporated herein by reference from Item 3 - "Legal
          Proceedings" in the company's definitive Form 10-K dated
          January 22, 1997, Commission File No. 1-9618. 

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

          The company's Annual Meeting of Shareowners was held on
          March 19, 1997.  The following three nominees were elected
          to the Board of Directors for three year terms until the
          2000 Annual Meeting of Shareowners.

                              Shares Voted         Shares
          Nominees                "FOR"           "WITHHELD"
          --------            ------------       ----------

         Jerry E. Dempsey       42,157,412        1,472,941
         Robert C. Lannert      42,169,966        1,460,387
         John F. Fiedler        42,164,786        1,465,567

         The results of the voting on the following additional items
         were as follows:

        - Ratification of the appointment of Deloitte & Touche LLP
          as independent auditors for the current fiscal year -

                  Shares Voted "FOR"           43,207,901
                  Shares Voted "AGAINST"          283,211
                  Shares "ABSTAINING"             139,141

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits:                                 10-Q Page
                                                        ---------

              11. Computation of Net Income Per Share      E-1

         (b)  Reports on Form 8-K:

              No reports on Form 8-K were filed for the six months
              ended April 30, 1997.
<PAGE>
         <PAGE 19>

                             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.



NAVISTAR INTERNATIONAL CORPORATION
----------------------------------
           (Registrant)




/s/  J. Steven Keate
-----------------------------------
     J. Steven Keate
     Vice President and Controller
     (Principal Accounting Officer)

June 13, 1997