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

 /X/    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES AND EXCHANGE ACT OF 1934

          For the quarterly period ended June 30, 1998
                                
                               OR

 / /    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934

     For the transition period from _________ to _________.
                                
                 Commission file number: 1-3203
                     _______________________
                                
                     CHESAPEAKE CORPORATION
                                
     (Exact name of registrant as specified in its charter)

           Virginia                             54-0166880
(State or other jurisdiction of              (I.R.S. Employer
 incorporation or organization)              Identification No.)

        1021 East Cary Street
         Richmond, Virginia                     23218-2350
(Address of principal executive offices)         Zip Code

Registrant's telephone number, including area code: 804-697-1000
                                
                         Not Applicable
      (Former name, former address, and former fiscal year,
                  if changed since last report)
                     _______________________

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 receding 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 June 30, 1998: 21,328,154 shares.



                     CHESAPEAKE CORPORATION
                            FORM 10-Q
          FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
                              INDEX

                                                           PAGE
                                                          NUMBER
                                                          ------
PART I.  FINANCIAL INFORMATION

    Item 1. Financial Statements

        Consolidated Statements of Earnings-
         Quarter and Six months ended June 30, 1998
          and June 30, 1997                                  3

        Consolidated Balance Sheets
         at June 30, 1998 and December 31, 1997              5

        Consolidated Statements of Cash Flows-
         Six months ended June 30, 1998
          and June 30, 1997                                  7

        Notes to Consolidated Financial Statements           9

    Item 2. Management's Discussion and Analysis of
            Financial Position and Results of Operations    18


PART II. OTHER INFORMATION

    Item 1. Legal Proceedings                               25

    Item 6. Exhibits and Reports on Form 8-K                25


Signature                                                   26














                               -2-
                             PART I
                                
                                
             CHESAPEAKE CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF EARNINGS
              (In millions, except per share data)
                           (Unaudited)

                                Quarter Ended    Six Months Ended
                                   June 30,          June 30,
                               --------------------------------
                                  1998    1997      1998   1997
                                ------  ------    ------ ------
Net sales                       $237.0  $264.3    $453.8 $558.8
Costs and expenses:
  Cost of products sold          171.6   201.3     326.2  424.9
  Depreciation and cost of
   timber harvested               15.1    19.8      29.7   46.5
  Selling, general and
   administrative expenses        32.2    41.2      65.2   82.5
  Restructuring/special charges      -    18.9         -   18.9
                                ------  ------    ------ ------
   Earnings(loss)from operations  18.1   (16.9)     32.7  (14.0)

Gain on sale of businesses           -    86.3         -   86.3
Other income and expenses, net     3.3     2.1       6.0    3.1
Interest expense, net             (4.7)   (6.8)     (9.3) (16.3)
                                ------  ------    ------ ------
   Earnings before taxes and
      extraordinary item          16.7    64.7      29.4   59.1

Income taxes                       6.2    27.6      10.9   25.5
                                ------  ------    ------ ------
   Income before extraordinary
      item                        10.5    37.1      18.5   33.6
Extraordinary item, net of
      income tax                     -    (2.3)        -   (2.3)
                                ------  ------    ------ ------
    Net earnings                $ 10.5  $ 34.8    $ 18.5 $ 31.3
                                ======  ======    ====== ======











                               -3-
             CHESAPEAKE CORPORATION AND SUBSIDIARIES
         CONSOLIDATED STATEMENTS OF EARNINGS, Continued
              (In millions, except per share data)
                           (Unaudited)

                                Quarter Ended    Six Months Ended
                                   June 30,          June 30,
                               --------------------------------
                                  1998    1997      1998   1997
                                ------  ------    ------ ------
Basic earnings per share
   Earnings before
      extraordinary item        $  .50  $ 1.58    $  .87 $ 1.43
   Extraordinary item, net of
      income taxes                   -    (.10)        -   (.10)
                                ------  ------    ------ ------
   Earnings                     $  .50  $ 1.48    $  .87 $ 1.33
                                ======  ======    ====== ======
Weighted average number of
 common shares                    21.1    23.8      21.3   23.7
                                ======  ======    ====== ======
Diluted earnings per share
   Earnings before
      extraordinary item        $  .49  $ 1.56    $  .86 $ 1.41
   Extraordinary item,
      net of income taxes            -    (.10)        -   (.10)
                                ------  ------    ------ ------
   Earnings                     $  .49  $ 1.46    $  .86 $ 1.31
                                ======  ======    ====== ======
Weighted average number of
 common shares and equivalents
 outstanding, assuming dilution   21.5    23.8      21.5   23.7
                                ======  ======    ====== ======
Cash dividends declared per
 share of common stock          $  .20  $  .20    $  .40 $  .40
                                ======  ======    ====== ======


See accompanying notes to consolidated financial statements.












                               -4-
             CHESAPEAKE CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS
                      (Millions of dollars)

                                             (Unaudited)
                                               June 30,  Dec. 31,
                                                 1998      1997
                                              ---------- --------

      ASSETS

Current assets:
    Cash and cash equivalents                    $ 58.6  $ 73.3
    Accounts receivable, less allowances for
     doubtful accounts (1998-$4.7; 1997-$5.9)     127.8   111.8
    Inventories, at lower of cost or market       103.4    98.8
    Deferred income taxes                          17.8    17.8
    Other                                           7.4     6.6
                                                 ------  ------
      Total current assets                        315.0   308.3
                                                 ------  ------

Property, plant and equipment, at cost            847.1   818.6
    Less accumulated depreciation                 372.4   350.1
                                                 ------  ------
                                                  474.7   468.5

    Timber and timberlands, net                    39.8    39.8
                                                 ------  ------
  Net property, plant and equipment               514.5   508.3
                                                 ------  ------
Goodwill, net                                      46.4    44.0

Other assets                                       50.9    52.4
                                                 ------  ------

    Total assets                                 $926.8  $913.0
                                                 ======  ======













                               -5-
             CHESAPEAKE CORPORATION AND SUBSIDIARIES
             CONSOLIDATED BALANCE SHEETS, Continued
            (Millions of dollars, except share data)

                                             (Unaudited)
                                               June 30,  Dec. 31,
                                                 1998      1997
                                              ---------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable                               $ 53.8  $ 52.1
  Accrued liabilities                              75.9    74.5
  Current maturities of long-term debt              0.8     0.6
  Dividends payable                                 4.3     4.3
  Income taxes payable                              2.4     1.9
                                                 ------  ------
      Total current liabilities                   137.2   133.4
                                                 ------  ------
Long-term debt                                    267.8   264.3

Other long-term liabilities                         5.6     5.8

Postretirement benefits other than pensions        20.4    19.1

Deferred income taxes                              68.8    68.4
                                                 ------  ------
      Total liabilities                           499.8   491.0
                                                 ------  ------
Shareholders' equity:
  Preferred stock, $100 par value, issuable
    in series; authorized, 500,000 shares;
    issued, none                                      -       -
  Common stock, $1 par value; authorized,
    60,000,000 shares; outstanding 21,328,154
    in 1998 and 21,330,232 shares in 1997,
    respectively                                   21.3    21.3
  Additional paid-in capital                       20.8    24.7
  Other comprehensive income                       (3.9)   (2.8)
  Retained earnings                               388.8   378.8
                                                 ------  ------
      Total shareholders' equity                  427.0   422.0
                                                 ------  ------
          Total liabilities and shareholders'
            equity                               $926.8  $913.0
                                                 ======  ======

See accompanying notes to consolidated financial statements.



                               -6-
             CHESAPEAKE CORPORATION AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                      (Millions of dollars)
                           (Unaudited)
                                                Six Months Ended
                                                    June 30,
                                                  1998    1997
                                                 ------ -------
Operating activities
  Net earnings                                   $ 18.5  $ 31.3
  Adjustments to reconcile net earnings
   to net cash provided by operating activities:
    Depreciation, cost of timber harvested and
     amortization of intangibles                   31.0    48.2
    Deferred income taxes                            .4   (62.5)
    Gain on sale of property, plant and equipment  (1.6)   ( .6)
    Gain on sale of business                        -     (86.3)
    Restructuring/special charges                   -      18.9
    Extraordinary item                              -       4.0
    Changes in operating assets and liabilities,
     net of acquisitions:
       Accounts receivable                        (15.0)   (6.1)
       Inventories                                 (3.3)   (5.6)
       Other assets                                (1.0)    5.5
       Accounts payable                             1.7     9.5
       Accrued liabilities                          1.4     9.1
       Income taxes payable                          .5    78.2
       Other current liabilities                     .9     2.6
                                                 ------  ------
  Net cash provided by operating activities        33.5    46.2
                                                 ------  ------


Investing activities
    Purchases of property, plant and equipment    (36.6)  (32.1)
    Acquisitions and proceeds from sale of
      property, plant and equipment                (2.9)     .4
    Proceeds from sale of businesses, net of
      disposition expenses                            -   472.7
    Other, net                                        -    (2.3)
                                                 ------  ------
  Net cash (used in) provided by investing
    activities                                    (39.5)  438.7
                                                 ------  ------







                               -7-
             CHESAPEAKE CORPORATION AND SUBSIDIARIES
        CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued
                      (Millions of dollars)
                           (Unaudited)
                                                Six Months Ended
                                                    June 30,
                                                  1998    1997
                                                 -----   -----
Financing activities
  Net borrowings (payments) on lines of credit      4.6  (169.0)
  Payments on long-term debt                       (1.6)  (63.6)
  Proceeds from long-term debt                       .5      .1
  Proceeds from issuances of common stock             -      .6
  Purchases of outstanding common stock            (6.9)      -
  Dividends paid                                   (8.5)   (9.4)
  Other, net                                        3.2       -
                                                 ------  ------
Net cash used in financing activities              (8.7) (241.3)
                                                 ------  ------
  (Decrease) increase in cash and cash
    equivalents                                   (14.7)  243.6
Cash and cash equivalents at beginning of
  period                                           73.3     9.8
                                                 ------  ------
Cash and cash equivalents at end of period       $ 58.6  $253.4
                                                 ======  ======


See accompanying notes to consolidated financial statements.






















                               -8-
             CHESAPEAKE CORPORATION AND SUBSIDIARIES
     Notes To Consolidated Financial Statements (Unaudited)
                                
                                
Note 1.  Summary of Significant Accounting Policies

     The condensed consolidated financial statements of
Chesapeake Corporation and subsidiaries (the "Company") included
herein are unaudited, except for the December 31, 1997
consolidated balance sheet, and have been prepared by the Company
pursuant to the rules and regulations of the Securities and
Exchange Commission.  In the opinion of management, the condensed
consolidated financial statements reflect all adjustments, all of
a normal recurring nature, necessary to present fairly the
Company's consolidated financial position and results of
operations for the interim periods reported hereon.

     The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates in reporting the amounts of certain revenues and
expenses during the reporting period of the financial statements
and certain assets and liabilities at the date of the financial
statements.  Actual results could differ from those estimates.
These condensed consolidated financial statements should be read
in conjunction with the consolidated financial statements and the
notes thereto included or incorporated by reference in the
Company's latest Annual Report on Form 10-K.  The results of
operations for the 1998 interim period should not be regarded as
necessarily indicative of the results that may be expected for
the entire year.

     Certain prior-year data have been reclassified to conform to
the 1998 presentation.

Note 2.  Adoption of Accounting Pronouncements

     In June 1997, the Financial Accounting Standards Board
issued Statement No. 130, "Reporting Comprehensive Income" ("SFAS
130"), which is effective for all fiscal periods beginning after
December 15, 1997.  SFAS 130 establishes standards for reporting
and display of comprehensive income and its components in a full
set of general-purpose financial statements, either in the
statements of operations or in a separate statement.
Additionally, SFAS 130 requires the display







                               -9-
             CHESAPEAKE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited),continued


Note 2.  Adoption of Accounting Pronouncements, continued

of the accumulated balance of other comprehensive income.  For
the quarter and six months ended June 30, 1998 and 1997,
comprehensive income is as follows:

                                Quarter Ended    Six Months Ended
                                   June 30,          June 30,
                               --------------------------------
                                  1998    1997      1998   1997
                                ------  ------    ------ ------
Net earnings                     $10.5   $34.8     $18.5  $31.3
   Foreign currency translation
     (Net of tax)                  (.4)    (.5)      (.8)   (.8)
                                 -----   -----     -----  -----
     Comprehensive income        $10.1   $34.3     $17.7  $30.5
                                 =====   =====     =====  =====

     The Financial Accounting Standards Board has issued
Statement of Financial Accounting Standards No. 131, "Disclosure
about Segments of an Enterprise and Related Information" ("SFAS
131"), Statement of Financial Accounting Standards No. 132,
"Employers' Disclosures about Pensions and Other Postretirement
Benefits" ("SFAS 132") and Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and
Hedging Activities" ("SFAS 133").  SFAS 131 establishes standards
for the way that public business enterprises report information
about operating segments.  The Company expects to adopt this
standard by the end of the year.  SFAS 132, which is effective
for fiscal years beginning after December 31, 1997, requires
revisions to disclosures for pensions and other postretirement
benefits.  SFAS 133, which is effective for fiscal years
beginning after June 15, 1999, requires companies to record
derivatives on the balance sheet as assets or liabilities,
measured at fair market value.  These standards are not expected
to have a material impact on the Company's financial statements.
The American Institute of Certified Public Accountants has issued
Statement of Position ("SOP") 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use" and SOP
98-5, "Reporting on the Costs of Start-up Activities."  SOP 98-1
provides guidance on accounting for the cost of computer software
for internal use





                              -10-
             CHESAPEAKE CORPORATION AND SUBSIDIARIES
 Notes To Consolidated Financial Statements(Unaudited),continued
                                
Note 2.  Adoption of Accounting Pronouncements, continued

and SOP 98-5 provides guidance on the financial reporting of
start-up and organizational costs.  SOP 98-1 and SOP 98-5 are
effective for fiscal years beginning after December 15, 1998.
The Company has adopted these pronouncements, and there was no
impact on its financial statements for the first quarter and no
material impact for the second quarter of 1998.
                                
Note 3.  Acquisitions and Dispositions

     On June 24, 1998, Chesapeake Corporation signed a letter of
intent to acquire all of the outstanding capital stock of Capitol
Packaging Corporation, a specialty packaging company located in
Denver, Colorado.

     On February 2, 1998, Chesapeake Packaging Co. purchased
substantially all of the assets, and assumed certain liabilities,
of Rock City Box Co., Inc., located in Utica, NY.  This operation
manufactures corrugated containers, trays, and pallets, as well
as wood and foam packaging products.

     On May 23, 1997, the Company completed the sale to St.
Laurent Paperboard (U.S.) Inc. ("St. Laurent (U.S.)"), a wholly-
owned subsidiary of St. Laurent Paperboard Inc. (Toronto and
Montreal:(SPI)), of: (i) the sole membership interest in
Chesapeake Paper Products Company LLC (successor to Chesapeake
Paper Products Company), a wholly-owned subsidiary of Chesapeake
which, as of the closing date, owned and operated Chesapeake's
kraft products mill located in West Point, VA (the "West Point
Mill"); (ii) all of the capital stock of Chesapeake Box Company
which, as of the closing date, owned and operated directly or
through a subsidiary substantially all of the assets of four of
Chesapeake's corrugated box plants; and (iii) all of the capital
stock of Chesapeake Fiber Company which, as of the closing date,
owned and operated directly or through a subsidiary certain
assets related to the West Point Mill's wood procurement
operations.  The four box plants involved in the transaction are
located in Richmond, VA; Roanoke, VA; Baltimore, MD; and North
Tonawanda, NY.

     The purchase price of approximately $500.0 million was paid
in cash at closing, with a post-closing purchase price adjustment
of approximately $10 million paid to the buyer.  The transaction
resulted in an after-tax gain for Chesapeake of $49.1 million, or
$2.07 a share, recorded in the second quarter of 1997.
Chesapeake used approximately $250 million of net

                              -11-
             CHESAPEAKE CORPORATION AND SUBSIDIARIES
 Notes To Consolidated Financial Statements(Unaudited),continued

Note 3.  Acquisitions and Dispositions, continued

after-tax proceeds to reduce debt, $79 million to repurchase
common stock, and plans to use the remainder of the net after-tax
proceeds for further repurchases of its common stock and to
finance growth opportunities internally and through acquisitions.

Note 4.  Inventories
                                     June 30,   Dec. 31,
                                       1998       1997
                                     --------   --------
                                        (In millions)
     Inventories consist of:
          Finished goods               $ 35.4    $ 26.7
          Work in process                25.4      36.2
          Materials and supplies         42.6      35.9
                                       ------    ------
             Totals                    $103.4    $ 98.8
                                       ======    ======

Note 5.  Commitments

     At June 30, 1998, commitments, primarily for capital
expenditures, approximated $28 million.  These commitments
include anticipated expenditures of $1.5 million in 1998 for
environmental protection related to the Company's tissue mills.
The remaining commitments of $26.5 million are related to various
capital projects, none of which is individually material.

     Additional non-determinable environmental protection
expenditures could be required in the future if facilities are
expanded or if more stringent standards become applicable.  See
Note 8.

Note 6.  Litigation

     Wisconsin Tissue ("WT"), a wholly-owned subsidiary of the
Company, has been identified by the federal government and the
State of Wisconsin as a potentially responsible party with
respect to possible natural resource damages and Superfund
liability in the Fox River and Green Bay System.  See Note 8 for
further information regarding this matter.




                              -12-
             CHESAPEAKE CORPORATION AND SUBSIDIARIES
Notes To Consolidated Financial Statements (Unaudited),continued

Note 6.  Litigation, continued

     On May 13, 1997, the Attorney General of Florida filed a
civil complaint against WT alleging violations of antitrust laws.
The complaint also names nine other commercial and industrial
tissue manufacturers and seeks compensatory monetary damages,
civil penalties, and injunctive relief.  Other private civil
antitrust class actions have also been filed against WT (or
against the Company, identifying WT as a "division" of the
Company) and against the other defendants.  WT and the Company
believe that WT has valid defenses to the plaintiffs' claims and
intend to defend the actions vigorously.

     The Company is a party to various other legal actions which
are ordinary and incidental to its business.

     While the outcome of legal actions cannot be predicted with
certainty, the Company believes the outcome of any of these
proceedings, or all of them combined, will not have a materially
adverse effect on its consolidated financial position, results of
operations, or cash flows.

Note 7.  Income Taxes

     The Company's effective income tax rate was 37.5% for the
first two quarters of 1998 and 43.2% for the first two quarters
of 1997.  The difference between the Company's effective income
tax rate and the statutory federal income tax rate are primarily
due to state income taxes and purchase accounting adjustments
resulting from a one-time second quarter 1997 disposition and
from acquisitions.

Note 8.  Environmental Matters

     Chesapeake has a strong commitment to protecting the
environment.  The Company has an environmental audit program to
monitor compliance with environmental laws and regulations.

     The Company is committed to abiding by the environmental,
health and safety principles of the American Forest & Paper
Association.  Each expansion project has been planned to comply
with applicable environmental regulations and to enhance
environmental protection at existing facilities.  The Company
faces increasing capital expenditures and operating costs to
comply with expanding and more stringent environmental
regulations, although compliance with existing environmental


                              -13-
             CHESAPEAKE CORPORATION AND SUBSIDIARIES
Notes To Consolidated Financial Statements (Unaudited),continued

Note 8.  Environmental Matters, continued

regulations is not expected to have a materially adverse effect
on the Company's earnings, financial position, or competitive
position.

     The Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") and similar state "Superfund" laws
impose liability, without regard to fault or to the legality of
the original action, on certain classes of persons (referred to
as potentially responsible parties or "PRPs") associated with a
release or threat of a release of hazardous substances into the
environment.  Financial responsibility for the clean-up or other
remediation of contaminated property or for natural resource
damages can extend to previously owned or used properties,
waterways, and properties owned by third parties, as well as to
properties currently owned and used by a company even if
contamination is attributable entirely to prior owners.  As
discussed below, the U.S. Environmental Protection Agency ("EPA")
has given notice of its intent to list the lower Fox River in
Wisconsin on the National Priorities List under CERCLA and has
identified WT as a PRP.

     Except for the Fox River matter, the Company has not been
identified as a PRP at any CERCLA-related sites.  However, there
can be no assurance that the Company will not be named as a PRP
at any other sites in the future, or that the costs associated
with additional sites would not be material to the Company's
financial position or results of operation.

     In June 1994, the United States Fish and Wildlife Service
("FWS"), a federal natural resources trustee, notified WT that it
had identified WT and four other companies located along the
lower Fox River in northeast Wisconsin as PRPs for purposes of
natural resources liability under CERCLA arising from alleged
releases of polychlorinated biphenyls ("PCBs") in the Fox River
and Green Bay System.  Two other companies subsequently received
similar notice from the FWS.  The FWS and other governmental and
tribal entities, including the State of Wisconsin, allege that
natural resources, including endangered species, fish, birds,








                              -14-
             CHESAPEAKE CORPORATION AND SUBSIDIARIES
Notes To Consolidated Financial Statements (Unaudited),continued

Note 8.  Environmental Matters, continued

tribal lands, or lands held by the United States in trust for
various Indian tribes, have been exposed to PCBs that were
released from facilities located along the lower Fox River.  The
FWS is proceeding with a natural resource damage assessment with
respect to the alleged discharges.  On January 31, 1997, the FWS
notified WT of its intent to file suit, subject to final approval
by the Department of Justice, against WT to recover alleged
natural resource damages.  WT and other PRPs are engaged in
discussions with the parties asserting federal trusteeship of the
natural resources concerning the damage assessment and the basis
for resolution of the federal natural resource damage claims.

     WT and other PRPs are also engaged in discussions with the
State of Wisconsin with respect to resolving possible state
claims concerning remediation, restoration, and natural resource
damages related to the alleged discharge of PCBs into the Fox
River and Green Bay System. Under an interim agreement with the
State of Wisconsin, the PRPs are providing funds for an interim
phase of resource damage assessment and restoration work. WT's
obligation under the agreement is not material to the Company's
financial position or results of operations.

     On June 18, 1997, the EPA announced that it was initiating
the process of listing the lower Fox River on the CERCLA National
Priorities List of hazardous waste sites.  The EPA identified
several PRPs including WT.  The EPA has announced that it will
proceed with a remedial investigation/feasibility study of the
lower Fox River site.

     The ultimate cost to WT, if any, associated with these
matters cannot be predicted with certainty at this time, due to
the inability to determine the outcome of pending settlement
discussions or, if a settlement cannot be reached, WT's share of
any multi-party clean-up expenses; the uncertain extent of any
contamination; the varying costs of alternative restoration
methods; the evolving nature of clean-up technologies and
governmental regulations; the lack of controlling legal
precedent; the extent to which contribution will be available
from other parties; and the scope of potential recoveries from
insurance carriers and prior owners of WT.  Based on presently
available information, the Company believes that there are




                              -15-
           CHESAPEAKE CORPORATION AND ITS SUBSIDIARIES
Notes To Consolidated Financial Statements (Unaudited),continued
                                
Note 8.  Environmental Matters, continued

additional parties, some of which may have substantial resources,
that may also be identified as PRPs with respect to this matter
and could be expected to participate in any final
settlement.  The Company believes that it is entitled to
indemnification from a prior owner of WT, pursuant to a stock
purchase agreement between the parties, with respect to
liabilities related to this matter.  The prior owner has
reimbursed WT for out-of-pocket costs and attorneys' fees related
to investigation of the matter.  The Company believes that the
prior owner intends to, and has the financial ability to, honor
its indemnification obligation under the stock purchase
agreement.

     In March 1995, the EPA issued "Final Guidance" for basin-
wide water quality standards pursuant to the Great Lakes Water
Quality Agreement between the U.S. and Canada regarding the
development of water quality standards for the Great Lakes and
their tributaries.  The State of Wisconsin has issued a discharge
permit for WT's mill in Menasha, WI, based on the Final Guidance.
WT does not expect to have significant capital expenditures or
additional operating costs to comply with the permit.

     The EPA has published draft rules under the Clean Water Act
and the Clean Air Act which would impose new air and water
quality standards for pulp and paper mills (the "Cluster Rules").
The recently published Cluster Rules, which are primarily
applicable to the bleached kraft industry, require compliance
within three years after the date of adoption.  Based on the
Company's preliminary estimates, compliance with the recently
published cluster rules will require capital expenditures
totaling not more than approximately $5 to 6 million, primarily
at the Company's largest tissue mill located in Menasha, WI.  The
EPA has stated its intent to develop additional Cluster Rules.
The eventual capital cost impact on the Company of compliance
with the additional Cluster Rules is not presently determinable
and will depend on a number of factors, including the scope of
the standards imposed and time permitted for compliance; the
Company's strategic decisions related to compliance, including
potential changes in product mix and market; and development in
compliance technology.

     In March 1998, WT's Chicago tissue mill received a Notice of
Violation from EPA alleging violation of the Illinois State


                              -16-
           CHESAPEAKE CORPORATION AND ITS SUBSIDIARIES
Notes To Consolidated Financial Statements (Unaudited),continued
                                
Note 8.  Environmental Matters, continued

Implementation Plan as adopted pursuant to the Clean Air Act.
The alleged violation involves the emission of volatile organic
material.  WT is in the process of evaluating the EPA's
allegations.  The ultimate cost to WT, if any, associated with
the alleged violation cannot be determined with certainty at this
time due to the absence of a determination that there has been a
violation, and, if a violation is found to have occurred, a
determination of the appropriate capture and control techniques
or other corrective action and the cost thereof, and the amount
of any penalties imposed by EPA.  WT believes that it is entitled
to significant indemnification for any costs or expenses incurred
with regard to this matter from the prior owner of the Chicago
mill and that the prior owner has the financial ability honor its
indemnification obligation.

     One July 17, 1998, WT's Menasha paper mill received a Notice
of Violation from the Wisconsin Department of Natural Resources
("WDNR") alleging violations of Wisconsin's Air Management Rules.
The alleged violations involve the emission of volatile organic
material and the failure to comply with reporting requirements.
WT is in the process of evaluating the WDNR's allegations.  The
ultimate cost to WT, if any, associated with the alleged
violations cannot be determined with certainty at this time due
to the absence of a determination that there have been violations
and, if violations are found to have occurred, a determination of
the appropriate corrective action and the cost thereof and the
amount of any penalties imposed by WDNR.

     Chesapeake operates under, and believes it is in substantial
compliance with, the terms of various air emission and water and
effluent discharge permits and other environmental regulations.













                              -17-
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

Results of Operations

BUSINESS SEGMENT HIGHLIGHTS
                                 Second Quarter   Year-to-Date
                                 --------------  -------------
                                  1998    1997     1998   1997
                                  ----    ----     ----   ----
Net sales:
 Tissue                           $113.4 $102.0  $215.2 $196.7
 Specialty packaging               111.5   97.1   215.7  190.9
 Forest products/land development   12.1    9.2    22.9   15.7
                                  ------ ------  ------ ------
 Ongoing operations                237.0  208.3   453.8  403.3
 Divested businesses                   -   56.0       -  155.5
                                  ------ ------  ------ ------
                                  $237.0 $264.3  $453.8 $558.8
                                  ====== ======  ====== ======
EBIT:
 Tissue                           $ 18.4 $ 13.5  $ 33.8 $ 26.7
 Specialty packaging                 1.7   (0.6)    2.5   (2.6)
 Forest products/land development    5.1    2.9     8.4    5.6
 Corporate                          (3.8)  (3.4)   (6.0)  (7.4)
                                  ------ ------  ------ ------
 Ongoing operations                 21.4   12.4    38.7   22.3
 Divested businesses                   -   (8.3)      -  (14.3)
 Gain on sale of business              -   86.3       -   86.3
 Restructuring/special charges         -  (18.9)      -  (18.9)
                                  ------ ------  ------ ------
                                  $ 21.4 $ 71.5  $ 38.7 $ 75.4
                                  ====== ======  ====== ======



Second Quarter 1998 vs. Second Quarter 1997

     Net earnings for the three months ended June 30, 1998, were
$10.5 million, or $.49 a share fully diluted, compared with the
1997 second quarter reported net earnings of $34.8 million, or
$1.46 a share.  Reported net income for the second quarter of
1997 included: an after-tax gain of $49.1 million, or $2.07 per
share, on the sale of the West Point Mill and four box plants to
St. Laurent Paperboard Inc.; restructuring charges of $10.8
million after tax, or $.45 per share; and an extraordinary loss
of $2.3 million, or $.10 per share, net of income taxes, related




                              -18-
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS, CONTINUED

to the repurchase of debt.  Net earnings from ongoing operations
for the second quarter of 1997 on a pro forma basis (after giving
effect to the May 23, 1997, sale of the West Point Mill and
related assets as if it had occurred as of the beginning of the
second quarter of 1997) were $5.4 million, or $.23 a share fully
diluted.  The increase in net earnings was primarily the result
of higher sales volume and lower outstanding debt.

     Net sales for the three months ended June 30, 1998, were
$237.0 million, compared with second quarter reported net sales
of $264.3 million in 1997.  Second quarter 1998 net sales were up
14% from second quarter 1997 net sales from ongoing operations of
$208.3 million.  This increase was primarily the result of growth
in unit volume.

     Net sales for the Tissue segment of $113.4 million for the
second quarter of 1998 were up 11% from the second quarter of
1997.  Shipments of converted tissue products were up more than
10% over the second quarter of 1997.  Sales of parent rolls were
nearly twice those of last year's second quarter.  Earnings
before interest and taxes ("EBIT") for the tissue segment for the
second quarter of 1998 of $18.4 million increased 36% compared to
the second quarter of 1997 due primarily to volume growth and
improved converting efficiencies.

     Net sales for the Specialty Packaging segment for the second
quarter of 1998 of $111.5 million were up 15% compared to net
sales from ongoing operations for the segment during the second
quarter of 1997 due primarily to volume growth.  For the second
quarter of 1998, segment EBIT was $1.7 million, a $2.3 million
improvement over the $.6 million loss for the second quarter of
1997 for ongoing operations.  The increase was primarily due to
cost reductions in the display and custom packaging business
coupled with strong revenue growth.  The corrugated container
business unit continued to perform well.

     Net sales for the Forest Products/Land Development segment
for the second quarter of 1998 were $12.1 million, up 32% from
net sales of $9.2 million in the second quarter of 1997, due
primarily to additional pulpwood shipments and higher land sales.
Segment EBIT for the second quarter of 1998 was $5.1
million, up 76% compared to $2.9 million for the second quarter
last year.  The increase was primarily due to modestly higher
pulpwood pricing and increased land sales.




                              -19-
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS, CONTINUED


     Part of the proceeds from the sale of the West Point Mill
and related assets were used to reduce outstanding debt during
1997, thereby reducing interest expense in the second quarter of
1998 by $2.1 million from $6.8 million in the second quarter of
1997.

Second Quarter Year-to-date 1998 vs. Second Quarter Year-to-date
   1997

     Net income for the six months ended June 30, 1998 was $18.5
million, or $.86 per diluted share, compared with pro forma net
income from ongoing operations of $9.0 million, or $.38 per
share, for the first half of 1997.  Reported net income the first
six months of 1997, including the one-time and extraordinary
item, was $31.3 million, or $1.31 per share.

     Net sales for the six months ended June 30, 1998, were
$453.8 million, compared with net sales of $403.3 million from
ongoing operations for the first half of 1997.  Reported sales
for the first half of last year, including divested businesses,
were $558.8 million.

     Net sales for the Tissue segment of $215.2 million for the
first half of 1998 were up greater than 10% from the first half
of 1997.  Converted shipments were 144,283 tons, a 12% increase
over last year.  EBIT for the Tissue segment of $33.8 million was
up 27% compared to the first half of 1997.  The increase in EBIT
was due primarily to improved margins resulting from increased
volume and improved converting efficiencies.

     Net sales for the Specialty Packaging segment for the first
half of 1998 were $215.7 million, up from 13% compared to net
sales from ongoing operations of $190.9 million in 1997.  EBIT
year-to-date was $2.5 million, up $5.1 million from the $2.6
million loss from ongoing operations in 1997.  The increase in
EBIT was primarily due to cost reductions in the display and
custom packaging business coupled with strong revenue growth.

     Net sales for the Forest Products/Land Development segment
of $22.9 million were up 46% from net sales of $15.7 million from
ongoing operations for the first half of 1997.  EBIT for the
first half of 1997 was $8.4 million, or 50% higher than 1997's
EBIT from ongoing operations of $5.6 million.  The increase in
EBIT was primarily due to modestly higher pulpwood pricing and
increased land sales.


                              -20-
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS, CONTINUED

Liquidity and Financial Position

     Management assesses the Corporation's liquidity in terms of
its overall ability to generate cash to fund its operating and
investing activities.  Significant factors affecting the
management of liquidity are cash flows generated from operating
activities, capital expenditures, acquisitions, common stock
repurchases, adequate bank lines of credit, and financial
flexibility to attract long-term capital on satisfactory terms.

     Cash flows provided by operating activities were $33.5
million during the first six months of 1998 compared to $46.2
million for the first six months of 1997.  The reduction resulted
from the sale of the West Point Mill and related assets.

     Cash flows used in investing activities were $39.5 million
during the first six months of 1998 compared to funds provided of
$438.7 million in the first six months of 1997.  Capital
expenditures for the six months ended June 30, 1998 totaled $36.6
million and related primarily to strategic initiatives in the
packaging and tissue businesses.  Capital expenditures in the
first half of 1997 totaled $32.1 million and also related
primarily to strategic initiatives in the packaging and tissue
businesses.  Capital expenditures for the full year 1998 are
expected to be approximately $65 to $70 million.  These
initiatives include new tissue converting equipment at the
Menasha, WI, Bellemont, AZ, and Greenwich, NY, facilities;
implementation of several new information systems throughout the
company; and expansion and modernization of the West Point, VA,
sawmill.  On June 24, 1998, the Company signed a letter of intent
to acquire all of the outstanding capital stock of Capitol
Packaging Corporation.  On February 2, 1998, Chesapeake Packaging
Co. acquired substantially all of the assets, and assumed certain
liabilities, of Rock City Box Co., Inc.  These projects are
consistent with Chesapeake's strategy of expanding its core
businesses, reducing costs, and focusing capital spending on
projects that are expected to generate a high return on
investment.  No other 1998 capital project is expected to account
for more than 5% of the total planned spending.  Capital
expenditures for 1998 are expected to be financed with internally
generated cash.  The Corporation also invested $6.3 million in
acquisitions of businesses in the first half of 1998.





                              -21-
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS, CONTINUED

Liquidity and Financial Position, continued

     The Corporation repurchased $6.9 million of common stock,
representing .2 million shares, in the first six months of 1998
under previously announced stock repurchase programs.  Share
repurchase continues to be a significant use of the Corporation's
strong cash flows and serves to offset the dilutive effect
resulting from the issuance of stock under stock-based employee
benefit programs.

     Working capital increased $2.9 million for the first six
months of 1998.  The increase was primarily due to an increase in
accounts receivable driven by higher sales.  The average accounts
receivable collection period for the first six months of 1998
improved slightly compared to the first six months of 1997.  The
inventory turnover rate for the first six months of 1998 was
approximately the same as for the first six months of last year.
The ratio of current assets to current liabilities was 2.3 at the
end of the second quarter of 1998 and 1997.

     EBITDA, a measure of internal cash flow combining earnings
before interest and income taxes plus non-cash charges for
depreciation, cost of timber harvested and amortization, was
$37.2 million for the second quarter of 1998.  This was 51%
higher than pro forma EBITDA of $24.6 million for the second
quarter of 1997.  Net cash provided by operating activities for
the second quarter was $16.4 million, down from $44.2 million of
net cash provided by operating activities for the second quarter
of 1997.

     At the end of the second quarter of 1998, long-term debt
totaled $267.8 million, compared to $265.5 million at the end of
the same period of 1997.  Long-term debt was substantially
reduced in the second quarter of 1997 by applying part of the
proceeds from the sale of the West Point Mill and related assets.
The ratio of long-term debt to total capital was 35% at the end
of the second quarter of 1998, an increase of 3% from
the end of the same period last year.  The ratio of long-term
debt to shareholders' equity was 63% at the end of the second
quarter of 1998 compared to 54% at the end of the second quarter
of 1997.  Out of a total of $67 million committed and $105
million uncommitted domestic and foreign credit lines available
at the end of the second quarter of 1998, none of the domestic
lines and $13 million of foreign lines were utilized.




                              -22-
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS, CONTINUED

Liquidity and Financial Position, continued

     Management believes that its existing cash position and
other available sources of liquidity are sufficient to meet
current and anticipated requirements for the foreseeable future.
Management anticipates that the debt-to-capital will increase
slightly during the balance of the year in order to satisfy its
various cash flow requirements, including acquisition spending
and continued share repurchases.

Year 2000 Planning

     The Company continues to assess its exposure related to the
impact of the Year 2000 date issue which is attributable to the
fact that many computer programs use only two digits that
identifies a year in a date field.  The Company has established a
Company-wide plan to address the Year 2000 issue, primarily
through significant upgrades of information systems to improve
productivity of the Company's packaging businesses.  Contracts
have been signed with application vendors and consultants to
provide most of the upgrades of the packaging segment's business
systems and certain modifications or upgrades to the systems for
the Company's other businesses.  The Company's plans, and the
contracts with the outside vendors, anticipate substantial
completion of the upgrades and modifications by 1999.  The Year
2000 data conversion effort is expected to increase costs in 1998
and 1999.  However, based on the contracts with outside vendors
and current cost estimates, management does not expect the cost
of compliance with the Year 2000 issues will have a material
impact on the Company's financial position, results of operations
or cash flow.  While the Company believes its planning efforts
are adequate to address its Year 2000 concerns, the Company could
be adversely impacted by the Year 2000 date issue if the
conversion schedule and cost estimate for its internal systems
are not met or suppliers, customers and other businesses do not
address this issue successfully.  The Company is requesting that
its significant suppliers and customers confirm that they have
plans for achieving Year 2000 compliance.  Management continues
to assess these risks in order to reduce any impact on the
Company.

     Foreign currency transactions and financial statements of
foreign subsidiaries are translated into U.S. dollars at
prevailing or current rates, respectively, except for revenue
costs and expenses, which are translated at average current rates
during each reporting period.  Gains and losses resulting from
foreign currency transactions are included in income.

                              -23-
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS, CONTINUED

Accounting Pronouncements

     The Financial Accounts Standards Board has issued several
new pronouncements, including standards on capital structure,
comprehensive income, business segment reporting, pensions and
other post-retirement benefits, and derivatives. In addition, the
American Institute of Certified Public Accountants has issued
several new standards on accounting for computer software and
reporting the cost of start-up activities.  These standards are
not expected to have a material impact on the Company's financial
statements.  See Note 2 in the notes to consolidated financial
statements for more information on these standards.

Other

     "Management's Discussion and Analysis of Financial Condition
and Results of Operations" may include "forward-looking
statements" that are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995.  Changes
in the following important factors, among others, could cause
Chesapeake's actual results to differ materially from those
expressed in the forward-looking statements: competitive products
and pricing; production costs, particularly for raw materials
such as waste paper and corrugated box and display materials;
fluctuations in demand; governmental policies and regulations
affecting the environment; interest rates; currency translation
movements; and other risks that are detailed from time to time in
reports filed by the Company with the Securities and Exchange
Commission.



















                              -24-
                             PART II


Item 1.  Legal Proceedings

         Reference is made to Note 6 of the Notes to
          Consolidated Financial Statements included herein.


Item 6.  Exhibits and Reports on Form 10-Q

         (a) Exhibit 10.1 - Agreement with Robert F. Schick

         (b) Exhibit 10.2 - Agreement with Jack C. King

         (c) Exhibit 27.1 - Financial Data Schedule - 1998

         (d) Exhibit 27.2 - Financial Data Schedule - 1997
                            Restated

         (e) Exhibit 27.3 - Financial Data Schedule - 1996
                            Restated

         (f) Exhibit 27.4 - Financial Data Schedule - 1995
                            Restated

         (g) Reports on Form 8-K:

             None.

















                                
                                
                                
                                
                                
                              -25-
                            SIGNATURE


     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.


                                       CHESAPEAKE CORPORATION
                                             (Registrant)



Date:_________________              BY:  /s/ William T. Tolley
                                             William T. Tolley
                                         Group Vice President -
                                          Finance & Chief
                                          Financial Officer

































                              -26-
                          EXHIBIT INDEX



EXHIBIT                                       METHOD OF FILING
-------                                     --------------------

10.1    Agreement with Robert F. Schick               *

10.2    Agreement with Jack C. King                   *

27.1    Financial Data Schedule - 1998                *

27.2    Financial Data Schedule - 1997 Restated       *

27.3    Financial Data Schedule - 1996 Restated       *

27.4    Financial Data Schedule - 1995 Restated       *



  *  Filed herewith electronically





























                               -1-