SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549

                                 FORM 10-K

             ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) of
                  THE SECURITIES AND EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 1996Commission File Number 1-9399

                      RESEARCH FRONTIERS INCORPORATED           
          (Exact name of registrant as specified in its charter)

                    DELAWARE               11-2103466     
     (State or other jurisdiction of    (I.R.S. Employer
     incorporation or organization)     Identification No.)

         240 CROSSWAYS PARK DRIVE
         WOODBURY, NEW YORK                        11797-2033
       (Address of principal executive offices)    (Zip Code)

     Registrant's telephone number, including area code (516) 364-1902

        Securities registered pursuant to Section 12(b) of the Act:

                                         Name of Exchange
            Title of Class               on Which Registered

         COMMON STOCK, $0.0001 PAR VALUE  Boston Stock Exchange

        Securities registered pursuant to Section 12(g) of the Act:
                                        NONE 
                                 (Title of Class)

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 by check mark if disclosure of delinquent filers pursuant to Item 405 
of Regulation S-K is not contained herein, and will not be contained, to the 
best of registrant's knowledge,in definitive proxy or information statements 
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

As of March 27, 1997 there were 10,175,726 shares of Research Frontiers 
Incorporated common stock outstanding (of which 1,162,936 shares were held, 
either directly or indirectly, by affiliates of the Company), and the aggregate
market value of the common shares (based upon the closing trading price of these
shares on NASDAQ on March 27, 1997) held by non-affiliates was approximately 
$63,598,288. In making this computation, all shares known to be owned by 
directors and executive officers of the Company and all shares known to be
owned by other persons holding in excess of 5% of the Company's common stock
have been deemed held by "affiliates" of the Company.  Nothing herein shall
prejudice the right of the Company or any such person to deny that any such 
director,executive officer, or stockholder is an "affiliate."

                       Exhibit Index at pages 15-18
                               Page 1 of 36
                                     <PAGE>

                              PART I

ITEM 1.  BUSINESS

General

     Research Frontiers Incorporated (the "Company") was incorporated in
New York in 1965 and reincorporated in Delaware in 1989.  Since its
inception, the Company has primarily engaged in the development and
licensing of suspended particle technology and devices to control the
transmission of light.  Such suspended particle devices, often referred to as
"SPDs" or "light valves" use a suspension of microscopic particles that is 
either in the form of a liquid suspension or a film, which is usually enclosed 
between two conductively-coated glass or plastic plates, at least one of which 
is transparent.  When an electrical voltage is applied, the microscopic 
particles are aligned, thereby permitting a range of transparency within which 
light transmission can be rapidly varied to any degree desired depending upon 
the voltage applied.  The first light valve of this type was invented by Dr. 
Edwin Land of Polaroid Corporation in 1934.  Since its incorporation the Company
has developed its own technology embodied in patents, trade secrets and know
how.  Light valves using the Company's proprietary suspensions and related
technology may have wide commercial applications in devices of many types
where variable light transmission is desired, such as "smart" windows, variable
light transmission eyewear and goggles, self-dimmable automotive sunroofs,
sun visors and mirrors, and flat panel information displays for use in
computers, televisions, telephones and other electronic instruments.

     The Company expects to compete against various technologies that are
currently being used commercially.  In particular, the Company expects to
compete on the basis of the performance characteristics of its products with
liquid crystal displays ("LCDs").  An LCD is generally similar in construction
to an SPD display, but instead of a fluid or film suspension, utilizes an 
organic material called a liquid crystal which, although comprised of molecules
that flow like a liquid, has some of the characteristics of solid crystals.  
Like SPD displays, LCDs are "passive" devices which do not generate light, but 
merely reflect or modulate existing light.  The market for flat panel LCDs 
estimated by others is approximately $15.5 billion for 1997.  The Company 
believes that some of its licensees using SPD displays may begin to challenge 
liquid crystal displays for part of the LCD market during the next several
years.

     The Company believes that its SPD light valves and related technology
have significant advantages over existing display devices and related
technology.  In comparison to existing twisted nematic type LCDs, the
Company's SPD displays are believed to have (i) higher contrast and
brightness, (ii) lower estimated production costs, (iii) a less complex
fabrication procedure, (iv) a wider angle of view, (v) the ability to function 
over a wider temperature range, (vi) less stringent internal spacing tolerances,
(vii) the ability to make large area displays without using sheet polarizers or
alignment layers, and (viii) lower light loss and a corresponding reduction in
backlighting requirements.  With respect to other types of displays which emit
their own light, such as light-emitting diodes (LEDs) and cathode ray tubes
(CRTs), the Company's SPD light valves should have the advantages of lower
power consumption and make possible larger displays that are easier to read in
bright light.

     The Company also believes that its SPD light valve technology will have
certain advantages over other technologies in the production of so-called "smart
windows," windows which electrically vary the amount of light passing through
them, and in the production of self-dimmable automotive rear-view mirrors. 
The differences between the competing technologies for use in variable light
transmission windows and mirrors should favor SPDs in some important
respects.

     Variable light transmission technologies can be classified into two basic
types: "smart" technologies that can be controlled by the user either
automatically or manually, and passive technologies that can only react to
ambient environmental conditions.  One type of passive variable light
transmission technology is photochromic technology; such devices change their
level of transparency in reaction to external radiation.  As compared to
photochromic technology, the Company's technology permits the user to adjust
the amount of light passing through the viewing area of the device rather than
merely reacting to external radiation.  In addition, the reaction time necessary
to change from light to dark with SPDs is almost instantaneous, as compared
to the much slower reaction time for photochromic devices.  Unlike SPD
technology, photochromic technology does not function well within the
temperature range in which smart windows are normally expected to operate.

     Another category of variable light transmission window technology
comprises user-controllable "smart" technologies:  These "smart" technologies
include electrochromic technology, liquid crystal technology, and the
Company's SPD technology.

     Electrochromic Technology:  When compared to electrochromic windows
and rear-view mirrors, which use a direct current voltage to alter the molecular
structure of electrochromic materials (which currently can be in the form of
either a liquid, gel or solid film) causing the material to darken, SPDs have
numerous potential performance, manufacturing and cost advantages. In
comparing the Company's SPD light valves to electrochromic technologies, 
SPDs are expected to have some or all of the following advantages: (i) faster
response time, (ii) higher manufacturing yields, (iii) a simpler manufacturing
process requiring less expensive equipment, (iv) lower estimated
manufacturing costs, (v) more reliable performance over a wider temperature
range, (vi) capability of achieving darker off-states,(vii) lower current drain,
(viii) higher estimated battery life in applications where batteries are used, 
(ix) no "iris effect" (where light transmission changes first occur at the outer
edges of a window or mirror and then work their way toward the center) when
changing from clear to dark and back again, and (x) the ability to use SPDs in
conjunction with plastic materials.

     Liquid Crystal Technology:  To date, the main type of liquid crystal smart
window was produced by Taliq Corp. (a subsidiary of Raychem Corp. which
has since discontinued its operations and licensed its technology to others),
Polytronix, Inc. and 3M.  These windows are very expensive (having an
estimated installed cost of about $85-100 per square foot), and only change
from a cloudy opaque milky-white to a hazy clear state, with no useful
intermediate states.  As compared to liquid crystal windows, SPD smart
windows should be substantially less expensive to produce, could be viewed
at wide angles without a light scattering haze effect when activated, would
operate over a wider temperature range, and would permit an infinite number
of intermediate states between a transparent state with no visible haze to a 
dark blue state.

     LCDs and other types of displays, as well as electrochromic self-
dimmable rear-view mirrors, are already on the market, whereas the
performance and long-term reliability of SPD light valves have not yet been
fully ascertained.  The companies manufacturing LCD and other display
devices, LCD windows, and electrochromic self-dimmable rear-view mirrors,
have substantially greater financial resources and manufacturing experience
than the Company.  There is no assurance that comparable systems having the
same advantages of the Company's SPD light valves could not be developed
by competitors at a lower cost or that other products could not be developed
which would render the Company's products difficult to market or
technologically or otherwise obsolete.

     In each of the last three fiscal years the Company has devoted
substantially all of its time to the development of one class of products and
therefore revenue analysis per class is not provided herein.

     The Company does not believe that future sales will be seasonal in any
material respect.  Due to the nature of the Company's business operations and
the fact that the Company is not presently a manufacturer, there is no backlog
of orders for the Company's products.

     The Company believes that compliance with federal, state and local
provisions which have been enacted or adopted regulating the discharge of
materials into the environment, or otherwise relating to the protection of the
environment, will not have a material effect upon the capital expenditures,
earnings and competitive position of the Company.  The Company has no
material capital expenditures for environmental control facilities planned for
the remainder of its current fiscal year or its next succeeding fiscal year.

     On March 27, 1997, the Company had twelve full-time employees, seven
of whom are technical personnel, and five of whom perform legal, marketing,
investor relations, and administrative functions.  The success of the Company
is dependent on, among other things, the services of its senior management, the
loss of whose services could have a material adverse effect upon the prospects
of the Company.

Licensing Activities

     The Company's current marketing efforts have taken the form of offering
other companies (both domestic and foreign) the opportunity to enter into
license agreements with the Company for one or more specific fields of use. 
The following table summarizes the Company's existing license and option
agreements:


Licensee or Optionee           Products Covered                    Territory  

General Electric Company     SPD film for other licensees and      Worldwide
                                prospective licensees

Glaverbel, S.A.              Automotive vehicle rear-view mirrors,  Worldwide
                            transportation vehicle sun visors, and (except Korea
                             architectural windows.                 for windows)

Hankuk Glass Industries Inc. Architectural Windows                  Korea

Japan Steel Works Ltd. and   Windows                                Japan
Central Glass Company Ltd.

Material Sciences Corporation SPD film for other licensees and for   Worldwide
                              window applications, architectural (except Korea
                               and automotive windows.              for windows)

Saint Gobain Vitrage, S.A.   Architectural Windows                  Worldwide 
                                                                 (except Korea
                                                             and South America)

Sanyo Electric Co., Ltd.     Flat panel displays                   Worldwide 

Licenses generally provide for a 3-10% royalty on the sale of licensed products
and may provide for minimum annual royalties.  The Company's license
agreements typically allow the licensee to terminate the license after some
period of time, and give the Company only limited rights to terminate prior to
their expiration. The license granted to Hankuk is exclusive within Korea
through July 1998.

     On January 18, 1997, the Company entered into a license agreement with
Material Sciences Corporation (MSC). The agreement grants MSC a non-
exclusive license to manufacture and sell electrically-controllable variable 
light transmission or "smart" windows for architectural and automotive applica-
tions throughout most of the world.  The agreement also permits MSC to produce
and sell films incorporating the Company's proprietary suspended particle
device (SPD) light control technology to window companies for automotive and
architectural uses, and to a selected list of the Company's licensees and
prospective licensees for a variety of applications.  Under the license
agreement, MSC will pay Research Frontiers an earned royalty of up to 10%
of the net selling price of products sold under the agreement.

     In April 1996, the Company announced that it had entered into an
expanded new license agreement with Glaverbel, S.A., which replaced a
previous agreement between the companies, changed Glaverbel's rights from
exclusive to nonexclusive for automotive sun visor and rear-view mirror
products, and granted Glaverbel new nonexclusive rights to manufacture and
sell variable light transmission windows for architectural and automotive
applications throughout most of the world. Glaverbel has filed patent
applications to protect several important inventions relating to the production
of simple low-cost electronics, the filling of cells, and meeting government
regulations relating to the reflectivity of rear-view mirrors in the unactivated
state.  Glaverbel has also made very attractive prototype SPD rear-view mirrors
which have been demonstrated to numerous potential customers. 
Notwithstanding these impressive accomplishments, due to the complexity of
developing, manufacturing and marketing  SPD mirror products and
Glaverbel's limited technical, financial and other resources, the Company
believes that Glaverbel probably will require or find it advantageous to have 
the assistance of others to produce and sell SPD rear view mirrors. As a result,
Glaverbel, Research Frontiers, and one or more third parties such as a tier-one
automotive industry supplier are exploring the possibility of a joint venture or
other arrangement to commercialize SPD rear-view mirror products. In
comparing rear-view mirrors using SPD technology to rear-view mirrors such
as those currently being produced for the automotive industry which use
electrochromic technology,  SPD mirrors are expected to have the following
advantages: (1) a much faster response time promoting safer operation, (2)
ability to use their virtually instantaneous reaction time, to feature "real-
time" switching in which the mirror can automatically adjust to an infinite 
number of intermediate levels of glare reduction, rather than merely switching 
from light to dark, and (3) ability to make larger size mirrors without slowing
down the response time of the mirror.  In addition, self-dimmable SPD rear-view
mirrors do not have the yellow tint normally associated with most
electrochromic mirrors.

     In August 1995, the Company announced that it had entered into a non-
exclusive license with General Electric Company to make SPD film for the
Company's other licensees.  SPD film permits light transmission to be
electrically controlled instantly either automatically or by the user.  Devices
which can use SPD technology include variable light transmission "smart"
windows, variable light transmission eyewear and goggles, self-dimmable
automotive sunroofs, sun visors and rear-view mirrors, and flat panel
information displays for use in computers, television, telephones and other
electronic instruments.  The Company believes that having a third party such
as Material Sciences Corporation and General Electric which can provide high-
quality SPD film for the Company's licensees and prospective licensees is an
important step towards the commercialization of SPD technology. In addition,
the Company believes that some of the world's leading manufacturers  prefer 
to purchase SPD film from others, rather than making it internally, and  that if
SPD film is commercially available, this would greatly enlarge the universe of
potential licensees and users for SPD  technology.

     In November 1995, the Company announced that Hankuk Glass
Industries Inc. has been successfully developing SPD films for smart windows
and had reached an advanced stage of development.  In January 1996, it was
reported to the Company that Hankuk had demonstrated publicly at the New
Glass Forum in Tokyo a prototype SPD smart window measuring
approximately 2.5 feet by 3 feet in size.  Hankuk's current license with
Research Frontiers only covers architectural smart windows.  At Hankuk's
request, Research Frontiers and Hankuk are in negotiations which may lead to
a new expanded license agreement relating to the manufacture of SPD film and
other SPD products.

     On April 30, 1992 the Company announced that The Japan Steel Works,
Ltd. had reported installing a wall of variable light transmission "smart"
windows in a newly-constructed office building near Tokyo.  The wall of
"smart" windows, which serves as a conference room partition, is comprised
of a total of 50 windows, each about 1.5 feet square, arranged in a pattern five
windows high by 10 windows wide, which utilizes the Company's liquid
suspension light control technology.  The Japan Steel Works and Central Glass
Company currently do not have licensed rights to use the film form of the
Company's SPD technology.

     On May 25, 1994, the Company announced that it had signed an option-
license agreement with Saint-Gobain Vitrage International S.A. (now known
as Saint-Gobain Vitrage, S.A.). The agreement, as amended, gives Saint-
Gobain the option through December 31, 1997 (with the right to further extend
the option until June 30, 1998) to enter into a non-exclusive license agreement
with the Company which covers the manufacture and sale of variable light
transmission "smart" windows for architectural applications using Research
Frontiers' patented SPD technology.  If Saint-Gobain exercises the option and
enters into the license agreement, Saint-Gobain would pay Research Frontiers
a royalty of 5% of net sales of licensed products, subject to the payment of
minimum annual royalties or an up-front fee which, under the terms of the
original option-license agreement, remain to be negotiated.

     While the Company believes based upon the status of current
negotiations that additional license agreements with third parties will be
entered into, there can be no assurance that any such additional license
agreements will be consummated, or that any licensee of the Company will
produce or sell commercial products using the Company's technology.

     The Company plans to continue to exploit its SPD light valve technology
by entering into additional license agreements with end-product manufacturers
such as manufacturers of flat glass,  flat panel displays, sunglasses and ski
goggles, and with other interested companies who may wish to acquire rights
to manufacture and sell the Company's proprietary fluid suspensions and films. 
The Company's plans also call for further development of its SPD light valve
technology and the provision of additional technological assistance to its
licensees to develop commercially viable products.  The Company cannot
predict when or if new license agreements will be entered into or if commercial
products will result from its existing or future licenses because of the risks
inherent in the developmental process and because commercialization is
dependent upon the efforts of its licensees as well as on the continuing 
research and development efforts of the Company.  To date, no licensed products
have been sold under any of the Company's license agreements.

Research and Development; Technological Developments

     As a result of the Company's research and development efforts, the
Company believes that its SPD light valves will be usable in a number of
commercial products.  Such products may include one or more of the following
fields: "smart" windows, variable light transmission eyewear and goggles, self-
dimmable automotive sunroofs, sun visors and mirrors, and instruments and
other information displays that use digits, letters, graphic images, or other
symbols to supply information, including scientific instruments, aviation
instruments, automobile dashboard displays and, if certain improvements can
be made in various features of the Company's SPD light valves, portable
computer displays and flat panel television displays.  The Company believes
that most of its research and development efforts have applicability to products
that may incorporate the Company's technology.  Although the Company
believes that the state of development of its technology is sufficiently 
advanced that commercial products should be producible hereafter by its 
licensees, such potential commercialization is beyond the control of the 
Company.  In addition, the Company intends to continue its research and 
development efforts for the foreseeable future to improve its SPD light valve 
technology and thereby assist in the potential commercialization of the 
Company's SPD light valve technology by the Company's licensees.

     The Company has devoted most of the resources it has heretofore
expended to research and development activities with the goal of producing
commercially viable light valves and already has developed working prototypes
of its SPD light valves for several different applications including smart
windows, eyewear, mirrors and flat panel displays.  The Company expended
approximately $1,712,000, $1,410,000, and $1,396,000 during the years ended
December 31, 1996, 1995, and 1994, respectively, for research and
development.  The Company plans to engage in substantial continuing research
and development activities.  Seven of the Company's twelve full-time
employees are principally engaged in the Company's research and development
activities.  The Company's main goals in its research and development will be
(i) developing suspensions that change their transparency with greater speed,
(ii) increasing the light transmission range obtainable from the Company's
suspensions,(iii) developing particles to be used in the suspensions that absorb
different wavelengths of light so that fluid suspensions and light valves can be
produced in a variety of colors, (iv) reducing the voltage required to operate
SPDs, and (v) obtaining data relating to the environmental stability and
longevity of the Company's fluid suspensions and films.

     In June 1994, the Company announced that it had developed a new
prototype SPD flat panel display which operates at substantially lower voltages
than previous prototypes. In January 1995, the Company announced that it had
successfully developed, with the collaboration of London's Imperial College of
Science, Technology and Medicine, a new type of high-information flat panel
display using SPD technology which can offer display manufacturers and users
an attractive alternative to liquid crystal displays (LCDs).  SPD displays offer
high information content as well as good brightness and contrast with an
excellent angle of view due to the elimination of light-absorbing sheet
polarizers.  This should make SPD displays simpler than LCDs to construct and
could also reduce backlighting requirements.  Such SPD displays are intended
for use in computers, flat television sets, telephones and other electronic
instruments, and will be demonstrated to the Company's existing and
prospective licensees for these applications.  With further development, the
Company believes that larger size high information content display prototypes
using the Company's suspensions and having color capability will be
demonstrable.

     In March 1989, the Company announced that it had successfully 
developed and tested a prototype pair of electrically controllable variable 
light transmission sunglasses.  Eyewear products incorporating the Company's
technology should have the advantage of having a fast response time. 
Sunglasses and ski goggles incorporating the Company's technology should
have the additional advantage of being controllable by the user as well as
merely reacting to external radiation.  Although in recent years the Company
has concentrated its efforts in the flat panel display, smart window, and
automotive application areas, the Company has recommenced work on
producing more advanced eyewear prototypes using SPD film.  The Company
believes that advanced eyewear prototypes, if successfully developed, will aid
the Company's efforts to license its SPD light valve technology for eyewear.

     In June 1991, the Company announced the development of a film form
of its fluid suspensions for SPD light valves.  In September 1992, the Company
announced a dramatically improved film which had reduced haze to less than
one-sixth of former levels and demonstrated remarkable clarity. In January
1993, the Company announced a further improvement in its film which
substantially reduced the voltage necessary to operate film SPD light valves. 
The Company's low-haze film is expected to reduce manufacturing costs,
eliminate the risk of leakage, and facilitate the use of SPD light valves in 
large sizes and unusual shapes.  The low-voltage film should further simplify 
the manufacturing and operation of products using this technology.
     
Patents and Proprietary Information

     The Company has 20 United States patents in force.  Three United States
patent applications are pending.  The Company's United States patents expire
at various dates from 1997 through 2014.  The Company has approximately 26
issued patents and a substantial number of patent applications pending in
foreign countries.  The Company's foreign patents expire at various dates from
1998 through 2014.  The Company believes that its SPD light valve technology
is adequately protected by its patent position and by its proprietary
technological know-how.  However, the validity of the Company's patents has
never been contested in any litigation.  To a lesser extent, the Company relies
on trade secrets and nondisclosure agreements to protect its technology.  The
Company generally requires any employee, consultant, or licensee having
access to its confidential information to execute an agreement whereby such
person agrees to keep such information confidential.

Rights Plan

     In February 1993, the Company's Board of Directors declared a dividend
distribution of one Right for each outstanding share of Company common stock
to stockholders of record at the close of business on April 12, 1993.  If a 
person or group has acquired beneficial ownership of, or commences a tender or
exchange offer for, 20% or more of the Company's common stock, unless
redeemed by the Company's Board of Directors, each Right entitles the holder
(other than the acquiring person) to purchase from the Company $90 worth of
common stock for $45.  If the Company is merged into, or 50% or more of its
assets or earning power is sold to, the acquiring company, the Rights will also
enable the holder (other than the acquiring person) to purchase $90 worth of
common stock of the acquiring company for $45.  The Rights will expire at the
close of business on February 16, 2003, unless earlier redeemed by the
Company at a price of $.0000424 per Right. The Rights are not exercisable
during the time when they are redeemable by the Company.  The above
description highlights some of the features of the Company's Rights Plan and
is not a complete description of the Rights Plan. A more detailed description
and a copy of the Rights Plan is available from the Company upon request.

ITEM 2.  PROPERTIES

     The Company currently occupies approximately 8,100 square feet of
space at a minimum annual rental of approximately $97,000 for its executive
office and research facility at 240 Crossways Park Drive, Woodbury, New York
11797 under a lease expiring January 31, 1999. The Company believes that its
space, including its laboratory facilities, is adequate for its present needs.

ITEM 3.  LEGAL PROCEEDINGS

     There are no legal proceedings pending by or against the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS

     None
                             PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
     AND RELATED STOCKHOLDER MATTERS

  (a)Market Information

     (1)  The Company's common stock is primarily traded on the NASDAQ
SmallCap Market  and is also traded on the Boston Stock Exchange. As of
March 27, 1997, there were  10,175,726 shares of common stock outstanding.

     (2)  The following table sets forth the range of the high and low selling
prices (as provided by the National Association of Securities Dealers) of the
Company's common stock for each quarterly period within the past two fiscal
years:
     
       Quarter Ended               Low               High
       March 31, 1995              5.125             8.000
       June 30, 1995               5.750             8.750
       September 30, 1995          6.875            16.875
       December 31, 1995           8.500            15.000
       March 31, 1996              8.500            11.000
       June 30, 1996               7.250            11.750
       September 30, 1996          7.000            10.625
       December 31, 1996           7.000             9.500
                       
These quotations may reflect inter-dealer prices, without retail mark-up, mark-
down, or commission, and may not necessarily represent actual transactions.

  (b)Approximate Number of Security Holders

     As of March 27, 1997, there were 599 holders of record of the
Company's common stock. 

  (c)Dividends

     The Company did not pay dividends on its common stock in 1996 and
does not expect to pay any cash dividends in the foreseeable future.  There are
no restrictions on the payment of dividends.

ITEM 6.  SELECTED FINANCIAL DATA

     The following table sets forth selected data regarding the Company's
operating results and financial position. The data should be read in conjunction
with Management's Discussion and Analysis of Financial Condition and
Results of Operations and the financial statements and notes thereto, all of
which are contained in this Annual Report on Form 10-K.

                                            Year Ended December 31,
                  
                                1996        1995     1994        1993     1992
Statement of Operations Data:
 Fee income             $    50,000 $     1,500  $ 574,965   $206,607 $  278,393
 Operating expenses       1,226,410   1,226,691  1,325,761  1,005,107    812,199
 Research and development 1,711,634   1,410,443  1,395,942  1,300,726  1,049,369
                          2,938,044   2,637,134  2,721,703  2,305,833  1,861,568
 Operating Loss         (2,888,044) (2,635,634)(2,146,738)(2,099,226)(1,583,175)
 Investment income(loss)(1)(761,437)   (14,988)    91,816    257,842    284,334
 Unrealized gain (loss)
    on investments        1,174,643   (268,100)  (868,786)    24,089    (55,206)
 Net loss                (2,474,838)(2,918,722)(2,923,708)(1,817,295)(1,354,047)
 Net loss per share (2)        (.25)      (.32)      (.33)      (.24)      (.19)
 Dividends per share             --          --        --          --        --

                                                  As of December 31,
                   
                               1996       1995       1994       1993        1992

Balance Sheet Data:
 Total current assets    $8,193,639  $9,871,002 $7,232,454 $9,883,504 $3,860,355
 Total assets             8,425,141  10,026,113  7,425,278 10,047,596  4,012,287
 Long-term debt, including
   accrued interest             --           --         --         --         --
 Total shareholders'equity 8,216,847  9,783,060  7,234,613  8,103,776  3,824,023
                                       

(1)   Investment loss for 1996 and 1995 is net of $211,360 and $7,073,
      respectively, of interest income received from an officer of the Company 
      upon payment of a note receivable.
(2)   Per share figures have been restated to reflect the 50% common stock 
      dividend paid by the Company on July 15, 1993 and the 25% common stock 
      dividend paid by the Company on February 15, 1994.

 ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
        CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Year Ended December 31, 1996 Compared to the Year Ended December 31,
1995

     The Company earned $50,000 in fee income for the year ended December
31, 1996 relating to the Company's new license agreement with Glaverbel,
S.A. compared to $1,500 for the year ended December 31, 1995 received from
another licensee.

     Operating expenses remained essentially the same, being $1,266,410 for
the year ended December 31, 1996 and $1,226,691 for the year ended
December 31, 1995.

     Research and development expenditures increased to $1,711,634 for the
year ended December 31, 1996 from $1,410,443 for the year ended December
31, 1995, primarily as a result of increased salaries, consultant fees, and 
related expenses as well as higher costs for materials used in research,and non-
cash compensation expenses of $57,031 associated with the exercise of certain 
stock options.  Management estimates that research and development costs for 
1997 will reflect a modest increase over 1996 levels.  Such costs, however, 
cannot be predicted with any significant degree of accuracy since they will be 
based on future staffing levels, which in turn will be dependent upon new
developments and the degree of support necessary to assist existing and
prospective licensees.

     The Company's net gain from its investing activities for the year ended
December 31, 1996 was $201,846, as compared to a net loss from its investing
activities of $283,088 for the year ended December 31, 1995.  This
improvement was a result of higher interest income and a reduction in  realized
and unrealized losses incurred by the Company on its investments in 1996. 
The Company invested the proceeds from all sales of marketable equity
securities in short-term U.S. Treasury securities.  In addition, the Company
recorded $211,360 of interest income from the repayment of a note receivable
from one of its officers.

     The net loss was $2,474,838 ($.25 per share) for the year ended
December 31, 1996 as compared to $2,918,722 ($.32 per share) for the year
ended December 31, 1995.  The decrease in the net loss was a result of the
combined effect of the factors discussed above. Because the Company has sold
all of its equity investments and invested the proceeds from such sales and a
large part of the cash it received from the sale of common stock and the
exercise of options and warrants in short-term U.S. Treasury securities, the
Company does not expect significant realized and unrealized gains and losses
on investments in 1997.

Year Ended December 31, 1995 Compared to the Year Ended December 31,
1994

     The Company earned $1,500 in fee income for the year ended December
31, 1995 compared to $574,965 for the year ended December 31, 1994.  This
was a result of  income which was recognized by the Company in 1994 in
connection with an option agreement entered into between the Company and
Saint-Gobain Vitrage S.A. as well as the renegotiation by the Company of
certain license agreements, including the levels of minimum annual royalties
payable thereunder.

     Operating expenses decreased by approximately $99,000 to $1,226,691
for the year ended December 31, 1995 from $1,325,761 for the year ended
December 31, 1994.  This decrease was primarily a result of  decreased travel
and public relations costs, office supplies and depreciation expense, partially
offset by an increase in salaries, utilities and insurance costs.

     Research and development expenditures increased to $1,410,443 for the
year ended December 31, 1995 from $1,395,942 for the year ended December
31, 1994, primarily as a result of increased salaries, consultant fees, and 
related expenses as well as higher costs for materials used in research. 

     Net investment income decreased by approximately $107,000 from
$91,816 for the year ended December 31, 1995 to a net investment loss of
$14,988 for the year ended December 31, 1995.  This decrease was a result of
higher realized losses incurred by the Company on its investments in 1995,
partially offset by higher interest and dividend income.  The unrealized loss on
investments decreased to $268,100 for the year ended December 31, 1995 from
$868,786 for the year ended December 31, 1994.  This decrease was primarily
the result of the sale of securities resulting in realized losses in 1995 as
opposed to unrealized losses in 1994.

     The net loss was $2,918,722 ($.32 per share) for the year ended
December 31, 1995 as compared to $2,923,708 ($.33 per share) for the year
ended December 31, 1994.  The decrease in the net loss was a result of the
combined effect of the factors discussed above, with realized and unrealized
investment losses accounted for over 31% of the Company's total losses.

Financial Condition, Liquidity and Capital Resources

     During the year ended December 31, 1996, the Company's cash and
marketable investment securities balance decreased by $1,655,558 from
$9,764,881 for the year ended December 31, 1995 to $8,109,323 for the year
ended December 31, 1996.  This decrease was primarily due to the Company's
loss from operations ($2,888,044) and loans made to officers ($350,000)
partially offset by the proceeds from the issuance of common stock
($1,440,462) in a private placement and from the exercise of options and
warrants.  At December 31, 1996, the Company had working capital of
$7,985,345 and its stockholders' equity was $8,216,847.

     Notes receivable from officers increased by approximately $47,500
during 1996.  This was a result of the repayment by the Company's President
of an outstanding note receivable, including $211,360 in accumulated interest
thereon, offset by three new loans made by the Company to certain of its
officers.  Repayment was made through the transfer to the Company of 49,528
shares of the Company's common stock held by the President, which shares
were subsequently retired by the Company.

     The Company expects to use its cash and short-term investments to fund
its research and development of SPD light valves and for other working capital
purposes.  The Company's working capital and capital requirements depend
upon numerous factors, including the results of research and development
activities, competitive and technological developments, the timing and cost of
patent filings, and the development of new licensees and changes in the
Company's relationships with its existing licensees.  The degree of dependence
of the Company's working capital requirements on each of the foregoing
factors cannot be quantified; increased research and development activities and
related costs would increase such requirements; the addition of new licensees
would provide additional working capital, and changes in relationships with
existing licensees would have a favorable or negative impact depending upon
the nature of such changes.  Based upon existing levels of expenditures,
assumed ten percent annual increases therein, existing cash reserves and
budgeted revenues, the Company believes that it would not require additional
funding for the next two to three  years.  There can be no assurance that
expenditures will not exceed the anticipated amounts or that additional
financing, if required, will be available when needed or, if available, that its
terms will be favorable or acceptable to the Company.  Eventual success of the
Company and generation of positive cash flow will be dependent upon the
commercialization of products using the Company's technology by the
Company's licensees and payments of continuing royalties on account thereof.

     The information set forth in this Report and in all publicly disseminated
information about the Company, including the narrative contained in
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" above, includes "forward-looking statements" within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
and is subject to the safe harbor created by that section. Readers are cautioned
not to place undue reliance on these forward-looking statements as they speak
only as of the date hereof and are not guaranteed.

Inflation

     The Company does not believe that inflation has a significant impact on
its business.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The financial statements listed in Item 14(a)(1) and (2) are included in
this Report beginning on page F-1.

 ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
        ON ACCOUNTING AND FINANCIAL DISCLOSURE

     None.

                             PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information required by this Item 10 is incorporated by reference to
the Company's definitive Proxy Statement to be filed with the Commission on
or before April 30, 1997, in connection with the Company's Annual Meeting
of Stockholders scheduled to be held on June 12, 1997.

ITEM 11.   EXECUTIVE COMPENSATION

     The information required by this Item 11 is incorporated by reference to
the Company's definitive Proxy Statement to be filed with the Commission on
or before April 30, 1997, in connection with the Company's Annual Meeting
of Shareholders scheduled to be held on June 12, 1997.  Notwithstanding
anything to the contrary set forth herein or in any of the Company's past or
future filings with the Securities and Exchange Commission that might
incorporate by reference the Company's definitive Proxy Statement, in whole
or in part, the report of the compensation committee and the stock price
performance graph contained in such definitive Proxy Statement shall not be
incorporated by reference into this Annual Report on Form 10-K or in any other
such filings.

 ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

     The information required by this Item 12 is incorporated by reference to
the Company's definitive Proxy Statement to be filed with the Commission on
or before April 30, 1997, in connection with the Company's Annual Meeting
of Stockholders scheduled to be held on June 12, 1997.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this Item 13 is incorporated by reference to
the Company's definitive Proxy Statement to be filed with the Commission on
or before April 30, 1997, in connection with the Company's Annual Meeting
of Stockholders scheduled to be held on June 12, 1997.

                             PART IV

 ITEM 14.EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K

     (a)(1) and (2)  Financial Statements and Financial Statement Schedules

     The following financial statements of Research Frontiers Incorporated,
the related notes thereto, together with the report thereon of KPMG Peat
Marwick LLP are filed under Item 8 of this Report.

Independent Auditors' Report . . . . . . . . . . . . . . . . . . . .         F-1

Financial Statements:

    Balance Sheets,
    December 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . .         F-2

    Statements of Operations,
    Years Ended December 31, 1996, 1995 and 1994 . . . . . . . . . .         F-3

    Statements of Shareholders' Equity,
    Years Ended December 31, 1996, 1995 and 1994 . . . . . . . . . .         F-4

    Statements of Cash Flows,
    Years Ended December 31, 1996, 1995 and 1994 . . . . . . . . . .         F-5

Notes to Financial Statements. . . . . . . . . . . . . . . . . . . .         F-6

     All schedules are omitted because they are not applicable, or not
required, or because the required information is included in the financial
statements or notes thereto.

     (a)(3)     Exhibits                                     Page

3.1     Restated Certificate of Incorporation of the Company. Previously
        filed as  Exhibit 3.1 to the Company's Quarterly Report on Form 10-
        Q for the fiscal quarter ended June 30, 1994, and incorporated
        herein by reference.

3.2     Amended and Restated Bylaws of the Company.  Previously filed as
        an Exhibit to the Company's Annual Report on Form 10-K for the
        fiscal year ended December 31, 1993 and incorporated herein by
        reference.

4.1     Form of Common Stock Certificate. Previously filed as an Exhibit
        to the Company's Registration Statement on Form S-18 (Reg. No.
        33-5573NY), declared effective by the Commission on July 8, 1986,
        and incorporated herein by reference.

4.2     Rights Agreement dated as of February 16, 1993 between Research
        Frontiers Incorporated and Continental Stock Transfer & Trust
        Company, as Rights Agent, which includes as Exhibit A thereto the
        Form of Rights Certificate.  Previously filed as an Exhibit to the
        Company's Registration Statement on Form 8-A dated February 16,
        1993, and incorporated herein by reference.

10.1*   Amended and Restated Employment Contract effective January 1,
        1989 between the Company and Robert L. Saxe. Previously filed as
        an Exhibit to the Company's Annual Report on Form 10-K for the
        fiscal year ended December 31, 1993 and incorporated herein by
        reference.

10.2*   Amended and Restated 1986 Stock Option Plan.  Previously filed as
        Exhibit 4.2 to the Company's Registration Statement on Form S-8
        (Reg. No. 33-53030) filed with the Commission on October 6, 1992,
        and incorporated herein by reference.

10.3*   Amended and Restated 1992 Stock Option Plan. Previously filed as
        Exhibit 4 to the Company's Registration Statement on Form S-8
        (Reg. No. 33-86910) filed with the Commission on November 30,
        1994, and incorporated herein by reference.

10.4*   Form of Stock Option Agreement between the Company and
        recipients of stock options issued pursuant to the Company's Stock
        Option Plans. Previously filed as part of Exhibits 4.1, 4.2, and 4.3
        to the Company's Registration Statement on Form S-8 (Reg. No. 33-
        53030) filed with the Commission on October 6, 1992, and
        incorporated herein by reference.

10.5    Lease Agreement dated November 7, 1986, between the Company
        and Industrial & Research Associates Co.  Previously filed as an
        exhibit to the Company's Annual Report on Form 10-K for the fiscal
        year ended December 31, 1986 and incorporated herein by
        reference.

10.5.1  First Amendment to Lease dated November 26, 1991 between the
        Company and Industrial and Research Associates Co. Previously
        filed as an Exhibit to Amendment No. 1 to the Company's
        Registration Statement on Form S-1 (Reg. No. 33-43768) declared
        effective by the Commission on December 17, 1991, and
        incorporated herein by reference.

10.5.2  Second Amendment to Lease dated March 11, 1994 between the
        Company and Industrial and Research Associates Co. Previously
        filed as an exhibit to the Company's Annual Report on Form 10-K
        for the fiscal year ended December 31, 1993 and incorporated herein
        by reference.

10.6    License Agreement dated February 16, 1989 among the Company,
        the Japan Steel Works, Ltd. and the Central Glass Company, Ltd. 
        Previously filed as an exhibit to the Company's Annual Report on
        Form 10-K for the fiscal year ended December 31, 1988 and
        incorporated herein by reference.

10.7    License Agreement dated June 15, 1990 between the Company and
        Hankuk Glass Industry Co., Ltd. and related Korean government
        approval of the agreement dated July 4, 1990, with English
        translation attached. Previously filed as an Exhibit to Amendment
        No. 1 to the Company's Registration Statement on Form S-2 (Reg.
        No. 33-35130) declared effective by the Commission on August 7,
        1990, and incorporated herein by reference.

10.8    Option Agreement effective as of June 1, 1994 between the
        Company and Saint-Gobain Vitrage International SA (now known
        as Saint-Gobain Vitrage SA).  Previously filed as an Exhibit to the
        Company's Current Report on Form 8-K dated June 9, 1994 and
        incorporated herein by reference.

10.9    License Agreement effective as of February 17, 1995 between the
        Company and Sanyo Electric Co., Ltd.  Previously filed as an
        Exhibit to the Company's Current Report on Form 8-K/A dated
        April 17, 1995 with portions omitted pursuant to the Registrant's
        request for confidential treatment and filed separately with the
        Securities and Exchange Commission, and incorporated herein by
        reference.

10.10   License Agreement effective as of August 2, 1995 between the
        Company and General  Electric Company.  Previously filed as an
        Exhibit to the Company's Current Report on Form 8-K dated August
        2, 1995 with portions omitted pursuant to the Registrant's request
        for confidential treatment and filed separately with the Securities
        and Exchange Commission, and incorporated herein by reference.

10.11   License Agreement effective as of April 29, 1996 between the
        Company and Glaverbel, S.A.  Previously filed as an Exhibit to the
        Company's Quarterly Report on Form 10-Q for the fiscal quarter
        ended March 31, 1996 with portions omitted pursuant to the
        Registrant's request for confidential treatment and filed separately
        with the Securities and Exchange Commission, and incorporated
        herein by reference.

10.12   License Agreement effective as of January 18, 1997 between the
        Company and Material Sciences Corporation.  Previously filed as an
        Exhibit to the Company's Current Report on Form 8-K dated March
        3, 1997 with portions omitted pursuant to the Registrant's request for
        confidential treatment and filed separately with the Securities and
        Exchange Commission, and incorporated herein by reference.

      22Subsidiaries of the Registrant - None

      23Consent of KPMG Peat Marwick LLP - Filed herewith.
                                                                  
    *Executive Compensation Plan or Arrangement.

     (b)  Reports on Form 8-K:

     No reports on Form 8-K have been filed by the Registrant during the last
quarter of the period covered by this report.<PAGE>

                            SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

     RESEARCH FRONTIERS INCORPORATED


     By:  /s/Robert L. Saxe                     
     Robert L. Saxe, President
       and Treasurer
     (Principal Executive, Financial, 
     and Accounting Officer)

Dated:  March 27, 1997

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:

      Signature                          Position                Date

     /s/Robert M. Budin                  Director                March 27, 1997
        Robert M. Budin

     /s/Bernard D. Gold                  Director                March 27, 1997
        Bernard D. Gold

     /s/Joseph M. Harary                 Director                March 27, 1997
        Joseph M. Harary

    /s/Robert L. Saxe                    Director, President     March 27, 1997
       Robert L. Saxe                      and Treasurer

     /s/Robert I. Thompson              Director                 March 27, 1997
        Robert I. Thompson<PAGE>

                   Independent Auditors' Report



The Stockholders and Board of Directors
Research Frontiers Incorporated:


We have audited the accompanying balance sheets of Research Frontiers
Incorporated as of December 31, 1996 and 1995, and the related statements of
operations, shareholders' equity and cash flows for each of the years in the
three-year period ended December 31, 1996.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis for our
opinion.

In our opinion,the financial statements referred to above present fairly, in all
material respects, the financial position of Research Frontiers Incorporated at
December 31, 1996 and 1995 and the results of its operations and cash flows
for each of the years in the three-year period ended December 31, 1996 in
conformity with generally accepted accounting principles.


KPMG PEAT MARWICK LLP

/s/ KPMG PEAT MARWICK LLP

Jericho, New York
February 26, 1997<PAGE>


                     RESEARCH FRONTIERS INCORPORATED
                                    
                             Balance Sheets
                                    
                       December 31, 1996 and 1995
                                                     
                    Assets                         1996               1995

Current assets:
   Cash                                    $       457,959         3,827,573
   Marketable investment securities              7,651,364         5,937,308
   Accrued interest and dividends receivable        65,429            82,422
   Prepaid expenses and other current assets        18,887            23,699
             Total current assets                8,193,639         9,871,002

Fixed assets, net                                  167,846            96,491
Deposits and other assets                           63,656            58,620
         Total assets                      $     8,425,141        10,026,113

     Liabilities and Shareholders' Equity

Current liabilities:
   Accounts payable                                 86,590          113,120
   Accrued expenses                                121,704          129,933

         Total liabilities                         208,294          243,053

Shareholders' equity:
   Common stock, par value $0.0001 per share;
    authorized 100,000,000 shares,issued and
    outstanding 10,066,897 and 9,830,761 shares
    for 1996 and 1995                                1,007             983
   Additional paid-in capital                   29,355,663      28,399,562
   Accumulated deficit                         (20,510,323)    (18,035,485)
                                                 8,846,347      10,365,060

   Notes receivable from officers                 (629,500)       (582,000)

             Total shareholders' equity          8,216,847       9,783,060

Commitments         

  Total liabilities and shareholders' equity  $  8,425,141      10,026,113

See accompanying notes to financial statements.<PAGE>

                                    
                                    
                                    
                     RESEARCH FRONTIERS INCORPORATED
                                    
                        Statements of Operations
                                    
              Years ended December 31, 1996, 1995 and 1994
                                    
                                  1996                1995               1994
    
Fee income               $      50,000               1,500            574,965
    
Operating expenses           1,226,410           1,226,691          1,325,761
Research and development     1,711,634           1,410,443          1,395,942
                             2,938,044           2,637,134          2,721,703
    
           Operating loss   (2,888,044)         (2,635,634)        (2,146,738)
    
Net investment income (loss)  (972,797)            (22,061)            91,816
Unrealized gain (loss)
  on investments             1,174,643            (268,100)          (868,786)
Interest income on note
  receivable from officer      211,360                7,073                --
    
           Net loss$        (2,474,838)          (2,918,722)       (2,923,708)
    
Net loss per share$              (0.25)                (.32)             (.33)
                
    
Weighted average number of 
common shares outstanding    9,924,875            9,196,479         8,768,801 
    
    See accompanying notes to financial statements.


                                       <PAGE>


                                     RESEARCH FRONTIERS INCORPORATED
                                   Statements of Shareholders' Equity
                              Years ended December 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>
                                 Common Stock     Additional       Accumulated    Treasury       Notes
                               Shares     Amount  Paid in Capital  Deficit      Stock, at cost   Receivable    Total

<S>                          <C>        <C>         <C>           <C>           <C>              <C>          <C>
Balance, December 31, 1993   6,854,887  856,860     19,794,329    (12,193,055)              --   (354,358)   8,103,776

Five for four stock split    1,718,244    214,781     (214,781)            --               --         --           --
Adjustment of par value             -- (1,070,784)   1,070,784             --               --         --           --
Issuance of common stock       590,429         59    2,915,115             --               --         --    2,915,174
Purchase of treasury stock          --         --           --             --         (333,343)        --     (333,343)
Retirement of treasury stock   (42,500)        (4)    (333,339)            --          333,343         --           --
Net loss                            --         --           --     (2,923,708)              --         --   (2,923,708)
Repayment of note by officer        --         --           --             --               --       1,858       1,858
Loans to officers                   --         --           --             --               --    (529,144)   (529,144)

Balance, December 31, 1994   9,121,060        912   23,232,108    (15,116,763)              --    (881,644)  7,234,613

Issuance of common stock       755,246         76    5,474,166             --               --          --   5,474,242
Retirement of treasury stock   (45,545)        (5)    (306,712)            --          306,717          --          --
Net loss                            --         --           --     (2,918,722)              --          --    (2,918,722)
Repayment of note by officer        --         --           --             --         (306,717)    299,644        (7,073)

Balance, December 31, 1995   9,830,761   $    983   28,399,562    (18,035,485)              --    (582,000)    9,783,060

Issuance of common stock       305,021         31    1,634,171             --          (85,383)         --     1,548,819
Purchase of treasury stock          --         --           --             --          (78,841)         --       (78,841)
Repayment of note by officer        --         --           --             --         (513,853)    302,500      (211,353)
Retirement of treasury stock   (68,885)        (7)    (678,070)            --          678,077          --            --
Net loss                            --         --           --      (2,474,838)             --          --    (2,474,838)
Loans to officers                   --         --           --              --              --    (350,000)     (350,000)
Balance, December 31, 1996  10,066,89   $   1,007   29,355,663     (20,510,323)             --    (629,500)    8,216,847

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

                       RESEARCH FRONTIERS INCORPORATED
                           Statements of Cash Flows
                 Years ended December 31, 1996, 1995 and 1994
                                                                      
                                                   1996        1995        1994
Cash flows from operating activities:
 Net loss                                  $ (2,474,838) (2,918,722) (2,923,708)
 Adjustments to reconcile net loss to net cash
  provided by (used in) operating activities:
   Depreciation and amortization                 45,847      58,178     105,046
   Interest income on officer notes receivable (211,353)     (7,073)         --
   Unrealized loss (gain) on investments     (1,174,643)    268,100     868,786
   Cashless exercise of options                 108,357          --          --
   Changes in assets and liabilities:
    Decrease in accounts receivable, licensee        --          --      30,000
     Decrease (increase) in accrued
      interest and dividends receivable          16,993     (21,020)    (27,409)
     (Increase) decrease in prepaid expenses and
          other current assets                    4,812      (7,851)     (7,596)
     Increase in deposits and other assets       (5,036)     (4,000)     (9,800)
     Increase (decrease) in accounts payable
          and accrued expenses                  (34,759)     52,388     (68,770)
     Net sales (purchases) of investments      (539,413)    730,025  (2,361,560)

  Net cash used in operating activities      (4,264,033) (1,849,975) (4,395,011)

Cash flows from investing activities:
  Purchases of fixed assets                    (117,202)   (16,465)    (123,978)
  Decrease in accounts payable
    for purchase of investments                      --         --   (1,684,385)

     Net cash used in investing activities     (117,202)   (16,465)  (1,808,363)

Cash flows from financing activities:
 Loans to officers                             (350,000)        --     (527,286)
 Proceeds from issuances of common stock      1,440,462  5,474,242    2,915,174
 Purchase of treasury stock                     (78,841)        --     (333,343)

    Net cash provided by financing activities 1,011,621  5,474,242    2,054,545

Net increase (decrease) in cash              (3,369,614) 3,607,802   (4,148,829)

Cash at beginning of year                     3,827,573    219,771    4,368,600
Cash at end of year                     $       457,959  3,827,573      219,771

Supplemental schedule of non-cash financing activities:
 Redemption of treasury stock as 
  payment for officer note receivable   $       513,853    306,717        1,858
Market value of stock received
  to exercise options                   $        85,383         --           -- 
        
See accompanying notes to financial statements.

                RESEARCH FRONTIERS INCORPORATED
                                
                 Notes to Financial Statements
                                
                December 31, 1996, 1995 and 1994

(1)Business

Research Frontiers Incorporated (the Company) is primarily engaged in the
development and  marketing of technology and devices to control the flow of
light.  Such devices, often referred to as "light valves" or suspended particle
devices (SPDs), use microscopic particles either in the form of a liquid
suspension or a film which is enclosed between two glass or plastic plates, at
least one of which is transparent.

The Company has historically utilized its cash and short-term investments to
fund its research and development of SPD light valves and for other working
capital purposes.  The Company's working capital and capital requirements
depend upon numerous factors, including the results of research and
development activities, competitive and technological developments, the timing
and cost of patent filings, the development of new licensees and changes in the
Company's relationships with its existing licensees.  The degree of dependence
of the Company's working capital requirements on each of the foregoing
factors cannot be quantified; increased research and development activities and
related costs would increase such requirements; the addition of new licensees
would provide additional working capital, and changes in relationships with
existing licensees would have a favorable or negative impact depending upon
the nature of such changes.  Based upon existing levels of expenditures,
assumed ten percent annual increases therein, existing cash reserves and
budgeted revenues, the Company believes that it would not require additional
funding for the next two to three  years.  There can be no assurance that
expenditures will not exceed the anticipated amounts or that additional
financing, if required, will be available when needed or, if available, that its
terms will be favorable or acceptable to the Company.  Eventual success of the
Company and generation of positive cash flow will be dependent upon the
commercialization of products using the Company's technology by the
Company's licensees and payments of continuing royalties on account thereof.

(2)Summary of Significant Accounting Policies

    (a)Marketable Investment Securities

The Company accounts for its investments in marketable securities under the
provisions of Statement of Financial Accounting Standards No. 115,
"Accounting  for Certain Investment in Debt and Equity Securities" (Statement
115).  In accordance with Statement 115, the Company classifies its debt and
marketable equity securities as trading securities as they are bought and held
principally for the purpose of selling them in the near term. Trading securities
are recorded at fair value and unrealized holding gains and losses are
recognized in earnings.

Dividend and interest income are recognized when earned.  Cost is maintained
on a specific identification basis for purposes of determining realized gains
and losses on sales of investments.

    (b)Fixed Assets

Fixed assets are carried at cost.  Depreciation and amortization are computed
using the straight-line method over the estimated useful lives of the assets.

    (c)Fee Income

Fee income represents amounts earned by the Company under various license
and other agreements (note 8) relating to technology developed by the
Company.

    (d)Loss Per Share

Loss per share is computed based upon the weighted average number of
common shares outstanding. Common share equivalents were not included in
the computation as their effect would be to decrease net loss per share.

    (e)Research and Development Costs

Research and development costs are charged to expense as incurred.

    (f)Patent Costs

The Company expenses costs relating to the development of patents due to the
uncertainty of the recoverability of these items.

    (g)Use of Estimates

Management of the Company has made a number of estimates and assumptions
relating to the  reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles.  Actual results could
differ from those estimates.

    (h)Income Taxes

The Company utilizes the asset and liability method as required by Statement
of Financial Accounting Standard  No. 109 "Accounting for Income Taxes". 
Under the asset and liability method of Statement 109, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases.  Deferred tax assets and 
liabilities are measured using enacted tax rates expected to be recovered or 
settled. Under Statement 109, the effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period that includes the
enactment date.

    (i)Fair Value of Financial Instruments

The fair value of a financial instrument is the amount at which the instrument
could be exchanged in a current transaction between willing parties. The
carrying amounts of cash, prepaid expenses, accounts payable and accrued
liabilities approximate fair value because of the short maturity of those
instruments.

The fair value of the long-term notes receivable from officers approximates the
carrying value as their stated interest rate, the broker call rate, is similar 
to other rates currently offered by local brokerage institutions for loans of 
similar terms to individuals with comparable credit risk.

    (j)Stock Option Plan

Prior to January 1, 1996, the Company accounted for its stock option plan in
accordance with the provisions of Accounting Principles Board ("APB")
Opinion No. 25 "Accounting for Stock Issued to Employees", and related
interpretations.  As such, compensation expense would be recorded on the date
of grant only if and to the extent that the current market price of the under-
lying stock exceeded the exercise price.  On January 1,1996, the Company adopted
Statement of Financial Accounting Standards No. 123 "Accounting for Stock-
Based Compensation" (Statement 123) which permits entities to recognize as
expense over the vesting period the fair value of all stock-based awards on the
date of grant.  Alternatively, Statement 123 also allows entities to continue to
apply the provisions of APB Opinion No. 25 and provide pro forma net income
(loss) and pro forma earnings (loss) per share disclosures for employee stock
option grants made in 1995 and future years as if the fair-value-based method
defined in Statement 123 had been applied.  The Company has elected to
continue to apply the provisions of APB Opinion No. 25 and provide the pro
forma disclosure provisions of Statement 123.

   (k)  Reclassifications

Certain reclassifications have been made to the 1995 financial statements to
conform to the 1996 presentation.

(3)Marketable Investment Securities

The fair value of marketable investment securities are  based upon quoted
market prices.  The gross unrealized holding gains (losses) and fair values of
trading securities by major type at December 31, 1996 and 1995 were as
follows:

                                           1996                    1995      
                                     Gross      Fair       Gross        Fair
                                   Unrealized   Value     Unrealized    Value
                                     Holding     of        Holding      of
                                  Gain (Loss) Investment  Gain (Loss) Investment

Fidelity Short-Term World Income Fund $   --         --         (892)     8,801
U.S. government obligations            6,399  7,651,364       (7,340) 3,158,250
First Australia Prime Income Fund         --         --     (354,931) 2,590,257
WRT Energy Convertible Preferred Stock    --         --     (804,840)   180,000
                                      $6,399  7,651,364   (1,168,003) 5,937,308

Maturities of all U.S. treasury securities were less than one year at December
31, 1996.

(4)Notes Receivable from Officers

In 1987, the Company loaned one of its officers $412,500, of which $302,500
in principal remained
outstanding after the officer repaid $134,085 in cash in December 1989.  On
January 3, 1996 this loan was repaid in full principally through the surrender
of 49,528 shares of the Company's common stock.  In 1992, the Company
loaned this officer $72,133 which was repaid in 1993 and 1994, principally
through the surrender of shares of the Company's common stock by the officer.
In 1993, the Company loaned another officer $50,000, and in 1994 the
Company loaned several  officers an aggregate of $529,144.  In January 1995,
one officer repaid in full two of these loans with an aggregate principal
balance of $299,644 principally through the surrender of 45,545 shares of the
Company's common stock.  In connection with these loan repayments, the
Company recorded $7,073 of interest income in 1995 and $211,360 in 1996. 
It is the Company's policy to record interest income on these notes as received.
In 1996 the Company loaned several  officers an aggregate of $350,000.

Each of the aforementioned loans are due in January 1999.  The loans relate to
the purchase of common stock of the Company, are collateralized by the pledge
of shares of common stock of the Company, may be prepaid in part or in full
without notice or penalty, are represented by a promissory note which bears
interest at a rate per annum equal to the broker call rate (7.0% at December 31,
1996 and 7.5% at December 31, 1995) in effect on the first day of each
calendar quarter, and permit repayment of the loan by delivery of securities of
the Company having a fair market value equal to the balance of the loan
outstanding.

(5)Fixed Assets

Fixed assets and their estimated useful lives, are as follows:

                                   1996           1995   Estimated useful life

Equipment                  $    596,767        511,399    5 years
Leasehold improvements          115,808         83,974    Life of lease or esti-
                                712,575        595,373    mated life if shorter

Less accumulated depreciation
       and amortization         544,729        498,882
                           $    167,846         96,491

(6)Income Taxes

There was no income tax expense for the years ended December 31, 1996,
1995 and 1994 due to losses incurred by the Company.

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets  and deferred tax liabilities at December 31, 1996 
and 1995 are presented below.

                                            1996            1995
Deferred tax assets:
  Net operating loss carryforwards    $6,350,000       5,700,000
  Research and other credits             400,000         160,000
  Total gross deferred tax assets      6,750,000       5,860,000

  Less valuation allowance             6,750,000       5,860,000
                                              --              --

The Company has recorded a valuation allowance against the deferred tax
assets which will not be realized unless the Company achieves profitable
 operations in the future.

At December 31, 1996, the Company had a net operating loss carryforward for
federal income tax purposes of approximately $15,900,000, varying amounts
of which will expire in each year from 1997 through 2011. Research and other
credit carryforwards of $400,000 are available to the Company to reduce
income taxes payable in future years principally through 2011.

(7)Shareholders' Equity

    (a)Sale of Common Stock and Warrants

During 1994, the Company received $2,915,174 as net proceeds from the
issuance of 590,429 shares of common stock, as follows: the issuance of
503,617 shares of common stock from the exercise of warrants resulting in
proceeds of $2,600,034; the issuance of 25,312 shares of common stock from
the exercise of unit purchase warrants resulting in proceeds of $121,498; and
the issuance of 61,500 shares of common stock from the exercise of options
resulting in proceeds of $193,642.

During 1995, the Company received $5,474,242 as net proceeds from the
issuance of 755,246 shares of common stock, as follows: a private placement
of 523,749 shares of common stock resulting in proceeds of $4,572,589; the
issuance of 27,168 shares of common stock from the exercise of warrants
resulting in proceeds of $43,896; the issuance of 79,498 shares of common
stock from the exercise of unit purchase warrants resulting in proceeds of
$429,289; and the issuance of 124,831 shares of common stock from the
exercise of options resulting in proceeds of $428,468.

During 1996, the Company received $1,548,819 as net proceeds from the
issuance of 305,021 shares of common stock, as follows: a private placement
of 172,019 shares of common stock resulting in proceeds of $1,187,511; the
issuance of 49,687 shares of common stock from the exercise of warrants
resulting in proceeds of $94,999; the issuance of 29,249 shares of common
stock from the exercise of unit purchase warrants resulting in proceeds of
$157,945; and the issuance of 54,066 shares primarily from the cashless
exercise of options resulting in net equity proceeds valued at $108,364.

    (b)Options, Warrants and Unit Purchase Warrants

    (i)Options

In 1983, the shareholders approved a stock option plan which provides for the
granting of incentive stock options at the fair market value at the date of 
grant to full-time employees (as defined) of the Company. The Company had
reserved 375,000 shares of its common stock for issuance under this plan. 
Options may no longer be issued under this plan, as the terms of this plan
expired in 1993.

In 1986, the shareholders approved a second stock option plan. This plan
provides for the granting of both incentive stock options and nonqualified
options at the fair market value at the date of grant to employees including 
both officers and members of the Board of Directors. The Company originally
reserved 262,500 shares of its common stock for issuance under this plan. The
plan was amended in 1990 to increase the number of authorized shares to
450,000.Options may no longer be issued under this plan, as the terms of this
plan expired in 1996. 

In 1992, the shareholders approved a third stock option plan (1992 Stock
Option Plan) which provides for the granting of both incentive stock options
at the fair market value at the date of grant and nonqualified stock options at
or below the fair market value at the date of grant to employees or non-
employees who, in the determination of the Board of Directors, have made or
may make significant contributions to the Company in the future.  The
Company has reserved 468,750 shares of its common stock for issuance under
this plan.  In 1994 and 1996, the Company's shareholders approved an
additional 300,000 shares and 450,000 shares, respectively, for issuance under
this plan.

At the discretion of the Board of Directors, options expire in ten years or less
from the date of grant and are generally fully exercisable upon grant.  Full
payment of the exercise price may be made in cash or in shares of common
stock valued at the fair market value thereof on the date of exercise, or by
agreeing with the Company to cancel a portion of the exercised options. 
During 1996, options were exercised that resulted in the issuance of 54,066
shares of common stock.  Of these options, 43,125 were exercised through the
surrender of 9,357 shares of common stock.  These shares were  subsequently
retired by the Company.  In addition, 10,941 options were exercised, for which
payment was received through the cancellation of 37,121 options, resulting in
compensation expense of $108,357.

At December 31, 1996, there were 189,833 additional shares available for grant
under the Company's 1992 Stock Option Plan.

Activity in stock options is summarized below:

                                    Number of Shares            Weighted Average
                                    Subject to Option           Exercise Price
     Balance at December 31, 1993        372,058                    $4.25
          Granted                        410,125                    $7.88
          Exercised                      (61,500)                   $3.15

     Balance at December 31, 1994        720,683                    $6.40
          Granted                        190,100                   $10.87
          Cancelled                      (21,012)                   $4.48
          Exercised                     (124,831)                   $4.48

     Balance at December 31, 1995        764,940                    $7.83
          Granted                        327,400                    $8.24
          Cancelled                      (52,371)                   $3.14
          Exercised                     ( 54,066)                   $2.98

     Balance at December 31, 1996        985,903                    $8.20

At December 31, 1996, the number of options exercisable was 783,903 at a
weighted average exercise price of $8.41 per share.  All share and price data
have been restated to reflect the three for two stock split of June 1993 and the
five for four stock split of January 1994.

The per share weighted average fair value of warrants issued to directors and
stock options granted during 1996 and 1995 was approximately $3.51 and
$4.67, respectively, on the date of grant using the Black-Scholes option-pricing
model with the following weighted average assumptions: 1996 - expected
dividend yield 0%, risk-free interest rate of 6.53% for options and warrants
granted in June 1996 and 5.79% for options and warrants granted in November
1996, expected stock volatility of 50.82% for options and warrants granted in
June 1996 and 49.92% for options and warrants granted in November 1996 and
an expected life of 3.5 years; 1995 - expected dividend yield 0%, risk-free
interest rate of 5.93% for options and warrants granted in June 1995 and 5.62%
for options and warrants granted in November 1995, expected stock volatility
of 47.5% for options and warrants granted in June 1995 and 51.81% for options
and warrants granted in November 1995 and an expected life of 3.5 years.

The Company applies APB Opinion No. 25 in accounting for its stock option
plans and, accordingly, no compensation cost has been recognized for its stock
options and warrants in the financial statements at the date of grant.  Had the
Company determined compensation cost based on the fair value at the grant
date for its stock options under Statement 123, the Company's net loss and net
loss per share would have been increased to the pro forma amounts indicated
below:

                                                   1996              1995

 Net loss               As reported           $ (2,474,838)  $ (2,918,722)
                        Pro forma             $ (3,747,886)  $ (3,907,874)

 Net loss per share     As reported                $ (0.25)       $ (0.32)
                        Pro forma                  $ (0.38)       $ (0.42)

Pro forma net loss reflects only options and warrants granted in 1996 and 1995. 
Therefore, the full impact of calculating compensation cost for stock options
and warrants under Statement 123 is not reflected in the pro forma net loss
amounts presented above because compensation costs for options and warrants
granted prior to January 1, 1995 were not considered.

    (ii)Warrants

Summarized below are the changes in the number of shares underlying
warrants granted from January 1, 1994 to December 31, 1996:

                                           Number of Shares         Exercise
                                     Underlying Warrants Granted      Price 

     Balance at December 31, 1993                607,344           $1.33-7.27
           Exercised                            (526,107)           1.33-6.00
           Redeemed                              (12,069) (a)              --
           Issued                                188,812  (b)       5.88-9.35

     Balance at December 31, 1994                257,980            1.33-9.35
           Exercised                             (27,168)           1.33-2.13
           Issued                                 31,600  (c)       7.31-13.50

     Balance at December 31, 1995                262,412            1.47-13.50
           Exercised                             (49,687)           1.47-4.00
           Terminated                           (100,000)                   --
           Issued                                 98,100  (d)       7.38-11.63

     Balance at December 31, 1996                210,825           $5.88-13.50

(a)     Represents the redemption of remaining public warrants at $0.50 per
        warrant pursuant to a call feature.

(b)     Represents warrants to purchase 25,000 shares at $7.25 per share and
        10,000 shares at $7.50 per share relating to finders fees; warrants to
        purchase 25,312 shares at $6.00 per share relating to the exercise of 
        unit purchase warrants issued to the underwriter of the  Company's Dec-
        ember 1991 public offering;warrants to purchase 100,000 shares at $5.875
        per share to an employee if certain contingencies occur; and warrants to
        purchase 11,000 shares at $5.875 per share, 12,500 shares at $9.35 per
        share and 5,000 shares at $8.1875 per share to two directors of the
        Company.In connection with the warrants granted as finders fees, only an
        immaterial amount are vested. The remaining warrants are contingent upon
        the occurrence of certain future events (generally, the execution of 
        license agreements with new licensees), and therefore, the Company will
        charge operations for the related value in the period in which the 
        warrants vest.

(c)     Represents warrants to purchase 6,000 shares at $7.3125 per share and
        18,600 shares at $13.50 per share to two directors of the Company and
        warrants to purchase 7,000 shares at $7.9875 per share to a consultant 
        if certain contingencies occur.

(d)     Represents warrants to purchase 5,600 shares at $9.625 per share and
        30,000 shares at $7.375 per share issued to two directors of the Company
        and redeemable warrants to purchase 31,250 shares at $8.72 per share and
        31,250 shares at $11.625 per share issued to institutional investors in
        a private placement of the Company's common stock.

Warrants generally expire from two to ten years from the date of issuance. At
December 31, 1996, the number of warrants exercisable was 168,825 at a
weighted average exercise price of $9.15 per share.

    (iii)Unit Purchase Warrants

In connection with the 1991 public offering of the Company's common stock,
7,800 unit purchase warrants rights remained outstanding at the end of 1995.
Such unit purchase warrants enable the holders to purchase 29,249 shares of
common stock at an effective exercise price of $5.40 per share.  During 1996
all of these unit purchase warrants were exercised.

    (c)Stock Splits

In February 1994, the Company issued 1,718,244 shares of common stock in
connection with a five for four stock split payable in the form of a 25% stock
dividend to shareholders of record on January 31, 1994. All references to
earnings per share, stock options and warrants data in the accompanying
financial statements have been adjusted to give effect to this stock split.

    (d)Treasury Stock

During 1996, the Company purchased in the open market and subsequently
retired 10,000 shares of treasury stock with an aggregate cost of approximately
$79,000.  During 1995, no treasury stock was purchased by the Company. 
During 1994, the Company purchased in the open market and subsequently
retired 42,500 shares of treasury stock with an aggregate cost of approximately
$333,000.

    (e)Restricted Stock

In connection with a license agreement entered into during 1996 pursuant to
which certain technology was licensed to the Company, the Company agreed
to issue to the licensor 8,800 shares of its common stock as a licensing fee. 
These shares, which were issued in 1997, were discounted based upon
restrictions on transferability and charged to expense ($46,970) in 1996.

    (f)Par Value and Authorized Shares

During 1994, pursuant to shareholder approval, the Company adjusted the par
value of its common stock from $0.125 per share to $0.0001 per share. 
Common stock and additional paid-in capital have been adjusted to effect this
new par value. In addition, the Company's shareholders approved an increase
in the number of shares authorized from 20,000,000 to 100,000,000.

(8)License and Other Agreements

The Company has entered into a number of license agreements and one option
agreement covering potential products using the Company's SPD technology.
Although the Company may receive minimum annual royalties under certain
of these licenses, to date no products have been sold resulting in earned
royalties under these license agreements.

The following table summarizes the license and other agreements in effect as
of December 31, 1996:

Licensee or Optionee        Products Covered                         Territory

General Electric Company    SPD film for other licensees and         Worldwide
                            prospective licensees

Glaverbel, S.A.             Automotive vehicle rear-view mirrors,    Worldwide
                            transportation vehicle sun visors, and (except Korea
                            architectural windows                   for windows)

Hankuk Glass Industries Inc.Architectural Windows                        Korea

Japan Steel Works Ltd. and  Windows                                      Japan
Central Glass Company Ltd.

Saint Gobain Vitrage, S.A.  Architectural Windows                      Worldwide
                                                                   (except Korea
                                                              and South America)

Sanyo Electric Co., Ltd.    Flat panel displays                        Worldwide

Licenses generally provide for a 3-5% royalty on the sale of licensed products
and may provide for minimum annual royalties.  The Company's license
agreements typically allow the licensee to terminate the license after some
period of time, and give the Company only limited rights to terminate prior to
their expiration. The license granted to Hankuk is exclusive within Korea
through July 1998.

On January 18, 1997, the Company entered into a license agreement with
Material Sciences Corporation (MSC). The agreement grants MSC a non-
exclusive license to manufacture and sell electrically-controllable variable 
light transmission or "smart" windows for architectural and automotive 
applications throughout most of the world.  The agreement also permits MSC to 
produce and sell films incorporating the Company's proprietary SPD light control
technology to window companies for automotive and architectural uses, and to
a selected list of the Company's licensees and prospective licensees for a
variety of applications.  Under the license agreement, MSC will pay the
Company an earned royalty of up to 10% of the net selling price of products
sold under the agreement.

(9)     Commitments

The Company has an employment agreement with one of its officers which
provides for an annual salary of $287,800 through December 31, 1997.

The Company occupies premises under an operating lease agreement which
expires on January 31, 1999 and requires minimum annual rent of $97,296 plus
certain expenses. Rent expense, including other expenses, amounted to
approximately $139,000, $125,000 and $135,000 for 1996, 1995 and 1994,
respectively.

The Company has no commitment to provide post-retirement or post-
employment retirement benefits to any of its employees.

(10)   Subsequent Event

On February 18, 1997, the Company raised approximately $500,000 from the
private sale of 83,334 shares of common stock to an institutional investor
affiliated with a North American bank.  In addition, the investor received two
year warrants to purchase (i) 13,889 shares of common stock at a warrant
exercise price of $7.20 per share, and (ii) 13,889 shares of common stock at a
warrant exercise price of $9.60 per share, and the right to receive up to 8,334
additional shares of common stock if certain market conditions occur.  The
warrants are redeemable by the Company under certain conditions. These
shares are subject to various restrictions on their resale or transfer by such
institution, and the proceeds from their sale have been invested by the
Company in short-term U.S. Treasury securities.