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 March 31, 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 preceding 12 months (or for such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.   Yes /X/   No / /     .
                                  
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of March 31, 1998: 21,195,613 shares.
                                  
                                  
                                                     Page 1 of 23<PAGE>
CHESAPEAKE CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998


INDEX

     
                                                     Page Number
                                                     -----------

PART I.   FINANCIAL INFORMATION

  Item 1.  Financial Statements

       Consolidated Statements of Earnings-
       Three months ended March 31, 1998 
            and March 31, 1997                              3
       Consolidated Balance Sheets 
       at March 31, 1998 and December 31, 1997              4

       Consolidated Statements of Cash Flows-
       Three months ended March 31, 1998 
       and March 31, 1997                                   6


       Notes to Consolidated Financial Statements           7

  Item 2.  Management's Discussion and Analysis of
           Financial Position and Results of Operations     15


PART II.  OTHER INFORMATION

  Item 1. Legal Proceedings                                 20

  Item 4. Submission of Matters to a Vote of
          Security Holders                                  20

  Item 6. Exhibits and Reports on Form 8-K                  20


Signature                                                   21







<PAGE>
<TABLE>
                               PART I
                                  
              CHESAPEAKE CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF EARNINGS
                (In millions, except per share data)
                            (Unaudited)
<CAPTION>
                                                   Three Months Ended
                                                         March 31,   
                                                    ------------------
                                                     1998      1997
                                                     ----      ----
<S>                                                  <C>      <C>
Net sales                                          $216.8     $294.5
Costs and expenses: 
  Cost of products sold                              154.6     223.6  
  Depreciation and cost of timber harvested           13.2      26.7  
  Selling, general and administrative expenses        34.4      41.3
                                                    ------     ------
   Earnings from operations                           14.6       2.9

Other income and expenses, net                         2.7       1.0 
Interest expense, net                                 (4.6)     (9.5)
                                                    ------     ------  
    Earnings (loss) before taxes                      12.7      (5.6)

Income tax expense (benefit)                           4.7      (2.1)
                                                    ------     ------
    Net earnings (loss)                              $ 8.0     $ (3.5)
                                                    ======     ======
Basic earnings (loss) per share                      $0.38     $(0.15)
                                                    ======     ======
Weighted average number of 
  common shares                                       21.2       23.4
                                                     ======    ======
Diluted earnings (loss) per share                    $0.37     $(0.15)
                                                     ======    ======
Weighted average number of 
  common shares and 
  equivalents outstanding,
  assuming dilution                                   21.5       23.4
                                                     ======    ======
Cash dividends declared per
  share of common stock                              $0.20      $0.20
                                                     ======    ======

</TABLE>                                            
See accompanying notes to consolidated financial statements.

                                                                    
                                                                    
<TABLE>       CHESAPEAKE CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS
                       (Millions of Dollars)
                                  

<CAPTION>
                                       (Unaudited)
                                       March 31, 1998     Dec. 31, 1997
                                       --------------     -------------  

       ASSETS
<S>                                      <C>                 <C>
Current assets:
    Cash and cash equivalents            $ 66.3                $ 73.3
    Accounts receivable, less
      allowances for doubtful
      accounts (1998 - $5.9;
      1997 - $5.9)                        117.0                 111.8 
    Inventories, at lower of cost
      or market                           102.6                   98.8
    Deferred income taxes                  17.8                   17.8
    Other                                   6.3                    6.6
                                          ------                ------
      Total current assets                310.0                  308.3
                                          ------                ------


Property, plant and equipment, at cost    827.4                  818.6
    Less accumulated depreciation         358.6                  350.1 
                                         ------                 ------
                                          468.8                  468.5
                                         ------                 ------
    Timber and timberlands, net            39.8                   39.8
                                         ------                 ------
  Net property, plant and equipment       508.6                  508.3
                                         ------                 ------
Goodwill, net                              47.1                   44.0

Other assets                               50.3                   52.4
                                         ------                 ------
     
        Total assets                     $916.0                 $913.0
                                        =======                =======

/TABLE
<PAGE>
<TABLE>
                   CHESAPEAKE CORPORATION AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                  (Millions of dollars, except share data )
                                       
<CAPTION>
                                              (Unaudited)    
                                             March 31, 1998   Dec. 31, 1997
                                             --------------   -------------
 
LIABILITIES AND SHAREHOLDERS' EQUITY
<S>                                             <C>              <C>
Current liabilities:
        Accounts payable                         $50.7            $52.1
        Accrued liabilities                       73.1             74.5 
        Current maturities of long-term debt       0.7              0.6
        Dividends payable                          4.2              4.3
        Income taxes payable                       6.7              1.9
                                                 -----            -----
      Total current liabilities                  135.4            133.4
                                                 -----            -----

Long-term debt                                   266.0            264.3

Other long-term liabilities                        5.5              5.8

Postretirement benefits other than pensions        20.0            19.1

Deferred income taxes                              68.4            68.4
                                                  -----          ------
      Total liabilities                           495.3           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 21,195,613 in 1998 and
    21,330,232 shares in 1997, respectively          21.2            21.3
  Additional paid-in capital                         22.0            26.4
  Foreign currency translation adjustment            (3.4)           (2.8)
  Other                                              (1.6)           (1.7)
  Retained earnings                                 382.5           378.8
                                                   ------           ------
      Total shareholders' equity                    420.7           422.0
                                                   ------           ------
          Total liabilities and
            shareholders' equity                   $916.0          $913.0
                                                   ======          ======

</TABLE>
See accompanying notes to consolidated financial statements.

<PAGE>
<TABLE>
                   CHESAPEAKE CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Millions of Dollars)
                                  (Unaudited)
<CAPTION>                                              Three Months Ended    
                                                            March 31,   
                                                         1998       1997
                                                         ----       ----
<S>                                                     <C>      <C>
Operating activities
  Net earnings (loss)                                      $ 8.0    $ (3.5)
  Adjustments to reconcile net earnings (loss)
   to net cash provided by operating activities:
    Depreciation, cost of timber harvested and
     amortization of intangibles                            15.2      27.7
    Deferred income taxes                                    -         0.5 
    Gain on sale of property, plant and equipment           (1.5)     (0.6)
    Changes in operating assets and liabilities,
     net of acquisitions:
     Accounts receivable                                    (4.1)    (14.5)
     Inventories                                            (3.2)      1.0 
     Other assets                                            0.5       2.4  
     Accounts payable                                        1.3      10.3 
      Accrued liabilities                                   (4.5)    (18.1)
      Income taxes payable                                   4.7      (3.2)
                                                          -----      -----
Net cash provided by operating activities                  16.4        2.0
                                                          -----      -----
Investing activities
  Purchases of property, plant and equipment               (15.8)    (15.1)
  Acquisitions and proceeds from sale of 
    property, plant and equipment                          ( 2.8)      0.6
  Other                                                      2.2      (0.3)
                                                           -----      -----
  Net cash used in investing activities                    (16.4)    (14.8)
                                                           -----      -----
Financing activities
  Net borrowing on lines of credit                           2.5      23.9 
  Payments on long-term debt                                (1.0)     (5.3)
  Proceeds from issuances of common stock                      -       0.3
Purchases of outstanding common stock                       (4.7)        -
    Dividends paid                                          (4.2)     (4.7)
    Other                                                    0.4      (0.5)
                                                          ------     -----
  Net cash (used in) provided by financing activities       (7.0)     13.7
                                                           -----     -----
  (Decrease) increase in cash and cash equivalents          (7.0)      0.9 
 
Cash and cash equivalents at beginning of period            73.3       9.8
                                                           -----     -----
Cash and cash equivalents at end of period                $ 66.3    $ 10.7
                                                          ======    ======
Supplemental cash flow information:
  Interest payments                                       $  4.7    $  8.1
                                                          ======    ======
  Income tax payments, net of refunds                     $  0.5    $  2.1
                                                          ======    ======
</TABLE>
See accompanying notes to consolidated financial statements.<PAGE>


               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 at March
31, 1998 and December 31, 1997, and the results of operations and cash
flows for the three months ended March 31, 1998 and 1997. 

    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 of the accumulated balance of other comprehensive income.  For

 <PAGE>
<TABLE>
              CHESAPEAKE CORPORATION AND SUBSIDIARIES
   Notes To Consolidated Financial Statements (Unaudited),continued
                                  
                                  
Note 2.  Adoption of Accounting Pronouncements, continued

the three months ended March 31, 1998 and 1997, comprehensive income
is as follows:
<CAPTION>
                                       Mar. 31, 1998   Mar. 31, 1997
                                       -------------   -------------
                                               (In millions)
<S>                                             <C>            <C>         
Net Earnings                                      $8.0           $(3.5) 
  Other comprehensive income, net
   of tax:                                          
  Foreign currency translation                    (0.4)           (0.3)
                                                  ----            ----
 Comprehensive income                             $7.6           $(3.8)
                                                  ====           =====
</TABLE>

    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"), and Statement of
Financial Accounting Standards No. 132, "Employers' Disclosures about
Pensions and Other Postretirement Benefits" ("SFAS 132"). SFAS No.
131, which the Company expects to adopt in the second quarter of 1998,
establishes standards for the way that public business enterprises
report information about operating segments in annual financial
statements and requires that selected operating segment information be
reported in interim financial statements. SFAS No. 132, which is
effective for fiscal years beginning after December 31, 1997,
standardizes the disclosure requirements for pensions and other
postretirement benefits to the extent practicable, requires additional
information on changes in the benefit obligations and fair values of
plan assets, and eliminates certain disclosures that are no longer
useful.  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 and SOP 98-5
provides guidance on the financial reporting of start-up costs and
organizational costs. SOP 98-1 and SOP 98-5 are effective for fiscal
years beginning after December 15, 1998.  The Company is currently
evaluating these pronouncements and does not expect their adoption to
have a material impact on its financial statements.




                   CHESAPEAKE CORPORATION AND SUBSIDIARIES
   Notes To Consolidated Financial Statements (Unaudited),continued
                                  
                                             
Note 3.  Acquisitions and Dispositions

    In February, 1998, Chesapeake Packaging Co. purchased
substantially all of the assets, and assumed certain liabilities, of
Rock City Box Co., Inc., of 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 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.<PAGE>


              CHESAPEAKE CORPORATION AND SUBSIDIARIES
  Notes To Consolidated Financial Statements (Unaudited),continued
                                                                     
<TABLE>
Note 4.      Inventories
<CAPTION>
                                       Mar. 31, 1998   Dec. 31, 1997
                                       -------------   -------------
                                               (In millions)
    <S>                                    <C>             <C>
    Inventories consist of:
         Finished goods                         $ 36.7           $26.7
         Work in process                          27.9            36.2
         Materials and supplies                   38.0            35.9
                                                 -----            ----
            Totals                              $102.6           $98.8
                                                ======           =====
</TABLE>

Note 5.      Commitments

    At March 31, 1998, commitments, primarily for capital
expenditures, approximated $54 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 $52.5 million are related to various capital projects,
none of which are 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.

    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.  At least 35 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 

              CHESAPEAKE CORPORATION AND SUBSIDIARIES
   Notes To Consolidated Financial Statements (Unaudited),continued
                                        
Note 6.  Litigation, continued

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% in the first
quarter of 1998 and 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 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 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

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

          
Note 8. Environmental Matters, continued

("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 possible PRP. 

    The previously disclosed identification by EPA of the Company's
Color-Box, Inc., subsidiary as a PRP in connection with certain sites
operated by PCB Treatment, Inc., in Kansas and Missouri was resolved
in April, 1998, through a de micromis settlement with the PRP Steering
Committee.  The settlement was not material to the Company's financial
position or results of operation.  Except for the Fox River matter,
the Company has not been identified as a potential 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, 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.  On January 31, 1997, the PRPs signed an interim agreement
with the State of Wisconsin under which the PRPs will provide 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. 


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

Note 8. Environmental Matters, continued

    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
possible 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 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. 
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 


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

Note 8. Environmental Matters, continued
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 paper mill located
in Menasha, WI. The EPA has stated its intent to develop additional
Cluster Rules. The eventual capital expense 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 markets; and developments in
compliance technology. 

    In March 1998, WT's Chicago tissue mill received a Notice of
Violation from EPA alleging violation of the Illinois State
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 allegations of a violation. 
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 to
pay any such indemnification. 
    
    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.
<PAGE>
<TABLE>
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL             
    CONDITION AND RESULTS OF OPERATIONS           

Results of Operations

BUSINESS SEGMENT HIGHLIGHTS
<CAPTION>                                                               
                                                    First Quarter
                                                    -------------
                                                   1998       1997
                                                   ----       ----
<S>                                              <C>         <C>
Net Sales:
 Tissue                                            $101.7    $ 94.7
 Specialty packaging                                104.3      93.8
 Forest products/land development                    10.8       6.5
                                                    -----      -----
 Ongoing operations                                 216.8     195.0
 Divested businesses                                    -      99.5
                                                    -----     -----
                                                   $216.8    $294.5
                                                   ======    ======   
EBIT:                                              
 Tissue                                             $15.4     $13.2
 Specialty packaging                                  0.8      (2.0)
 Forest products/land development                     3.3       2.7
 Corporate                                           (2.2)     (4.0)
                                                     ----      ----
 Ongoing operations                                  17.3       9.9
      Divested businesses                               -      (6.0)
                                                    -----       ----
                                                    $17.3     $ 3.9
                                                    =====     =====

</TABLE>
First Quarter 1998 vs. First Quarter 1997

     Net earnings for the three months ended March 31, 1998, were $8.0
million, or $.37 a share fully diluted, compared with the 1997 first
quarter reported net loss of $3.5 million, or $.15 a share.
Net earnings from ongoing operations for the first quarter of 1997 on
a pro forma basis (after giving effect to the May 23, 1997, sale of
the West Point, VA, kraft mill and related assets as if it had
occurred as of the beginning of the first quarter of 1997) were $3.6
million, or $.15 a share fully diluted.  The increase in net earnings
was primarily the result of higher sales volume, higher corrugated box
pricing and lower interest costs on outstanding debt.

     Net sales for the three months ended March 31, 1998, were $216.8
million, compared with first quarter net sales of $294.5 million in
1997.  First quarter 1998 net sales were up 11% from first quarter
1997 net sales from ongoing operations of $195.0 million.  This 

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


increase was primarily the result of growth in unit volume.

     Net sales for the Tissue segment of $101.7 million for the first
quarter of 1998, were up 7% from the first quarter of 1997. Shipments
of converted tissue products were up 8% over the first quarter of
1997.  Sales of parent rolls were nearly twice that of last year's
first quarter.  Earnings before interest and taxes ("EBIT") for the
tissue segment for the first quarter of 1998 of $15.4 million
increased 17% compared to the first quarter of 1997 due primarily to
volume growth. 

     Net sales for the Specialty Packaging segment for the first
quarter of 1998 of $104.3 million were up 11% compared to net sales
from ongoing operations for the segment during the first quarter of
1997 due primarily to improved product mix, volume growth and higher
corrugated box pricing.  For the first quarter of 1998, segment EBIT
was $.8 million, a $2.8 million improvement over the $2 million loss
for the first 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 first quarter of 1998 were $10.8 million, up 66% from net sales of
$6.5 million in the first quarter of 1997, due, primarily to
additional pulpwood shipments and slightly higher lumber pricing. 
Segment EBIT for the first quarter of 1998 was $3.3 million, up 22%
compared to $2.7 million for the first quarter last year. The increase
was primarily due to favorable shipments and pricing, offset in part
by the negative impact on logging operations due to the extremely wet
weather during the first quarter of 1998.

     Other income and expenses, net increased for the first quarter of
1998 compared to the first quarter of 1997 due primarily to a gain on
the sale of a corporate aircraft.

     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 first quarter of 1998 by $4.9
million from $9.5 million in the first quarter of 1997.


Capital Expenditures

     Capital expenditures for the three months ended March 31, 1998
and 1997, respectively, totaled $15.8 million and $15.1 million and
related primarily to strategic initiatives in the packaging and tissue
businesses.  Planned capital expenditures and acquisitions for 1998 <PAGE>

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

are expected to be approximately $65 to $70 million. These initiatives
include new for 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.  These projects are
consistent with Chesapeake's strategy of expanding the packaging and
tissue 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 and acquisitions
for 1998 are expected to be financed with internally generated cash.

Liquidity and Capital Resources

          Working capital decreased $.3 million during the first quarter of
1998.   The decrease was primarily due to the decrease in cash and
cash equivalents resulting from the repurchase of common stock and the
completion of the Rock City Box acquisition in February 1998,
partially offset by an increase in  accounts receivable.  The average
accounts receivable collection period for the first three months of
1998 improved slightly compared to the first three months of  1997. 
The inventory turnover rate for the first three months of 1998 was
approximately the same as the first three months of last year.  The
ratio of current assets to current liabilities was 2.3 at the end of
the first 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 $32.5 million for the first
quarter of 1998.  This was slightly higher than EBITDA of $31.6
million for the first quarter of 1997.  Net cash provided by operating
activities for the first quarter was $16.4 million, up from $2.0
million of net cash provided by operating activities for the first
quarter of 1997 due to improved net earnings and improved management
of working capital.

          At the end of the first quarter of 1998, long-term debt totaled
$266 million, compared to $518.7 million at the end of the same period
of 1997.  Long-term debt was substantially reduced in the second
quarter of 1997 by use of part of the proceeds of 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 first quarter of 1998, a reduction
of 12% 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 first
quarter of 1998 compared to 112% at the end of the first 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 first quarter of 1998, $11 million of foreign lines were utilized.<PAGE>

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


          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.

Year 2000 Planning

          The Company has established a company-wide plan for addressing
the Year 2000 issue, primarily through significant upgrades of
information systems for the Company's packaging businesses.  Contracts
have been signed with appropriate application vendors and consultants,
where appropriate, to provide most of the upgrades of the packaging
business systems and the necessary 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 necessary upgrades and modifications by 1999.  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 suppliers, customers and other businesses do not address
this issue successfully.  Management continues to assess these risks
in order to reduce the impact on the Company.

Accounting Pronouncements

          The Financial Accounting Standards Board has issued several new
pronouncements, including standards on information about capital
structure, comprehensive income, business segment reporting and
pensions and other post-retirement benefits.  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 the Company's actual 

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



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.

<PAGE>
                               PART II




Item 1.      Legal Proceedings

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


Item 4.      Submission of Matters to a Vote of Security Holders

             At the Annual Meeting of Stockholders on April 22, 1998, the
             following business was transacted:

             (1)  All nominees for election to the Board of
                  Directors were elected.

       <TABLE>
                  
                                       Number       Number
                                       of           of Shares
                                       Shares       Authority
                                       For          Withheld 
             <CAPTION>
             <S>                        <C>         <C>
            Robert L. Hintz            15,091,222   3,373,462
            Thomas H. Johnson          15,958,859   2,505,825
            Frank S. Royal             15,996,637   2,468,047

          </TABLE>

        (2) The appointment of Coopers & Lybrand L.L.P. as
            independent accountants for the fiscal year ending
            December 31, 1998 was ratified.  There were 18,405,937
            votes for the proposal and 25,305 against with 33,442
            abstentions.

Item 6. Exhibits and Reports on Form 8-K

        (a) Exhibit  3.2 - Amended and Restated Bylaws

            Exhibit 10.1 - J. Carter Fox Consulting Agreement

            Exhibit 11.1 - Computation of Net Earnings Per
                           Share of Common Stock

            Exhibit 27.1 - Financial Data Schedule
        
        (b) Reports on Form 8-K
             None

<PAGE>
                              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: May 6, 1998                 BY: /s/William T. Tolley           
                                         William T. Tolley
                                      Group Vice President - Finance
                                      & Chief Financial Officer     

<PAGE>
<TABLE>
                             EXHIBIT INDEX

<CAPTION>

                                                               Page
<S>                                                             <C>
Exhibit 3.2 
   Amended and Restated Bylaws                                  

Exhibit 10.1
   J. Carter Fox Consulting Agreement                           

Exhibit 11.1
   Computation of Net Earnings per Share of
   Common Stock                                                 23

<PAGE>
</TABLE>
<TABLE>                                                    
                                                                                                   EXHIBIT 11.1


               CHESAPEAKE CORPORATION AND SUBSIDIARIES
        COMPUTATION OF NET EARNINGS PER SHARE OF COMMON STOCK
FOR THE FIRST QUARTER ENDED MARCH 31, 1998 AND 1997

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

                                                   1998      1997
                                                    ----      ----
<S>                                               <C>        <C>
Basic:
  Weighted average number of common shares
   outstanding                                      21,195     23,410
                                                    ======     ======
 
  Net earnings (loss)                                $ 8.0     $ (3.5)
                                                      =====     ======
                                                
  Per share amount                                   $0.38     $(0.15)
                                                     =====     ======
  
Fully diluted:
  Weighted average number of common shares     
   outstanding                                      21,195     23,410
  Net additional common shares
    issuable upon exercise of
    dilutive options, determined
    by treasury stock method using
    the average price                                  267         23
                                                    ------     ------
  Common shares, equivalents and
    other potentially dilutive
    securities                                      21,462     23,433
                                                    ======     ======          
 
  Net earnings (loss) for fully diluted
    computation                                     $  8.0    $  (3.5)
                                                    ======    =======
  Per share amount                                  $ 0.37    $ (0.15)
                                                    ======    =======
 


</TABLE>