U.S. SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549


                                 FORM 10-QSB


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

              For the quarterly period ended September 30, 1997

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934 [No Fee Required]

            For the transition period from _________ to _________


Commission File Number 1-13628


                         INTELLIGENT CONTROLS, INC.
                   Exact name of small business issuer as
                          specified in its charter)

                Maine                                01-0354107
   (State or other jurisdiction of                (I.R.S. Employer
   incorporation or organization)                Identification No.)

                 74 Industrial Park Road, Saco, Maine 04072
                  (Address of principal executive offices)

                               (207) 283-0156
                         (Issuer's telephone number)


Check whether the issuer (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for 
such shorter period that the registrant was required to file such reports), 
and (2) has been subject to such filing requirements for the past 90 days.  
Yes  X   No     
    ---     ---

There were 3,252,406 shares of Common Stock of the issuer outstanding as of 
October 9, 1997.

Transitional Small Business Disclosure Format:  Yes      No  X 
                                                    ---     ---


                                                 Page 1 of 11
                                                 Exhibit Index at page   


                                   PART I

ITEM 1.  FINANCIAL STATEMENTS.

Unaudited financial statements of the Company appear beginning at page F-1 
below, and are incorporated herein by reference.  These financial statements 
include all adjustments which, in the opinion of management, are necessary 
in order to make the financial statements not misleading.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

Results of Operations For Nine Months Ended September 30, 1997

For the nine months ended September 30, 1997, sales grew 41% to 
approximately $10.0 million compared to $7.1 million for the same period in 
1996. Third quarter sales have continued the trend of the first two quarters 
of 1997, increasing 36% to $3.8 million compared to $2.8 million for the 
same period in 1996.

Petroleum segment sales continued their upward trend in the third quarter of 
1997, increasing 42% to $3.4 million dollars compared to $2.4 million for 
the same period in 1996. For the nine months ended September 30,1997, 
Petroleum Segment sales are $8.8 million compared to $6.0 million for the 
same period in 1996. A 47% increase over 1996. The quarterly and year-to-
date increases can be attributed to strong market conditions, improved 
product quality and two of the three shipments under the Company's $1.8 
million Chinese Petroleum contract.

Utility segment sales of approximately $1.1 million for the first nine 
months of 1997 are relatively flat with the same period in 1996. The 
Company's Optimizer circuit breaker monitor continues to be purchased by 
utilities for evaluation. Utilities tend to go through twelve to eighteen 
month evaluations on new concept products such as the Optimizer.

Gross margins for the first nine months were 41.6% compared to 44.3% for the 
same period in 1996. However, gross margins continued to improve in the 
third quarter of 1997, increasing to 44.5% compared to 40.0% for the same 
period in 1996. Decreases in material prices through better purchasing, 
increased production throughput and improved production efficiencies have 
attributed to the improvement in margins in the third quarter. The lower 
utility sales as a percent of total sales and the two shipments to Chinese 
Petroleum, which has special pricing due to the size of the order, have 
contributed to the lower margins for the first nine months of 1997 compared 
to the same period in 1996.

For the first nine months of 1997 operating expenses declined to 34.1% of 
sales compared to 47.2% of sales for the same nine month period in 1996. 
Actual dollars have increased $54,000 due to higher commissions paid, which 
is attributable to the higher sales. The continued improvement in gross 
margins, lower operating expenses and increased sales have resulted in net 
income of $336,500 or $.10 per share for the first nine months of 1997 
compared to a loss of $203,300 or $(.06) per share for the first nine months 
of 1996.


Liquidity and Capital Resources at September 30, 1997

As of September 30, 1997 the Company had $200,000 in cash and $2.7 million 
available to be borrowed on its $3.5 million dollar working capital line of 
credit. On April 16, 1997, the working capital line of credit was increased 
to $3.5 million from $3.0 million. The current ratio has improved to 1.85 
from 1.50 as of December 31, 1996 and for the same period the quick ratio 
has improved to 1.00 from .50. The continued improvement in liquidity can be 
attributable to the improvement in profitability and the affect of better 
inventory management resulting in a $976,000 decrease in inventories. The 
Company believes that current resources will be sufficient to finance the 
Company's operating needs for the foreseeable future.


                                   PART II

ITEM 1.  LEGAL PROCEEDINGS.

As previously reported, the Company is party to an action entitled John
D. Knight v. Intelligent Controls, Inc., filed in Maine Superior Court,
Cumberland County.  The action was brought in August 1997 by Mr.
Knight, a former director and executive officer of INCON whose
employment had recently been terminated by the Company.  Mr. Knight
alleges that he is owed $287,100 in unpaid bonus payments over a six
and a half year period under his original Employment Agreement dated as
of December 29, 1986.  As amended, the complaint further alleges that
he is entitled to $574,200 in statutory punitive damages, plus 
attorneys'fees and costs. The complaint also alleges that the Company has 
breached an Incentive Stock Option Agreement with Mr. Knight, and that he 
has incurred an unspecified amount of damages from such breach.

The Company has filed an answer denying all material allegations, and
has asserted various counterclaims against Mr. Knight for breach of
contract and breach of fiduciary duty.  The Company believes that the
bonus arrangements called for in the 1986 agreement had been
superseded from year to year by other annual bonus arrangements
approved by the Board of Directors (of which Mr. Knight was a voting
member), and that all bonuses due to Mr. Knight were paid each year in
accordance with these substitute arrangements.  The Company further
believes that it had grounds to withhold the shares of stock that Mr.
Knight would otherwise have received upon exercise of his Incentive
Stock Option.

In October 1997 Mr. Knight filed a motion for summary judgment on his
claims; the Company has filed a motion in opposition, and has filed its
own motion for summary judgment.  The Superior Court has not yet ruled
on these motions.


ITEM 5.  OTHER INFORMATION.

Kenneth J. Burek has resigned from the Company effective November
28, 1997, to pursue other career opportunities.  Mr. Burek served as Chief 
Financial Officer.  Management and the Audit Committee of the Board of 
Directors are in the process of interviewing applicants for the position of 
Chief Financial Officer, and expect to fill this position in the near 
future.  In the meantime, the Company anticipates no disruption of its 
financial control and reporting function.  Earlier this year, the Company 
retained its outside accountants (Coopers & Lybrand, LLP) to conduct 
quarterly reviews of interim financial statements.  


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

The following exhibits are filed with the report:

      27  Financial data schedule



                                 SIGNATURES

In accordance with the requirements of the Exchange Act, the Company caused 
this report to be signed on its behalf by the undersigned, thereunto duly 
authorized.

                                       INTELLIGENT CONTROLS, INC.

                                   By: /s/ Kenneth J Burek
                                       ------------------------------------
                                       Kenneth J. Burek, Vice President
                                         of Finance (on behalf of the
                                           Company and as principal
Date:  October 9, 1997                        financial officer)


To the Board of Directors and Shareholders of
INTELLIGENT CONTROLS, INC.

We have reviewed the accompanying balance sheet of Intelligent Controls, Inc., 
as of September 30, 1997 and the related statements of income for the three 
month and nine month periods ended September 30, 1997 and related statements of 
cash flows for the nine month period ended September 30, 1997. These financial 
statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the 
American Institute of Certified Public Accountants. A review of interim 
financial information consists principally of applying analytical procedures to 
financial data and making inquiries of persons responsible for financial and 
accounting matters. It is substantially less in scope than an audit conducted 
in accordance with generally accepted auditing standards, the objective of 
which is the expression of an opinion regarding financial statements taken as a 
whole. Accordingly, we do not express such an opinion. We previously audited 
and expressed an unqualified opinion on the Company's financial statements for 
the year ended December 31, 1996 (not presented herein). In our opinion, the 
information set forth in the accompanying balance sheet as of December 31, 
1996, is fairly stated in all materials respects, in relation to the statement 
of financial position from which it has been derived.

Based on our review, we are not aware of any material modifications that should 
be made to the accompanying financial statements for them to be in conformity 
with generally accepted accounting principles.

/s/  Coopers & Lybrand  L.L.P.
------------------------------

Portland, Maine
October 9, 1997



                         INTELLIGENT CONTROLS, INC.
                               BALANCE SHEETS

<TABLE>
<CAPTION>
                                                  (unaudited)
                                                  September 30    December 31
                                                      1997           1996

<S>                                                <C>            <C>
Current Assets:
  Cash and cash equivalents                        $  200,039     $  133,690
  Accounts receivable, net of allowance
   for doubtful accounts of $71,505 in
   1997 and $60,000 in 1996                         2,426,204      1,960,979
  Inventories                                       1,886,723      2,863,335
  Prepaid expenses and other                          233,206        312,837
  Income taxes receivable                                   -        160,000
  Deferred income taxes                               173,627        210,000
                                                   -------------------------

      Total current assets                          4,919,799      5,640,841

Property, Plant, and Equipment, net                   825,533        851,081

Other assets                                           23,513         19,979

Restricted cash                                             -        199,120
                                                   -------------------------

                                                   $5,768,845     $6,711,021
                                                   =========================

                     LIABILITIES AND STOCKHOLDERS EQUITY

Current Liabilities:
  Note payable - bank                              $  755,093     $2,015,862
  Accounts payable                                    671,642        881,349
  Accrued expenses                                    788,615        673,767
  Accrued income taxes                                237,772              -
  Current portion of long-term debt                   191,700        191,700
                                                   -------------------------

      Total current liabilities                     2,644,822      3,762,678

Long-term debt, net of current portion                423,450        409,967

Deferred taxes                                         58,450         58,450

Deposit from stockholder                                    -        199,120

Stockholders' Equity
  Common stock, no par value; 5,000,000 shares
   authorized; 3,252,406 issued in 1997 and 
   3,238,952 in 1996                                2,272,528      2,252,041
  Retained earnings                                   369,595         33,071
  Less:  Treasury stock, 2,153 shares at cost
   in 1996                                                  -         (4,306)
                                                   -------------------------
                                                    2,642,123      2,280,806
                                                   -------------------------

                                                   $5,768,845     $6,711,021
                                                   =========================
</TABLE>


                           See accompanying notes


                         INTELLIGENT CONTROLS, INC.

                      STATEMENTS OF INCOME (unaudited)


<TABLE>
<CAPTION>
                                 Three Months Ended          Nine Months Ended
                               Sept 30       Sept 30       Sept 30       Sept 30
                                 1997          1996          1997          1996

<S>                           <C>           <C>           <C>           <C>
Net sales                     $3,796,604    $2,839,091    $9,994,590    $7,108,777

Cost of sales                  2,107,496     1,704,099     5,827,823     3,961,042
                              ----------------------------------------------------
                               1,689,108     1,134,992     4,166,767     3,147,735

Operating expenses:
  Selling, general and
   administrative              1,019,025       991,332     2,816,974     2,624,847
  Research and develop.          189,640       243,492       591,104       728,348
                              ----------------------------------------------------
                               1,208,665     1,234,824     3,408,078     3,353,195

Operating income (loss)          480,443       (99,832)      758,689      (205,460)

Other income (expense):
  Interest expense               (40,461)      (53,545)     (141,669)     (131,068)
  Other(expense)                 (14,462)      (13,487)      (44,787)      (26,719)
                              ----------------------------------------------------
                                 (54,923)      (67,032)     (186,456)     (157,787)

Income (loss)before income
 tax expense (benefit)           425,520      (166,864)      572,233      (363,247)

Income tax expense
 (benefit)                       180,200       (79,074)      235,709      (159,904)
                              ----------------------------------------------------

Net income (loss)
 after tax                    $  245,320    $  (87,790)   $  336,524    $ (203,343)
                              ====================================================

Earnings per share:
  Net income (loss)           $      .07    $     (.02)   $      .10    $     (.06)
                              ====================================================

Weighted average number of
 common shares
 outstanding                   3,324,662     3,479,192     3,324,662     3,479,192
                              ====================================================
</TABLE>


                           See accompanying notes.


                         INTELLIGENT CONTROLS, INC.
                    STATEMENTS OF CASH FLOWS (unaudited)

<TABLE>
<CAPTION>
                                                           Nine Months Ended
                                                        Sept 30         Sept 30
                                                         1997            1996

<S>                                                   <C>             <C>
Cash flows from operating activities
  Net Income (loss)                                   $   336,524     $  (115,554)
  Adjustments to reconcile net income
   (loss)to net cash provided (used) by
   operating activities:
    Depreciation and amortization                         175,831         101,714
    Deferred taxes                                         36,333               -
    Changes in assets and liabilities:
      Accounts receivable                                (465,225)        244,535
      Inventories                                         976,612      (1,000,761)
      Prepaid expenses and other                           79,631         (32,575)
      Income taxes receivable                             160,000               -
      Accounts payable and accrued expenses               (94,859)        357,303
      Accrued income taxes                                237,722         (51,068)
      Other                                                (3,534)         (2,357)
                                                      ---------------------------

  Net cash provided(used) by operating
   activities                                           1,439,125        (498,763)

Cash flows from investing activities:
  Purchases of equipment and leasehold
   improvements, net                                     (150,283)       (139,760)
                                                      ---------------------------
  Net cash (used) by investing activities                (150,283)       (139,760)

Cash flows from financing activities:
  Net borrowings on note payable - bank                (1,260,769)        600,925
  Repayment of long-term debt                              13,483              69
  Issuance of common stock, net                            20,487               -
  Sale of treasury stock                                    4,306
  Decrease in restricted cash                            (199,120)              -
  Decrease in deposit from shareholder                    199,120               -
                                                      ---------------------------
  Net cash provided (used)by financing
   activities                                          (1,222,493)        600,994
                                                      ---------------------------

Net increase (decrease) in cash                            66,349         (37,529)

Cash and cash equivalents beginning of year               133,690         225,518
                                                      ---------------------------

Cash and cash equivalents end of period               $   200,039     $   187,989
                                                      ===========================

Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Interest                                          $   141,669     $    78,092
                                                      ===========================
    Income taxes                                      $         -     $    55,000
                                                      ===========================
</TABLE>


                           See accompanying notes.


                         INTELLIGENT CONTROLS, INC.

                  NOTES TO FINANCIAL STATEMENTS (Unaudited)


1.  The consolidated financial statements included herein have been prepared 
by the Company, without audit, pursuant to the rules and regulations of the 
Securities and Exchange Commission.  Certain information and footnote 
disclosures normally included in financial statements prepared in accordance 
with generally accepted accounting principles have been condensed or omitted 
pursuant to such rules and regulations, although the Company believes that 
the disclosures are adequate to make the information presented not to be 
misleading.  In the opinion of management, the amounts shown reflect all 
adjustments necessary to present fairly the financial position and results 
of operations for the periods presented.  All such adjustments are of a 
normal recurring nature.

Earnings per share of common stock have been determined by dividing net 
earnings by the weighted average number of shares of common stock 
outstanding.

It is suggested that the financial statements be read in conjunction with 
the financial statements and notes thereto included in the Company's 10-KSB.

2.    Property, Plant, and Equipment

      Property, plant, and equipment, at cost,

<TABLE>
<CAPTION>
                                           (Unaudited)
                                            Sept 30,      December 31
                                              1997           1996


      <S>                                  <C>            <C>
      Leasehold improvements               $  111,983     $  105,442
      Equipment                             1,223,100      1,119,610
      Software                                159,806        119,554
      Furniture and Fixtures                  120,087        120,087
                                           -------------------------
                                            1,614,976      1,464,693

      Less accumulated depreciation and
       amortization                          (789,443)      (613,612)
                                           -------------------------
                                           $  825,533     $  851,081
                                           =========================
</TABLE>


3.    Inventories consisted of the following at September 30, 1997 and 
      December 31,1996.


<TABLE>
<CAPTION>
                          (Unaudited)
                           Sept 30,      December 31
                             1997           1996

      <S>                 <C>            <C>
      Raw Material        $1,159,128     $1,930,834
      Work in Progress       227,407        294,576
      Finished Goods         401,239        587,788
      Other                   98,949         50,137
                          -------------------------

                          $1,886,723     $2,863,335
                          =========================
</TABLE>


4.    New accounting pronouncements

      During February 1997, the Financial Accounting Standards Board (FASB) 
      issued Statement of Financial Accounting Standards SFAS No. 128, 
      "Earnings per Share" , which will require a change in how the Company 
      calculates earnings per share.  This statement is effective for 
      financial statements issued for periods after December 15, 1997, with 
      earlier application not permitted. The statement requires a dual 
      presentation of basic and diluted earnings per share on the statements 
      of income. Had the earnings per share calculation been applied on a 
      basis consistent with the provisions of SFAS No. 128, basic and 
      diluted earnings per share would be equivalent to the amounts reported 
      in the statements of income.

      In June 1997, FASB issued SFAS No. 130, Reporting Comprehensive 
      Income", which requires the separate reporting of all changes to 
      Stockholders' Equity, and SFAS No. 131, " Disclosures About Segments 
      of an Enterprise and Related Information", which revises existing 
      guidelines about the level of financial disclosure of a Company's 
      operations. Both statements are effective for financial statements 
      issued after December 15, 1997. The Company has not determined the 
      impact of the new standards, but does not expect them to make a 
      material impact to existing financial reporting.