SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                   FORM 10-QSB

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
    SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1996

OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
    SECURITIES AND EXCHANGE ACT OF 1934



                          Commission File Number 1-7037


                           ENVIRONMENT ONE CORPORATION
                 (Name of small business issuer in its charter)


           New York                                             14-1505298  
--------------------------------------------------------------------------------
(State or other  jurisdiction  of                           (IRS Employer
incorporation of organization)                             Identification No.)


     2773 Balltown Road, Schenectady, NY                   12309-1090
--------------------------------------------------------------------------------
    (Address of principal executive offices)               (Zip Code)


                    Issuer's telephone number (518) 346-6161



Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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  [   ]


                      APPLICABLE ONLY TO CORPORATE ISSUERS

The  number  of  shares of Common  Stock,  par value  $.10 as of June 30,  1996:
4,146,473.


Transitional Small Business Disclosure Format (check one):

                             Yes  [   ]    No  [ X ]


<PAGE>
                           Environment One Corporation
                                   FORM 10-QSB



                                      INDEX



                                                                       Page No. 
                                                                                
Part I. Financial Information-                                                  
                                                                                
Item 1. - Financial Statements                                                  
Consolidated Balance Sheets September 30, 1996 and                              
December 31, 1995                                                         3     
                                                                                
Consolidated Statements of Operations for the Nine Months                       
Ended September 30, 1996 and 1995                                         5     
                                                                                
                                                                                
Consolidated Statements of Operations for the Three Months                      
Ended September 30, 1996 and 1995                                         6     
                                                                                
Consolidated Statements of Cash Flows for the Nine Months                       
Ended September 30, 1996 and 1995                                         7     
                                                                                
Notes to Consolidated Financial Statements                                8     
                                                                                
Item 2.                                                                         
Management's Discussion and Analysis of Financial                               
Condition and Results of Operations                                    9-12     
                                                                                
Part II. Other Information                                               13     
                                                                                
Signatures                                                               13     
                                                                       





















                                        2
<PAGE>
                           Part I - Financial Information

Item 1. Financial Statements
<TABLE>
<CAPTION>
                           Environment One Corporation
                           Consolidated Balance Sheets
                    September 30, 1996 and December 31, 1995

                      Assets                          9/30/96         12/31/95
------------------------------------------------   ------------    ------------
<S>                                                <C>             <C>      
Current Assets
     Cash ......................................   $     81,333          91,115
     Accounts Receivable, Net ..................      4,455,654       2,715,795
     Inventories
             Raw Materials .....................      1,385,139       1,202,527
             Work in Process ...................        292,744         387,165
             Finished Goods ....................        201,946         259,869
                                                   ------------    ------------
                                                      1,879,829       1,849,561
Note Receivable ................................              0          16,041
Other Current Assets ...........................        307,944         223,018
                                                   ------------    ------------
     Total Current Assets ......................      6,724,760       4,895,530
                                                   ------------    ------------

Property, Plant and Equipment
     Land ......................................        334,491         334,491
     Buildings .................................      2,271,832       2,271,832
     Machinery and Equipment ...................      4,813,067       4,573,834
     Construction in Progress ..................        265,364         109,343
     Less: Accumulated Depreciation ............     (4,195,318)     (3,752,410)
                                                   ------------    ------------
     Net Property, Plant and Equipment .........      3,489,436       3,537,090

Note Receivable ................................              0         125,417
Other Assets ...................................        153,355         163,878
                                                   ------------    ------------
Total Assets ...................................     10,367,551       8,721,915
                                                   ============    ============
</TABLE>













          (See Accompanying Notes to Consolidated Financial Statements)


                                       3
<PAGE>
<TABLE>
<CAPTION>
                           Environment One Corporation
                     Consolidated Balance Sheets - Continued
                    September 30, 1996 and December 31, 1995

      Liabilities and Shareholders' Equity            9/30/96        12/31/95
------------------------------------------------   ------------    ------------
<S>                                                <C>             <C>      
Current Liabilities
     Current Installments - Long Term Debt .....        338,101         338,245
     Note Payable - Bank .......................        375,000         550,000
     Accounts Payable ..........................      1,793,376       1,144,408
     Accrued Expenses ..........................        850,575         407,136
     Taxes Other than on Income ................          1,259           5,067
      Interest Payable .........................         17,996          20,410
                                                   ------------    ------------
          Total Current Liabilities ............      3,376,307       2,465,266

Deferred Tax Liability .........................         21,716          21,716
Minority Interest ..............................         39,002          48,530
Long Term Debt .................................      1,585,019       1,838,594
                                                   ------------    ------------
      Total Liabilities ........................      5,022,044       4,374,106
                                                   ------------    ------------
Shareholders' Equity
     Common Stock at Par Value .................        416,597         412,761
     Additional Paid in Capital ................      7,406,382       7,295,115
     Accumulated Deficit .......................     (2,403,232)     (3,330,851)
                                                   ------------    ------------
                                                      5,419,747       4,377,025
     Less: Treasury Stock at Cost ..............        (74,240)        (29,216)
                                                   ------------    ------------
       Total Shareholders' Equity ..............      5,345,507       4,347,809
                                                   ------------    ------------

Total Liabilities and Shareholders' Equity .....   $ 10,367,551       8,721,915
                                                   ============    ============
</TABLE>
















          (See Accompanying Notes to Consolidated Financial Statements)


                                       4
<PAGE>
<TABLE>
<CAPTION>
                           Environment One Corporation
                      Consolidated Statements of Operations
              For the Nine Months Ended September 30, 1996 and 1995
                                                                                
                                                  Nine Months Ended September 30,
                                                  -------------------------------
                                                      1996             1995
                                                  ------------     ------------
<S>                                               <C>              <C>       
Revenue ......................................    $ 15,307,202       12,963,253
                                                  ------------     ------------

Costs and Expenses

          Cost of Sales ......................      10,446,106        8,641,059

          Selling and Marketing ..............       1,726,926        1,489,451

          General and Administrative .........       1,489,956        1,525,427

          Interest Expense ...................         195,478          257,673

         Other Expense (Income) ..............         (45,388)          (6,355)
                                                  ------------     ------------

Total Expenses, Net ..........................      13,813,078       11,907,255
                                                  ------------     ------------


Net Earnings Before Taxes ....................       1,494,124        1,055,998

Income Tax Expense ...........................         566,505          403,633
                                                  ------------     ------------


Net Earnings .................................    $    927,619          652,365
                                                  ============     ============

Per Share Amounts:
Primary Earnings per Common Share ............    $       0.22             0.16
Fully Diluted Earnings per Common Share ......            0.22             0.16
                                                  ============     ============
</TABLE>










          (See Accompanying Notes to Consolidated Financial Statements)


                                       5
<PAGE>
                           Environment One Corporation
                      Consolidated Statements of Operations
             For the Three Months Ended September 30, 1996 and 1995
                                                                                
<TABLE>
<CAPTION>
                                                 Three Months Ended September 30,
                                                 --------------------------------
                                                      1996             1995
                                                  ------------     ------------
<S>                                               <C>              <C>       
Revenue ......................................    $  6,033,821        4,576,170
                                                  ------------     ------------

Costs and Expenses

          Cost of Sales ......................       3,876,205        2,919,108

          Selling and Marketing ..............         643,684          515,859

          General and Administrative .........         720,294          565,140

          Interest Expense ...................          65,650           82,164

         Other Expense (Income) ..............         134,702                0
                                                  ------------     ------------

Total Expenses, Net ..........................       5,440,535        4,082,271
                                                  ------------     ------------


Net Earnings Before Taxes ....................         593,286          493,899

Income Tax Expense ...........................         225,705          187,400
                                                  ------------     ------------


Net Earnings .................................    $    367,581          306,499
                                                  ============     ============

Per Share Amounts:
Primary Earnings per Common Share ............    $       0.09             0.07
Fully Diluted Earnings per Common Share ......            0.09             0.07
                                                  ============     ============
</TABLE>










          (See Accompanying Notes to Consolidated Financial Statements)


                                       6
<PAGE>
<TABLE>
<CAPTION>
                               Environment One Corporation
                          Consolidated Statements of Cash Flows
                  For the Nine Months Ended September 30,1996 and 1995
 
                                                           Nine Months Ended September 30,
                                                           -------------------------------
                                                                  1996         1995
                                                              -----------   -----------
<S>                                                           <C>           <C>    
Cash Flows-Operating Activities:

Net Earnings ...............................................  $   927,619       652,365

Adjustments to Reconcile Net Earnings
to Net Cash Provided (Used) by Operating Activities:

Depreciation and Amortization ..............................      447,003       450,000
Non-cash Compensation Expense ..............................      102,495        45,000
Decrease (Increase) - Receivables, Net .....................   (1,723,818)     (931,355)
Decrease (Increase) - Inventories ..........................      (30,268)     (130,092)
Decrease (Increase) - Income Tax Receivable ................            0       178,027
Decrease (Increase) - Other Current Assets .................      (84,928)      (66,617)
Decrease (Increase) - Other Assets .........................      131,847       (15,946)
Increase (Decrease) - Accounts Payable .....................      648,968       163,766
Increase (Decrease) - Accrued Expenses and other Liabilities      437,217       234,826
Increase (Decrease) - Minority Interest ....................       (9,528)       28,201
                                                              -----------   -----------

Net Cash Provided by Operating Activities ..................      846,607       608,175
                                                              -----------   -----------

Cash Flows (Used) in Investing Activities:
Capital Expenditures .......................................     (395,254)     (217,826)
                                                              -----------   -----------

Cash Flows From Financing Activities:
Increase (Decrease) - Note Payable to Bank .................     (175,000)     (250,000)
Increase (Decrease) - Long Term Debt .......................     (253,719)     (283,183)
Issuance of Common Stock ...................................        2,073             0
Purchase of Treasury Stock .................................      (34,489)            0
                                                              -----------   -----------

Net Cash (Used) by Financing Activities ....................     (461,135)     (533,183)
                                                              -----------   -----------

Net (Decrease) in Cash .....................................       (9,782)     (142,834)

Cash at Beginning of Period ................................       91,115       223,701
                                                              -----------   -----------

Cash at End of Period ......................................  $    81,333        80,867
                                                              ===========   ===========
</TABLE>
          (See Accompanying Notes to Consolidated Financial Statements)


                                       7
<PAGE>
                           Environment One Corporation
                   Notes to Consolidated Financial Statements
              For the Nine Months Ended September 30, 1996 and 1995

                                   (Unaudited)



         1.  In  the  opinion  of   management,   the   accompanying   unaudited
consolidated  financial statements contain all adjustments,  which are only of a
normal   recurring   nature,   necessary  to  fairly  present   Environment  One
Corporation's  financial position as of September 30, 1996 and December 31, 1995
as well as the  results  of  operations  and cash  flows  for the three and nine
months ended September 30, 1996 and 1995.  Operating results for any quarter are
not necessarily indicative of results for any future periods.

         2. Net earnings per share  computations  are based on primary and fully
diluted  number of shares of  Common  Stock  outstanding  for the three and nine
months ended September 30, 1996 (three month 4,248,140 and 4,263,234; nine month
4,248,186 and 4,264,890  shares) and the weighted  average  number of shares for
the period September 30, 1995 (4,096,743 shares).

         3. In January,  1996,  the Company  concluded an agreement  with PROTEC
Fire Detection,  plc of Nelson,  Lancashire,  England for the sale of its Cirrus
IFD  product  line.  In a two-stage  transaction  with an  approximate  value of
$750,000, the Company transferred all Cirrus IFD assets and operations to PROTEC
and simultaneously  entered into a product technology development contract to be
concluded during 1996. The pre-tax impact of the sale, net of certain  expenses,
was a gain of  $171,000  and is  recorded as other  income in the  statement  of
operations for the nine months ended September 30, 1996.

         4.  In  September,   1996,   the  Company   recognized   the  potential
uncollectability of a note receivable from General Testing Corporation incurring
a pre-tax write-off of $136,000. After failure to receive timely payments on the
note, the Company,  through legal counsel,  served notice of default on the note
to General Testing  Corporation.  General  Testing  Corporation did not cure the
payment defaults in the period required.  The Company is working with counsel on
further action.




















                                       8
<PAGE>
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

RESULTS OF OPERATIONS
The following  information  should be read in conjunction  with the consolidated
financial  statements  and notes  thereto  included in Item 1 of this  Quarterly
Report,  and  the  consolidated  financial  statements  and  notes  thereto  and
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  contained in the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1995.


     NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
       (ALL FIGURES ROUNDED TO THE NEAREST 000'S)

Revenue for the period increased $2,344,000,  or 18.1% over the same period last
year.  Sewer  Systems  revenue  increased  $2,263,000  along with an increase of
$99,000 in Detection Systems.

Sales in Sewer Systems improved  compared to the same period last year as second
quarter 1996 sales  benefited by a reversal of extreme  weather  conditions  and
funding  delays in municipal  projects  experienced in quarter one of 1996 while
third quarter sales improved as the market  continues to respond to the emphasis
the Company has placed on sales and marketing.  New distribution  agreements and
new sales offices are adding up to increased growth which has resulted in record
shipments in the third quarter of 1996.

As part of the Detection  Systems  business revenue  increase,  Hydrogen Control
Cabinet Sales increased $445,000, Generator Condition Monitor increased $118,000
while Cirrus IFD sales decreased by $464,000.  As sales of the Hydrogen  Control
Cabinet began in the fourth  quarter of 1995, all sales in the first nine months
of 1996 reflect an increase over the same period in the prior year. Sales of the
Generator  Condition Monitor slowed in the third quarter as timing decisions for
capital equipment purchases negatively affected quarter to quarter sales after a
strong first half. The decrease in Cirrus IFD sales is  attributable to the sale
of the business to PROTEC, although the Company will continue to supply units to
PROTEC until completion of the technology development contract in 1996.

Cost of Sales increased $1,805,000 when compared with the same period last year.
Expressed in percent of sales,  cost of sales  increased from 66.7% in the first
nine  months of 1995 to 68.2% in the nine  months of 1996.  In percent of sales,
direct labor  improved  slightly  while direct  material  increased by 2.8%. The
increase in direct material percent to sales is attributable to project start-up
costs for the GP2000  product and lower  first half  average  selling  prices on
large  municipal  projects in Sewer Systems.  Indirect labor costs  increased by
$87,000  primarily  due to a shift in  engineering  resources  to  manufacturing
support. Indirect non-labor costs increased $43,000 due to increases in variable
overhead costs as a result of increased production and shipments.










                                        9
<PAGE>
     NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995, CONTINUED
       (ALL FIGURES ROUNDED TO THE NEAREST 000'S)

Selling and  Marketing  costs  increased  $237,000  compared with the first nine
months of 1995. Sewer Systems marketing costs increased $464,000 while Detection
Systems marketing costs decreased $227,000.  Sewer Systems marketing labor costs
increased  $222,000  along with an increase of $242,000 in  non-labor  marketing
costs.  The  increase  in Sewer  Systems  labor costs can be  attributed  to the
opening of new district sales offices, the hiring of a national sales manager in
the third quarter of 1996 and increased internal sales commissions. The increase
in non-labor  Sewer  Systems  marketing  costs is primarily  due to increases in
advertising,   promotion  and  literature,   travel  and  living  and  marketing
consultant  expenses.  The  decrease in Detection  Systems is  primarily  due to
avoided costs as a result of the sale of the Cirrus IFD partially  offset by new
marketing expenses for the Hydrogen Control Cabinet.

General and Administrative costs, including research and development, decreased
$35,000 over the same period last year. Research and development costs decreased
$124,000 while other general and administrative costs increased $89,000.

The decrease in Research and  Development  costs is attributable to the shifting
of effort to manufacturing  and marketing support in Sewer Systems and Detection
Systems  along with cost  reductions  due to the sale of the Cirrus IFD  product
line.

In regard to other  general and  administrative  costs,  third  quarter  charges
related to profit sharing was the primary driver of the additional expense along
with  increases  in travel and living,  legal  fees,  temporary  help,  investor
relations  and  training  expenses.  Partially  offsetting  the  increases  were
decreases  in  tuition   reimbursement,   consultant   expenses,   expenses  for
Environment One Japan and allocated facilities charges.

Interest expense  decreased  $62,000 over the nine months of 1995.  Average debt
during the first nine months of 1996 was  $285,000  less than the same period in
1995. Interest rates on the line of credit and term loans were reduced as of May
1, 1996 to prime and prime plus one half point, respectively.

Other income  increased  $39,000 over the same period last year.  As a result of
the sale of the Cirrus IFD product  line to PROTEC in quarter  one of 1996,  the
Company  recorded,  net  of  certain  expenses,   pre-tax  income  of  $171,000.
Offsetting  this  increase was the write-off of a note  receivable  from General
Testing  Corporation  in the third  quarter of 1996 in the  amount of  $136,000,
pre-tax.

     THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
       (ALL FIGURES ROUNDED TO THE NEAREST 000'S)

Revenue for the period increased $1,458,000,  or 31.9% over the same period last
year. Sewer Systems revenue increased $1,479,000 while Detection Systems revenue
decreased $21,000 when compared with the same period last year.

Sales in Sewer  Systems  improved  as the  market  continues  to  respond to the
emphasis  the  Company  has  placed  on  sales  and   marketing   following  the
introduction of the GP2000 product in late 1994. New distribution agreements and
new sales offices are adding up to increased growth which has resulted in record
shipments in the quarter.


                                       10
<PAGE>
     THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995, CONTINUED
       (ALL FIGURES ROUNDED TO THE NEAREST 000'S)

As part of the Detection  Systems  business revenue  decrease,  Hydrogen Control
Cabinet sales increased $293,000 while Generator Condition Monitor and Incipient
Fire Detector sales decreased $204,000 and $110,000,  respectively.  As sales of
the Hydrogen  Control  Cabinet began in the fourth quarter of 1995, all sales in
the third quarter of 1996 reflect an increase over the same quarter in the prior
year.  The decrease in Generator  Condition  Monitor  sales can be attributed to
timing  decisions by electric  utility  customers in their  purchases of capital
equipment  which led to a strong  first  half  increase  in sales  over the same
period in 1995. The decrease in Cirrus IFD sales is  attributable to the sale of
the business to PROTEC,  although  the Company will  continue to supply units to
PROTEC until completion of the technology development contract in 1996.

Cost of Sales  increased  $957,000 when compared with the same period last year.
Expressed in percent of sales,  cost of sales  increased  slightly from 63.8% in
the third  quarter of 1995 to 64.2% in the third  quarter of 1996. In percent of
sales,  direct labor  remained flat while direct  material  increased  2.4% when
compared with the same period in 1995. The increase in direct  material  percent
to sales is  attributable  to project  start-up  costs for the  GP2000  product.
Indirect labor costs  increased  $49,000  primarily due to shifting  engineering
labor from research and development to manufacturing support. Indirect non-labor
costs increased  $25,000  reflecting  increases in variable  overhead costs as a
result of increased  production and shipments  offset partially by a decrease in
costs for inventory obsolescence.

Selling and Marketing costs increased  $128,000  compared with the third quarter
of 1995.  Sewer Systems  marketing  costs  increased  $208,000  while  Detection
Systems  marketing  costs  decreased  $80,000.  The  increase  in Sewer  Systems
marketing costs reflects the additional costs of one sales office and the hiring
of a  national  sales  manager in the third  quarter  along  with  increases  in
internal salesperson's commissions, travel and living, advertising,  promotions,
literature and marketing consultant expenses.  The decrease in Detection Systems
marketing  costs is mainly  attributable  to the sale of the Cirrus IFD  product
line.

General and Administrative costs, including research and development, increased
$155,000  over the  same  period  last  year.  Research  and  development  costs
decreased  $70,000  while  other  general  and  administrative  costs  increased
$225,000.

The decrease in Research and  Development  costs is attributable to the shifting
of effort to manufacturing  and marketing support in Sewer Systems and Detection
Systems.

In regard to other general and  administrative  costs,  third quarter 1996 costs
for profit  sharing was the main driver of the increase  along with increases in
legal fees, director's fees and investor relations.

Interest  expense  decreased  $17,000  compared  with the third quarter of 1995.
Average  debt during the third  quarter of 1996 was  $65,000  more than the same
period in 1995. Interest rates on the line of credit and term loans were reduced
as of May 1, 1996 to prime and prime plus one half point, respectively.




                                       11
<PAGE>
     THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995, CONTINUED
       (ALL FIGURES ROUNDED TO THE NEAREST 000'S)

Other income  decreased  $135,000  over the same period last year as a result of
the  write-off of a note  receivable  from the General  Testing  Corporation  of
$136,000 pre-tax.


     FINANCIAL POSITION AND LIQUIDITY
       (ALL FIGURES ROUNDED TO THE NEAREST 000'S)

Cash needs for the first nine months of 1996 were met by an opening cash balance
of $91,000 along with cash provided by operating activities of $847,000. Capital
expenditures  for the period were $395,000  along with a reduction in total bank
debt of $429,000.  During the same period last year,  cash provided by operating
activities was $608,000 while capital expenditures and total bank debt reduction
was $218,000 and $533,000, respectively.

Continued control over inventory,  operating  expenses and capital  expenditures
along with forecasted cash receipts and line of credit  availability will enable
the Company to meet its  day-to-day  working  capital  requirements  in the near
term.




































                                       12
<PAGE>
                           Environment One Corporation
                                   FORM 10-QSB


                           Part II - Other Information


     Not Applicable



                                   SIGNATURES

Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934,  as
amended,  the  Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.



                                                ENVIRONMENT ONE CORPORATION




Date: October 29, 1996                          By: /s/Stephen V. Ardia
                                                    ----------------------------
                                                       Stephen V. Ardia
                                                       Chairman of the Board,
                                                       Chief Executive Officer,
                                                       President and Director





Date: October 29, 1996                          By: /s/Philip W. Welsh
                                                    ----------------------------
                                                       Philip W. Welsh
                                                       Director of Finance,
                                                       Treasurer

















                                       13