FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, DC  20549


                  Quarterly Report Under Section 13 Or 15(d)
                    Of The Securities Exchange Act Of 1934



For the Quarter Ended:   September 27, 1997      Commission File No:   0-6933



                              CAMBEX CORPORATION

            (Exact name of registrant as specified in its charter)



       Massachusetts                             04-244-2959

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


                  360 Second Avenue, Waltham, Massachusetts

                   (Address of principal executive offices)


                                    02154

                                  (Zip Code)


Registrant's telephone number, including area code:  (617) 890-6000


       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

<PAGE>
<TABLE>
<S>     <C>

                                             CAMBEX CORPORATION AND SUBSIDIARIES
      
                                                 CONSOLIDATED BALANCE SHEETS
                                            SEPTEMBER 27, 1997 AND DECEMBER 31, 1996
                                                           (UNAUDITED) 
      
                                                            ASSETS
      
      
                                                                          SEPTEMBER 27,              DECEMBER 31,
                                                                              1997                      1996
                                                                          -------------             -------------
      CURRENT ASSETS:
      
         CASH AND CASH EQUIVALENTS                                       $     103,199             $     615,949
      
      
         ACCOUNTS RECEIVABLE, LESS RESERVES OF
           $131,000 ON SEPTEMBER 27, 1997 AND
           $131,000 ON DECEMBER 31, 1996                                     1,578,296                 1,934,708
      
         CURRENT PORTION OF INVESTMENT IN SALES-TYPE LEASES,
           NET OF UNEARNED INTEREST INCOME OF $5,000 ON
           SEPTEMBER 27, 1997 AND $34,000 ON DECEMBER 31, 1996                  58,383                   423,220
      
         INVENTORIES                                                         4,579,538                 6,200,033
      
         PREPAID TAXES                                                          -                      2,335,295
      
         PREPAID EXPENSES                                                       73,078                   135,721
                                                                         --------------            --------------
            TOTAL CURRENT ASSETS                                         $   6,392,494             $  11,644,926
                                                                         --------------            --------------
      LONG-TERM INVESTMENT IN SALES-TYPE LEASES, NET
         OF UNEARNED INTEREST INCOME OF $1,000 ON
         SEPTEMBER 27, 1997 AND $5,000 ON DECEMBER 31, 1996              $      40,993             $     162,971
      
      LEASED EQUIPMENT, AT COST, NET OF ACCUMULATED
         DEPRECIATION OF $154,000 ON SEPTEMBER 27, 1997                         
         AND $244,000 ON DECEMBER 31, 1996                               $      65,983             $     140,417
      
      PROPERTY AND EQUIPMENT, AT COST:
      
         MACHINERY AND EQUIPMENT                                         $   3,027,962             $   7,379,202
         FURNITURE AND FIXTURES                                                247,173                   304,666
         LEASEHOLD IMPROVEMENTS                                                620,949                   620,949
                                                                         --------------            --------------
                                                                         $   3,896,084             $   8,304,817
      
         LESS - ACCUMULATED DEPRECIATION AND AMORTIZATION                    3,349,135                 7,258,383
                                                                         --------------            --------------
            NET PROPERTY AND EQUIPMENT                                   $     546,949             $   1,046,434
      
      OTHER ASSETS
            TECHNOLOGY LICENSE/MARKETING AGREEMENT, 
              NET OF ACCUMULATED AMORTIZATION OF $8,500,000
              ON SEPTEMBER 27, 1997 AND ON DECEMBER 31, 1996             $      -                  $      -
            OTHER                                                               37,830                    37,830
                                                                         --------------            --------------
        TOTAL ASSETS                                                     $   7,084,249             $  13,032,578
                                                                         ==============            ==============
</TABLE>
      
      
                                                             -2-
<PAGE>
<TABLE>
<S>     <C>
       
                                           CONSOLIDATED BALANCE SHEETS
                                              SEPTEMBER 27, 1997 AND DECEMBER 31, 1996
                                                          (UNAUDITED)
      
                                          LIABILITIES AND STOCKHOLDERS' INVESTMENT
      
                                                                             SEPTEMBER 27,         DECEMBER 31,
                                                                                 1997                  1996
                                                                            -------------         --------------
      CURRENT LIABILITIES:
      
        REVOLVING CREDIT AGREEMENT                                          $         --          $   1,800,000
      
        ACCOUNTS PAYABLE                                                       4,670,813              4,329,638
      
        OBLIGATIONS FOR TRADE-IN MEMORY                                        1,014,250              1,036,235
      
        ACCRUED EXPENSES                                                         710,429              1,319,237
                                                                            -------------         --------------
           TOTAL CURRENT LIABILITIES                                        $  6,395,492          $   8,485,110
                                                                            -------------         --------------
      
      DEFERRED REVENUE                                                      $    555,352          $   1,022,751
      
      STOCKHOLDERS' INVESTMENT: 
      
        PREFERRED STOCK, $1.00 PAR VALUE PER SHARE
          AUTHORIZED - 3,000,000 SHARES
          ISSUED - NONE                                                               --                     --
      
        COMMON STOCK, $.10 PAR VALUE PER SHARE -
           AUTHORIZED -   25,000,000 SHARES
           ISSUED  -  10,636,108 SHARES ON SEPTEMBER 27, 1997 AND
                      10,614,139 SHARES ON DECEMBER 31, 1996                $  1,063,611          $   1,061,414
                                                                              
        CAPITAL IN EXCESS OF PAR VALUE                                        15,814,783             15,792,105
      
        CUMULATIVE TRANSLATION ADJUSTMENT                                        246,819                183,355
      
        RETAINED EARNINGS (DEFICIT)                                          (16,137,042)           (12,657,391)
      
        LESS - COST OF SHARES HELD IN TREASURY -  
               1,534,356 ON SEPTEMBER 27, 1997 AND
               ON DECEMBER 31, 1996                                             (854,766)              (854,766)
                                                                            -------------         --------------
        TOTAL STOCKHOLDERS' INVESTMENT                                      $    133,405         $   3,524,717
                                                                            -------------         --------------
        TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT                      $  7,084,249          $  13,032,578
                                                                            =============         ==============
</TABLE>
      
                                                        -3-
<PAGE>
<TABLE>
<S>     <C>
       
                                      CAMBEX CORPORATION AND SUBSIDIARIES
  
                                              CONSOLIDATED STATEMENTS OF INCOME
                                  FOR THE NINE MONTHS ENDED SEPTEMBER 27, 1997 AND SEPTEMBER 28, 1996
                                                      (UNAUDITED)
                                              
                                                      QUARTER ENDED                             NINE MONTHS ENDED
  
                                            SEPTEMBER 27,        SEPTEMBER 28,        SEPTEMBER 27,        SEPTEMBER 28,
                                                 1997                 1996                1997                 1996
                                            ------------         ------------         ------------         ------------
 
  REVENUES                                  $ 1,225,125         $  4,192,637         $  8,627,760         $ 19,335,991
  
  COST OF SALES                               1,095,324            2,588,188            5,793,832           10,404,423
                                            ------------        -------------        -------------        -------------
  GROSS PROFIT                              $   129,801         $  1,604,449         $  2,833,928         $  8,931,568
  
  OPERATING EXPENSES:
                                                                  
    RESEARCH AND DEVELOPMENT                $   555,043         $    886,381         $  2,067,447         $  2,969,174
    SELLING                                     705,902            1,679,713            2,912,404            5,483,343
    GENERAL AND ADMINISTRATIVE                  357,672              484,262            1,070,165            1,713,160
                                            ------------        -------------        -------------        -------------
                                            $ 1,618,617         $  3,050,356         $  6,050,016         $ 10,165,677
                                            ------------        -------------        -------------        -------------
  
  OPERATING INCOME (LOSS)                   $(1,488,816)        $ (1,445,907)        $ (3,216,088)        $ (1,234,109)
  
  OTHER INCOME (EXPENSE):
    INTEREST EXPENSE                        $   (30,999)        $    (61,681)        $    (74,453)        $   (196,814)
    INTEREST INCOME                               2,368               28,317               21,686               84,889
    OTHER INCOME (EXPENSE)                     (166,886)            (439,536)            (210,796)          (1,356,613)
                                            ------------        -------------        -------------        -------------
  INCOME (LOSS) BEFORE INCOME TAXES         $(1,684,333)        $ (1,918,807)        $ (3,479,651)        $ (2,702,647)
  
    PROVISION FOR INCOME TAXES              $         0         $          0         $          0         $          0
                                            ------------        -------------        -------------        -------------
  NET INCOME (LOSS)                         $(1,684,333)        $ (1,918,807)        $ (3,479,651)        $ (2,702,647)
                                            ============        =============        =============        =============
  
  NET INCOME (LOSS) PER COMMON SHARE        $    (0.18)         $      (0.21)         $     (0.38)         $     (0.30)
                                            ============        =============        =============        =============
  WEIGHTED AVERAGE COMMON AND COMMON                              
  EQUIVALENT SHARES OUTSTANDING               9,090,000            9,000,000            9,090,000            8,975,000
  
 
</TABLE>
  
                                                        -4-       
                                                                 
<PAGE>
<TABLE>
<S>     <C>

                                           CAMBEX CORPORATION AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 FOR THE NINE MONTHS ENDED SEPTEMBER 27, 1997 AND SEPTEMBER 28, 1996
  
                                                                                 FOR THE NINE MONTHS ENDED
                                                                               SEPTEMBER 27,    SEPTEMBER 28,
                                                                                    1997             1996
                                                                               ----------       ----------
  CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income (Loss)                                                            $ (3,479,651)    $ (2,702,647)
  Adjustments to reconcile net income to net
    cash provided by (used in) operating activities:
    Depreciation and amortization                                              $    587,258     $  1,841,578
    Amortization of prepaid expenses                                                 28,990           14,074
    Common stock issued in lieu of cash                                                  --          161,715
    Change in assets and liabilities:
      Decrease (increase) in accounts receivable                                    356,412       (2,225,309)
      Decrease in inventory                                                       1,620,495          886,207
      Decrease in investment in sales-type leases                                   486,815           10,255
      Decrease in prepaid taxes                                                   2,335,295        2,257,928
      Decrease in prepaid expenses                                                   33,653            3,787 
      Decrease in other assets                                                           --               45
      Increase in accounts payable                                                  341,175          372,906
      Decrease in obligations for trade-in memory                                   (21,985)        (319,456)
      Increase (decrease) in accrued liabilities                                   (608,808)         419,544
      Increase (decrease) in deferred revenue                                      (467,399)         172,539
                                                                                 
                                                                               -------------     ------------
        Total adjustments                                                      $  4,691,901     $  3,595,813
                                                                               -------------     ------------
        Net cash provided by operating activities                              $  1,212,250     $    893,166
  
  CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of Equipment                                                     $    (13,339)    $   (123,258)
                                                                                ------------     ------------
        Net cash used in investing activities                                  $    (13,339)    $   (123,258)
  
  CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from sale of common stock                                         $     24,875     $     61,491
    Repayments under revolving credit agreement                                  (1,800,000)        (920,000)
                                                                               -------------     ------------
      Net cash used in financing activities                                    $ (1,775,125)    $   (858,509)
  
    Effect of exchange rate changes on cash                                          63,464         (117,281)
                                                                                ------------     ------------
  Net increase (decrease) in cash and cash equivalents                         $   (512,750)    $   (205,882)
  
  Cash and cash equivalents at beginning of period                             $    615,949     $    588,322
                                                                               -------------     ------------
  Cash and cash equivalents at end of period                                   $    103,199     $    382,440
                                                                               =============     ============
  SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
    Cash paid during the period for:
      Interest                                                                 $     43,454     $    196,814
      Income Taxes                                                                       --           12,263
</TABLE>
  
                                                               -5-
<PAGE>
                                  FORM 10-Q

                     CAMBEX CORPORATION AND SUBSIDIARIES


For The Quarter Ended: September 27, 1997        Commission File No:   0-6933

Notes & Comments:

       (1)Significant Accounting Policies

       The accompanying consolidated financial statements include the accounts 
       of the Company and its wholly-owned subsidiaries.  All material 
       intercompany transactions and balances have been eliminated in 
       consolidation.

       The Company has deferred revenue associated with the sale of certain 
       products which have future performance obligations, relating 
       to reinstallation of IBM memory and maintenance.

       The condensed financial statements included herein have been prepared by 
       the Company, without audit, pursuant to the rules and regulations of the 
       Securities and Exchange Commission.  Certain information and footnote 
       disclosures normally included in financial statements prepared in 
       accordance with generally accepted accounting principles have been 
       condensed or omitted pursuant to such rules and regulations, although 
       the Company believes that the disclosures are adequate to make the 
       information presented not misleading.  The information furnished 
       includes all adjustments and accruals consisting only of normal 
       recurring accrual adjustments which are, in the opinion of management, 
       necessary for a fair presentation of results for the interim period.  It 
       is suggested that these condensed financial statements be read in 
       conjunction with the financial statements and the notes thereto included 
       in the Company's latest annual report on Form 10-K.

       Inventories, which include raw materials, labor and manufacturing 
       overhead are stated at the lower of cost (first-in, first-out) or market 
       and consist of the following:

                                  September 27,         December 31, 
                                    1997                    1996       
 
       Raw materials              $2,463,054            $ 2,386,454
       Work-in-process             1,004,292                861,073
       Finished goods              1,072,192              2,765,066
       Trade-in memory                 -                    187,500

                                  $4,579,538            $ 6,200,033


                                    - 6 -
<PAGE>
                                  FORM 10-Q

                     CAMBEX CORPORATION AND SUBSIDIARIES


For The Quarter Ended:   September 27, 1997            Commission File:  0-6933



Notes & Comments (Continued):


       (2)    Income and Dividends Per Share

              Per share amounts are based on the weighted average number of 
              shares outstanding during each year plus applicable common stock 
              equivalents.  There were no material differences for per share 
              amounts assuming full dilution in either year.

       (3)    Management's Discussion and Analysis of Financial Condition and 
              Results of Operations

              Revenues for the third quarter ended September 27, 1997 decreased
              71% from the comparable three months of the prior year due 
              to decreased sales of the Company's mainframe storage and 
              client/server storage products. 

              The gross profit of 11% for the third quarter of 1997 was lower 
              than the 38% achieved in 1996 due to product mix and to the 
              relative amount of fixed costs in relation to lower revenues.

              Operating expenses for the three months ended September 27, 1997 
              decreased 47% from the comparable three months of the prior year 
              due principally to the cost savings achieved through a work force 
              reduction and other expense controls put in place. 

              Other expense for the three months ended September 28, 1996  
              included approximately $425,000 in amortization expenses relating
              to the Company's technology license/marketing agreement, which 
              was amortized over a five year period, ending in 1996. 

              During the first quarter, the Company received approximately 
              $2,300,000 in cash from the Internal Revenue Service, which 
              represented the refund due from prior periods.  This refund was 
              then used to repay the Company's outstanding debt under its 
              Revolving Credit Agreement.  After the final payment to its bank, 
              the Revolving Credit Agreement was terminated and the bank 
              released its security interest in the Company's accounts 
              receivable, inventory and general intangibles.


                                    - 7 -
<PAGE>
                                  FORM 10-Q

                     CAMBEX CORPORATION AND SUBSIDIARIES


For The Quarter Ended:   September 27, 1997      Commission File:      0-6933


Notes & Comments (Continued):

              On July 25, 1997, the Cambex common stock ceased being traded 
              on the Nasdaq stock market and began trading on the OTC bulletin
              board (symbol: CBEX).

              On October 10, 1997, Cambex filed a petition for reorganization
              under Chapter 11 of the United States Bankruptcy Code in
              Boston, Massachusetts. By filing this petition, Cambex will be
              given the opportunity to reorganize and restructure its
              indebtedness under court protection. The Company plans to file
              its Plan for Reorganization during the first quarter of 1998.

























                                    - 8 -

<PAGE>
                                  FORM 10-Q

                     CAMBEX CORPORATION AND SUBSIDIARIES


For The Quarter Ended:  September 27, 1997             Commission File:  0-6933



                                  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.


CAMBEX CORPORATION


By:    /s/    Joseph F. Kruy
       
              Joseph F. Kruy
              President




By:    /s/    Sheldon M. Schenkler
                    
              Sheldon M. Schenkler
              Chief Financial Officer




Dated:        November 10, 1997










                                    - 9 -