SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                   ------------------------------------------
                                    FORM 10-K
   (mark one)
   [ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the fiscal year ended December 28, 1996

   [   ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

                          Commission file number 1-9786

                         THERMO INSTRUMENT SYSTEMS INC.
             (Exact name of Registrant as specified in its charter)
   Delaware                                                        04-2925809 
   (State or other jurisdiction of                           (I.R.S. Employer 
   incorporation or organization)                          Identification No.)

   1275 Hammerwood Avenue
   Sunnyvale, California                                                94089 
   (Address of principal executive offices)                         (Zip Code)
       Registrant's telephone number, including area code: (617) 622-1000

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

                                                         Name of each exchange
   Title of each class                                     on which registered
   ----------------------------                        -----------------------
   Common Stock, $.10 par value                        American Stock Exchange

           Securities registered pursuant to Section 12(g) of the Act:
                                      None

   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, and (2) has been subject to the
   filing requirements for at least 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 the Registrant's knowledge, in definitive proxy or
   information statements incorporated by reference into Part III of this Form
   10-K or any amendment to this Form 10-K. [  ]

   The aggregate market value of the voting stock held by nonaffiliates of the
   Registrant as of January 24, 1997, was approximately $597,117,000.

   As of January 24, 1997, the Registrant had 96,931,388 shares of Common
   Stock outstanding.

                       Documents Incorporated by Reference

   Portions of the Registrant's Annual Report to Shareholders for the year
   ended December 28, 1996, are incorporated by reference into Parts I and II.

   Portions of the Registrant's definitive Proxy Statement for the Annual
   Meeting of Shareholders to be held on June 2, 1997, are incorporated by
   reference into Part III.
PAGE
<PAGE>
                                    PART I


   Item 1.  Business

   (a)  General Development of Business.

        Thermo Instrument Systems Inc. (the Company or the Registrant) is a
   worldwide leader in the development, manufacture, and marketing of
   analytical instruments used to identify complex chemical compounds, toxic
   metals, and other elements in a broad range of liquids and solids, as
   well as instruments used to monitor radioactivity and air pollution, and
   to control, image, inspect, and measure various industrial processes and
   life sciences phenomena. Through its 72%-owned ThermoSpectra Corporation
   (ThermoSpectra) subsidiary, the Company develops, manufactures, and
   markets precision imaging, inspection, and measurement instrumentation
   that employ a variety of energy sources or signals as well as high-speed
   data acquisition and digital processing technologies. The Company's
   93%-owned ThermoQuest Corporation (ThermoQuest) subsidiary develops,
   manufactures, and sells mass spectrometers, liquid chromatographs, and
   gas chromatographs for the pharmaceutical, environmental, and industrial
   marketplaces. These analytical instruments are used in the quantitative
   and qualitative chemical analysis of organic and inorganic compounds at
   ultra-trace levels of detection. Through its 93%-owned Thermo Optek
   Corporation (Thermo Optek) subsidiary, the Company develops,
   manufactures, and markets optical and energy-based analytical instruments
   and has key technologies in electro-optic components and systems. Thermo
   Optek's analytical instruments are used in the quantitative and
   qualitative chemical analysis of elements and molecular compounds in
   solids, liquids, and gases. Through its 67%-owned Thermo BioAnalysis
   Corporation (Thermo BioAnalysis) subsidiary, the Company develops,
   manufactures, and markets instruments and information management systems
   used in biochemical research and production, as well as in clinical
   diagnostics. The Company's 84%-owned Metrika Systems Corporation (Metrika
   Systems) subsidiary develops, manufactures, and markets on-line
   industrial process optimization systems that employ proprietary,
   ultra-high-speed measurement technologies. Through its wholly owned
   subsidiaries, the Company also manufactures monitoring instruments to
   detect and measure nuclear radiation and air pollutants, including toxic
   and combustible gases and participates in the process monitoring,
   analysis, gauging, and control instruments markets, primarily for the
   oil, gas, and petrochemical industries.

        The Company has adopted a strategy of spinning out certain of its
   businesses into separate subsidiaries and having these subsidiaries sell
   a minority interest to outside investors. The Company believes that this
   strategy provides additional motivation and incentives for the management
   of the subsidiaries through the establishment of subsidiary-level stock
   option incentive programs, as well as capital to support the

                                        2PAGE
<PAGE>
   subsidiaries' growth. During 19961, ThermoQuest, Thermo Optek, and Thermo
   BioAnalysis sold shares of their common stock in initial public offerings
   and Metrika Systems sold shares of its common stock in a private
   placement for aggregate net proceeds of $125.0 million. See Note 11 to
   Consolidated Financial Statements in the Registrant's 1996 Annual Report
   to Shareholders for a description of the issuance of stock by the
   Company's subsidiaries.

        In September 1996, Thermo Optek announced its intent to spin out its
   Thermo Vision Corporation (Thermo Vision) subsidiary through a
   distribution of all of Thermo Vision's outstanding capital stock in the
   form of a dividend to Thermo Optek shareholders. The Company anticipates
   completing the spinout in 1997 and is seeking a Letter Ruling from the
   Internal Revenue Service stating that the proposed spinout will have no
   current tax effect on Thermo Optek or its shareholders. Thermo Optek
   would distribute the shares upon receipt of the Letter Ruling and
   satisfaction of other conditions, including the listing of the Thermo
   Vision shares on the American Stock Exchange. Upon completion of this
   proposed transaction, Thermo Vision would be a majority-owned subsidiary
   of the Company.

        The Company historically has expanded both through the acquisition
   of companies and product lines and through internal development of new
   products and technologies. During the past several years, the Company has
   completed a number of complementary acquisitions that have provided
   additional technologies, specialized manufacturing or product development
   expertise, and broader capabilities in marketing and distribution. In
   1996, the Company's acquisitions included Oriel Corporation for $11.8
   million in cash and the assumption of $0.7 million in debt; Corion
   Corporation for $5.1 million in cash; the DYNEX Technologies (formerly
   Dynatech Laboratories Worldwide) division of Dynatech Corporation for
   $43.2 million in cash; and a substantial portion of the businesses
   comprising the Scientific Instruments Division of Fisons plc (Fisons), a
   wholly owned subsidiary of Rhone-Poulenc Rorer Inc., for approximately
   123.5 million British pounds sterling in cash (approximately $188.9
   million) and the assumption of approximately 30.8 million British pounds
   sterling of indebtedness (approximately $47.2 million). The purchase
   price for the Fisons businesses is subject to post-closing adjustments
   equal to the amounts by which the net tangible assets and net debt of the
   acquired businesses on the closing date are greater or less than certain
   target amounts agreed to by the parties. On March 12, 1997, the Company
   declared unconditional in all respects its cash tender offer for all
   outstanding shares of Life Sciences International PLC (Life Sciences) for
   135 British pence per share (approximately $2.16 per share). As of that
   date, the Company had received acceptances representing approximately 91%
   of the Life Sciences shares outstanding and the Company owned an
   additional 3% of the outstanding Life Sciences shares. There are
   approximately 175 million Life Sciences shares outstanding. The Company
   has established March 26, 1997, as the date for payment for all shares to
   which acceptance had been received. In addition, the Company expects to
   repay approximately $72 million of Life Sciences' debt, net of acquired


   1 References to 1996, 1995, and 1994 herein are for the fiscal years
     ended December 28, 1996, December 30, 1995, and December 31, 1994,
     respectively.
                                        3PAGE
<PAGE>
   cash expected to be used. Life Sciences, a London Stock Exchange-listed
   company, manufactures laboratory science equipment, appliances,
   instruments, consumables, and reagents for the research, clinical, and
   industrial markets.

        The Company was incorporated in Delaware in May 1986 as a wholly
   owned subsidiary of Thermo Electron Corporation (Thermo Electron) to
   succeed the instruments businesses that were previously conducted by
   several Thermo Electron subsidiaries. As of December 28, 1996, Thermo
   Electron owned 79,207,044 shares, or 82%, of the Company's outstanding
   common stock. Thermo Electron is a world leader in environmental
   monitoring and analysis instruments, biomedical products such as
   heart-assist devices and mammography systems, paper-recycling and
   papermaking equipment, biomass electric power generation, and other
   specialized products and technologies. Thermo Electron also provides a
   range of services related to environmental quality.

        Thermo Electron intends for the foreseeable future to maintain at
   least 80% ownership of the Company, so that it may continue to file
   consolidated U.S. federal and certain state income tax returns with the
   Company. This may require the purchase by Thermo Electron of additional
   shares of common stock and/or convertible debentures of the Company from
   time to time as the number of outstanding shares of the Company
   increases. These and any other purchases may be made either in the open
   market or directly from the Company or pursuant to conversions of the
   Company's 3 3/4% senior convertible note due 2000 held by Thermo
   Electron. See Notes 5 and 7 to Consolidated Financial Statements in the
   Registrant's 1996 Annual Report to Shareholders for a description of the
   Company's outstanding stock options and convertible obligations. During
   1996, Thermo Electron purchased 753,750 shares of the Company's common
   stock in the open market at a total cost of $24.6 million.

   Forward-looking Statements

        Forward-looking statements, within the meaning of Section 21E of the
   Securities Exchange Act of 1934, are made throughout this Annual Report
   on Form 10-K. For this purpose, any statements contained herein that are
   not statements of historical fact may be deemed to be forward-looking
   statements. Without limiting the foregoing, the words "believes,"
   "anticipates," "plans," "expects," "seeks," "estimates," and similar
   expressions are intended to identify forward-looking statements. There
   are a number of important factors that could cause the results of the
   Company to differ materially from those indicated by such forward-looking
   statements, including those detailed under the caption "Forward-looking
   Statements" in the Registrant's 1996 Annual Report to Shareholders
   incorporated herein by reference.

   (b)  Financial Information About Industry Segments.

        The Company operates in one business segment: the developing,
   manufacturing, and marketing of analytical instruments used to identify  
   complex chemical compounds, toxic metals, and other elements in a broad
   range of liquids and solids, as well as instruments used to monitor
   radioactivity and air pollution, and to control, image, inspect, and
   measure various industrial processes and life sciences phenomena.

                                        4PAGE
<PAGE>
   (c)  Description of Business.

        Principal Products and Services

        The Company manufactures and markets instruments that employ a
   variety of advanced analytical techniques to determine the composition,
   structure, and physical properties of natural and synthetic substances.
   The Company's instruments are used for analysis; test and measurement;
   environmental and nuclear monitoring; process control; and in life
   sciences applications. Revenues from analytical and test and measurement
   instruments were $772.0 million, $537.5 million, and $429.8 million in
   1996, 1995, and 1994, respectively.

        ThermoSpectra develops, manufactures, and markets precision imaging,
   inspection, and measurement instrumentation based on high-speed data
   acquisition and digital processing technologies to provide industrial and
   research customers with integrated systems that address their specific
   needs. ThermoSpectra's products include digital oscillographic recorders
   and data acquisition systems that continuously measure and monitor
   signals from various sensors; digital storage oscilloscopes (DSOs) that
   are capable of taking hundreds of millions of measurements per second of
   transient signals or short bursts of data; X-ray microanalyzers used as
   accessories to electron microscopes to provide elemental materials
   analysis as a supplement to the microscopes' imaging capabilities; X-ray
   fluorescence instruments used for bulk and selected area sample analysis
   in the semiconductor and electronics industries; nondestructive X-ray
   inspection systems for process monitoring and quality control
   applications; and confocal laser scanning microscopes that use laser
   light to generate precise optical images primarily for life science
   applications. ThermoSpectra recently added a line of scanning probe
   microscopes that are used in industry and academia to test and measure
   the topography and other surface properties of materials, down to the
   atomic level.

        ThermoQuest manufactures commercial mass spectrometers and has
   pioneered many of the significant developments and applications of mass
   spectrometry. ThermoQuest's mass spectrometry products identify and
   measure the components of a sample for organic chemical compounds or for
   inorganic compounds. These instruments are used primarily by
   pharmaceutical companies for drug research, testing, and quality control;
   by environmental laboratories for testing water, air, and soil samples
   for compliance with environmental regulations; by chemical companies for
   research and quality control; by manufacturers for testing in certain
   industrial applications, such as the manufacture of silicon chips, and
   for quality control; by food and beverage companies for quality control
   and to test for product contamination; and in forensic applications.
   ThermoQuest provides both stand-alone mass spectrometers and combined
   systems that use its own chromatographs or those purchased from other
   companies. These products span a range of sensitivity, specificity,
   separation technologies, data-handling capabilities, sizes, and prices.

        ThermoQuest also manufactures high performance liquid
   chromatographs, gas chromatographs, and related instruments and equipment
   used principally in the research and development and production analysis
   of pharmaceuticals and chemicals, and for environmental analysis. These

                                        5PAGE
<PAGE>
   instruments separate the chemical components of substances for purposes
   of identification and measurement and are frequently used in
   environmental and industrial laboratories as stand-alone instruments or
   in conjunction with mass spectrometers, where the gas or liquid
   chromatograph separates a sample into individual chemical components for
   the mass spectrometer to identify.

        Thermo Optek develops, manufactures, and markets analytical
   instruments that utilize a range of optical spectroscopy and energy-based
   techniques. These instruments are used in the quantitative and
   qualitative chemical analysis of elements and molecular compounds in a
   wide variety of solids, liquids, and gases and are based on several
   optical spectroscopy techniques, including atomic emission (AE), atomic
   absorption (AA), Fourier transform infrared (FT-IR) and FT-Raman, and
   ultraviolet/visible (UV/Vis) technologies. AA and AE spectrometers are
   used to detect and measure metals and other elements in solid and liquid
   samples from ultratrace (parts per billion) to major concentrations based
   on the atomic spectra that a sample emits or absorbs when it is excited
   by an energy source. FT-IR and FT-Raman spectrometers are used to
   determine the molecular composition of samples by observing how they
   absorb or emit infrared light. UV/Vis spectrometry instruments are based
   upon the selective absorbence of ultraviolet radiation by various
   substances. Thermo Optek also offers a line of wavelength dispersive
   X-ray fluorescence instruments that provide elemental analysis of a wide
   variety of materials in a highly precise and generally nondestructive
   manner. Thermo Optek's products are used by its customers for
   productivity enhancement, research and development, quality control, and
   testing applications in the environmental testing, chemical,
   metallurgical, food and beverage, pharmaceutical, and petroleum
   industries; and by forensic laboratories, research organizations, and
   educational institutions. Through its Thermo Vision subsidiary, Thermo
   Optek addresses the photonics marketplace for optical components, imaging
   systems, analytical instruments, and lasers. Thermo Vision is pursuing
   applications of its photonics technologies for cost-effective,
   application-specific instruments and for optical components, systems, and
   subassemblies for analytical instrumentation.

        Thermo BioAnalysis develops, manufactures, and markets instruments
   and information management systems used in biochemical research and
   production, as well as in clinical diagnostics. The Company focuses on
   three principal product areas: life sciences instrumentation, laboratory
   information management systems, and health physics instrumentation. The
   Company's life sciences instrumentation products include instruments and
   consumables based on proprietary immunoassay, optical biosensor, mass
   spectrometry, and capillary electrophoresis (CE) technologies. The
   Company's laboratory information management systems (LIMS) and
   chromatography data systems (CDS) are used in laboratories and clinical
   testing facilities. These systems are designed to facilitate the
   monitoring and analysis of samples throughout the laboratory or clinical
   lifecycle. The Company's health physics instrumentation includes
   radiation detection instrumentation and complete radiation monitoring
   systems for use in and around nuclear power plants and other facilities
   where radioactive materials are used.

                                        6PAGE
<PAGE>
        The Company's majority-owned, privately held Metrika Systems
   subsidiary manufactures equipment that provides on-line, real-time
   analysis of the elemental composition of bulk raw materials, such as coal
   and cement, in the basic materials production process. In addition,
   Metrika Systems manufactures industrial gauging and process control
   instruments and systems for measuring thickness and coating used
   principally by manufacturers of web-type materials, such as metal strip,
   rubber, and plastic foils.

        In other wholly owned businesses, the Company manufactures
   monitoring instruments for three principal markets: the detection and
   measurement of nuclear radiation; the monitoring of air pollutants,
   including toxic and combustible gases; and process monitoring, analysis,
   and control.

        The Company's nuclear radiation monitoring instruments detect and
   measure alpha, beta, gamma, neutron, and X-ray radiation emitted by
   natural sources and by radioactive materials used in nuclear power plants
   and certain governmental, industrial, and medical facilities. The Company
   is a leading manufacturer of a broad range of stand-alone and portable
   instruments and computer-integrated instrument systems used to ensure the
   safety of personnel from exposure to nuclear radiation. In addition, the
   Company is a major supplier of instruments and systems that are
   manufactured to European standards for personnel protection and
   environmental monitoring.

        The Company's air-monitoring instruments measure pollutants in
   ambient air and from stationary sources such as industrial smokestacks.
   The principal pollutants measured are oxides of nitrogen, sulfur dioxide,
   carbon monoxide, ozone, volatile organic compounds (VOCs), and airborne
   particulates. These instruments are used by utility and industrial
   customers to ensure compliance with environmental regulations; by
   government agencies to monitor air quality; and by research facilities.
   The Occupational Safety and Health Administration's safety requirements
   for protecting workers from toxic or explosive atmospheres in confined
   spaces are addressed with the Company's detectors, instruments, and
   systems for sensing, monitoring, and warning of such dangers. These
   worker-safety products are used in a wide range of applications, from
   large petrochemical plants, utilities, and industrial manufacturing
   facilities to commercial buildings.

        The Company also participates in the process monitoring, analysis,
   gauging, and control instruments markets, primarily for the oil, gas, and
   petrochemical industries. The Company manufactures and markets a number
   of process monitoring, analysis, and control systems including: analog
   and digital recorders for continuous process industries; process and
   laboratory analytical instruments and monitors to detect lethal gases for
   the oil, gas, and petrochemical industries; supervisory control and data
   acquisition software for process monitoring and operator interface in a
   variety of industrial processes; and turnkey, integrated systems to
   control networks of distant oil and gas wells.

        The Company also manufactures and markets process gauges and
   noncontacting and nonintrusive process control instrumentation to measure
   liquid levels, density, weight, and flows for a variety of industries.

                                        7PAGE
<PAGE>
   The Company's X-ray fluorescence instruments allow for the nondestructive
   analysis of inorganic elements.

        With the acquisition of Life Sciences, the Company manufactures
   laboratory science equipment, appliances, instruments, consumables, and
   reagents for the research, clinical, and industrial markets. These
   operations are organized into four product groups including: laboratory
   products, serving the global research laboratory market; clinical
   products, serving the hospital and clinical laboratory markets;
   biosystems, serving the biotech and molecular biology R&D and QC labs;
   and industrial products, serving semiconductor manufacturers and other
   industries with water baths and chillers. The Company believes that this
   acquisition will extend its product offerings into new markets, such as
   clinical laboratory equipment, as well as enhance its presence in the
   bioanalytical instrumentation marketplace.

        Backlog

        The Company's backlog of firm orders was $266.6 million as of
   December 28, 1996, and $188.7 million as of December 30, 1995. The
   Company anticipates that substantially all of the backlog as of December
   28, 1996, will be shipped or completed during 1997. The Company does not
   believe that the level of, or changes in the level of, its backlog is
   necessarily indicative of intermediate or long-term trends in its
   business.

        Competition

        The Company generally competes on the basis of technical advances
   that result in new products and improved price/performance ratios,
   reputation among customers as a quality leader for products and services,
   and active research and application-development programs. To a lesser
   extent, the Company competes on the basis of price.

        In many markets, the Company competes with large analytical
   instrument companies such as Hewlett-Packard Co. (Hewlett-Packard),
   Perkin-Elmer Corp. (Perkin-Elmer), Varian Associates, Inc. (Varian), and
   Hitachi, Ltd. (Hitachi). Certain products manufactured by the Company
   also compete with products sold by numerous smaller, specialized firms.

        ThermoSpectra competes in each of its markets primarily on the basis
   of technical advances that result in new products and improved
   price/performance ratios and reputation among customers as a quality
   leader for products and services. To a lesser extent, ThermoSpectra
   competes on the basis of price. The market for digital oscillographic
   recorders is characterized by competition among a number of competitors,
   including Astro-Med, Inc. and Yokogawa Corporation (Yokogawa). The
   general purpose DSO market is dominated by Tektronix, Inc. and
   Hewlett-Packard. The Company competes primarily in the high- and mid-ends
   of the X-ray microanalysis market. In the high end of this market,
   ThermoSpectra offers superior imaging and user-interface software.
   ThermoSpectra competes in the mid end of the X-ray microanalysis market
   on the basis of quality, performance, and price. The main competitor in
   this segment is Link Analytical Limited, a wholly owned subsidiary of
   Oxford Instruments plc (Oxford). In the X-ray inspection market,

                                        8PAGE
<PAGE>
   ThermoSpectra competes with smaller companies in the manual segment of
   the market, and primarily with Four Pi Systems, a subsidiary of
   Hewlett-Packard, in the automated segment. In the digital video segment
   of the confocal microscopy market, ThermoSpectra competes primarily with
   Nikon Inc. as well as Bio-Rad Laboratories, Inc. (Bio-Rad). The Company
   competes in the scanning probe microscope market on the basis of quality
   and, to a lesser extent, price. The dominant competitor in this market is
   Digital Instruments, Inc.

        ThermoQuest competes in each of its markets primarily on technical
   performance, customer service and support and, to a lesser extent, price.
   ThermoQuest's principal competitors in the mass spectrometry market
   include Hewlett-Packard, Micromass Ltd. (Micromass), Japan Electro
   Optical Laboratories, and the Sciex Division of Perkin-Elmer.
   ThermoQuest's principal competitors in the liquid chromatography market
   are Waters Technologies Corporation, Hewlett-Packard, Shimadzu
   Corporation (Shimadzu), Beckman Instruments, Inc. (Beckman), and
   Perkin-Elmer. In the gas chromatography market, ThermoQuest competes with
   numerous companies, including Hewlett-Packard, Varian, Perkin-Elmer, and
   Shimadzu.

        Thermo Optek competes in each of its markets primarily on the basis
   of performance, reliability, customer service, and price. In the market
   for AE and AA spectrometers and inductively coupled plasma/mass
   spectrometry instruments, Thermo Optek competes primarily with
   Perkin-Elmer and, to a lesser extent, Varian. Thermo Optek competes in
   the arc/spark market primarily with Spectro. In the FT-IR and FT-Raman
   markets, Thermo Optek competes primarily with Perkin-Elmer, the Digilab
   division of Bio-Rad, and Bruker Instruments, Inc. (Bruker). Thermo
   Optek's primary competitors in the UV/Vis instruments market are
   Perkin-Elmer, Shimadzu, and Hewlett-Packard.

        Thermo BioAnalysis competes in each of its markets primarily on the
   basis of technological innovation, cost, performance (including
   throughput and sensitivity), and flexibility. The Company's principal
   competitors in the immunoassay consumables or plastics market include
   Nunc-Nalge Inc., Greiner GmbH, and Corning-Costar Corp. In the detection
   systems market, the Company competes primarily with Bio-Tek Instruments,
   Inc. and Molecular Devices Corp. In the automated systems market, the
   Company's main competitors include BioChem Pharma Inc., Immunosystems,
   Inc., and Hamilton Bonaduz AG. The Company's dominant competitor in the
   market for optical biosensors is the Pharmacia Biosensor subsidiary of
   Pharmacia & Upjohn, Inc. In the matrix-assisted laser
   desorption/time-of-flight (MALDI-TOF) mass spectrometry market, principal
   competitors include PerSeptive Biosystems, Inc., Bruker, and Micromass.
   Thermo BioAnalysis' principal competitors in the CE market include
   Beckman, Bio-Rad, and Hewlett-Packard. Significant competitors in the
   LIMS and CDS markets include Perkin-Elmer, Beckman, and the Laboratory
   MicroSystems Inc. subsidiary of Instron Corp. Significant competitors in
   the health physics instrumentation market include the Instruments Group
   of EG&G, Inc., the Nuclear Products Division of Morgan Crucible Co., plc,
   and the Bicron/NE Technology division of Saint-Gobain-Norton Industrial
   Ceramics Corporation.

                                        9PAGE
<PAGE>
        Metrika Systems competes primarily on the basis of performance and,
   to a lesser extent, price in the coal, cement, and mineral industries.
   Scantech Holdings is the Company's primary competitor in these
   industries. Competition in the thickness gauging business is highly
   fragmented with numerous competitors competing in various end use market
   segments. As a result, competition varies according to the end use
   segment. Metrika Systems competes on the basis of quality, performance,
   and price. Metrika Systems' competitors in this market include Measurex,
   Toshiba, Yokogawa, IMS, and Asea Brown Boveri.

        The Company is a leading manufacturer of ambient air monitoring
   instruments and a major manufacturer of source monitoring and
   worker-safety monitoring instruments. The Company competes in these
   markets on the basis of technical performance and reliability, as well as
   customer service. The Company's principal competitors include Monitor
   Labs Incorporated, Advanced Pollution Instruments, and Mine Safety
   Appliances Co.

        The Company has a relatively small presence within the large and
   varied process control marketplace, which is extremely fragmented and
   comprises several large companies, including Fisher-Rosemount, Elsig
   Bailey, and Honeywell Process Control, as well as numerous smaller
   companies. The Company competes in this market primarily on the basis of
   technical performance, customer service, and reliability.

        Environmental Protection Regulations

        The Company believes that compliance by the Company with federal,
   state, and local environmental protection regulations will not have a
   material adverse effect on its capital expenditures, earnings, or
   competitive position.

        Number of Employees

        As of December 28, 1996, the Company employed approximately 6,870
   people.

   (d)  Financial Information About Exports by Domestic Operations and
        About Foreign Operations.

        Financial information about exports by domestic operations and about
   foreign operations is summarized in Note 13 to Consolidated Financial
   Statements in the Registrant's 1996 Annual Report to Shareholders and is
   incorporated herein by reference.



                                       10PAGE
<PAGE>
   (e)  Executive Officers of the Registrant.

                                      Present Title (Year First Became
   Name                        Age    Executive Officer)
   -------------------------   ---    --------------------------------
   Arvin H. Smith              67     Chief Executive Officer (1986)
   Earl R. Lewis               53     President and Chief Operating
                                       Officer (1990)
   Denis A. Helm               58     Senior Vice President (1986)
   Dr. Richard W.K. Chapman    52     Vice President (1994)
   Barry S. Howe               41     Vice President (1994)
   John N. Hatsopoulos *       62     Vice President and Chief
                                       Financial Officer (1988)
   Paul F. Kelleher            54     Chief Accounting Officer (1986)

   * John N. Hatsopoulos and George N. Hatsopoulos, a director of the
     Company, are brothers.

        Each executive officer serves until his successor is chosen or
   appointed by the Board of Directors and qualified or until earlier
   resignation, death, or removal. All executive officers, except Mr. Lewis
   and Dr. Chapman, have held comparable positions for at least five years
   either with the Company or with its parent company, Thermo Electron. Mr.
   Lewis was named President of the Company in March 1997. Mr. Lewis served
   as Executive Vice President and Chief Operating Officer of the Company
   from January 1996 through March 1997, as a Senior Vice President from
   January 1994 through January 1996, and as a Vice President from March
   1990 through January 1994. Dr. Chapman has been President and Chief
   Executive Officer of ThermoQuest since its inception in June 1995, and
   served as President of Finnigan Corporation (Finnigan), a subsidiary of
   ThermoQuest, from 1992 to 1995 and as Marketing Manager of Finnigan from
   1989 to 1992. Messrs. Lewis, Helm, Chapman, and Howe are full-time
   employees of the Company. Messrs. Smith, Hatsopoulos, and Kelleher are
   full-time employees of Thermo Electron and certain of its subsidiaries,
   but devote such time to the affairs of the Company as the Company's needs
   reasonably require.


   Item 2.  Properties

        The Company owns approximately 1,973,000 square feet of office,
   engineering, laboratory, and production space, principally in California,
   Colorado, Florida, New Mexico, Texas, Wisconsin, Germany, England, and
   Switzerland, and leases approximately 2,281,000 square feet of office,
   engineering, laboratory, and production space under leases expiring from
   1997 through 2017, principally in California, Massachusetts, Connecticut,
   Ohio, Texas, England, France, Germany, and Japan. As of December 28,
   1996, the Company had a $9.3 million mortgage loan that is secured by
   200,000 square feet of property in California with a net book value of
   $16.0 million. The Company believes that its facilities are in good
   condition and are suitable and adequate for its present operations and
   that suitable space is readily available if any of such leases are not
   extended.
                                       11PAGE
<PAGE>
   Item 3.  Legal Proceedings

        Not applicable.


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

        Not applicable.


                                    PART II


   Item 5. Market for Registrant's Common Equity and Related Stockholder
           Matters

        Information concerning the market and market price for the
   Registrant's common stock, $.10 par value, and dividend policy is
   included under the sections labeled "Common Stock Market Information" and
   "Dividend Policy" in the Registrant's 1996 Annual Report to Shareholders
   and is incorporated herein by reference.


   Item 6.  Selected Financial Data

        The information required under this item is included under the
   sections labeled "Selected Financial Information" and "Dividend Policy"
   in the Registrant's 1996 Annual Report to Shareholders and is
   incorporated herein by reference.


   Item 7. Management's Discussion and Analysis of Financial Condition and
           Results of Operations

        The information required under this item is included under the
   heading "Management's Discussion and Analysis of Financial Condition and
   Results of Operations" in the Registrant's 1996 Annual Report to
   Shareholders and is incorporated herein by reference.


   Item 8.  Financial Statements and Supplementary Data

        The Registrant's Consolidated Financial Statements as of December
   28, 1996, and Supplementary Data are included in the Registrant's 1996
   Annual Report to Shareholders and are incorporated herein by reference.


   Item 9. Changes in and Disagreements with Accountants on Accounting and
           Financial Disclosure

        Not applicable.

                                       12PAGE
<PAGE>
                                   PART III


   Item 10.  Directors and Executive Officers of the Registrant

        The information concerning directors required under this item is
   incorporated herein by reference from the material contained under the
   caption "Election of Directors" in the Registrant's definitive proxy
   statement to be filed with the Securities and Exchange Commission
   pursuant to Regulation 14A, not later than 120 days after the close of
   the fiscal year. The information concerning delinquent filers pursuant to
   Item 405 of Regulation S-K is incorporated herein by reference from the
   material contained under the heading "Section 16(a) Beneficial Ownership
   Reporting Compliance" under the caption "Stock Ownership" in the
   Registrant's definitive proxy statement to be filed with the Securities
   and Exchange Commission pursuant to Regulation 14A, not later than 120
   days after the close of the fiscal year.


   Item 11.  Executive Compensation

        The information required under this item is incorporated herein by
   reference from the material contained under the caption "Executive
   Compensation" in the Registrant's definitive proxy statement to be filed
   with the Securities and Exchange Commission pursuant to Regulation 14A,
   not later than 120 days after the close of the fiscal year.


   Item 12.  Security Ownership of Certain Beneficial Owners and Management

        The information required under this item is incorporated herein by
   reference from the material contained under the caption "Stock Ownership"
   in the Registrant's definitive proxy statement to be filed with the
   Securities and Exchange Commission pursuant to Regulation 14A, not later
   than 120 days after the close of the fiscal year.


   Item 13.  Certain Relationships and Related Transactions

        The information required under this item is incorporated herein by
   reference from the material contained under the caption "Relationship
   with Affiliates" in the Registrant's definitive proxy statement to be
   filed with the Securities and Exchange Commission pursuant to Regulation
   14A, not later than 120 days after the close of the fiscal year.

                                       13PAGE
<PAGE>
                                    PART IV


   Item 14.  Exhibits, Financial Statement Schedules, and Reports on
             Form 8-K

   (a), (d) Financial Statements and Schedules.

            (1) The consolidated financial statements set forth in the list
                below are filed as part of this Report.

            (2) The consolidated financial statement schedule set forth in
                the list below is filed as part of this Report.

            (3) Exhibits filed herewith or incorporated herein by reference
                are set forth in Item 14(c) below.

            List of Financial Statements and Schedules Referenced in this
            Item 14.

            Information incorporated by reference from Exhibit 13 filed
            herewith:

                Consolidated Statement of Income
                Consolidated Balance Sheet
                Consolidated Statement of Cash Flows
                Consolidated Statement of Shareholders' Investment
                Notes to Consolidated Financial Statements
                Report of Independent Public Accountants

            Financial Statement Schedules filed herewith:

                Schedule II: Valuation and Qualifying Accounts

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

        (b) Reports on Form 8-K.

            None.

        (c) Exhibits.

            See Exhibit Index on the page immediately preceding exhibits.

                                       14PAGE
<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.

   Date: March 19, 1997                    THERMO INSTRUMENT SYSTEMS INC.


                                           By: Arvin H. Smith
                                               ----------------------
                                               Arvin H. Smith
                                               Chief Executive Officer

        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 indicated, as of March 19, 1997.

   Signature                          Title
   ---------                          -----

   By:Arvin H. Smith                  Chief Executive Officer, Chairman of
      -----------------------          the Board, and Director
      Arvin H. Smith                  

   By:John N. Hatsopoulos             Vice President, Chief Financial
      -----------------------           Officer, and Director
      John N. Hatsopoulos    

   By:Paul F. Kelleher                Chief Accounting Officer
      -----------------------
      Paul F. Kelleher

   By:Frank Borman                    Director
      -----------------------
      Frank Borman

   By:George N. Hatsopoulos           Director
      -----------------------
      George N. Hatsopoulos

   By:Polyvios C. Vintiadis           Director
      -----------------------
      Polyvios C. Vintiadis
PAGE
<PAGE>





                   Report of Independent Public Accountants
                   ----------------------------------------


   To the Shareholders and Board of Directors of
   Thermo Instrument Systems Inc.:

        We have audited, in accordance with generally accepted auditing
   standards, the consolidated financial statements included in Thermo
   Instrument Systems Inc.'s Annual Report to Shareholders incorporated by
   reference in this Form 10-K, and have issued our report thereon dated
   February 11, 1997 (except with respect to the matter discussed in Note 15
   as to which the date is March 12, 1997). Our audits were made for the
   purpose of forming an opinion on those statements taken as a whole. The
   schedule listed in Item 14 on page 14 is the responsibility of the
   Company's management and is presented for purposes of complying with the
   Securities and Exchange Commission's rules and is not part of the basic
   consolidated financial statements. This schedule has been subjected to
   the auditing procedures applied in the audits of the basic consolidated
   financial statements and, in our opinion, fairly states, in all material
   respects, the financial data required to be set forth therein in relation
   to the basic consolidated financial statements taken as a whole.



                                                Arthur Andersen LLP



   Boston, Massachusetts
   February 11, 1997
PAGE
<PAGE>
SCHEDULE II

                         THERMO INSTRUMENT SYSTEMS INC.

                        Valuation and Qualifying Accounts
                                 (In thousands)
                                     
                         Provision
             Balance at    Charged                Accounts               Balance
              Beginning         to     Accounts    Written                at End
Description     of Year    Expense    Recovered        Off    Other(a)   of Year
--------------------------------------------------------------------------------
Year Ended
 December 28,
 1996

Allowance for
 Doubtful
 Accounts       $12,569     $2,274       $   69   $(5,015)    $7,084     $16,981

Year Ended
 December 30,
 1995

Allowance for
 Doubtful
 Accounts       $ 8,779     $2,543       $  191   $(2,942)    $3,998     $12,569

Year Ended
 December 31,
 1994

Allowance for
 Doubtful
 Accounts       $ 8,456     $  733       $  126   $(2,736)    $2,200     $ 8,779

(a) Includes allowance of businesses acquired during the year as described in
    Note 4 to Consolidated Financial Statements in the Company's 1996 Annual
    Report to Shareholders, the effect of foreign currency translation, and a
    disposition in 1994 of $2,696,000.







                                       17PAGE
<PAGE>
                                  EXHIBIT INDEX

    Exhibit
    Number       Description of Exhibit
    ----------   -----------------------------------------------------------
      2.1        Asset and Stock Purchase Agreement among the
                 Registrant, Thermo Electron,. and Fisons plc dated
                 March 1, 1995, as amended (filed as Exhibit 2.3 to the
                 Registrant's Annual Report on Form 10-K for the fiscal
                 year ended December 31, 1994, and as Exhibit 2 to the
                 Registrant's Quarterly Report on Form 10-Q for the
                 quarter ended September 30, 1995 [File No. 1-9786] and
                 incorporated herein by reference). Pursuant to Item
                 601(b)(2) of Regulation S-K, schedules to this
                 Agreement have been omitted. The Company hereby
                 undertakes to furnish supplementally a copy of such
                 schedules to the Commission upon request.

      3.1        Amendment to Restated Certificate of Incorporation of
                 the Registrant (filed as Exhibit 3.1 to the
                 Registrant's Quarterly Report on Form 10-Q for the
                 quarter ended June 29, 1996 [File No. 1-9786] and
                 incorporated herein by reference).

      3.2        By-Laws of the Registrant (filed as Exhibit 3(b) to
                 the Registrant's Annual Report on Form 10-K for the
                 fiscal year ended January 2, 1993 [File No. 1-9786]
                 and incorporated herein by reference).

      4.1        Fiscal Agency Agreement dated as of September 15,
                 1993, among the Registrant, Thermo Electron, and
                 Chemical Bank as fiscal agent, relating to $70,000,000
                 principal amount of 3 3/4% senior convertible
                 debentures due 2000 (filed as Exhibit 4 to the
                 Registrant's Quarterly Report on Form 10-Q for the
                 quarter ended October 2, 1993 [File No. 1-9786] and
                 incorporated by reference).

      4.2        Senior convertible note purchase agreement by and
                 between the Registrant and Thermo Electron as of
                 September 15, 1993 (filed as Exhibit 10(a) to the
                 Registrant's Quarterly Report on Form 10-Q for the
                 quarter ended October 2, 1993 [File No. 1-9786] and
                 incorporated by reference).

                 The Registrant hereby agrees, pursuant to Item 601(b)
                 (4) (iii) (A) of Regulation S-K, to furnish to the
                 Commission upon request, a copy of each instrument
                 with respect to other long-term debt of the Registrant
                 or its subsidiaries.

     10.1        Amended and Restated Corporate Services Agreement,
                 dated as of January 3, 1993, between Thermo Electron
                 and the Registrant (filed as Exhibit 10(a) to the
                 Registrant's Annual Report on Form 10-K for the fiscal
                 year ended January 2, 1993 [File No. 1-9786] and
                 incorporated herein by reference).
                                       18PAGE
<PAGE>
                                  EXHIBIT INDEX

    Exhibit
    Number       Description of Exhibit
    ----------   -----------------------------------------------------------
     10.2        Tax Allocation Agreement dated as of May 29, 1986,
                 between Thermo Electron and the Registrant (filed as
                 Exhibit 10(b) to the Registrant's Registration
                 Statement on Form S-1 [Reg. No. 33-6762] and
                 incorporated herein by reference).

     10.3        Thermo Electron Corporate Charter, as amended and
                 restated effective January 3, 1993 (filed as Exhibit
                 10(f) to the Registrant's Annual Report on Form 10-K
                 for the fiscal year ended January 2, 1993 [File No.
                 1-9786] and incorporated herein by reference).

     10.4        Form of Indemnification Agreement with Directors and
                 Officers (filed as Exhibit 10(g) to the Registrant's
                 Annual Report on Form 10-K for the fiscal year ended
                 December 29, 1990 [File No. 1-9786] and incorporated
                 herein by reference).

     10.5        Plan for sale of shares by the Registrant to Thermo
                 Electron (filed as Exhibit 10(dd) to the Registrant's
                 Quarterly Report on Form 10-Q for the quarter ended
                 July 3, 1993 [File No. 1-9786] and incorporated herein
                 by reference).

     10.6        Master Repurchase Agreement dated December 28, 1996,
                 between the Registrant and Thermo Electron.

     10.7        Master Guarantee Reimbursement Agreement dated January
                 1, 1994, by and among the Registrant and Thermo
                 Electron (filed as Exhibit 4.4 to the Registrant's
                 Annual Report on Form 10-K for the fiscal year ended
                 December 31, 1994 [File No. 1-9786] and incorporated
                 herein by reference).

     10.8        $30,000,000 Promissory Note dated as of February 13,
                 1996, issued by Thermo BioAnalysis to Thermo Electron
                 (filed as Exhibit 10.1 to the Registrant's Quarterly
                 Report on Form 10-Q for the quarter ended March 30,
                 1996 [File No. 1-9786] and incorporated herein by
                 reference).

     10.9        $65,000,000 Promissory Note dated as of April 12,
                 1996, issued by the Registrant to Thermo Electron
                 (filed as Exhibit 10.2 to the Registrant's Quarterly
                 Report on Form 10-Q for the quarter ended March 30,
                 1996 [File No. 1-9786] and incorporated herein by
                 reference).

     10.10       Restated Stock Holdings Assistance Plan and Form of
                 Promissory Note.

                                       19PAGE
<PAGE>
                                  EXHIBIT INDEX

    Exhibit
    Number       Description of Exhibit
    ----------   -----------------------------------------------------------
     10.11-10.15 Reserved.

     10.16       Deferred Compensation Plan for Directors of the
                 Registrant (filed as Exhibit 10(f) to the Registrant's
                 Registration Statement on Form S-1 [Reg. No. 33-6762]
                 and incorporated herein by reference).

     10.17       Directors' Stock Option Plan of the Registrant (filed
                 as Exhibit 10.17 to the Registrant's Annual Report on
                 Form 10-K for the fiscal year ended December 31, 1994
                 [File No. 1-9786] and incorporated herein by
                 reference).

     10.18       Incentive Stock Option Plan of the Registrant (filed
                 as Exhibit 10(c) to the Registrant's Registration
                 Statement on Form S-1 [Reg. No. 33-6762] and
                 incorporated herein by reference). (Maximum number of
                 shares issuable in the aggregate under this plan and
                 the Registrant's Nonqualified Stock Option Plan is
                 2,812,500 shares, after adjustment to reflect share
                 increase approved in 1990; 3-for-2 stock splits
                 effected in January 1988, July 1993, and April 1995;
                 and 5-for-4 stock split effected in December 1995).

     10.19       Nonqualified Stock Option Plan of the Registrant
                 (filed as Exhibit 10(d) to the Registrant's
                 Registration Statement on Form S-1 [Reg. No. 33-6762]
                 and incorporated herein by reference). (Maximum number
                 of shares issuable in the aggregate under this plan
                 and the Registrant's Incentive Stock Option Plan is
                 2,812,500 shares, after adjustment to reflect share
                 increase approved in 1990; 3-for-2 stock splits
                 effected in January 1988, July 1993, and April 1995;
                 and 5-for-4 stock split effected in December 1995).

     10.20       Equity Incentive Plan of the Registrant (filed as
                 Appendix A to the Proxy Statement dated April 27,
                 1993, of the Registrant [File No. 1-9786] and
                 incorporated herein by reference). (Maximum number of
                 shares issuable is 4,031,250 shares, after adjustment
                 to reflect share increase approved in December 1993;
                 3-for-2 stock splits effected in July 1993 and April
                 1995; and 5-for-4 stock split effected in December
                 1995).

     10.21       Finnigan Corporation 1979 Long-term Incentive Stock
                 Option Plan (filed as Exhibit 10.21 to the
                 Registrant's Annual Report on Form 10-K for the fiscal
                 year ended December 31, 1994 [File No. 1-9786] and
                 incorporated herein by reference).

                                       20PAGE
<PAGE>
                                  EXHIBIT INDEX

    Exhibit
    Number       Description of Exhibit
    ----------   -----------------------------------------------------------
     10.22       Former Thermo Environmental Corporation Incentive
                 Stock Option Plan (filed as Exhibit 10(d) to Thermo
                 Environmental's Registration Statement on Form S-1
                 [Reg. No. 33-329] and incorporated herein by
                 reference). (Maximum number of shares issuable in the
                 aggregate under this plan and the Former Thermo
                 Environmental Corporation Nonqualified Stock Option
                 Plan is 1,160,156 shares, after adjustment to reflect
                 share increase approved in 1987; 3-for-2 stock splits
                 effected in July 1993 and April 1995; and 5-for-4
                 stock split effected in December 1995).

     10.23       Former Thermo Environmental Corporation Nonqualified
                 Stock Option Plan (filed as Exhibit 10(e) to Thermo
                 Environmental's Registration Statement on Form S-1
                 [Reg. No. 33-329] and incorporated herein by
                 reference). (Maximum number of shares issuable in the
                 aggregate under this plan and the Former Thermo
                 Environmental Corporation Incentive Stock Option Plan
                 is 1,160,156 shares, after adjustment to reflect share
                 increase approved in 1987; 3-for-2 stock splits
                 effected in July 1993 and April 1995; and 5-for-4
                 stock split effected in December 1995).

     10.24       Thermo Instrument Systems Inc. - ThermoSpectra
                 Corporation Nonqualified Stock Option Plan (filed as
                 Exhibit 10.51 to the Registrant's Annual Report on
                 Form 10-K for the fiscal year ended December 31, 1994
                 [File No. 1-9786] and incorporated herein by
                 reference).

     10.25       Thermo Instrument Systems Inc. - ThermoQuest
                 Corporation Nonqualified Stock Option Plan (filed as
                 Exhibit 10.65 to Thermo Cardiosystems' Annual Report
                 on Form 10-K for the fiscal year ended December 30,
                 1995 [File No. 1-10114] and incorporated herein by
                 reference).

     10.26       Thermo Instrument Systems Inc. - Thermo BioAnalysis
                 Corporation Nonqualified Stock Option Plan (filed as
                 Exhibit 10.64 to Thermo Cardiosystems' Annual Report
                 on Form 10-K for the fiscal year ended December 30,
                 1995 [File No. 1-10114] and incorporated herein by
                 reference).

     10.27       Thermo Instrument Systems Inc. - Thermo Optek
                 Corporation Nonqualified Stock Option Plan. 


                                       21PAGE
<PAGE>
                                  EXHIBIT INDEX

    Exhibit
    Number       Description of Exhibit
    ----------   -----------------------------------------------------------
                 In addition to the stock-based compensation plans of
                 the Registrant, the executive officers of the
                 Registrant may be granted awards under stock-based
                 compensation plans of Thermo Electron for services
                 rendered to the Registrant or to such affiliated
                 corporations. Thermo Electron's plans were filed as
                 Exhibits 10.21 through 10.44 to the Annual Report on
                 Form 10-K of Thermo Electron for the year ended
                 December 30, 1995 [File No. 1-8002] and as Exhibit
                 10.19 to the Annual Report on Form 10-K of Trex
                 Medical Corporation for the fiscal year ended
                 September 28, 1996 [File No. 1-11827] and are
                 incorporated herein by reference.

     11          Statement re: Computation of Earnings per Share.

     13          Annual Report to Shareholders for the year ended
                 December 28, 1996 (only those portions incorporated
                 herein by reference).

     21          Subsidiaries of the Registrant.

     23          Consent of Arthur Andersen LLP.

     27          Financial Data Schedule.