SECURITIES AND EXCHANGE COMMISSION


                              Washington, DC 20549

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

                                    FORM 10-Q

   (mark one)

   [ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the Quarter Ended June 28, 1997.

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

                         Commission File Number 1-10573


                            THERMO POWER CORPORATION
             (Exact name of Registrant as specified in its charter)

   Massachusetts                                                    04-2891371
   (State or other jurisdiction of                            (I.R.S. Employer
   incorporation or organization)                          Identification No.)

   81 Wyman Street, P.O. Box 9046
   Waltham, Massachusetts                                           02254-9046
   (Address of principal executive offices)                         (Zip Code)


       Registrant's telephone number, including area code: (617) 622-1000

         Indicate by check mark whether the Registrant (1) has filed all
         reports required to be filed by Section 13 or 15(d) of the
         Securities Exchange Act of 1934 during the preceding 12 months
         (or for such shorter period that the Registrant was required to
         file such reports), and (2) has been subject to such filing
         requirements for the past 90 days. Yes [ X ] No [   ]

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

                     Class                 Outstanding at July 25, 1997
          ----------------------------     ----------------------------
          Common Stock, $.10 par value              11,915,247
PAGE
<PAGE>
   PART I - FINANCIAL INFORMATION

   Item 1 - Financial Statements


                            THERMO POWER CORPORATION

                           Consolidated Balance Sheet
                                   (Unaudited)

                                     Assets


                                                     June 28,  September 28,
   (In thousands)                                        1997           1996
   -------------------------------------------------------------------------
   Current Assets:
     Cash and cash equivalents                       $ 25,129       $ 29,852
     Available-for-sale investments, at quoted
       market value (amortized cost of $9,142 and
       $6,022)                                          9,168          6,028
     Accounts receivable, less allowance of $679
       and $589                                        18,810         18,054
     Unbilled contract costs and fees                   7,397          7,110
     Inventories:
       Raw materials and supplies                      18,862         16,233
       Work in process and finished goods               2,768          2,404
     Prepaid income taxes                               3,319          2,921
     Other current assets                                 216            324
                                                     --------       --------
                                                       85,669         82,926
                                                     --------       --------

   Rental Assets, at Cost                              13,449         12,358
     Less: Accumulated depreciation and
           amortization                                 3,114          2,378
                                                     --------       --------
                                                       10,335          9,980
                                                     --------       --------

   Property, Plant, and Equipment, at Cost             19,284         17,580
     Less: Accumulated depreciation and
           amortization                                 8,756          7,813
                                                     --------       --------
                                                       10,528          9,767
                                                     --------       --------

   Long-term Available-for-sale Investments, at
     Quoted Market Value (amortized cost of $1,095
     and $210; Note 2)                                  1,049            184
                                                     --------       --------
   Other Assets                                           222            345
                                                     --------       --------
   Cost in Excess of Net Assets of Acquired
     Companies                                          7,316          7,509
                                                     --------       --------
                                                     $115,119       $110,711
                                                     ========       ========
                                        2PAGE
<PAGE>
                            THERMO POWER CORPORATION

                     Consolidated Balance Sheet (continued)
                                   (Unaudited)

                    Liabilities and Shareholders' Investment


                                                     June 28,  September 28,
   (In thousands except share amounts)                   1997           1996
   -------------------------------------------------------------------------
   Current Liabilities:
     Accounts payable                                $ 17,579       $ 14,005
     Accrued payroll and employee benefits              3,154          2,832
     Accrued income taxes                               2,057            713
     Accrued warranty costs                             2,971          2,323
     Other accrued expenses                             5,576          4,823
     Due to Thermo Electron Corporation and
       affiliated companies                               458            511
                                                     --------       --------
                                                       31,795         25,207
                                                     --------       --------
   Deferred Income Taxes                                  114             84
                                                     --------       --------
   Long-term Obligations                                  263            305
                                                     --------       --------
   Common Stock of Subsidiary Subject to
     Redemption ($18,450 redemption value)             17,982         17,747
                                                     --------       --------

   Shareholders' Investment:
     Common stock, $.10 par value, 30,000,000
       shares authorized; 12,493,371 and
       12,487,149 shares issued                         1,249          1,249
     Capital in excess of par value                    54,519         54,448
     Retained earnings                                 12,802         11,707
     Treasury stock at cost, 570,324 and
       2,724 shares                                    (3,592)           (23)
     Net unrealized loss on available-for-sale
       investments                                        (13)           (13)
                                                     --------       --------
                                                       64,965         67,368
                                                     --------       --------
                                                     $115,119       $110,711
                                                     ========       ========


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




                                        3PAGE
<PAGE>
                            THERMO POWER CORPORATION

                        Consolidated Statement of Income
                                   (Unaudited)

                                                       Three Months Ended
                                                    ------------------------
                                                     June 28,       June 29,
   (In thousands except per share amounts)               1997           1996
   -------------------------------------------------------------------------
   Revenues                                          $ 33,839       $ 32,429
                                                     --------       --------

   Costs and Operating Expenses:
     Cost of revenues                                  27,894         27,106
     Selling, general, and administrative expenses      4,519          4,202
     Research and development expenses                    507            721
                                                     --------       --------
                                                       32,920         32,029
                                                     --------       --------

   Operating Income                                       919            400

   Interest Income                                        466            437
   Interest Expense                                        (5)            (5)
   Gain on Sale of Investments (includes $53
     from sale of related-party investments in
     fiscal 1997; Note 2)                                  53              -
                                                     --------       --------
   Income Before Provision for Income Taxes and
     Minority Interest                                  1,433            832
   Provision for Income Taxes                             639            306
   Minority Interest Expense                               78             78
                                                     --------       --------
   Net Income                                        $    716       $    448
                                                     ========       ========
   Earnings per Share                                $    .06       $    .04
                                                     ========       ========
   Weighted Average Shares                             11,977         12,477
                                                     ========       ========


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





                                        4PAGE
<PAGE>
                            THERMO POWER CORPORATION

                        Consolidated Statement of Income
                                   (Unaudited)


                                                         Nine Months Ended
                                                       ---------------------
                                                      June 28,      June 29,
   (In thousands except per share amounts)                1997          1996
   -------------------------------------------------------------------------
   Revenues                                           $ 91,450      $ 89,637
                                                      --------      --------

   Costs and Operating Expenses:
     Cost of revenues                                   75,758        74,866
     Selling, general, and administrative expenses      12,732        12,170
     Research and development expenses                   1,778         2,250
                                                      --------      --------
                                                        90,268        89,286
                                                      --------      --------

   Operating Income                                      1,182           351

   Interest Income                                       1,389         1,311
   Interest Expense                                        (14)          (21)
   Gain on Sale of Investments, Net (includes 
     $53 and $469 from sale of related-party
     investments; Note 2)                                   53           451
                                                      --------      --------
   Income Before Provision for Income Taxes and
     Minority Interest                                   2,610         2,092
   Provision for Income Taxes                            1,281           790
   Minority Interest Expense                               234           234
                                                      --------      --------
   Net Income                                         $  1,095      $  1,068
                                                      ========      ========
   Earnings per Share                                 $    .09      $    .09
                                                      ========      ========
   Weighted Average Shares                              12,311        12,461
                                                      ========      ========


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






                                        5PAGE
<PAGE>
                            THERMO POWER CORPORATION

                      Consolidated Statement of Cash Flows
                                   (Unaudited)

                                                         Nine Months Ended
                                                      ----------------------
                                                      June 28,      June 29,
   (In thousands)                                         1997          1996
   -------------------------------------------------------------------------
   Operating Activities:
     Net income                                       $  1,095      $  1,068
     Adjustments to reconcile net income to net
       cash provided by operating activities:
         Depreciation and amortization                   2,223         1,965
         Provision for losses on accounts receivable       157             5
         Gain on sale of investments, net                  (53)         (451)
         Minority interest expense                         234           234
         Other noncash items                              (132)            -
         Changes in current accounts:
           Accounts receivable                            (913)         (811)
           Inventories and unbilled contract
             costs and fees                             (3,280)         (988)
           Other current assets                           (283)          404
           Accounts payable                              3,574         1,278
           Other current liabilities                     3,081           950
                                                      --------      --------
   Net cash provided by operating activities             5,703         3,654
                                                      --------      --------
   Investing Activities:
     Purchases of available-for-sale investments       (10,095)       (5,000)
     Proceeds from sale and maturities of available-
       for-sale investments                              6,000         8,982
     Proceeds from sale of related-party
       investments (Note 2)                                263           852
     Increase in rental assets                          (2,304)       (3,499)
     Proceeds from sale of rental assets                 1,213         1,370
     Purchases of property, plant, and equipment        (1,973)       (1,148)
     Issuance of notes receivable                            -          (292)
     Other                                                  10           357
                                                      --------      --------
   Net cash provided by (used in) investing
     activities                                         (6,886)        1,622
                                                      --------      --------
   Financing Activities:
     Purchase of Company common stock                   (3,569)            -
     Net proceeds from issuance of Company
       common stock                                         71           342
     Repayment of long-term obligations                    (42)          (42)
                                                      --------      --------
   Net cash provided by (used in) financing activities  (3,540)          300
                                                      --------      --------
   Increase (Decrease) in Cash and Cash Equivalents     (4,723)        5,576
   Cash and Cash Equivalents at Beginning of Period     29,852        23,504
                                                      --------      --------
   Cash and Cash Equivalents at End of Period         $ 25,129      $ 29,080
                                                      ========      ========

   The accompanying notes are an integral part of these consolidated financial
   statements.
                                        6PAGE
<PAGE>
                            THERMO POWER CORPORATION

                   Notes to Consolidated Financial Statements

    1.  General

        The interim consolidated financial statements have been prepared by
    Thermo Power Corporation (the Company) without audit and, in the opinion
    of management, reflect all adjustments of a normal recurring nature
    necessary for a fair statement of the financial position at June 28,
    1997, the results of operations for the three- and nine-month periods
    ended June 28, 1997, and June 29, 1996, and the cash flows for the
    nine-month periods ended June 28, 1997, and June 29, 1996. Interim
    results are not necessarily indicative of results for a full year.

        The consolidated balance sheet presented as of September 28, 1996,
    has been derived from the consolidated financial statements that have
    been audited by the Company's independent public accountants. The
    consolidated financial statements and notes are presented as permitted by
    Form 10-Q and do not contain certain information included in the annual
    financial statements and notes of the Company. The consolidated financial
    statements and notes included herein should be read in conjunction with
    the financial statements and notes included in the Company's Annual
    Report on Form 10-K for the fiscal year ended September 28, 1996, filed
    with the Securities and Exchange Commission.

    2.  Related-party Transaction

        In May 1997, the Company sold 420,000 shares of common stock of The
    Randers Group Incorporated to Thermo TerraTech Inc., an affiliate of the
    Company, for proceeds of $262,500, resulting in a gain of $53,000.


    Item 2 - Management's Discussion and Analysis of Financial Condition and
             Results of Operations

        Forward-looking statements, within the meaning of Section 21E of the
    Securities Exchange Act of 1934, are made throughout this Management's
    Discussion and Analysis of Financial Condition and Results of Operations.
    For this purpose, any statements contained herein that are not statements
    of historical fact may be deemed to be forward-looking statements.
    Without limiting the foregoing, the words "believes," "anticipates,"
    "plans," "expects," "seeks," "estimates," and similar expressions are
    intended to identify forward-looking statements. There are a number of
    important factors that could cause the results of the Company to differ
    materially from those indicated by such forward-looking statements,
    including those detailed under the caption "Forward-looking Statements"
    in Exhibit 13 to the Company's Annual Report on Form 10-K for the fiscal
    year ended September 28, 1996, filed with the Securities and Exchange
    Commission.

    Overview

        The Company's business is divided into three segments: Industrial
    Refrigeration Systems, Engines, and Cooling and Cogeneration Systems.
    Through the Company's FES division, the Industrial Refrigeration Systems
    segment supplies standard and custom-designed industrial refrigeration

                                        7PAGE
<PAGE>
                            THERMO POWER CORPORATION

    Overview (continued)

    systems used primarily by the food-processing, petrochemical, and
    pharmaceutical industries. NuTemp, Inc. (NuTemp) is a supplier of both
    remanufactured and new industrial refrigeration and commercial cooling
    equipment for sale or rental. NuTemp's industrial refrigeration equipment
    is used primarily in the food-processing, petrochemical, and
    pharmaceutical industries, and its commercial cooling equipment is used
    primarily in institutions and commercial buildings, as well as by service
    contractors. The demand for NuTemp's equipment is typically highest in
    the summer months and can be adversely affected by cool summer weather.

        Within the Engines segment, the Company's Crusader Engines division
    (Crusader) manufactures gasoline engines for recreational boats; propane
    and gasoline engines for lift trucks; and natural gas engines for
    vehicular, cooling, pumping, refrigeration, and other industrial
    applications.

        The Cooling and Cogeneration Systems segment consists of the
    Company's Tecogen division and the Company's ThermoLyte Corporation
    (ThermoLyte) subsidiary, formed in March 1995. Tecogen designs, develops,
    markets, and services packaged cooling and cogeneration systems fueled
    principally by natural gas for sale to a wide range of commercial,
    institutional, industrial, and multi-unit residential users. Certain
    large-capacity cooling systems are manufactured by FES, and the
    cogeneration systems are manufactured by Crusader. Tecogen also conducts
    research and development of natural gas-engine technology and on
    applications of thermal energy. ThermoLyte is developing and
    commercializing a family of gas-powered lighting products.

        The Company's revenues by industry segment are shown in the following
    table:

                                  Three Months Ended      Nine Months Ended
                                 --------------------    -------------------
                                 June 28,    June 29,    June 28,  June 29,
    (In thousands)                   1997        1996        1997      1996
    ------------------------------------------------------------------------
    Industrial Refrigeration
      Systems                     $21,297     $19,916     $56,082   $52,949
    Engines                         9,294       6,626      22,617    22,183
    Cooling and Cogeneration
      Systems                       3,716       6,402      14,280    15,925
    Intersegment sales
      elimination                    (468)       (515)     (1,529)   (1,420)
                                  -------     -------     -------   -------
                                  $33,839     $32,429     $91,450   $89,637
                                  =======     =======     =======   =======




                                        8PAGE
<PAGE>
                            THERMO POWER CORPORATION

    Results of Operations

    Third Quarter Fiscal 1997 Compared With Third Quarter Fiscal 1996

        Total revenues were $33,839,000 in the third quarter of fiscal 1997
    and $32,429,000 in the third quarter of fiscal 1996. Industrial
    Refrigeration Systems segment revenues increased to $21,297,000 in 1997
    from $19,916,000 in 1996, primarily due to greater demand for
    custom-designed industrial refrigeration packages and product services at
    FES, as well as increased shipments of remanufactured commercial cooling
    equipment and increased demand for rental equipment at NuTemp. Engines
    segment revenues increased to $9,294,000 in 1997 from $6,626,000 in 1996,
    primarily due to the inclusion in 1997 of a large shipment of
    TecoDrive(R) natural gas engines to one customer and, to a lesser extent,
    an increase in lift-truck engine sales, offset in part by a decrease in
    sales of marine-engine related products. Revenues from marine-engine
    related products declined $161,000 primarily due to a decrease in demand.
    Cooling and Cogeneration Systems segment revenues decreased to $3,716,000
    in 1997 from $6,402,000 in 1996, primarily due to decreased revenues from
    large-capacity gas-fueled cooling systems resulting from fewer incentive
    programs offered by gas companies for buyers of these systems, which is
    expected to continue. In addition, the Company had a decrease in revenues
    from sponsored research and development as a result of a continuing
    reduction in contract funding, relative to the prior year's level.

        The gross profit margin increased to 18% in the third quarter of
    fiscal 1997 from 16% in the third quarter of fiscal 1996. The gross
    profit margin for the Industrial Refrigeration Systems segment increased
    to 20% in 1997 from 18% in 1996, primarily due to higher margins at FES,
    resulting from lower warranty expenses, manufacturing efficiencies, and a
    decrease in the cost of a major component, and higher margins at NuTemp
    resulting from increased revenues. FES experienced a cost increase in the
    major component in fiscal 1996, for which the Company has begun receiving
    deliveries from an additional supplier at a lower cost. The gross profit
    margin for the Engines segment was unchanged at 10% in 1997 and 1996. The
    gross profit margin for the Cooling and Cogeneration Systems segment
    increased to 21% in 1997 from 18% in 1996, primarily due to an increase
    in higher-margin service revenues and, to a lesser extent, decreased
    shipments in 1997 of large-capacity gas-fueled cooling systems, which
    have lower margins.

        Selling, general, and administrative expenses as a percentage of
    revenues was unchanged at 13% in the third quarter of fiscal 1997 and
    1996. Research and development expenses decreased to $507,000 in 1997
    from $721,000 in 1996, primarily due to a decrease in spending on natural
    gas-engine products and gas-powered lighting products, primarily due to
    the completion of the current phase of development efforts for these
    products.

        The effective tax rate was 45% in the third quarter of fiscal 1997
    and 37% in the third quarter of fiscal 1996. The effective tax rate
    exceeded the statutory federal income tax rate primarily due to an
    increase in the valuation allowance for net operating loss carryforwards
    and other tax assets of the Company's ThermoLyte subsidiary in 1997, and
    the impact of state income taxes in 1997 and 1996.

                                        9PAGE
<PAGE>
                            THERMO POWER CORPORATION

    First Nine Months Fiscal 1997 Compared With First Nine Months Fiscal 1996

        Total revenues were $91,450,000 in the first nine months of fiscal
    1997 and $89,637,000 in the first nine months of fiscal 1996. Industrial
    Refrigeration Systems segment revenues increased to $56,082,000 in 1997
    from $52,949,000 in 1996, primarily due to greater demand for
    custom-designed industrial refrigeration packages and product services at
    FES and, to a lesser extent, increased demand for rental equipment at
    NuTemp. Engines segment revenues increased to $22,617,000 in 1997 from
    $22,183,000 in 1996, primarily due to an increase in lift-truck engine
    sales, offset in part by a decrease in sales of marine-engine related
    products and TecoDrive natural gas engines. Cooling and Cogeneration
    Systems segment revenues were $14,280,000 in 1997, compared with
    $15,925,000 in 1996.  Decreased revenues from sponsored research and
    development, gas-fueled cooling systems, and thermoelectric devices were
    offset in part by increased service revenues in 1997.
        The gross profit margin increased to 17% in the first nine months of
    fiscal 1997 from 16% in the first nine months of fiscal 1996. The gross
    profit margin for the Industrial Refrigeration Systems segment increased
    to 20% in 1997 from 19% in 1996, primarily due to higher margins at FES
    resulting from lower warranty expenses and manufacturing efficiencies.
    The gross profit margin for the Engines segment increased to 8% in 1997
    from 6% in 1996, primarily due to a reduction in warranty expenses and
    lower overhead expenses resulting from the consolidation of two
    manufacturing facilities at Crusader. The gross profit margin for the
    Cooling and Cogeneration Systems segment decreased to 20% in 1997 from
    23% in 1996, primarily due to lower revenues.

        Selling, general, and administrative expenses as a percentage of
    revenues remained unchanged at 14% in the first nine months of fiscal
    1997 and 1996. Research and development expenses decreased to $1,778,000
    in 1997 from $2,250,000 in 1996 due to the reasons discussed in the
    results of operations for the third quarter.

        Net gain on sale of investments in the first nine months of fiscal
    1996 primarily represents a gain of $344,000 relating to the sale of the
    Company's remaining investment in Thermo Electron common stock and a gain
    of $125,000 relating to the sale of the Company's remaining investment in
    6.5% subordinated convertible debentures issued by Thermo TerraTech Inc.,
    a majority-owned subsidiary of Thermo Electron.

        The effective tax rate was 49% in the first nine months of fiscal
    1997 and 38% in the first nine months of fiscal 1996. The effective tax
    rate exceeded the statutory federal income tax rate due to the reasons
    discussed in the results of operations for the third quarter.

    Liquidity and Capital Resources

        Consolidated working capital was $53,874,000 at June 28, 1997,
    compared with $57,719,000 at September 28, 1996. Included in working
    capital are cash, cash equivalents, and available-for-sale investments of
    $34,297,000 at June 28, 1997, compared with $35,880,000 at September 28,
    1996. Of the $34,297,000 balance at June 28, 1997, $15,601,000 was held
    by ThermoLyte, and the remainder was held by the Company and its wholly
    owned subsidiaries.

                                       10PAGE
<PAGE>
                            THERMO POWER CORPORATION

    Liquidity and Capital Resources (continued)

        During the first nine months of fiscal 1997, $5,703,000 of cash was
    provided by operating activities. Cash provided by operating results was
    improved by an increase in accounts payable of $3,574,000 and an increase
    in other current liabilities of $3,081,000. These increases were offset
    in part by an increase in inventories of $2,993,000 and an increase in
    accounts receivable of $913,000. Inventories increased primarily due to
    expanded purchases of one component prior to its expected redesign by its
    manufacturer. Such purchases also resulted in the increase in accounts
    payable. Other current liabilities and accounts receivable increased
    primarily due to the timing of cash collections and payments.

        During the first nine months of fiscal 1997, the Company's primary
    investing activities, excluding available-for-sale investment activity,
    included $4,277,000 expended for purchases of rental assets and property,
    plant, and equipment and $1,213,000 in proceeds received from the sale of
    rental assets. 

        The Company's financing activities used $3,540,000 of cash in the
    first nine months of fiscal 1997, primarily due to $3,569,000 of cash
    expended for the purchase of Company common stock. The Company's Board of
    Directors has authorized the repurchase, through March 17, 1998, of up to
    $5,000,000 of its own securities. Any such purchases would be funded from
    working capital. Through June 28, 1997, the Company had expended
    $3,569,000 under this authorization.

        During the remainder of fiscal 1997, the Company expects to make
    capital expenditures for the purchase of rental assets and property,
    plant, and equipment of approximately $1,900,000. The Company believes
    its existing resources are sufficient to meet the capital requirements of
    its existing operations for the foreseeable future.






                                       11PAGE
<PAGE>
                            THERMO POWER CORPORATION

                                   SIGNATURES


        Pursuant to the requirements of the Securities Exchange Act of 1934,
    the Registrant has duly caused this report to be signed on its behalf by
    the undersigned thereunto duly authorized as of the 31st day of July
    1997.

                                              THERMO POWER CORPORATION



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



                                              John N. Hatsopoulos
                                              ----------------------
                                              John N. Hatsopoulos
                                              Vice President and Chief
                                              Financial Officer



























                                       12PAGE
<PAGE>
                            THERMO POWER CORPORATION

                                   EXHIBIT INDEX

    Exhibit
    Number        Description of Exhibit
    ------------------------------------------------------------------------

      27          Financial Data Schedule.