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, 1999
                                
                               OR
                                
    [  ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934
                                
        For the transition period from _______ to _______


                 Commission file number: 1-10434


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

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

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

         ______________________________________________


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


As  of April 30, 1999, the following shares of the registrant's
common stock were outstanding:

Class  A  Nonvoting Common Stock, $0.01 par value:   85,716,573 shares
Class B Voting Common Stock, $0.01 par value:        21,716,057 shares



                                                               
     THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
                                
                       Index to Form 10-Q
                                
                         March 31, 1999


                                                                Page No.

Part I - Financial Information

Item 1. 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, 1999
  and 1998                                                           3

 Consolidated Condensed Balance Sheets
  as of March 31, 1999 and June 30, 1998                             4

 Consolidated Condensed Statements of Cash Flows
  for the nine-month periods ended March 31, 1999 and 1998           5

 Notes to Consolidated Condensed Financial Statements                6

Item 2. Management's Discussion and Analysis
        of Financial Condition and Results of Operations            10


Part II - Other Information

Item 6. Exhibits and Reports on Form 8-K.                           20



     THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
           CONSOLIDATED CONDENSED STATEMENTS OF INCOME
   Three and nine-month periods ended March 31, 1999 and 1998
              (In millions, except per share data)
                           (unaudited)




<TABLE>
                                                         Three-month period ended   Nine-month period ended
                                                                  March 31,                 March 31,
                                                            1999         1998          1999          1998
<S>                                                        <C>          <C>           <C>          <C>                
Revenues                                                   $ 591.8      $ 635.5       $ 1,947.8    $ 2,009.4
Product, distribution and editorial expenses                 216.1        232.3           700.9        733.6
Promotion, marketing and administrative                                                   
 expenses                                                    341.4        381.5         1,097.1      1,181.2
Other operating items and impairment losses                    ---          ---            31.0         70.0
Operating profit                                              34.3         21.7           118.8         24.6
Other income, net                                              5.8          1.6            69.0          8.2
Income before provision for income taxes                      40.1         23.3           187.8         32.8
Provision for income taxes                                    15.1          8.7            73.8         20.3
Income before cumulative effect of                                                        
 change in accounting principles                              25.0         14.6           114.0         12.5
Cumulative effect of change in accounting                                                 
 principles for pension assets                                 ---          ---            25.3          ---

Net income                                                 $  25.0      $  14.6       $   139.3    $    12.5
Basic and diluted earnings per share:                                                     

 Before cumulative effect of change in                                                    
  accounting principles                                    $  0.23      $  0.13       $    1.05    $    0.11
 Cumulative effect of change in accounting                                                
  principles                                                   ---          ---            0.24          ---
 Basic and diluted earnings per share                      $  0.23      $  0.13       $    1.29    $    0.11

Average common shares outstanding                            107.3        106.5           107.2        106.4
Dividends per common share                                 $  0.05      $ 0.225       $   0.325    $   0.675
</TABLE>

See accompanying notes to consolidated condensed financial statements.


     THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
              CONSOLIDATED CONDENSED BALANCE SHEETS
             As of March 31, 1999 and June 30, 1998
                          (In millions)
                           (unaudited)





                                                         March 31,   June 30,
                                                           1999        1998
Assets                                                              
Cash and cash equivalents                               $   370.2   $   122.8
Receivables, net                                            389.3       376.4
Inventories                                                 119.6       162.2
Prepaid expenses and other current assets                   311.7       311.2

Total current assets                                      1,190.8       972.6

Property, plant and equipment, net                          186.1       285.4
Other noncurrent assets                                     306.0       306.0

Total assets                                            $ 1,682.9   $ 1,564.0

Liabilities and stockholders' equity                                
Accounts payable                                        $   112.3   $   172.1
Accrued expenses                                            393.9       377.4
Income taxes payable                                         50.5        21.0
Unearned revenue                                            376.5       355.4
Other current liabilities                                    59.4        90.0

Total current liabilities                                   992.6     1,015.9

Other noncurrent liabilities                                317.2       289.5

Total liabilities                                         1,309.8     1,305.4

Capital stock                                                23.8        16.6
Paid-in capital                                             145.4       144.8
Retained earnings                                           948.5       845.0
Accumulated other comprehensive loss                        (52.1)      (49.8)
Treasury stock, at cost                                    (692.5)     (698.0)

Total stockholders' equity                                  373.1       258.6

Total liabilities and stockholders' equity              $ 1,682.9   $ 1,564.0


See accompanying notes to consolidated condensed financial statements.


     THE READER'S DIGEST ASSOCIATION, INC. AND SUBSIDIARIES
         CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
        Nine-month periods ended March 31, 1999 and 1998
                          (In millions)
                           (unaudited)





                                                      Nine-month period ended
                                                              March 31,
                                                         1999          1998
Cash flows from operating activities                                   
Net income                                             $ 139.3       $  12.5
Depreciation and amortization                             46.0          35.1
Other, net                                               (18.6)         12.4

Net change in cash due to operating activities           166.7          60.0

Cash flows from investing activities                                   
Proceeds from maturities and sales of                                  
 short-term investments and marketable securities, net     2.1          31.4
Proceeds from other long-term investments, net            (0.8)         45.6
Proceeds from sales of property, plant and equipment     170.1           4.0
Payments for business acquisitions                       (32.7)          ---
Other, net                                               (16.7)        (23.2)

Net change in cash due to investing activities           122.0          57.8

Cash flows from financing activities                                   
Short-term borrowings, net                               (12.4)        (13.1)
Dividends paid                                           (35.8)        (72.8)
Other, net                                                13.1           2.9

Net change in cash due to financing activities           (35.1)        (83.0)

Effect of exchange rate changes on cash                   (6.2)         (3.9)

Net change in cash and cash equivalents                  247.4          30.9

Cash and cash equivalents at beginning of period         122.8          69.1

Cash and cash equivalents at end of period             $ 370.2       $ 100.0


See accompanying notes to consolidated condensed financial statements.


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

(1)  Basis of Presentation

The company reports on a fiscal year beginning July 1.  The three-
month  periods ended March 31, 1999 and 1998 are the third fiscal
quarters of fiscal year 1999 and fiscal year 1998, respectively.

The accompanying consolidated condensed financial statements have
not  been  audited, but in the opinion of management,  have  been
prepared   in  conformity  with  generally  accepted   accounting
principles applying certain judgments and estimates which include
all adjustments (consisting only of normal recurring adjustments)
considered   necessary  to  present  fairly   such   information.
Operating  results  for any interim period  are  not  necessarily
indicative  of  the  results for an entire year  because  of  the
seasonality of the company's business.  These condensed financial
statements should be read in conjunction with the company's  Form
10-K  for  the year ended June 30, 1998.  Prior year's  financial
statements  have  been  reclassified to conform  to  the  current
year's presentation.

(2)  Basic and Diluted Earnings Per Share

Basic 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, 1999 and 1998, and  $1.0  in
each  of the nine-month periods ended March 31, 1999 and 1998  by
the  weighted average number of common shares outstanding  during
the  period.  Diluted earnings per share is computed by  dividing
net  income, less preferred stock dividend requirements,  by  the
weighted  average number of common shares outstanding during  the
period,  assuming  exercise and conversion of stock  options.   A
weighted  average number of common shares of 108.3 and 106.6  for
the  three-month periods ended March 31, 1999 and 1998, and 107.7
and  106.6  for the nine-month periods ended March 31,  1999  and
1998,  respectively,  was  used for the  computation  of  diluted
earnings per share.

(3)  Inventories
                                        March 31,      June 30,
                                           1999          1998
                                                      
Raw materials                            $ 16.0        $ 21.8
Work-in-progress                           20.6          24.7
Finished goods                             83.0         115.7
                                         $119.6        $162.2

(4)     Revenues by Business Segments and Geographic Areas
<TABLE>
                                Three-month period ended   Nine-month period ended
                                         March 31,                 March 31,
                                      1999       1998          1999       1998
<S>                                 <C>        <C>          <C>         <C>
BUSINESS SEGMENTS                                                   
Reader's Digest Magazine            $ 161.6    $ 171.2      $   504.9   $   530.4
Books and Home Entertainment
 Products                             376.5      413.0        1,201.7     1,241.5
Special Interest Magazines             28.2       22.7           78.4        69.0
Other Businesses                       25.5       28.6          162.8       168.5

Total revenues                      $ 591.8    $ 635.5      $ 1,947.8   $ 2,009.4
                                                                    
GEOGRAPHIC AREAS                                                    
United States                       $ 262.7    $ 296.1      $   884.0   $   931.8
Europe                                238.1      243.4          757.6       767.9
Pacific and Other Markets              91.0       96.0          306.2       309.7

Total revenues                      $ 591.8    $ 635.5      $ 1,947.8   $ 2,009.4
</TABLE>

(5) Comprehensive Income

Effective  July  1,  1998,  the  company  adopted  Statement   of
Financial  Accounting Standards No. 130, "Reporting Comprehensive
Income."   The company has determined that at June 30,  1999,  it
will  display comprehensive income in the Consolidated  Statement
of   Changes   in   Stockholders'  Equity.    Accumulated   other
comprehensive  loss  as  reported in the  Consolidated  Condensed
Balance Sheets as of March 31, 1999 and June 30, 1998, represents
foreign  currency  translation adjustments.   The  components  of
comprehensive income, net of related tax, for the three and nine-
month periods ended March 31, 1999 and 1998 were as follows:

<TABLE>
                                            Three-month period ended   Nine-month period ended
                                                     March 31,                March 31,
                                                 1999       1998          1999       1998
<S>                                            <C>         <C>          <C>         <C>
Net income                                     $ 25.0      $ 14.6       $ 139.3     $ 12.5
Change in:                                                                  
 Foreign currency translation adjustment        (14.8)       (0.9)         (2.3)     (14.6)
 Net unrealized gains on certain                                            
  investments                                     ---         0.1           ---        0.3
                                                                            
                                               $ 10.2      $ 13.8       $ 137.0     $ (1.8)
</TABLE>

(6)            Other Operating Items and Impairment Losses

In  the  second  quarter  of  1999, the  company  recorded  other
operating items and impairment losses of $31.0 ($21.5 after  tax,
or $0.20 per share) composed of the following:

1.  The company recorded charges of $51.3 ($33.7 after tax,  or
  $0.32 per share) (second quarter 1999 charges) composed primarily
  of  severance  costs  associated with cost  reduction  and  re-
  engineering activities and costs related to the discontinuation
  of  certain unproductive businesses.  These actions covered the
  separation  of  more  than  700 employees  from  the  worldwide
  workforce in substantially all functional areas of the company,
  and  are expected to be substantially completed by December 31,
  1999.   As of March 31, 1999, more than half of these employees
  had been separated from the workforce.

2.  The  company  adjusted the remaining accrual balances  from
  charges  originally recorded in 1998, 1997 and  1996.   Several
  actions initiated by prior management and included in these prior
  charges are not expected to be completed in connection with the
  new  long-term  strategy of the company.  This  resulted  in  a
  benefit  of  $35.0  ($22.2  after  tax,  or  $0.21  per  share)
  (adjustments to prior balances) in the second quarter of  1999.
  The  accrual  balances remaining from the 1998, 1997  and  1996
  charges  relate principally to ongoing severance  payments  and
  contract termination costs.

3. The company also recorded impairment losses of $14.7 ($10.0
  after  tax, or $0.09 per share) relating principally to certain
  computer hardware and software that will no longer be used in the
  company's   operations  and,  to  a  lesser  extent,  leasehold
  improvements, furniture and fixtures that were written off as a
  result of the headcount reduction and re-engineering activities.

In   addition  to  finalizing  further  components  of  the   re-
engineering  plan discussed above and estimated costs  associated
with those actions, the company is currently reviewing additional
potential  re-engineering activities.  As a result,  the  company
expects to record additional charges to other operating items and
impairment losses over the next nine to twelve months,  beginning
in  the fourth quarter of 1999, related to cost reduction and re-
engineering  actions as further components of the strategic  plan
and  estimated costs associated with those actions are  completed
and   additional  re-engineering  activities  are  reviewed   and
approved.

The  following table summarizes the components of other operating
items  and impairment losses for the second quarter of 1999.   In
addition,  the  components of the second  quarter  1999  charges,
current activity, as well as accrual balances remaining at  March
31, 1999, were:
<TABLE>
                                            Other
                                            Operating                     
                                            Items and                   
                                            Impairment   Current     Balance
                                            Losses       Activity   Remaining
<S>                                         <C>        <C>         <C>                     
Employee severance benefits                 $ 44.9     $(14.5)     $ 30.4
Contract terminations                          4.8       (0.5)        4.3
Other                                          1.6        ---         1.6
                                                                          
Second quarter 1999 charges                 $ 51.3     $(15.0)       36.3
Impairment losses                             14.7                 
Adjustments to prior balances                (35.0)                
                                                                          
Total other operating items and 
    impairment losses                       $ 31.0                 
</TABLE>

As  described in Note TWO to the company's consolidated financial
statements  included in its 1998 Annual Report  to  Stockholders,
the  company  recorded charges of $70.0 in the first  quarter  of
1998  relating  to the discontinuation of certain businesses  and
the realignment of business processes and operations, charges  of
$35.0  in  the fourth quarter of 1998 relating primarily  to  the
realignment  of the organization and operations, and  charges  of
$204.0  in the third quarter of 1996 relating to the streamlining
of  the  company's  organizational structure  and  the  strategic
repositioning  of  certain  businesses.   The  current  activity,
adjustments to prior balances discussed above, as well as accrual
balances remaining at March 31, 1999, were:

<TABLE>
                          Balance at     Current                   Balance
                        June 30, 1998   Activity    Adjustments    Remaining
<S>                        <C>            <C>          <C>           <C>        
Employee retirement and                                        
 severance benefits        $ 59.6         $(15.2)      $(27.1)       $ 17.3     
Other items                  24.2           (7.2)        (6.2)         10.8
Business repositioning        3.9           (1.1)        (1.7)          1.1

Total                      $ 87.7         $(23.5)      $(35.0)       $ 29.2

</TABLE>


(7) Debt

As described in Note NINE to the company's consolidated financial
statements  included in its 1998 Annual Report  to  Stockholders,
the  company  is a party to a Competitive Advance  and  Revolving
Credit Facility Agreement (the credit agreement) of up to $300.0.
Under  the credit agreement, the company must comply with certain
financial  covenants, including a minimum level  of  consolidated
tangible  net  worth.   At  March 31, 1999,  no  borrowings  were
outstanding  under  the credit agreement.  In  addition,  various
international subsidiaries of the company have available lines of
credit totaling $59.0.  At March 31, 1999, loans in the amount of
$1.3  were outstanding under international lines of credit  at  a
weighted average interest rate of 10.7%.

(8) Change in Accounting for Pension Assets

Effective  July  1,  1998, the company  changed  the  method  for
calculating the market-related value of pension plan assets  used
in  determining  the return-on-asset component of annual  pension
expense  and the cumulative net unrecognized gain or loss subject
to  amortization.  The company believes that the  new  method  is
more widely used in practice and preferable because it results in
pension  plan  asset  values that more closely  approximate  fair
value,  while still mitigating the effect of annual market  value
fluctuations.  In addition, the new method facilitates the global
management  of  the company's pension plans as it  results  in  a
consistent methodology for all plans for this calculation.   This
change  resulted  in a noncash benefit in fiscal  1999  of  $40.5
($25.3 after tax, or $0.24 per share) representing the cumulative
effect  of the change related to years prior to fiscal  1999  and
$4.8 and $14.3 in lower pension expense ($3.0 and $8.9 after tax,
or  $0.03  and $0.08 per share) related to the three-  and  nine-
month periods ended March 31, 1999, respectively, as compared  to
the  previous  accounting method.  Had this change  been  applied
retroactively,  pension expense would have been reduced  by  $3.9
and $11.8 ($2.5 and $7.4 after tax, or $0.02 and $0.07 per share)
in  the  three-  and  nine-month periods ended  March  31,  1998,
respectively.

(9) Sale of Artwork

In  November 1998, the company sold important works of  art  from
its collection, which resulted in a gain on the sale of property,
plant  and  equipment of $85.3 ($53.3 after  tax,  or  $0.50  per
share)  recorded  in other income, net in the  nine-month  period
ended March 31, 1999.

(10) Sale of Operations in South Africa

On  December  31, 1998 the company sold its operations  in  South
Africa,  which resulted in a non-cash loss of $7.9,  ($6.1  after
tax,  or  $0.06 per share) recorded in other income, net  in  the
nine-month period ended March 31, 1999.  The net loss included  a
write-off  of  $9.5  that was transferred from  foreign  currency
translation adjustments as a result of the sale.

(11) Sale and Leaseback

On  January  29, 1999, the company entered into an agreement  for
the sale and leaseback of its Canary Wharf office facility in the
United Kingdom, for a sale price of approximately $97.0.  Of  the
sale  price,  approximately $13.0 was placed into escrow  at  the
time  of  closing  and  approximately $4.0  was  used  for  costs
incurred  in  connection  with  the  sale.   The  gain  is  being
recognized on a straight-line basis over the term of the lease.

     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, 1999 Compared With Three-Month
Period Ended March 31, 1998

Revenues/Operating Profit
Worldwide  revenues for the third quarter of  1999  decreased  to
$591.8,  or  by 7%, compared with $635.5 in the third quarter  of
1998.   Excluding  the  adverse  impact  of  changes  in  foreign
currency exchange rates, revenues decreased 6%.  This decline was
primarily attributable to lower unit sales within Books and  Home
Entertainment  Products,  particularly  in  the  United   States,
principally  caused  by  a  strategic  reduction  both  in   mail
quantities and in certain types of marginally profitable  mailing
activities.   Revenues  also declined, to  a  lesser  extent,  in
Russia,  where  operations have been scaled back in  response  to
adverse   economic  conditions.   These  revenue  declines   were
somewhat offset by growth in Brazil (excluding the devaluation of
the  real)  and  higher  revenues  in  Germany  as  a  result  of
significantly  higher  customer response to  certain  promotional
mailings.

The  company reported worldwide operating profit of $34.3 for the
third  quarter of 1999, compared with operating profit  of  $21.7
for  the  third  quarter  of 1998, a 58% improvement.   The  rise
occurred  primarily because the decline in revenues was  outpaced
by  lower promotion and product costs.  Promotion costs declined,
particularly  in  the United States and, to a lesser  extent,  in
certain developed European markets, primarily as a result of  the
strategic  reduction in mail quantities and in certain  types  of
marginally  profitable  mailing  activities.   The  increase   in
operating profit was somewhat offset by higher inventory reserves
required primarily in certain developing markets where historical
customer  response  rates have declined somewhat.   Net  overhead
expenses  improved slightly compared with the  year  ago  period,
principally  resulting from a reduction in pension costs  in  the
United   States   and   benefits  derived   from   re-engineering
activities,  which  were  somewhat  offset  by  higher  incentive
compensation expense.

Other Income, Net
Other  income,  net,  was  $5.8 in the  third  quarter  of  1999,
compared  with  $1.6  in the prior year comparable  period.   The
increase  was  principally a result of gains on foreign  exchange
transactions  and hedging activity combined with higher  interest
income  earned  on  a  higher level  of  invested  funds.   These
favorable  variances were partly offset by a gain  recognized  on
the sale of certain assets in the prior year.

Income Taxes
For  the  third quarters of 1999 and 1998, the overall  effective
tax rate was 37.5%.

Change in Accounting Principles
In  the  first  quarter  of fiscal 1999, the  company  adopted  a
preferred  method  for  calculating the market-related  value  of
pension  plan  assets  used  in determining  the  return-on-asset
component  of  annual  pension expense  and  the  cumulative  net
unrecognized gain or loss subject to amortization.   This  change
reduced  pension expense for the third quarter of  1999  by  $4.8
($3.0  after  tax,  or $0.03 per share for  both  the  basic  and
diluted methods).

Basic and Diluted Earnings per Share
The  company reported net income of $25.0, or $0.23 per share for
both the basic and diluted methods, in the third quarter of 1999,
compared  with net income of $14.6, or $0.13 per share  for  both
the basic and diluted methods, in the third quarter of 1998.

Geographic Areas

United States
Revenues  in the United States decreased from $296.1 in  1998  to
$262.7,  or  by  11%,  in  1999.   This  decrease  was  primarily
attributable   to  lower  unit  sales  within  Books   and   Home
Entertainment Products, which was slightly offset by sales  of  a
higher-priced  product  mix.  Also contributing  to  the  revenue
decline  was slightly lower revenue for Reader's Digest Magazine.
These  declines were moderately offset by increases  in  revenues
from  the  acquisitions of the Good Catalog Company and  American
Woodworker  magazine, both of which were acquired in  the  second
quarter  of  fiscal 1999.  Books and Home Entertainment  Products
revenues  declined in most product lines principally  because  of
lower  unit sales from reductions in mail quantities and  certain
types  of  marginally  profitable mailing  activities.   Revenues
declined  particularly in general books and, to a lesser  extent,
in  video  and  music  products  because  of  the  aforementioned
reasons.   Music products revenues were also unfavorably affected
by  the  timing of mailings.  Revenues also declined in Condensed
Books  as  a  result of the timing of shipments, lower membership
and  lower  mail  quantities.   Partly  offsetting  these  volume
declines  in  Books and Home Entertainment Products  were  higher
average  prices  across  most product  lines,  resulting  from  a
postage  and handling price increase and a higher-priced  mix  of
products  offered in 1999.  Reader's Digest Magazine  circulation
revenues  decreased primarily from a reduction in the rate  base,
which  began in January 1999 and lower paid subscriptions  during
the   third   quarter   of  1999.   Operating   profit   improved
significantly in the third quarter of 1999, compared  with  1998,
primarily  because of the reduction in the rate base of  Reader's
Digest  Magazine.  Operating profit also increased, to  a  lesser
extent,  from  the  elimination of certain  strategic  alliances.
Moderately  offsetting the operating profit increase were  higher
inventory reserves.  In addition, overhead expenses were lower in
1999  principally  because of a reduction in  pension  costs  and
benefits  from  re-engineering activities, which were  moderately
offset by higher incentive compensation expense.

Europe
Revenues in Europe decreased from $243.4 in 1998 to $238.1, or by
2%, in 1999.  Excluding the positive effect of changes in foreign
currency  exchange rates, revenues decreased 5%.   This  decrease
was attributable to lower revenues in Russia from the significant
scaling  back  of mailing activity and revenue declines  in  most
other   developed  European  markets  from  reductions  in   mail
quantities.  As expected, revenues declined as customer  response
in the developing markets in Eastern Europe decreased somewhat in
comparison  to  the rapid growth in the earlier stages  of  these
markets.   These declines were somewhat offset by higher revenues
in  Germany,  which  experienced  significantly  higher  customer
response  to  certain  promotional  mailings.   The  decrease  in
revenues   was   principally  in  Books  and  Home  Entertainment
Products.   To  a lesser extent, revenues declined  for  Reader's
Digest  Magazine,  primarily  as a result  of  lower  circulation
volume.   Within Books and Home Entertainment Products,  declines
in  unit  sales primarily within music products and, to a  lesser
extent,  in  series  books and Condensed Books,  were  moderately
offset  by  sales of a higher-priced product mix in most  product
lines.  The decline in music products was driven by the timing of
mailings  compared with the prior year period and lower  response
rates  in  Eastern  European markets.  In all  European  markets,
series and Condensed Books revenues were negatively affected by a
reduction in the number of mailings.  Operating profit more  than
doubled in the third quarter of 1999, compared with 1998,  mainly
attributable  to lower promotion and product costs.  Contributing
to  this improvement was Germany, which experienced a sharp  rise
in  operating  profit  as  a result of higher  customer  response
rates.   Partly  offsetting the favorable variance  in  operating
profit   were  higher  inventory  reserves  required  in  certain
developing markets where historical customer response rates  have
declined somewhat.

Pacific and Other Markets
Revenues  in  Pacific and Other Markets decreased from  $96.0  in
1998  to $91.0, or by 5%, in 1999.  Excluding the adverse  effect
of  changes in foreign currency exchange rates, in particular the
devaluation  of  the  Brazilian  real,  revenues  increased   9%.
Revenues  increased primarily as a result of  growth  in  Brazil,
which  was  partly offset by the sale of the company's operations
in  South  Africa  in  the  second  quarter  of  1999.   Revenues
increased  predominantly  within  Books  and  Home  Entertainment
Products, principally because of sales of a higher-priced product
mix, primarily in music products, combined with higher unit sales
in  video  products  and Condensed Books.  These  increases  were
driven  by growth in Brazil and the launch of Condensed Books  in
Latin  America.  The timing of mailings in Australia  contributed
to  the  increase  in  video products  revenues.   Excluding  the
adverse  effect  of changes in foreign currency  exchange  rates,
operating  profit decreased compared with the prior year  period.
Improved  results  in several markets were more  than  offset  by
higher inventory reserves, costs associated with the shutdown  of
certain  operations in Latin America and unusual operating  items
in Brazil.

Corporate Expense
Corporate   expense  in  the  third  quarter  of  1999   remained
relatively  flat  at  $8.4 compared with  $8.5  in  1998.   Lower
pension  costs  and other employee benefit costs were  offset  by
higher incentive compensation expense.

Business Segments

Reader's Digest Magazine
Revenues  for Reader's Digest Magazine decreased from  $171.2  in
1998  to $161.6, or by 6%, in 1999.  Excluding the adverse effect
of changes in foreign currency exchange rates, revenues decreased
4%.    The  decrease  in  revenues  was  attributable  to   lower
circulation and, to a lesser extent, lower advertising  revenues.
Circulation  declined as a result of the reduction  in  the  rate
base  and  fewer  paid  subscriptions in  the  United  States,  a
reduction  in business in Russia and lower circulation levels  in
major  markets  such  as the United Kingdom  and  Canada.   These
declines  were  moderately offset by price increases  in  certain
international markets.  Advertising revenues declined principally
as  a  result  of  a lower number of advertising  pages  sold  in
certain  international markets at a slightly higher average  rate
per  page.   The  higher average rate per page  in  international
markets  was largely offset by a lower rate per advertising  page
in  the  United States as a result of the reduction in  the  rate
base.   Operating profit for Reader's Digest Magazine doubled  in
the  third quarter of 1999, compared with the prior year  period.
The   increase  in  operating  profit  reflected  lower  product,
promotion  and,  to  a  lesser extent, overhead  costs  resulting
primarily  from  the  reduction in the rate base  in  the  United
States.

Books and Home Entertainment Products
Revenues for Books and Home Entertainment Products decreased from
$413.0  in  1998  to  $376.5, or by 9%, in 1999.   Excluding  the
adverse  effect  of changes in foreign currency  exchange  rates,
revenues  decreased 8%.  Revenues decreased primarily because  of
lower  unit sales across most product lines, most notably general
books  and music products, attributable principally to reductions
in  mail quantities and in certain types of marginally profitable
mailing  activities  in  many markets.   Lower  unit  sales  were
moderately offset by sales of a higher-priced product mix  across
all  product  lines,  notably in video and music  products.   The
decrease  in general books unit sales was principally  caused  by
lower  mail  quantities in the United States  and,  to  a  lesser
extent,  the  significant scaling back  of  mailing  activity  in
Russia,  partly  offset  by  higher  revenues  in  certain  other
markets.  The decline in music products was attributable  to  the
timing  of mailings and lower mail quantities in certain European
markets  and  the United States, and lower customer  response  in
developing  markets  in Eastern Europe compared  with  the  rapid
growth  in the earlier stages of these markets.  Operating profit
for  Books and Home Entertainment Products increased slightly  in
1999,  compared  with  1998,  primarily  as  a  result  of  lower
promotion  and, to a lesser extent, product costs from reductions
in  mailings.  Partly offsetting operating profit increases  were
higher   inventory   reserves  required  primarily   in   certain
developing markets where historical customer response rates  have
declined  somewhat.  In addition, a decrease in overhead expenses
principally  from benefits from re-engineering activities  and  a
reduction  in pension costs in the United States also contributed
to the rise in operating profit.

Special Interest Magazines
Revenues  for Special Interest Magazines increased from $22.7  in
1998 to $28.2, or by 24%, in 1999, principally as a result of the
acquisition of American Woodworker magazine in the second quarter
of 1999.  Excluding American Woodworker, revenues increased 8% in
1999,   as  higher  circulation  revenues  combined  with  higher
advertising revenues.  The favorable variance in circulation  and
advertising  was  driven  principally  by  one  magazine,   which
produced  an  additional issue in the third quarter of  1999  and
displayed a higher number of advertising pages sold.  The rise in
circulation  and  advertising revenues outpaced  an  increase  in
expenses  and  resulted  in operating profit  improving  in  1999
compared with 1998.


Nine-Month  Period Ended March 31, 1999 Compared With  Nine-Month
Period Ended March 31, 1998

Items Affecting the Comparability of Reported Results

Other Operating Items and Impairment Losses

In  the  second quarter of 1999, the company recorded  net  other
operating items and impairment losses of $31.0 ($21.5 after  tax,
or  $0.20  per share).  The other operating items and  impairment
losses were composed of the following:

1. The company recorded charges of $51.3 ($33.7 after tax,  or
   $0.32 per share) composed primarily of severance costs associated
   with  cost  reduction and re-engineering activities  and  costs
   related   to   the  discontinuation  of  certain   unproductive
   businesses.  These actions covered the separation of more  than
   700 employees from the worldwide workforce in substantially all
   functional  areas  of  the company,  and  are  expected  to  be
   substantially completed by December 31, 1999.

2. The  company  adjusted the remaining accrual balances  from
   charges  originally recorded in 1998, 1997 and  1996.   Several
   actions initiated by prior management and included in these prior
   charges are not expected to be completed in connection with the
   new  long-term  strategy of the company.  This  resulted  in  a
   benefit of $35.0 ($22.2 after tax, or $0.21 per share)  in  the
   second quarter of 1999.  The accrual balances remaining from the
   1998,  1997  and  1996  charges relate principally  to  ongoing
   severance payments and contract termination costs.

3. The company also recorded impairment losses of $14.7 ($10.0
   after  tax, or $0.09 per share) relating principally to certain
   computer hardware and software that will no longer be used in the
   company's   operations  and,  to  a  lesser  extent,  leasehold
   improvements, furniture and fixtures that were written off as a
   result of the headcount reduction and re-engineering activities.

In  the  first  quarter  of  1998,  the  company  recorded  other
operating items of $70.0 ($51.8 after tax, or $0.49 per share).

Management's   discussion  and  analysis,  as  it   pertains   to
geographic  and  business segment information, has  been  written
excluding  the effect of the second quarter 1999 other  operating
items  and  impairment losses and the first  quarter  1998  other
operating  items in order to analyze the results on a  comparable
basis.

Other Income, Net
In the second quarter of 1999, the company recorded a gain on the
sale  of important works of art from the company's collection  of
$85.3  ($53.3  after tax, or $0.50 per share).  In  addition,  on
December  31,  1998,  the company sold its  operations  in  South
Africa,  which  resulted in a non-cash loss of $7.9  ($6.1  after
tax, or $0.06 per share).

Revenues/Operating Profit
Worldwide revenues for the nine-month period ended March 31, 1999
decreased  to $1,947.8, or by 3%, compared with $2,009.4  in  the
nine-month  period ended March 31, 1998.  Excluding  the  adverse
effect  of  changes in foreign currency exchange rates,  revenues
decreased  2%.  The decline was attributable to lower unit  sales
within  Books  and Home Entertainment Products, in particular  in
the  United  States, and lower circulation revenues for  Reader's
Digest Magazine.  These decreases were moderately offset by sales
of   a   higher-priced  product  mix  within   Books   and   Home
Entertainment   Products.   The  decrease  in  unit   sales   was
principally  caused by a strategic reduction in mail  quantities,
fewer  promotional mailings and a reduction of certain  types  of
marginally  profitable mailing activities.  Customer response  to
promotional  mailings  improved  in  certain  developed  European
markets, especially Germany.  Lower revenues in the United States
combined with lower revenues in the United Kingdom and a  decline
in  revenue in Russia, where the company has significantly scaled
back  its  operations, were moderately offset by higher  revenues
from growth in Latin America, particularly Brazil (excluding  the
devaluation  of the real) and other major developed international
markets, such as Germany and France.

The  company reported worldwide operating profit of $118.8 in the
nine-month  period ended March 31, 1999, compared with  operating
profit  of  $24.6 in the nine-month period ended March 31,  1998.
Excluding  the  items  affecting the  comparability  of  reported
results  in fiscal 1999 and 1998, operating profit was $149.8  in
the  nine-month period ended March 31, 1999, compared with  $94.6
in  the  nine-month period ended March 31, 1998.   This  increase
occurred  primarily because of the strategic decision  to  reduce
the  number  of  mailings  and  mail  quantities,  which  reduced
promotion   and   product  costs.   Promotion   costs   declined,
particularly  in  the United States, and to a lesser  extent,  in
certain developed European markets, because of this reduction  in
mail  quantities combined with fewer promotional mailings  and  a
reduction  of  certain  types  of marginally  profitable  mailing
activities.   Operating profit also improved as a result  of  the
elimination  of spending on certain unprofitable initiatives  and
the  termination  of  certain  strategic  alliances.   Moderately
offsetting the operating profit improvement were higher inventory
reserves  primarily  in the United States because  of  the  lower
volume  associated  with the reduction in  mail  quantities,  and
losses  in  Russia  from adverse economic  conditions.   Overhead
expenses  also decreased because of a reduction in pension  costs
and  benefits from re-engineering activities principally  in  the
United  States,  which  were partly offset  by  higher  incentive
compensation expense.

Other Income, Net
Other income, net, increased in the nine-month period ended March
31,  1999  to  $69.0,  compared with  $8.2  in  the  prior  year.
Excluding  the  items  affecting the  comparability  of  reported
results, other income, net, in the nine-month period ended  March
31,   1999  was  a  net  expense  of  $8.4.   This  decrease  was
principally  a  result  of  foreign exchange  translation  losses
resulting from the devaluation of the Russian ruble and losses on
foreign exchange transactions and hedging activity.  In addition,
other income, net, in the nine-month period ended March 31,  1998
included gains from sales of certain investments.

Income Taxes
For  the nine-month period ended March 31, 1999, the reported tax
rate  was  39.3%,  compared with 62.0% for the nine-month  period
ended  March  31,  1998.   Excluding  the  items  affecting   the
comparability  of reported results in fiscal 1999 and  1998,  the
overall  effective  tax rate was 37.5% for  both  the  nine-month
periods ended March 31, 1999 and March 31, 1998.

Change in Accounting Principles
In  the  first  quarter  of fiscal 1999, the  company  adopted  a
preferred  method  for  calculating the market-related  value  of
pension  plan  assets  used  in determining  the  return-on-asset
component  of  annual  pension expense  and  the  cumulative  net
unrecognized   gain   or  loss  subject  to  amortization.    The
cumulative  effect of adopting this change, for  years  prior  to
fiscal  1999, was a benefit of $40.5 ($25.3 after tax,  or  $0.24
per share).  In addition, this change reduced pension expense for
the  nine-month period ended March 31, 1999 by $14.3 ($8.9  after
tax, or $0.08 per share).

Basic and Diluted Earnings per Share
The  company  reported net income in the nine-month period  ended
March  31, 1999 of $139.3, or $1.29 per share for both the  basic
and  diluted methods, compared with net income of $12.5, or $0.11
per  share  for both the basic and diluted methods, in the  nine-
month  period  ended  March 31, 1998.  Excluding  the  cumulative
effect of change in accounting principles for pension assets  and
the  items  affecting  the comparability of reported  results  in
fiscal  1999 and 1998, basic and diluted earnings per  share  was
$0.81  in  the  nine-month period ended March 31, 1999,  compared
with  $0.60  per share in the nine-month period ended  March  31,
1998.


Geographic Areas

United States
Revenues  in the United States decreased from $931.8 in  1998  to
$884.0,   or  by  5%,  in  1999.   This  decrease  was  primarily
attributable   to  lower  unit  sales  within  Books   and   Home
Entertainment Products, moderately offset by sales of  a  higher-
priced product mix and revenues from the Good Catalog Company and
American Woodworker magazine, both of which were acquired in  the
second  quarter of fiscal 1999.  Within Reader's Digest Magazine,
slightly  lower circulation revenues primarily resulting  from  a
reduction  in  the  rate base, were moderately offset  by  higher
advertising   revenues.   Advertising  revenues   experienced   a
significantly higher number of pages sold at a lower average rate
per   page.   Books  and  Home  Entertainment  Products  revenues
declined  in most product lines, in particular general books  and
music  products,  principally because  of  a  reduction  in  mail
quantities,  lower customer response to promotional  mailings  in
certain  product  lines  and  a reduction  in  certain  types  of
marginally  profitable mailing activities.  These decreases  were
moderately offset by sales of a higher-priced product mix  across
all  product  lines  as a result of postage  and  handling  price
increases  in  response to postal rate increases, as  well  as  a
higher-priced mix of products offered in 1999.  Operating  profit
improved  significantly in 1999, compared  with  1998,  primarily
because  the  decline in revenues was more than offset  by  lower
promotion and product costs as a result of the reduction in  mail
quantities,  the elimination of spending on certain  unprofitable
initiatives  and the termination of certain strategic  alliances.
Moderately  offsetting the favorable variance for  product  costs
were  higher  inventory  reserves because  of  the  lower  volume
associated  with  the  reduced  mail  quantities.   In  addition,
overhead  expenses were lower in 1999 principally  because  of  a
reduction in pension costs and, to a lesser extent, benefits from
re-engineering  activities,  partly offset  by  higher  incentive
compensation expense.

Europe
Revenues in Europe decreased from $767.9 in 1998 to $757.6, or by
1%, in 1999.  Excluding the positive effect of changes in foreign
currency   exchange  rates,  revenues  decreased   4%.    Revenue
increases  in Germany and France were more than offset  by  lower
revenues  in  the United Kingdom, in Russia from the  significant
scaling  back  of  mailing activity, and in most other  developed
markets.   Improved customer response to promotional mailings  in
certain developed markets in 1999 partially offset the decline in
revenues  from  the reduction in mail quantities in  the  current
year.   Revenues   declined  principally  in   Books   and   Home
Entertainment  Products  and, to a  lesser  extent,  in  Reader's
Digest  Magazine.   Most  product lines  within  Books  and  Home
Entertainment Products experienced lower unit sales, particularly
video  products  and series books. The decline in video  products
was the result of a reduction in the number of mailings and lower
mail   quantities  within  individual  mailings.   Series   books
revenues  declined  primarily as a result of  the  aforementioned
factors  and  because  of a series that is being  phased  out  in
certain  markets.   These volume declines were mostly  offset  by
sales  of  a higher-priced product mix across all product  lines.
Within  Reader's  Digest Magazine, revenues  decreased  primarily
because of circulation declines in major markets, particularly in
the  United  Kingdom and Germany, and a reduction of business  in
Russia.   Operating profit doubled in 1999, compared  with  1998,
primarily as a result of improved performance in Germany,  partly
offset   by   losses  at  the  company's  operations  in   Russia
principally caused by adverse economic conditions.  In  addition,
the  decline in revenues was more than offset by lower  promotion
and   product  costs  resulting  from  the  reduction   in   mail
quantities.

Pacific and Other Markets
Revenues  in Pacific and Other Markets decreased from  $309.7  in
1998  to $306.2, or by 1%, in 1999.  Excluding the adverse effect
of changes in foreign currency exchange rates, revenues increased
12%.  Revenues increased principally as a result of expansion  in
Latin America, particularly in Brazil.  Revenues increased within
Books  and  Home Entertainment Products, because of  higher  unit
sales  in  most  product  lines, most  notably  music  and  video
products  and,  to  a  lesser extent, sales  of  a  higher-priced
product mix across most product lines, principally within general
books.   Higher unit sales were attributable to growth  in  music
and video product sales in Latin America, particularly in Brazil.
Revenues  also increased within these product lines in  Australia
because of the timing of mail dates and shipments as well as  the
number  of promotional mailings compared with the prior year  and
improved  customer  response to promotional mailings.   Operating
profit  decreased slightly in 1999, compared with 1998, primarily
because  of  lower revenues and higher product costs, which  were
offset by lower promotion costs.  Excluding the adverse effect of
changes  in  foreign  currency exchange rates,  operating  profit
increased significantly in 1999.

Corporate Expense
Corporate Expense in the nine-month period ended March  31,  1999
increased to $28.7, compared with $24.9 a year ago, primarily  as
a  result  of  higher incentive compensation  expense  which  was
partly  offset  by  lower levels of pension  and  other  employee
benefits costs.

Business Segments

Reader's Digest Magazine
Revenues  for Reader's Digest Magazine decreased from  $530.4  in
1998  to $504.9, or by 5%, in 1999.  Excluding the adverse effect
of changes in foreign currency exchange rates, revenues decreased
3%.  The decrease in revenues was primarily attributable to lower
circulation  revenues  slightly offset  by  a  higher  number  of
advertising  pages sold at a lower average rate per page  in  the
nine-month  period  ended  March  31,  1999.   Lower  circulation
revenues  were a result of the rate base reduction in the  United
States   and  circulation  declines  in  several  major  markets,
particularly  the  United Kingdom, Germany and  Russia.   In  the
United  States,  the effect of a significantly higher  number  of
advertising  pages sold was moderately offset by a lower  average
rate  per  page.   Operating profit for Reader's Digest  Magazine
improved  slightly in the nine-month period ended March 31,  1999
compared  with  the  same  period a year  ago.   The  improvement
resulted  primarily from the rate base reduction  in  the  United
States,  which  contributed to a combination of lower  promotion,
product and overhead costs, which outpaced the revenue decline.

Books and Home Entertainment Products
Revenues for Books and Home Entertainment Products decreased from
$1,241.5  in 1998 to $1,201.7, or by 3%, in 1999.  Excluding  the
adverse  effect  of changes in foreign currency  exchange  rates,
revenues  decreased 2%.  The decrease was primarily  attributable
to  lower  unit  sales across most product lines, principally  in
general books, video and music products and series books.   These
declines  were mostly offset by a higher-priced mix of  products,
particularly  in  video  products  and  general  books,  and  the
acquisition of the Good Catalog Company in the United  States  in
October 1998.  The decrease in general books was caused by  lower
mail  quantities within the United States and, to a  much  lesser
extent,  in  Russia from the significant scaling back of  mailing
activity.  The decline in video products was the result of  lower
mail   quantities  and  reduced  activity  in  certain  developed
European  markets,  as  well  as  lower  mail  quantities  and  a
reduction in the number of mailings in the United States.   Music
products also declined, principally in the United States, for the
aforementioned  reasons,  as well as because  of  the  timing  of
mailings,  and  in  the  developing  Eastern  European   markets,
compared  with  the rapid growth in the earlier stages  of  these
markets.  Partly offsetting these declines in video and music was
growth from the Pacific and Other Markets, particularly in Brazil
(excluding  the devaluation of the real).  Series books  revenues
declined  primarily as a result of lower mail  quantities  within
mailings  and a reduction in the number of mailings, and  because
of  a  series  that  is  being phased  out  in  certain  markets.
Operating  profit increased significantly in 1999, compared  with
1998,  because the declines in revenue were more than  offset  by
lower  promotion  and, to a lesser extent, lower  product  costs.
Promotion  costs  fell  as  a result of  the  reduction  in  mail
quantities   within  individual  mailings  and  the   number   of
promotional mailings.  Operating profit also improved as a result
of   the   elimination   of  spending  on  certain   unprofitable
initiatives.   Moderately  offsetting the  reduction  in  product
costs  were  higher inventory reserves, primarily in  the  United
States.   In  addition, overhead expenses  were  lower  in  1999,
principally  because of a reduction in pension costs  and,  to  a
lesser extent, benefits from re-engineering activities, primarily
in the United States.

Special Interest Magazines
Revenues  for Special Interest Magazines increased from $69.0  in
1998  to  $78.4, or by 14%, in 1999.  This was principally  as  a
result of the acquisition of American Woodworker magazine in  the
second  quarter of 1999.  Excluding American Woodworker, revenues
increased  5%  in  1999, primarily because of higher  advertising
revenues.  This increase was principally attributable to a higher
average  rate per advertising page sold in 1999 as  a  result  of
rate  base  increases  for several magazines.   Operating  profit
improved  in 1999, compared with 1998, primarily as a  result  of
the  higher  advertising  revenues, which  more  than  offset  an
increase in promotion and product costs.

Other Businesses
Revenues  for Other Businesses decreased from $168.5 in  1998  to
$162.8, or by 3%, in 1999.  The decrease primarily resulted  from
a  reduction  in  activity in the worldwide  merchandise  catalog
product   line,  primarily  in  the  United  Kingdom,   and   the
elimination of a strategic alliance, largely offset by growth  at
QSP,  the  company's youth fund-raising organization, principally
because of higher unit sales of magazine subscriptions and  music
products.   Operating  profit  improved  significantly  in  1999,
compared  with  1998, principally as a result of  lower  product,
promotion and overhead costs in the merchandise catalog line  and
growth and cost savings at QSP.


Forward-Looking Information

Fiscal 1999 Results
The  company  expects its full year operating profit  to  show  a
significant  improvement over fiscal 1998, including the  benefit
for  the  change in accounting for pension assets and before  the
effects  of  other  operating items and impairment  losses.   The
improvement reflects improved customer response which the company
has  experienced  and  accelerated progress in  implementing  the
company's cost-reduction and re-engineering initiatives.

The  company  expects  to  record  additional  charges  to  other
operating  items  and impairment losses over  the  next  nine  to
twelve  months, beginning in the fourth quarter of 1999,  related
to   cost   reduction  and  re-engineering  actions  as   further
components  of the strategic plan and estimated costs  associated
with  those  actions are completed and additional  re-engineering
activities  are  reviewed and approved.   As  a  result  of  this
strategy,  the  company expects a continued revenue  decline  but
operating profit improvements during the fourth quarter.

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

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

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

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

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

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

The  United  States  and  developed international  markets  have
fully  completed  the  inventory phase.   Also,  the  company's
operations  in  developing  international  markets,   including
operations in Latin America, Eastern Europe and the  Far  East,
have completed the inventory and analysis phases.

2) Analysis   -  This  phase  includes  the  evaluation   of   the
   inventoried  items for year 2000 compliance, the  determination
   of  the  remediation  method  and resources  required  and  the
   development of an implementation plan.  The analysis  phase  is
   complete  in  the  United  States and  developed  international
   markets.

3) Implementation   -   This   phase   includes   executing    the
   implementation plan for all applicable hardware  and  software,
   interfaces  and  systems.  This involves testing  the  changes,
   beginning   to  utilize  the  changed  procedures   in   actual
   operations,  testing in a year 2000-simulated  environment  and
   vendor  interface testing.  The implementation phase, including
   testing  for  certain critical applications, is in  process  in
   the  United States and developed international markets, and  is
   expected  to  be  substantially  completed  by  June  1999  for
   applications  and  IT  equipment and non-IT  embedded  systems.
   The  company  expects that its German operations  will  not  be
   completed  with this aspect of the implementation  phase  until
   August  1999.   The implementation phase for the United  States
   and  developed  international markets with  respect  to  vendor
   relationships is expected to be completed by September 1999.

The implementation  phase  has  commenced  in  all   developing
international  markets and is expected to be  completed  by  June
1999  for  applications  and  IT equipment  and  non-IT  embedded
systems.   The  implementation  phase  with  respect  to   vendor
relationships  in these markets is expected to  be  completed  by
September 1999.

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

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

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

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

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

Costs  to Address the Company's Year 2000 Issue.  The total  cost
of  the  company's remediation plan is estimated at approximately
$13.0  to $18.0 and is being funded through operating cash flows.
To  manage the cash flow effects of these incremental costs,  the
company has deferred certain IT development activities and system
enhancements.    Of  the  total  cost,  approximately   $2.0   is
attributable   to  new  hardware  and  software  that   will   be
capitalized.   The remainder will be expensed  as  incurred.   To
date,  approximately $10.0 of the total cost of  the  remediation
plan has been spent, of which approximately $1.0 was capitalized.

Impact of the Euro Conversion
On January 1, 1999, 11 of the 15 member countries of the European
Union  established fixed conversion rates between their  existing
sovereign currencies ("legacy currencies") and a single  currency
called  the euro.  The legacy currencies are scheduled to  remain
legal  tender as denominations of the euro during the  transition
period  from  January  1, 1999 to December 31,  2001.   Beginning
January  1,  2002,  euro-denominated  bills  and  coins  will  be
introduced and by July 1, 2002, legacy currencies will no  longer
be legal tender.

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

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


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

Liquidity and Capital Resources

Cash  and cash equivalents, short-term investments and marketable
securities increased $246.9 to $373.0 at March 31, 1999  compared
with  June 30, 1998.  The increase was primarily a result of cash
flow  provided  from  operating  activities,  the  sale  of   the
company's principal operating facility in the United Kingdom  and
the sale of important works of art from the company's collection,
slightly  offset by the acquisitions of the Good Catalog  Company
and American Woodworker and dividend payments.

In  the third quarter of 1999, the company paid a $0.05 per share
dividend  on its common stock, compared with $0.225 per  share  a
year ago.  At the current rate, the annualized dividend is $0.375
per share in 1999 compared with $0.90 in 1998.

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

The  company  is a party to a Competitive Advance  and  Revolving
Credit  Facility  Agreement amended as of June 2,  1998,  with  a
syndicate  of domestic and foreign banks (the credit  agreement).
The  credit  agreement, which expires in November  2001,  permits
competitive  advance  and revolving credit borrowings  of  up  to
$300.0  by the company and its designated subsidiaries.  Interest
rates can be based on several pricing options that can vary based
upon  operating  results of the company.   The  proceeds  of  the
borrowings may be used for general corporate purposes,  including
acquisitions, share repurchases and commercial paper backup.  The
credit  agreement contains certain restrictions on incurrence  of
debt,  liens  and guarantees of indebtedness.  The  company  must
also comply with certain financial covenants, including a minimum
level  of  consolidated tangible net worth.  At March  31,  1999,
there were no borrowings outstanding under the credit agreement.

In  addition, various international subsidiaries of  the  company
have  available  lines of credit totaling $59.0.   At  March  31,
1999,  loans  in  the  amount  of  $1.3  were  outstanding  under
international lines of credit at a weighted average interest rate
of 10.7%.

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


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

(a)  Exhibits

     27   Financial Data Schedule

(b)  Reports on Form 8-K

     The company filed a report on Form 8-K dated January 8, 1999
     which  included  a copy of a press release relating  to  the
     election of a director to the company's Board of Directors.

     The  company  filed a report on Form 8-K dated  February  4,
     1999  which  included a copy of a press release relating  to
     the sale of its United Kingdom headquarters building.

     The  company  filed a report on Form 8-K dated February  25,
     1999  which  included a copy of a press release relating  to
     the company's growth strategy.


                           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 12, 1999        By:  /s/GEORGE S. SCIMONE
                                George S. Scimone
                                Senior Vice President and
                                Chief Financial Officer
                                (and authorized signatory)

                                
                          EXHIBIT INDEX
                                
                                                              
Exhibit                                                  Page
                                                               
                                                               
27      Financial Data Schedule