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:  September 30, 1997

Commission File Number:  1-5642  

                                                                               
                            DRAVO CORPORATION                                  
      (Exact name of registrant as specified in its charter)

           Pennsylvania                                  25-0447860          
(State or other jurisdiction of                        (I.R.S. employer
  incorporation or organization)                      identification no.)


One Oliver Plaza, Pittsburgh, Pennsylvania                 15222             
(Address of principal executive offices)                 (Zip Code)            

Registrant's telephone number, including area code:        (412) 566-3000     



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       

The number of shares outstanding of each of the registrant's classes of common
stock as of October 31, 1997:


     Title of Class                              Shares Outstanding
Common Stock, $1.00 par value                        14,780,836  

                DRAVO CORPORATION AND SUBSIDIARIES

                              INDEX


PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
                                                                  Page No.
     <S>                                                              <C>

     Consolidated Balance Sheets at September 30, 1997
     and December 31, 1996                                             3, 4
 
     Consolidated Statements of Earnings for the
     Quarters ended September 30, 1997 and 1996                           5
    
     Consolidated Statements of Earnings for the
     Nine Months ended September 30, 1997 and 1996                        6

     Consolidated Statements of Cash Flows for the
     Nine Months ended September 30, 1997 and 1996                     7, 8

     Notes to Consolidated Financial Statements                        9-12

     Management's Discussion and Analysis of Financial    
     Condition and Results of Operations                                 13


PART II - OTHER INFORMATION                                        
 
     Item 6.  Exhibits and Reports on Form 8-K                           14


SIGNATURES                                                               15

</TABLE>





                DRAVO CORPORATION AND SUBSIDIARIES
                    Consolidated Balance Sheets
                           ($ in 000's)

<TABLE>
<CAPTION>
                                               September 30, December 31,
                                                   1997          1996    
                                               (unaudited)

ASSETS
<S>                                               <C>          <C>
Current assets:
Cash and cash equivalents                         $  1,749     $  1,600
Accounts receivable, net                            20,396       23,265
Notes receivable, net                                  768          921
Inventories                                         17,988       16,481
Other current assets                                   625          751

 Total current assets                               41,526       43,018

Advances to and equity in joint ventures             2,953        2,093
Notes receivable                                     6,419        4,380
Other assets                                        25,854       25,066
Deferred income taxes                               24,853       24,853

Property, plant and equipment                      260,776      238,025
Less: accumulated depreciation and 
amortization                                       119,151      112,026

 Net property, plant and equipment                 141,625      125,999

   Total assets                                   $243,230     $225,409

</TABLE>


See accompanying notes to consolidated financial statements.

                DRAVO CORPORATION AND SUBSIDIARIES
                    Consolidated Balance Sheets
                           ($ in 000's)
<TABLE>
<CAPTION>
                                                 September 30, December 31,
                                                      1997        1996     
                                                  (unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
<S>                                               <C>          <C>

Current liabilities:
Current portion of long-term notes                $  9,760     $  6,166
Accounts payable - trade                            14,165       14,542
Accrued insurance                                    2,642        1,906
Accrued retirement contribution                      1,810        1,785
Net liabilities of discontinued operations           4,432        6,299
Other current liabilities                            4,630        3,843

 Total current liabilities                          37,439       34,541

Long-term notes                                     71,390       63,535
Net liabilities of discontinued operations           5,953        6,786
Other liabilities                                    7,157        6,632

Redeemable preference stock:
     Par value $1, issued 200,000 shares: 
 Series D, $12.35 cumulative, convertible, 
 exchangeable (entitled in liquidation to 
 $20.0 million)                                     20,000       20,000

Shareholders' equity:
     Preference stock, par value $1, authorized 
 1,878,870: Series B, $2.475 cumulative, 
 convertible; issued 19,386 and 20,386 shares
 (entitled in liquidation to $1.1 million);             19           20
 Series D, reported above

     Common stock, par value $1, authorized 
 35,000,000 shares; issued 15,100,033
 and 15,096,817                                     15,100       15,097

Other capital                                       63,063       63,077
Retained earnings                                   27,316       20,063
Treasury stock at cost:
 Common shares 322,413 and 333,168                 (4,207)      (4,342)

Total shareholders' equity                         101,291       93,915

Total liabilities and shareholders' equity        $243,230     $225,409

</TABLE>



 See accompanying notes to consolidated financial statements.

                DRAVO CORPORATION AND SUBSIDIARIES
                Consolidated Statements of Earnings
          (unaudited, $ in 000's, except per share data)

<TABLE>
<CAPTION>
                                              Quarters ended September 30,
                                                   1997            1996  
<S>                                               <C>          <C>

Revenue                                           $ 40,966     $ 40,752
Cost of revenue                                     29,921       30,217

   Gross profit                                     11,045       10,535

Selling, general and administrative expenses         5,575        5,454

   Earnings from operations                          5,470        5,081

Other income (expense):
Equity in earnings of joint ventures                   259          234
Interest income                                         79            6
Interest expense                                   (1,926)      (1,575)

   Net other income (expense)                      (1,588)      (1,335)

Earnings before taxes                                3,882        3,746
Provision for income taxes                             127          113

Net earnings                                         3,755        3,633
Preference dividends                                   629          633

Net earnings available 
for common shares                                 $  3,126     $  3,000

Earnings per share                                $   0.21     $   0.20
 
Weighted average shares outstanding                 14,854       14,936

</TABLE>


See accompanying notes to consolidated financial statements.

                DRAVO CORPORATION AND SUBSIDIARIES
                Consolidated Statements of Earnings
          (unaudited, $ in 000's, except per share data)

<TABLE>
<CAPTION>
                                            Nine Months ended September 30,
                                                   1997            1996  
<S>                                               <C>          <C>

Revenue                                           $121,025     $118,325
Cost of revenue                                     90,680       88,707

   Gross profit                                     30,345       29,618

Selling, general and administrative expenses        16,356       15,777

   Earnings from operations                         13,989       13,841

Other income (expense):
Equity in earnings of joint ventures                   632          702
Other expense                                          (9)            -
Interest income                                        161          874
Interest expense                                   (5,095)      (4,911)

   Net other income (expense)                      (4,311)      (3,335)

Earnings before taxes                                9,678       10,506
Provision for income taxes                             537          316

Net earnings                                         9,141       10,190
Preference dividends                                 1,888        1,899

Net earnings available 
for common shares                                 $  7,253     $  8,291

Earnings per share                                $   0.49     $   0.56
 
Weighted average shares outstanding                 14,851       14,879

</TABLE>

See accompanying notes to consolidated financial statements.

                DRAVO CORPORATION AND SUBSIDIARIES
               Consolidated Statements of Cash Flows
                      (unaudited, $ in 000's)

<TABLE>
<CAPTION>
                                                                             
                                             Nine Months ended September 30,
                                                   1997            1996   
<S>                                               <C>         <C>
 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings                                      $  9,141    $  10,190
Adjustments to reconcile net earnings
 to net cash provided by continuing
 operations activities:
 Depreciation and amortization                       7,732        7,744
 Loss on disposal of assets                              9            -
 Equity in joint ventures                            (860)        (431)
 Changes in assets and liabilities:
  Decrease (increase) in accounts receivable         2,869      (1,314)
  Decrease (increase) in notes receivable          (1,886)           37
  Increase in inventories                          (1,507)      (1,020)
  Decrease (increase) in other current assets          188        (145)
  Increase (decrease) in accounts payable 
   and accrued expenses                              1,208      (1,431)
  Increase (decrease) in taxes payable                  24        (171)
  Increase in other assets                           (788)        (903)
  Increase in other liabilities                        525        1,954

Net cash provided by continuing
operations activities                               16,655       14,510

Net cash provided (used) by discontinued
operations activities                              (2,700)        4,932
  
Net cash provided by operating
activities                                          13,955       19,442

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment        (23,367)     (15,528)

Net cash used by investing activities           $ (23,367)   $ (15,528)

</TABLE>

See accompanying notes to consolidated financial statements.


                DRAVO CORPORATION AND SUBSIDIARIES
               Consolidated Statements of Cash Flows
                      (unaudited, $ in 000's)
<TABLE>
<CAPTION>
                                            Nine Months ended September 30,
                                                    1997         1996  
<S>                                              <C>          <C>

CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowing (repayment) under revolving
 credit agreements                               $ (1,010)     $  3,550
Principal payments under long-term notes           (6,204)      (6,014)
Proceeds from long-term notes                       18,663            -
Proceeds from issuance of common stock                   -          248
Dividends on preference stock                      (1,888)      (1,899)

Net cash provided (used) by financing
activities                                           9,561      (4,115)

Net increase (decrease) in cash and cash
equivalents                                            149        (201)
Cash and cash equivalents at beginning of
period                                               1,600        1,086

Cash and cash equivalents at end of period        $  1,749     $    885

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
     Cash paid during the period for:
 Interest (net of amount capitalized)             $  4,905     $  4,976
 Income taxes                                          517          487

</TABLE>

See accompanying notes to consolidated financial statements.


                DRAVO CORPORATION AND SUBSIDIARIES
            Notes to Consolidated Financial Statements

(1)       Basis of Presentation

     The accompanying consolidated financial statements include the
accounts of Dravo Corporation and its majority-owned subsidiaries (the
company). The principal subsidiary is Dravo Lime Company, one of the nation's
largest lime producers.  Significant intercompany balances and transactions
have been eliminated in the consolidation process.

     These unaudited consolidated financial statements include all
adjustments, consisting only of normal, recurring accruals, which management
considers necessary for a fair presentation of the company's consolidated
financial position, results of operations, and cash flows for the interim
periods presented.
     

(2)       Inventories

          Inventories are classified as follows:

          ($ in 000's)
<TABLE>
<CAPTION>
                                              September 30,      December 31,
                                                    1997           1996    
        <S>                                        <C>            <C>

        Finished goods                             $ 3,205        $ 2,586
        Materials and supplies                      14,783         13,895

        Net inventories                            $17,988        $16,481
</TABLE>
     Finished goods are valued at average production cost or market, whichever
is lower, and include raw materials, direct labor, and operating overhead. 
Materials and supplies are valued at average cost.  


(3)       Contingent Liabilities

     The company has been notified by the federal Environmental Protection
Agency (EPA) that the EPA believes the company is a potentially responsible
party (PRP) for the clean-up of soil and groundwater contamination at four
sub-sites in Hastings, NE.  The Hastings site is one of the EPA's priority
sites for taking remedial action under the Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA).
    
     The company participated in an EPA-initiated allocation proceeding for
a municipal landfill sub-site to allocate shares of liability for past
response costs and costs of a proposed cap of the landfill.  As part of this
proceeding, the allocator conducted a mediation session which resulted in a
settlement among the EPA and the PRPs.  Pursuant to the settlement, the
company agreed to pay $702,000, or 14.33 percent of the $4.9 million past
costs and estimated source control costs for this sub-site.  A Consent Order
incorporating the settlement and an agreement among the private parties
concerning the construction and maintenance of the proposed cap is being
negotiated.  In exchange, the
company received contribution protection against third-party claims as
well as a covenant from the EPA not to sue for its past and future response
costs at this sub-site and matters covered by the settlement.
    
     The company has also been notified by the EPA that the EPA considers
it a PRP at another municipal landfill in Hastings.  At least three other
parties (including the City of Hastings) are considered by the EPA to be PRPs
at this second sub-site.  At this sub-site, the company has concluded that the
City of Hastings is primarily responsible for proper closure of the landfill
and the remediation of any release of hazardous substances. In January, 1994,
the EPA invited the company and the other PRPs to make an offer to conduct a
remedial investigation and feasibility study (RI/FS) of this sub-site and
stated that the EPA was in the process of preparing a work plan for the RI/FS. 
None of the PRPs accepted EPA's invitation to perform the RI/FS for this
sub-site. The EPA has conducted the remedial investigation.  The company is
considering a proposal to conduct the feasibility study along with other PRPs.
    
     With respect to the third sub-site, the company and two other PRPs have
been served with administrative orders directing them to undertake soil
remediation and interim groundwater remediation at that sub-site.  The company
is currently complying with these orders while reserving its right to seek
reimbursement from the United States for its costs if it is determined it is
not liable for response costs or if it is required to incur costs because of
arbitrary, capricious or unreasonable requirements imposed by the EPA.
    
     The EPA has taken no legal action with respect to its demand that the  
company and the other PRPs pay its past response costs.  A total of five
parties have been named by the EPA as PRPs at this sub-site, but two of them
have been granted de minimis status.  The company believes other persons
should also be named as PRPs.

     The fourth sub-site is a former naval ammunition depot which was
subsequently converted to an industrial park.  The company and its predecessor
owned and operated a manufacturing facility in this industrial park.  To date,
the company's investigation indicates that it did not cause the release of
hazardous substances at this sub-site during the time it owned and operated
the facility. The United States has undertaken to conduct the remediation of
this sub-site.
    
     In addition to sub-site clean-up, the EPA is seeking a clean-up of
area-wide contamination associated with all of the sub-sites in and around
Hastings, NE.  The company, along with other Hastings PRPs, has recommended
that the EPA adopt institutional controls as the area-wide remedy in Hastings. 
EPA has completed an area wide remedial investigation and has asked the PRPs
to agree to perform a feasibility study to determine whether institutional
controls or another remedial alternative should be undertaken.  The company,
along with other PRPs, are considering this proposal.  An acceptable area wide
remediation plan could result in interim remedies at the subsites becoming
final remedies.
    
On August 10, 1992, the company filed suit in the Alabama District
Court against its primary liability insurance carriers and one of its
predecessor's insurers, seeking a declaratory judgment that the company is
entitled to a defense and indemnity under its contracts of insurance
(including certain excess policies provided by one of the primary carriers)
with regard to the third Hastings sub-site.  On motion of the defendant
insurance carriers, the suit was transferred to the District
Court for the Western District of Pennsylvania on October 31, 1996. 
The company has settled the claim against its predecessor's insurer, but the
case against the company's insurers is still in litigation.  An award of
punitive damages is also being sought against the company's insurers for their
bad faith in failing to investigate the company's claim and/or denying the
company's claim.  The company has notified its primary and excess general
liability carrier, as well as the excess carrier of its predecessor, of the
receipt of its notice of potential liability at the second and fourth sub-sites.
    
     Estimated total clean-up costs at the third sub-site, including
capital outlays and future maintenance costs for soil and groundwater
remediation of approximately $14 million, are based on independent engineering
studies.  Included in the discontinued operations provision is the company's
estimate that it will participate in 33 percent of these remediation costs. 
The company's estimated share of the costs is based on its assessment of the
total clean-up costs, its potential exposure, and the viability of other named
PRPs.  These estimates are, by their nature, uncertain and dependent upon
numerous factors, any of which could cause actual results to differ materially
from projected amounts.
    
     Other claims and assertions made against the company will be resolved,
in the opinion of management, without material additional charges to earnings.


(4)  Discontinued Operations

     Discontinued operations' assets and liabilities at September 30, 1997 and
December 31, 1996 relate to non-cancelable leases, insurance, environmental, 
legal and other matters associated with exiting the engineering and construction
business and are presented below:
    
<TABLE>
<CAPTION>
    
    ($ in 000's)                              September 30,      December 31,
                                                    1997         1996  
    <S>                                               <C>          <C>
    Current assets:
     Accounts and retainers receivable            $    275     $    323
    
      Total current assets                             275          323
    
     Other                                             309          309
    
      Total assets                                $    584     $    632
    
    Current liabilities:
     Accounts and retainers payable               $    527     $    536
     Accrued loss on leases                          1,705        2,304
     Other                                           2,475        3,782
    
      Total current liabilities                      4,707        6,622
    
     Accrued loss on leases                              -          954
     Other                                           6,262        6,141
    
      Total liabilities                           $ 10,969     $ 13,717
    
     Net liabilities and accrued loss 
      on leases of discontinued operations       $(10,385)   $ (13,085)
</TABLE>

                DRAVO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

(5)  Earnings Per Share

     In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings per Share (FAS
128).  FAS 128 supersedes APB Opinion No. 15, Earnings per Share (APB 15) and
requires the calculation and dual presentation of Basic and Diluted earnings
per share, replacing the measures of Primary and Fully-diluted earnings per
share as reported under APB 15.  FAS 128 is effective for financial statements
issued for periods ending after December 15, 1997; earlier application is not
permitted.  After the effective date, all prior-period earnings per share data
presented must be restated to conform with the provisions of FAS 128.  The
impact of FAS 128 on the company's earnings per share calculation will be
immaterial.


DRAVO CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial
Condition and Results of Operations

Third quarter revenue of $41.0 million was up slightly over last year's
$40.8 million.  Gross profit was up $510,000 over last year on the higher
revenue and a 1 percent gross margin increase.  The company's results are
heavily influenced by its major utility customers plant operations.  Events at
two large utility customers, an equipment failure and a decision to take a
generating unit out of service earlier than anticipated, suppressed revenue and
earnings during the quarter.  Strong commercial sales, however, helped to
offset the utility revenue shortfall.  The margin increase was attributable
primarily to lower production costs at the Maysville and Black River plants.
Selling, general and administrative expenses were higher primarily due to a bad
debt accrual for disputed invoices.  Interest expense was $351,000 higher
because of higher debt levels and because the 1996 period benefited from the
capitalization of interest charges associated with the Maysville expansion
project.

      Year-to date earnings of $9.1 million, or 49 cents per share, were down
from last year's $10.2 million, or 56 cents per share.  The shortfall is
attributable to this year's poor first quarter earnings of $1.1 million, or
three cents per share.  As reported previously, an early March flood in
northern Kentucky stopped the company from loading barges and its customers
from unloading barges for an extended period.  Revenue and income in both the
second and third quarters of the current year have exceeded last year's
comparable period results, however, the impact of the flood and other
previously reported first quarter difficulties were too severe to recoup. 
Additionally, last year's earnings were bolstered by refunds received from a
state taxing authority for amended returns filed based on current
interpretation of the state tax code.  The refunds included interest income of
$851,000.

      Capital expenditures for the nine months ended September 30 were $23.4
million compared to $15.5 million last year.  Construction progress payments
for a new Maysville kiln, $8.3 million, and the $8.3 million purchase of land
containing more than 27 million tons of high calcium reserves adjacent to the
Longview facility accounted for a large part of the additions to property,
plant and equipment.  Total debt increased $11.4 million from year-end
primarily due to funding capital expenditures.

      The company's effective tax rate increased from 3.0% for the nine
months ended September 30, 1996 to 5.5% for the nine months ended September 30,
1997.  This rate increase is attributed to alternative minimum tax.  The
company is currently reviewing its deferred tax asset valuation allowance in
light of current and projected income levels and the status of the remaining
discontinued operations issues.  If it is determined that it is more likely
than not that more net operating losses  will be used before expiration than
have already been recorded, the valuation allowance will be adjusted and a tax
benefit will be recognized.  Accordingly, for financial reporting purposes, tax
expense in future periods will be recorded at a higher effective tax rate.

                DRAVO CORPORATION AND SUBSIDIARIES

                   PART II - Other Information 


                                            
Item 6.   Exhibits and Reports on Form 8-K

     (a)  Exhibits

          The following is filed as an exhibit to Part I of this Form 10-Q:

           Exhibit No. 11 - Statement re computation of per share earnings.

          The following are filed as exhibits to Part II of this Form 10-Q:

           Exhibit No. 4 - Instruments defining the rights of security 
               holders, including indentures

               Amendment Agreement dated July 31, 1997 encompassing the
               Seventh Amendment to the Override Agreement and the Sixth
               Amendment to Revolving Credit Agreement.

           Exhibit No. 10 - Material contracts

               Agreement dated September 15, 1997 between Dravo
               Corporation and Carl A. Gilbert.  Identical agreements were
               entered into with James J. Puhala, John R. Major, Marshall
               S.Johnson, and Donald H. Stowe, Jr.

     (b)  Reports on Form 8-K

          The company filed no reports on Form 8-K for the quarter ended
          September 30, 1997.  


                                 
                            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.





                                  DRAVO CORPORATION    
                                  (Registrant)




Date:  November 13, 1997          /s/JAMES J. PUHALA          
                                  James J. Puhala
                                  Vice President, Administration and 
                                  General Counsel and Acting
                                  Chief Financial Officer




Date:  November 13, 1997          /s/LARRY J. WALKER          
                                  Larry J. Walker
                                  Vice President and Controller
                                  (Principal Accounting Officer)