FORM 10-Q

                    SECURITIES AND EXCHANGE COMMISSION

                          WASHINGTON, D.C. 20549


  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 EXCHANGE ACT OF 1934

        For the transition period from         to        .

                                     
                      Commission file number: 1-3203

                          CHESAPEAKE CORPORATION

Incorporated under the                            I.R.S. Employer 
laws of Virginia                                  Identification
                                                  No. 54-0166880


                           1021 East Cary Street
                              P. O. Box 2350
                       Richmond, Virginia 23218-2350
                      Telephone Number (804) 697-1000



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     .

The number of shares outstanding of each of the issuer's classes of common
stock, as of the close of period covered by this report:

             Common stock of $1 par value, 23,373,361 shares.



                                     Page 1 of 21 Pages. 

                                PART I
<TABLE>

                  CHESAPEAKE CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENT OF INCOME
               FOR THE THIRD QUARTER AND YEAR TO DATE ENDED
                        SEPTEMBER 30, 1996 AND 1995 


<CAPTION>                                         
                                  
                                   Third Quarter       Year to Date
                                  1996       1995      1996    1995
                                  (In millions, except per share data)
<S>                              <C>       <C>       <C>       <C>

Net sales                             $309.3    $330.8    $863.6    $937.0
Costs and expenses:
  Cost of products sold                224.3     229.1     629.5     656.0
  Depreciation and cost 
   of timber harvested                  22.2      19.1      66.0      56.5
  Selling, general and 
   administrative expenses              38.1      33.0     112.4      97.5
  
    Income from operations              24.7      49.6      55.7     127.0

Other income and expenses, net          ( .8)      3.5       3.3       4.6
Interest expense                        (8.7)     (7.4)    (24.9)    (23.5)

    Income before taxes                 15.2      45.7      34.1     108.1

Income taxes                             5.7      15.8      12.8      38.9

    Net income                        $  9.5    $ 29.9    $ 21.3    $ 69.2

Earnings per share                    $  .40    $ 1.24     $  .90    $ 2.88

Weighted average number of 
  common shares and 
  equivalents outstanding               23.5      24.1      23.7      24.1

Cash dividends declared per
  share of common stock                $ .20     $ .20     $ .60     $ .58
      
</TABLE>

                          See accompanying notes.








<TABLE>
                  CHESAPEAKE CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEET


<CAPTION>
                                       Sept. 30, 1996      Dec. 31, 1995
                                                  (In millions)
<S>                                       <C>                <C> 
       ASSETS

Current assets:
    Cash and cash equivalents                  $   13.2            $    5.2
    Accounts receivable, less
      allowances for doubtful
      accounts of $3.8 and $3.2                   166.2               140.4 
    Inventories, at lower of cost
      or market                                   117.7               112.5
    Deferred income taxes                          16.6                16.6
    Other                                           8.2                 6.9

      Total current assets                        321.9               281.6



Property, plant and equipment, at cost:
    Land, buildings, machinery
      and equipment                             1,555.5             1,416.4
    Less accumulated depreciation                (738.3)             (675.5)

                                                  817.2               740.9


    Timber and timberlands, net                    39.6                40.0

  Net property, plant and equipment               856.8               780.9


Goodwill, net                                      54.3                41.5


Other assets                                       45.7                42.3


                                               $1,278.7            $1,146.3


</TABLE>







<TABLE>
                                          Sept. 30, 1996   Dec. 31, 1995
                                                   (In millions)
<CAPTION>
                            
  LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                          <C>              <C>
Current liabilities:
  Accounts payable and accrued expenses           $   155.9                  $  130.2
  Current maturities of long-term debt                  9.8                        .9
  Dividends payable                                     4.7                       4.8
  Income taxes payable                                 ( .6)                      3.4
                                            

      Total current liabilities                       169.8                     139.3


Long-term debt                                        491.3                     393.6

Postretirement benefits other than pensions            28.2                      26.5

Deferred income taxes                                 125.2                     118.6



Stockholders' 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 23,373,361 and
    23,792,433 shares                                  23.4                      23.8
  Additional paid-in capital                           96.4                     107.3
  Retained earnings                                   344.4                     337.2

                                                      464.2                     468.3

                                                   $1,278.7                  $1,146.3
</TABLE>


                        See accompanying notes.











<TABLE>
                     CHESAPEAKE CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENT OF CASH FLOWS
              FOR THE YEAR TO DATE ENDED SEPTEMBER 30, 1996 AND 1995


<CAPTION>                                                   1996      1995  
                                                             (In millions)
<S>                                                      <C>        <C>
Operating activities
  Net income                                               $ 21.3     $ 69.2 
  Adjustments to reconcile net income 
   to net cash provided by operating activities:
    Depreciation, cost of timber harvested and
     amortization of intangibles                             68.2       58.2
    Deferred income taxes                                     6.6       10.8 
    Gain on sale of property, plant and equipment            ( .2)      (3.0)
    Changes in operating assets and liabilities,
     net of acquisitions:
       Accounts receivable                                   (5.0)     (29.8)
       Inventories                                            3.0      (29.9)
       Other assets                                           8.5        3.6  
       Accounts payable and accrued expenses                  1.8       17.4 
       Income taxes payable                                  (3.9)       (.9)
       Other payables                                         1.6        2.8  

  Net cash provided by operating activities                 101.9       98.4

Investing activities
  Purchases of property, plant and equipment               (102.6)    (114.5)
  Acquisitions                                            (39.4)       (15.8)
  Proceeds from sale of property, plant and equipment          .2        3.4 
  Other                                                        .0         .3 
  
  Net cash used in investing activities                    (141.8)    (126.6)

Financing activities
  Net borrowings (payments) on credit lines                  70.7       76.7 
  Payments on long-term debt                                ( 3.9)     (71.1)
  Proceeds from long-term debt                               10.5         .6
  Proceeds from issuances of common stock                     -          3.3
                                                             Purchases of outstanding common stock  (15.2)       -
 Dividends paid                                             (14.2)     (13.3)
  Other                                                       -          (.9)
  

  Net cash provided by (used in) financing activities        47.9       (4.7)

  Increase (decrease) in cash and cash equivalents            8.0      (32.9)

Cash and cash equivalents at beginning of period              5.2       33.2

  Cash and cash equivalents at end of period              $  13.2     $   .3   

Supplemental cash flow information:
  Interest payments                                       $  23.3     $ 24.6
 
  Income tax payments, net of refunds                     $   8.6     $ 29.1
</TABLE>
                         See accompanying notes. 
                 CHESAPEAKE CORPORATION AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.  The condensed consolidated financial statements included herein are
    unaudited, except for the December 31, 1995 consolidated balance sheet,
    have been prepared by the Company pursuant to the rules and regulations
    of the Securities and Exchange Commission, and, in the opinion of
    management, reflect all adjustments, all of a normal recurring nature,
    necessary to present fairly the Company's consolidated financial
    position, results of operations and cash flows.  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 1996 interim periods should not
    be regarded as necessarily indicative of the results that may be
    expected for the entire year. 
<TABLE>
2.  Inventories:
<CAPTION>                                              Sept. 30, 1996     Dec. 31, 1995
 <S>                                           (In millions)
                                           <C>            <C>
       Inventories consist of:
         Finished goods                         $ 42.2          $ 33.7
         Work in process                          24.0            33.3
         Materials and supplies                   51.5            45.5

             Totals                             $117.7          $112.5
</TABLE>                                    
         
3.  Commitments and Other Matters:

    At September 30, 1996, commitments, primarily for capital expenditures,
    approximated $57 million.  These commitments include anticipated
    expenditures of $7 million in 1996 for environmental protection related
    to planned expansions and upgrades primarily at the Company's paper
    mills in Arizona, Virginia and  Wisconsin.  The remaining commitments of
    $50 million are primarily for 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 6.

3.  Commitments and Other Matters:

    In April 1996, Chesapeake Display and Packaging Company and Chesapeake
    Display and Packaging (Canada) Limited, its Ontario subsidiary,
    completed the purchase of substantially all assets associated with the
    Display Division of Dyment Limited.  The Display Division, which has
    operations in Erlanger, Ky., and Toronto, Canada, had sales of
    approximately $35 million in 1995.

    On August 5, 1996, Chesapeake completed its acquisition of the point-of-sale
    display and packaging businesses of Sailliard S.A., with 10
    locations in France and nearly $100 million in sales in 1995.  These
    businesses specialize in the design and manufacture of permanent and
    temporary point-of-sale displays; rigid boxes for perfume, champagne and
    specialty products customers; and folding cartons for luxury goods and
    pharmaceutical industries.  The businesses also include a design firm
    specializing in development of creative packaging and marketing
    materials for the fine spirits industry.  This acquisition is
    Chesapeake's first investment in an operating company in Europe.  This
    acquisition was accounted for by the purchase method.

    As of September 3, 1996, Chesapeake acquired the assets of Triad
    Packaging Co., Inc.  in Richmond, Va., a manufacturer of corrugated
    containers.  This plant will be managed as part of our existing
    corrugated container facility in Richmond.

    In June 1996, Chesapeake signed a letter of intent to purchase certain
    tissue converting assets of Jokel Desarrollos, S. A. De C.V. and
    Ambitec, S.A. de C.V., both in Mexico.  The acquisition will include a
    headquarters in Mexico City, operations in Monterey and Puebla that
    convert approximately 12,000 tons of tissue a year and distribution
    facilities in all three cities plus Guadalajara, Mexico.  This
    transaction will be the Company's first tissue acquisition outside the
    United States and is subject to due diligence and negotiation of a
    definitive purchase and sale agreement.

4.  Litigation:

    In May 1996, Wisconsin Tissue Mills Inc. ("WT"), a wholly-owned
    subsidiary of the Company, received a subpoena from a grand jury of the
    United States District Court for the Northern District of Ohio
    requesting documents in connection with an investigation of alleged
    antitrust violations in commercial and industrial tissue markets.  The
    subpoena primarily requests documents supplementing the materials
    produced by WT in response to a Civil Investigative Demand ("CID")
    received by WT in late 1994.  WT has substantially responded to the
    grand jury's subpoena. One company employee has testified before the
    grand jury.

4.  Litigation (continued):

    WT has received a notice from the United States Fish and
    Wildlife Service that WT has been identified as a potentially
    responsible party with respect to possible natural resource damages in
    the Fox River and Green Bay System. See Note 6 "Environmental Matters"
    for further information regarding this notice.

    The Company is a party to various 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 or results of
    operations. 

5.  Income Taxes:

    The Company's effective income tax rate was 37.5% in 1996 compared to
    36.0% for the first three quarters of 1995. The differences 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 acquisitions.

6.  Environmental Matters:

    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 a hazardous
    substance 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 the Company even if contamination is attributable
    entirely to prior owners. While joint and several liability is
    authorized under CERCLA, as a practical matter the cost of clean-up or
    other remediation is generally allocated among the waste generators. 
    Except for the United States Department of Interior, Fish and Wildlife
    Service ("FWS") assessment of the Fox River discussed below, the Company
    is not presently named 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 operations.
 
    In June 1994, the 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. 
    The FWS alleges that natural resources including endangered species,
    fish, birds, tribal lands or lands held by the United States in trust 

6.  Environmental Matters (continued):

    for various Indian tribes have been exposed to PCBs that were released
    from facilities located along the Fox River.  The notice invites the
    PRPs to participate in the development and performance of a natural
    resource damage assessment with respect to the alleged discharges.  WT
    and the four other PRPs are engaged in negotiations with FWS concerning
    the proposed damage assessment and restoration plans.

    WT and the four other PRPs are also engaged in discussions with the
    Wisconsin Department of Natural Resources ("WDNR") with respect to
    resolving possible state claims concerning remediation, restoration and
    natural resource damage related to the alleged discharge of PCBs into
    the Fox River and Green Bay System.  The PRPs have proposed a settlement
    to WDNR, and are engaged with WDNR in continuing discussions of
    settlement proposals. WT's obligation under the proposed settlements
    would not be material to the Company's financial position or results of
    operations.  Based upon presently available information, the Company
    believes that there are 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 settlement.

    The ultimate cost to WT, if any, associated with this matter 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, the Company's share of any multi-party
    clean-up; the unknown magnitude of any contamination; the varying cost
    of alternative clean-up methods; the evolving nature of clean-up
    technologies and governmental regulations; 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. 
    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 all liabilities related to this matter.  That prior
    owner has reimbursed the Company for out-of-pocket costs and attorneys'
    fees related to investigation of the matter.  The Company believes that
    such prior owner intends to, and has the financial ability to, honor its
    indemnification obligation under the stock purchase agreement.

    In March 1995, the United States Environmental Protection Agency ("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.  Under federal law, the affected states will be
    required within two years to implement specific regulations that are
    consistent with the provisions of the Final Guidance.  Dischargers would
    then have an additional period of up to five years during which to
    comply with any new, more stringent, permit limits derived under the
    Final Guidance.  The Final Guidance is currently the subject of
    administrative and judicial challenges by the paper industry 
    and other groups, and of pending legislation in the U.S.  Congress.  The
    WDNR is currently developing regulations to implement the Final Guidance
    by a March 1997 deadline.  WT is evaluating the potential effects of the 

6.  Environmental Matters (continued):

    Final Guidance and regulations on its operations and results, which
    effects cannot be predicted with certainty at this time. However, based
    on the Company's initial review of the Final Guidance and proposed
    regulations, the Company believes that compliance would  not have a
    material adverse effect on its financial position or results of
    operations.
    
    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 definitive Cluster Rules,
    when proposed, are expected to require compliance within three years
    after the date of adoption. Based on the Company's preliminary
    estimates, if the Cluster Rules were adopted in substantially their
    present form, compliance would require capital expenditures totaling
    approximately $55 million at the Company's two largest paper mills in
    West Point, Va., and Menasha, Wis.  The Company has joined with the
    American Forest & Paper Association and most of its members in stating
    that they believe that the Cluster Rules, as proposed, are inappropriate,
    unjustified and do not comply with applicable law.  The eventual capital
    expense impact on the Company of compliance with the definitive 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 markets; and developments
    in  compliance technology.

    The additional effect, if any, on the Company's business of compliance
    with the definitive Cluster Rules will depend on a number of other factors,
including: the domestic and international competitive effects of compliance;
and the effect of evolving consumer demands related to environmental issues
on the Company and its competitors.

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







































                MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Results of Operations

3rd Quarter 1996 vs. 3rd Quarter 1995

    Net sales for third quarter 1996 were $309.3 million, down 6%
from the record net sales of $330.8 million for the third quarter of
last year.  Continued weak market conditions for certain commodity
products in the kraft business were primarily responsible for the
decrease.  

    Net income for third quarter 1996 was $9.5 million, or $.40 a
share, a decrease of 68% compared to third quarter 1995 net income of
$29.9 million, or $1.24 a share.  Cost of products sold as a percentage
of net sales increased by 3% compared to third quarter 1995 primarily
due to lower net sales.  Selling, general and administrative expenses
as a percentage of net sales were up 2%.  Expenses were impacted by the
start-up of various growth initiatives in the packaging and tissue
businesses.  Depreciation increased because of acquisitions and capital
expenditures.  Other income and expenses, net in 1996 was $4.3 million
less than in third quarter 1995.   Interest expense for the quarter was
up $1.3 million compared to the third quarter of 1995, primarily due
to increased borrowings to finance growth initiatives.
<TABLE>

BUSINESS SEGMENT HIGHLIGHTS
<CAPTION>                                                               
                                         
                      Third Quarter        Second Quarter    Year-to-date
<S>                       1996     1995        1996        1996       1995
Net Sales:         <C>      <C>         <C>          <C>       <C>
      Packaging              $131.1    $122.5      $106.3      $346.6    $342.1
      Tissue                  104.7      98.8       100.6       299.1     267.6
      Kraft products           71.1     107.8        68.2       212.5     322.3
                       Corporate                2.4          1.7       1.5       5.4       5.0
                                 $309.3      $330.8       $276.6    $863.6    $937.0
EBIT:
                       Packaging              $ 7.6        $ 9.8     $ 4.2     $16.6    $ 26.6
                       Tissue      19.5        11.3         20.1      52.1      31.6
                       Kraft products          (1.1)        35.2      (6.2)      0.0      81.9
                       Corporate               (2.1)        (3.2)     (3.2)     (9.7)     (8.5)
                                  $23.9       $53.1        $14.9     $59.0    $131.6
</TABLE>
    Overall packaging segment shipments for the third quarter 1996 were
up about 6% and net sales up 7% compared to third quarter 1995.  "EBIT"
(earnings before interest and taxes) for the packaging segment for third
quarter 1996 was down 22% compared to third quarter 1995. Start-up costs
associated with growth initiatives were approximately $4 million during
the quarter. These costs included: those associated with recent
acquisitions in the point-of-sale display business; those related to the
two-year plan to double the corporation's manufacturing capability for
its consumer graphic packaging business; and those associated with the
acquisition of Chesapeake Europe S.A., the corporation's point-of-sale
display and packaging business in France.             

    The tissue segment had record quarterly sales and near-record EBIT
in the third quarter of 1996.  Tissue shipments were 82,000 tons, a 36%
increase over the third quarter of last year.  Third quarter 1996 sales
were up 6% from third quarter 1995.  Sales from new facilities more than
offset the loss of sales from the consumer products business, which was
sold in the fourth quarter of last year.  Approximately 20% of shipments
were from new facilities in northern Arizona, Chicago, Ill. and
Greenwich, N.Y.   Average selling prices of converted products were down
5% from those of third quarter 1995.  Earnings were impacted favorably
by significantly lower recovered paper costs in 1996 compared to 1995. 
EBIT of $19.5 million was up 73% from last year.

    Kraft products net sales for third quarter 1996 declined 34%
compared to the third quarter net sales experienced in 1995 for this
segment.  Average selling prices were 38% lower than in the third quarter
of 1995, negatively impacting EBIT by about $45 million compared to third
quarter last year.  This decline in selling prices was the primary cause
for the loss experienced in the quarter by this segment.  Lower recovered
paper costs partially offset the price impact.  Shipments for the third
quarter of 1996 were 212,000 tons, or 12% higher than third quarter 1995.

    
3rd Quarter Year-to-date 1996 vs. 3rd Quarter Year-to-date 1995.

    Net sales for the nine months ended September 30, 1996, were $863.6
million, down 8% from the record net sales of $937.0 million for the
first nine months of 1995.  Lower sales prices for certain commodity
kraft products were the primary cause for the decline.  Significant
growth in tissue shipments helped mitigate the impact of these
conditions.  

    Year-to-date net income was $21.3 million, or $.90 a share, down 69%
from $69.2 million, or $2.88 a share, earned in the first three quarters
of 1995. Included in 1995 results are pre-tax charges of approximately
$8 million for the enhanced hourly retirement program in the kraft
products segment and post-closing obligations related to Chesapeake's
former wood treating business.  Cost of products sold as a percentage of
net sales increased to 73% in 1996 from 70% in 1995 as a result of lower
sales.  Selling, general and administrative expenses as a percentage of
net sales was 13% in 1996 and 10% in 1995.  Depreciation was up $9.5
million over 1995 due to capital expenditures and acquisitions.  Other
income was down $1.3 million from last year.  Interest expense increased
$1.4 million, or 6%, due to increased borrowings to finance growth
initiatives.

    During 1993, the bottom of the last down cycle in the paper
industry, Chesapeake earned only $.13 a share in the first three quarters
of the year.  During the first three quarters of 1996, with margins
similar to 1993, Chesapeake earned $.90 a share.  This improvement is
primarily due to the packaging and tissue businesses becoming larger and
more important parts of the corporation, a strategy that Chesapeake is
continuing to implement.

    Year-to-date overall packaging segment net sales for 1996 were up
1% compared to the first three quarters of 1995.  Net sales of point-of-sale
displays were up 20%, while sales of corrugated shipping containers
and graphic packaging were down 10% and 4%, respectively.   Shipments
were about the same as last year for the packaging segment.  EBIT of
$16.6 million for 1996 was down $10.0 million, or 38%, compared to the
first nine months of 1995. The packaging segment earnings were impacted
by about $10 million of start-up costs associated with various growth
initiatives.   

    Tissue segment shipments of 233,000 tons for the first three
quarters of 1996 were 38% higher than in 1995, due in part to sales from
new facilities.  Approximately 20% of shipments were from new facilities.
Net sales were a record, up 12% from last year, as a result of higher
shipments and improved product mix.   The stronger sales and lower
recovered paper costs resulted in record EBIT for this segment for the
first three quarters, up 65% from the prior year.

    Kraft products year-to-date net sales for 1996 were down 34%
compared to the first three quarters of 1995.  Year-to-date shipments
were 621,000 tons, up 3% from the previous year.  The average selling
price for kraft products in the first three quarters  of 1996 was 32%
lower than in the first three quarters of 1995, resulting in an
approximately $90 million negative impact on EBIT.  Segment EBIT was at
break-even for 1996 year to date and down $81.96 million from last year. 
 Net losses for the kraft business were partially offset by earnings of
the woodlands and building product businesses.  Lower recovered paper
prices partially offset the negative price impact in the kraft business.

3rd Quarter 1996 vs 2nd Quarter 1996

    Net sales for the third quarter of 1996 of $309.3 million were 12%
higher than net sales of $276.6 million for the second quarter of 1996. 
This improvement was due to growth in the packaging and tissue
businesses, some improvement in market conditions for certain kraft
products and packaging and the normal seasonally stronger third quarter. 


    Net income for the third quarter of 1996 was up $5.6 million from
net income of $3.9 million in the second quarter due to the increased
sales for the packaging and tissue segments and lower losses for the
kraft products segment.  

    Net sales for the packaging segment were $131.1 million for the
third quarter, up $24.8 million compared to the second quarter of this
year, as sales improved for each of the three packaging businesses--
point-of-sale display, graphic packaging and corrugated shipping
containers.  Overall shipments were up 7% from second quarter levels.  
EBIT was $7.6 million, up $3.4 million over the second quarter.  Start-up
costs associated with growth initiatives were about the same as in the
second quarter.  During the third quarter, the corporation completed the
acquisition of Chesapeake Europe S.A., a point-of-sale display and
packaging business in France.  The operating results of the French
operation were immaterial to third quarter consolidated results.

    Net  sales for the tissue segment for the third quarter of $104.7
million were a record; up 4% compared to the second quarter of this year. 
Total third quarter tissue shipments were up 5% and sales of converted
products were up 10%, as volume increased at the new converting site in
Bellemont, Ariz. and the Greenwich, N.Y. converting site began
production.  Average sales prices were down slightly.  EBIT for the
tissue segment was $19.5 million, just 3%under the record second quarter
1996.  The purchase of certain assets in Mexico is expected to augment
tissue converting capacity for this business.  A letter of intent has
already been signed for the acquisition in Mexico.   

    Net sales for the kraft products segment for the third quarter were
4% higher than in the second quarter due to higher percentage of white
product in the mix and some price improvement for bleached market pulp. 
These factors also caused average selling prices to improve 5% during the
third second quarter compared to the prior quarter.   Shipments of kraft
products were about the same as in the second quarter.  Although still
a loss, EBIT improved by $5.1 million over the second quarter. 

    Weak market conditions in kraft products will continue to put
pressure on earnings in the fourth quarter.  Modest price increases,
however, have recently been implemented for certain kraft products. 
Start-up costs associated with growth initiatives in the packaging and
tissue businesses will also continue to put some pressure on earnings
during the seasonally slower fourth quarter, but these initiatives are
necessary to better position the corporation for the future.


Capital Expenditures

    Capital expenditures for the first nine months of 1996 totaled $142
million and related primarily to strategic initiatives in the packaging
and tissue businesses, including the acquisition of the Display Division
of Dyment Limited, Triad Packaging Co., Inc. and Chesapeake Europe S.A. 
Capital expenditures for the first nine months of 1995 totaled $130
million and related primarily to expansions in the packaging and kraft
businesses, including approximately $15 million for the purchase of a
tissue mill in Flagstaff, Ariz. and a tissue converting facility in
Greenwich, N.Y.  Capital expenditures and acquisitions for 1996 are
expected to be about $200 million, of which about one-half relates to
strategic initiatives in the packaging and tissue businesses.  Identified
initiatives include: the second phase of the Visalia, Calif.,
manufacturing plant for the Company's Color-Box graphic packaging
business;  a new consumer graphics manufacturing plant in Pelahatchie,
Miss.;  the acquisition of the Display Division of Dyment Limited; the
acquisition of Triad Packaging Co., Inc., new tissue converting equipment
at the Bellemont, Ariz., and Greenwich, N.Y. facilities;  the acquisition
of Chesapeake Europe S.A., a point-of-sale display and packaging business
in France; and the anticipated acquisition of certain tissue converting
assets from Jokel Desarrollos, S.A. de C.V. and Ambitec, S.A. de C.V.,
in Mexico.  These projects are consistent with Chesapeake's strategy of
expanding the packaging and tissue businesses, lowering costs and
focusing capital spending on projects that are expected to have a higher
return on investment.  No other 1996 capital projects are expected to
account for more than 5% of the total planned spending.  Capital
expenditures for 1996 are expected to be financed with internally
generated cash supplemented by proceeds from borrowings.  

Liquidity and Capital Structure

    Working capital increased $8.3 million during the third quarter of
1996.   Accounts receivable increased $19.1 million during the third
quarter and $25.8 million for the first three quarters. The average
collection period for the first three quarters was up 6 days compared to
the first three quarters of 1995.  Inventories increased during the
quarter by $9.4 million and are up $5.2 since year-end 1995 due to
acquisitions, offset in part by increases in LIFO reserves and lower
valuations resulting from lower selling prices.  The annual inventory
turnover rate for the first three quarters of 1996 was down to 7.3
compared to 8.2 for the first three quarters of last year.  Accounts
payable and accrued expenses increased $16.4 million during the quarter
as a result of acquisitions and the timing of payments.  The ratio of
current assets to current liabilities was 1.9 at the end of the third
quarter of 1996 compared to 2.0 at the end of the second quarter of 1996
and 2.0 at year end 1995.

    "EBIT + D" (earnings before interest and income taxes plus non-cash
charges for depreciation, cost of timber harvested and amortization) was
$46.4 million for the third quarter of 1996, or 36% lower than $72.7
million for the third quarter of 1995.  Lower earnings was primarily
responsible for this decrease.  Year-to-date EBIT + D was $126.1 million,
or 33% lower than $189.6 million in 1995.  Net cash provided by operating
activities for the third quarter was $34.1 million, down from $42.7
million for the third quarter of 1995, primarily because of higher net
income in 1995.  For the year-to-date, net cash provided by operating
activities was $101.9 million, or 4% higher than $98.40 million for the
first three quarters of 1995, as reductions of accounts receivables and
inventories offset the higher income in the prior year.  

    At the end of the third quarter, long-term debt totaled $491.3
million, or $97.7 million higher than long-term debt at year-end 1995. 
The increased borrowings were used to finance capital investments during
the first three quarters of the year.  The ratio of long-term debt to
total capital was 45% at the end of the third quarter, compared to 44%
at the end of the second quarter of 1996 and 40% at the end of the third
quarter of 1995.  During the past twelve months, the corporation has
repurchased almost 750,000 shares of Chesapeake common stock under
continuing authorization of the Board of Directors for repurchasing
shares.





                                PART II




Item 1.       Legal Proceedings

              Reference is made to Note 4 of the Notes to 
              Consolidated Financial Statements included herein

Item 6.       Exhibits and Reports on Form 8-K

              (a)  Exhibit 11.1 - Computation of Net Income Per
                                  Share of Common Stock

                   Exhibit 27.1 - Financial Data Schedule
              
              (b)  Reports on Form 8-K

                   None


































                              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.


                                  CHESAPEAKE CORPORATION
                                       (Registrant)


Date: November 8, 1996            BY: /s/Christopher R. Burgess         
                                      Christopher R. Burgess 
                                      Controller  
                                                                           
                     


Date: November 8, 1996            BY: /s/Andrew J. Kohut                
                                      Andrew J. Kohut  
                                      Group Vice President - Speciality
                                      Packaging & Merchandising Services
                                      & Chief Financial Officer
































                             EXHIBIT INDEX



                                                               Page

Exhibit 11.1
         Computation of Net Income per Share of
         Common Stock                                          21  

<PAGE>
                                                         EXHIBIT 11.1
<TABLE>

                     CHESAPEAKE CORPORATION AND SUBSIDIARIES
               COMPUTATION OF NET INCOME PER SHARE OF COMMON STOCK
                     FOR THE THIRD QUARTER AND YEAR TO DATE 
                        ENDED SEPTEMBER 30, 1996 AND 1995

             (Share amounts in thousands, dollar amounts in millions,
                          except for per share amounts)
<CAPTION>

                                           Third Quarter      Year to Date
                                           1996    1995      1996      1995
<S>                                       <C>      <C>       <C>      <C>
Primary:
  Weighted average number of common
    shares outstanding                    23,417   23,853    23,588   23,812  
  Net additions to common shares
    assuming exercise of dilutive
    options, determined by treasury
    stock method                              80      266       104      250
  Common shares and equivalents           23,497   24,119    23,692   24,062


  Net Income                              $  9.5   $ 29.9    $ 21.3   $ 69.2

  Per share amount                          $  .40   $ 1.24    $  .90   $ 2.88

Fully diluted:
  Common shares and equivalents           23,497   24,119    23,692   24,062
  Net additional common shares
    issuable upon exercise of
    dilutive options, determined
    by treasury stock method using
    period end market price, if
    higher than average price                 28       14        22        7  

  Common shares, equivalents and
    other potentially dilutive
    securities                            23,525   24,133    23,714   24,069

  Net income for fully diluted
    computation                           $  9.5   $ 29.9    $ 21.3   $ 69.2


  Per share amount                        $  .40   $ 1.24    $  .90   $ 2.88
                                          
</TABLE>

NOTE:   (a) Dilution is less than 3%