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 28, 1996       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>
<C>     <S>

                                               CAMBEX CORPORATION AND SUBSIDIARIES
        
                                                   CONSOLIDATED BALANCE SHEETS
                                              SEPTEMBER 28, 1996 AND DECEMBER 31, 1995
                                                             (UNAUDITED) 
        
                                                              ASSETS
        
        
                                                                            SEPTEMBER 28,             DECEMBER 31,
                                                                                1996                      1995
                                                                            -------------             -------------
        CURRENT ASSETS:
        
           CASH AND CASH EQUIVALENTS                                       $     382,440             $     588,322
        
        
           ACCOUNTS RECEIVABLE, LESS RESERVES OF
             $135,000 ON SEPTEMBER 28, 1996 AND
             $136,000 ON DECEMBER 31, 1995                                     4,854,087                 2,628,778
        
           CURRENT PORTION OF INVESTMENT IN SALES-TYPE LEASES,
             NET OF UNEARNED INTEREST INCOME OF $43,000 ON
             SEPTEMBER 28, 1996 AND $31,000 ON DECEMBER 31, 1995                 433,022                   393,284
        
           INVENTORIES                                                        11,144,117                12,030,324
        
           PREPAID TAXES                                                       4,130,731                 6,388,659
        
           PREPAID EXPENSES                                                      161,130                   178,991
                                                                           --------------            --------------
              TOTAL CURRENT ASSETS                                         $  21,105,527             $  22,208,358
                                                                           --------------            --------------
        LONG-TERM INVESTMENT IN SALES-TYPE LEASES, NET
           OF UNEARNED INTEREST INCOME OF $14,000 ON
           SEPTEMBER 28, 1996 AND $19,000 ON DECEMBER 31, 1995             $     312,999             $     362,992
        
        LEASED EQUIPMENT, AT COST, NET OF ACCUMULATED
           DEPRECIATION OF $218,000 ON SEPTEMBER 28, 1996                    
           AND $245,000 ON DECEMBER 31, 1995                               $     226,040             $     300,174
        
        PROPERTY AND EQUIPMENT, AT COST:
        
           MACHINERY AND EQUIPMENT                                         $   7,375,588             $   7,257,673
           FURNITURE AND FIXTURES                                                294,811                   303,428
           LEASEHOLD IMPROVEMENTS                                                608,654                   606,454
                                                                           --------------            --------------
                                                                           $   8,279,053             $   8,167,555
        
           LESS - ACCUMULATED DEPRECIATION AND AMORTIZATION                    7,187,007                 6,706,326
                                                                           --------------            --------------
              NET PROPERTY AND EQUIPMENT                                   $   1,092,046             $   1,461,229
        
        OTHER ASSETS
              TECHNOLOGY LICENSE/MARKETING AGREEMENT, 
                NET OF ACCUMULATED AMORTIZATION OF $7,933,000
               ON SEPTEMBER 28, 1996 AND $6,658,000 ON DECEMBER 31, 1995   $     566,668             $   1,841,671
              OTHER                                                               37,830                    37,875
                                                                           --------------            --------------
          TOTAL ASSETS                                                     $  23,341,110             $  26,212,299
                                                                           ==============            ==============
        
        

</TABLE>
                                                               -2-

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

                                                    CONSOLIDATED BALANCE SHEETS
                                                SEPTEMBER 28, 1996 AND DECEMBER 31, 1995
                                                            (UNAUDITED)
        
                                            LIABILITIES AND STOCKHOLDERS' INVESTMENT
        
        
        
                                                                               SEPTEMBER 28,         DECEMBER 31,
                                                                                   1996                  1995
                                                                              -------------         --------------
        CURRENT LIABILITIES:
        
          REVOLVING CREDIT AGREEMENT                                          $  1,440,000          $   3,200,000
        
          ACCOUNTS PAYABLE                                                       4,911,758              4,538,852
        
          OBLIGATIONS FOR TRADE-IN MEMORY                                        1,620,201              1,939,657
        
          ACCRUED EXPENSES                                                       4,137,235              3,717,691
                                                                              -------------         --------------
             TOTAL CURRENT LIABILITIES                                        $ 12,109,194          $  13,396,200
                                                                              -------------         --------------
        
        REVOLVING CREDIT AGREEMENT                                            $    840,000          $          --
        
        DEFERRED REVENUE                                                      $  1,089,626          $     917,087
        
        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  -  10,556,888 SHARES ON SEPTEMBER 28, 1996 AND
                        10,452,987 SHARES ON DECEMBER 31, 1995                $  1,055,689          $   1,045,299
                                                                                
          CAPITAL IN EXCESS OF PAR VALUE                                        15,658,820             15,446,004
        
          CUMULATIVE TRANSLATION ADJUSTMENT                                        170,482                287,763
        
          RETAINED EARNINGS (DEFICIT)                                           (6,727,935)            (4,025,288)
        
          LESS - COST OF SHARES HELD IN TREASURY -  
                 1,534,356 ON SEPTEMBER 28, 1996 AND
                 1,534,356 ON DECEMBER 31, 1995                                   (854,766)              (854,766)
                                                                              -------------         --------------
          TOTAL STOCKHOLDERS' INVESTMENT                                      $  9,302,290          $  11,899,012
                                                                              -------------         --------------
          TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT                      $ 23,341,110          $  26,212,299
                                                                              =============         ==============
</TABLE>
                                                                              
                                                                    -3-
<PAGE>
<TABLE>
<S>     <C>

                                                CAMBEX CORPORATION AND SUBSIDIARIES
     
                                                 CONSOLIDATED STATEMENTS OF INCOME
                                     FOR THE NINE MONTHS ENDED SEPTEMBER 28, 1996 AND AUGUST 31, 1995
                                                         (UNAUDITED)
     
                                                 
                                                         QUARTER ENDED                             NINE MONTHS ENDED
     
                                                SEPTEMBER 28,        AUGUST 31,          SEPTEMBER 28,         AUGUST 31,
                                                    1996               1995                 1996                 1995
                                               ------------         ------------         ------------         ------------
     
     REVENUES                                  $ 4,192,637         $  3,306,751         $ 19,335,991         $ 24,985,279
     
     COST OF SALES                               2,588,188            5,808,302           10,404,423           17,997,523
     DECLINE IN VALUE OF IBM TRADE-IN MEMORY         -                4,647,499               -                 4,647,499
                                               ------------        -------------        -------------        -------------
     GROSS PROFIT (LOSS)                       $ 1,604,449         $ (7,149,050)        $  8,931,568         $  2,340,257
     
     
     OPERATING EXPENSES:
                                                 
       RESEARCH AND DEVELOPMENT                $   886,381         $  1,838,594         $  2,969,174         $  4,857,500
       SELLING                                   1,679,713            2,133,059            5,483,343            6,270,650
       GENERAL AND ADMINISTRATIVE                  484,262              653,676            1,713,160            1,990,505
                                               ------------        -------------        -------------        -------------
                                               $ 3,050,356         $  4,625,329         $ 10,165,677         $ 13,118,655
                                               ------------        -------------        -------------        -------------
     
     OPERATING INCOME (LOSS)                   $(1,445,907)        $(11,774,379)        $ (1,234,109)        $(10,778,398)
                                                                     
     
     OTHER INCOME (EXPENSE):
       INTEREST EXPENSE                        $   (61,681)        $    (53,676)        $   (196,814)        $   (190,880)
       INTEREST INCOME                              28,317               35,257               84,889               80,114
       OTHER INCOME (EXPENSE)                     (439,536)            (560,592)          (1,356,613)          (1,049,811)
                                               ------------        -------------        -------------        -------------
     INCOME (LOSS) BEFORE INCOME TAXES         $(1,918,807)        $(12,353,390)        $ (2,702,647)        $(11,938,975)
     
       PROVISION (CREDIT) FOR INCOME TAXES     $         0         $ (2,049,000)        $          0         $ (1,884,000)
                                               ------------        -------------        -------------        -------------
     NET INCOME (LOSS)                         $(1,918,807)        $(10,304,390)        $ (2,702,647)        $(10,054,975)
                                               ============        =============        =============        =============
     
     
     NET INCOME (LOSS) PER COMMON SHARE        $    (0.21)         $     (1.18)         $     (0.30)         $     (1.15)
                                               ============        =============        =============        =============
     WEIGHTED AVERAGE COMMON AND COMMON          

     EQUIVALENT SHARES OUTSTANDING               9,000,000            8,750,000            8,975,000            8,750,000
     
     
</TABLE>
                                                         -4-       
<PAGE>
<TABLE>
<S>     <C>
       
                                       CAMBEX CORPORATION AND SUBSIDIARIES
                                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    FOR THE NINE MONTHS ENDED SEPTEMBER 28, 1996 AND AUGUST 31, 1995 
          
     
                                                                                     FOR THE NINE MONTHS ENDED
                                                                                   SEPTEMBER 28,     AUGUST 31,
                                                                                       1996             1995
                                                                                  ----------         ----------
     
     CASH FLOWS FROM OPERATING ACTIVITIES:
     Net Income (Loss)                                                            $ (2,702,647)    $(10,054,975)
     Adjustments to reconcile net income to net
       cash provided by (used in) operating activities:
       Depreciation and amortization                                              $  1,841,578     $  1,903,369
       Provision for losses on accounts receivable                                          --               --
       Provision for losses on inventory                                                    --        1,881,428
       Amortization of prepaid expenses                                                 14,074           15,423
       Common stock issued in lieu of cash                                             161,715          206,810
       Decline in value of IBM trade-in memory                                              --        4,647,499
       Change in assets and liabilities:                                            
         Decrease (increase) in accounts receivable                                 (2,225,309)       2,082,777
         Decrease in inventory                                                         886,207        1,452,233
         Decrease (increase) in investment in sales-type leases                         10,255         (152,863)
         Decrease (increase) in prepaid taxes                                        2,257,928       (3,610,212)
         Decrease in prepaid expenses                                                    3,787          262,946
         Decrease in other assets                                                           45               47
         Increase in accounts payable                                                  372,906          570,121
         Increase (decrease) in obligations for trade-in memory                       (319,456)       1,157,000
         Increase in accrued liabilities                                               419,544          354,954
         Increase (decrease) in deferred revenue                                       172,539         (149,916)
                                                                                    
                                                                                  -------------     ------------
           Total adjustments                                                      $  3,595,813     $ 10,621,616
                                                                                  -------------     ------------
           Net cash provided by operating activities                              $    893,166     $    566,641
     
     CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchases of Equipment                                                     $   (123,258)    $   (329,137)
                                                                                   ------------     ------------
           Net cash used in investing activities                                  $   (123,258)    $   (329,137)
     
     CASH FLOWS FROM FINANCING ACTIVITIES:
       Payments of notes payable                                                  $         --     $    (92,074)
       Proceeds from sale of common stock                                               61,491          825,320
       Net borrowings (repayments) under revolving credit agreement                   (920,000)         550,000
                                                                                  -------------     ------------
         Net cash Provided by (used in) financing activities                      $   (858,509)    $  1,283,246
     
       Effect of exchange rate changes on cash                                        (117,281)         141,514
                                                                                   ------------     ------------
     Net increase (decrease) in cash and cash equivalents                         $   (205,882)    $  1,662,264
     
     Cash and cash equivalents at beginning of period                             $    588,322     $  1,584,089
                                                                                  -------------     ------------
     Cash and cash equivalents at end of period                                   $    382,440     $  3,246,353
                                                                                  =============     ============
     SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
       Cash paid during the period for:
         Interest                                                                 $    196,814     $    178,624
         Income Taxes                                                                   12,263           25,696
     
</TABLE>
                                                                 -5-
<PAGE>
                                 FORM 10-Q

                    CAMBEX CORPORATION AND SUBSIDIARIES


For The Quarter Ended: September 28, 1996        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, principally 
       relating to reinstallation of IBM memory.

       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 28,         December 31, 
                                    1996                    1995
 
       Raw materials              $2,454,117            $ 2,600,433
       Work-in-process               980,000              1,017,749
       Finished goods              6,400,000              7,097,086
       Trade-in memory             1,343,000              1,315,056

                                  $11,144,117           $12,030,324


                                   - 6 -
<PAGE>
                                 FORM 10-Q

                    CAMBEX CORPORATION AND SUBSIDIARIES


For The Quarter Ended: September 28, 1996     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

              As a result of changing the fiscal year-end to December 31 from 
              August 31, the financial comparison presented is between the 
              current third quarter ended September 28, 1996, and the fourth 
              quarter of the prior fiscal year, ended August 31, 1995. 

              Revenues for the third quarter ended September 28, 1996 
              increased 27% from the comparable quarter of the prior year 
              (from $3,307,000 to $4,193,000).  The fourth quarter of the 
              prior year was impacted by an unprecedented slowdown and price 
              erosion in the ES/9000 mainframe computer market.  Although the 
              market has stabilized, the Company is still unable to predict 
              whether or when the market will return to its former position.

              The gross profit for the quarter ended September 28, 1996 was 
              $1,604,000 compared to a negative gross profit of $7,149,000 
              for the comparable quarter of the prior year.  The prior year's 
              amounts include a $4,647,000 decline in the value of its IBM 
              trade-in memory and a $1,900,000 inventory valuation reduction.

              Operating expenses for the quarter ended September 28, 1996, 
              decreased 34% from the comparable quarter of the prior year due 
              principally to the cost savings achieved through several 
              expense control actions.  Research and development expenses 
              decreased 52% due to completion of major projects in fiscal 
              1995 in addition to the expense control actions. 

              Other expense for the third quarter ended September 28, 1996 
              and the fourth quarter of the prior year included approximately 
              $425,000 in amortization expenses relating to the Company's 
              technology license/marketing agreement. 

                                   - 7 -
<PAGE>
                                 FORM 10-Q

                    CAMBEX CORPORATION AND SUBSIDIARIES


For The Quarter Ended:  September 28, 1996    Commission File:   0-6933


Notes & Comments (Continued):


              The Company's present operating plans indicate that cash flow 
              generated from operations will be adequate to meet its 
              obligations.

              During the second quarter, the Company agreed with its Bank to 
              extend and modify its Revolving Credit Agreement dated     
              April 15, 1993, as amended as of August 31, 1994.  Under the 
              terms of the Modification Agreement, the current loan, which 
              was $3,200,000 as of the end of the first quarter, is termed 
              out as follows:  After an initial payment of $320,000, the 
              Company will pay $120,000 monthly for a period of twenty-four 
              months. The balance as of the end of the third quarter was 
              $2,280,000.  When the Company receives its anticipated tax 
              refund from the Internal Revenue Service for the fiscal years 
              1991 to 1994, the Company will apply such refund against the 
              loan principal, thereby reducing the term out period.

              Interest on the indebtedness will be paid monthly at the 
              aggregate of the Bank's Base Rate, approximately the "Prime 
              Rate", plus one percent, currently aggregating to 9.25%.

              The Company granted to its Bank a security interest in the 
              Company's accounts receivable, inventory and general 
              intangibles.













                                   - 8 -

<PAGE>
                                 FORM 10-Q

                    CAMBEX CORPORATION AND SUBSIDIARIES


For The Quarter Ended:  September 28, 1996    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 12, 1996








                                   - 9 -