FORM 10-Q

               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

     [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934
                                
        For the quarterly period ended September 30, 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: 1-10434


              THE READER'S DIGEST ASSOCIATION, INC.
     (Exact name of registrant as specified in its charter)

                   Delaware                   13-1726769
        (State or other jurisdiction of         (I.R.S.
        incorporation or organization)         Employer
                                            Identification
                                                 No.)
                                                   
            Pleasantville, New York           10570-7000
        (Address of principal executive       (Zip Code)
                   offices)
                       

                         (914) 238-1000
      (Registrant's telephone number, including area code)

         ______________________________________________


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 [  ]


As   of   October  30,  1998,  the  following  shares  of   the
registrant's common stock were outstanding:

Class  A  Nonvoting Common Stock, $0.01 par value:   85,450,747 shares
Class B Voting Common Stock, $0.01 par value:        21,716,057 shares



                                                               
     THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
                                
                       Index to Form 10-Q
                                
                       September 30, 1998


Part I - Financial Information                                   Page No.

The Reader's Digest Association, Inc. and Subsidiaries
Financial Statements (unaudited):

 Consolidated Condensed Statements of Income
  for the three-month periods ended September 30, 1998 and 1997       3

 Consolidated Condensed Balance Sheets
  as of September 30, 1998 and June 30, 1998                          4

 Consolidated Condensed Statements of Cash Flows
  for the three-month periods ended September 30, 1998 and 1997       5

 Notes to Consolidated Condensed Financial Statements                 6

Management's Discussion and Analysis
 of Financial Condition and Results of Operations                     9


Part II - Other Information                                          16


     THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
           CONSOLIDATED CONDENSED STATEMENTS OF INCOME
      Three-month periods ended September 30, 1998 and 1997
              (In millions, except per share data)
                           (unaudited)



                                                    Three-month period ended
                                                           September 30,
                                                         1998        1997

Revenues                                              $ 575.0     $ 561.4

Product, distribution and editorial expenses            212.5       203.5
Promotion, marketing and administrative expenses        345.9       371.4
Other operating items                                     ---        70.0

Operating profit (loss)                                  16.6       (83.5)

Other (expense) income, net                             (12.6)        6.2

Income (loss) before provision (benefit) for
 income taxes                                             4.0       (77.3)

Provision (benefit) for income taxes                      1.5       (20.9)

Income (loss) before cumulative effect of change
 in accounting principles                                 2.5       (56.4)

Cumulative effect of change in accounting principles
 for pension assets(net of tax provision of $15.2)       25.3         ---

Net income (loss)                                     $  27.8     $ (56.4)

Basic and diluted earnings (loss) per share:                                    

 Before cumulative effect of change in accounting
  principles                                          $  0.02     $ (0.53)

 Cumulative effect of change in accounting
  principles                                             0.24         ---

 Basic and diluted earnings (loss) per share          $  0.26     $ (0.53)


Average common shares outstanding                       107.2       106.3

Dividends per common share                            $ 0.225     $ 0.225



See accompanying notes to consolidated condensed financial statements.



     THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
              CONSOLIDATED CONDENSED BALANCE SHEETS
           As of September 30, 1998 and June 30, 1998
                          (In millions)
                           (unaudited)




                                                September 30,     June 30,      
                                                    1998            1998
Assets                                                                    
Cash and cash equivalents                        $    96.3       $   122.8
Receivables, net                                     478.2           376.4
Inventories                                          164.1           162.2
Prepaid expenses and other current assets            316.3           311.2

Total current assets                               1,054.9           972.6

Property, plant and equipment, net                   286.3           285.4
Other noncurrent assets                              314.3           306.0

Total assets                                     $ 1,655.5       $ 1,564.0

Liabilities and stockholders' equity                                      
Accounts payable                                 $   162.3       $   172.1
Accrued expenses                                     375.5           377.4
Income taxes payable                                   8.9            21.0
Unearned revenue                                     384.1           355.4
Other current liabilities                            115.9            90.0

Total current liabilities                          1,046.7         1,015.9

Other noncurrent liabilities                         338.9           289.5

Total liabilities                                  1,385.6         1,305.4

Capital stock                                         19.5            16.6
Paid-in capital                                      144.5           144.8
Retained earnings                                    848.4           845.0
Accumulated other comprehensive loss                 (44.7)          (49.8)
Treasury stock, at cost                             (697.8)         (698.0)

Total stockholders' equity                           269.9           258.6

Total liabilities and stockholders' equity       $ 1,655.5       $ 1,564.0


See accompanying notes to consolidated condensed financial statements.
     


    THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
         CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
      Three-month periods ended September 30, 1998 and 1997
                          (In millions)
                           (unaudited)



                                                  Three-month period ended
                                                          September 30,
                                                       1998         1997
Cash flows from operating activities                                       
Net income (loss)                                    $  27.8      $ (56.4)
Depreciation and amortization                           10.5         11.2
Other, net                                             (90.2)       (43.3)

Net change in cash due to operating activities         (51.9)       (88.5)

Cash flows from investing activities                                       
Proceeds from maturities and sales of short-term                           
 investments and marketable securities                   0.5          9.8
Proceeds from other long-term investments, net           0.8         46.1
Advance on sale of assets                               50.0          ---
Other, net                                              (5.6)        (0.9)

Net change in cash due to investing activities          45.7         55.0

Cash flows from financing activities                                       
Short-term borrowings, net                               2.6         43.2
Dividends paid                                         (24.4)       (24.2)
Other, net                                               2.7         (0.2)

Net change in cash due to financing activities         (19.1)        18.8

Effect of exchange rate changes on cash                 (1.2)        (0.3)

Net change in cash and cash equivalents                (26.5)       (15.0)

Cash and cash equivalents at beginning of period       122.8         69.1

Cash and cash equivalents at end of period           $  96.3      $  54.1



See accompanying notes to consolidated condensed financial statements.



     THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
              (In millions, except per share data)
                           (unaudited)

(1) Basis of Presentation

The company reports on a fiscal year beginning July 1.  The three-
month  periods  ended September 30, 1998 and 1997 are  the  first
fiscal  quarters  of  fiscal  year 1999  and  fiscal  year  1998,
respectively.

The accompanying consolidated condensed financial statements have
not  been  audited, but in the opinion of management,  have  been
prepared   in  conformity  with  generally  accepted   accounting
principles applying certain judgments and estimates which include
all adjustments (consisting only of normal recurring adjustments)
considered   necessary  to  present  fairly   such   information.
Operating  results  for any interim period  are  not  necessarily
indicative  of  the  results  for  an  entire  year  due  to  the
seasonality of the company's business.

(2) Basic and Diluted Earnings (Loss) Per Share

Basic  earnings  (loss)  per share is computed  by  dividing  net
income (loss), less preferred stock dividend requirements of $0.3
in  each of the three-month periods ended September 30, 1998  and
1997  by the weighted average number of common shares outstanding
during the period.  Diluted earnings (loss) per share is computed
by  dividing  net  income (loss), less preferred  stock  dividend
requirements,  by  the weighted average number of  common  shares
outstanding  during the period, assuming exercise and  conversion
of  stock options.  A weighted average number of common shares of
107.4  and 106.3 for the three-month periods ended September  30,
1998  and  1997,  respectively was used for  the  computation  of
diluted earnings (loss) per share.

(3) Inventories
                                               September 30,      June 30,
                                                   1998             1998
                                                      
Raw materials                                     $  17.5         $  21.8
Work-in-progress                                     20.1            24.7
Finished goods                                      126.5           115.7
                                                  $ 164.1         $ 162.2

(4) Revenues by Business Segments and Geographic Areas

                                                   Three-month period ended
                                                        September 30,
                                                      1998          1997
BUSINESS SEGMENTS                                                
Reader's Digest Magazine                           $ 167.6        $ 172.1
Books and Home Entertainment Products                372.3          352.0
Special Interest Magazines                            22.9           21.3
Other Businesses                                      12.2           16.0

Total revenues                                     $ 575.0        $ 561.4
                                                                 
GEOGRAPHIC AREAS                                                 
United States                                      $ 256.5        $ 248.5
Europe                                               222.0          217.7
Pacific and Other Markets                             96.5           95.2

Total revenues                                     $ 575.0        $ 561.4
                                                                 
                                
(5) Comprehensive Income (Loss)

Effective  July  1,  1998,  the  company  adopted  Statement   of
Financial  Accounting Standards No. 130, "Reporting Comprehensive
Income."   The company has determined that at June 30,  1999,  it
will  display  comprehensive income (loss)  in  the  Consolidated
Statement of Changes in Stockholders' Equity.  Accumulated  other
comprehensive  loss  as  reported in the  Consolidated  Condensed
Balance  Sheets  as  of September 30, 1998  and  June  30,  1998,
represents   foreign  currency  translation   adjustments.    The
components  of comprehensive income (loss), net of  related  tax,
for  the  three-month periods ended September 30, 1998  and  1997
were as follows:

                                                   Three-month period ended
                                                          September 30,
                                                       1998           1997
                                                                     
Net income (loss)                                     $ 27.8        $(56.4)
Change in:                                                           
 Foreign currency translation adjustment                 5.1          (6.5)
 Net unrealized gains on certain investments             ---           0.2
                                                                     
                                                      $ 32.9        $(62.7)


(6) Other Operating Items

In  connection  with  the  new long-term  strategy  announced  in
September 1998, the company expects to record additional  charges
to  other operating items in the second quarter of fiscal 1999 in
a   range   of  $30.0  to  $50.0   for  the  discontinuation   of
unproductive  businesses, cost reductions and  re-engineering  as
components of the plan are finalized.

As  described in Note TWO to the company's consolidated financial
statements  included in its 1998 Annual Report  to  Stockholders,
the  company  recorded charges of $70.0 in the first  quarter  of
1998  relating  to the discontinuation of certain businesses  and
the realignment of business processes and operations, charges  of
$35.0  in  the fourth quarter of 1997 relating primarily  to  the
realignment  of the organization and operations, and  charges  of
$204.0  in the third quarter of 1996 relating to the streamlining
of  the  company's  organizational structure  and  the  strategic
repositioning  of certain businesses.  The current  activity,  as
well as reserve balances remaining at September 30, 1998, were:

                                          Balance at    Current     Balance
                                        June 30, 1998   Activity   Remaining
                                                                         
Employee retirement & severance
 benefits                                  $  59.6      $  (4.5)     $ 55.1
Other items                                   24.2         (6.3)       17.9
Business repositioning                         3.9          ---         3.9
                                                                         
Total                                      $  87.7      $ (10.8)     $ 76.9

(7) Debt

As described in Note NINE to the company's consolidated financial
statements  included in its 1998 Annual Report  to  Stockholders,
the  company  is a party to a Competitive Advance  and  Revolving
Credit Facility Agreement (the credit agreement) of up to $300.0.
Under  the credit agreement, the company must comply with certain
financial  covenants, including a minimum level  of  consolidated
tangible  net  worth.  At September 30, 1998, no borrowings  were
outstanding  under  the credit agreement.  In  addition,  various
international subsidiaries of the company have available lines of
credit  totaling  $70.9.  At September 30,  1998,  loans  in  the
amount  of  $10.2 were outstanding under international  lines  of
credit at a weighted average interest rate of  7.8%.

(8) Change in Accounting for Pension Assets

Effective  July  1,  1998, the company  changed  the  method  for
calculating the market-related value of pension plan assets  used
in  determining  the return-on-asset component of annual  pension
expense  and the cumulative net unrecognized gain or loss subject
to  amortization.  The company believes that the  new  method  is
more widely used in practice and preferable because it results in
pension  plan  asset  values that more closely  approximate  fair
value,  while still mitigating the effect of annual market  value
fluctuations.  In addition, the new method facilitates the global
management  of  the company's pension plans as it  results  in  a
consistent methodology for all plans for this calculation.   This
change  resulted  in a noncash benefit in fiscal  1999  of  $40.5
($25.3 after tax, or $0.24 per share) representing the cumulative
effect  of the change related to years prior to fiscal  1999  and
$4.8  in  lower  pension expense ($3.0 after tax,  or  $0.03  per
share) related to the three-month period ended September 30, 1998
as  compared to the previous accounting method.  Had this  change
been  applied  retroactively, pension  expense  would  have  been
reduced by $3.9 ($2.5 after tax, or $0.02 per share) in the three-
month period ended September 30, 1997.

(9) Sale Leaseback Transaction

In  the  first  quarter of fiscal 1999 the company announced  its
intention  to  enter  into  a sale leaseback  agreement  for  its
principal  operating office in the United Kingdom.   The  company
anticipates that this transaction will be finalized in the second
quarter of fiscal 1999.


     The Reader's Digest Association, Inc. and Subsidiaries
              Management's Discussion and Analysis
        of Financial Condition and Results of Operations
          (Dollars in millions, except per share data)

Results of Operations

Three-Month Period Ended September 30, 1998 Compared With  Three-
Month Period Ended September 30, 1997

Management's   discussion  and  analysis,  as  it   pertains   to
geographic  and  business segment information, has  been  written
excluding  the  effect of the 1998 first quarter other  operating
items  of  $70.0 in order to analyze the results on a  comparable
basis.

Revenues/Operating Profit (Loss)
Worldwide  revenues for the first quarter of  1999  increased  to
$575.0,  or  by 2%, compared with $561.4 in the first quarter  of
1998.   Excluding  the  adverse  effect  of  changes  in  foreign
currency exchange rates, revenues increased 4%.  This improvement
was  primarily attributable to higher unit sales and sales  of  a
higher-priced  product  mix within Books and  Home  Entertainment
Products.  The increase in unit sales was predominantly a  result
of  the  timing of mail dates and number of promotional  mailings
during  the  quarter,  as well as improved customer  response  to
promotional mailings in most international markets.   The  higher
customer  response  rates resulted primarily  from  a  return  to
traditional promotional formats and the elimination of the  least
profitable  names from promotional mailings.  Higher revenues  in
most  major  developed markets and growth in Eastern  Europe  and
Latin  America  were  moderately  offset  by  declines  in  other
developed European markets.

The  company reported worldwide operating profit of $16.6 in  the
first  quarter of 1999, compared with an operating loss of  $83.5
in  the first quarter of 1998, before excluding the first quarter
1998  other  operating  items of $70.0. These  operating  results
reflect   higher   revenues,  the  benefits  of  cost-containment
initiatives in developed markets resulting from actions taken  in
prior years, lower proportionate promotional spending as a result
of  lower mail quantities and higher customer response rates, and
the termination of strategic alliances as well as the elimination
of  spending on certain unprofitable growth initiatives, slightly
offset  by losses at the company's operations in Russia  stemming
primarily  from the economic turmoil in Russia that  resulted  in
the devaluation of the ruble.

Other (Expense) Income, Net
Other  (expense)  income, net decreased in the first  quarter  of
1999  to  expense of $12.6, compared with income of $6.2  in  the
prior  year.   This  decrease was primarily  because  of  foreign
exchange   translation  losses  of  $7.8   resulting   from   the
devaluation of the Russian ruble and, to a lesser extent,  losses
on  foreign  exchange  transactions  and  hedging  activity.   In
addition,  other  income in the first quarter  of  1998  included
gains from sales of certain investments.

Income Taxes
For  the first quarter of 1999, the effective tax rate was 37.5%.
For  the first quarter of 1998, the reported tax rate was  27.1%.
Excluding  the  effect  of  other operating  items,  the  overall
effective tax rate was 37.5% for the first quarter of 1998.

Change in Accounting Principles
In  the  first  quarter  of fiscal 1999, the  company  adopted  a
preferred  method  for  calculating the market-related  value  of
pension  plan  assets  used  in determining  the  return-on-asset
component  of  annual  pension expense  and  the  cumulative  net
unrecognized   gain   or  loss  subject  to  amortization.    The
cumulative  effect of adopting this change, for  years  prior  to
fiscal  1999, was a benefit of $40.5 ($25.3 after tax,  or  $0.24
per share).  In addition, this change reduced pension expense for
the  first quarter of 1999 by $4.8 ($3.0 after tax, or $0.03  per
share).

Basic and Diluted Earnings (Loss) per Share
The company reported net income of $27.8, or $0.26 per share,  in
the first quarter of 1999, compared with a net loss of $56.4,  or
$0.53  per  share, in the first quarter of 1998.   Excluding  the
cumulative effect of change in accounting principles for  pension
assets  in  1999  and other operating items in  1998,  basic  and
diluted  earnings  per share was $0.02 in the  first  quarter  of
1999,  compared  with  a loss of $0.05 per  share  in  the  first
quarter of 1998.

The company's operations in Russia were significantly affected by
the  general  economic turmoil and resulting devaluation  of  the
ruble  in the first quarter of 1999.  In response to the  Russian
economic  situation, the company took actions to scale  back  its
operations  in  Russia.   The  company's  operations  in   Russia
generated  a net loss of $16.4, or $0.15 per share in  the  first
quarter of 1999, primarily as a result of the economic turmoil.

Geographic Areas

United States
Revenues  in the United States increased from $248.5 in  1998  to
$256.5,   or  by  3%,  in  1999.   This  increase  was  primarily
attributable  to  higher unit sales and sales of a  higher-priced
product  mix  within  Books and Home Entertainment  Products  and
increased  advertising  revenues for  Reader's  Digest  Magazine.
Within  Books  and Home Entertainment Products,  higher  revenues
from  unit  sales  of  general books and,  to  a  lesser  extent,
Condensed Books, were moderately offset by declines in  sales  of
music  products.   General  books  revenues  increased  primarily
because  of  the  number  of promotional mailings  in  the  first
quarter  of  1999  which  resulted in an  additional  promotional
mailing as compared to a year ago and, to a lesser extent, higher
customer   response  to  promotional  mailings.    Revenues   for
Condensed  Books improved principally because of  the  timing  of
shipments  compared with the prior year.  The decrease  in  music
products  was  caused by lower customer response to mailings,  as
well  as  lower  mail  quantities within  the  mailings.   Higher
average prices in Books and Home Entertainment Products were  the
result  of  an  increase in the price of Condensed  Books  and  a
higher-priced  mix  of  products offered  in  1999.   Advertising
revenues  for  Reader's Digest Magazine increased  because  of  a
higher number of advertising pages sold, moderately offset  by  a
lower   average  rate  per  page.   Operating  results   improved
significantly  in  1999, compared with 1998, resulting  from  the
improved  revenues, a reduction in employee benefit  costs  as  a
result  of  the change in accounting for pension assets  and  the
termination of strategic alliances as well as the elimination  of
spending on certain unprofitable growth initiatives.

Europe
Revenues in Europe increased from $217.7 in 1998 to $222.0, or by
2%, in 1999.  Excluding the positive effect of changes in foreign
currency  exchange rates, revenues were at the same  level  as  a
year  ago.  Higher revenues in major developed markets and growth
in  Eastern  Europe  were offset by declines in  other  developed
markets.   Higher  Books  and  Home Entertainment  revenues  were
offset by lower circulation revenues for Reader's Digest Magazine
in  major developed markets and lower activity in the merchandise
catalog  business.  Within Books and Home Entertainment Products,
increased general books revenues resulting from higher units sold
at  a  higher  average price and increased unit  sales  of  music
products,  were  moderately offset by lower unit sales  of  video
products.   Improved  customer  response  rates  to   promotional
mailings in major developed markets principally resulting from  a
return to traditional promotional formats and the elimination  of
the  least profitable names from promotional mailings contributed
to  higher  general  books and music products revenues.   General
books  revenues also benefited from a significantly higher-priced
mix  of  products offered in the first quarter of 1999 and growth
in  Eastern  Europe.   Sales  of video products  were  negatively
affected  by  the timing of mail dates and number of  promotional
mailings during the quarter, which resulted in fewer mailings  as
compared  to a year ago.  Operating profit improved significantly
in  1999,  compared  with 1998, as a result of  higher  revenues,
lower  proportionate promotional spending as a  result  of  lower
mail  quantities  and  higher customer response  rates,  and  the
benefits   of  cost-containment  initiatives  in  most  developed
markets  resulting from actions taken in prior years,  moderately
offset  by losses at the company's operations in Russia  stemming
primarily  from the economic turmoil in Russia that  resulted  in
the devaluation of the ruble.

Pacific and Other Markets
Revenues  in  Pacific and Other Markets increased from  $95.2  in
1998  to $96.5, or by 1%, in 1999.  Excluding the adverse  effect
of changes in foreign currency exchange rates, revenues increased
16%.    Revenues  increased  primarily  within  Books  and   Home
Entertainment  Products,  because of higher  unit  sales  in  all
product  lines,  most  notably  music  and  video  products   and
Condensed Books and, to a lesser extent, sales of a higher-priced
product  mix  within  general  books.   Higher  unit  sales  were
attributable to growth in music and video product sales in  Latin
America,  particularly  in  Brazil, as  well  as  the  launch  of
Condensed  Books  in  this region.  Revenues  also  increased  in
Australia  because of the timing of mail dates and  shipments  as
well  as  the  number of promotional mailings during the  quarter
compared  with the prior year, and improved customer response  to
promotional  mailings.   Operating  results  improved  in   1999,
compared  with 1998, primarily because of higher revenues,  lower
proportionate promotional spending as a result of higher customer
response  rates and the benefits of cost-containment  initiatives
in developed markets resulting from actions taken in prior years.

Corporate Expense
Corporate Expense in the first quarter of 1999 decreased to $8.4,
compared  with  $10.9 in 1998, primarily as  a  result  of  lower
consulting  and  recruiting costs, moderately offset  by  certain
employee benefit costs.

Business Segments

Reader's Digest Magazine
Revenues  for Reader's Digest Magazine decreased from  $172.1  in
1998  to $167.6, or by 3%, in 1999.  Excluding the adverse effect
of changes in foreign currency exchange rates, revenues decreased
1%.  The decrease in revenues was primarily attributable to lower
circulation  revenues moderately offset by  a  higher  number  of
advertising  pages sold at a lower average rate per page  in  the
first   quarter   of  1999.   Lower  circulation  revenues   were
principally  caused  by lower circulation levels  in  the  United
States   and  circulation  declines  in  several  major  markets,
particularly  Germany and the United Kingdom.  The  effect  of  a
significantly higher number of ad pages sold in the United States
and,  to a lesser extent, in Germany, was moderately offset by  a
lower   negotiated  average  rate  per  page  in  these  markets.
Operating  profit for Reader's Digest Magazine  improved  in  the
first  quarter of 1999 compared with the same period a year  ago.
The  increase primarily reflects a reduction in employee  benefit
costs as a result of the change in accounting for pension assets.
In  order to increase the efficiency of its promotional spending,
the  company announced on October 1, 1998 that it will reduce the
rate  base for Reader's Digest Magazine in the United States from
15  million  copies per issue to 13.3 million for the  January  -
June 1999 issues, then level off at 12.5 million copies with  the
July 1999 issue.

Books and Home Entertainment Products
Revenues for Books and Home Entertainment Products increased from
$352.0  in  1998  to  $372.3, or by 6%, in  1999.  Excluding  the
adverse  effect  of changes in foreign currency  exchange  rates,
revenues  increased 8%, principally attributable to the company's
Pacific and Other Markets and, to a lesser extent, United  States
operations.  Revenues increased in general books and, to a lesser
extent,  Condensed Books, as a result of higher  unit  sales  and
sales  of  a higher-priced product mix.  The increase in  general
books  was  caused by the number of promotional mailings  in  the
first quarter of 1999 which resulted in an additional promotional
mailing  as  compared to a year ago in the United States,  higher
customer  response  to promotional mailings  in  major  developed
markets,  growth  in  Eastern Europe and a significantly  higher-
priced  mix  of  products offered in the first quarter  of  1999.
Higher  customer response rates to promotional mailings  resulted
primarily  from a return to traditional promotional  formats  and
the  elimination  of the least profitable names from  promotional
mailings.  Condensed Books revenues improved principally  because
of the timing of shipments compared with the prior year, improved
customer response to promotional mailings in certain markets, and
the  launch of Condensed Books in Latin America.  Higher  average
prices for Condensed Books were the result of price increases  in
the  United States and certain International markets.   Operating
profit  for  Books  and  Home  Entertainment  Products  increased
significantly  in  1999,  compared with  1998.   These  operating
results  were  affected by higher revenues,  lower  proportionate
promotional  spending as a result of lower  mail  quantities  and
higher  customer response rates, the elimination of  spending  on
certain unprofitable growth initiatives and the benefits of cost-
containment initiatives in most developed markets resulting  from
actions taken in prior years.

Special Interest Magazines
Revenues  for Special Interest Magazines increased from $21.3  in
1998  to  $22.9, or by 8%, in 1999.  This increase was  primarily
attributable  to  higher  circulation and  advertising  revenues,
resulting  from subscription price increases, higher subscription
levels  and  a higher average rate per advertising page  sold  in
1999,  principally as a result of rate base increases for several
magazines.  Operating results improved in 1999 compared with 1998
primarily  as a result of the higher circulation and  advertising
revenues.

Forward-Looking Information

Strategic Initiatives
The company is undertaking a three-phase strategy to build on its
fundamental  strengths and create growth opportunities  over  the
next three years.

In  July  1998, the company announced as the first step  in  this
strategy  a  global reorganization that included the organization
of  operations  into four business groups, the  restructuring  of
editorial  organizations,  the  establishment  of  new  reporting
relationships  and the reassignment of certain  executives.   The
second  phase  of  the  strategy, announced  in  September  1998,
targeted  the  restructuring  of  costs  and  the  conversion  of
underproductive  assets  to cash.  The  main  components  of  the
second   phase   of   the  strategy  were  the   elimination   or
rationalization  of unproductive businesses, activity-based  cost
reductions and re-engineering, and leveraging the asset  base  of
the company.

The  global  reorganization announced in  July  is  substantially
complete.    The  second  phase  of  the  strategy  is  currently
underway,  and the elimination or rationalization of unproductive
businesses is still on track to be completed within the  next  18
months.  The company expects to record charges to other operating
items  in  a  range  of $30.0 to $50.0 in the second  quarter  of
fiscal  1999 related to cost reduction and re-engineering actions
as components of the plan are finalized.  Actions to leverage the
asset  base  of the company are in process and the  sale  of  key
works from the art collection and the sale of the company's  U.K.
Canary Wharf office facility are expected to be completed by  the
end  of  the second quarter of 1999.  In addition, on October  9,
1998  the company announced a reduction in its quarterly dividend
for the second quarter of 1999 from $0.225 per share to $0.05 per
share.

The  third  phase of the strategy is expected to be announced  in
January  1999  and  will focus on plans to expand  the  business.
This will include investing in internal opportunities, as well as
targeting   acquisitions  that  leverage   the   company's   core
strengths, expanding geographically, introducing new products and
engaging in at least one completely new business.

Fiscal 1999 Results
The  first  quarter of fiscal 1999 was significantly affected  by
the  economic turmoil in Russia that resulted in the  devaluation
of  the  ruble.   The  company has taken actions  to  scale  back
operations  in Russia in response to the economic  turmoil.   The
company's actions are expected to mitigate future losses from the
company's  operations in Russia.  Further losses are  anticipated
for  the  company's  operations in Russia, although  not  at  the
levels that were recognized in the first quarter.

In  addition, results for the first quarter of fiscal  1999  were
positively  affected by the timing of mail dates  and  number  of
promotional  mailings during the quarter as compared  to  a  year
ago, as well as improved customer response to those mailings.  On
balance,  the remainder of fiscal 1999 is expected to reflect  an
offset  to a portion of this timing, as well as some weakness  in
series   product   lines  in  certain  markets   resulting   from
disappointing  introductory mailings in the first  quarter.   The
remainder of the year is expected to continue to benefit from the
improved  customer response rates and the reduction  in  employee
benefit costs as a result of the change in accounting for pension
assets.   However,  the  company  continues  to  see  significant
volatility  in the level of customer response rates in individual
mailings.   As  such,  the  company  is  cautious  regarding  the
continuing  effect  of improved customer response  rates  on  its
outlook for results for fiscal 1999.  Notwithstanding the  events
in  Russia, results for fiscal 1999 are expected to show a modest
improvement over fiscal 1998 including the benefit for the change
in  accounting for pension assets and before the effects  of  the
execution of the second phase of the strategy and other operating
items;  however,  as the strategy is executed worldwide,  results
are  expected  to show additional improvement in  1999  and  more
significant benefits are anticipated over the next two  to  three
years.

Impact of the Year 2000 Issue
The year 2000 issue is the result of computer programs which were
written  using only two digits, rather than four, to represent  a
year.   Date-sensitive software or hardware may not  be  able  to
distinguish  between  1900  and 2000 and  programs  that  perform
arithmetic operations, comparisons or sorting of date fields  may
begin yielding incorrect results.  This could potentially cause a
system failure or miscalculations that could disrupt operations.

The  Company's State of Readiness.  The company has  developed  a
remediation  plan  for its year 2000 issue  that  involves  three
overlapping phases:

1)Inventory  -  This phase includes the creation of an  inventory
  of three functional areas:

     a)Applications and information technology (IT)  equipment  -
     These  include  all mainframe, network and desktop  hardware
     and  software,  including custom and packaged  applications,
     and IT embedded systems.

     b)Non-information  technology (non-IT)  embedded  systems  -
     These   include  non-IT  equipment  and  machinery.   Non-IT
     embedded  systems,  such as security,  fire  prevention  and
     climate   control   systems   typically   include   embedded
     technology, such as microcontrollers.

    c)Vendor  relationships  -  These include  significant  third
     party  vendors and suppliers of goods and services, as  well
     as vendor and supplier interfaces.

 The  United  States  and  developed international  markets  have
  substantially  completed the inventory phase  and  plan  to  be
  fully completed by December 1998.

2) Analysis   -  This  phase  includes  the  evaluation   of   the
  inventoried  items for year 2000 compliance, the  determination
  of  the  remediation  method  and resources  required  and  the
  development  of an implementation plan.  A significant  portion
  of  the  analysis  phase is complete in the United  States  and
  developed  international markets.  The United States and  major
  developed   international  markets  expect  to   complete   the
  analysis  phase  for non-IT embedded systems by December  1998.
  All  other  components  of the analysis phase  for  the  United
  States and developed international markets are expected  to  be
  completed by March 1999.

3) Implementation   -   This   phase   includes   executing    the
  implementation plan for all applicable hardware  and  software,
  interfaces  and  systems.  This involves testing  the  changes,
  beginning   to  utilize  the  changed  procedures   in   actual
  operations,  testing in a year 2000-simulated  environment  and
  vendor  interface  testing.  Subsequent to implementation,  the
  company  will  conduct live testing on January 1 and  2,  2000,
  before   business   commences  on   January   3,   2000.    The
  implementation  phase, including testing for  certain  critical
  applications,  has  commenced in the United  States  and  major
  developed  international  markets,  and  is  expected   to   be
  completed  by  June 1999 for applications and IT equipment  and
  non-IT   embedded  systems.   All  other  components   of   the
  implementation  phase  for  the  United  States  and  developed
  international   markets  are  expected  to  be   completed   by
  September 1999.

The  company's  operations in developing  international  markets,
including operations in Latin America, Eastern Europe and the Far
East,  are  in the preliminary stages of assessing exposure  with
respect to their local year 2000 issues.

The  company's  remediation plan for its year 2000  issue  is  an
ongoing  process  and the estimated completion  dates  above  are
subject to change.

The Risk of the Company's Year 2000 Issue.  Overall, at this time
the company believes that its systems will be year 2000 compliant
in  a  timely  manner  for several reasons.  Several  significant
marketing  and  fulfillment systems are  already  compliant.   In
addition,   the  company  extensively  utilizes  certain   shared
applications that should be remediated once and then deployed  to
all  appropriate  markets.  Also, comprehensive  testing  of  all
critical  systems is planned to be conducted in a simulated  year
2000 environment.  Additionally, critical fulfillment systems  in
the United States and several developed international markets use
a  one-digit field to denote the year, therefore the date  fields
for these systems are updated every 10 years and the year 2000 is
not an issue requiring separate attention.

The  company  believes that the risk of developing  international
markets' not being year 2000 compliant on a timely basis  is  low
primarily  because the majority of their custom applications  are
shared  systems  that  were developed in the  United  States  and
Canada and are currently year 2000 compliant, or are expected  to
be  by  December  31,  1998.   In addition,  since  most  of  the
equipment  in  these locations is relatively new  there  is  less
likelihood  that  the  equipment  is  not  currently  year   2000
compliant.

The  company  believes  that the area of  greatest  risk  to  the
company  surrounding the year 2000 issue relates  to  significant
suppliers'  failing  to remediate their year  2000  issues  in  a
timely  manner.   The  company  has  relationships  with  certain
significant  suppliers  in  most of the  locations  in  which  it
operates.   These  relationships may be material  to  some  local
operations and, in the aggregate, may be material to the company.
The company relies on suppliers to deliver a broad range of goods
and  services  worldwide, including book  and  magazine  printing
services,  supplies of promotional materials and paper, warehouse
facilities,  lettershops  which  assemble  promotional  mailings,
customer  service  facilities, postal delivery services,  banking
services,  telecommunications and electricity.   The  company  is
conducting  formal communications with its significant  suppliers
in  all  locations to determine the extent to  which  it  may  be
affected  by  those third parties' plans to remediate  their  own
year 2000 issue in a timely manner.  The level of preparedness of
significant  suppliers can vary greatly from country to  country.
If a number of significant suppliers are not year 2000 compliant,
this  could  have  a  material adverse effect  on  the  company's
results of operations, financial position or cash flow.

The  Company's Contingency Plans.  The company is developing  its
country-by-country  contingency plans and expects  to  have  them
completed by June 1999.  To mitigate the effects of the company's
or significant suppliers' potential failure to remediate the year
2000 issue in a timely manner, the company would take appropriate
actions.   Such  actions  may  include  having  arrangements  for
alternate suppliers, re-running processes if errors occur,  using
manual  intervention  to  ensure the continuation  of  operations
where  necessary, and scheduling activity in December  1999  that
would  normally occur at the beginning of January  2000.   If  it
becomes  necessary  for  the company  to  take  these  corrective
actions,  it  is  uncertain,  until  the  contingency  plans  are
finalized,  whether  this would result in significant  delays  in
business  operations  or have a material adverse  effect  on  the
company's results of operations, financial position or cash flow.

Costs  to Address the Company's Year 2000 Issue.  The total  cost
of  the  company's remediation plan is estimated at approximately
$13.0  to $18.0 and is being funded through operating cash flows.
To  manage the cash flow effects of these incremental costs,  the
company  has  deferred certain IT development  costs  and  system
enhancements.    Of  the  total  cost,  approximately   $2.0   is
attributable   to  new  hardware  and  software  that   will   be
capitalized.   The remainder will be expensed  as  incurred.   To
date,  approximately $6.0 of the total cost  of  the  remediation
plan has been spent, the majority of which was expensed.

Impact of the Euro Conversion
On January 1, 1999, 11 of the 15 member countries of the European
Union  are scheduled to establish fixed conversion rates  between
their  existing sovereign currencies ("legacy currencies") and  a
single  currency  called  the euro.  The  legacy  currencies  are
scheduled  to remain legal tender as denominations  of  the  euro
during  the transition period from January 1, 1999 to January  1,
2002.   Beginning  January  1, 2002, euro-denominated  bills  and
coins  will  be introduced and by July 1, 2002, legacy currencies
will no longer be legal tender.

The  company  has  initiated an internal analysis  regarding  the
business and systems issues related to the euro conversion and is
in  the process of developing a strategic plan to ensure that all
necessary modifications are made on a timely basis.  As the first
step,  to accommodate the introduction of the euro on January  1,
1999,  the company's operations in markets that are adopting  the
euro  plan  to  be able to accept payments and pay  suppliers  in
euros  at that time, as well as have the ability to indicate  the
euro  equivalent of pricing on invoices.  During  the  transition
period,  the  company will be monitoring customer and  competitor
reaction  to  the  euro  and will update the  strategic  plan  as
needed.

The  company  believes that the conversion to the euro  will  not
have  a  significant  impact on the marketing  strategy  for  the
company's European operations.  The euro is not expected to  have
a significant competitive impact, including the resulting need to
synchronize  prices between markets, primarily because,  for  the
most  part,  the  editorial content of the  company's  publishing
products  varies, the products are published in  local  languages
and  they  are sold principally through direct mail  rather  than
retail  channels.  These factors result in products that tend  to
be  unique  to each market that do not easily lend themselves  to
price comparisons across borders.  The estimated costs to convert
all  affected systems to the euro will not be finalized until the
company has completed a strategic plan; therefore it is uncertain
whether  the  costs  of conversion will have a  material  adverse
effect on the company's results of operations, financial position
or cash flow.

                              *****

The  statements contained in this report, if not historical,  are
forward-looking statements, which involve risks and uncertainties
that  could  cause actual results to differ materially  from  the
financial  results  described in the forward-looking  statements.
These risks and uncertainties include:  the effect of potentially
more   restrictive  privacy  and  other  governmental  regulation
relating  to  the  company's marketing  methods;  the  effect  of
modified  and varied promotions; the ability to identify customer
trends; the ability to continue to create a broadly appealing mix
of  new  products;  the ability to attract  and  retain  new  and
younger magazine subscribers and product customers in view of the
maturing  of an important portion of the U.S. customer base;  the
ability  to  attract and retain subscribers and customers  in  an
economically   efficient   manner;  the   effect   of   selective
adjustments   in  pricing;  the  ability  to  expand   and   more
effectively utilize the company's customer database; the  ability
to  expand  into new international markets and to  introduce  new
product  lines  into  new and existing markets;  the  ability  to
expand  into  new  channels  of  distribution;  the  ability   to
negotiate and implement productive strategic alliances and  joint
ventures;  the  ability to contain and reduce  costs,  especially
through global efficiencies; the cost and effectiveness of the re-
engineering of business processes and operations; the accuracy of
management's  assessment of the current status of  the  company's
business;  the  evolution  of  the company's  organizational  and
structural capabilities; the ability of the company to respond to
competitive  pressures within and outside  the  direct  marketing
industry;  the effect of worldwide paper and postage  costs;  the
effect of postal disruptions on deliveries; the effect of foreign
currency  fluctuations; the effect of the year  2000  issue;  the
effect  of  the  transition  to the euro;  and  general  economic
conditions, particularly those in Russia.

Liquidity and Capital Resources

Cash  and cash equivalents, short-term investments and marketable
securities  decreased  $26.8  to  $99.3  at  September  30,  1998
compared with June 30, 1998.  The decrease was primarily a result
of  operating cash flow requirements and dividend payments, which
were  offset  to  a large extent by an advance  on  the  sale  of
certain assets.

In the first quarter of 1999, the company paid a $0.225 per share
dividend on its common stock, the same as a year ago.  On October
9,  1998,  the  company announced a reduction  in  its  quarterly
dividend  for the second quarter of 1999 to $0.05 per share.   At
the current rate, the annualized dividend is $0.375 per share  in
1999 compared with $0.90 in 1998.

The  company  did not repurchase any shares of Class A  nonvoting
common stock in the first quarter of 1999.

The  company  is a party to a Competitive Advance  and  Revolving
Credit  Facility  Agreement amended as of June 2,  1998,  with  a
syndicate  of domestic and foreign banks (the credit  agreement).
The  credit  agreement, which expires in November  2001,  permits
competitive  advance  and revolving credit borrowings  of  up  to
$300.0  by the company and its designated subsidiaries.  Interest
rates can be based on several pricing options that can vary based
upon  operating  results of the company.   The  proceeds  of  the
borrowings may be used for general corporate purposes,  including
acquisitions, share repurchases and commercial paper backup.  The
credit  agreement contains certain restrictions on incurrence  of
debt,  liens  and guarantees of indebtedness.  The  company  must
also comply with certain financial covenants, including a minimum
level of consolidated tangible net worth.  At September 30, 1998,
there were no borrowings outstanding under the credit agreement.

In  addition, various international subsidiaries of  the  company
have available lines of credit totaling $70.9.  At September  30,
1998,  loans  in  the  amount  of $10.2  were  outstanding  under
international lines of credit at a weighted average interest rate
of 7.8%.

The  company believes that its liquidity, capital resources, cash
flow and borrowing capacity are sufficient to fund normal capital
expenditures,  working  capital  requirements,  the  payment   of
dividends   and   implementation  of  the   company's   strategic
initiatives.


                   PART II.  OTHER INFORMATION


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

(a)  Exhibits

     18   Letter from KPMG Peat Marwick LLP dated as of November 13, 1998
          re change in accounting principles for pension assets.

     27   Financial Data Schedule





(b)  Reports on Form 8-K

     During  the  three-months  ended  September  30,  1998,  the
     company filed the following reports on Form 8-K:

     Form  8-K  dated July 27, 1998 which included a  copy  of  a
     press release relating to senior management changes.

     Form  8-K dated August 19, 1998 which included a copy  of  a
     press release relating to the election of a director to  the
     company's Board of Directors.

     Form 8-K dated September 16, 1998 which included a copy of a
     press   release   relating   to  the   company's   strategic
     initiatives.








                           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.






                                     The Reader's Digest Association, Inc.
                                        (Registrant)



Date:  November 13, 1998   By:          GEORGE S. SCIMONE
                                        George S. Scimone
                                        Senior Vice President and
                                        Chief Financial Officer
                                        (and authorized signatory)



                                
                                
                          EXHIBIT INDEX
                                
                                
                                                              
Exhibit                                                         Page
                                                               
18      Letter from KPMG Peat Marwick LLP dated as of November 13,
        1998 re change in accounting principles for pension assets.
                                                               
27      Financial Data Schedule