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, 1999

                                  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  29, 1999, the following shares of the  registrant's
common stock were outstanding:

Class A Nonvoting Common Stock, $0.01 par value:  94,037,769 shares
Class B Voting Common Stock, $0.01 par value:     12,432,164 shares



                                                 Page 1 of 19 pages.

        THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES

                          Index to Form 10-Q

                          September 30, 1999


Part I - Financial Information                               Page No.

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

Consolidated Condensed Statements of Income
 for the three-month periods ended September 30, 1999 and 1998     3

Consolidated Condensed Balance Sheets
 as of September 30, 1999 and June 30, 1999                        4

Consolidated Condensed Statements of Cash Flows
 for the three-month periods ended September 30, 1999 and 1998     5

Notes to Consolidated Condensed Financial Statements               6


Management's Discussion and Analysis
 of Financial Condition and Results of Operations                 10


Part II - Other Information                                       17

        The Reader's Digest Association, Inc. and Subsidiaries
              Consolidated Condensed Statements of Income
         Three-month periods ended September 30, 1999 and 1998
                 (In millions, except per share data)
                              (unaudited)


                                                   Three-month period ended
                                                        September 30,
                                                     1999          1998

Revenues                                        $    519.2     $   579.7

Product, distribution and editorial expenses         182.6         217.2
Promotion, marketing and administrative              297.8         345.9
expenses

 Operating profit                                     38.8          16.6

Other income (expense), net                            7.0         (12.6)

 Income before provision for income taxes             45.8           4.0

Provision for income taxes                            17.2           1.5

Income before cumulative effect of change in
accounting principles                                 28.6           2.5

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

 Net income                                     $     28.6     $    27.8



Weighted average common shares outstanding           107.4         107.2


Basic and Diluted Earnings per Share:
 Before cumulative effect of change in            $   0.26       $  0.02
  accounting principles
 Cumulative effect of change in accounting             ---          0.24
  principles

 Basic and diluted earnings per share             $   0.26       $  0.26


Dividends per common share                        $   0.05       $ 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, 1999 and June 30, 1999
                             (In millions)
                              (unaudited)





                                                   September 30,     June 30,
                                                       1999            1999
Assets
  Cash and cash equivalents                           $ 430.6      $  413.4
  Receivables, net                                      364.6         319.9
  Inventories, net                                      101.0          94.9
  Prepaid expenses and other current assets             336.9         318.3
Total current assets                                  1,233.1       1,146.5
Marketable securities                                   215.3          20.9
Property, plant and equipment, net                      142.6         148.4
Intangible assets, net                                   64.9          68.5
Other non-current assets                                318.1         326.2
Total assets                                         $1,974.0      $1,710.5
Liabilities and stockholders' equity
  Accounts payable                                    $ 126.7      $  130.7
  Accrued expenses                                      328.0         352.2
  Income taxes payable                                   62.3          56.0
  Unearned revenue                                      337.6         336.5
  Other current liabilities                             115.4         110.9
Total current liabilities                               970.0         986.3
Other non-current liabilities                           456.5         342.7
Total liabilities                                     1,426.5       1,329.0
  Capital stock                                          26.2          24.8
  Paid-in capital                                       221.5         146.2
  Retained earnings                                     978.3         955.4
  Accumulated other comprehensive income (loss)          83.0         (56.6)
  Treasury stock, at cost                              (761.5)       (688.3)
Total stockholders' equity                              547.5         381.5
Total liabilities and stockholders' equity            $1,974.0      $1,710.5


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, 1999 and 1998
                             (In millions)
                              (unaudited)





                                                    Three-month period ended
                                                         September 30,
                                                    1999           1998
Cash flows from operating activities

 Net income                                         $ 28.6       $   27.8
 Cumulative effect of change in accounting            ---           (25.3)
  principles
 Depreciation and amortization                         8.9           10.5
(Gains) losses on the sales of a business,
certain assets and certain investments                (7.5)           0.4
 Other, net                                          (23.8)         (65.3)
Net change in cash from operating activities           6.2          (51.9)
Cash flows from investing activities

Proceeds from maturities and sales of short-term
  investments and marketable securities                2.3           0.6
Purchases of short-term investments and               (3.9)         (0.1)
  marketable securities
Proceeds from sales of a business and other long-
  term   investments, net                             10.8           0.8
  Capital expenditures                                (4.0)         (6.5)
  Advance on sale of assets                            ---          50.0
  Other, net                                           1.4           0.9
Net change in cash from investing activities           6.6          45.7
Cash flows from financing activities

 Short-term borrowings, net                            2.0           2.6
 Dividends paid                                       (5.7)        (24.4)
 Other, net                                            3.4           2.7
Net change in cash from financing activities          (0.3)        (19.1)
Effect of exchange rate changes on cash                4.7          (1.2)
Net change in cash and cash equivalents               17.2         (26.5)
Cash and cash equivalents at beginning of period     413.4         122.8
Cash and cash equivalents at end of period          $430.6        $ 96.3


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 and Use of Estimates

The accompanying consolidated condensed financial statements include
the accounts of The Reader's Digest Association, Inc. and its United
States (U.S.) and international subsidiaries (the Company).  All
significant intercompany accounts and transactions have been
eliminated in consolidation.  These statements and accompanying notes
have not been audited, but in the opinion of management, have been
prepared in conformity with generally accepted accounting principles
applying certain assumptions and estimates, including all adjustments
considered necessary to present fairly such information.  Although
these estimates are based on management's knowledge of current
events and actions the Company may undertake in the future, actual
results may ultimately differ from those estimates.

The Company reports on a fiscal year beginning July 1.  The three-
month periods ended September 30, 1999 and 1998 are the first fiscal
quarters of fiscal year 2000 and fiscal year 1999, respectively.
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.

Certain prior year amounts have been restated to conform to the
current year presentation. Revenues have been reclassified to reflect
certain publisher remittances as a component of product, distribution
and editorial expenses.


(2)  Basic and Diluted Earnings Per Share

Basic earnings per share is computed by dividing net income, less
preferred stock dividend requirements ($0.3 for each of the three-
month periods ended September 30, 1999 and 1998), by the weighted
average number of common shares outstanding during the period.
Diluted earnings per share is computed in the same manner except that
the weighted average number of common shares outstanding assumes the
exercise and conversion of certain stock options.

For the three-month periods ended September 30, 1999 and 1998, basic
and diluted earnings per share were the same.


(3)  Inventories

                                          September 30,        June 30,
                                              1999               1999

Raw materials                               $  10.5             $ 12.7
Work-in-progress                               16.2               20.2
Finished goods                                 74.3               62.0
Total inventories                           $ 101.0             $ 94.9



(4)    Revenues and Operating Profit by Operating Segments

In the first quarter of 2000, the Company modified its segment
reporting information to include an "Other Businesses" segment.  Other
Businesses includes the activities of the Company's catalog, financial
services, Internet and other developing businesses.  Reportable
segments are based on the Company's method of internal reporting.

Prior year revenue and operating profit (loss) segment information has
been restated to present the Company's four reportable segments
indicated below.  The accounting policies of the segments are the same
as those described in Note One to the Company's consolidated financial
statements included in its 1999 Annual Report to Stockholders.  The
restatement did not materially affect the Company's segment disclosure
included in Note Twelve to the Company's consolidated financial
statements included in its 1999 Annual Report to Stockholders.

                                             Three-month period ended
                                                   September 30,
                                              1999               1998

Revenues
 Global Books and Home Entertainment        $319.7              $375.4
 U.S. Magazines                              118.0               124.5
 International Magazines                      72.6                79.4
 Other Businesses                              8.9                 0.4

Total revenues                              $519.2              $579.7

                                              Three-month period ended
                                                   September 30,
                                              1999               1998

Operating Profit (Loss)
 Global Books and Home Entertainment        $ 40.9              $ 17.2
 U.S. Magazines                                3.4                 4.3
 International Magazines                       0.8                (4.8)
 Other Businesses                             (6.3)               (0.1)

Total operating profit                      $ 38.8              $ 16.6


(5) Comprehensive Income

Accumulated other comprehensive income (loss) as reported in the
Consolidated Condensed Balance Sheets as of September 30, 1999 and
June 30, 1999, represents unrealized gains/losses on certain
investments and foreign currency translation adjustments.  The
components of comprehensive income, net of related tax, for the three-
month periods ended September 30, 1999 and 1998 were as follows:

                                                   Three-month period ended
                                                         September 30,
                                                    1999                1998

Net income                                         $  28.6           $  27.8
Change in:
 Foreign currency translation adjustments              5.7               5.1
  Net unrealized gains on certain investments, net
of deferred taxes of $80.3                          133.9               ---

Total comprehensive income                         $ 168.2           $  32.9


Net unrealized gains on investments in marketable securities, net of
related tax, principally represent the Company's investment in the
voting common shares of LookSmart, Ltd.  As of September 30, 1999, the
market value of the shares totaled $214.2.  These securities are
accounted for and classified as available for sale securities and are
included in non-current assets in the Consolidated Condensed Balance
Sheet at fair value based on quoted market price.


(6) Other Operating Items

As described in Note Two to the Company's consolidated financial
statements included in its 1999 Annual Report to Stockholders, the
Company recorded charges of $37.9, $70.0 and $35.0 in the years ended
June 30, 1999, 1998 and 1997, respectively. Other operating items in
1999, net of reversals of $55.6 for adjustments to prior year
accruals, related primarily to the streamlining of the Company's
organizational structure and the strategic repositioning of certain
businesses.  Other operating items in 1998, consisted primarily of
severance costs associated with workforce reductions. Other operating
items in 1997, related primarily to the realignment of the Company's
organizational structure and operations.

The current activity and reserve balances remaining at September 30,
1999, associated with these items were:

                                             Balance at    Current    Balance
                                              June 30,    Activity   Remaining
                                                1999

Employee retirement & severance benefits     $ 48.0      $  (9.0)     $ 39.0
Contract terminations                          15.0         (3.6)       11.4

Total                                        $ 63.0       $(12.6)    $  50.4


(7) Debt

As described in Note Nine to the Company's consolidated financial
statements included in its 1999 Annual Report to Stockholders, the
Company is a party to a Competitive Advance and Revolving Credit
Facility Agreement (the Credit Agreement).  The Credit Agreement was
amended as of September 2, 1999.  Prior to the amendment, the Credit
Agreement included a covenant to maintain a minimum level of
consolidated tangible net worth.  The amendment provides borrowing
flexibility by replacing this covenant with covenants to maintain
minimum levels of consolidated assets and net worth and a maximum
level of leverage.

At September 30, 1999, no borrowings were outstanding under the Credit
Agreement.  However, related to the acquisition of Books Are Fun,
Ltd., $120.0 was drawn under the Credit Agreement on October 1, 1999.


(8) Share Exchange

In September 1999, the Company executed a share exchange with the
DeWitt Wallace-Reader's Digest Fund and the Lila Wallace-Reader's
Digest Fund (the Funds).  Under the terms of the exchange, the Funds
exchanged approximately 9.3 million shares of Class B voting stock for
approximately 8.0 million shares of Class A nonvoting stock, at an
exchange ratio of 0.865 Class A shares for each Class B share.  As a
result, the Company exchanged Class A treasury shares at a cost of
$164.9 and a market value of $239.9, for Class B shares, resulting in
additional paid-in capital of $75.0.


(9) Change in Accounting for Pension Assets

Effective July 1, 1998, the Company changed its method for calculating
the market-related value of pension plan assets.  This method is used
in determining the return-on-asset component of annual pension expense
and the cumulative net unrecognized gain (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.  This change resulted in a non-cash benefit in fiscal 1999
of $40.5 ($25.3 after tax, or $0.24 per share).  This benefit
represented the cumulative effect of the change related to years prior
to fiscal 1999.


(10) Sale of American Health

In August 1999, the Company sold its American Health magazine, which
resulted in a gain of $6.5 ($4.1 after tax, or $0.04 per share)
recorded in other income (expense), net.


(11) Subsequent Events

On October 1, 1999, the Company purchased 100% of the outstanding
common stock of Books Are Fun, Ltd. for approximately $400 in cash.
Books Are Fun, Ltd. sells books and gift items by display marketing
those products on-site at schools and corporate businesses.  The
acquisition is subject to purchase price adjustments that are
scheduled to be substantially finalized in the second quarter of 2000.
The Company financed the acquisition through a combination of internal
funds and bank borrowings of $120 under its principal revolving credit
facility (see (7) Debt).

On October 19, 1999, the Company entered into an agreement with
BrandDirect Marketing Inc., an affinity membership-based direct
marketing company, to acquire an 18% equity interest in BrandDirect
Marketing Inc. and to develop and market Reader's Digest-branded
membership clubs.  Under the agreement, the purchase price of $50
million is payable in equal amounts on October 19, 1999 and July 1,
2000.  The agreement also permits the Company to acquire additional
equity in BrandDirect Marketing Inc. through the exercise of warrants
and other rights.


        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)


Unless indicated otherwise, references in Management's Discussion and
Analysis to "we" and "our" are to The Reader's Digest Association,
Inc. and Subsidiaries.  All references to 2000 and 1999, unless
specifically identified, are to fiscal 2000 and fiscal 1999,
respectively.

Three-Month Period Ended September 30, 1999, Compared With Three-Month
Period Ended September 30, 1998

Results of Operations:  Company-Wide

Revenues/Operating Profit

Revenues for the first quarter of 2000 decreased by 10% to $519,
compared with $580 in the first quarter of 1999.  Excluding the
adverse effect of changes in foreign currency exchange rates, revenues
decreased 8%.  The reduction in revenues was primarily attributable to
the continued strategic reduction in the number of mailings and mail
quantities within mailings for Global Books and Home Entertainment
products.  We also experienced a company-wide decline in sales volumes
of Reader's Digest magazines, primarily because of planned reductions
in the circulation rate base.

Operating profit for the first quarter of 2000 increased significantly
to $39, compared with $17 in the first quarter of 1999.  The increase
in operating profit was primarily a result of the strategic reductions
in promotional mailings, which reduced product and promotion costs.
Additionally, overhead costs were lower on a company-wide basis,
primarily because of initiatives to re-engineer critical processes and
eliminate marginally profitable activities.  Operating profit
increased in Germany because of revenue growth in music products,
continued strong responses to mailings and reduced overhead costs.  In
addition, our operating losses in Russia were less than losses in the
prior year quarter, because of reduced business activities there as a
result of the Russian economic crisis in August 1998.

Other Income (Expense), Net

Other income (expense), net increased in the first quarter of 2000 to
income of $7, compared with expense of $(13) in the first quarter of
1999.  This increase was primarily because of:

Reduced foreign exchange losses of $7, mostly resulting from the
devaluation of the Russian ruble in the first quarter of 1999.

A gain from sale of American Health magazine of $7 ($4 after tax
or $0.04 per share) in the first quarter of 2000.

An increase in interest income and a decrease in interest expense
amounting to a net increase in interest income of $6, because of
higher cash and cash equivalents balances compared with the prior year
quarter.

Income Taxes

For the first quarter of 2000 and 1999, the reported and overall
effective tax rates were 37.5%.

Change in Accounting Principles

In the first quarter of fiscal 1999, we adopted a preferred method for
calculating the market-related value of pension plan assets.  This
method is used in determining the return-on-asset component of annual
pension expense and the cumulative net unrecognized gain (loss)
subject to amortization.  The cumulative effect of adopting this
change, for years prior to fiscal 1999, was a non-cash benefit of $40
($25 after tax, or $0.24 per share).

Net Income and Earnings Per Share

Net income was $29, or $0.26 per share, in the first quarter of 2000,
compared with $28, or $0.26 per share, in the first quarter of 1999.
Excluding the cumulative effect of change in accounting principles for
pension assets in 1999, basic and diluted earnings per share were
$0.02 in the first quarter of 1999.

Results of Operations:  Operating Segments

Global Books and Home Entertainment

Revenues for Global Books and Home Entertainment decreased 15% in the
first quarter of 2000 to $320, compared with $375 in the first quarter
of 1999.  Excluding the adverse effect of changes in foreign currency
exchange rates, revenues decreased 12%.  This decrease was primarily
attributable to the continued strategic reduction in the number of
mailings to marginal customers for general books products mostly in
the U.S. and other developed markets.  These reductions were partially
offset by revenue increases from the launches of Select Editions
products in Eastern Europe and Latin America and continued growth in
Germany.

The decrease in revenues in the U.S. was mostly a result of the
planned reductions in mailings to marginally profitable customers.
This decrease was partially offset by the effect of stronger response
rates to the recent Select Editions mailing.  In Europe, particularly
the United Kingdom, Finland and Benelux, re-engineering efforts to
eliminate marginally profitable activities resulted in additional
declines in revenues for music and general books products.  Most of
the remaining decline was attributable to the discontinuation of
marginally profitable operations in Latin America and the sale of our
South African operations.

In Eastern Europe and Latin America, revenues increased Select
Editions products in several markets, the expansion of certain
existing product lines, and selective price increases.  Revenue growth
in Germany resulted from changes in music product offerings
accompanied by continued strong responses to mailings.

Operating profit for Global Books and Home Entertainment increased
significantly in the first quarter of 2000 to $41, compared with $17
in the first quarter of 1999.  The increase was primarily the result
of improved profitability in the United States, Germany, and Russia.
In the United States, operating profit improved from lower promotion
costs through fewer mailings and mail quantities and re-engineering
efforts to reduce overhead.  In Germany, significant improvement in
operating profit was driven by the increases in revenues previously
mentioned and reduced overhead costs from re-engineering efforts.  In
Russia, we scaled back operations because of the economic crisis in
that country in August 1998.

U.S. Magazines

Revenues for U.S. Magazines decreased 5% in the first quarter of 2000
to $118, compared with $125 in the first quarter of 1999.  The
decrease in revenues was attributable to:

  Lower subscription revenues from Reader's Digest magazine,
  primarily resulting from the planned reduction in the circulation rate
  base to 12.5 million from 15 million a year ago.

  Lower advertising revenues from Reader's Digest magazine
  resulting from fewer advertising pages sold, partially offset by a
  higher average rate per page.

  A decline in revenues from American Health, which ended
  publication with the October 1999 issue as a result of the sale of its
  subscription list.

  Slightly lower revenues at QSP.

Partially offsetting these decreases were revenues from American
Woodworker, which was acquired in the second quarter of fiscal 1999.

Operating profit for U.S. Magazines decreased 21% in the first quarter
of 2000 to $3, compared with $4 in the first quarter of 1999.  The
decrease was primarily the result of investment in the development of
new marketing channels for promotion, as well as lower revenues of
Reader's Digest magazine from the planned reduction in the circulation
rate base.  Partially offsetting these decreases in operating profit
were lower product and promotion costs for Reader's Digest magazine
primarily attributable to the circulation rate base decline.

International Magazines

Revenues for International Magazines decreased 9% in the first quarter
of 2000 to $73, compared with $79 in the first quarter of 1999.
Excluding the adverse effect of changes in foreign currency exchange
rates, revenues decreased 5%.  We strategically reduced the
circulation rate base for Reader's Digest magazine in most markets to
improve profitability.

The decline in revenues from fewer subscriptions was partially offset
by price increases in many markets.  Operations in Russia were scaled
back in response to the economic crisis in that country last year and
as a result, there were 70% fewer subscribers.   The discontinuation
of marginally profitable operations in Latin America and the sale of
our South African operations also contributed to the decline in
revenues.

Advertising revenues decreased because of fewer advertising pages
sold, primarily as a result of the continued economic softness in Asia
and circulation rate base reductions in Germany.

Operating profit improved to $1 in the first quarter of 2000 from an
operating loss of $(5) in the first quarter of 1999, primarily a
result of subscription price increases in many markets and lower
promotion costs from the strategic reduction in promotional mailings.
Reduced losses in Russia and the discontinuation of marginally
profitable operations discussed previously also contributed to the
increased operating profit.

Other Businesses

Revenues from Other Businesses amounted to $9 in the first quarter of
2000.  These revenues were primarily generated by sales of Good
Catalog Company, which was acquired in the second quarter of 1999.

Operating losses from Other Businesses amounted to $(6) in the first
quarter of 2000.  These losses consisted primarily of planned start-up
costs for gifts.com (our online gift shopping service), costs for
other new businesses being developed and a small seasonal loss in the
first quarter results of Good Catalog Company.


Forward-Looking Information

Fiscal 2000 Results

We continue to expect significant operating profit growth in fiscal
year 2000.  Our outlook for the year reflects the positive effects of
Books Are Fun, Ltd. and our financial services partnerships, offset by
the negative effects of significant investments in new business
activities.  As a result of revenue declines more modest than
previously expected for the year and the acquisition of Books Are Fun,
Ltd. in October 1999, we now believe that revenues for the full fiscal
year 2000 will be more or less flat compared with last year.

Liquidity and Capital Resources

                                                            Three-month
                                                           period ended
                                                           September 30,
                                                               1999

Cash and cash equivalents at June 30, 1999                 $  413.4

Net change in cash from:
 Operating activities                                          6.2
 Investing activities                                          6.6
 Financing activities                                         (0.3)
 Effect of exchange rate changes on cash and cash              4.7
   equivalents
Net change in cash and cash equivalents                       17.2

Cash and cash equivalents at September 30, 1999           $  430.6


Cash and cash equivalents increased 4% to $430.6 at September 30,
1999, compared with $413.4 at June 30, 1999.  The increase was
primarily a result of proceeds from the sale of American Health
magazine ($10.0) and contributions from operating activities ($6.2).

In the first quarter of 2000, we paid a $0.05 per share dividend on
our common stock.  This was a reduction from the dividend paid in the
first quarter of 1999 of $0.225 per share.  At the current rate, the
annualized dividend is $0.20 per share in 2000, compared with $0.375
in 1999.

In September 1999, we executed a share exchange with the DeWitt
Wallace-Reader's Digest Fund and the Lila Wallace-Reader's Digest Fund
(the Funds).  Under the terms of the exchange, the Funds exchanged
approximately 9.3 million shares of our Class B voting stock for
approximately 8.0 million shares of our Class A nonvoting stock, at an
exchange ratio of 0.865 Class A shares for each Class B share.  As a
result, we exchanged Class A treasury shares at a cost of $164.9 and a
market value of $239.9, for Class B shares, resulting in additional
paid-in capital of $75.0.

As described in Note Nine to our consolidated financial statements
included in our 1999 Annual Report to Stockholders, we are a party to
a Competitive Advance and Revolving Credit Facility Agreement (the
Credit Agreement).  The Credit Agreement was amended as of September
2, 1999.  Prior to the amendment, the Credit Agreement included a
covenant to maintain a minimum level of consolidated tangible net
worth.  The amendment provides borrowing flexibility by replacing this
covenant with covenants to maintain minimum levels of consolidated
assets and net worth and a maximum level of leverage.

At September 30, 1999, no borrowings were outstanding under the Credit
Agreement.  However, related to the acquisition of Books Are Fun,
Ltd., $120 was drawn under the Credit Agreement on October 1, 1999.
In addition, we utilized approximately $280 of our cash on hand to
fund the remaining portion of the Books Are Fun, Ltd. purchase price.

We believe that our liquidity, capital resources, cash flow and
borrowing capacity are sufficient to fund normal capital expenditures,
working capital requirements, the payment of dividends, Year 2000
remediation costs and the implementation of our strategic initiatives.


Currency Risk Management

In the normal course of business, we are exposed to the effects
of foreign exchange rate fluctuations on the U.S. dollar value of our
foreign subsidiaries' results of operations and financial condition.
We purchase foreign currency option and forward contracts to minimize
the effect of fluctuating foreign currency exchange rates on our
earnings and specifically identifiable anticipated transactions.  In
addition, we enter into forward contracts to minimize the effect of
fluctuating foreign currency exchange rates on certain foreign
currency denominated assets and liabilities.

At September 30, 1999, our primary foreign currency market
exposures included the euro and the British pound.  We estimate that
the results of a uniform 10% strengthening in the value of the U.S.
dollar relative to the currencies in which the option and forward
contracts are denominated, with all other variables held constant,
would result in a net decrease in the fair value of these instruments
of approximately $7.0.  This estimate, however, includes changes in
the fair value of forward contracts that would be substantially offset
by the related impact on the assets and liabilities being hedged.
This calculation assumes that each exchange rate would change in the
same direction relative to the U.S. dollar.  Changes in exchange rates
not only affect the U.S. dollar value of the fair value, but
also affect the underlying foreign subsidiaries' income.  Our
sensitivity analysis as described above does not factor in a potential
change in local sales levels, local currency prices, or amounts of
option or forward contracts to cover these changes.


Impact of the Year 2000 Issue

The Year 2000 issue is the result of computer programs that 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 the years 1900 and 2000 and programs that perform arithmetic
operations, comparisons or sorting of date fields may begin yielding
incorrect results.  This could potentially cause system failures or
miscalculations that could disrupt operations.

State of Readiness

Our remediation plan for the Year 2000 issue is currently under way
and involves three overlapping phases:

1)  Inventory - Creation of an inventory of three functional areas:
    applications and information technology (IT) equipment, non-
    information technology (non-IT) embedded systems and vendor
    relationships.  All locations have fully completed the inventory
    phase.

2)  Analysis - 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.
    All locations have fully completed the analysis phase.

3)  Implementation - Execution of 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.

The implementation phase has been substantially completed in most
locations for applications, IT equipment and non-IT embedded systems.
We have conducted formal communications with significant suppliers in
all locations to determine our third parties' plans to remediate their
own Year 2000 issues in a timely manner.  We believe that most of our
critical supplier base has made substantial progress toward achieving
Year 2000 compliance.

Our remediation plan for the Year 2000 issue is an ongoing process
and estimated completion dates are subject to change.

Risk of the Year 2000 Issue

At this time, we believe that our systems will be Year 2000
compliant in a timely manner for several reasons:

    Most significant marketing and fulfillment systems are already
    compliant.

    We extensively utilize certain shared applications that have been
    or will be remediated once and then deployed to all appropriate
    locations.

    Comprehensive testing of all critical systems is conducted in a
    simulated Year 2000 environment.

    Critical fulfillment systems in the U.S. and several developed
    international locations 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 does not require separate attention.

We believe that the area of greatest risk of the Year 2000
issue relates to significant suppliers failing to remediate their Year
2000 issues in a timely manner.   We have relationships with certain
significant suppliers in most of the locations in which we operate.
These relationships may be material to some local operations and, in
the aggregate, may be material.  We rely on suppliers to deliver a
broad range of goods and services worldwide.  These include book and
magazine printing services, suppliers of promotional materials and
paper, warehouse facilities, lettershops that assemble promotional
mailings, customer service facilities, postal delivery services,
banking services, telecommunications and electricity providers.   We
are monitoring our suppliers' progress toward implementing Year 2000
corrective procedures.  If a number of significant suppliers
encounter Year 2000 problems, this could have a material adverse
effect on our results of operations, financial position or cash flow.

Contingency Plans

We are in the process of finalizing our country-by-country
contingency plans.  Revisions to preliminary plans will be made, as
needed, during the remainder of the year.

To mitigate the effects of our significant suppliers'
potential failure to remediate the Year 2000 issue in a timely manner,
we will take appropriate actions.  Such actions include having
arrangements for alternate suppliers, re-running processes if errors
occur, using manual intervention to ensure the continuation of
operations where necessary, and rescheduling January 2000 activity to
December 1999 or February 2000 where appropriate. If it becomes
necessary for us 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 our results of operations, financial position or
cash flow.

Costs to Address the Year 2000 Issue

The total cost of our remediation plan is estimated at
approximately $15.0 to $16.0 and is being funded through operating
cash flows. To manage the cash flow effects of these incremental
costs, we have deferred certain IT development activities and system
enhancements.  To date, approximately $12.7 of the total cost of the
remediation plan has been spent, of which approximately $1.5 was
capitalized.   The remainder will be expensed as incurred.


Impact of the Euro Conversion

On January 1, 1999, 11 of the 15 member countries of the European
Union established 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 December 31, 2001.  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.

We performed an internal analysis regarding the business and
systems issues related to the euro conversion and have developed 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, our operations in markets that have
adopted the euro are able to accept payments and pay suppliers in
euros, and are able to indicate the euro equivalent of pricing on
invoices.  During the transition period, we will be monitoring
customer and competitor reaction to the euro and will update the
strategic plan as needed.

During the transition period, we believe that the conversion to
the euro will not have a significant impact on the marketing strategy
of our European operations. We do not anticipate the need to
synchronize prices between markets, primarily because the editorial
content of our publishing products varies. In addition, products are
published in local languages and are sold principally through direct
mail rather than retail channels.  These factors result in products
that tend to be unique to each market and do not easily
lend themselves to price comparisons across borders.  The estimated
costs to convert all affected systems to the euro are not expected to
have a material adverse effect on our results of operations, financial
position or cash flow.


This report includes "forward-looking statements" within the meaning
of the U.S. federal securities laws.  Forward-looking statements
include any statements that address future results or occurrences.
These forward-looking statements inherently involve risks and
uncertainties that could cause actual future results and occurrences
to differ materially from the forward-looking statements.  Some of
these risks and uncertainties include factors relating to the:

  effect of potentially more restrictive privacy and other
  governmental regulation relating to our marketing methods;

  effect of modified and varied promotions;

  ability to identify customer trends;

  ability to continue to create a broadly appealing mix of new products;

  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;

  ability to attract and retain subscribers and customers in an
  economically efficient manner;

  effect of selective adjustments in pricing;

  ability to expand and more effectively utilize our customer
  database;

  ability to expand into new international markets and to introduce
  new product lines into new and existing markets;

  ability to expand into new channels of distribution;

  ability to negotiate and implement productive acquisitions,
  strategic alliances and joint ventures;

  ability to integrate newly acquired and newly formed businesses
  successfully;

  strength of relationships of newly acquired and newly formed
  businesses with their employees, suppliers and customers;

  accuracy of the basis of forecasts relating to newly acquired
  and newly formed businesses;

  ability to contain and reduce costs, especially through global
  efficiencies;

  cost and effectiveness of reengineering of business processes and
  operations;

  accuracy of management's assessment of the current status of our
  business;

  evolution of our organizational and structural capabilities;

  ability we have to respond to competitive pressures within and
  outside the direct marketing industry, including the Internet;

  effect of worldwide paper and postage costs;

  effect of postal disruptions on deliveries;

  effect of foreign currency fluctuations;

  effect of the Year 2000 issue;

  effect of the transition to the euro; and

  general economic conditions.


                      PART II.  OTHER INFORMATION


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


(a)  Exhibits

     27   Financial Data Schedule



(b)  Reports on Form 8-K

During the three-months ended September 30, 1999, the company
filed the following reports on Form 8-K:

     Form 8-K dated August 30, 1999, which included a copy of a press
     release relating to the Company's acquisition of Books Are Fun,
     Ltd.

     Form 8-K dated September 24, 1999, which included a copy of a
     press release relating to a share exchange between the Company
     and the DeWitt Wallace-Reader's Digest Fund, Inc. and the Lila
     Wallace-Reader's Digest Fund, Inc.

     Form 8-K dated October 7, 1999, which included financial
     information relating to the Company's acquisition of Books Are
     Fun, Ltd.

     Form 8-K and Amendment No. 1 to Form 8-K dated October 27, 1999,
     which include a copy of a press release relating to the Company's
     first quarter financial results.


                              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 3, 1999    By:/s/ DORVIN D. LIVELY
                                  Dorvin D. Lively
                                  Vice President and
                                  Corporate Controller
                                  (and authorized signatory)





                             EXHIBIT INDEX



Exhibit                                                         Page


  27    Financial Data Schedule