SECURITIES AND EXCHANGE COMMISSION

                           Washington, D.C. 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 October 24, 1998

                                     OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
       EXCHANGE ACT OF 1934

For the transition period from            to           
                               ----------    ----------

                       Commission file number 0-15046
                                              -------

                           WESTERBEKE CORPORATION
           ------------------------------------------------------
           (Exact name of registrant as specified in its charter)

                Delaware                                 041925880
----------------------------------------        ---------------------------
(State or other jurisdiction of Employer        (I.R.S. Identification No.)
     incorporation or organization)

       Avon Industrial Park
       Avon, Massachusetts 02322                          02322
----------------------------------------                ----------
(Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code (508) 588 - 7700
                                                   ----------------

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

                                                  Name of each exchange on 
      Title of each class                         which registered
      -------------------                         -------------------------
             None                                           None

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

                                Common Stock,
                               $.01 par value
                              ----------------
                              (Title of class)

      Indicate by a check mark whether the registrant (1) has filed all 
reports required to be filed by Section 13 or 15 (d) of the Securities 
Exchange Act of 1934 during the preceding 12 months (or for such shorter 
period as the registrant was required to file such reports), and (2) has 
been subject to such filing requirements for the past 90 days.

                                       Yes   X   No      
                                           -----    -----

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


      State the aggregate market value of the voting stock held by non-
affiliates of the registrant.  The aggregate market value shall be computed 
by reference to the price at which the stock was sold, or the average bid 
and asked prices of such stock, as of a specified date within 60 days prior 
to the date of filing.

      Aggregate market value as of January 14, 1999..........  $2,341,000

      Indicate the number of shares outstanding of each of the issuer's 
classes of common stock, as of the latest practicable date.

      Common Stock, $.01 par value, as of January 14, 1999...   1,917,812 
shares


                     DOCUMENTS INCORPORATED BY REFERENCE

                       None.


                                   PART I

ITEM 1.  BUSINESS.

General
-------

      The Company is primarily engaged in the business of designing, 
manufacturing and marketing marine engine and air-conditioning products.  
The Company was organized in 1932 and was re-incorporated in Delaware in 
1986.  The Company's marine products consist of diesel and gasoline engine-
driven electrical generator sets, inboard propulsion engines, self-
contained, reverse-cycle air-conditioners, and associated spare parts and 
accessories.  In addition, the Company manufactures and markets electrical 
generator sets for use in non-marine applications.  The Company markets its 
products throughout the United States and internationally principally for 
recreational marine applications.  Accordingly, the market for the Company's 
products is dependent on the market for recreational boats, including 
auxiliary powered sailboats, powerboats, houseboats and other pleasure 
boats.  The market for recreational boats, and consequently the Company's 
products, may be adversely affected by general economic conditions.

Products
--------

      The Company's marine engine product line consists of 18 models of 
electrical generator sets, 18 models of inboard propulsion engines, and 
associated spare parts and accessories.  The Company also offers 11 models 
of non-marine generator sets.

      The Company's diesel and gasoline engine-driven marine generator sets 
are installed in powerboats, houseboats, large sailboats and other pleasure 
and commercial boats to provide electricity for communication and 
navigational equipment, lighting, refrigeration and other galley services, 
and other safety, operating and convenience needs.  The Company's present 
line of generator sets produce from 4.5 to 65 kilowatts of electricity.  A 
generator set consists of an electrical generator and an attached diesel or 
gasoline engine used to drive the generator.  These engines are fresh water 
cooled and range from two to eight cylinders.

      The Company's propulsion engines are inboard engines, generally 
installed as auxiliary power systems for sailboats.  The Company's 
propulsion engines are fresh water cooled and range from two to six 
cylinders and from 12 to 108 horsepower.  Management believes that more than 
90% of the propulsion engines produced by the Company are installed in 
sailboats of up to 50 feet in length.  The Company's higher horsepower 
propulsion engines are also installed in powerboats of up to approximately 
30 feet in length such as fishing boats, cruisers and work boats.

      The Company's product line also includes marine auxiliary engines and 
associated spare and replacement parts marketed under the Universal(R) name 
and marine air-conditioning products marketed under the Rotary Aire(R) name.  
The Company manufactures and markets two self-contained, reverse-cycle air-
conditioning units and accessories under the Rotary Aire(R) name.  These 
units can be installed in powerboats, houseboats, sailboats and other 
pleasure and commercial boats.

      The Company's product line includes 11 models of non-marine electrical 
generator sets which may be installed in bus-converted motor coaches, 
specialty vehicles, such as refrigeration trucks, and ambulances and other 
emergency vehicles to provide electricity for lighting, refrigeration and 
other safety, operating and convenience needs.  These generators may also be 
used as stand-by or secondary power sources in the event of power outages or 
in locations where primary power is not readily available, such as 
construction sites, rural areas and less developed countries.

      The Company offers a complete line of spare parts and accessories for 
its current product lines and for most discontinued models.  The Company's 
line of spare parts includes oil and fuel filters, belts, thermostats, 
distributor caps, fuses, spark plugs, wiring, alternators, heat exchangers, 
circuit breakers, water and fuel pumps, starter motors and fuel solenoids.  
Many basic parts are packaged and sold as spare part kits.  Accessories 
offered by the Company include various control and instrument panels, 
exhaust silencers and generator sound enclosures.

      The Company provides its distributors, dealers and final customers 
with documentation covering operation, maintenance and repair procedures for 
its products.  Management believes that the provision of current and 
comprehensive documentation enhances the Company's marketing and competitive 
effectiveness.  See "Marketing and Sales" and "Competition" below.

      Each of the Company's products is covered by a one-year limited 
warranty covering parts and authorized labor.  In addition, the Company 
offers a five-year limited warranty on certain marine generator sets.  Many 
of the Company's suppliers also warrant their products for parts and labor.  
Some of the Company's major suppliers warrant their products for the 
duration of the Company's warranties.  The Company believes it has made 
adequate provisions for warranty claims for the upcoming fiscal year.  See 
Note 1 of Notes to Consolidated Financial Statements included in "Item 8 - 
Financial Statements and Supplementary Data." The Company's distributors are 
generally responsible for administering the Company's warranties through the 
dealer network.  See "Marketing and Sales" below.

Governmental Regulation
-----------------------

      Many of the Company's products are subject to exhaust emission 
standards pursuant to regulations promulgated by the Environmental 
Protection Agency (the "EPA"), effective September 1, 1996, and by the State 
of California, effective August 1, 1995.  The emission standards are 
intended to reduce the emissions of hydrocarbons, nitrogen oxides, carbon 
monoxide, particulates and smoke.  It is anticipated that by January 1, 
2000, all of the Company's products will be subject to such regulations.  
All of the regulations include manufacturer testing requirements, mandated 
warranties on emissions related components, product labeling and reporting 
requirements.  Additionally, future regulations may include provisions for 
selective enforcement audits and recall and repair requirements.

      At this time, all of the Company's products which are subject to these 
emissions regulations comply with the regulations.  Achieving and 
maintaining this compliance has been accomplished through significant design 
and development expense. The emission standards established by the 
regulations will become broader in scope and more stringent regarding 
emissions levels each year.  As a result, research and development 
expenditures for emissions compliance will continue at a significant level 
for the foreseeable future.  Additionally, if at any time the Company cannot 
effect the required modifications of its products to meet the required 
emissions levels within the time frame allowed, the Company could be 
materially adversely affected.

Design and Development
----------------------

      The Company has an ongoing product improvement and development program 
intended to enhance the reliability, performance and longevity of existing 
products, and to develop new products.  A significant portion of the 
Company's senior management's time, as well as the efforts of the Company's 
thirteen person product engineering department, is spent in this area. As 
part of the Company's ongoing product development program, the Company 
upgrades its engine products and periodically adds models to its product 
line.  For example, as and when improvements in component parts allow, the 
Company may manufacture smaller or more light-weight versions of existing 
models.  In fiscal 1998, the product engineering department focused 
principally on the modernization of the Company's existing product line and 
modifications which the Company believes will be required as a result of the 
emissions standards discussed above.  In addition, in response to demand, 
the Company may expand its engine product line by manufacturing generator 
sets or propulsion engines with different kilowattage or horsepower than its 
existing models.  The Company intends to introduce upgraded and new models 
as and when developed.

      The Company's design and engineering focus is on reliability, ease of 
maintenance, compactness, operating smoothness, safety and longevity, among 
other technical and performance factors.  The Company's technical and 
performance specifications are utilized by the Company's suppliers in 
producing certain component parts, metal and nonmetal fabrications and other 
peripheral equipment that the Company manufactures and assembles into 
finished products.  Generally, the Company retains title to Company-
developed drawings, patterns and specifications used by these suppliers.

      For the three fiscal years ended October 1998, the Company incurred 
expenses of approximately $3,129,900 for design and development activities 
as follows: 1998 - $1,180,900, 1997 - $1,030,300 and 1996 - $918,700.  All 
these activities were conducted and sponsored by the Company and the major 
portion of these expenses was applied toward salaries and other expenses of 
the Company's product design and engineering personnel.

Manufacturing and Sources of Supply
-----------------------------------

      The Company's manufacturing activities are conducted in an 
approximately 37,500 square foot facility owned by the Company.  See "Item 2 
- Properties" below.  The Company has approximately 61 persons employed in 
various manufacturing and assembly functions.  See "Employees" below.

      The Company's engine products generally contain from 250 to 500 
component parts and assemblies purchased from domestic and foreign 
manufacturers and suppliers.  Some of these component parts are manufactured 
to Company specifications, while others are further machined and assembled 
by the Company.  The basic component of the Company's engine products is a 
"long block" engine, which is a complete engine block and head assembly 
without peripheral equipment.  Peripheral equipment added by the Company 
includes subassemblies (generators, transmissions, alternators, carburetors, 
motors and pumps), machined castings (flywheels, bellhousings, manifolds, 
mounts, pulleys, brackets and couplings), sheet metal fabrications (control 
and instrumentation panels), injection-molded plastic and other non-metallic 
fabrications (belt guards, drip trays, belts, hoses and panels) and various 
other component parts (mounts, switches and other electrical devices).

      The Company purchases "long block" engines from five foreign 
manufacturers.  The Company currently purchases all of its requirements of 
"long block" engines on a purchase order basis rather than pursuant to long-
term supply agreements.  In certain cases, the Company has an agreement with 
its "long block" engine manufacturers to supply these component parts 
exclusively to the Company for marine products of the type produced by the 
Company.  Orders for  "long block" engines are dollar-denominated and 
therefore fluctuations in the dollar/yen exchange rate have had and will 
continue to have an effect on the cost of the Company's raw materials.  See 
"Item 7 - Management's Discussion and Analysis of Financial Condition and 
Results of Operations."  The Company believes that the purchase of "long 
block" engines on a purchase order basis has become the more common industry 
practice.  Interruption of the supply of "long block" engines would have a 
material adverse effect on the Company if the time to develop new sources of 
supply and replacement products is longer than the time it takes to exhaust 
the Company's inventory of existing "long block" engines.  The supply of 
"long block" engines from one vendor stopped in fiscal 1997.  See "Item 7 - 
Management's Discussion and Analysis of Financial Condition and Results of 
Operations."  In addition, the Company does not have long-term supply 
agreements with other manufacturers of other component parts or peripheral 
equipment.  The Company believes that it can obtain these parts and 
equipment from a variety of sources on commercially reasonable terms.  
However, the disruption of its supply of these parts, equipment or "long 
block" engines would have a material adverse effect on the Company's 
operations.

      The lead time between ordering and receipt of component parts varies 
with the part involved, but generally ranges from a few weeks in the case of 
unfinished products to three to six months in the case of "long block" 
engines, generators and transmissions.  The Company has not experienced any 
difficulties in obtaining finished or unfinished components or peripheral 
equipment on commercially reasonable terms.

      Most of the Company's purchases of component parts and peripheral 
equipment from Japanese ("long block" engines), Italian (generators) and 
other foreign manufacturers are dollar-denominated.  Fluctuations in 
exchange rates have resulted, and may in the future result, in price 
increases from some of the Company's suppliers.  Management believes that to 
varying degrees the Company's competitors in the engine product markets have 
been and will be similarly affected since many of its competitors also 
purchase component parts and peripheral equipment abroad.  However, some of 
the Company's principal competitors are divisions of large and diversified 
multinational companies with extensive production facilities and sales and 
marketing staffs and substantially greater financial resources than the 
Company and therefore may be better situated to accommodate price increases 
from suppliers due to fluctuations in exchange rates.  The engine product 
markets are price sensitive, and there can be no assurance that the Company 
will be able to pass on price increases from its suppliers to its customers.

      The manufacturing of a particular engine product requires the 
integration of a number of engineering, machining and assembly functions in 
order to produce high quality components.  Prior to final assembly, the 
Company's manufacturing activities involve machining various metal and 
nonmetal component parts on computer-controlled and conventional milling 
machines, lathes, drill presses, welders and other machinery, modification 
and assembly of electrical and mechanical subassemblies, calibration of 
electrical devices and components and testing for variances from 
specifications and operating parameters.  The Company has approximately 
thirteen machine operators who satisfy approximately 95% of the Company's 
machining needs.  The remainder of the machining is performed by independent 
contractors.

      The Company has a final assembly line for its engine products where 
component parts, subassemblies and peripheral equipment are assembled onto 
"long-block" engines.  Following final assembly, each generator set and 
propulsion engine is tested at increasing loads up to full operating 
capacity to verify performance and safety features.  After product testing, 
the product is pressure hot water washed, primed and painted, unpainted 
components are attached, and the product is packed and shipped to the 
customer, generally via common carrier freight collect.

      The Company's air-conditioning products are produced on a separate 
assembly line where component parts (compressors, evaporator and condensing 
coils, fans, electrical components and plastic housings), purchased from 
manufacturers and suppliers, are assembled into final units.  The Company 
does not have any long-term supply agreements with the manufacturers of 
these component parts.  However, the Company believes it can obtain most of 
these parts from a variety of sources on commercially reasonable terms.  
Following assembly, each air-conditioner is painted and tested for 
performance, leakage and compliance with safety standards.

      Management believes that the Company's present facilities are 
sufficient for the production of its products in the foreseeable future.  
Any future expansion will be dependent upon future growth in demand for the 
Company's products.  See "Item 7 - Management's Discussion and Analysis of 
Financial Condition and Results of Operations" and "Item 2 - Properties" 
below.

Quality Control and Computerization
-----------------------------------

      Management believes that maintaining high quality manufacturing 
standards is important to its competitive position and also believes that 
the Company has developed a reputation for high quality products.  The 
Company maintains quality control systems and procedures which it reviews 
with its manufacturing personnel and which it modifies as appropriate.

      The Company's quality control systems and procedures include the 
testing of each fully assembled generator set and propulsion engine at 
increasing loads up to full operating capacity to verify performance and 
safety features.  The checklist includes testing wiring and electrical 
systems, all connections and fittings, fuel and oil systems, the fresh water 
cooling system and safety shutdown features.  In the case of the Company's 
generator sets, output current, voltage and frequency are also tested.  The 
results of the tests are recorded and each product is approved by quality 
assurance personnel before it leaves the testing area.

      In line with its policy of updating and improving its manufacturing 
operations, the Company utilizes a computerized manufacturing management 
system which integrates the Company's inventory control, sales and financial 
functions with its manufacturing operations.

Marketing and Sales
-------------------

      The Company's marine engine and air-conditioning products are marketed 
through a nationwide and international network of distributors and dealers.  
The Company markets its non-marine engine products through a sales 
representative and to distributors.  In addition, the Company's two sales 
managers and senior management devote a substantial amount of time to the 
overall coordination of the Company's sales to distributors, as well as to 
the Company's direct sales to boat and other manufacturers (OEM's).  Direct 
sales by the Company to OEM's accounted for approximately 40%, 42%, and 34% 
of total sales for the fiscal years ended October 1998, 1997 and 1996, 
respectively.

      The Company's marine products are sold to distributors for resale to 
manufacturers of powerboats, houseboats, sailboats and other pleasure and 
commercial boats, and to boat dealers and marinas.  Boat manufacturers 
install the Company's products as original equipment.  In addition, the 
Company's distributors resell the Company's marine products to over 400 
authorized dealers (including boatyards and marinas) located on or near 
major navigable waterways throughout the United States and Canada.  These 
dealers install the Company's generator sets, propulsion engines and air-
conditioners as either new or replacement equipment.  In addition, many of 
these dealers maintain inventories of spare parts and accessories in order 
to maintain and repair the Company's marine products.

      The Company's distributor network consists of 10 domestic and 53 
foreign distributors.  The Company's domestic distributors are located along 
the East, West and Gulf Coasts and in the Great Lakes Region.  Two of the 
Company's foreign distributors are located and operate in Canada, 17 are 
located and operate in Europe, seven are located and operate in Central and 
South America, and ten are located and operate in the Far East.  The Company 
also has distributors in Australia, New Zealand, Pakistan, Egypt, Israel, 
Bahrain, Bermuda, Tahiti, the British West Indies, the U.S. Virgin Islands, 
British Virgin Islands, Martinique, St. Maarten, Puerto Rico, Mexico, 
Maldives and the Netherlands Antilles.  Each distributor operates in a 
specified region under a distribution agreement with the Company which 
assigns to the distributor the nonexclusive responsibility for sales and 
service of the Company's products in its territory, including warranty 
administration, accounts receivable collection and other customer related 
functions.  Each distributor maintains inventories of the Company's marine 
products, including spare parts and accessories, in order to provide boat 
manufacturers and dealers with prompt delivery of products.  Typically, the 
Company's distributors and dealers also distribute and sell other marine 
accessories and products.  Generally, however, the Company's distributors do 
not sell products which compete with the Company's products.

      Sales to international customers totaled $2,305,500 (8.8% of net 
sales), $2,843,400 (11.5% of net sales) and $2,594,500 (12.6% of net sales) 
for the fiscal years ended October 1998, 1997 and 1996, respectively.  See 
Note 2 of Notes to Consolidated Financial Statements included in "Item 8 - 
Financial Statements and Supplementary Data" for additional information 
concerning sales to international customers for the Company's three most 
recent fiscal years.  Management is not aware of any special tariffs, 
importation quotas or any other restrictions imposed by the foreign 
countries in which the Company sells its products.  All of the Company's 
international sales are dollar-denominated which protects the Company to 
some extent against foreign currency exchange rate fluctuations, although 
significant increases in the value of the dollar in relation to foreign 
currencies may adversely impact the Company's ability to market its products 
abroad.  Management believes that, to varying degrees, the Company's 
competitors in the marine product market are similarly affected since many 
of its competitors also sell products abroad.  However, some of the 
Company's principal competitors are divisions of large and diversified 
multinational companies with extensive production facilities and sales and 
marketing staffs and substantially greater financial resources than the 
Company and therefore may be better situated to accommodate fluctuations in 
exchange rates.  Management is not aware of any other unusual or special 
risks associated with this aspect of the Company's business.  The Company 
considers international customers to be an important market for its marine 
products.

      An important aspect of the Company's marketing approach and 
competitive position is the ability of its technical personnel and its 
distributors to provide technical assistance to boat manufacturers and 
dealers with a view to developing specifications and performance parameters 
for unit or serial production of its marine products.  To that end, the 
Company selects its distributors with great care and continually monitors 
their technical expertise.  In addition, at times the Company conducts 
seminars in each distribution region.  These sessions are conducted by 
personnel from the Company and from its distributors and are open to boat 
manufacturers, dealers and individual boat owners.  The Company occasionally 
sponsors service schools at its manufacturing facility designed to upgrade a 
distributor's technical expertise and to introduce product innovations and 
new products.  See "Competition" below.

      The Company markets the Westerbeke(R), Universal(R) and Rotary Aire(R) 
names and its marine products through various methods of advertising.  
Certain advertising is accomplished under a cooperative system with the 
Company's distributors.  Under this system, the Company pays a portion of 
the cost of and approves the advertising developed by its distributors.  
Advertisements are placed in trade publications such as Soundings, Motor 
Boating and Sailing, Sail, Power & Motor Yacht and Cruising World.  In 
addition, a substantial amount of the Company's advertising is conducted 
through the distribution of technical and sales literature and pamphlets, 
direct mailings and sponsorship of exhibits at boat shows.  During the 
fiscal years ended October 1998, 1997 and 1996, the Company incurred 
advertising and promotional expenses of $528,400, $520,900, and $453,200, 
respectively.

      For the fiscal year ended October 24, 1998, sales to Sea Ray Boats, 
Inc. and Marysville Marine Distributors, Inc., accounted for approximately 
22.0% and 18.0%, respectively, of the Company's total sales.  See Note 2 of 
Notes to Consolidated Financial Statements included in " Item 8 - Financial 
Statements and Supplementary Data" and "Item 7 - Management's Discussion and 
Analysis of Financial Condition and Results of Operations." The Company 
believes that, if necessary, it could replace any of its distributors or 
sell the products presently distributed by them directly to boat 
manufacturers and dealers.  However, the loss of these customers or the 
inability to replace these distributors could have a material adverse effect 
on the Company.

      The market for the Company's products is dependent on the market for 
recreational boats, including auxiliary powered sailboats, powerboats, 
houseboats and other pleasure boats.  In addition, the recreational marine 
boat business is seasonal in nature and accordingly, the Company's business 
generally experiences some fluctuations in its business during the course of 
the year.  See Note 14 of Notes to Consolidated Financial Statements 
included in "Item 8 - Financial Statements and Supplementary Data."

Proprietary Rights
------------------

      Although the Company follows a policy of protecting its proprietary 
rights to its marine engine products and designs, it does not believe that 
its business, as a whole, is materially dependent upon such protection. The 
Company has registered the names Westerbeke(R), Universal(R), Rotary Aire(R) 
and Atomic Four(R) under Federal trademark law.

Backlog and Credit Terms
------------------------

      The Company believes that because its production is based upon 
cancelable purchase orders rather than long-term agreements, the amount of 
its backlog is not an important indicator of future sales.  The Company 
extends credit to certain of its customers on terms which it believes are 
normal and customary in the marine industry.

Competition
-----------

      The business of manufacturing and supplying marine products is 
extremely competitive.  The Company faces competition from a number of 
companies, including at least seven significant competitors, some of which 
are divisions of large and diversified multinational companies with 
extensive production facilities and sales and marketing staffs and 
substantially greater financial resources than the Company.  Such 
competitors may be better situated to accommodate price increases from 
suppliers due to fluctuations in exchange rates.  In addition, the Company 
faces competition from similar companies as it expands its product line or 
seeks other non-marine applications for its product line.  Although price is 
an important competitive factor, the Company believes that its pricing is 
competitive.

      The market for the Company's marine products is dependent on the 
market for recreational boats which may experience contracting sales as a 
result of general economic conditions.  A contracting market may result in 
additional competition particularly for direct sales to large boat 
manufacturers.

      The Company believes that it can compete effectively with all of its 
present competitors based upon the high quality, reliability, performance 
and longevity of its products, the comprehensiveness of its line of 
products, price, the effectiveness of its customer service and the technical 
expertise of its personnel and that of its distributors.

Employees
---------

      At December 31, 1998, the Company had 104 full-time employees, 
including officers and administrative personnel.  None of the Company's 
employees is covered by a collective bargaining agreement and the Company 
considers its relationship with its employees to be excellent.

Directors and Executive Officers of the Company
-----------------------------------------------

      The directors and executive officers of the Company are as follows:

<TABLE>
<CAPTION>
Name                        Position with the Company        Age
----                        -------------------------        ---

<S>                         <S>                               <C>
John H. Westerbeke, Jr      Chairman, President and           58
                            Director (Class C)

John H. Westerbeke, Sr      Director (Class C)                89

Carleton F. Bryant, III     Executive Vice President,         53
                            Treasurer, Chief Operating
                            Officer and Secretary

Gerald Bench                Director (Class A)                57

Thomas M. Haythe            Director (Class B)                59

Nicholas H. Safford         Director (Class B)                66

James W. Storey             Director (Class B)                64
</TABLE>


      John H. Westerbeke, Jr. has been President and a director of the 
Company since 1976.  In June 1986, Mr. Westerbeke, Jr. assumed the 
additional position of Chairman of the Company.  Mr. Westerbeke, Jr. has 
served in various managerial capacities since joining the Company in 1966.

      John H. Westerbeke, Sr. is the founder of the Company.  Mr. 
Westerbeke, Sr. has served as a director of the Company since 1946 and was 
Chairman of the Board of Directors of the Company from 1976 until June 1986.  
Mr. Westerbeke, Sr. is presently employed by the Company in various 
engineering capacities.

      Carleton F. Bryant, III has been Executive Vice President, Treasurer, 
Chief Operating Officer, and Secretary of the Company since May 1993. From 
October 1987 to May 1993, Mr. Bryant was Director of Business Development 
for Analysis & Computer Systems, Inc., a developer of computer software and 
systems.  From June 1980 to October 1987, Mr. Bryant held various management 
positions with Bird-Johnson Company, a manufacturer of ship propellers, bow 
thrusters and hydraulic actuators.  From 1969 to 1980, Mr. Bryant held a 
variety of management positions with Bath Iron Works Corporation, a 
shipbuilder.

      Gerald Bench has been a director of the Company since June 1986.  Mr. 
Bench has been the President and Chief Executive Officer of Hadley Fruit 
Orchards, Inc. since November 1996 and was a consultant from March 1995 to 
November 1996.  Mr. Bench was a partner in ICAP Marine Group (consulting 
firm) from November 1993 to February 1995.  Mr. Bench was the Chairman and 
President of TDG Aerospace, Inc. (manufacturer of aircraft de-icing devices) 
from October 1991 to November 1993.  Mr. Bench was the President of 
Thermion, Inc. (manufacturer of heaters for aircraft de-icing devices) from 
April 1990 to September 1991.  From July 1989 to March 1990, Mr. Bench was 
the general manager of Lermer Corporation (manufacturer of airline galley 
equipment).  Mr. Bench is the former Chairman of the Board, President, Chief 
Executive Officer and director of E&B Marine Inc. (marine supplies and 
accessories).  Mr. Bench had held various executive positions with E&B 
Marine Inc. for more than 30 years.

      Thomas M. Haythe has been a director of the Company since June 1986.  
Mr. Haythe has been a partner of the law firm of Haythe & Curley since its 
formation in February 1982.  Mr. Haythe is also a director of Novametrix 
Medical Systems Inc. (manufacturer of electronic medical instruments), Guest 
Supply, Inc. (provider of hotel guest room amenities, accessories and 
products) and Ramsay Youth Services, Inc. (provider of youth and educational 
services).

      Nicholas H. Safford has been a director of the Company since February 
1991.  Mr. Safford has been the President of Nicholas H. Safford & Co., Inc. 
(investment counselor and private trustee) since 1983 and from 1979 to 1981.  
From 1982 to 1983, Mr. Safford was the President and a director of Wendell, 
Safford and Co., Inc. (investment counseling firm).  Prior to 1978, Mr. 
Safford was Vice President and a director of David L. Babson & Co., Inc. 
(investment counseling firm).

      James W. Storey has been a director of the Company since June 1986.  
Mr. Storey was the President of Wellingsley Corporation (private investment 
management company) from December 1986 through December 1992.  Mr. Storey is 
currently an independent consultant.  From 1982 to 1986, Mr. Storey was the 
President and Chief Executive Officer of Codex Corporation, a subsidiary of 
Motorola, Inc., and was a Vice President of Motorola, Inc.  Mr. Storey had 
held various managerial positions with Codex Corporation since 1966.  Mr. 
Storey is also a director of Progress Software Corporation (software).

ITEM 2.  PROPERTIES.

      The Company's executive and administrative offices and manufacturing 
operations are located in Avon, Massachusetts in an approximately 37, 500 
square foot facility owned by the Company.  The Company also leases a 
warehouse of approximately 26,000 square feet.  Management believes that the 
Company's present facilities are sufficient for the production of its 
products in the foreseeable future. Any future expansion will be dependent 
upon future growth in demand for the Company's products.  Annual warehouse 
rent was approximately $141,300 in fiscal 1998 and $137,200 in fiscal 1997.  
See Notes 8 and 10 of Notes to Consolidated Financial Statements included in 
"Item 8 - Financial Statements and Supplementary Data."

ITEM 3.  LEGAL PROCEEDINGS.

      The Company has initiated arbitration with the American Arbitration 
Association in New York against Daihatsu Motor Company, Ltd. ("Daihatsu") 
for breach of contract and other claims.  The Company is seeking damages 
based on Daihatsu's breach of a Component Sales Agreement which also granted 
the Company rights to certain engines including an engine Daihatsu began 
marketing in 1993 through a joint venture with Briggs & Stratton 
Corporation.  In a separate but related case pending in the Federal District 
Court for the District of Massachusetts, the Company is seeking damages from 
Briggs & Stratton Corporation for tortious interference with the Company's 
Agreement with Daihatsu and other related claims.

      In addition, from time to time, the Company is party to certain 
claims, suits and complaints which arise in the ordinary course of business.  
Currently, there are no such claims, suits or complaints which, in the 
opinion of management, would have a material adverse effect on the Company's 
financial position.

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

      Not applicable.


                                   PART II

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

      The Company's Common Stock is traded in the over-the-counter market on 
the National Association of Securities Dealers Automated Quotation System 
("NASDAQ") under the symbol WTBK.  On January 14, 1999, there were 
approximately 149 shareholders of record.  The following table sets forth 
the range of high and low sales prices per share of the Company's Common 
Stock from October 27, 1996 through October 24, 1998, on the NASDAQ.

<TABLE>
<CAPTION>
                                           Common Stock Prices
                                             High        Low
                                             ----        ---

<S>                                         <C>        <C>
FISCAL 1997
  First Quarter (October 27, 1996 to
   January 25, 1997)                        $2.875     $2.375

  Second Quarter (January 26, 1997 to
   April 26, 1997)                           3.312      2.750

  Third Quarter (April 27, 1997 to
   July 26, 1997)                            3.750      2.750

  Fourth Quarter (July 27, 1996 to
   October 25, 1997)                         5.469      3.500

FISCAL 1998
  First Quarter (October 26, 1997 to
   January 24, 1998)                        $4.750     $3.750

  Second Quarter (January 25, 1998 to
   April 25, 1998)                           4.250      3.250

  Third Quarter (April 26, 1998 to
   July 25, 1998)                            4.000      2.938

  Fourth Quarter (July 26, 1998 to
   October 24, 1998)                         3.375      2.625
</TABLE>


      On January 14, 1999, the last high and low sales price for the 
Company's Common Stock were $2.906 and $2.906, respectively.

      No dividends have been paid or declared on the Common Stock of the 
Company and the Company does not expect to pay any dividends on its Common 
Stock in the foreseeable future.

                      ITEM 6.  SELECTED FINANCIAL DATA.

               Five Year Comparison of Selected Financial Data

<TABLE>
<CAPTION>
                                       October 24,    October 25,    October 26,    October 28,    October 29,
                                          1998           1997           1996           1995           1994
                                       -----------------------------------------------------------------------
For the Year:                                         (In thousands, except for per share amount)

<S>                                      <C>            <C>            <C>            <C>            <C>
Net sales                                $26,202        $24,620        $20,653        $18,794        $15,038
Gross profit                               5,966          5,556          4,778          4,292          3,399
Selling, general and
 administrative expense                    3,684          3,106          2,672          2,514          2,223
Research and development expense           1,181          1,030            919            679            488

Income from operations                     1,100          1,420          1,187          1,099            688
Interest (income) expense                     10             71            (47)           (43)           (19)

Income before cumulative effect of 
 change in accounting principle              644            799            737            698            432

Net income                                   644            799            737            698            633

Income per share before
 cumulative effect of 
 change in accounting method                0.31           0.37           0.33           0.31           0.19

Net income per share, diluted*              0.31           0.37           0.33           0.31           0.28

At end of year:
Total assets                             $14,670        $14,811        $12,681        $10,999        $10,264
Working capital                            5,650          5,800          6,315          5,908          5,733
Long-term liabilities                        893          1,069            520            189            267
Stockholders' equity                      10,719         10,136          9,841          9,091          8,319

<FN>
<F*>  See Note 1 of Notes to Consolidated Financial Statements.
</FN>
</TABLE>


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

Results of Operations:

The following table sets forth, for the years indicated, the percentages 
which the following items in the Consolidated Statements of Operations bear 
to Net Sales.

<TABLE>
<CAPTION>
                                                               Years Ended
                                                -----------------------------------------
                                                October 24,    October 25,    October 26,
                                                   1998           1997           1996
                                                -----------------------------------------

<S>                                               <C>            <C>            <C>
Net sales                                         100.0%         100.0%         100.0%

Gross profit                                       22.8           22.6           23.1

Selling, general and administrative expense        14.1           12.6           12.9

Research and development expense                    4.5            4.2            4.4

Income from operations                              4.2            5.8            5.7

Interest income (expense), net                      0.0           (0.3)           0.2

Provision for income taxes                          1.7            2.2            2.4

Net income                                          2.5            3.2            3.6
</TABLE>


Fiscal 1998 compared to Fiscal 1997
-----------------------------------

Net sales increased $1,581,700 or 6.4% in fiscal 1998 as compared to fiscal 
1997.  The increase was attributable to higher unit sales of the Company's 
marine generators, primarily the result of more favorable economic 
conditions benefiting the pleasure boat industry.  International sales were 
$2,305,500 in 1998, representing 8.8% of net sales, as compared to 
$2,843,400 in 1997, or 11.5% of net sales.  The decrease in 1998 was the 
result of less than favorable economic conditions in the Far East.

Gross profit increased $409,400 or 7.4% in fiscal 1998 as compared to fiscal 
1997.  Gross profit as a percentage of sales increased to 22.8% in fiscal 
1998 as compared to 22.6% in fiscal 1997.

Selling, general and administrative expense increased $578,600 or 18.6% in 
fiscal 1998 as compared to fiscal 1997.  The increase was primarily the 
result of higher legal costs associated with the legal proceeding against 
one of its former "long block" suppliers and also an increase in the 
warranty expense during the year.

Research and development expense increased $150,600 or 14.6% in fiscal 1998 
as compared to fiscal 1997. The increase is due to additional engineering 
personnel, education and training expenses and costs associated with 
bringing the replacement "long block" engines into full production. The 
Company also experienced increased costs to comply with federal and state 
exhaust requirements for existing and new engines. See "Business - 
Governmental Regulation."

Net interest expense was $9,900 in fiscal 1998 compared to $71,000 in fiscal 
1997.  The decrease is primarily due to a decrease in the loan balance used 
for operating purposes during the year.

The Company's income tax expense in fiscal 1998 was $446,700 as compared to 
$550,000 in fiscal 1997.

The Company's net income was $643,500 as compared to $798,900 in fiscal 
1997.  The decrease is mainly attributable to the increase in selling, 
general and administrative expenses.

The Company is currently renegotiating its exclusive agreement with its 
largest customer.  The existing agreement will expire on June 30, 1999.  The 
Company cannot predict the results of these negotiations. The loss of the 
revenues associated with this agreement would have a material effect on the 
Company's operating results and financial condition if the Company was 
unable to replace the business and or reduce operating expenses.

Fiscal 1997 compared to Fiscal 1996
-----------------------------------

Net sales increased $3,967,400 or 19.2% in fiscal 1997 as compared to fiscal 
1996.  The increase was attributable to higher unit sales of the Company's 
marine generators.  The overall increase is primarily the result of more 
favorable economic conditions benefiting the pleasure boat industry.  
International sales were $2,843,400 in 1997, representing 11.5% of net 
sales, as compared to $2,594,500 in 1996, or 12.6% of net sales.

Gross profit increased $778,100 or 16.3% in fiscal 1997 as compared to 
fiscal 1996.  Gross profit as a percentage of sales decreased to 22.6% in 
fiscal 1997 as compared to 23.1% in fiscal 1996.  The decrease in gross 
profit percentage is primarily due to the costs associated with the 
cessation of supply of "long block" engines from one supplier and the 
development of replacement products based on another supplier's engine.

Selling, general and administrative expense increased $433,800 or 16.2% in 
fiscal 1997 as compared to fiscal 1996.  The Company incurred higher 
marketing and promotional expenses due to increased boat show and travel 
activity. Employee compensation costs were also higher as a result of the 
Company's improved profitability.  In addition, legal expenses increased in 
fiscal 1997.

Research and development expense increased $111,600 or 12.1% in fiscal 1997 
as compared to fiscal 1996.  The increase is primarily due to the costs of 
developing products using "long block" engines from a new supplier which 
will replace the engines that could no longer be obtained from an existing 
supplier.   The Company also experienced increased costs to comply with 
federal and state exhaust requirements for existing and new engines. See " 
Business - Governmental Regulation."

One of the Company's vendors of "long block" engines stopped supplying 
engines to the Company in fiscal 1997.  The Company's existing inventory of 
this vendor's engines was nearly exhausted at the end of the fiscal year.  
The Company was able to obtain similar "long block" engines from another 
source, but there have been, and will continue to be, added costs associated 
with making this change.  A portion of the costs to obtain replacement "long 
block" engines from another supplier and to develop replacement products 
based on those engines are reflected in the decreased gross profit as a 
percentage of sales and in the increased research and development costs 
experienced in fiscal 1997.  The Company anticipates that there will be 
added costs in fiscal 1998 associated with bringing the new products into 
full production and introducing them to the market, which will adversely 
affect gross margins and research and development costs.

Net interest expense was $71,000 in fiscal 1997 compared to net interest 
income of $47,400 in fiscal 1996.  The increase in interest expense is 
primarily due to the interest expense incurred on the loans used for 
operating purposes throughout the year.

The Company's income tax expense in fiscal 1997 was $550,000 as compared to 
$497,200 in fiscal 1996.

The Company's net income was $798,900 as compared to $737,400 in fiscal 
1996.  The increase is mainly attributable to higher unit sales throughout 
fiscal 1997.

Liquidity and Capital Resources
-------------------------------

During fiscal 1998, net cash provided by operations was $1,191,600 as 
compared to $924,000 in fiscal 1997. The decrease in inventories and the 
increase in accounts payable is primarily the result of the timing of engine 
purchase order receipts.

During fiscal 1998 and 1997, the Company purchased property, plant and 
equipment of $444,300 and $578,000, respectively.  The Company plans capital 
spending of approximately $500,000 on machinery and equipment during fiscal 
1999.

The Company has a $4,000,000 Credit Agreement with State Street Bank and 
Trust Company, collateralized by inventory, accounts receivable and general 
intangibles.  The Credit Agreement was renewed on March 31, 1998, and will 
expire on March 31, 1999.  The Company believes that it will be able to 
continue to extend the term of the Credit Agreement on commercially 
reasonable terms.  As of October 24, 1998, the Company had approximately 
$3,459,300 in unused borrowing capacity under the Credit Agreement and 
approximately $150,900 committed to cover the Company's reimbursement 
obligations under certain open letters of credit and bankers' acceptances.

On April 25, 1997, the Company entered into a $300,000 revolving line of 
credit agreement (the "1997 Revolving Line of Credit") and term loan 
facility with State Street Bank and Trust Company, collateralized by various 
items of emission testing and product development equipment and subject to 
working capital and equity covenants.  On June 30, 1997, the 1997 Revolving 
Line of Credit terminated and automatically converted into a five-year term 
loan bearing a fixed interest rate of 8.11%.  At October 24, 1998, the 
outstanding principal amount was $220,800.

On January 23, 1996, the Company entered into a $500,000 revolving line of 
credit agreement (the "Revolving Line of Credit") and term loan facility 
with State Street Bank and Trust Company, collateralized by various emission 
testing and product development equipment and subject to working capital and 
equity covenants.  On July 31, 1996, the Revolving Line of Credit terminated 
and automatically converted into a five year term loan in the principal 
amount of $491,600 bearing a fixed interest rate of 8.08%.  As of October 
24, 1998, the outstanding principal amount was $275,900. 

Management believes cash flow from operations and borrowings available under 
the Credit Agreement will provide for working capital needs, principal 
payments on long-term debt, and capital and operating leases through fiscal 
1999.

Domestic inflation is not expected to have a major impact on the Company's 
operations.

The costs of engine blocks and other components are subject to foreign 
currency fluctuations (primarily the Japanese yen).  The value of the U.S. 
dollar relative to the yen had no material effect on the cost of the 
Company's products in fiscal 1998.

Year 2000 Compliance
--------------------

The Company is aware of the potential for industry wide business disruption 
which could occur due to problems related to the "Year 2000 Issue."  It is 
the belief of the Company's management that it has a prudent plan to address 
these issues within the Company and with its suppliers.  The components of 
the Company's plan include an assessment of internal systems for 
modification and/or replacement, communication with vendors to determine 
their state of readiness to maintain an uninterrupted supply of goods and 
services to the Company; an evaluation of the Company's production equipment 
as to its ability to function properly after the turn of the century; an 
evaluation of facility related issues; and the development of a contingency 
plan.

  State of Readiness

The Company has developed a plan to reduce the probability of operational 
difficulties due to Year 2000 related failures.  While there is still a 
significant amount of work to do, the Company believes that it is on track 
towards a timely completion. 

  Internal Systems (Information Technology)

The Company is in the process of  completing its assessment of all 
information technology systems that could be significantly affected by the 
Year 2000 issue.  The assessment has indicated that certain systems are 
already Year 2000 compliant while others are still in the process of being 
remediated.  The Company has received from its software vendor the updated 
software necessary to make its operating system Year 2000 compliant, which 
the Company anticipates will be installed by the end of its second quarter.

  Suppliers

The Company is in the process of communicating with its external vendors to 
gain an understanding of their readiness to maintain an uninterrupted supply 
of goods and services to the Company.  The Company has identified vendors it 
views as critical to its business.  The Company is defining a critical 
vendor as one whose inability to continue to provide goods and services 
would have a serious adverse impact on the Company's ability to produce, 
deliver and collect payment.  To date, the Company is not aware of any 
supplier with a Year 2000 issue that would materially impact the results of 
operations, liquidity or capital resources.  However, the Company has no 
means of ensuring that suppliers will be Year 200 ready.  The inability of 
suppliers to complete their Year 2000 resolution process in a timely fashion 
could materially impact the Company.

  Production Equipment

The Company has completed an inventory of production equipment currently 
used at the Company.  The Company has determined the Year 2000 readiness of 
its equipment through communication with the equipment manufacturers and 
testing where appropriate.  The Company is not aware of any production 
equipment that is effected by the Year 2000 issue.

  Facility Related Issues

The Company is in the process of evaluating facilities related equipment 
with the potential for Year 2000 related failures.  The Company will 
determine the Year 2000 readiness of its equipment through communication 
with the equipment manufacturers and testing where appropriate.  It is the 
Company's intention to repair or replace non-compliant equipment prior to 
operating difficulties.  The Company, as in most companies, remains aware of 
the potential for imbedded logic within microchips to cause equipment 
failure.  The Company believes that it has a prudent approach towards 
evaluating facilities equipment, however, it may be impracticable or 
impossible to test certain items of equipment for Year 2000 readiness.  To 
the extent such untested equipment is not Year 2000 ready, it may fail to 
operate on January 1, 2000, resulting in possible interruption of security, 
heating, telephone and other services.

  Costs

The Company is evaluating the total cost of Year 2000 compliance.  At this 
time, the Company estimates the total cost of Year 2000 related activities 
to be approximately $75,000.  This amount is not incremental spending and 
has been budgeted within the normal magnitude of Information Technology 
spending.  This amount includes the replacement of hardware and applications 
that are outdated and were due for replacement regardless of Year 2000 
issues.

  Contingency Plan

Although the Company believes that it is taking prudent action related to 
the identification and resolution of issues related to the Year 2000, its 
assessment is still in progress.  The Company may never be able to know with 
certainty whether certain key vendors are compliant.  Failure of key vendors 
to make their computer systems Year 2000 compliant could result in delayed 
deliveries of products to the Company.  If such delays are extended they 
could have a material adverse effect on the Company's business, financial 
condition and results of operations.

The Company continues to evaluate the risks associated with potential Year 
2000 related failures.  As it better understands the risks within its unique 
set of business partners, production processes, and internal systems, it 
will develop a formal contingency plan outlined by April 1999.  Until the 
contingency plan is completed, the Company does not possess the information 
necessary to estimate the potential impact of Year 2000 compliance issues 
relating to its Information Technology systems, non-Information Technology 
systems, its vendors, its customers, and other parties. 

This Annual Report on Form 10-K may contain forward-looking information 
about the Company.  The Company is hereby setting forth statements 
identifying important factors that may cause the Company's actual results to 
differ materially from those set forth in any forward-looking statements 
made by the Company.  Some of the most significant factors include: an 
unanticipated down-turn in the recreational boating industry resulting in 
lower demand for the Company's products; the unanticipated loss of, or 
decline in sales to, a major customer; the unanticipated loss of a major 
supplier; the inability of the Company to effect required modifications of 
its products to meet governmental regulations with respect to emission 
standards; the unanticipated inability of the Company to be Year 2000 
compliant; and foreign currency fluctuations resulting in cost increases to 
the Company for its foreign supplied components.  Accordingly, there can be 
no assurances that any anticipated future results will be achieved.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.






                    WESTERBEKE CORPORATION AND SUBSIDIARY

                    -------------------------------------

                      CONSOLIDATED FINANCIAL STATEMENTS

                    For the years ended October 24, 1998,
                    October 25, 1997 and October 26, 1996


KPMG Peat Marwick LLP

      99 High Street       Telephone 617 988 1000       Telefax 617 988 0800
      Boston, MA 02110-2371



                        Independent Auditors' Report
                        ----------------------------


To the Board of Directors and Stockholders of
 Westerbeke Corporation:

We have audited the accompanying consolidated balance sheets of Westerbeke 
Corporation and subsidiary as of October 24, 1998 and October 25, 1997, and 
the related consolidated statements of operations, changes in stockholders' 
equity, and cash flows for each of the years in the three-year period ended 
October 24, 1998.  In connection with our audits of the consolidated 
financial statements, we have also audited the financial statement schedule 
as listed in Item 14(a) 2.  These consolidated financial statements and 
financial statement schedule are the responsibility of the Company's 
management.  Our responsibility is to express an opinion on these 
consolidated financial statements and financial statement schedule based on 
our audits.

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

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the financial position of 
Westerbeke Corporation and subsidiary as of October 24, 1998 and October 25, 
1997, and the results of their operations and their cash flows for each of 
the years in the three-year period ended October 24, 1998, in conformity 
with generally accepted accounting principles.  Also in our opinion, the 
related financial statement schedule, when considered in relation to the 
basic consolidated financial statements taken as a whole, presents fairly, 
in all material respects, the information set forth therein.



                                       By /s/ KPMG Peat Marwick LLP
                                       ----------------------------


Boston, Massachusetts
December 23, 1998



                    WESTERBEKE CORPORATION AND SUBSIDIARY
                         CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                        October 24,     October 25,
                                                                           1998            1997
                                                                        -----------     -----------

<S>                                                                     <C>             <C>
ASSETS
Current assets:
  Cash and cash equivalents                                             $   101,900     $   156,900
  Accounts receivable, net of allowance for doubtful accounts 
   of $59,200 and $63,900, respectively (Note 2)                          2,292,900       1,949,000
  Inventories (Note 3)                                                    5,391,600       6,254,300
  Prepaid expenses and other assets                                         343,000         301,600
  Prepaid income taxes                                                            -         212,000
  Deferred income taxes (Note 9)                                            578,600         532,200
                                                                        ---------------------------
      Total current assets                                                8,708,000       9,406,000

Property, plant and equipment, net (Notes 4,8 and 10)                     2,161,500       2,139,300
Other assets, net (Note 5)                                                2,002,100       1,597,100
Investments in marketable securities (Note 1)                             1,690,700       1,545,500
Note receivable - related party (Note 6)                                    108,000         122,800
                                                                        ---------------------------
                                                                        $14,670,300     $14,810,700
                                                                        ===========================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term debt (Notes 8 and 10)                    $   189,700     $   213,100
  Revolving demand note payable (Note 7)                                    200,000         600,000
  Accounts payable                                                        1,905,900       2,227,900
  Accrued expenses and other liabilities                                    668,900         564,600
  Accrued income taxes (Note 9)                                              93,900               -
                                                                        ---------------------------
      Total current liabilities                                           3,058,400       3,605,600
                                                                        ---------------------------

Deferred income taxes (Note 9)                                              154,900         304,200
Deferred compensation                                                       320,700         159,600
Long-term debt, net of current portion (Notes 8 and 10)                     417,400         605,400
                                                                        ---------------------------
                                                                            893,000       1,069,200
                                                                        ---------------------------
Commitments and contingencies (Notes 7 and 10)

Stockholders' equity (Notes 11 and 12):
  Common stock, $.01 par value; authorized 5,000,000 shares; issued 
   2,185,950 shares in 1998 and 2,156,950 in 1997.                           21,900          21,600
  Additional paid-in-capital                                              6,025,300       5,996,600
  Unrealized gain on marketable securities (Note 1)                         151,200         240,700
  Retained earnings                                                       5,276,500       4,633,000
                                                                        ---------------------------
                                                                         11,474,900      10,891,900
  Less - Treasury shares at cost, 268,138 shares in 1998 and 1997           756,000         756,000
                                                                        ---------------------------
      Total stockholders' equity                                         10,718,900      10,135,900
                                                                        ---------------------------
                                                                        $14,670,300     $14,810,700
                                                                        ===========================
</TABLE>


The accompanying notes are an integral part of 
the consolidated financial statements.

                    WESTERBEKE CORPORATION AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                   Years Ended
                                                   -----------------------------------------
                                                   October 24,    October 25,    October 26,
                                                      1998           1997           1996
                                                   -----------    -----------    -----------


<S>                                                <C>            <C>            <C>
Net sales (Note 2)                                 $26,202,000    $24,620,300    $20,652,900

Cost of sales                                       20,236,500     19,064,200     15,874,900
                                                   -----------------------------------------

  Gross profit                                       5,965,500      5,556,100      4,778,000

Selling, general and administrative expense          3,684,500      3,105,900      2,672,100

Research and development expense                     1,180,900      1,030,300        918,700
                                                   -----------------------------------------

  Income from operations                             1,100,100      1,419,900      1,187,200

Interest income (expense), net                          (9,900)       (71,000)        47,400
                                                   -----------------------------------------

  Income before income taxes                         1,090,200      1,348,900      1,234,600

Provision for income taxes (Note 9)                    446,700        550,000        497,200
                                                   -----------------------------------------

Net income                                         $   643,500    $   798,900    $   737,400
                                                   =========================================


Income per common share, basic                     $       .34    $       .40    $       .36
                                                   =========================================
Income per common share, diluted                   $       .31    $       .37    $       .33
                                                   =========================================

Weighted average common shares - diluted basic       1,914,546      1,995,155      2,072,092
                                                   =========================================

Weighted average common shares - diluted             2,077,125      2,159,114      2,248,678
                                                   =========================================
</TABLE>


The accompanying notes are an integral part of 
the consolidated financial statements.


                    WESTERBEKE CORPORATION AND SUBSIDIARY
         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                     Three years ended October 24, 1998

<TABLE>
<CAPTION>
                                                        Additional    Unrealized Gain                                 Total
                                    Common Stock         Paid-in       on Marketable     Retained     Treasury    Stockholders'
                                 Shares      Amount      Capital        Securities       Earnings      Stock         Equity
                                -----------------------------------------------------------------------------------------------

<S>                             <C>          <C>        <C>               <C>            <C>          <C>          <C>
October 28, 1995                2,064,650    $20,600    5,902,100          71,200        3,096,700           -      9,090,600
Exercise of stock options          58,300        600       57,700               -                -           -         58,300
Repurchase of 44,400 shares             -          -            -               -                -    (133,200)      (133,200)
Unrealized gain on 
 marketable securities                  -          -            -          87,900                -           -         87,900
Net Income                              -          -            -               -          737,400           -        737,400
                                ---------------------------------------------------------------------------------------------
October 26, 1996                2,122,950     21,200    5,959,800         159,100        3,834,100    (133,200)     9,841,000
Exercise of stock options          34,000        400       36,800               -                -           -         37,200
Repurchase of 223,738 shares            -          -            -               -                -    (622,800)      (622,800)
Unrealized gain on
 marketable securities                  -          -            -          81,600                -           -         81,600
Net Income                              -          -            -               -          798,900           -        798,900
                                ---------------------------------------------------------------------------------------------
October 25,1997                 2,156,950     21,600    5,996,600         240,700        4,633,000    (756,000)    10,135,900
Exercise of stock options          29,000        300       28,700               -                -           -         29,000
Unrealized loss on
 marketable securities                  -          -            -         (89,500)               -           -        (89,500)
Net Income                              -          -            -               -          643,500           -        643,500
                                ---------------------------------------------------------------------------------------------

October 24, 1998                2,185,950    $21,900    6,025,300         151,200        5,276,500    (756,000)    10,718,900
                                =============================================================================================
</TABLE>


The accompanying notes are an integral part of
the consolidated financial statements.


                    WESTERBEKE CORPORATION AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                    Years Ended
                                                     -----------------------------------------
                                                     October 24,    October 25,    October 26,
                                                        1998           1997           1996
                                                     -----------------------------------------

<S>                                                  <C>            <C>            <C>
Cash flows from operating activities: 
Net income                                           $  643,500     $   798,900    $   737,400
  Reconciliation of net income to net cash
   provided (used) by operating activities:
    Depreciation and amortization                       428,800         417,700        404,700
    Loss on disposal of fixed assets                     15,000               -              -
    Deferred income taxes                              (195,700)         87,500       (143,500)
    Changes in operating assets and liabilities:
      Accounts receivable                              (343,900)        369,500       (777,100)
      Inventories                                       862,700        (826,300)    (1,114,500)
      Prepaid expenses and other assets                 (41,400)        (52,600)      (114,900)
      Prepaid income taxes                              212,000        (212,000)             -
      Other assets                                     (426,700)       (414,200)       (85,500)
      Accounts payable                                 (322,000)        597,600        552,700
      Accrued expenses and other liabilities            104,300           7,200        177,000
      Deferred compensation                             161,100         159,600              -
      Accrued income taxes payable                       93,900          (8,900)      (217,400)
                                                     -----------------------------------------
Net cash provided (used) by operating activities      1,191,600         924,000       (581,100)
                                                     -----------------------------------------

Cash flows from investing activities:
  Purchase of property, plant and equipment            (444,300)       (578,000)      (570,400)
  Proceeds from payment of note receivable - 
   related party                                         14,800          13,800         12,800
  Investment in marketable securities                  (234,700)       (541,700)      (348,300)
                                                     -----------------------------------------
Net cash used in investing activities                  (664,200)     (1,105,900)      (905,900)
                                                     -----------------------------------------

Cash flows from financing activities:
  Exercise of stock options                              29,000          37,200         58,300
  Net (repayments) borrowings under revolving
   demand note                                         (400,000)        600,000              -
  Purchase of treasury stock                                  -        (622,800)      (133,200)
  Proceeds from equipment line                                -         300,000        491,600
  Principal payments on long-term debt and
   capital lease obligations                           (211,400)       (176,100)       (51,400)
                                                     -----------------------------------------
Net cash provided (used) by financing activities       (582,400)        138,300        365,300
                                                     -----------------------------------------

Decrease in cash and cash equivalents                   (55,000)        (43,600)    (1,121,700)
Cash and cash equivalents, beginning of year            156,900         200,500      1,322,200
                                                     -----------------------------------------
Cash and cash equivalents, end of year               $  101,900     $   156,900    $   200,500
                                                     =========================================

Supplemental cash flow disclosures:
  Interest paid                                      $  167,600     $   136,600    $    24,900
    Income taxes paid                                $  266,000     $   849,000    $   857,900
Supplemental disclosures of non-cash flow items:
  Equipment purchase under capital lease                      -     $   175,000              -
  Increase (decrease) in unrealized gains on 
   marketable securities, net of income taxes        $  (89,500)    $    81,600    $    87,900
                                                     =========================================
</TABLE>


The accompanying notes are an integral part of the 
consolidated financial statements.

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           October 24, 1998, October 25, 1997 and October 26, 1996

1.  Summary of Significant Accounting Policies:

The Company is primarily engaged in the business of designing, manufacturing 
and marketing marine engine and air-conditioning products.

Principles of Consolidation

The consolidated financial statements include the accounts of Westerbeke 
Corporation (the "Company"), and its wholly owned subsidiary, Westerbeke 
International, Inc. (a foreign sales corporation).  Westerbeke 
International, Inc. was inactive during fiscal years 1998, 1997, and 1996.

Use of Estimates

The preparation of consolidated financial statements in conformity with 
generally accepted accounting principles requires management to make 
estimates and assumptions that affect the reported amounts of assets and 
liabilities and disclosure of contingent assets and liabilities at the date 
of the financial statements and the reported amounts of revenues and 
expenses.  Actual results could differ from these estimates.

Cash Equivalents

All highly liquid investments with an original maturity of three months or 
less are considered to be cash equivalents.

Investments in Marketable Securities

Marketable investment securities at October 24, 1998 and October 25, 1997 
consist of equity securities in various mutual funds.  The Company employs 
the provisions of Statement of Financial Accounting Standards No. 115, 
Accounting for Certain Investments in Debt and Equity Securities (Statement 
115).  Under Statement 115, the Company classifies its marketable securities 
in one of two categories:  trading or available-for-sale.

Trading and available-for-sale securities are recorded at fair value.  
Unrealized holding gains and losses on trading securities are included in 
earnings.  Unrealized holding gains and losses, on available-for-sale 
securities are excluded from earnings and are reported as a separate 
component of stockholders' equity until realized.  Transfers of securities 
between categories are recorded at fair value at the date of transfer.  
Unrealized holding gains and losses are recognized in earnings for transfers 
into trading securities.

A decline in the market value of any available-for-sale security below cost 
that is deemed other than temporary is charged to earnings resulting in the 
establishment of a new cost basis for the security.

Dividend and interest income are recognized when earned.  Realized gains and 
losses, if any, for securities classified as available-for-sale are included 
in earnings with cost determined using the specific identification method.

Marketable investment securities at October 24, 1998 include equity 
securities, principally mutual funds for which the Company has both intent 
and ability to hold.  Equity securities are stated at the fair market value 
at October 24, 1998 and at October 25, 1997.  The total cost of the 
marketable securities at October 24, 1998 was $1,437,500.  The total cost of 
marketable securities at October 25, 1997 was $1,139,300. Unrealized holding 
gains in investment securities, net of income taxes, at October 24, 1998 and 
October 25, 1997 were $151,200 and $240,700, respectively.

Inventories

Inventories are valued at the lower of cost (determined on the last-in, 
first-out method) or market.

Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of

The Company accounts for long-lived assets in accordance with the provisions 
of SFAS No. 121, Accounting  for the Impairment of Long-Lived Assets and for 
Long-Lived Assets to Be Disposed Of.  This Statement requires that long-
lived assets and certain identifiable intangibles be reviewed for impairment 
whenever events or changes in circumstances indicate that the carrying 
amount of an asset may not be recoverable.  Recoverability of assets to be 
held and used is measured by a comparison of the carrying amount of an asset 
to future net cash flows expected to be generated by the asset.  If such 
assets are considered to be impaired, the impairment to be recognized is 
measured by the amount by which the carrying amount of the assets exceed the 
fair value of the assets.  Assets to be disposed of are reported at the 
lower of the carrying amount or fair value less costs to sell.

Depreciation and Amortization

The Company computes depreciation and amortization expense on a straight-
line basis over the following estimated useful lives:

<TABLE>
<CAPTION>
Asset Classification                          Estimated Useful Lives
--------------------                          ----------------------

<S>                                               <C>
Building and building improvements                15 - 40 years
Machinery and equipment                                10 years
Patterns                                                5 years
Furniture and fixtures                             5 - 10 years
Transportation equipment                            3 - 5 years
Equipment under capital lease                      5 - 10 years
Intangibles                                        3 - 17 years
</TABLE>


Intangible assets are classified in other assets.  Maintenance and repairs 
are charged to expense in the period incurred.  The cost and accumulated 
depreciation of assets retired or sold are removed from the accounts and any 
gain or loss is credited or charged to income.

Leasehold improvements are amortized on a straight-line basis over the 
shorter of the life of the lease or their estimated useful lives.

Revenue Recognition

The Company recognizes revenue upon shipment of product.

Fair Value of Financial Instruments

Financial instruments of the Company consist of cash, cash equivalents, 
accounts receivable, accounts payable and accrued liabilities.  The carrying 
value of these financial instruments approximates their fair value because 
of the short maturity of these instruments.  Based upon borrowing rates 
currently available to the Company for issuance of similar debt with similar 
terms and remaining maturities, the estimated fair value of long-term debt 
approximates their carrying amounts.

Product Warranty Cost

The anticipated costs related to product warranty are expensed at the time 
of sale of the product. Accrued warranty expense of $330,000 and $225,000 is 
included in accrued expenses and other liabilities at October 24, 1998 and 
October 25, 1997, respectively.

Income Taxes

The Company uses the asset and liability method of accounting for income 
taxes. Under the asset and liability method of Statement 109, deferred 
income taxes are recognized for the future tax consequences attributable to 
differences between the financial statement carrying amounts of existing 
assets and liabilities and their respective tax bases.  Deferred tax assets 
and liabilities are measured using enacted tax rates expected to apply to 
taxable income in the years in which those temporary differences are 
expected to be recovered or settled.  Under Statement 109, the effect on 
deferred taxes of a change in tax rate is recognized in income in the period 
that includes the enactment date.

Net Income Per Share

Basic income per common share is computed by dividing income available to 
common stockholders by the weighted average number of shares outstanding for 
the period.  Diluted income per share reflects the maximum dilution that 
would have resulted from the exercise of stock options.  Diluted income per 
share is computed by dividing net income by the weighted average number of 
common shares and all dilutive securities.

<TABLE>
<CAPTION>
                                          For the Twelve Months Ended
                          October 24, 1998                           October 25, 1997
                 ----------------------------------         ----------------------------------
                  Income                     Net             Income                     Net
                 per share     Shares       Income          per share     Shares       Income
                 ----------------------------------------------------------------------------

<S>                <C>        <C>          <C>                <C>        <C>          <C>
Basic              $ .34      1,914,546    $643,500           $ .40      1,995,155    $798,900
Effect of
Stock options       (.03)       162,579           -            (.03)       163,959           -
                   --------------------------------           --------------------------------

Diluted            $ .31      2,077,125    $643,500           $ .37      2,159,114    $798,900
</TABLE>


In February 1997, the Financial Accounting Standards Board (FASB) issued 
Financial Accounting Standard No. 128, "Earnings per Share" (FAS 128).  FAS 
128 supersedes Accounting Principles Board Opinion No. 15 and specifies the 
computation, presentation and disclosure requirements for earnings per 
share.  FAS 128 is effective for financial Statements for both interim and 
annual periods ending after December 15, 1997.  Accordingly, the Company has 
adopted FAS 128 and has restated prior period information as required under 
the statement. 

2.  Business Segment

The Company has one business segment; the designing, manufacturing and 
marketing of marine engines and related products.  The profitability of the 
Company is directly tied to the marine industry.  The industry is subject to 
fluctuations in economic conditions that may adversely affect the Company.  
Four customers accounted for approximately 61%, 58% and 56% of Company 
revenues for the fiscal years ended 1998, 1997 and 1996, respectively.  The 
loss of one of these customers could adversely affect the Company's 
profitability. 

Net sales include export sales, primarily to customers in the Far East, 
Canada and Europe of approximately $2,305,500, $2,843,400 and $2,594,500 for 
fiscal years ended October 24, 1998, October 25, 1997, and October 26, 1996, 
respectively.   In fiscal 1998, three customers accounted for sales in 
excess of 10% of net sales as follows:  $5,878,000, $4,827,900 and 
$2,788,500.  In fiscal 1997, two customers accounted for sales in excess of 
10% of net sales as follows: $5,656,600 and $4,193,700.  In fiscal 1996, 
three customers accounted for sales in excess of 10% of net sales as 
follows: $3,928,900, $3,819,600 and $2,265,800. 

At October 24, 1998, three customers accounted for trade accounts receivable 
in excess of 10% of net accounts receivable as follows:  $537,700, $490,000, 
and $308,800.  At October 25, 1997, three customers accounted for trade 
accounts receivable in excess of 10% of net accounts receivable as follows:  
$419,200, $357,800, and $355,200. The Company performs ongoing credit 
evaluations of its customers and therefore does not require 
collateralization of trade receivables.

3.  Inventories 

Inventories consist of the following:

<TABLE>
<CAPTION>
                   October 24, 1998    October 25, 1997
                   ----------------    ----------------

<S>                   <C>                 <C>
Raw materials         $4,416,300          $5,065,400

Work-in-process          530,700             601,400

Finished goods           445,000             587,500
                      ----------          ----------
                      $5,391,600          $6,254,300
                      ==========          ==========
</TABLE>


The Company uses the last-in, first-out (LIFO) method to value inventory.  
The Company believes the LIFO inventory method results in a better matching 
of costs and revenues during periods of changing prices.  Inventories would 
have been $892,500 and $1,165,000 higher at October 24, 1998 and October 25, 
1997, respectively, if the first-in, first-out (FIFO) method had been used.  
In 1998, inventory was reduced resulting in liquidation of LIFO inventory 
layers.  The effect of the inventory reductions was to reduce cost of sales 
by approximately $176,300.  Inventory cost determined on the FIFO method 
approximates replacement or current cost.

The basic component of the Company's engine products is a "long block" 
engine, which is a complete engine block and head assembly without 
peripheral equipment.  The Company purchases "long block" engines from five 
foreign manufacturers.  Interruption of the supply of "long block" engines 
would have a material adverse effect on the Company if the time to develop 
new sources of supply and replacement products is longer than the time it 
takes to exhaust the Company's inventory of existing "long block" engines.

4.  Property, Plant and Equipment

Property, plant and equipment, at cost, consists of the following:

<TABLE>
<CAPTION>
                                      October 24, 1998    October 25, 1997
                                      ----------------    ----------------

<S>                                      <C>                 <C>
Land                                     $   48,000          $   48,000
Building and building improvements        1,352,200           1,340,800
Furniture and fixtures                      447,500             443,900
Machinery, patterns and equipment         3,266,800           2,822,900
Transportation equipment                     51,500              11,700
Leasehold improvements                       20,400              20,400
Equipment under capital lease               594,200           1,020,400
                                      ---------------------------------
                                          5,780,600           5,708,100
Less accumulated depreciation             3,619,100           3,568,800
                                      ---------------------------------
                                         $2,161,500          $2,139,300
                                      =================================
</TABLE>


The Company incurred depreciation expense of approximately $407,100, 
$396,000, and $383,000 for fiscal years 1998, 1997, and 1996, respectively.

5.  Other Assets

The Company has entered into a split-dollar insurance arrangement with John 
H. Westerbeke, Jr., the chairman, president and chief executive officer of 
the Company, as part of his employment agreement (see note 10), pursuant to 
which the Company will pay the premium costs of certain life insurance 
policies.  Upon surrender of the policies or payment of the death benefit, 
the Company is entitled to repayment of an amount equal  to the cumulative 
premiums  previously paid by the Company, with all remaining payments to be 
made to Mr. Westerbeke Jr. or his beneficiaries.  Included in other assets 
at October 24, 1998 and October 25, 1997 is $1,345,000 and $1,200,000, 
respectively, which represents the cumulative value of insurance premiums 
paid to date.

6.  Note Receivable-Related Party

The Company holds a note receivable from John H. Westerbeke, Jr., the 
chairman, president and chief executive officer of the Company.  The 
principal amount of the secured loan at October 24, 1998 and October 25, 
1997 was $108,000 and $122,800, respectively.  The loan was used by Mr. 
Westerbeke, Jr. to purchase a 40 foot sailboat.  The loan bears interest at 
7-3/4% per annum, is secured by a security interest in the sailboat and is 
payable in monthly installments over a ten year period.  The Company has 
leased the sailboat from Mr. Westerbeke, Jr. pursuant to a lease expiring in 
July 1999 at a rental of $2,660 per month (see Note 10).  The Company makes 
use of the boat to evaluate the performance of its marine engines and 
products and for other corporate matters.  

7.  Revolving Demand Note Payable

The Company has a $4,000,000 Credit Agreement with State Street Bank and 
Trust Company, collateralized by inventory, accounts receivable and general 
intangibles.  The Credit Agreement was renewed on March 31, 1998 and will 
expire on March 31, 1999.  The Company believes that it will be able to 
continue to extend the term of the Credit Agreement on commercially 
reasonable terms.  As of October 24, 1998, the Company had approximately 
$3,459,300 in unused borrowing capacity under the Credit Agreement and 
approximately $150,900 committed to cover the Company's reimbursement 
obligations under certain open letters of credit and bankers' acceptances.


8.  Long-Term Debt

<TABLE>
<CAPTION>
                                                 October 24, 1998    October 25, 1997
                                                 ----------------    ----------------

<S>                                                  <C>                 <C>
Mortgage note with an interest rate of 5 1/2%
 with repayment terms through August 1998.                  -            $ 21,300

Term Loan with an interest rate of 8.08% in
 1998 and 8.96% in 1997, with repayment
 terms through July 2001.                            $275,900             375,000

Capital Lease with an interest rate of 8.75%
 with repayment terms through September 2001.         110,400             142,200

Term Loan with an interest rate of 8.11% in 
 1998 and 8.75% in 1997, with repayment 
 terms through June 2002.                             220,800             280,000
                                                 --------------------------------
                                                      607,100             818,500
Less current portion                                  189,700             213,100
                                                 --------------------------------
                                                     $417,400            $605,400
                                                 ================================
</TABLE>


On January 23, 1996, the Company entered into a $500,000 revolving line of 
credit agreement (the "Revolving Line of Credit") and term loan facility 
with State Street Bank and Trust Company, collateralized by various emission 
testing and product development equipment and subject to working capital and 
equity covenants.  On July 31, 1996, the Revolving Line of Credit terminated 
and automatically converted into a five year term loan in the principal 
amount of $491,600.  As of October 24, 1998, the outstanding principal 
amount was $275,900. 

On April 25, 1997, the Company entered into a $300,000 revolving line of 
credit agreement (the "1997 Revolving Line of Credit") and term loan 
facility with State Street Bank and Trust Company, collateralized by various 
items of emission testing and product development equipment and subject to 
working capital and equity covenants.  On June 30, 1997, the 1997 Revolving 
Line of Credit terminated and automatically converted into a five-year term 
loan.  At October 24, 1998, the outstanding principal amount was $220,800.

Aggregate maturities of long-term debt for each of the ensuing five years 
are as follows:

<TABLE>
<CAPTION>
            Year              Amount
            ----              ------

            <S>              <C>
            1999             $189,700
            2000              192,900
            2001              176,500
            2002               48,000
                             --------
                             $607,100
</TABLE>


9.  Income Taxes

Income tax expense attributable to income from continuing operations 
consists of:

<TABLE>
<CAPTION>
                                        Years Ended
                  --------------------------------------------------------
                  October 24, 1998    October 25, 1997    October 26, 1996
                  ----------------    ----------------    ----------------

<S>                   <C>                 <C>                 <C>
Federal:
  Current             $444,000            $483,200            $486,700
  Deferred            (111,500)            (59,700)           (109,600)
                      -------------------------------------------------
                       332,500             423,500             377,100
                      ------------------------------------------------

State:
  Current              134,800             144,900             154,000
  Deferred             (20,600)            (18,400)            (33,900)
                      -------------------------------------------------
                       114,200             126,500             120,100
                      -------------------------------------------------
      Total           $446,700            $550,000            $497,200
                      =================================================
</TABLE>


The Company has no available book or tax net operating loss carryforwards.

The Internal Revenue Service is currently reviewing the Company's fiscal 
1995, 1996 and 1997 tax returns.  The Company does not believe the outcome 
of such audit will have a material effect on its financial condition.

Income tax expense differed from the amounts computed by applying the U.S. 
federal income tax rate of 34 percent to pretax income as a result of the 
following:

<TABLE>
<CAPTION>
                                                      Years Ended
                                --------------------------------------------------------
                                October 24, 1998    October 25, 1997    October 26, 1996
                               ---------------------------------------------------------

<S>                                 <C>                 <C>                 <C>
Provision at statutory rate         $370,700            $458,600            $419,800

State tax provision,
 net of federal tax benefit           75,400              83,500              79,300
Other, net                               600               7,900              (1,900)
                                    ------------------------------------------------
Total                               $446,700            $550,000            $497,200
                                    ================================================
</TABLE>


The tax effects of temporary differences that give rise to significant 
portions of the deferred tax assets and deferred tax liabilities at October 
24, 1998, and October 25, 1997 are presented below.

<TABLE>
<CAPTION>
                                            October 24, 1998     October 25, 1997
                                            -------------------------------------

<S>                                            <C>                  <C>
Deferred tax assets:
  Accounts receivable reserve                  $ 112,400            $  66,000
  Inventory reserves and capitalization          333,300              324,100
  Accrued bonus                                  144,400               51,500
  Warranty reserve                               132,900               90,600
                                               ------------------------------
      Total gross deferred tax assets            723,000              532,200
                                               ------------------------------

Deferred tax liabilities:
  Fixed assets, principally due to
   accelerated depreciation methods             (197,300)            (138,600)
  Unrealized gain on marketable securities      (102,000)            (165,600)
                                               ------------------------------
      Total gross deferred tax liabilities      (299,300)            (304,200)
                                               ------------------------------

Net deferred tax assets                        $ 423,700            $ 228,000
                                               ==============================
</TABLE>


There was no net change in the total valuation allowance for the year ended 
October 24, 1998.  Management believes that the realization of deferred tax 
assets is more likely than not because future operations of the Company are 
expected to generate sufficient taxable income.

10.  Commitments and Contingencies

Lease Obligations

The Company has lease agreements for a warehouse and certain equipment (see 
note 6) expiring at various dates through 2001.  Rental expense under 
operating leases was $173,200, $169,100, and $110,300 for the years ended 
October 24, 1998, October 25, 1997 and October 26, 1996, respectively.

The following capital leases are included in property, plant and equipment:

<TABLE>
<CAPTION>
                                               1998         1997
                                               ----         ----

            <S>                              <C>         <C>
            Property, plant and equipment    $769,200    $1,020,400
            Less accumulated amortization     627,500       861,200
                                             ----------------------
                                             $141,700    $  159,200
                                             ======================
</TABLE>


The future minimum lease payments required under operating leases that have 
initial or remaining noncancelable lease terms in excess of one year are as 
follows:

<TABLE>
<CAPTION>
Year                                   Operating
----                                   ---------

<S>                                    <C>
1999                                   $60,000
                                       -------

Total future minimum lease payments    $60,000
                                       =======
</TABLE>


Letters of Credit and Bankers' Acceptances

Certain foreign vendors require the Company to provide letters of credit at 
the time purchase orders are placed.  As of October 24, 1998, the Company 
was contingently liable for open letters of credit and bankers' acceptances 
of approximately $150,900 (see note 7).

Employment Agreements

In March of 1993, the Company entered into an Employment Agreement (the 
"Agreement") with John H. Westerbeke, Jr., the chairman of the board, 
president, and chief executive officer of the Company.  The Agreement calls 
for Mr. Westerbeke, Jr. to be paid an annual salary of $141,750, subject to 
increases based upon the Consumer Price Index and at the discretion of the 
Company.  The Agreement also provides for payment of a bonus at the 
discretion of the board of directors of the Company.  In September 1996, the 
Board of Directors established an incentive plan for Mr. Westerbeke pursuant 
to which Mr. Westerbeke will have an annual bonus opportunity, based on net 
income and increases in sales, in each of the four years beginning with the 
1997 fiscal year.  Mr. Westerbeke may elect to have all or any part of his 
base salary or bonus paid as deferred compensation in five annual 
installments commencing upon his retirement or other termination of 
employment, or upon a change of control of the Company, as defined in the 
Agreement.  Amounts deferred by Mr. Westerbeke are contributed by the 
Company to a trust established to hold and invest these funds until such 
time as the amounts are payable to Mr. Westerbeke.  The Agreement also 
requires the Company to pay premiums for certain life insurance policies on 
the life of Mr. Westerbeke, Jr.  In addition, in the event of a change in 
control of the Company, Mr. Westerbeke, Jr. may terminate his employment 
during the one year period following such change in control, and in such 
event, the Company is required to pay him a lump sum cash payment in an 
amount equal to three times his average annual cash compensation during the 
most recent five taxable years of the Company.  In addition, in such 
circumstances, the Company is required to continue to carry group life and 
health insurance for Mr. Westerbeke, Jr. for a three year period and is 
required to pay any premiums payable on the life insurance policies on his 
life for a three year period.

Under an employment agreement between the Company and John H. Westerbeke, 
Sr., a director of the Company, Mr. Westerbeke, Sr. will be paid $35,000 per 
year.  This agreement provides that following his retirement, Mr. 
Westerbeke, Sr. will act as consultant to the Company at an annual 
consulting fee of $30,000.

11.  Stockholders' Equity

In June 1986, the board of directors and the stockholders of the Company 
adopted the Company's 1986 Stock Option Plan (the "Option Plan"), under 
which 300,000 shares of common stock have been made available.  The Company 
has also reserved 250,000 shares of common stock for issuance in connection 
with a Supplemental Stock Option Plan (the "Supplemental Plan").  The 
Supplemental Plan permits acceleration of the exercisability of options in 
the event of a change in control of the Company with the Company retaining 
the right of first refusal with respect to shares issued under this plan.

In March 1996, the board of directors and the stockholders of the Company 
adopted the Company's 1996 Stock Option Plan (the "1996 Option Plan"), under 
which 150,000 shares of common stock have been made available.  As of 
October 24, 1998, there has been no activity under the 1996 Option Plan.

Options under the plans may be either nonqualified stock options or 
incentive stock options.  Options may be granted to eligible employees of 
the Company and members of the board of directors.

The price at which the shares may be granted may not be less than the lower 
of fair market value or tangible book value in the case of nonqualified 
options, or 110% of the fair market value in the case of incentive stock 
options.  The options generally become exercisable in 20% annual increments 
beginning on the date of the grant and expire at the end of ten years.

The Financial Accounting Standards Board issued Statement of Financial 
Accounting Standards (SFAS) No.123 in October 1995, which statement 
establishes financial accounting and reporting standards for stock based 
employee compensation plans.  The Company has adopted the disclosure 
requirements of SFAS No.123 and continues to apply the accounting provisions 
of Opinion No.25 of the Accounting Principles Board.  Accordingly, the 
adoption of SFAS No.123 has not had a material impact on the Company's 
consolidated financial statements.
Information for fiscal years 1996, 1997 and 1998, with respect to the Option 
Plan, is as follows:

<TABLE>
<CAPTION>
                                                        Weighted average
                                                        exercise price of
                                            Shares      shares under plan
                                            ----------------------------

<S>                                         <C>              <C>
Balance outstanding at October 28, 1995     207,500          $1.105
  Exercised                                 (26,100)          1.000
  Canceled                                   (6,400)          1.000
                                            -------

Balance outstanding at October 26, 1996     175,000           1.125
  Exercised                                 (25,000)          1.125
                                            -------

Balance outstanding at October 25, 1997     150,000           1.125
                                            -------

Balance outstanding and exercisable at
 October 24, 1998                           150,000          $1.125
                                            =======
</TABLE>


The outstanding options expire on various dates through May 2003. Options 
for 88,100 shares are available for future grant under the Option Plan.

The following table summarizes information concerning currently outstanding 
and exercisable options as of October 24, 1998:

<TABLE>
<CAPTION>
                            Weighted
                             average         Weighted
Range of                    remaining        average                          Weighted
exercise      Number       contractual     outstanding       Options           average
 prices     outstanding    life (years)    option price    exercisable    exercise price
----------------------------------------------------------------------------------------

 <C>          <C>              <C>            <C>            <C>              <C>
 $1.125       150,000          4.4            $1.125         150,000          $1.125
</TABLE>


Information for fiscal years 1996, 1997, and 1998, with respect to the 
Supplemental Plan, is as follows:

<TABLE>
<CAPTION>
                                                      Weighted average
                                                       exercise price of
                                           Shares     shares under plan
                                           -----------------------------

<S>                                        <C>             <C>
Balance outstanding at October 28, 1995    155,300         $1.044
  Exercised                                (32,200)          .961
  Granted                                   33,300          3.000
                                           -------

Balance outstanding at October 26, 1996    156,400         1.478
  Exercised                                 (9,000)        1.000
                                           -------

Balance outstanding at October 25, 1997    147,400         1.507
  Exercised                                (29,000)        1.507
                                           -------

Balance outstanding at October 24, 1998    118,400         1.631
                                          ========

Balance exercisable at October 24, 1998    105,080         $1.294
                                           =======
</TABLE>


The following table summarizes information concerning currently outstanding 
and exercisable options as of October 25, 1997:

<TABLE>
<CAPTION>
                                  Weighted
                                   average         Weighted
      Range of                    remaining        average                          Weighted
      exercise      Number       contractual     outstanding       Options           average
       prices     outstanding    life (years)    option price    exercisable    exercise price
----------------------------------------------------------------------------------------------

<S>                 <C>              <C>            <C>            <C>              <C>
$.875 - $3.000      118,400          4.0            $1.631         105,080          $1.294
</TABLE>


The outstanding options expire on various dates through June 2006. Options 
for 41,300 shares are available for future grant under the Supplemental 
Plan.

Preferred Stock

As of October 24, 1998 and October 25, 1997, 1,000,000 shares of $1.00 par 
value Serial Preferred Stock were authorized; none were issued or 
outstanding.

12.  1986 Employee Stock Purchase Plan

In June 1986, the board of directors and the stockholders of the Company 
adopted the Company's 1986 Employee Stock Purchase Plan (the "Purchase 
Plan").  Under the Purchase Plan, an aggregate of 100,000 shares of common 
stock are available for purchase by eligible employees of the Company, 
including directors and officers, through payroll deductions over successive 
six-month offering periods.  The Purchase Plan will become effective when so 
declared by the board of directors.

The Purchase Plan is intended to qualify as an "Employee Stock Purchase 
Plan" within the meaning of Section 423 of the Internal Revenue Code.  The 
purchase price of the common stock under the Purchase Plan will be 85% of 
the average of the closing high bid and last asked prices per share in the 
over-the-counter market on either the first or last day of each six-month 
offering period, whichever is less.  As of October 24, 1998, there has been 
no activity under the Purchase Plan.

13.  Employee Benefit Plan

In 1994, the Company started an Employee Deferred Compensation Plan that 
covers all employees over 21 years of age who have completed at least 3 
months of service with the Company.  Contributions by the Company are 
discretionary and are determined by the Company's board of directors.  The 
Company's defined contribution plan, available to substantially all salaried 
employees, contains a matched savings provision that permits both pretax and 
after-tax employee contributions.  Participants can contribute up to 15% of 
their annual compensation and receive a 25% matching employer contribution 
on up to 8% of their annual compensation. The Company contributed $38,800, 
$37,000 and $11,800 for the fiscal years ended October 24, 1998, October 25, 
1997 and October 26, 1996, respectively. 

14.  Quarterly Financial Data (Unaudited)
     (In thousands, except per share amounts)

Selected quarterly financial data for the years ended October 24, 1998 and 
October 25, 1997 is as follows:

<TABLE>
<CAPTION>
                                                                              Fiscal
Fiscal 1998:                      First      Second     Third      Fourth      Year
                                  ---------------------------------------------------

<S>                               <C>        <C>        <C>        <C>        <C>
Net sales                         $4,960     $7,225     $7,622     $6,395     $26,202
Gross profit                         885      1,573      1,863      1,645       5,966
Income (loss) from operations       (142)       348        642        252       1,100
Net income (loss)                    (54)       173        367        158         644
Net income per share, diluted      (0.03)      0.08       0.18       0.08        0.31

                                                                              Fiscal
<CAPTION>
Fiscal 1997:                      First      Second     Third      Fourth      Year
                                  ---------------------------------------------------

<S>                               <C>        <C>        <C>        <C>        <C>
Net sales                         $5,195     $6,975     $6,817     $5,633     $24,620
Gross profit                       1,093      1,627      1,662      1,174       5,556
Income from operations               126        518        558        218       1,420
Net income                            88        289        310        112         799
Net income per share, diluted       0.04       0.14       0.15       0.04        0.37
</TABLE>


New Accounting Pronouncements

In June 1997, the FASB issued Financial Accounting Standards No. 130, 
"Reporting Comprehensive Income" (FAS 130) and No. 131, "Disclosure about 
Segments of an Enterprise and Related Information" (FAS 131), which are 
effective for fiscal years beginning after December 15, 1997.  Unrealized 
gains on marketable securities is a component of comprehensive income and 
will be presented accordingly when FAS 130 is adopted.  The Company is 
currently evaluating the effects of FAS 131.

In March 1998, the American Institute of Certified Public Accountants issued 
Statement of Position 98-1 (SOP 98-1), "Accounting for the Costs of Computer 
Software Developed and Obtained for Internal Use".  The statement is 
effective for fiscal years beginning after December 15, 1998.  Earlier 
application is encouraged in fiscal years for which annual financial 
statements have not been issued.  The statement defines which costs of 
computer software developed or obtained for internal use are capitalized and 
which costs are expensed.  The Company does not believe the adoption of SOP 
98-1 will have a material impact on the financial statements. 

In April 1998, the American Institute of Certified Public Accountants issued 
Statement of Position 98-5 (SOP 98-5), "Reporting on the Costs of Start-Up 
Activities".  The statement is effective for fiscal years beginning after 
December 15, 1998. The statement requires costs of start-up activities and 
organization costs to be expenses as incurred.  The Company does not believe 
the adoption of SOP 98-5 will have a material impact on the financial 
statements.

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133 
"Accounting for Derivative Instruments and Hedging Activities" (SFAS 133).  
The statement requires companies to recognize all derivatives as either 
assets or liabilities with the instruments measured at fair value. The 
accounting for changes in fair value gains and losses depends on the 
intended use of the derivative and its resulting designation.  The statement 
is effective for all fiscal quarters of fiscal years beginning after June 
15, 1999. The Company does not believe the adoption of SFAS 133 will have a 
material impact on the financial statements.


                                 SCHEDULE II
                    WESTERBEKE CORPORATION AND SUBSIDIARY

                      VALUATION AND QUALIFYING ACCOUNT
           For the years ended October 24, 1998, October 25, 1997
                            and October 26, 1996


<TABLE>
<CAPTION>
                        Balance at      Charged to     Charged                    Balance
                       Beginning of     Costs and      to Other                   at End
                          Period         Expenses      Accounts    Deductions     of Year

<S>                      <C>                <C>           <C>        <C>          <C>
1996
Allowance for
 doubtful accounts       $60,500            -             -            (200)      $60,700


1997
Allowance for
 doubtful accounts       $60,700            -             -          (3,200)      $63,900


1998
Allowance for
 doubtful accounts       $63,900            -             -           4,700       $59,200
</TABLE>


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

          Not applicable.

                                  PART  III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

      Certain biographical information concerning the directors of the 
Company as of January 1, 1999 is set forth below.  Such information was 
furnished by them to the Company.

<TABLE>
<CAPTION>
                                                          Certain
   Name of Director         Age                   Biographical Information
   ----------------         ---                   ------------------------

<S>                         <C>     <S>
GERALD BENCH                57      President and Chief Executive Officer, Hadley Fruit 
                                    Orchards, Inc. since November 1996; Consultant, 
                                    Hadley Fruit Orchards, Inc. from March 1995 to 
                                    November 1996; Partner, ICAP Marine Group 
                                    (consulting firm) from November 1993 to February 
                                    1995; Chairman and President, TDG Aerospace, 
                                    Inc. (manufacturer of aircraft de-icing devices) 
                                    from October 1991 to November 1993; President, 
                                    Thermion, Inc. (manufacturer of heaters for aircraft 
                                    de-icing devices) from April 1990 to September 
                                    1991; General Manager, Lermer Corporation 
                                    (manufacturer of airline galley equipment) from 
                                    June 1989 through March 1990; former Chairman 
                                    of the Board, President, Chief Executive Officer 
                                    and Director of E&B Marine Inc. (marine supplies 
                                    and accessories) from prior to 1988; Director of 
                                    the Company since June 1986

THOMAS M. HAYTHE            59      Partner, Haythe & Curley (attorneys) since 
                                    February 1982; Director: Novametrix Medical 
                                    Systems Inc. (manufacturer of electronic medical 
                                    instruments), Guest Supply, Inc. (provider of hotel 
                                    guest room amenities, accessories and products) 
                                    and Ramsay Youth Services, Inc. (provider of 
                                    youth and educational services); Director of the 
                                    Company since June 1986.

NICHOLAS H. SAFFORD         66      President, Nicholas H. Safford & Co., Inc. 
                                    (investment counselor and private trustee) since 
                                    1983 and from 1979 to 1981; former president and 
                                    director of Wendell, Safford & Co., Inc. 
                                    (investment counseling firm) from 1982 to 1983; 
                                    former vice president and director of David L. 
                                    Babson & Co., Inc. (investment counseling firm) 
                                    prior to 1978; Director of the Company since 
                                    February 1991.

JAMES W. STOREY             64      Consultant since January 1993; President, 
                                    Wellingsley Corporation (private investment 
                                    management company) from December 1986 
                                    through December 1992; President and Chief 
                                    Executive Officer of Codex Corporation, a 
                                    subsidiary of Motorola, Inc. from 1982 to 1986; 
                                    Vice President of Motorola, Inc. from 1982 to 
                                    1986; Director: Progress Software Corporation 
                                    (software); Director of the Company since June 
                                    1986.

JOHN H. WESTERBEKE, JR.     58      President of the Company since 1976; Director of 
                                    the Company since 1976; Chairman of the Board of 
                                    Directors of the Company since June 1986.

JOHN H. WESTERBEKE, SR.     89      Founder of the Company; Presently serving in 
                                    various engineering capacities with the Company; 
                                    Chairman of the Board of Directors of the 
                                    Company from 1946 to June 1986.
</TABLE>


      For additional information concerning the management of the Company, 
see "Item 1 - Business - Executive Officers" contained in Part I hereof.

      The Board of Directors of the Company consists of three classes of 
directors, Class A, Class B and Class C.  Directors in each class are 
elected for a term of three years.  The term of office of the Class A 
directors will expire at the Annual Meeting of Stockholders to be held in 
1999.  Class B and Class C directors will be elected at the Annual Meetings 
to be held in 2000 and 2001, respectively.  Mr. Bench is a Class A director, 
Messrs. Haythe, Safford and Storey are Class B directors and Messrs. 
Westerbeke, Jr. and Westerbeke, Sr. are Class C directors.

      The directors and officers of the Company other than Messrs. Bench, 
Haythe, Safford and Storey are active in the business on a day-to-day basis.  
Messrs. Westerbeke, Sr. and Westerbeke, Jr. are father and son.  No other 
family relationships exist between any of the directors and officers of the 
Company.

      Section 16 (a) of the Securities Exchange Act of 1934 requires the 
Company's directors and executive officers, and persons who own more than 
ten percent of the Company's Common Stock, to file with the SEC initial 
reports of ownership and reports of changes in ownership of Common Stock.  
Officers, directors and greater than ten percent stockholders are required 
by SEC regulations to furnish the Company with copies of all Section 16 (a) 
reports they file.

      To the Company's knowledge, based solely on a review of the copies of 
such reports furnished to the Company and representations that no other 
reports were required, during the fiscal year ended October 24, 1998 all 
Section 16 (a) filing requirements applicable to its officers, directors and 
greater than ten percent beneficial owners were complied with.

ITEM 11.  EXECUTIVE COMPENSATION

      The following table sets forth information for the fiscal years ended 
October 24, 1998, October 25, 1997 and October 26, 1996 concerning the 
compensation paid or awarded to the Chief Executive Officer and the other 
executive officer of the Company.

                         SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                       Fiscal
            Name and                    Year           Annual Compensation
            Principal                   Ended      ---------------------------      All Other
            Position                   October       Salary           Bonus        Compensation
-----------------------------------------------------------------------------------------------

<S>                                     <C>        <C>             <C>              <C>
John H. Westerbeke, Jr.                 1998       $214,488(1)     $ 53,838(2)      $31,622(6)
President, Chairman of the Board        1997        206,852(3)      130,447(4)       37,262(6)
of Directors and Class C Director       1996        151,531          80,696(5)       38,647(6)

Carleton F. Bryant, III                 1998       $ 94,500        $ 72,998               -
Executive Vice President,               1997         94,500          44,545               -
Treasurer, Chief Operating Officer      1996         94,500          24,532               -
and Secretary  

<FN>
--------------------
<F1>  Includes $61,842 of salary earned in fiscal year 1998, payment of 
      which has been deferred.     
<F2>  Includes a $49,628 bonus earned in fiscal year 1998, payment of which 
      has been deferred.
<F3>  Includes $53,762 of salary earned in fiscal year 1997, payment of 
      which has been deferred.
<F4>  Includes a $125,571 bonus earned in fiscal year 1997, payment of which 
      has been deferred.
<F5>  Includes a $75,000 bonus earned in fiscal year 1996, payment of which 
      has been deferred.
<F6>  Includes amounts ($18,062, $14,750 and $20,357 in fiscal 1998, 1997 
      and 1996, respectively) reflecting the current dollar value of the 
      benefit to Mr. Westerbeke of premiums paid by the Company with respect 
      to a split-dollar insurance arrangement (see "Employment Agreements"  
      below for a description of such arrangement).  Such benefit was 
      determined by calculating the time value of money (using the 
      applicable federal rates) of the premiums paid by the Company in the 
      fiscal years ended October 24, 1998, October 25, 1997 and October 26, 
      1996 for  the period from the date on which each premium was paid 
      until March 31, 2001 (which is the earliest date on which the Company 
      could terminate the agreement and request a refund of premiums paid).
</FN>
</TABLE>


      The Company did not grant any stock options to the executive officers 
named in the Summary Compensation Table during the fiscal year ended October 
24, 1998.

      The following table sets forth the number and value of options 
exercised by the executive officers named in the Summary Compensation Table 
during the fiscal year ended October 24, 1998 and the number and value of 
options held by such executive officers at October 24, 1998. 

                     OPTION EXERCISES IN FISCAL 1998 AND
                      OPTION VALUES AT OCTOBER 24, 1998

<TABLE>
<CAPTION>
                                                                                                    Value of
                                                                   Number of                      Unexercised
                                                                  Unexercised                   In-the-Money(1)
                                                                   Options at                      Options at
                                                                October 24, 1998                October 24, 1998
                           Shares Acquired     Value      ----------------------------    ----------------------------
         Name                On Exercise      Realized    Exercisable    Unexercisable    Exercisable    Unexercisable
----------------------------------------------------------------------------------------------------------------------

<S>                            <C>            <C>           <C>                <C>         <C>                 <C>
John H. Westerbeke, Jr.        20,000         $63,800       150,000            -           $231,300            -

Carleton F. Bryant, III             -               -        75,000            -           $115,600            -


<FN>
<F1>  In-the-money options are those where the fair market value of the 
      underlying Common Stock exceeds the exercise price of the option.  The 
      value of in-the-money options is determined in accordance with 
      regulations of the Securities and Exchange Commission by subtracting 
      the aggregate exercise price of the option from the aggregate year-end 
      value of the underlying Common Stock.
</FN>
</TABLE>


Employment Agreements
---------------------

      The Company has an Employment Agreement (the "Agreement") with John H. 
Westerbeke, Jr., the Chairman of the Board, President and Chief Executive 
Officer of the Company, which provides for his employment by the Company at 
an annual base salary, subject to increases based upon the Consumer Price 
Index and at the discretion of the Company.  During fiscal 1998, Mr. 
Westerbeke's salary was $212,488, which included $61,842 of salary which has 
been deferred.  The Agreement also provides for payment of a bonus at the 
discretion of the Board of Directors of the Company.  In September 1996, the 
Board of Directors established an incentive plan for Mr. Westerbeke pursuant 
to which Mr. Westerbeke will have an annual bonus opportunity, based on net 
income and increases in sales, in each of the four years beginning with the 
1997 fiscal year.  Mr. Westerbeke may elect to have all or any part of his 
base salary or bonus paid as deferred compensation in five annual 
installments commencing upon his retirement or other termination of 
employment, or upon a change of control of the Company, as defined in the 
Agreement.  Amounts deferred by Mr. Westerbeke are contributed by the 
Company to a trust established to hold and invest these funds until such 
time as the amounts are payable to Mr. Westerbeke.  The Agreement also 
requires the Company to pay premiums for certain life insurance policies on 
the life of Mr. Westerbeke as described below.  The Agreement may be 
terminated by the Company upon the disability of Mr. Westerbeke, by the 
Company with or without cause, and by Mr. Westerbeke in the event there has 
occurred a constructive termination of employment by the Company.  In 
addition, in the event of a change in control of the Company, as defined in 
the Agreement, Mr. Westerbeke may terminate his employment during the one 
year period following such change in control, and in such event, the Company 
will be required to pay him a lump sum cash payment in an amount equal to 
three times his annual cash compensation during the most recent five taxable 
years of the Company, less $1,000.  In addition, in such circumstances, the 
Company is required to continue to carry group life and health insurance for 
Mr. Westerbeke for a three year period and is required to pay any premiums 
payable on the split-dollar life insurance policies on his life for a three 
year period.  Under the Agreement, Mr. Westerbeke has agreed not to compete 
with the Company for a period of one year following termination of his 
employment.

      The Company has entered into a split-dollar insurance arrangement with 
Mr. Westerbeke, Jr., pursuant to which the Company will pay the premium 
costs of certain life insurance policies that pay a death benefit of not 
less than $4,889,403 in the aggregate upon the death of Mr. Westerbeke.  
Upon surrender of the policies or payment of the death benefit thereunder, 
the Company is entitled to repayment of an amount equal to the cumulative 
premiums previously paid by the Company, with all remaining payments to be 
made to Mr. Westerbeke or his beneficiaries.  See footnote (6) to the 
"Summary Compensation Table" above for further information on premium 
payments made by the Company.

      The Company has an agreement with Carleton F. Bryant, III, the 
Executive Vice President, Treasurer and Chief Operating Officer of the 
Company, which provides for his employment by the Company at an annual 
salary of $94,500.  Under a related agreement Mr. Bryant agrees not to 
compete with the Company for a period of three years following the 
termination of his employment.

      The Company has an agreement with John H. Westerbeke, Sr., a director 
of the Company, which provides for his employment by the Company at an 
annual salary of $35,000 until Mr. Westerbeke, Sr. retires.  This agreement 
also provides that following his retirement, Mr. Westerbeke, Sr. will act as 
consultant to the Company at an annual consulting fee of $30,000.  The 
Company paid Mr. Westerbeke, Sr. $35,000 during fiscal 1998.

Compensation Committee Interlocks and Insider Participation
-----------------------------------------------------------

      Thomas M. Haythe, a director of the Company and a member of the 
Compensation Committee, is a partner of the New York City law firm of Haythe 
& Curley, which firm acted as legal counsel to the Company during the past 
fiscal year.  It is expected that Haythe & Curley will continue to render 
legal services to the Company in the future.

Compensation of Directors
-------------------------

      The Company currently pays its directors a fee of $2,000 for attending 
each meeting of the Board of Directors of the Company.

Termination of Employment and Change of Control Arrangements
------------------------------------------------------------

      See "Employment Agreements" above for information concerning certain 
change of control arrangements with respect to John H. Westerbeke, Jr., the 
Chairman of the Board, President and Chief Executive Officer of the Company.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

      The shareholders (including any "group" as that term is used in 
Section 13(d)(3) of the Securities Exchange Act of 1934) who, to the 
knowledge of the Board of Directors of the Company, owned beneficially more 
than five percent of any class of the outstanding voting securities of the 
Company as of January 1, 1999, each director and each executive officer 
named in the Summary Compensation Table of the Company who owned 
beneficially shares of Common Stock and all directors and executive officers 
of the Company as a group, and their respective shareholding as of such date 
(according to information furnished by them to the Company), are set forth 
in the following table.  Except as indicated in the footnotes to the table, 
all of such shares are owned with sole voting and investment power.


<TABLE>
<CAPTION>
                                            Shares of Common Stock
Name and Address                            Owned Beneficially         Percent of Class
----------------                            ----------------------     ----------------

<S>                                              <C>                        <C>
Paul B. Luber.............................         133,255(1)                6.9%
  4201 North Oakland Avenue
  Shorewood, Wisconsin 53211

Gerald Bench..............................           6,660(2)                 *
  17 1/2 Passaic Avenue
  Spring Lake, New Jersey 07762

Thomas M. Haythe..........................          11,660(3)                 *
  237 Park Ave.
  New York, New York 10017

Nicholas H. Safford.......................          10,100(4)                 *
  9 Cleaves Street
  Rockport, Massachusetts 01966


James W. Storey...........................          15,660(5)                 *
  3 Saddle Ridge Road
  Dover, Massachusetts 02030

John H. Westerbeke, Jr....................       1,248,250(6)               60.4%
  Avon Industrial Park
  Avon, Massachusetts 02322

John H. Westerbeke, Sr....................               0                    -
  Avon Industrial Park
  Avon, Massachusetts 02322

Carleton F. Bryant, III...................          75,000(7)                3.8%
  Avon Industrial Park
  Avon, Massachusetts 02322

All Directors and Officers as a Group            1,367,330(2)               62.9%
 (seven persons)                                 (3)(4)(5)(6)(7)

<FN>
--------------------
<F*>  Less than one percent.
<F1>  Information as to these holdings is based upon a report on Schedule 
      13D filed with the Securities and Exchange Commission by Mr. Paul B. 
      Luber. Such report indicates that Mr. Luber has sole voting and 
      dispositive power with respect to 133,255 shares, of which 53,555 
      shares are directly owned by Mr. Luber and 79,700 shares are owned by 
      Great Lakes Capital Holdings, LLP, a limited liability partnership of 
      which Mr. Luber is a general partner.
<F2>  Consists of 6,660 shares issuable upon the exercise of presently 
      exercisable stock options held by Mr. Bench.
<F3>  Includes 6,660 shares issuable upon the exercise of presently 
      exercisable stock options held by Mr. Haythe.
<F4>  Consists of 10,100 shares issuable upon the exercise of presently 
      exercisable stock options held by Mr. Safford.
<F5>  Includes 6,660 shares issuable upon the exercise of presently 
      exercisable stock options held by Mr. Storey.
<F6>  Includes 150,000 shares issuable upon the exercise of presently 
      exercisable stock options held by Mr. Westerbeke, Jr.
<F7>  Consists of 75,000 shares issuable upon the exercise of presently 
      exercisable stock options held by Mr. Bryant.
</FN>
</TABLE>


      To the Company's knowledge, there have been no significant changes in 
stock ownership or control of the Company as set forth above since January 
1, 1999.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

      The Company leases a 40-foot sailboat from Mr. Westerbeke, Jr. the 
Chairman of the Board, President and Chief Executive Officer of the Company, 
pursuant to a lease expiring in July 1999.  The Company pays an annual 
rental to him of $31,920 and also pays approximately $10,000 to $15,000 of 
annual expenses in connection with the operation and maintenance of the 
sailboat.  The Company makes use of the sailboat to evaluate the performance 
of its marine engine products and for other corporate purposes. In July 
1994, Mr. Westerbeke, Jr. executed a promissory note payable to the Company 
in the principal amount of $165,000.  The proceeds of the loan were used by 
Mr. Westerbeke, Jr. to purchase the sailboat which is leased to the Company 
as described above.  The loan, which is due June 1, 2004, is payable in 
equal monthly installments which commenced on July 1, 1994, together with 
interest at 7.75% per annum and is secured by the sailboat.  Management of 
the Company believes that the terms of the lease and of the secured loan are 
no less favorable to the Company than it could obtain from an unrelated 
party.

      Thomas M. Haythe, a Class B director of the Company, is a partner of 
the New York City law firm of Haythe & Curley, which firm has acted as legal 
counsel to the Company during the past fiscal year.  It is expected that 
Haythe & Curley will continue to render legal services to the Company in the 
future.

                                   PART IV

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

          (a)  1.  Financial Statements:

          Included in PART II of this report:                     Page
                                                                  ----

          Report of KPMG Peat Marwick LLP...................       25

          Consolidated Balance Sheets at 
          October 24, 1998 and October 25, 1997.............       26

          Consolidated Statements of Operations
          for the three years in the period ended
          October 24, 1998..................................       27

          Consolidated Statements of Changes in 
          Stockholders' Equity for the three years
          in the period ended October 24, 1998..............       28

          Consolidated Statements of Cash Flow
          for the three years in the period ended
          October 24, 1998..................................       29

          Notes to Consolidated Financial Statements........       30

          2.  Financial Statement Schedule:

          Included in PART II of this report:

          Schedule II - Valuation and Qualifying
          Account for the three years in the period
          ended October 24, 1998............................       42

          Schedules other than those listed above are omitted because they 
are not applicable, or the required information is shown in the Consolidated 
Financial Statements or Notes thereto.  Columns omitted from schedules filed 
have been omitted because the information is not applicable.

          3.  Exhibits:

          The exhibits required to be filed as part of this Annual Report on 
Form 10-K are listed in the attached Index to Exhibits.

          (b)  Current Reports on Form 8-K:

               During the fiscal quarter ended October 24, 1998, the Company 
          did not file any Current Reports on Form 8-K.

                                 *    *    *

      Copies of the exhibits filed with this Annual Report on Form 10-K or 
incorporated by reference herein do not accompany copies hereof for 
distribution to stockholders of the Company.  The Company will furnish a 
copy of any of such exhibits to any stockholder requesting the same for a 
nominal charge to cover duplicating costs.


                              POWER OF ATTORNEY

      The registrant and each person whose signature appears below hereby 
appoint John H. Westerbeke, Jr. and Thomas M. Haythe as attorney-in-fact 
with full power of substitution, severally, to execute in the name and on 
behalf of the registrant and each such person, individually and in each 
capacity stated below, one or more amendments to this Annual Report on Form 
10-K, which amendments may make such changes in this Annual Report as the 
attorney-in-fact acting in the premises deems appropriate and to file any 
such amendment(s) to this Annual Report with the Securities and Exchange 
Commission.

                                 SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the registrant has duly caused this Annual Report to 
be signed on its behalf by the undersigned thereunto duly authorized.

Dated:  January 22, 1999

                                       WESTERBEKE CORPORATION


                                       By /s/ John H. Westerbeke, Jr.
                                          ---------------------------
                                          John H. Westerbeke, Jr.
                                          Chairman of the Board
                                          and President

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

Dated:  January 22, 1999
                                       By /s/ John H. Westerbeke, Jr.
                                          ---------------------------
                                          John H. Westerbeke, Jr.
                                          Chairman of the Board,
                                          President and Principal 
                                          Executive Officer

Dated:  January 22, 1999               By /s/ Carleton F. Bryant III
                                          --------------------------
                                          Carleton F. Bryant III
                                          Executive Vice President,
                                          Chief Operating Officer and
                                          Principal Financial 
                                          and Accounting Officer

Dated:  January 22, 1999               By /s/ Gerald Bench
                                          ----------------
                                          Gerald Bench
                                          Director

Dated:  January 22, 1999               By /s/ Thomas M. Haythe
                                          --------------------
                                          Thomas M. Haythe
                                          Director

Dated:  January 22, 1999               By /s/ Nicholas H. Safford
                                          -----------------------
                                          Nicholas H. Safford
                                          Director

Dated:  January 22, 1999               By /s/ James W. Storey
                                          -------------------
                                          James W. Storey
                                          Director

Dated:  January 22, 1999               By /s/ John H. Westerbeke , Sr.
                                          ----------------------------
                                          John H. Westerbeke, Sr.
                                          Director


                              Index to Exhibits
                              -----------------

<TABLE>
<CAPTION>
Exhibit
   No.                       Name of Exhibit                         Page
-------                      ---------------                         ----

<C>         <S>                                                      <C>
 2          Agreement and Plan of Merger between the Company
            and J.H. Westerbeke Corporation, a Massachusetts
            corporation..........................................    (1)

 3(a)       Certificate of Incorporation of the Company (as
            amended).............................................    (1)

 3(b)       By-Laws of the Company...............................    (2)

10(a)       Agreement dated as of June 30, 1986 by and
            between the Company and John H. Westerbeke, Sr.......    (1)

10(b)       1986 Stock Option Plan of the Company as 
            amended on January 6, 1987 and on May 26, 1988.......    (2)

10(c)       1986 Employee Stock Purchase Plan of the 
            Company..............................................    (1)

10(d)       Supplemental Stock Option Plan of the 
            Company..............................................    (2)

10(e)       1996 Stock Option Plan of the Company................    (5)

10(f)       Agreement dated as of June 1, 1986 by and among
            the Company, Ruth A. Westerbeke, John H. 
            Westerbeke, Jr., John H. Westerbeke, Sr. and
            Ruth A. Westerbeke, as trustees......................    (1)

10(g)       Form of Agreement with Distributors - 
            Domestic.............................................    (3)

10(h)       Form of Agreement with Distributors - 
            International........................................    (1)

10(i)       Supplemental Medical Insurance Policy................    (1)

10(j)       Letter Agreement dated March 20, 1996 between
            the Company and State Street Bank and Trust 
            Company..............................................    (5)

10(k)       Note of the Company dated March 29, 1996,
            due March 31, 1997 in the principal amount of
            $3,000,000 payable to the order of State Street 
            Bank and Trust Company...............................    (5)

10(l)       Loan Facility Agreement dated January 23, 1996
            between the Company and State Street Bank
            and Trust Company....................................    (4)

10(m)       Security Agreement dated January 23, 1996 
            by the Company in favor of State Street Bank
            and Trust Company....................................    (4)

10(n)       Note of the Company dated January 23, 1996,
            due June 30, 2001 in the principal amount of
            $500,000 payable to the order of State Street Bank
            and Trust Company....................................    (4)

10(o)       Asset Purchase Agreement dated as of January 5,
            1990 by and among the Company, Westerbeke 
            Rotary Aire, Inc., Rotary Marine, Inc., Eugene
            Whipp and Arville J. Collins.........................    (2)

10(p)       Convertible Subordinated Note of the Company
            and Westerbeke Rotary Aire, Inc. dated January 5,
            1990 in the principal amount of $115,000 payable
            to Rotary Marine, Inc................................    (2)

10(q)       Lease dated November 4, 1987 by and between 
            GBD/Odyssey Associates Limited Partnership and
            the Company..........................................    (2)

10(r)       Lease Amendment Agreement dated April 29, 1991
            by and between GBD/Odyssey Associates Limited
            Partnership and the Company..........................    (5)

10(s)       Third Lease Amendment Agreement dated February 
            20, 1996 by and between GBD/Odyssey Associates
            Limited Partnership and the Company..................    (5)

10(t)       Subordination, Nondisturbance and Attornment 
            Agreement dated November 8, 1994 by and among
            the Company, New Avon Limited Partnership and 
            UNUM Life Insurance Company of America...............    (2)

10(u)       Lease dated January 22, 1997 by and between 
            New Avon Limited Partnership and
            the Company..........................................    (6)

10(v)       Loan Facility Agreement dated April 25, 1997
            between the Company and State Street Bank
            and Trust Company....................................    (6)

10(w)       Note of the Company dated April 25, 1997,
            due June 30, 2002 in the principal amount of
            $300,000 payable to the order of State Street Bank
            and Trust Company....................................    (6)

10(x)       Letter Agreement dated April 25, 1997 between
            the Company and State Street Bank and Trust 
            Company..............................................    (6)

10(y)       Note of the Company dated April 4,1997,    
            due March 31, 1998 in the principal amount of
            $4,000,000 payable to the order of State Street 
            Bank and Trust Company...............................    (6)

10(z)       Loan Facility Agreement dated April 23, 1998
            between the Company and State Street Bank
            and Trust Company....................................    (7)

10(aa)      Letter Agreement dated April 8, 1998 between
            the Company and State Street Bank and Trust 
            Company..............................................    (7)

10(bb)      Note of the Company dated April 3,1998, 
            due March 31, 1999 in the principal amount of
            $4,000,000 payable to the order of State Street 
            Bank and Trust Company...............................    (7)

21          Subsidiary of the Company............................    

23          Consent of KPMG Peat Marwick LLP.....................    

24          Power of Attorney....................................    (See Page 55
                                                                     of Annual
                                                                     Report on
                                                                     Form 10-K)
27          Financial Data Schedule.............................. 

<FN>
--------------------
<F1>  Incorporated by reference to Exhibits to Registration Statement 
      No. 33-6972 filed with the Securities and Exchange Commission.
<F2>  Incorporated by reference to Exhibits to Annual Report on Form 10-K 
      for fiscal year ended October 29, 1994.
<F3>  Incorporated by reference to Exhibits to Annual Report on Form 10-K 
      for fiscal year ended October 28, 1995.
<F4>  Incorporated by reference to Exhibits to Quarterly Report on Form 10-Q 
      for fiscal quarter ended January 27, 1996.
<F5>  Incorporated by reference to Exhibits to Annual Report on Form 10-K 
      for fiscal year ended October 26, 1996.
<F6>  Incorporated by reference to Exhibits to Quarterly Report on Form 10-Q 
      for fiscal quarter ended April 26, 1997.
<F7>  Incorporated by reference to Exhibits to Quarterly Report on Form 10-Q 
      for fiscal quarter ended April 25, 1998.
</FN>
</TABLE>