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 December 31, 1997
                                   
                                  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  December 31, 1997, the following shares of the  registrant's
common stock were outstanding:

Class A Nonvoting Common Stock, $0.01 par value:  84,733,370 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
                                   
                           December 31, 1997


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 six-month periods ended December 31, 
 1997 and 1996                                                  3

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

 Consolidated Condensed Statements of Cash Flows
  for the six-month periods ended December 31, 1997 and 1996    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

        THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
              CONSOLIDATED CONDENSED STATEMENTS OF INCOME
     Three and six-month periods ended December 31, 1997 and 1996
                 (In millions, except per share data)
                              (unaudited)

<TABLE>
                           Three-month period ended  Six-month period ended
                                 December 31,               December 31,
                             1997           1996       1996         1997
<C>                    <S>            <S>         <S>         <S>
Revenues               $    812.5     $    874.6  $  1,373.9  $  1,518.6

Product,                                                      
distribution and            297.8          297.4       501.3       519.1
 editorial expense
Promotion, marketing                                          
and                         428.3          444.6       799.7       820.3
 administrative
expense
Other operating              ---            ---         70.0         ---
items
                                                              
Operating profit             86.4          132.6         2.9       179.2

Other income                  0.4                        6.6         7.7
(expense), net                       (0.3)

Income before                                                 
provision                    86.8          132.3         9.5       186.9
 for income taxes

Provision for income                                          
 taxes                       32.5           48.2        11.6        68.2

Net income (loss)      $     54.3     $     84.1  $    (2.1)  $    118.7

Earnings (loss) per    $    0.51      $    0.78   $   (0.03)  $     1.10
share

                                                              
Average common                                                
shares                      106.3          106.6       106.3       107.0
 outstanding

Dividends per common   $   0.225      $    0.45   $    0.45   $     0.90
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 December 31, 1997 and June 30, 1997
                             (In millions)
                              (unaudited)

                                             December 31,   June 30,
                                                 1997         1997
<C>                                           <S>          <S>
Assets                                                    
Cash and cash equivalents                     $    62.5    $    69.1
Receivables, net                                  610.6        426.3
Inventories                                       180.0        167.8
Prepaid expenses and other current assets         267.1        262.6

Total current assets                            1,120.2        925.8

Property, plant and equipment, net                298.9        314.8
Other noncurrent assets                           332.3        403.2

Total assets                                  $ 1,751.4    $ 1,643.8

Liabilities and stockholders' equity                      
Accounts payable                              $   190.9    $   211.8
Accrued expenses                                  436.1        373.6
Short-term borrowings                              88.1         30.3
Income taxes payable                               30.5         22.1
Unearned revenue                                  407.5        356.5
Other current liabilities                          18.1         18.8

Total current liabilities                       1,171.2      1,013.1

Other noncurrent liabilities                      295.5        284.7

Total liabilities                               1,466.7      1,297.8

Capital stock                                      29.4         29.0
Paid-in capital                                   141.5        141.8
Retained earnings                                 873.6        924.2
Foreign currency translation adjustment           (47.1)       (33.4)
Net unrealized losses on certain                   (0.1)        (0.3)
investments
Treasury stock, at cost                          (712.6)      (715.3)

Total stockholders' equity                        284.7        346.0

Total liabilities and stockholders' equity    $ 1,751.4    $ 1,643.8
</TABLE>



See accompanying notes to consolidated condensed financial statements.



        THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
            CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
          Six-month periods ended December 31, 1997 and 1996
                             (In millions)
                              (unaudited)


                                                  Six-month period ended
                                                        December 31,
                                                   1997               1996
Cash flows from operating activities                           
Net (loss) income                           $     (2.1)         $    118.7
Depreciation and amortization                     23.1                23.1
Other, net                                       (82.7)             (171.6)
                                                               
Net change in cash due to operating              (61.7)              (29.8)
activities
                                                               
Cash flows from investing activities                           
Proceeds from maturities and sales of                          
 short-term investments and marketable            10.1                48.8
securities
Purchases of short-term investments and           (1.0)              (21.2)
marketable securities
Proceeds from other long-term investments,        46.6                 1.0
net
Other, net                                       (11.6)              (16.4)
                                                               
Net change in cash due to investing               44.1                12.2
activities
                                                               
Cash flows from financing activities                           
Short-term borrowings, net                        57.9                26.7
Dividends paid                                   (48.5)              (97.2)
Common stock repurchased                           ---               (61.5)
Other, net                                         2.7                 6.7
                                                               
Net change in cash due to financing               12.1              (125.3)
activities
                                                               
Effect of exchange rate changes on cash           (1.1)               (1.7)
                                                               
Net change in cash and cash equivalents           (6.6)             (144.6)
                                                               
Cash and cash equivalents at beginning of         69.1               258.1
period
                                                               
Cash and cash equivalents at end of period  $     62.5          $    113.5


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 December 31, 1997 and 1996 are the second 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 (Loss) Per Share

Earnings (loss) per share is computed by dividing net income (loss),
less  preferred stock dividend requirements of $0.3 in each  of  the
three-month  periods ended December 31, 1997 and 1996, and  $0.7  in
each  of  the six-month periods ended December 31, 1997 and 1996  by
the  weighted average number of common shares outstanding during the
period.

(3)  Inventories
                                            December 31,   June 30,
                                                1997         1997
                                                          
Raw materials                               $   17.8      $   17.4
Work-in-progress                                21.1          26.5
Finished goods                                 141.1         123.9
                                                          
                                            $  180.0      $  167.8

(4)     Revenues by Business Segments and Geographic Areas
<TABLE>
                            Three-month period           Six-month period
                                     ended                    ended
                                  December 31,             December 31,
                              1997          1996          1997       1996
<C>                        <S>             <S>         <S>         <S>
BUSINESS SEGMENTS                                                  
Reader's Digest Magazine   $  187.1        $ 187.6     $  359.2    $  362.5
Books and Home                476.5          549.0        828.5       988.2
Entertainment Products
Special Interest Magazines     25.0           22.0         46.3        37.7
Other Businesses              123.9          116.0        139.9       130.2

Total revenues             $  812.5       $  874.6     $1,373.9    $1,518.6
                                                                   
GEOGRAPHIC AREAS                                                   
United States              $  387.2       $  396.3     $  635.7    $  665.8
Europe                        306.8          354.0        524.5       629.6
Pacific and Other Markets     118.5          124.3        213.7       223.2

Total revenues             $  812.5       $  874.6     $1,373.9    $1,518.6
</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
December 31, 1997, were:

<TABLE>
                                 Balance at       1998     Current   Balance
                               June 30, 1997     Charges   Activity  Remaining
<C>                              <S>           <S>         <S>       <S>  
Employee retirement & severance  $   56.7      $   39.5    $  17.1   $  79.1
benefits                                      
Other items                          23.6          23.1        8.6      38.1
Business repositioning                0.7           7.4        2.1       6.0
                                                                   
Total                            $   81.0      $   70.0    $  27.8   $ 123.2

</TABLE>

(6) Debt

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 December 31, 1997, no borrowings were
outstanding under the Morgan line of credit.

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) 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 calculation of
consolidated tangible net worth, which calculation was modified in the
first quarter of 1998.  At December 31, 1997, no borrowings were
outstanding under the Chase line of credit and borrowings in the
amount of $50.0 were outstanding under the credit agreement at a
weighted average interest rate of 6.0%.  In addition, various
international subsidiaries of the company have available lines of
credit totaling $88.7.  At December 31, 1997, loans in the amount of
$35.3 were outstanding under international lines 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 December 31, 1997 Compared With Three-Month
Period Ended December 31, 1996

Worldwide  revenues  for the second quarter  of  1998  decreased  to
$812.5,  or  by  7%, compared with $874.6 in the second  quarter  of
1997.   Excluding the adverse effect of changes in foreign  currency
exchange  rates, revenues decreased 3%.  Revenues declined primarily
in  the  company's European and, to a lesser extent,  United  States
operations.   The  decrease in revenues was due  almost  equally  to
sales  of  a lower-priced product mix and lower unit sales  in  most
product  lines  within Books and Home Entertainment  Products  as  a
result  of a combination of lower mail quantities and lower customer
response  to  promotional mailings in major  markets.   The  company
reported  worldwide operating profit of $86.4 in the second  quarter
of  1998, compared with $132.6 in the second quarter of 1997.  These
operating   results  reflect  lower  revenues  in   major   markets,
significant  declines in revenues and operating profit  in  Germany,
higher  proportionate promotional spending, and increased investment
in product development, testing, and list development initiatives.

The  company reported  net income of $54.3, or $0.51 per  share,  in
the second quarter of 1998, compared with $84.1, or $0.78 per share,
in the second quarter of 1997.

Other Income (Expense), Net
Other income (expense), net increased in the second quarter of  1998
to  $0.4, compared with $(0.3) in the prior year.  This increase was
primarily   because  of  favorable  effects  of   foreign   exchange
transactions  and  hedging activity, and  lower  losses  on  certain
investments, which were partially offset by higher interest  expense
in 1998.

Income Taxes
The  overall effective tax rate was 37.5% for the second quarter  of
1998,  compared  with  36.5% for the second 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 $396.3  in  1997  to
$387.2, or by 2%, in 1998.  This decrease was primarily attributable
to  lower  unit  sales  as a result of lower  customer  response  to
promotional  mailings,  reduced mail quantities  and,  to  a  lesser
extent,  lower-priced product offerings and sales of a  lower-priced
product  mix  across  all  product  lines  within  Books  and   Home
Entertainment  Products, particularly with respect to  series  books
and  video  products.   These  declines  were  partially  offset  by
increased revenues at QSP as well as in Reader's Digest Magazine and
Special  Interest  Magazines.   The decrease  in  series  books  was
primarily  a  result of one fewer series mailing in  1998,  and  the
discontinuance of another book series.  Revenues for video  products
declined due to lower customer response to promotional mailings  and
the effect of lower-priced video products.  The increase in Reader's
Digest  Magazine  was primarily attributable to  higher  circulation
revenues  and  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 in 1998, compared
with  1997,  due  to  the revenue decrease, spending  on  investment
initiatives  such  as  new  product development,  testing  and  list
development projects and higher promotional spending.

Europe

Revenues  in Europe decreased from $354.0 in 1997 to $306.8,  or  by
13%,  in  1998.  Excluding the adverse effect of changes in  foreign
currency  exchange  rates,  revenues  decreased  5%.   The   revenue
decrease  was  primarily due to lower-priced product  offerings  and
sales  of a lower-priced product mix, and, to a lesser extent, lower
unit  sales  of Books and Home Entertainment Products.  Within  this
segment  revenues declined in all product lines except  for  general
books.   Product expansion in Eastern European markets, particularly
in  general  books,  music and video product lines,  was  offset  by
continued  lower  sales in major markets, particularly  in  Germany,
where sales and operating profit have declined disproportionately to
other markets.  Lower sales were as a result of lower paid shipments
due  to  fewer customers carried into 1998 for series product lines,
lower  mail  quantities and lower customer response  to  promotional
mailings.   Operating  profit  decreased  significantly   in   1998,
compared   with  1997,  as  a  result  of  lower  revenues,   higher
proportionate promotional spending and higher proportionate  product
carrying costs.

Pacific and Other Markets
Revenues in Pacific and Other Markets decreased from $124.3 in  1997
to  $118.5,  or  by  5%, in 1998.  Excluding the adverse  effect  of
changes  in foreign currency exchange rates, revenues increased  2%.
Revenues  increased in both Reader's Digest Magazine and  Books  and
Home  Entertainment  Products.  Within Books and Home  Entertainment
Products,  the increase in revenues was due to higher general  books
and music products sales, which were partially offset by declines in
the   video  product  line.   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
a  postal  strike  in  November 1997, and, to a  lesser  extent,  in
Australia  and  South Africa because of reduced mail quantities  and
lower  customer response to promotional mailings.  Operating results
declined  significantly  in  1998,  compared  with  1997,  primarily
because of lower revenues and higher promotional spending.

Corporate Expense
Corporate  Expense in the second quarter of 1998 declined  to  $5.5,
compared  with  $13.7 in 1997, 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 remained almost even with  the
prior  year  at $187.1.  Excluding the adverse effect of changes  in
foreign  currency  exchange  rates,  revenues  increased  4%.    The
increase  in  revenues  was  principally attributable  to  increased
circulation  revenues.   Increased  circulation  levels  in  Eastern
Europe,  Brazil  and Thailand were partially offset  by  circulation
declines  in several major markets.  Higher circulation revenues  in
the  United  States  were  attributable to a  higher-priced  mix  of
subscriptions  and higher levels of renewals in 1998.   Globally,  a
lower  number  of  advertising pages sold in 1998 was  offset  by  a
higher average rate per page.  A higher number of advertising  pages
in  Europe and in Pacific and Other Markets was more than offset  by
lower  pages  in  the  United  States.  Rate  per  advertising  page
increased primarily due to a higher negotiated rate per page in  the
United  States.   Operating  profit  for  Reader's  Digest  Magazine
improved in the second quarter of 1998 compared with the same period
a  year  ago.  The increase reflects the benefit of cost-containment
initiatives  and lower paper costs in the United States,  offset  by
higher  promotional  spending to acquire and renew  subscribers  who
purchase  the  company's other products.  Consistent  with  industry
practice,   the   company  periodically  evaluates   the   financial
implications  of  the  circulation  rate  base  of  Reader's  Digest
Magazine.   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
$549.0 in 1997 to $476.5, or by 13%, in 1998.  Excluding the adverse
effect  of  changes  in  foreign currency exchange  rates,  revenues
decreased  8%,  principally attributable  to  the  company's  United
States and European operations.  The decrease in revenues was almost
equally  due to lower unit sales and sales of a lower-priced product
mix  across most product lines.  Lower revenues in series books  and
video products were partially offset by an increase in general books
sales.   The decline in series books was a result of lower shipments
in  Europe due to fewer series customers carried into 1998.  In  the
United  States,  series revenues declined due to  one  fewer  series
mailing  as  well as the discontinuance of another  book  series  in
1998.   Video  sales  declined  due to lower  customer  response  to
promotional  mailings in the United States and certain  other  major
markets, as well as the effect of lower-priced video products in the
United States.  Reduced revenues in certain major markets caused  by
lower  customer response to promotional mailings and the  effect  of
reduced mail quantities, 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,   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 $22.0 in 1997
to  $25.0,  or  by  14%,  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
second quarter of 1998.  Operating results declined in 1998 compared
with 1997 primarily due to increased promotional spending associated
with Walking.

Six-Month Period Ended December 31, 1997 Compared With Six-Month
Period Ended December 31, 1996

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 six-month period ended December 31,  1997
decreased to $1,373.9, or by 10%, compared with $1,518.6 in the six-
month  period ended December 31, 1996.  Excluding the adverse effect
of  changes  in foreign currency exchange rates, revenues  decreased
5%.   This  decrease was due almost equally to lower unit sales  and
lower-priced  product offerings and sales of a lower-priced  product
mix.   Revenues  declined  primarily in the company's  European  and
United  States  operations.   Within Books  and  Home  Entertainment
Products,  the decrease in revenues was predominantly due  to  lower
unit sales in certain product lines as a result of a combination  of
lower  mail  quantities and lower customer response  to  promotional
mailings in major markets.  The company reported worldwide operating
profit  of  $2.9  in the six-month period ended December  31,  1997,
compared  with  $179.2 in the six-month period  ended  December  31,
1996.   Excluding  the  effect of other operating  items,  operating
profit  was $72.9 in the six-month period ended December  31,  1997.
These  operating  results reflect lower revenues in  major  markets,
significant  declines in revenues and operating profit  in  Germany,
higher  proportionate promotional spending, and increased investment
in product development, testing and list development initiatives.

The  company reported a net loss of $2.1, or $0.03 per share, in the
six-month  period ended December 31, 1997, compared with net  income
of  $118.7,  or  $1.10  per  share, in the  six-month  period  ended
December  31, 1996.  Excluding the effect of other operating  items,
earnings  per  share   was $0.46 per share in the  six-month  period
ended December 31, 1997.

Other Income, (Expense) Net
Other  income, (expense) net decreased in the six-month period ended
December  31,  1997 to $6.6, compared with $7.7 in the  prior  year.
This  decrease  was  primarily because of higher  interest  expense,
lower   interest  income  and  lower  gains  on  sales  of   certain
investments  in  1998,  which  were partially  offset  by  favorable
effects of foreign exchange transactions and hedging activity.

Income Taxes
For  the six-month period ended December 31, 1997, the reported  tax
rate  was 122%.  Excluding the effect of other operating items,  the
overall effective tax rate was 37.5% for the six-month period  ended
December  31,  1997.   For the six-month period ended  December  31,
1996,  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 $665.8  in  1997  to
$635.7, or by 5%, in 1998.  This decrease was primarily attributable
to lower unit sales in the general books and Condensed Books product
lines  within  Books  and Home Entertainment  Products,  which  were
partially   offset   by  increased  revenues  in  Special   Interest
Magazines.  The decrease in general books was primarily a result  of
lower  customer  response  to promotional  mailings  in  1998.   The
decline  in  Condensed Books was a result of timing  of  promotional
mailings,  as  well as a reduction in paid shipments  due  to  fewer
customers  carried into 1998 who were participating in  the  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  and
spending  on investment initiatives such as new product development,
testing and list development projects.

Europe
Revenues  in Europe decreased from $629.6 in 1997 to $524.5,  or  by
17%,  in  1998.  Excluding the adverse effect of changes in  foreign
currency  exchange  rates,  revenues  decreased  7%.   The   revenue
decrease  was  primarily due to lower-priced product  offerings  and
sales  of a lower-priced product mix, and, to a lesser extent, lower
unit  sales  of Books and Home Entertainment Products.  Within  this
segment  revenues  declined principally  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  offset  by  continued lower  sales  in  major  markets,
particularly  in  Germany,  where sales and  operating  profit  have
declined disproportionately to other markets.  Lower sales were as a
result  of lower paid shipments due to fewer customers carried  into
1998  for series books and Condensed Books product lines, lower mail
quantities  and  lower  customer response to  promotional  mailings.
Operating  profit  decreased significantly in  1998,  compared  with
1997,   as   a   result  of  lower  revenues,  higher  proportionate
promotional  spending  and  higher  proportionate  product  carrying
costs.

Pacific and Other Markets
Revenues in Pacific and Other Markets decreased from $223.2 in  1997
to  $213.7,  or  by  4%, in 1998.  Excluding the adverse  effect  of
changes  in foreign currency exchange rates, revenues increased  1%.
Lower Books and Home Entertainment Products revenues were more  than
offset  by  increased Reader's Digest magazine circulation revenues.
Within  Books  and  Home  Entertainment  Products,  the  decline  in
revenues was due to lower unit sales of Condensed Books, and,  to  a
lesser  extent, lower-priced product offerings and sales of a lower-
priced  product  mix  in  the general books  product  line.   Higher
revenues in Latin America, reflecting product expansion primarily in
Brazil,  were  more than offset by significant revenue  declines  in
Canada   and  Australia  because  of  lower  customer  response   to
promotional mailings, and, to a lesser extent due to the effects  of
a  postal  strike  in  Canada in November 1997.   Operating  results
declined  significantly  in  1998,  compared  with  1997,  primarily
because  of  lower  revenues  and higher  promotional  and  overhead
spending.

Corporate Expense
Corporate  Expense in the six-month period ended December  31,  1997
declined  to $16.4, compared with $24.4 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 $362.5 in  1997
to  $359.2,  or  by  1%, in 1998.  Excluding the adverse  effect  of
changes  in foreign currency exchange rates, revenues increased  4%.
The  increase  in  revenues was attributable to  higher  circulation
revenues,  and,  to  a  lesser extent, higher advertising  revenues.
Increased circulation levels in Brazil, Eastern Europe and  Thailand
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.  Rate per advertising page increased due to a higher
negotiated rate in the United States.  Operating profit for Reader's
Digest Magazine decreased in the six-month period ended December 31,
1997  compared  with  the  same period a  year  ago.   The  decrease
reflects   higher   promotional  spending  to  acquire   and   renew
subscribers  who purchase the company's other products and  spending
on   investment  initiatives  such  as  list  development  projects.
Consistent   with   industry  practice,  the  company   periodically
evaluates the financial implications of the circulation rate base of
Reader's  Digest Magazine.  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
$988.2 in 1997 to $828.5, or by 16%, in 1998.  Excluding the adverse
effect  of  changes  in  foreign currency exchange  rates,  revenues
decreased  11%,  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.  The decline  in  Condensed
Books and series books revenues was caused by a combination of lower
customer response to promotional mailings in major markets,  reduced
mail  quantities  in many markets and lower paid  shipments  due  to
fewer  customers  carried  into 1998.  In addition,  the  timing  of
Condensed  Books mailings and the number of series mailings  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 in the United States and  certain
other major markets, 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 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 $37.7 in 1997
to  $46.3,  or  by  23%,  in  1998.   This  increase  was  primarily
attributable  to the acquisition of Walking magazine  in  the  third
quarter   of  1997.   Excluding  Walking,  revenues  increased   6%,
principally due to a higher number of advertising pages sold in  the
six-month  period  ended  December  31,  1997.   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 a future 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  decreased  from $102.4 at June 30,  1997,  to  $86.6  at
December 31, 1997.  The decrease was primarily due to cash  used  by
operations  of  $61.7  and dividend payments  of  $48.5  which  were
partially offset by net proceeds from short-term borrowings of $57.9
and proceeds from the sale of other long-term investments of $46.6.

In  the second 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 second quarter of 1998.

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 December 31, 1997 there
were no borrowings outstanding under the Morgan line of credit.

The  company is 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  loans
under  the  Chase  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  December 31, 1997 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 $88.7.  At December 31, 1997, loans in the amount of
$35.3  were  outstanding under international lines of credit,  at  a
weighted average interest rate of 6.1%.

The  company  is also 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,   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.  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  calculation of consolidated tangible net worth, which calculation
was  modified in the first quarter of 1998.  At December  31,  1997,
borrowings in the amount of $50.0 were outstanding under the  credit
agreement at a weighted average interest rate of 6.0%.

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 4. SUBMISSION OF MATTERS TO A VOTE  OF SECURITY HOLDERS.

At  the  1997 Annual Meeting of Stockholders of the Company,  held  on
December  12,  1997,  the  following matters  were  voted  on  by  the
stockholders:

Proposal 1:  Election of Directors to hold office until the next  Annual
Meeting  or  until  their successors are duly elected  and  qualified.
Each nominee was elected by the votes cast as follows:

                                  For        Withheld
       George V. Grune         19,817,225    1,265,835
       Melvin R. Laird         19,808,466    1,274,594
       Lynne V. Cheney         19,809,340    1,273,720
       M. Christine DeVita     19,813,719    1,269,341
       James E. Preston        19,816,699    1,266,361
       Robert G. Schwartz      19,814,771    1,268,289
       C.J. Silas              19,812,399    1,270,661
       William J. White        19,817,299    1,265,761

Proposal 2: Approval of amendment of the 1994 key employee  long  term
incentive plan to increase the number of shares available for  awards.
The amendment was approved by the votes cast as follows:

                                              Broker
           For        Against     Abstain    Non-Votes
        17,660,549   2,679,480    195,086     547,945

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

(a)  Exhibits

           27   Financial Data Schedule.

(b)  Reports on Form 8-K

     The  company filed a report on Form 8-K on October 6, 1997  which
     included a copy of a press release announcing expected earnings.

     The company filed a report on Form 8-K on November 24, 1997 which
     discussed the cancellation of a grant of stock options and stock
     appreciation rights, and the granting of stock options and stock
     appreciation rights in lieu of the canceled options and stock
     appreciation rights.


                              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:  January 30, 1998    By:  /s/George S. Scimone
                                   George S. Scimone
                                   Vice President and
                                   Chief Financial Officer
                                   (and authorized signatory)

                                   
                             EXHIBIT INDEX
                                   
Exhibit                                            Page
  27    Financial Data Schedule