FORM 10-Q
                   SECURITIES AND EXCHANGE COMMISSION
                          Washington, DC 20549
                           
         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934
                           
               For the quarterly period ended   September 29, 1996  
                           
               Commission file number           1-7807                  
                           
                                 Champion Parts, Inc.                          
               (Exact name of registrant as specified in its charter)
                           
               Illinois                               36-2088911
    (State or other jurisdiction of         I.R.S. Employer Identification No.
     incorporation or organization)
                           
                     2525 22nd Street, Oak Brook, Illinois 60521   
                    (Address of principal executive offices)
                           
                                    630-573-6600                                
               (Registrant's telephone number, including area code)
                           
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
     
            Class                           Outstanding at September 29, 1996
     Common Shares - $.10 par value                    3,655,266

     
<PAGE>     
                         CHAMPION PARTS, INC. 
                           AND SUBSIDIARIES
              CONSOLIDATED BALANCE SHEETS (CONDENSED)
                             
                             
                                            September 29        December 31
                                                1996               1995
                                           ------------        ------------     
                                                     (Unaudited)
ASSETS
                                                          
Current Assets
   Cash and cash equivalents                  $   820,000        $   874,000
   Accounts Receivable, less
     allowance for uncollectible accounts       3,782,000          4,737,000
   Inventories                                  7,448,000         10,700,000
   Prepaid expenses and other                   1,783,000          1,830,000
                                              -----------        -----------
          Total current assets                 13,833,000         18,141,000
                                                          

   Property, plant and equipment (net)          5,484,000          9,834,000
   Other assets                                   587,000            590,000
                                              -----------        -----------
   Total Assets                               $19,904,000        $28,565,000
                                              ===========        ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
   Accounts Payable                           $ 7,519,000        $ 7,320,000
   Accrued expenses and other payables          7,401,000          8,588,000
   Current maturities on long-term debts        7,490,000         13,462,000
                                              -----------        -----------
          Total current liabilities           $22,410,000        $29,370,000
                                                          
   Deferred income taxes                        1,376,000          1,403,000
   Long-term debt, less current maturities         46,000            701,000
                                              -----------        -----------
          Total liabilities                   $23,832,000        $31,474,000

Stockholders' Equity
   Preferred stock - no par value
    Authorized 10,000,000 shares 
    issued and outstanding, none
   Common stock - $.10 par value                  366,000            366,000
    Authorized 50,000,000 shares
    issued and outstanding 3,655,266 shares
   Additional paid-in capital                  15,578,000         15,578,000
   Cumulative translation adjustment             (625,000)          (592,000)
   Retained earnings                          (19,247,000)       (18,261,000)
                                              -----------        -----------
        Total stockholders' equity            $(3,928,000)       $(2,909,000)

Total Liabilities and Stockholders' Equity    $19,904,000        $28,565,000
                                              ===========        ===========
See notes to condensed consolidated financial statements.
</PAGE>                               





<PAGE>                                                          
                              CHAMPION PARTS, INC.
                                AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF OPERATIONS (CONDENSED)
                                                          
                                                          

(Amounts in thousands)
                              Nine Months Ended         Three Months Ended
                             Sept. 29,    Oct. 1,      Sept. 29,    Oct. 1,
                               1996        1995          1996        1995
                            ----------  ---------     ----------  ---------
                                 (Unaudited)                (Unaudited)

Net Sales                   $   20,744  $  46,341      $   5,310  $   8,697
                            ----------  ---------      ---------  ---------
                             
Cost and Expenses
   Cost of product sold         17,115     46,572          4,771      9,525
   Selling, distribution and
    administration               3,408     10,614          1,023      1,788
   Special charges                   0      1,263              0        130
                            ----------  ---------      ---------  ---------
                                20,523     58,449          5,794     11,443
                            ----------  ---------      ---------  ---------

Earnings (loss) before
   interest and income taxes       221    (12,108)          (484)     2,746
Interest                         1,200      1,785            332        533
                            ----------  ---------      ---------  ---------
Earnings (loss) before
   income taxes                   (979)   (13,893)          (816)    (3,279)
Income Tax                           7          1              0          0
                            ----------  ---------      ---------  ---------
Net earnings (loss)         $     (986) $ (13,894)     $    (816) $  (3,279)
                            ==========  =========      =========  =========
                             
Average Shares Outstanding   3,655,266  3,655,266      3,655,266  3,655,266
Net Earnings (loss) 
   per common share          $   (0.27) $   (3.80)     $   (0.22) $   (0.90)
                             
See notes to condensed consolidated financial statements.
                             











</PAGE>

<PAGE>                             
                         CHAMPION PARTS, INC.
                           AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS
              
                                                     Nine Months Ended
                                                 Sept. 29,          Oct. 1,
                                                    1996              1995
                                               -------------   --------------
                                                        (Unaudited)
                             
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net earnings (loss)                            $  (986,000)  $  (13,894,000)
   Adjustments to reconcile net earnings (loss)
    to net cash provided by operating activities:
      Depreciation and amortization                  729,000        1,129,000
      Provision for losses on accounts receivable    (25,000)         663,000
      Special charges                                      0        1,263,000
      Change in assets and liabilities:
       Accounts receivable                           979,000        6,086,000
       Inventories                                 3,254,000       12,657,000
       Accounts payable and accrued expenses        (983,000)      (1,190,000)
       Other                                          14,000          254,000
                                                 -----------    -------------
           NET CASH PROVIDED BY (USED IN)
             OPERATING ACTIVITIES                  2,982,000        6,968,000
                             
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures (net)                         (47,000)        (162,000)
  Proceeds from sales of property,
   plant & equipment                               3,677,000           10,000
                                                 -----------    -------------
                             
          NET CASH USED IN INVESTING ACTIVITIES    3,630,000         (152,000)
                             
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings (payments) under 
   credit agreements                              (5,761,000)      (5,965,000) 
  Principal payments on long-term debt              (871,000)        (990,000)
                                                 -----------    -------------
          NET CASH PROVIDED BY (USED IN)
            FINANCING ACTIVITIES                  (6,632,000)      (6,955,000)
                                                 -----------    -------------
                             
EFFECT OF EXCHANGE RATE CHANGES ON CASH              (34,000)           9,000
                             
NET INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS                                        (54,000)        (130,000)
                             
CASH AND CASH EQUIVALENTS, beginning of period       874,000          346,000
                                                 -----------    -------------
CASH AND CASH EQUIVALENTS, end of period         $   820,000     $    216,000
                                                 ===========    =============
SUPPLEMENTAL DISCLOSURES FOR CASH FLOW
  INFORMATION:

     Cash paid during the period for

       Interest                                  $ 1,200,000      $ 1,747,000 
       Income Taxes                                    7,000           71,000

See notes to condensed consolidated financial statements.

</PAGE>
                             
                             
                             
                           CHAMPION PARTS, INC.
                             AND SUBSIDIARIES
                        ________________________
                                    
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                         (UNAUDITED)
___________________________________________________________________________
                                                                             
1.  The accompanying financial statements for the nine months ended
    September 29, 1996 have been prepared, 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 condensed consolidated financial statements and these
    notes should be read in conjunction with the consolidated financial
    statements of the Company included in the Company's Annual Report
    on Form 10K for the year ended December 31, 1995. 
      
    The consolidated balance sheet at December 31, 1995 has been derived
    from the audited financial statements at that date and condensed.
      
2.  The information furnished herein reflects, except as discussed in Note 5,
    all adjustments (consisting only of normal recurring accruals) which are,
    in the opinion of management, necessary for a fair presentation of
    results of operations for the interim period. Results of operations for
    the nine months ended September 29, 1996 are not indicative of results
    to be expected for the entire year.
      
3.  Inventories are valued at the lower of cost (first-in, first-out method)
    or market.  A summary of the inventories follows:
      
      
                                           September 29,       December 31,
                                               1996                1995
                                           -------------      -------------
                          
   Raw Materials                              $1,779,000         $4,806,000 
                                              
   Work in Process                             2,746,000          2,529,000
                                              
   Finished Goods                              2,923,000          3,365,000
                                            ------------       ------------

                                             $7,448,000         $10,700,000
                                            ============       ============   
                                                
    Included in inventory above were cores of $3.7 million
    (September 29, 1996) and $6.2 million (December 31, 1995).
     
4.  For reporting purposes, product and core returns are offset against gross
    sales in arriving at net sales.  For the nine months ended September 29,
    1996 and October 1, 1995 returns were $13,174,000, and $38,573,000
    respectively.
      
5.  The Company amended its bank Credit Agreement effective July 1,
    1996.  This amendment expired on September 30, 1996.  The banks
    have continued to fund the Company's operations under substantially
    the same terms as in effect under the expired extension.
      
    The Company has been in discussion with its banks regarding a long
    term financing arrangement through 1997 which contemplates an
    agreement with its unsecured creditors.  Discussions between the
    Company and a panel representing its unsecured creditors have
    continued through the third quarter.  The Company is working to 
    finalize agreements with the banks and unsecured creditors in the fourth
    quarter.  There can be no assurance, however, that such agreements will
    be obtained.  Without long term financing and an agreement with the
    unsecured  creditors, the Company would not have sufficient funds to
    meet its obligations and would need to seek court protection. 
           
    The Company's financial statements are prepared on a going concern basis
    and do not contain adjustments which may be  necessary should the Company
    be forced to liquidate assets or take other actions to satisfy debt
    payments. 
      
    As previously reported, the Company received notice in September 1995
    that the lending bank to its 50% owned Canadian joint venture had
    demanded payment on its loan and guarantees from the Company.  In
    July 1996, the joint venture's debt was refinanced with another lender. 
    The Company provides, through a wholly owned foreign subsidiary,
    a guarantee on the outstanding debt.
      
6.  In the third quarter, the Company sold its former Fresno, California
    manufacturing facility and certain related equipment for $2,800,000
    less expenses.  It also sold another idle facility for $250,000 less
    expenses.  The net proceeds of both transactions were used to pay off
    existing mortgages ($747,000) and bank debt ($2,200,000).  Net
    proceeds from the sales approximated the net book value of the assets
    sold.        
          
      
Management's Discussion and Analysis of Financial Condition and Results
                          of Operations
                          
Except for the historical information contained herein, the matters discussed
in this Form 10-Q include forward looking statements that involve risks and
uncertainties that could cause actual results to differ materially from those
in the forward looking statements.  Potential risks and uncertainties include,
without limitation, those mentioned in the company's 1995 Annual Report
on Form 10-K, under "Risk Factors"; and in particular the company's ability
to grow its sales base, lower costs and reach agreement with its banks and
unsecured creditors.
          
Results     
      
Three Months Ended September 29, 1996 Compared to October 1, 1995
        
Net sales for the quarter ended September 29, 1996 were $5.3 million, 39% less
than net sales of $8.7 million for the same period of 1995. Net sales to the
Company's major current customers increased by approximately 13% over sales
to those same customers in the third quarter of 1995.  This increase was more
than offset by the lost business due to the Company's decision to exit the
manufacture and sale of passenger car electrical and mechanical products to
wholesale distributors and retailers and the loss of two large carburetor and
one large constant velocity drive shaft customer in the third quarter of 1995.
        
1995 results also reflected higher product and core returns which are
reflected as reductions to arrive at net sales.  In 1995, higher returns
were due to customers returning units without replacement sales.  Total
product and core returns, reflected as reductions in net sales, were 38% of
gross sales in 1996 compared to 45% in 1995.
        
Carburetor sales were 65% and 39% of net sales in the third quarter of 1996
and 1995, respectively.  The Company believes it continues to be a
significant supplier of carburetors to the aftermarket.  Since the mid-1980's
carburetors have been installed in fewer new vehicles sold in the United
States and Canada due to the increased use of fuel injection systems.
However, the Company continues to sell replacement units for older vehicles,
many of which use carburetors.  The Company expects that carburetor sales
will decline in future years.  In addition, carburetor margins may be
negatively impacted in the future as customers seek to return product during
periods of declining demand.  The Company has a customer product return
policy and has established reserves to mitigate this effect.
        
Cost of products sold was 90% of net sales in the third quarter of 1996
compared to 110% in the third quarter of 1995. Improvement in gross margin
is primarily attributed to the Company's 1995 decision to exit lower margin
passenger car electrical and mechanical product lines.  1995 third quarter
results also included $500,000 of provisions to write down inventory affected
by this decision.
        
Selling, distribution and administrative expenses were $1 million in the third
quarter of 1996 compared to $1.8 million in the third quarter of 1995.  Cost
reductions resulting from the Company's 1995 decision to exit certain markets,
close one manufacturing facility and downsize another manufacturing facility
accounted for the decrease.  
        
Operating results in the third quarter of 1995 were also negatively impacted
by $130,000 in special charges related to the Company's restructuring.
        
Interest expense was $332,000 in the third quarter of 1996 compared
to $533,000 in the prior year due to lower average outstanding borrowings.
The Company reduced borrowings primarily through sales of assets related to
the discontinued business lines.  Debt was reduced approximately $3 million
during the third quarter of 1996 with the sale of two idle facilities.
            
Net loss for the 1996 third quarter was $816,000 versus a $3.3 million net
loss in 1995.
        
The third quarter is traditionally the low point in the Company's sales
cycle.  Net sales in the third quarter  were 35% lower than in the first
quarter of 1996.  Fourth quarter sales are expected to be modestly higher
than third quarter sales due to normal seasonal increases.
        
The Company is attempting to develop new business and continues to evaluate
further cost reduction opportunities to achieve consistent profitability.
There can be no assurances that the Company will be successful in these
efforts.
        
Nine Months Ended September 29, 1996 Compared to Nine Months Ended
October 1, 1995

Net sales for the nine months of 1996 were $20.7 million, 55% less than net
sales of $46.3 million for the nine months of 1995.  Net sales to the
Company's major current customers for the first nine months of 1996 were
approximately 39% higher than in the first nine months of 1995.  This
increase mitigated the impact of lower sales resulting from the Company's 1995
decision to exit the manufacture and sale of passenger car electrical and
mechanical products and the loss of two large carburetor and two large
constant velocity joint customers in 1995.
        
1995 results reflected higher product and core returns which are reflected as
reductions to arrive at net sales.  The higher returns were due to customers
returning units without replacement sales.  Total product and core returns,
reflected as reductions in net sales, were 39% in 1996 compared to 45%
in 1995.
        
Carburetor sales were 62% of net sales in the first nine months of 1996
compared to 30% in 1995.
        
Cost of products sold was 83% of net sales in 1996 compared to 101% in 1995. 
The reduction in cost of products sold is attributed to the Company's 1995
decision to exit lower margin passenger car electrical and mechanical product
lines.  1995 results were also negatively impacted by a $3.5 million write
down of inventories due to that decision.
        
Selling, distribution and administrative expenses were $3.4 million in the
first nine months of 1996 compared to $10.6 million for the same period
in 1995.  Cost reductions resulting from the Company's 1995 decision to exit
certain markets, close one manufacturing facility and downsize another
manufacturing facility accounted for a large part of the decrease. 
        
1995 results reflect a $1.3 million pretax special charge to earnings
reflecting the company's decision to exit the manufacture and sale of
passenger car electrical and mechanical products to wholesale distributors
and retailers. 
        
Interest expense was $1.2 million in 1996 compared to $1.8 million in the
prior year due to lower average outstanding borrowings.  The Company reduced
borrowings through 1996 primarily through sales of assets related to the
discontinued business lines.  Interest expense is expected to be lower in
future periods as a result of the lower debt levels.  Income tax provisions
in 1996 and 1995 were minimal due to the company's net operating loss carry
forward position.
          
        
Liquidity and Capital Resources
        
Working Capital
        
Net working capital on September 29, 1996 was negative $(8.6) million
compared to negative $(11.2) million on December 31, 1995.
        
The improvement in net working capital primarily arose from proceeds from the
sale of idle facilities and equipment being used to pay down bank debt, which
is classified as a current liability.  These assets were held as security
under the bank agreement.
        
At September 29, 1996 the Company has classified $6 million of outstanding
debt and a $1.5 million capitalized lease obligation as current liabilities.
The amount of outstanding loans under the bank lines were $5.9 million on
September 29, 1996 versus $11.6 million on December 31, 1995.
        
The Company is continuing to generate cash from assets idled by its 1995
decision. However, the amount of cash generated in the future is expected to
be significantly lower than that generated in the prior three quarters.  In
the fourth quarter, the Company completed the sale of its last remaining idle
facility for approximately $300,000.  The proceeds of the sale were used to
reduce bank debt.
        
The Company has had discussions with a representative group of its trade
creditors regarding an agreement to settle their unsecured claims.  The
Company cannot predict the outcome of these discussions.  The result of
these discussions could have a significant impact on future operations and
on net working capital. 
        
Debt
        
The Company amended its bank credit agreement on July 1, 1996.  This
amendment expired on September 30, 1996.  The banks have continued to fund
the Company's operations under substantially the same terms as in effect
under the expired extension.
        
The Company has been in discussion with its banks regarding a long term
financing arrangement through 1997 which contemplates an agreement with its
unsecured creditors.  Discussions between the Company and a panel representing
its unsecured creditors have continued through the third quarter.  The Company
is working to finalize agreements with the banks and unsecured creditors in
the fourth quarter.  There can be no assurance, however, that such agreements
will be obtained.  Without long term financing and an agreement with the
unsecured creditors, the Company would not have sufficient funds to meet its
obligations and would need to seek court protection. 
        
The Company's financial statements are prepared on a going concern basis and
do not contain adjustments which may be  necessary should the Company be
forced to liquidate assets or take other actions to satisfy debt payments. 
        
As previously reported, the Company received notice in September 1995 that
the lending bank to its 50% owned Canadian joint venture had demanded payment on
its loan and guarantees from the Company.  In July 1996, the joint venture's
debt was refinanced with another lender.  The Company provides, through a
wholly owned foreign subsidiary, a guarantee on the outstanding debt.
        
        
Cash Flow  
        
The Company decreased its long-term debt, net of cash, by $6.6 million in the
nine months ended September 29, 1996.  Funds generated by operations, and
sales of inventories, plants and equipment related to discontinued product
lines accounted for the decrease.  The following summarizes significant
items affecting the change in total debt, (amounts in thousands).
        
                              
                                                Sept. 29,      Oct. 1,
                                                  1996          1995     
                                               -----------   ----------
                         
Net income (loss)
   Changes in working capital, other             $  2,214     $  5,839 

Depreciation and Amortization                         729        1,129 
                                               
Capital Expenditures                                  (47)        (162)
                                               
Proceeds from fixed asset sales                     3,677           10
                                                ----------   ---------  

(Increase) Decrease in total debt, net of cash   $  6,573     $  6,816      
                                                ==========   =========

           
        
        
PART II.    OTHER INFORMATION
      
Item 1.     Legal Proceedings 
        
In the second quarter the current owner of a former plant site filed a
complaint against the Company and two other parties.  The complaint seeks,
among other things, an order compelling the Company to investigate and clean
the site and related liabilities from a CERCLA action in which the
site is located, and other related costs and damages.  Several of the
Company's insurance carriers have agreed, under a reservation of rights, to
provide a defense.  The Company is also in negotiations with certain carriers
regarding settlement of indemnification coverage for this matter. 
        
The Company continues to be a defendant in three lawsuits from former trade
vendors and one former insurance carrier seeking payments of outstanding
balances.  Negotiations with each of the plaintiffs have continued.
        
        
Item 6.     Exhibits and Reports on Form 8-K
        
            (a)  Exhibits
        
            (27)  Financial Data Schedules
        
          
        
        
        
                       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.
        
        
        
        CHAMPION PARTS, INC.
                   (Registrant)
        
        
        
        
        DATE:                                    
        By:             /s/ Mark Smetana           
               Mark Smetana
               Vice President - Finance
               Corporate Secretary