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 January 2, 1999

[   ] 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 Identification No.)
incorporation or organization)

860 West Airport Freeway, Suite 301
Hurst, Texas                                                          76054
(Address of principal executive offices)                         (Zip Code)

     Registrant's telephone number, including area code: (781) 622-1000

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

      Title of each class             Name of each exchange on which registered
  ------------------------------      -----------------------------------------
   Common Stock, $.10 par value               American Stock Exchange
  4% Convertible Subordinated
    Debentures due 2005                       American StockExchange

        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 29, 1999, was approximately $273,411,000.

As of January 29, 1999, the Registrant had 119,276,531 shares of Common Stock
outstanding.

                    DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Annual Report to Shareholders for the year ended
January 2, 1999, 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 May 27, 1999, are incorporated by reference into
Part III.

<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 measurement
instruments used to monitor, collect, and analyze information. These systems are
used for multiple applications in a range of industries, including industrial
processing, food and beverage production, life sciences research, and medical
diagnostics.

    The businesses of Thermo Instrument operate in four instrumentation
segments: Analytical, which includes the Company's 89%-owned ThermoQuest
Corporation and 93%-owned Thermo Optek Corporation subsidiaries; Life Sciences,
which includes 62%-owned Thermo BioAnalysis Corporation; Process Control, which
includes the Company's 80%-owned ONIX Systems Inc. and 67%-owned Metrika Systems
Corporation subsidiaries; and Industrial, which primarily includes the Company's
82%-owned ThermoSpectra Corporation, 78%-owned Thermo Vision Corporation, and
wholly owned subsidiaries.

    The Company 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 subsidiaries' growth. During 1998*, ONIX
Systems sold shares of its common stock in an initial public offering and Thermo
BioAnalysis sold shares of its common stock in a public offering for aggregate
net proceeds of $102.7 million. See Note 10 to Consolidated Financial Statements
in the Registrant's 1998 Annual Report to Shareholders for a description of the
issuance of stock by the Company's subsidiaries.

      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. On February 22, 1999, the Company
declared unconditional in all respects its cash tender offer for all outstanding
shares of Spectra-Physics AB, a Stockholm Stock Exchange-listed company, for 160
Swedish krona per share (approximately $20 per share). As of that date, the
Company had acquired or received acceptances representing approximately 98% of
the Spectra-Physics shares outstanding. There are approximately 17.6 million
Spectra-Physics shares outstanding. The aggregate cost for Spectra-Physics will
total approximately $355 million. Payment was made for all shares as to which
acceptances had been received by March 1, 1999. Spectra-Physics manufactures a
wide range of laser-based instrumentation systems, primarily for the
process-control, industrial measurement, construction, research, commercial, and
government markets.

    The Company was incorporated in Delaware in May 1986 as a wholly owned
subsidiary of Thermo Electron Corporation to operate the instruments businesses
that were previously conducted by several Thermo Electron subsidiaries. As of
January 2, 1999, Thermo Electron owned 101,865,192 shares, or 85%, of the
Company's outstanding common stock. Thermo Electron is a world leader in
monitoring, analytical, and biomedical instrumentation; biomedical products
including heart-assist devices, respiratory-care equipment, and mammography
systems; and paper recycling and papermaking equipment. Thermo Electron also
develops alternative-energy systems and clean fuels, provides a range of
services including industrial outsourcing and environmental-liability
management, and conducts research and development in advanced imaging, laser,
and electronic information-management technologies.

--------------------
* References to 1998, 1997, and 1996 herein are for the fiscal years ended
  January 2, 1999, January 3, 1998, and December 28, 1996, respectively.

                                       2
<PAGE>

    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 4 and 6 to Consolidated Financial Statements in the
Registrant's 1998 Annual Report to Shareholders for a description of the
Company's outstanding stock options and convertible obligations. During 1998,
Thermo Electron purchased 2,046,300 shares of the Company's common stock in the
open market at a total cost of $53.2 million.

    During 1998, Thermo Electron announced a proposed reorganization involving
certain of Thermo Electron's subsidiaries, including the Company. As part of
this reorganization, ThermoSpectra may be taken private. The public shareholders
of ThermoSpectra would receive cash in exchange for their shares of common stock
of ThermoSpectra. The completion of these transactions is subject to numerous
conditions, as outlined in Note 17 to Consolidated Financial Statements in the
Registrant's 1998 Annual Report to Shareholders, which information is
incorporated herein by reference.

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 heading
"Forward-looking Statements" in the Registrant's 1998 Annual Report to
Shareholders, which statements are incorporated herein by reference.

(b) Financial Information About Segments

    Financial information concerning the Company's segments is summarized in
Note 13 to Consolidated Financial Statements in the Registrant's 1998 Annual
Report to Shareholders, which information is incorporated herein by reference.

(c) Description of Business

    (i) Principal Products and Services

Analytical

    ThermoQuest is a leading manufacturer of 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 ultratrace levels of detection. ThermoQuest also supplies
scientific equipment for the preparation and preservation of chemical samples,
and consumables for the chromatography industry.

    Thermo Optek is a worldwide leader in spectroscopy instrumentation for
molecular and elemental analysis based upon energy and light measurements, as
well as systems for materials sciences including surface analysis,
characterization, preparation, and physical-properties analysis.

                                       3
<PAGE>

Life Sciences

    Thermo BioAnalysis develops, manufactures, and markets instruments,
consumables, and information-management systems used in pharmaceutical research
and production, and in clinical diagnostics, including point-of-care test kits
for rapid diagnosis of certain illnesses.

Process Control

    ONIX Systems, which became a public subsidiary of the Company in March 1998,
designs, develops, markets, and services sophisticated field-measurement
instruments and on-line sensors for process-control industries, particularly the
oil and gas industry. These systems provide real-time data collection, analysis,
and local functions to enhance production efficiency, improve process and
quality control, ensure regulatory compliance, and increase employee safety.

    Metrika Systems manufactures on-line process optimization systems that
provide real-time, nondestructive analysis of the composition of raw materials
in basic-materials production processes, including coal, cement, and minerals.
In addition, Metrika Systems manufactures advanced systems used principally by
producers of finished flat metals, such as sheet metal, and web materials, such
as rubber, plastic foils, and glass, to measure and control parameters such as
thickness and coating weight of these materials.

Industrial

    ThermoSpectra develops, manufactures, and markets precision imaging and
inspection, temperature-control, and test and measurement instruments. These
instruments are generally combined with proprietary operations and analysis
software to provide industrial and research customers with integrated systems
that address their specific needs.

    Thermo Vision designs, manufactures, and markets a diverse array of
photonics products (light-based technologies) including optical components,
imaging sensors and systems, lasers, optically based instruments,
opto-electronics, and fiber optics, that are used in a wide range of
applications, including medical diagnostics and analytical instrumentation;
semiconductor manufacturing; X-ray imaging; physics, chemistry, and biology
research; and telecommunications.

    Thermo Instrument has wholly owned businesses, which produce instruments and
complete systems for detecting and monitoring environmental pollutants generated
from industrial and mobile sources and provides clinical laboratory equipment
and consumables that assist in the diagnosis of various diseases. In addition, a
wholly owned business of the Company has a joint venture with Thermo
BioAnalysis. This company, Thermo Nucleonics LLC, was established to address the
nuclear instrumentation market.

    (ii) and (xi) New Products; Research and Development

    The Company maintains active programs for the development of new
technologies and the enhancement of existing products. Research and development
expenses for the Company were $113.9 million, $107.6 million, and $84.1 million
in 1998, 1997, and 1996, respectively

    (iii)  Raw Materials

    Raw materials, components, and supplies purchased by the Company are
generally either available from a number of different suppliers or from
alternative sources that could be developed without a material adverse effect on
the Company. To date, the Company has experienced no difficulties in obtaining
these materials.

                                       4
<PAGE>

    (iv)   Patents, Licenses, and Trademarks

    The Company's policy is to protect its intellectual property rights,
including applying for and obtaining patents when appropriate. The Company holds
numerous patents related to its technologies, with additional patents pending.
The Company also enters into licensing agreements with other companies in which
it grants or receives rights to specific patents and technical know-how. The
Company also considers technical know-how, trade secrets, and trademarks to be
important to its business.

    (v)    Seasonal Influences

    There are no significant seasonal influences on the Company's sales of its
products.

    (vi)   Working Capital Requirements

    There are no special inventory requirements or credit terms extended to
customers that would have a material adverse effect on the Company's working
capital.

    (vii)  Dependency on a Single Customer

     No single customer accounted for more than 10% of the Company's total
revenues in any of the past three years.

    (viii) Backlog
<TABLE>
<CAPTION>
<S>                                                                                   <C>        <C>

      The Company's backlog of firm orders at year-end 1998 and 1997 was:

(In thousands)                                                                             1998       1997
------------------------------------------------------------------------------------- ---------- ----------

Analytical                                                                             $142,607   $151,532
Life Sciences                                                                            32,183     24,973
Process Control                                                                          55,345     53,435
Industrial                                                                               53,366     68,948
                                                                                      ---------   --------
                                                                                       $283,501   $298,888
                                                                                      =========   ========
</TABLE>
    Certain of these orders are cancelable by the customer upon payment of a
cancellation charge. The Company anticipates that substantially all of the
backlog as of January 2, 1999, will be shipped or completed during 1999. 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. The decreases in backlog in the Analytical and Industrial segments
were principally due to a slowdown in the semiconductor and related industries
and a decrease in demand in Asia.

    (ix)   Government Contracts

    Not applicable.

    (x)    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.

                                       5
<PAGE>


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

Analytical

    ThermoQuest competes in each of its markets primarily on technical
performance, customer service and support, and price. ThermoQuest's principal
competitors include the Chemical Analysis Group of Hewlett-Packard; the
MicroMass Group of Waters Corporation; Shimadzu Corporation; Perkin-Elmer;
Varian; Merck Corporation; Phenomenex Inc.; and
numerous regional suppliers.

    Thermo Optek competes in each of its markets primarily on performance,
reliability, customer service, and price. Thermo Optek competes primarily with
the Analytical Instruments division of Perkin-Elmer; Varian; Hewlett-Packard;
SpectroAnalytical Instruments, Inc.; Shimadzu; and Physical Electronics, Inc.

Life Sciences

    Thermo BioAnalysis competes primarily on the basis of technological
innovation, performance, flexibility, function, customization, and price. Major
competitors include Perkin-Elmer, Hewlett-Packard, and Waters.

Process Control

    The Company competes in the field measurement instruments and sensors market
primarily on quality and reliability, technical features, accuracy, ease of use,
price, and reputation for after-market service. ONIX Systems competes with a few
large competitors, including Fisher-Rosemount, a division of Emerson Electric
Co., Inc.; Asea Brown Boveri (Holding) Ltd. (ABB); Elsag-Bailey Process
Automation N.V., a division of ABB; and Yokogawa Electric Corporation, in each
of its product areas and with many companies within specific industries.

    Metrika Systems competes primarily on the basis of performance and, to a
lesser extent, price in the on-line coal, cement, and mineral analysis markets.
Scantech Limited is the Company's primary competitor in the on-line coal and
cement analysis market. Amdel of Australia is the Company's principal competitor
in the on-line minerals analysis market. The market for solids and multiphase
analyzers for process control is generally fragmented. 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 primarily on the
basis of quality, performance, and price.

    The Company has a relatively small presence within the large and varied
process-control marketplace, which is extremely fragmented and is comprised of
several large companies, including Fisher-Rosemount, Elsag 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,
price, and reliability.

Industrial

    Thermo Vision competes primarily on the basis of technical
suitability, product performance, reliability, and price.  Its principal
competitors include Optical Coating Laboratory, Inc. and Newport
Corporation.

    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.
ThermoSpectra's principal competitors include Tektronix, Inc.; Brinkmann
Instruments Inc.; Julabo USA Inc.; Hamamatsu Photonics KK; and Oxford
Instruments plc.



                                       6
<PAGE>

    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.

    (xii)  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.

    (xiii) Number of Employees

    As of January 2, 1999, the Company employed approximately 9,700 people.

(d) Financial Information About Geographic Areas

    Financial information about geographic areas is summarized in Note 13 to
Consolidated Financial Statements in the Registrant's 1998 Annual Report to
Shareholders and is incorporated herein by reference.

(e) Executive Officers of the Registrant

     Name                         Age  Present Title (Fiscal Year First
                                       Became Executive Officer)
     -----------------------------------------------------------------

     Earl R. Lewis                55  President and Chief Executive Officer
                                       (1990)
     Denis A. Helm                60  Executive Vice President (1986)
     Dr. Richard W. K. Chapman    54  Vice President (1994)
     Barry S. Howe                43  Vice President (1994)
     Theo Melas-Kyriazi           39  Chief Financial Officer (1998)
     Paul F. Kelleher             56  Chief Accounting Officer (1986)

    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, Dr. Chapman, and Mr.
Melas-Kyriazi, 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 and Chief Executive Officer in
January 1998. Mr. Lewis served as Chief Operating Officer of the Company from
January 1996 through January 1998, as Executive Vice President from January 1996
through March 1997, as a Senior Vice President from January 1994 through January
1996, and as a Vice President from March 1992 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, a
subsidiary of ThermoQuest, from 1992 to 1995. Mr. Melas-Kyriazi was appointed
Chief Financial Officer of the Company and Thermo Electron on January 1, 1999.
He joined Thermo Electron in 1986 as Assistant Treasurer, and became Treasurer
in 1988. He was named President and Chief Executive Officer of ThermoSpectra in
1994, a position he held until becoming Vice President of Corporate Strategy for
Thermo Electron in 1998. Mr. Melas-Kyriazi remains a Vice President of Thermo
Electron. Messrs. Lewis, Helm, Chapman, and Howe are full-time employees of the
Company. Messrs. Melas-Kyriazi 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.


                                       7
<PAGE>

Item 2. Properties

    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 in the event any lease is not extended. With respect to leases
expiring in the near future, in the event the Company does not renew such
leases, the Company believes suitable alternate space is available for lease on
acceptable terms. The location of the Company's principal properties by segment
as of January 2, 1999, are:

Analytical

    The Company owns approximately 1,553,000 square feet of office, engineering,
laboratory, and production space, principally in Ohio, Wisconsin, Germany,
Massachusetts, Italy, England, and California, and leases approximately 997,000
square feet of office, engineering, laboratory, and production space under
leases expiring from 1999 through 2017, principally in the United Kingdom,
Massachusetts, New York, and California. As of January 2, 1999, the Company had
a $7.3 million mortgage loan that is secured by 200,000 square feet of property
in California with a net book value of $14.9 million.

Life Sciences

    The Company owns approximately 95,000 square feet of office, engineering,
laboratory, and production space in Pennsylvania and leases approximately
748,000 square feet of office, engineering, laboratory, and production space
under leases expiring from 1999 through 2016, principally in Finland, the United
Kingdom, and Texas.

Process Control

    The Company owns approximately 165,000 square feet of office, engineering,
laboratory, and production space in Texas, France, and England, and leases
approximately 638,000 square feet of office, engineering, laboratory, and
production space under leases expiring from 1999 through 2007, principally in
Texas, Maryland, and the United Kingdom.

Industrial

    The Company owns approximately 282,000 square feet of office, engineering,
laboratory, and production space, principally in Wisconsin, and leases
approximately 783,000 square feet of office, engineering, laboratory, and
production space under leases expiring from 1999 through 2008, principally in
California, New Hampshire, Massachusetts, Germany, and the Netherlands.

Item 3. Legal Proceedings

    Not applicable.

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

    Not applicable.

                                       8
<PAGE>


                                  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 1998 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 1998 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 1998 Annual Report to Shareholders and
is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

    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 1998 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 January 2, 1999,
and Supplementary Data are included in the Registrant's 1998 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.

                                       9
<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.


                                       10
<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 Statement of Income
       Consolidated Balance Sheet
       Consolidated Statement of Cash Flows
       Consolidated Statement of Comprehensive Income and 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

    On December 10, 1998, the Company filed a Current Report on Form 8-K, with
    respect to a proposed reorganization by the Company's ultimate parent
    corporation, Thermo Electron Corporation, involving certain of Thermo
    Electron's subsidiaries, including the Company.

(c) Exhibits

    See Exhibit Index on the page immediately preceding exhibits.

                                       11
<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 22, 1999               THERMO INSTRUMENT SYSTEMS INC.


                                    By: /s/ Earl R. Lewis
                                        Earl R. Lewis
                                        President and 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 22, 1999.

Signature                           Title


By: /s/ Earl R. Lewis               President, Chief Executive Officer,
    Earl R. Lewis                     and Director


By: /s/ Theo Melas-Kyriazi          Chief Financial Officer
    Theo Melas-Kyriazi


By: /s/ Paul F. Kelleher            Chief Accounting Officer
    Paul F. Kelleher


By: /s/ Frank Borman                Director
    Frank Borman


By: /s/ George N. Hatsopoulos       Director
    George N. Hatsopoulos


By: /s/ John N. Hatsopoulos         Director
    John N. Hatsopoulos


By: /s/ Arvin H. Smith              Chairman of the Board and Director
        Arvin H. Smith


By: /s/ Polyvios C. Vintiadis       Director
    Polyvios C. Vintiadis

                                       12
<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 16, 1999 (except with
respect to the matter discussed in Note 18, as to which the date is March 1,
1999). 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 11 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 16, 1999

                                       13
<PAGE>
<TABLE>
<CAPTION>


SCHEDULE II

                                      THERMO INSTRUMENT SYSTEMS INC.
                                    Valuation and Qualifying Accounts
                                              (In thousands)

<S>                                 <C>         <C>         <C>         <C>         <C>         <C>

Description                                      Provision    Accounts    Accounts   Other (a)     Balance
                                    Balance at  Charged to   Recovered     Written        Off       at End
                                     Beginning     Expense                                         of Year
                                            of
                                          Year
----------------------------------- ----------- ----------- ----------- ----------- ----------- -----------

Allowance for Doubtful Accounts

Year Ended January 2, 1999             $22,786     $ 4,169    $    502     $(7,221)    $ 3,490    $ 23,726

Year Ended January 3, 1998             $16,981     $ 4,366    $    304     $(4,375)    $ 5,510    $ 22,786

Year Ended December 28, 1996           $12,569     $ 2,274    $     69     $(5,015)    $ 7,084    $ 16,981
</TABLE>
<TABLE>
<CAPTION>
<S>                                          <C>         <C>            <C>         <C>         <C>


 Description                                 Balance at    Established    Activity   Other (c)     Balance
                                              Beginning     as Cost of  Charged to                  at End
                                                  of      Acquisitions     Reserve                 of Year
                                                   Year
 ------------------------------------------- ----------- -------------- ----------- ----------- -----------

 Accrued Acquisition Expenses (b)

 Year Ended January 2, 1999                    $ 21,966      $   7,218    $ (9,517)  $  (3,164)   $ 16,503

 Year Ended January 3, 1998                    $ 20,563      $  24,752    $(18,665)  $  (4,684)   $ 21,966

 Year Ended December 28, 1996                  $ 14,838      $  38,782    $(26,571)  $  (6,486)   $ 20,563


   Description                                Balance at     Provision    Activity   Other (f)     Balance
                                               Beginning    Charged to  Charged to                  at End
                                                   of      Expense (e)     Reserve                 of Year
                                                    Year
 -------------------------------------------- ----------- ------------- ----------- ----------- -----------

 Accrued Restructuring Costs (d)

 Year Ended January 2, 1999                     $    244      $ 18,401     $(7,682)  $    263     $ 11,226

 Year Ended January 3, 1998                     $  1,024      $    953     $(1,733)  $      -     $    244

 Year Ended December 28, 1996                   $    308      $  1,038     $  (322)  $      -     $  1,024

(a) Includes allowance of businesses acquired during the year as described in
    Note 3 to Consolidated Financial Statements in the Company's 1998 Annual
    Report to Shareholders and the effect of foreign currency translation.
(b) The nature of activity in this account is described in Note 3 to
    Consolidated Financial Statements in the Registrant's 1998 Annual Report to
    Shareholders.
(c) Represents reversal of accrued acquisition expenses and corresponding
    reduction of cost in excess of net assets of acquired companies resulting
    from finalization of restructuring plans and the effect of foreign currency
    translation.
(d) The nature of activity in this account is described in Note 11 to
    Consolidated Financial Statements in the Registrant's 1998 Annual Report to
    Shareholders.
(e) Excludes provision of $2.8 million for asset write-downs and $0.4 million
    for loss on division sold in 1998.
(f) Represents the effect of foreign currency translation.

</TABLE>


                                       14
<PAGE>
<TABLE>
<CAPTION>
<S>        <C>

                               EXHIBIT INDEX
Exhibit
Number     Description of Exhibit

  2.1      Reserved.

  2.2      Agreement and Release dated as of December 15, 1997, among Fisons
           plc, the Registrant, and Thermo Electron (filed as Exhibit 2.2 to the
           Registrant's Annual Report on Form 10-K for the fiscal year ended
           January 3, 1998 [File No. 1-9876] and incorporated herein by
           reference).

  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      Subordinated Indenture, dated January 15, 1998, among the
           Registrant, Thermo Electron, and Bankers Trust Company as
           trustee, relating to $250,000,000 principal amount of 4%
           Convertible Subordinated Debentures due 2005 (filed as Exhibit
           4.1 to the Registrant's Current Report on Form 8-K filed with
           the Commission on January 16, 1998, and incorporated herein 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).

 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 (filed as Exhibit 10.6 to the
           Registrant's Annual Report on Form 10-K for the fiscal year ended
           December 28, 1996 [File No. 1-9786] and incorporated
           herein by reference).

                                       15
<PAGE>

Exhibit
Number     Description of Exhibit

 10.7      Amended and Restated Master Guarantee Reimbursement and Loan
           Agreement dated December 2, 1997, by and among the Registrant and
           Thermo Electron (filed as Exhibit 10.7 to the Registrant's Annual
           Report on Form 10-K for the fiscal year ended January 3, 1998 [File
           No. 1-9786] and incorporated herein by reference).

 10.8      Restated Stock Holdings Assistance Plan and Form of Promissory Note
           (filed as Exhibit 10.10 to the Registrant's Annual Report on Form
           10-K for the fiscal year ended January 3, 1998 [File No. 1-9786] and
           incorporated herein by reference).

 10.9-10.15     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
           3,515,625 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 splits
           effected in December 1995 and October 1997).

 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 3,515,625 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
           splits effected in December 1995 and October 1997).

 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 5,039,062 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 splits effected in December 1995 and October
           1997).

 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).

 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
           1,450,195 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 splits effected in December
           1995 and October 1997).

                                       16
<PAGE>

Exhibit
Number     Description of Exhibit

 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
           1,450,195 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 splits effected in December
           1995 and October 1997).

 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 (filed as Exhibit 10.27 to the
           Registrant's Annual Report on Form 10-K for the fiscal year
           ended December 28, 1996 [File No. 1-9786] and incorporated
           herein by reference).

 10.28     Thermo Instrument Systems Inc. - Metrika Systems Corporation
           Nonqualified Stock Option Plan (filed as Exhibit 10.28 to the
           Registrant's Annual Report on Form 10-K for the fiscal year ended
           January 3, 1998 [File No. 1-9786] and incorporated herein by
           reference).

 10.29     Thermo Instrument Systems Inc. - Thermo Vision Corporation
           Nonqualified Stock Option Plan (filed as Exhibit 10.29 to the
           Registrant's Annual Report on Form 10-K for the fiscal year ended
           January 3, 1998 [File No. 1-9786] and incorporated herein by
           reference).

 10.30     Thermo Instrument Systems Inc. - ONIX Systems Inc. Nonqualified Stock
           Option Plan (filed as Exhibit 10.30 to the Registrant's Annual Report
           on Form 10-K for the fiscal year ended January 3, 1998 [File No.
           1-9786] and incorporated herein by reference).

           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. The terms of such plans are substantially
           the same as those of the Registrant's Equity Incentive Plan.

 10.31 - 10.32  Reserved.

 10.33     3 3/4% Senior Convertible Note in the principal amount of
           $140,000,000 dated September 15, 1993, issued to Thermo Electron
           (filed as Exhibit 10(b) to the Registrant's Quarterly Report on Form
           10-Q for the quarter ended October 2, 1993 [File No. 1-9786] and
           incorporated herein by reference).

                                       17
<PAGE>

Exhibit
Number     Description of Exhibit

 10.34     $45,000,000 Promissory Note dated as of September 12, 1997,
           issued by ThermoSpectra to Thermo Electron (filed as Exhibit 10
           to ThermoSpectra's Quarterly Report on Form 10-Q for the
           quarter ended September 27, 1997 [File No. 1-13876] and
           incorporated herein by reference).

 10.35     Amended and Restated Master Guarantee Reimbursement and Loan
           Agreement dated as of December 5, 1997, between Thermo Optek and
           Thermo Electron (filed as Exhibit 10.35 to the Registrant's Annual
           Report on Form 10-K for the fiscal year ended January 3, 1998 [File
           No. 1-9786] and incorporated herein by reference).

 10.36     Amended and Restated Master Guarantee Reimbursement and Loan
           Agreement dated as of December 3, 1997, between ThermoQuest and
           Thermo Electron (filed as Exhibit 10.36 to the Registrant's Annual
           Report on Form 10-K for the fiscal year ended January 3, 1998 [File
           No. 1-9786] and incorporated herein by reference).

 10.37     Amended and Restated Master Guarantee Reimbursement and Loan
           Agreement dated as of December 3, 1997, between Metrika Systems and
           Thermo Electron (filed as Exhibit 10.37 to the Registrant's Annual
           Report on Form 10-K for the fiscal year ended January 3, 1998 [File
           No. 1-9786] and incorporated herein by reference).

 10.38     Master Guarantee Reimbursement and Loan Agreement dated as of
           November 14, 1997, between Thermo Vision and Thermo Electron (filed
           as Exhibit 10.38 to the Registrant's Annual Report on Form 10-K for
           the fiscal year ended January 3, 1998 [File No. 1-9786] and
           incorporated herein by reference).

 10.39     Amended and Restated Master Guarantee Reimbursement and Loan
           Agreement dated as of December 2, 1997, between Thermo BioAnalysis
           and Thermo Electron (filed as Exhibit 10.39 to the Registrant's
           Annual Report on Form 10-K for the fiscal year ended January 3, 1998
           [File No. 1-9786] and incorporated herein by reference).

 10.40     Amended and Restated Master Guarantee Reimbursement and Loan
           Agreement dated as of December 4, 1997, between ThermoSpectra and
           Thermo Electron (filed as Exhibit 10.40 to the Registrant's Annual
           Report on Form 10-K for the fiscal year ended January 3, 1998 [File
           No. 1-9786] and incorporated herein by reference).

 10.41     Amended and Restated Master Guarantee Reimbursement and Loan Agreement dated
           as of January 5, 1998, between ONIX Systems and Thermo Electron
           (filed as Exhibit 10.5 to the Registration Statement of ONIX Systems
           on Form S-1 [Reg. No. 333-45333] and incorporated herein by
           reference).

 10.42     Fiscal Agency Agreement dated as of August 3, 1995, among ThermoQuest,
           Thermo Electron, and The Chase Manhattan Bank (formerly Chemical
           Bank) (filed as Exhibit 10.12 to ThermoQuest's Registration Statement
           on Form S-1 [Reg. No. 333-00276] and incorporated herein by
           reference).

 10.43     Fiscal Agency Agreement dated as of October 12, 1995, between Thermo Optek,
           Thermo Electron, and The Chase Manhattan Bank (formerly Chemical
           Bank) (filed as Exhibit 10.10 to Thermo Optek's Registration
           Statement on Form S-1 [Reg. No. 333-03630] and incorporated herein by
           reference).

 10.44     $200,000,000 Promissory Note dated as of March 3, 1999, issued by the
           Registrant to Thermo Electron.

                                       18
<PAGE>

Exhibit
Number     Description of Exhibit

 13        Annual Report to Shareholders for the year ended January 2, 1999
           (only those portions incorporated herein by reference).

 21        Subsidiaries of the Registrant.

 23        Consent of Arthur Andersen LLP.

 27        Financial Data Schedule.

</TABLE>