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 March 31, 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 April 30, 1998, the following shares of the registrant's
common stock were outstanding:

Class  A  Nonvoting Common Stock, $0.01 par value:   84,973,454 shares
Class B Voting Common Stock, $0.01 par value:        21,716,057 shares


                                            Page 1 of 16 pages.
                                                               
     THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
                                
                       Index to Form 10-Q
                                
                         March 31, 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 and nine-month periods ended March 31, 
1998 and 1997                                                   3

Consolidated Condensed Balance Sheets
as of March 31, 1998 and June 30, 1997                         4

Consolidated Condensed Statements of Cash Flows
for the nine-month periods ended March 31, 1998 and 1997       5

Notes to Consolidated Condensed Financial Statements           6

Management's Discussion and Analysis
of Financial Condition and Results of Operations               8


Part II - Other Information                                    14
<TABLE>
     THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
           CONSOLIDATED CONDENSED STATEMENTS OF INCOME
   Three and nine-month periods ended March 31, 1998 and 1997
              (In millions, except per share data)
                           (unaudited)


                       Three-month period ended     Nine-month period ended
                              March 31,                     March 31,
                           1998         1997         1998           1997
<S>                    <C>            <C>          <C>           <C>
Revenues               $ 635.5        $ 684.3      $ 2,009.4     $ 2,202.9
Product,                                                   
distribution and         232.3          237.5          733.6         756.6
 editorial expense
Promotion, marketing                                       
and administrative       381.5          395.3        1,181.2       1,215.6
 expense
Other operating items      ---            ---           70.0           ---

Operating profit          21.7           51.5           24.6         230.7

Other income, net          1.6            7.7            8.2          15.4

Income before provision   23.3           59.2           32.8         246.1
 for income taxes

Provision for income                                       
 taxes                     8.7           21.6           20.3          89.8

Net income                14.6           37.6           12.5         156.3

Earnings per share        0.13           0.35           0.11          1.45
                                                           
Average common shares                                             
 outstanding             106.5          106.2          106.4         106.8

Dividends per common     0.225           0.45          0.675          1.35
 share
</TABLE>

See accompanying notes to consolidated condensed financial statements.



<TABLE>
     THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
              CONSOLIDATED CONDENSED BALANCE SHEETS
             As of March 31, 1998 and June 30, 1997
                          (In millions)
                           (unaudited)


                                               March 31,   June 30,
                                                  1998       1997
<S>                                            <C>        <C>
Assets                                                  
Cash and cash equivalents                      $  100.0   $    69.1
Receivables, net                                  489.4       426.3
Inventories                                       187.9       167.8
Prepaid expenses and other current assets         252.3       262.6

Total current assets                            1,029.6       925.8

Property, plant and equipment, net                286.0       314.8
Other noncurrent assets                           311.9       403.2

Total assets                                  $ 1,627.5   $ 1,643.8

Liabilities and stockholders' equity                    
Accounts payable                              $   184.6   $   211.8
Accrued expenses                                  417.1       373.6
Short-term borrowings                              16.8        30.3
Income taxes payable                               31.5        22.1
Unearned revenue                                  398.4       356.5
Other current liabilities                          19.0        18.8

Total current liabilities                       1,067.4     1,013.1

Other noncurrent liabilities                      285.8       284.7

Total liabilities                               1,353.2     1,297.8

Capital stock                                      29.5        29.0
Paid-in capital                                   141.5       141.8
Retained earnings                                 863.9       924.2
Foreign currency translation adjustment           (48.0)      (33.4)
Net unrealized losses on certain investments        ---        (0.3)
Treasury stock, at cost                          (712.6)     (715.3)
Total stockholders' equity                        274.3       346.0

Total liabilities and stockholders' equity    $ 1,627.5   $ 1,643.8

</TABLE>
See accompanying notes to consolidated condensed financial
statements.


<TABLE>
     THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
         CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
        Nine-month periods ended March 31, 1998 and 1997
                          (In millions)
                           (unaudited)



                                              Nine-month period ended
                                                     March 31,
                                                  1998      1997
<S>                                              <C>        <C>
Cash flows from operating activities                     
Net income                                       $  12.5    $ 156.3
Depreciation and amortization                       35.1       34.4
Other, net                                          12.4     (118.6)
                                                         
Net change in cash due to operating activities      60.0       72.1
                                                         
Cash flows from investing activities                     
Proceeds from maturities and sales of                    
 short-term investments and marketable              32.6      119.1
 securities
Purchases of short-term investments and             (1.2)     (31.3)
 marketable securities
Proceeds from other long-term investments, net      45.6        1.0
Other, net                                         (19.2)     (24.8)
                                                         
Net change in cash due to investing activities      57.8       64.0
                                                         
Cash flows from financing activities                     
Short-term borrowings, net                         (13.1)       6.7
Dividends paid                                     (72.8)    (145.3)
Common stock repurchased                             ---      (66.3)
Other, net                                           2.9        8.6
                                                         
Net change in cash due to financing activities     (83.0)    (196.3)
                                                         
Effect of exchange rate changes on cash             (3.9)      (5.9)
                                                         
Net change in cash and cash equivalents             30.9      (66.1)
                                                         
Cash and cash equivalents at beginning of period    69.1      258.1
                                                         
Cash and cash equivalents at end of period         100.0      192.0


</TABLE>
See accompanying notes to consolidated condensed financial
statements.




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

(1)  Basis of Presentation

The  company  reports on a fiscal year beginning July  1.   The
three-month periods ended March 31, 1998 and 1997 are the third
fiscal  quarters  of  fiscal year 1998 and  fiscal  year  1997,
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)  Earnings Per Share

Earnings  per  share is computed by dividing net  income,  less
preferred  stock dividend requirements of $0.3 in each  of  the
three-month periods ended March 31, 1998 and 1997, and $1.0  in
each of the nine-month periods ended March 31, 1998 and 1997 by
the weighted average number of common shares outstanding during
the period.

<TABLE>
(3)  Inventories
                                            March 31,   June 30,
                                              1998        1997
<S>                                         <C>         <C>                                                      
Raw materials                               $  22.3     $  17.4
Work-in-progress                               24.0        26.5
Finished goods                                141.6       123.9
                                                      
                                              187.9       167.8
</TABLE>

<TABLE>
(4)     Revenues by Business Segments and Geographic Areas

                             Three-month period     Nine-month period
                                   ended                   ended
                                 March 31,               March 31,
                              1998        1997       1998        1997
<S>                         <C>        <C>        <C>         <C>
BUSINESS SEGMENTS                                             
Reader's Digest Magazine    $ 171.2    $ 178.3    $   530.4   $  540.8
Books and Home                413.0      461.1      1,241.5    1,449.3
 Entertainment Products
Special Interest Magazines     22.7       17.8         69.0       55.5
Other Businesses               28.6       27.1        168.5      157.3

Total revenues                635.5      684.3      2,009.4    2,202.9
                                                              
GEOGRAPHIC AREAS                                              
United States                 296.1      308.8        931.8      974.6
Europe                        243.4      276.6        767.9      906.2
Pacific and Other Markets      96.0       98.9        309.7      322.1

Total revenues                635.5      684.3      2,009.4    2,202.9
                                                              
</TABLE>
                                
                                
                                
(5)                                  Other Operating Items

In  the  first quarter of 1998, the company recorded  charges  of
$70.0  (the  1998 charges) ($51.8 after tax, or $0.49 per  share)
composed  primarily of severance costs associated with  workforce
reductions  in  Europe, the United States and  at  the  corporate
level;  and  other  costs associated with the discontinuation  of
certain businesses and the realignment of business processes  and
operations.    Businesses  that  were  discontinued   include   a
children's  book  club in the United States,  and  the  company's
investment  in  LookSmart, a World Wide Web  navigation  service.
The realignment of business processes and operations also relates
to certain vendor contracts in the United States and Europe.  The
components of these charges are reported in the table below.

As  described  in Note 2 to the company's consolidated  financial
statements  included in its 1997 Annual Report  to  Stockholders,
the  company recorded charges of $35.0 in the fourth  quarter  of
1997,  and  charges  of  $204.0 in the  third  quarter  of  1996,
relating  primarily  to the realignment of the  organization  and
operations   and   to   the   streamlining   of   the   company's
organizational  structure  and  the  strategic  repositioning  of
certain  businesses,  respectively.   The  components  of   these
charges, as well as reserve balances remaining at March 31, 1998,
were:

<TABLE>
                           Balance at      1998       Current     Balance
                          June 30, 1997   Charges     Activity   Remaining
<S>                          <C>          <C>          <C>         <C>          
Employee retirement &        $ 56.7       $ 39.5       $ 25.1      $ 71.1
 severance benefits
Other items                    23.6         23.1          9.7        37.0
Business repositioning          0.7          4.2          7.4         3.9
                                                             
Total                          81.0         70.0         39.0       112.0
</TABLE>

(6) Debt

As  described in Note 13 to the company's consolidated  financial
statements  included in its 1997 Annual Report  to  Stockholders,
the  company is a party to an agreement with The Chase  Manhattan
Bank  for  a  line of credit of $75.0 (the Chase line of  credit)
which  expired on April 30, 1998, and a Competitive  Advance  and
Revolving Credit Facility Agreement (the credit agreement) of  up
to  $400.0.  Under the credit agreement, the company must  comply
with  certain financial covenants, including a minimum  level  of
consolidated tangible net worth.  The company is in  the  process
of  renegotiating  the  credit  agreement.   The  amended  credit
agreement,  if finalized, is expected to provide for a  necessary
reduction of the minimum required level of consolidated  tangible
net  worth,  a reduction of credit available and an  increase  in
borrowing   costs.    Going  forward  the  company   intends   to
consolidate  the  majority of its domestic borrowings  under  the
credit  agreement.   At  March  31,  1998,  no  borrowings   were
outstanding  under  the  Chase  line  of  credit  or  the  credit
agreement.   In  addition, various international subsidiaries  of
the  company have available lines of credit totaling  $77.3.   At
March  31,  1998,  loans in the amount of $9.2  were  outstanding
under  international  lines  of  credit  at  a  weighted  average
interest rate of 5.0%.

In  September  1997, the company entered into an  agreement  with
Morgan Guaranty Trust Company of New York for an uncommitted line
of  credit  of $50.0 (the Morgan line of credit) to be  used  for
general  corporate purposes.  The loans under the Morgan line  of
credit are payable on demand and bear interest at a floating rate
based  on the cost of funds of the bank plus a margin.  At  March
31,  1998, loans in the amount of $5.0 were outstanding under the
Morgan  line  of  credit at a weighted average interest  rate  of
6.1%.

(7)   Stock Option and Stock Appreciation Rights Repricing

On October 9, 1997, options and stock appreciation rights related
to  2.1  million shares of Class A common stock were  granted  to
eligible  employees pursuant to the 1989 and  1994  Key  Employee
Long Term Incentive Plans (October grant).  The October grant was
never  distributed to over 800 employees.  The exercise price  of
the October grant was $27.03 per share, the fair market value  of
the  company's  common stock at October 9, 1997.   These  options
provided  for  vesting  ratably over  four  years  and  could  be
exercised over a period of ten years from the date of grant.   On
November 18, 1997, the October grant was canceled and options and
stock  appreciation rights related to 2.1 million shares of Class
A  common stock were reissued to eligible employees at a price of
$21.47 per share, the fair market value of the company's stock at
November  18,  1997  (November grant).  This  reissuance  was  in
connection with a significant revision of the company's executive
compensation  structure, involving the elimination  of  long-term
cash performance awards, the reduction of annual cash bonuses and
the greater reliance on equity incentive awards.  The other terms
of  the  November grant were not changed from the  terms  of  the
October grant.


     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 March 31, 1998 Compared With Three-
Month Period Ended March 31, 1997

Worldwide  revenues for the third quarter of 1998 decreased  to
$635.5, or by 7%, compared with $684.3 in the third quarter  of
1997.   Excluding  the  adverse effect of  changes  in  foreign
currency  exchange  rates,  revenues  decreased  3%.   Revenues
declined primarily in the company's United States and developed
European  operations.   The  decrease  in  revenues   was   due
primarily   to   lower  unit  sales  within  Books   and   Home
Entertainment Products as a result of lower mail quantities and
fewer profitably promotable customers as well as lower customer
response  to promotional mailings primarily in major  developed
markets.   The company reported worldwide operating  profit  of
$21.7 in the third quarter of 1998, compared with $51.5 in  the
third  quarter of 1997.  These operating results reflect  lower
revenues  in  major developed markets, significant declines  in
operating  results in the United States, Germany and the  U.K.,
and   higher   proportionate  product  costs  and   promotional
spending.

The  company reported net income of $14.6, or $0.13 per  share,
in the third quarter of 1998, compared with $37.6, or $0.35 per
share, in the third quarter of 1997.

Other Income, Net
Other  income, net decreased in the third quarter  of  1998  to
$1.6, compared with $7.7 in the prior year.  This decrease  was
primarily  because  of losses on foreign exchange  transactions
and hedging activity, gains on sales of certain investments  in
the  prior  year  not recurring in the current year  and  lower
interest income, which were partially offset by a net  gain  on
the sale of certain assets in 1998.

Income Taxes
The  overall effective tax rate was 37.5% for the third quarter
of  1998,  compared with 36.5% for the third quarter  of  1997.
The  higher  effective tax rate in 1998 was  primarily  due  to
reduced utilization of foreign tax credits.

Geographic Areas

United States
Revenues in the United States decreased from $308.8 in 1997  to
$296.1,  or  by  4%,  in  1998.  This  decrease  was  primarily
attributable  to lower unit sales in the general books  product
line, and, to a lesser extent, in the music product line within
Books  and  Home Entertainment Products.  These  declines  were
partially  offset  by  increased revenues in  Special  Interest
Magazines.   The decline in general books was primarily  caused
by  lower customer response to promotional mailings, one  fewer
mailing  and lower mail quantities as well as fewer  profitably
promotable customers in 1998.  Music revenues decreased due  to
a significant reduction in mail quantities in 1998, in addition
to the timing of music series shipments compared with the prior
year.    Revenues  for  Special  Interest  Magazines  increased
primarily  due  to the acquisition of Walking magazine  in  the
third    quarter   of   1997.    Operating   profit   decreased
significantly in 1998, compared with 1997, due to  the  revenue
decrease,  higher promotional spending in order to acquire  and
renew  subscribers  to  Reader's  Digest  Magazine  and  higher
product costs.

Europe
Revenues in Europe decreased from $276.6 in 1997 to $243.4,  or
by  12%,  in 1998.  Excluding the adverse effect of changes  in
foreign  currency exchange rates, revenues decreased  4%.   The
revenue decrease was primarily due to lower unit sales, and, to
a  lesser extent, lower-priced product offerings and sales of a
lower-priced  product  mix  of  Books  and  Home  Entertainment
Products.  Within this segment, revenues declined in the series
books,  and,  to  a lesser extent, in the video  and  Condensed
Books  product  lines.  Product expansion in  Eastern  European
markets,  principally in the general books  and  music  product
lines,  was  offset by continued lower sales in major  markets,
particularly  in  Germany  and the  U.K.,  where  results  have
declined  more significantly than other markets.   Lower  sales
were  as  a  result of a reduction in shipments  due  to  fewer
customers  carried  into 1998 for series product  lines,  lower
mail  quantities and fewer profitably promotable  customers  as
well  as  lower  customer  response  to  promotional  mailings.
Mailings  executed later in 1998 compared with the  prior  year
negatively  affected  revenues  for  video  products  for   the
quarter.    Revenues  for  Reader's  Digest  Magazine  declined
slightly from the prior year as growth in Russia was offset  by
circulation  declines and a lower number of  advertising  pages
sold  in  major developed markets.  Operating profit  decreased
significantly in 1998, compared with 1997, as a result of lower
revenues,   higher  proportionate  product  costs  and   higher
proportionate promotional spending.

Pacific and Other Markets
Revenues  in Pacific and Other Markets decreased from $98.9  in
1997 to $96.0, or by 3%, in 1998.  Excluding the adverse effect
of   changes  in  foreign  currency  exchange  rates,  revenues
increased  7%.   Revenues  increased  primarily  in  the  music
product line within Books and Home Entertainment Products,  due
to  a  higher number of units sold, partially offset by a lower
number of Condensed Books sold in 1998.  More mailings in  this
product  line  compared  with the  prior  year  also  benefited
revenues  in  the  third quarter of 1998.  Higher  revenues  in
Latin  America,  reflecting  product  expansion  primarily   in
Brazil,  were partially offset by revenue declines  in  Canada,
due  in  part to the effects of severe ice storms which  forced
closure  of the business and adversely affected postal  service
during  the critical January mailing period.  Operating results
improved  in  1998,  compared with 1997, primarily  because  of
reduced promotional spending and lower overhead costs.

Corporate Expense
Corporate  Expense  in  the  third quarter  of  1998  increased
slightly to $8.5, compared with $8.2 in 1997.

Business Segments

Reader's Digest Magazine
Revenues for Reader's Digest Magazine decreased from $178.3  in
1997  to  $171.2,  or  by 4%, in 1998.  Excluding  the  adverse
effect  of changes in foreign currency exchange rates, revenues
were  about  even  with  the  prior year.   Higher  circulation
revenues were offset by lower advertising revenues.  Growth  in
subscriptions  in  Russia and Brazil were partially  offset  by
circulation declines in several major markets.  A lower  number
of  advertising pages sold in the United States and Germany was
partially  offset  by  a higher rate per  page  in  the  United
States.  Operating profit for Reader's Digest Magazine declined
significantly in 1998, as a result of lower revenues and higher
promotional spending in the United States to acquire and  renew
subscribers.   Consistent with industry practice,  the  company
periodically  evaluates  the  financial  implications  of   the
circulation  rate  base of Reader's Digest Magazine  worldwide.
In   order  to  increase  the  efficiency  of  its  promotional
spending, the company is presently reviewing possible rate base
reductions in selected major markets.

Books and Home Entertainment Products
Revenues  for  Books and Home Entertainment Products  decreased
from  $461.1 in 1997 to $413.0, or by 10%, in 1998.   Excluding
the  adverse  effect  of changes in foreign  currency  exchange
rates,  revenues decreased 5%, principally attributable to  the
company's  United  States, and, to a  lesser  extent,  European
operations.   The  decrease in revenues was  primarily  due  to
lower  unit sales in the general books and series books product
lines,  although revenues declined across most  product  lines.
In addition, a lower-priced mix of products overall was offered
in  1998, predominantly in major markets.  Revenues for general
books  declined  primarily in the United States  due  to  lower
customer  response to promotional mailings, one  fewer  mailing
and  a reduction in mail quantities as well as fewer profitably
promotable  customers  in 1998.  The decline  in  series  books
revenues was a result of a reduction in shipments in Europe due
to  fewer  series customers carried into 1998.  In  the  United
States, series revenues declined due to the scaling back  of  a
book  series  in  1998.   Across most  product  lines,  reduced
revenues  in  certain  major markets, particularly  the  United
States  and Germany, were offset by expansion in Eastern Europe
and  Latin  America.   Operating  profit  for  Books  and  Home
Entertainment   Products  decreased  significantly   in   1998,
compared  with 1997.  These operating results were affected  by
lower revenues and higher proportionate product costs.

Special Interest Magazines
Revenues for Special Interest Magazines increased from $17.8 in
1997 to $22.7, or by 27%, in 1998.  This increase was primarily
attributable  to  the acquisition of Walking  magazine  in  the
third  quarter of 1997.  Excluding Walking, revenues  increased
2%, principally due to a higher-priced mix of advertising pages
sold in 1998.  Operating results improved in 1998 compared with
1997 primarily due to the higher advertising revenues partially
offset  by  increased  promotional  spending  associated   with
Walking.

Nine-month Period Ended March 31, 1998 Compared With Nine-month
Period Ended March 31, 1997

Other Operating Items
In  the first quarter of 1998, the company recorded charges  of
$70.0  ($51.8 after tax, or $0.49 per share) composed primarily
of   severance   costs  of  $39.5  associated  with   workforce
reductions  in Europe, the United States, and at the  corporate
level;  and other costs associated with the discontinuation  of
certain  businesses  and the realignment of business  processes
and  operations.  Businesses that were discontinued  include  a
children's  book club in the United States, and  the  company's
investment  in LookSmart, a World Wide Web navigation  service.
The  realignment  of  business processes  and  operations  also
relates  to  certain vendor contracts in the United States  and
Europe.

Management's  discussion  and  analysis,  as  it  pertains   to
geographic  and business segment information, has been  written
excluding the effect of these charges.

Revenues/Operating Profit
Worldwide  revenues for the nine-month period ended  March  31,
1998 decreased to $2,009.4, or by 9%, compared with $2,202.9 in
the  nine-month  period ended March 31,  1997.   Excluding  the
adverse  effect of changes in foreign currency exchange  rates,
revenues  decreased  4%.  This decrease was  due  primarily  to
lower unit sales, and, to a lesser extent, lower-priced product
offerings and sales of a lower-priced product mix within  Books
and Home Entertainment Products.  Revenues declined principally
in   the   company's  developed  European  and  United   States
operations.   The decrease in revenues was predominantly  as  a
result of lower mail quantities and fewer profitably promotable
customers  as  well as lower customer response  to  promotional
mailings  in  major  developed markets.  The  company  reported
worldwide  operating profit of $24.6 in the  nine-month  period
ended  March  31, 1998, compared with $230.7 in the  nine-month
period  ended  March 31, 1997.  Excluding the effect  of  other
operating  items, operating profit was $94.6 in the  nine-month
period  ended March 31, 1998.  These operating results  reflect
lower revenues in major developed markets, significant declines
in  operating results in Germany and the United States,  higher
proportionate  product costs, higher proportionate  promotional
spending,  and  increased  investment in  product  development,
testing  and list development initiatives, partially offset  by
the benefits of cost-containment initiatives.

The  company reported net income of $12.5, or $0.11 per  share,
in  the  nine-month period ended March 31, 1998, compared  with
net  income  of  $156.3, or $1.45 per share, in the  nine-month
period  ended  March 31, 1997.  Excluding the effect  of  other
operating items, earnings per share  was $0.60 per share in the
nine-month period ended March 31, 1998.

Other Income, Net
Other  income,  net  decreased in the nine-month  period  ended
March  31, 1998 to $8.2, compared with $15.4 in the prior year.
This decrease was primarily because of lower gains on sales  of
certain  investments, lower interest income and higher interest
expense  in 1998, which were partially offset by a net gain  on
the sale of certain assets in the third quarter of 1998.

Income Taxes
For  the  nine-month period ended March 31, 1998, the  reported
tax  rate  was 62.0%.  Excluding the effect of other  operating
items,  the overall effective tax rate was 37.5% for the  nine-
month  period ended March 31, 1998.  For the nine-month  period
ended  March 31, 1997, the effective tax rate was  36.5%.   The
higher  effective tax rate in 1998 was primarily due to reduced
utilization of foreign tax credits.

Geographic Areas

United States
Revenues in the United States decreased from $974.6 in 1997  to
$931.8,  or  by  4%,  in 1998.  Revenues declined  across  most
product lines within Books and Home Entertainment Products, but
most  significantly  as a result of lower  unit  sales  in  the
general  books,  and, to a lesser extent, Condensed  Books  and
series  books  product  lines.  These declines  were  partially
offset by increased revenues in Special Interest Magazines  and
at  QSP.  The decrease in general books was primarily a  result
of  lower customer response to promotional mailings, one  fewer
mailing  and lower mail quantities as well as fewer  profitably
promotable  customers in 1998.  The decline in Condensed  Books
was a result of the timing of shipments, as well as a reduction
in  shipments due to fewer customers carried into 1998 who were
participating   in  the  series.   Series  revenues   decreased
primarily as a result of one fewer series mailing in 1998,  and
the  scaling  back  of another book series.   The  increase  in
Special  Interest  Magazines was  primarily  a  result  of  the
acquisition of Walking magazine in the third quarter  of  1997.
Operating profit decreased significantly in 1998, compared with
1997,  due to the revenue decrease, higher promotional spending
in  order  to acquire and renew subscribers to Reader's  Digest
Magazine  and spending on investment initiatives  such  as  new
product development, testing and list development projects.

Europe
Revenues in Europe decreased from $906.2 in 1997 to $767.9,  or
by  15%,  in 1998.  Excluding the adverse effect of changes  in
foreign  currency exchange rates, revenues decreased  6%.   The
revenue decrease was almost equally due to lower-priced product
offerings  and  sales of a lower-priced product mix  and  lower
unit  sales  of Books and Home Entertainment Products.   Within
this  segment  revenues  declined in all  product  lines,  most
significantly  in the series books and Condensed Books  product
lines.   Product   expansion  in  Eastern   European   markets,
particularly  in general books, music and video product  lines,
was   more  than  offset  by  lower  sales  in  major  markets,
particularly in Germany, where sales and operating profit  have
declined  more significantly than other markets.   Lower  sales
were  as  a  result of a reduction in shipments  due  to  fewer
customers  carried  into 1998 for series  books  and  Condensed
Books product lines, lower mail quantities and fewer profitably
promotable  customers  as well as lower  customer  response  to
promotional mailings.  Operating profit decreased significantly
in  1998,  compared with 1997, as a result of  lower  revenues,
higher  proportionate  product costs and  higher  proportionate
promotional spending.

Pacific and Other Markets
Revenues in Pacific and Other Markets decreased from $322.1  in
1997  to  $309.7,  or  by 4%, in 1998.  Excluding  the  adverse
effect  of changes in foreign currency exchange rates, revenues
increased  3%.   Revenues  increased primarily  due  to  higher
circulation revenues for Reader's Digest Magazine, as  well  as
higher  unit  sales  of Books and Home Entertainment  Products.
Within  Books and Home Entertainment Products, the increase  in
revenues  was due predominantly to higher unit sales  of  music
products,  and, to a lesser extent, general books,  which  were
partially  offset  by  lower  unit sales  of  Condensed  Books.
Higher  revenues in Latin America, reflecting product expansion
and  increased  circulation levels primarily  in  Brazil,  were
offset  by significant revenue declines in Canada and Australia
because of lower customer response to promotional mailings  and
lower  mail  quantities  in 1998.  In addition,  revenues  were
adversely  impacted in Canada due to the effects  of  a  postal
strike  in  November  1997 and severe ice storms  which  forced
closure  of the business and adversely affected postal  service
during  the critical January mailing period.  Operating results
declined  significantly in 1998, compared with 1997,  primarily
because  of  lower  revenues, higher promotional  spending  and
higher proportionate product costs.

Corporate Expense
Corporate Expense in the nine-month period ended March 31, 1998
declined to $24.9, compared with $32.7 a year ago, primarily as
a  result of savings in employee benefit costs and the  benefit
of cost-containment initiatives.

Business Segments

Reader's Digest Magazine
Revenues for Reader's Digest Magazine decreased from $540.8  in
1997  to  $530.4,  or  by 2%, in 1998.  Excluding  the  adverse
effect  of changes in foreign currency exchange rates, revenues
increased  3%.   The increase in revenues was  attributable  to
higher  circulation  revenues.  Increased  circulation  levels,
primarily  in  Russia  and  Brazil, were  partially  offset  by
circulation  declines in several major markets.   In  addition,
higher   circulation  revenues  in  the  United   States   were
attributable to a higher-priced mix of subscriptions.  A higher
number  of  advertising  pages sold in the  Pacific  and  Other
Markets was partially offset by a lower number of pages sold in
the  United  States  and  Europe.  Rate  per  advertising  page
increased due to a higher rate in the United States.  Operating
profit for Reader's Digest Magazine decreased significantly  in
the  nine-month period ended March 31, 1998 compared  with  the
same   period  a  year  ago.   The  decrease  reflects   higher
promotional spending in the United States to acquire and  renew
subscribers and spending on investment initiatives such as list
development projects, partially offset by the benefits of cost-
containment initiatives.
Books and Home Entertainment Products
Revenues  for  Books and Home Entertainment Products  decreased
from  $1,449.3  in  1997  to $1,241.5,  or  by  14%,  in  1998.
Excluding  the  adverse effect of changes in  foreign  currency
exchange rates, revenues decreased 9%, principally attributable
to  the  company's United States and European operations.   The
lower  revenues were predominantly due to lower unit  sales  in
the  Condensed  Books, series books and general  books  product
lines,  and, to a lesser extent, lower-priced product offerings
and  sales  of  a lower-priced product mix in music  and  video
products.   The  decline in Condensed Books  and  series  books
revenues was caused by a combination of lower customer response
to  promotional  mailings in major developed  markets,  reduced
mail  quantities and fewer profitably promotable  customers  in
many  markets as well as a reduction in shipments due to  fewer
customers  carried  into  1998.  In  addition,  the  timing  of
Condensed Books mailings, the number of series mailings and the
scaling  back  of  a  book  series in the  United  States  also
contributed  to lower revenues.  The decrease in general  books
sales  was  primarily  a result of lower customer  response  to
promotional  mailings,  one  fewer  mailing  and   lower   mail
quantities  and  fewer profitably promotable customers  in  the
United  States, which was partially offset by growth in Eastern
Europe and Latin America.  Operating profit for Books and  Home
Entertainment   Products  decreased  significantly   in   1998,
compared  with 1997.  These operating results were affected  by
lower  revenues,  higher proportionate  product  costs,  higher
proportionate  promotional spending and increased  spending  on
investment   initiatives  such  as  new  product   development,
testing, and list development projects.

Special Interest Magazines
Revenues for Special Interest Magazines increased from $55.5 in
1997 to $69.0, or by 24%, in 1998.  This increase was primarily
attributable  to  the acquisition of Walking  magazine  in  the
third  quarter of 1997.  Excluding Walking, revenues  increased
5%,  principally  due to a higher number of  advertising  pages
sold  in the nine-month period ended March 31, 1998.  Operating
results  improved  in 1998 compared with 1997  primarily  as  a
result of the higher advertising revenues, which were partially
offset  by  increased  promotional  spending  associated   with
Walking.

Forward-Looking Information

The  company  continues  to believe that  1998  is  a  year  of
stabilizing and rebuilding its core business.

Impact of the Year 2000 Issue
The  year  2000 issue is the result of computer programs  being
written  using  two  digits rather  than  four  to  define  the
applicable  year, with the result that date-sensitive  software
may  recognize a date using "00" as the year 1900  rather  than
the  year  2000,  potentially  causing  a  system  failure   or
miscalculations that could disrupt operations.

The  company has completed an assessment of the year 2000 issue
with respect to its computer systems and is currently executing
a  plan  to convert all affected systems.  The company believes
that its plan will be completed in a timely manner and that the
total  cost of its plan will not have a material effect on  the
results  of operations of the company.  The company is  in  the
process of formal communications with its significant suppliers
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 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 increased market testing of the company's promotions
and products, 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 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  realignment 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, including
the  effect  of  the  transition to  its  new  chief  executive
officer,   the   effect  of  privacy  and  other   governmental
regulation,   the  ability  of  the  company  to   respond   to
competitive  pressures within and outside of  the  direct  mail
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, and general economic conditions.

Liquidity and Capital Resources

Cash   and   cash   equivalents,  short-term  investments   and
marketable securities remained almost even at $101.8  at  March
31,  1998,  compared  with $102.4 at June 30,  1997.   Dividend
payments  of  $72.8,  capital expenditures  of  $23.2  and  net
payments of short-term borrowings of $13.1 were offset by  cash
provided from operations of $60.0 and proceeds from the sale of
other long-term investments of $45.6.

In  the  third quarter of 1998, the company paid a  $0.225  per
share dividend on its common stock, representing a 50% decrease
compared with $0.45 per share a year ago.  At the current rate,
the  annualized  dividend is $0.90 per share in  1998  compared
with $1.80 in 1997.

The  company did not repurchase any shares of Class A nonvoting
common stock in the third quarter of 1998.

The  company  is party to a Competitive Advance  and  Revolving
Credit Facility Agreement dated as of November 12, 1996, with a
syndicate of domestic and foreign banks (the credit agreement).
The credit agreement, which has a term of five years, currently
permits competitive advance and revolving credit borrowings  of
up  to  $400.0  by the company and its designated subsidiaries.
Interest  rates  can be based on: the prime rate,  the  federal
funds  rate,  the  London Interbank Offered Rate  (LIBOR),  and
money  market rates.  The proceeds of the borrowings are to  be
used  for  general corporate purposes, including  acquisitions,
share  repurchases and commercial paper backup.  At  March  31,
1998,   no   borrowings  were  outstanding  under  the   credit
agreement.   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.
The  company  is  in  the process of renegotiating  the  credit
agreement.   The  amended credit agreement,  if  finalized,  is
expected  to  provide for a necessary reduction of the  minimum
required  level of consolidated tangible net worth, a reduction
of  credit available and an increase in borrowing costs.  Going
forward the company intends to consolidate the majority of  its
domestic borrowings under the credit agreement.

The  company  was  also party to an agreement  with  The  Chase
Manhattan Bank for a line of credit of $75.0 (the Chase line of
credit) for a term of one year to be used for general corporate
purposes.  The Chase line of credit expired on April 30,  1998.
The loans under the Chase line of credit were payable on demand
and bore interest at a floating rate based on the cost of funds
of  the  bank plus a margin.  At March 31, 1998 there  were  no
borrowings  outstanding under the Chase  line  of  credit.   In
addition,  various international subsidiaries  of  the  company
have  available lines of credit totaling $77.3.  At  March  31,
1998,  loans  in  the  amount of $9.2  were  outstanding  under
international  lines of credit, at a weighted average  interest
rate of 5.0%.

In  September 1997, the company entered into an agreement  with
Morgan  Guaranty Trust Company of New York for  an  uncommitted
line  of credit of $50.0 (the Morgan line of credit) to be used
for  general  corporate purposes.  The loans under  the  Morgan
line  of  credit are payable on demand and bear interest  at  a
floating  rate based on the cost of funds of the  bank  plus  a
margin.   At  March 31, 1998 loans in the amount of  $5.0  were
outstanding  under  the Morgan line of  credit  at  a  weighted
average interest rate of 6.1%.

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  present plans to expand  existing  product
lines in existing markets, to identify and develop new products
and markets, and to enter into strategic alliances.

                   PART II.  OTHER INFORMATION



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

(a)  Exhibits

     10.31 The Reader's Digest Association,  Inc.  Director
           Compensation Program.*

     10.32 The  Reader's Digest Association,  Inc.  Deferred
           Compensation Plan for Directors (amended and  restated
           as of March 13, 1998).*

     10.33 Employment Agreement dated as of April  28,  1998
           between the registrant and Thomas O. Ryder.*

     10.34 First Amendment Agreement dated as of  April  28,
           1998 between the registrant and George V. Grune.*

     10.35 The  Reader's Digest Association, Inc.  1994  Key
           Employee  Long  Term Incentive Plan,  as  amended  and
           restated effective as of April 28, 1998.*

     27    Financial Data Schedule.

(b)  Reports on Form 8-K

     The  company  filed a report on Form 8-K on April  28,  1998
     which  included a copy of a press release relating to senior
     management changes.

     _______________
          *Denotes a management contract or compensatory plan.

                           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:  May 13, 1998        By: /s/GEORGE S. SCIMONE
                                  George S. Scimone
                                  Vice President and
                                  Chief Financial Officer
                                  (and authorized signatory)

                                
                          EXHIBIT INDEX
                                
                                
Exhibit                                                         Page
                                                               
10.31   The Reader's Digest Association, Inc. Director         
        Compensation Program.*                                 
        
10.32   The Reader's Digest Association, Inc. Deferred         
        Compensation Plan for Directors (amended and restated  
        as of March 13, 1998).*
        
10.33   Employment Agreement dated as of April 28, 1998        
        between the registrant and Thomas O. Ryder.*           
        
10.34   First Amendment Agreement dated as of April 28, 1998   
        between the registrant and George V. Grune.*           
        
10.35   The Reader's Digest Association, Inc. 1994 Key         
        Employee Long Term Incentive Plan, as amended and      
        restated effective as of April 28, 1998.*
        
27      Financial Data Schedule                                
                                                               
                                                                 
_______________
*Denotes a management contract or compensatory plan.