EXHIBIT INDEX ON PAGES 12-14



                     SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549
                                -----------
                                 FORM 10-K

                     FOR ANNUAL AND TRANSITION REPORTS
                 PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

(Mark One)
[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the fiscal year ended December 31, 1998

                                     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 1-3437-2

                      AMERICAN WATER WORKS COMPANY, INC.          
            ------------------------------------------------------
            (Exact name of registrant as specified in its charter)

            Delaware                               51-0063696             
-------------------------------       ------------------------------------
(State or other jurisdiction of       (I.R.S. Employer Identification No.)
 incorporation or organization)

1025 Laurel Oak Road, Voorhees, New Jersey                  08043   
------------------------------------------               ----------
(Address of principal executive offices)                 (Zip code)

Registrant's telephone number, including area code 609-346-8200

Securities registered pursuant to Section 12(b) of the Act:

                                               Name of each exchange on
     Title of each class                           which registered    
     -------------------                       ------------------------

Common Stock, $1.25 par value per share        New York Stock Exchange
Cumulative Preferred Stock, 5% Series,
  $25 par value per share                      New York Stock Exchange
5% Cumulative Preference Stock,
  $25 par value per share                      New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None      

<PAGE>
     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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the Registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.   [ ]

     The aggregate market value of the voting stock held by non-affiliates
of the Registrant at March 8, 1999 was $1,719,305,383.

     As of March 8, 1999, there were a total of 81,021,992 shares of Common
Stock, $1.25 par value per share, outstanding.

                     DOCUMENTS INCORPORATED BY REFERENCE

     Certain information contained and incorporated by reference herein
contains forward-looking statements as such term is defined in Section 27A
of the Securities Act of 1933, as amended (the "Securities Act") and
Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").  Certain factors could cause actual results to differ
materially from those in the forward-looking statements.  Those factors
include, but are not limited to, the unpredictability of weather, rate
regulations and timing of rate cases, and changes to existing and proposed
environmental regulations.  See "Management's Discussion and Analysis"
beginning on page 23 of the Company's Annual Report to Shareholders
incorporated herein by reference.

     (1)  The following pages and section in Registrant's Annual Report to
Shareholders for 1998 are incorporated by reference into Part I, Item 1 and
Part II of this Form 10-K:  pages 22 through 55, with the exception of the
section entitled "Management's Responsibility for Financial Reporting" on
page 37; and the section entitled "Range of Market Prices" on page 59.

     (2)  The following pages and section in Registrant's definitive Proxy
Statement relating to Registrant's Annual Meeting of Shareholders on May 6,
1999 are incorporated by reference into Part III of this Form 10-K:  Page 4
(beginning with the eighth full paragraph thereon) through page 7, the
section entitled "Director Remuneration" on page 9, pages 10 and 11, and
pages 15 through 17.
<PAGE>
                                                                     Page 1

                                   PART I

Item 1.    Business

     The "Description of the Business" is set forth on page 23 of the
Annual Report to Shareholders for 1998, filed as Exhibit 13 to this Report
on Form 10-K; and such description is hereby specifically incorporated
herein by reference thereto.  The information provided in that section is
supplemented by the following details:

     The water supplies of the regulated subsidiaries consist of surface
supplies, wells, and in a limited number of cases, water purchased under
contract.  Such supplies are considered adequate to meet present require-
ments.  In general, all surface supplies are filtered and substantially all
of the water is treated with chlorine, and, in some cases, special
treatment is provided to correct specific conditions of the water.

     In general, the regulated subsidiaries have valid franchises, free
from unduly burdensome restrictions, sufficient to enable them to carry on
their business as presently conducted.  They derive such franchise rights
from statutes under which they were incorporated, municipal consents and
ordinances, or certificates or permits received from state or local
regulatory agencies.  In most instances, such franchise rights are non-
exclusive.

     In most of the states in which the operations of the regulated
subsidiaries are carried on, there exists the right of municipal
acquisition by one or both of the following methods:  (1) condemnation; or
(2) the right of purchase given or reserved by the law of the state in
which the company was incorporated or received its franchise.  The price to
be paid upon condemnation is usually determined in accordance with the law
of the state governing the taking of land or other property under eminent
domain statutes; in other instances, the price is fixed by appraisers
selected by the parties, or in accordance with a formula prescribed by the
law of the state or in the particular franchise or special charter.

     Some of the expenditures for construction by regulated subsidiaries
have included facilities to comply with federal and state water quality and
safety standards.  The nature of some of the construction is described in
the subsection entitled "Capital Spending Program" under the section
entitled "System Growth and Development," located on pages 24 and 26 of the
Annual Report to Shareholders for 1998, filed as Exhibit 13 to this Report
on Form 10-K; such information is hereby specifically incorporated herein
by reference thereto.

     The number of persons employed by the Registrant and subsidiary
companies totaled 4,063 at December 31, 1998.
<PAGE>
                                                                     Page 2

Item 1A.   Executive Officers of the Registrant

     The following sets forth the names, ages and business experience
during the past five years of the executive officers of the Registrant.  No
family relationships exist among any of such executive officers, nor do any
arrangements or understandings exist between any such executive officer and
any other person pursuant to which he was selected as an officer.

      Name             Age   Business Experience During Past Five Years
              
J. James Barr           57   President and Chief Executive Officer
                             of the Registrant since March, 1998 and Acting
                             President and Chief Executive Officer of the
                             Registrant from November, 1997 to March, 1998.
                             Vice President and Treasurer of the
                             Registrant prior thereto.

Gerald C. Smith         64   Vice President of the Registrant.

W. Timothy Pohl         44   General Counsel and Secretary of the
                             Registrant.

Joseph F. Hartnett, Jr. 47   Treasurer of the Registrant since January,
                             1998.  Vice President and Treasurer of
                             American Water Works Service Company, Inc.,
                             service subsidiary of the Registrant, prior
                             thereto.

Robert D. Sievers       45   Comptroller of the Registrant.

     The executive officers are elected at the annual organizational
meeting of the Board of Directors of the Registrant which is held in May. 
The executive officers serve at the pleasure of the Board of Directors. 
Successors to officers who resign, die or are removed during the year are
elected by the Board.

Item 2.    Properties

     The Registrant leases its office space, equipment and furniture from
one of its wholly-owned subsidiaries.  The office space, equipment and
furniture are located in Voorhees, New Jersey and are utilized by the
Registrant's directors, officers and staff in the conduct of the
Registrant's business.

     The regulated subsidiaries own, in the states in which they operate,
transmission and distribution mains, pump stations, treatment plants,
storage tanks, reservoirs and related facilities.  Properties are
adequately maintained and units of property are replaced as and when
necessary.  The Registrant considers the properties of its regulated
subsidiaries to be in good operating condition.
<PAGE>
                                                                     Page 3

     A substantial acreage of land is owned by the regulated subsidiaries,
the greater part of which is located in watershed areas, with the balance
being principally sites of pumping and treatment plants, storage
reservoirs, tanks and standpipes.

Item 3.    Legal Proceedings

     There are no pending material legal proceedings, other than ordinary,
routine litigation incidental to the business, to which the Registrant or
any of its subsidiaries is a party or of which any of their property is the
subject.

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

     None.

                                   PART II

Item 5.    Market for the Registrant's Common Equity and Related
           Stockholder Matters

     The information required under this item is contained in the section
entitled "Range of Market Prices," located on page 59 of the Annual Report
to Shareholders for 1998, filed as Exhibit 13 to this Report on Form 10-K;
such information is hereby specifically incorporated herein by reference
thereto.

Item 6.    Selected Financial Data

     The information required under this item is contained in the section
entitled "Consolidated Summary of Selected Financial Data," located on page
22 of the Annual Report to Shareholders for 1998, filed as Exhibit 13 to
this Report on Form 10-K; such information is hereby specifically
incorporated by reference thereto.

Item 7.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations

     The information required under this item is contained in the section
entitled "Management's Discussion and Analysis," located on pages 23
through 36 of the Annual Report to Shareholders for 1998, filed as Exhibit
13 to this Report on Form 10-K; such information is hereby specifically
incorporated herein by reference thereto.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

     The information required by this item with respect to market risk is
contained on page 32, within the section entitled "Management's Discussion
and Analysis," located on pages 23 through 36 of the Annual Report to
Shareholders for 1998, filed as Exhibit 13 to this report on Form 10-K;
such information is hereby specifically incorporated herein by reference
thereto.
<PAGE>
                                                                     Page 4

Item 8.    Financial Statements and Supplementary Data

     The financial statements, together with the report thereon of
PricewaterhouseCoopers LLP dated February 2, 1999, except as to Note 16
which is as of February 4, 1999, appearing on pages 37 through 55 of the
1998 Annual Report to Shareholders, filed as Exhibit 13 to this Report on
Form 10-K, are hereby specifically incorporated herein by reference
thereto.

Item 9.    Changes in and Disagreements with Accountants on Accounting and
           Financial Disclosure

     None.

                                   PART III

Item 10.   Directors and Executive Officers of the Registrant

     The information required under this item with respect to the Directors
of the Registrant appears in the eighth full paragraph on page 4 through
page 7 and in the section entitled "Section 16(a) Beneficial Ownership
Reporting Compliance" on page 11 of the definitive Proxy Statement relating
to the Registrant's Annual Meeting of Shareholders on May 6, 1999, to be
filed by the Registrant with the Commission pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (the "1934 Act"); such information is
hereby specifically incorporated herein by reference thereto.

     The information required under this item with respect to the Executive
Officers of the Registrant is set forth in Item 1A of Part I above pursuant
to paragraph (3) of General Instruction G to Form 10-K.

Item 11.   Executive Compensation

     The information required under this item is contained in the section
entitled "Director Remuneration" which is located on page 9, and in the
sections entitled "Report of the Compensation and Management Development
Committee of the Board of Directors on Executive Compensation,"
"Performance Graph," "Management Remuneration," and "Pension Plan" which
are located on pages 12 through 17 of the definitive Proxy Statement
relating to the Registrant's Annual Meeting of Shareholders on May 6, 1999,
to be filed by the Registrant with the Commission pursuant to Section 14(a)
of the 1934 Act, and is hereby specifically incorporated herein by
reference thereto, except for the "Report of the Compensation and
Management Development Committee of the Board of Directors on Executive
Compensation" and "Performance Graph" which are not so incorporated by
reference.

Item 12.   Security Ownership of Certain Beneficial Owners and Management

     The information required under this item is contained in the section
entitled "Stock Ownership Information" which is located on pages 10 and 11
of the definitive Proxy Statement relating to the Registrant's Annual
Meeting of Shareholders on May 6, 1999, to be filed by the Registrant with
the Commission pursuant to Section 14(a) of the 1934 Act, and is hereby
specifically incorporated herein by reference thereto.
<PAGE>
                                                                    Page 5

Item 13.   Certain Relationships and Related Transactions

     There are no material relationships or related transactions other than
those disclosed in response to Item 11 of this Part III.

                                   PART IV

Item 14.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K

     a)  The following documents are filed as part of this report:

         1.  Financial Statements:  the Financial Statements required to be
             filed by Item 8 are listed in the Index to Financial
             Statements, which appears on Pages 9 and 10 of this Report on
             Form 10-K.

         2.  Financial Statement Schedules:  the Financial Statement
             Schedules required to be filed by Item 8 and by paragraph (d)
             of this Item are listed in the Index to Financial Statements,
             which appears on Pages 9 and 10 of this Report on Form 10-K.

         3.  Exhibits:  the Exhibits to this Form 10-K are listed in the
             Index to Exhibits, which appears on Pages 12 to 14 of this    
             Report on Form 10-K.

     b)  Reports on Form 8-K.

         During the last quarter of the period covered by this Report on
         Form 10-K, the Registrant filed no reports on Form 8-K.
<PAGE>
                                                                     Page 6


                                 SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

                                        AMERICAN WATER WORKS COMPANY, INC.



                                        By: J. James Barr, President
                                            and Chief Executive Officer


DATE:  March 4, 1999


     Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:

         Signature                       Title                    Date 

Principal Executive Officer:



J. James Barr                    President and Chief         March 4, 1999
                                 Executive Officer


Principal Financial Officer:



J. James Barr                    President and Chief         March 4, 1999
                                 Executive Officer


Principal Accounting Officer:



Robert D. Sievers                Comptroller                 March 4, 1999

<PAGE>
                                                                     Page 7


                           SIGNATURES (Cont'd.)

Directors:


Marilyn Ware                                                 March 4, 1999


Anthony P. Terracciano                                       March 4, 1999


J. James Barr                                                March 4, 1999


William O. Albertini                                         March 4, 1999


Elizabeth H. Gemmill                                         March 4, 1999


Ray J. Groves                                                March 4, 1999


Henry G. Hager                                               March 4, 1999


Gerald C. Smith                                              March 4, 1999


Paul W. Ware                                                 March 4, 1999


Ross A. Webber                                               March 4, 1999


Horace Wilkins, Jr.                                          March 4, 1999

<PAGE>
                                                                     Page 8











                    SECURITIES AND EXCHANGE COMMISSION

                          WASHINGTON, D.C.  20549





                                 FORM 10-K







                               ANNUAL REPORT

                       YEAR ENDED DECEMBER 31, 1998




                    AMERICAN WATER WORKS COMPANY, INC.




                           FINANCIAL STATEMENTS

<PAGE>
                                                                     Page 9

                    AMERICAN WATER WORKS COMPANY, INC.


                      INDEX TO FINANCIAL STATEMENTS



The following documents are filed as part of this report:

                                                              Page(s) in
(1)  FINANCIAL STATEMENTS                                    Annual Report*

     Report of Independent Accountants . . . . . . . . . . . . . . 37

     Consolidated Balance Sheet of American Water Works
     Company, Inc. and Subsidiary Companies at December 31, 
     1998 and 1997 . . . . . . . . . . . . . . . . . . . . . . .38 and 39

     Consolidated Statement of Income and Retained 
     Earnings of American Water Works Company, Inc.
     and Subsidiary Companies for each of the three 
     years in the period ended December 31, 1998 . . . . . . . . . 40

     Consolidated Statement of Cash Flows of American
     Water Works Company, Inc. and Subsidiary Companies
     for each of the three years in the period ended 
     December 31, 1998 . . . . . . . . . . . . . . . . . . . . . . 41

     Consolidated Statement of Capitalization of American
     Water Works Company, Inc. and Subsidiary Companies
     at December 31, 1998 and 1997 . . . . . . . . . . . . . . .42 and 43

     Consolidated Statement of Common Stockholders' Equity
     of American Water Works Company, Inc. and Subsidiary
     Companies for each of the three years in the period 
     ended December 31, 1998 . . . . . . . . . . . . . . . . . . . 44

     Balance Sheet of American Water Works Company, Inc.
     at December 31, 1998 and 1997 . . . . . . . . . . . . . . . . 45

     Statement of Income and Retained Earnings of
     American Water Works Company, Inc. for each of the
     three years in the period ended December 31, 1998 . . . . . . 46

     Statement of Cash Flows of American Water Works
     Company, Inc. for each of the three years in the
     period ended December 31, 1998. . . . . . . . . . . . . . . . 47

     Notes to Financial Statements . . . . . . . . . . . . . .48 through 55

*Incorporated by reference from the indicated pages of the 1998 Annual
Report to Shareholders, which is Exhibit 13 to this Report on Form 10-K.

<PAGE>
                                                                    Page 10


                    AMERICAN WATER WORKS COMPANY, INC.


                 INDEX TO FINANCIAL STATEMENTS (Continued)



(2)  FINANCIAL STATEMENT SCHEDULES




Financial Statement Schedules not included in this Report on Form 10-K have
been omitted because they are not applicable or the required information is
shown in the Financial Statements or notes thereto.





<PAGE>
                                                                    Page 11


                    Consent of Independent Accountants




We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 33-59059)
and in the Registration Statements on Form S-8 (No. 333-52309,
No. 33-52923, and No. 333-14451) of American Water Works Company, Inc. of
our report dated February 2, 1999, except as to Note 16 which is as of
February 4, 1999, appearing on page 37 of the Annual Report to Shareholders
which is incorporated in this Annual Report on Form 10-K.



PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania  19103
March 25, 1999

<PAGE>
                                                                    Page 12


                    AMERICAN WATER WORKS COMPANY, INC.

                            INDEX TO EXHIBITS

Exhibit
Number                         Description


   3            Articles of Incorporation and By-laws

                   (a) Certificate of Incorporation of the Registrant, as
                amended and restated as of May 15, 1987, is incorporated
                herein by reference to Exhibit 3(a) to Form 10-K report of
                the Registrant for 1996.

                   (b) Certificate of Amendment of the Restated Certificate
                of Incorporation of the Registrant, effective May 9, 1989,
                is incorporated herein by reference to Exhibit 3(b) to Form
                10-K report of the Registrant for 1996.

                   (c) Certificate of Amendment of the Restated Certificate
                of Incorporation of the Registrant, effective May 3, 1990,
                is incorporated herein by reference to Exhibit 3(c) to Form
                10-K report of the Registrant for 1996.

                   (d) Certificate of Designations of the Registrant,
                effective February 6, 1991, relating to its Cumulative
                Preferred Stock, 8.50% Series, is incorporated herein by
                reference to Exhibit 3(d) to Form 10-K report of the
                Registrant for 1996.

                   (e)  Certificate of Amendment of the Restated
                Certificate of Incorporation of the Registrant, effective
                May 2, 1996, is incorporated herein by reference to Exhibit
                3(e) to Form 10-K report of the Registrant for 1996.

                   (f) By-laws of the Registrant, as amended to February 4,
                1999, are filed herewith.

   4            Instruments Defining the Rights of Security Holders,
                Including Indentures                                

                   (a) Indenture dated as of November 1, 1977 between the
                Registrant and The Fidelity Bank (name later changed to
                First Union National Bank), Trustee, is incorporated herein
                by reference to Exhibit E to Form 10-K report of the
                Registrant for 1977.

                   (b) First Supplemental Indenture dated as of December 1,
                1989 between the Registrant and Fidelity Bank, National
                Association (name later changed to First Union National
                Bank), as Trustee, is incorporated herein by reference to
                Exhibit 4(i) to Form 10-K report of the Registrant for
                1989.
<PAGE>
                                                                    Page 13


                    AMERICAN WATER WORKS COMPANY, INC.

                            INDEX TO EXHIBITS

Exhibit
Number                         Description

   4 (cont'd.)     (c) Second Supplemental Indenture dated as of
                February 1, 1993 between the Registrant and Fidelity Bank,
                National Association (name later changed to First Union
                National Bank), as Trustee, is incorporated herein by
                reference to Exhibit 4(c) to Form 10-K report of the
                Registrant for 1992.

                   (d) Third Supplemental Indenture dated as of July 2,
                1998 between the Registrant and First Union National Bank,
                as Trustee, is filed herewith.

                   (e) Rights Agreement dated as of February 18, 1999
                between the Registrant and BankBoston N.A., as Rights
                Agent, is incorporated herein by reference to Exhibit 4 to
                Form 8-A Registration Statement of the Registrant,
                No. 1-3437-2.

  10            Material Contracts

                   (a) Employees' Stock Ownership Plan of the Registrant
                and Its Designated Subsidiaries, as Amended and Restated
                Effective January 1, 1989, is incorporated herein by
                reference to Exhibit 10(a) to Form 10-K report of the
                Registrant for 1994.

                   (b) Amendment No. 1 to Employees' Stock Ownership Plan
                of the Registrant is incorporated herein by reference to
                Exhibit 10(b) to Form 10-K report of the Registrant for
                1995.

                   (c) Amendment No. 2 to Employees' Stock Ownership Plan
                of the Registrant is incorporated herein by reference to
                Exhibit 10(c) to Form 10-K report of the Registrant for
                1996.

                   (d) Supplemental Executive Retirement Plan of the
                Registrant, as amended and restated July 1, 1997, is
                incorporated herein by reference to Exhibit 10(d) to Form
                10-K report of the Registrant for 1997.

                   (e) Supplemental Retirement Plan of the Registrant,
                as amended and restated effective July 1, 1997, is
                incorporated herein by reference to Exhibit 10(e) to Form
                10-K report of the Registrant for 1997.
               
<PAGE>
                                                                    Page 14


                    AMERICAN WATER WORKS COMPANY, INC.

                            INDEX TO EXHIBITS

Exhibit
Number                         Description

  10 (cont'd.)     (f) Long-Term Performance-Based Incentive Plan of the
                Registrant, effective as of January 1, 1993, is
                incorporated herein by reference to Exhibit 10(f) to Form
                10-K report of the Registrant for 1994.

                   (g) Annual Incentive Plan of the Registrant, effective
                as of January 1, 1996, is incorporated herein by reference
                to Exhibit 10(j) to Form 10-K report of the Registrant for
                1995.

                   (h) Amendment No. 1 to the Annual Incentive Plan of the
                Registrant is incorporated herein by reference to Exhibit
                10(h) to Form 10-K report of the Registrant for 1997.

                   (i) Deferred Compensation Plan of the Registrant,
                as amended and restated effective October 1, 1998, is filed
                herewith.

                   (j) Agreement between the Registrant and George W.
                Johnstone dated December 17, 1997, is incorporated herein
                by reference to Exhibit 10(j) to Form 10-K report of the
                Registrant for 1997.

                   (k) Stay Incentive Award for J. James Barr dated
                November 6, 1997, is incorporated herein by reference to
                Exhibit 10(k) to Form 10-K report of the Registrant for
                1997.

  13            Annual Report to Security Holders

                   The Registrant's Annual Report to Shareholders for 1998
                is filed as exhibit hereto solely to the extent portions
                thereof are specifically incorporated herein by reference.

  21            Subsidiaries of the Registrant

                   Subsidiaries of the Registrant as of December 31, 1998.

  23            Consents of Experts and Counsel

                   See "Consent of Independent Accountants" on page 11 of
                this Form 10-K report.

  27            Financial Data Schedule

                   Financial Data Schedule for the fiscal year ended
                December 31, 1998.