UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549

                                  FORM 10-QSB

                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

                       For Quarter Ended March 31, 1998
                        Commission File Number 0-11353

                          CIRCUIT RESEARCH LABS, INC.
             (Exact name of registrant as specified in its charter)

                 Arizona                                 86-0344671
        (State or other jurisdiction of                (I.R.S. Employer
        incorporation or organization)              Identification No.)

      2522 West Geneva Drive, Tempe, Arizona                  85282 
      (Address of Principal executive office)               (Zip Code)



                        Registrant's telephone number,
                              including area code
                                (602) 438-0888


                                  172743 20 5
                                (CUSIP Number)

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          

Indicate the number of  shares outstanding of  each of the issuer's  classes of
common stock, as of the close of the period covered by this report.

                                      Outstanding at
           Class                      March 31, 1998

      Common stock, $.10 par value     597,682<PAGE>





                 CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES

                                     INDEX



                                                                  Page
                                                                 number



Part I.  FINANCIAL INFORMATION:



   Item 1. Financial Statements

       Consolidated Condensed Balance Sheets
         March 31, 1998 (Unaudited) and
         December 31, 1997                                         2

       Consolidated Condensed Statements of
         Operations - Three months ended
         March 31, 1998 and 1997 (Unaudited)                       4

       Consolidated Condensed Statements of Cash

         Flows -  Three months ended March 31, 1998
         and 1997 (Unaudited)                                      5

       Notes to Consolidated Condensed Financial 
         Statements (Unaudited)                                    6
 

   Item 2. Management's Discussion and Analysis
         of Financial Condition and Results
         of Operations                                             8




Part II. OTHER INFORMATION:


   Item 6.  Exhibits and Reports on Form 8-K                       9

   Signatures                                                     10






                                       Page 1<PAGE>



                         PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                 CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES

                     CONSOLIDATED CONDENSED BALANCE SHEETS

                                                 March 31,       Dec. 31,
                                                   1998            1997     
                                              (Unaudited)
ASSETS


CURRENT ASSETS:
   Cash and cash equivalents                   $108,388     $    119,851
   Securities available-for-sale                948,156           89,607
   Accounts receivable, less allowance for 
      doubtful accounts of $6,520               181,202          112,320

   Inventories:
      Raw materials and supplies                168,302          176,439
      Work in process                           261,703          289,690
      Finished goods                            433,627          416,996

      Total inventories                         863,632          883,125


   Prepaid expenses and other                    63,290           58,346

      Total current assets                    2,164,668        1,263,249

PROPERTY, PLANT AND EQUIPMENT:
   Land                                         130,869          130,869
   Building and improvements                    497,004          497,004
   Furniture and fixtures                       302,568          300,628
   Machinery and equipment                      601,631          599,864

   Total                                      1,532,072        1,528,365

   Less accumulated depreciation              1,011,737          996,810

      Property, plant and equipment - net       520,335          531,555


OTHER ASSETS - NET                               10,288           51,794

TOTAL                                        $2,695,291       $1,846,598


                                                (continued)



                                       Page 2<PAGE>



                 CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES

                     CONSOLIDATED CONDENSED BALANCE SHEETS


                                                March 31,         Dec 31,  
                                                  1998             1997     
                                              (Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                             $58,104       $   53,382

   Accrued salaries and benefits                 31,830           63,086
   Accrued professional fees                     20,647           29,302
   Customer deposits                              1,732           26,180
   Other accrued expenses and liabilities        14,028            7,315
   Long-term debt - current portion              11,000           16,481

      Total current liabilities                 137,341          195,746


LONG-TERM DEBT - LESS CURRENT PORTION             9,961          105,656

      Total liabilities                         147,302          301,402

STOCKHOLDERS' EQUITY:
   Preferred stock, $100 par value - authorized

      500,000 shares, none issued
   Common stock, $.10 par value - authorized
      20,000,000 shares, 597,682 shares issued 
      and outstanding                            59,768          59,768
   Additional paid-in capital                 1,247,240       1,247,240
   Retained earnings                          1,240,981         238,188
      Total stockholders' equity              2,547,989       1,545,196

TOTAL                                        $2,695,291      $1,846,598

See accompanying notes to consolidated condensed financial statements.





                                       Page 3<PAGE>




                 CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES

                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                  (Unaudited)


                                                  Three Months Ended
                                                       March 31,
                                                     1998        1997    

NET SALES                                          $517,210    $510,852


COST OF GOODS SOLD                                  220,905     206,837

   Gross profit                                     296,305     304,015

OPERATING EXPENSES:
   Selling, general and administrative              221,877     247,736
   Research and development                          55,989      50,700

   Total operating expenses                         277,866     298,436

INCOME FROM OPERATIONS                               18,439       5,579

OTHER INCOME (EXPENSE):

   Proceeds from officer's life insurance
   in excess of cash surrender value              1,000,681
   Interest and other income                          2,829       1,587
   Interest expense                                 (19,156)     (3,303)

   Total other income (expense)                     984,354      (1,716)

INCOME  BEFORE INCOME TAXES                       1,002,793       3,863

INCOME TAX EXPENSE                                                3,050

NET  INCOME                                      $1,002,793    $    813


INCOME  PER COMMON SHARE - Basic and Diluted          $1.68        $.00


See accompanying notes to consolidated condensed financial statements.



                                       Page 4<PAGE>



                 CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES

                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                                  Three Months Ended
                                                   March 31,
                                                   1998         1997  

OPERATING  ACTIVITIES:

NET  INCOME                                    $1,002,793   $    813 
ADJUSTMENTS TO RECONCILE NET INCOME 

TO NET CASH USED IN OPERATING ACTIVITIES:
  Depreciation and amortization                    15,347      1,348
  Proceeeds from officer's life insurance in
  excess of cash surrender value               (1,000,681)
  Changes in assets and liabilities:
     Accounts receivable                          (68,882)    37,084
        Inventories                                19,493   ( 66,081)
     Prepaid expenses and other assets              3,772         11
     Accounts payable, accrued expenses and 
     customer deposits                            (52,924)   (52,911)

NET CASH USED IN OPERATING ACTIVITIES             (81,082)   (59,736) 
 
INVESTING ACTIVITIES:

  Proceeds from officer's life insurance         1,033,051
  Purchase of securities                         (948,156)
  Proceeds from sale or maturity of securities     89,607    109,614
  Capital expenditures                            ( 3,707)    (4,886)

NET CASH PROVIDED BY INVESTING ACTIVITIES         170,795     104,728

FINANCING ACTIVITIES:
  Principal payments on  long-term debt          (101,176)    ( 8,197)

NET (DECREASE) INCREASE IN CASH AND CASH 
EQUIVALENTS                                       (11,463)     36,795

CASH AND CASH EQUIVALENTS
  AT BEGINNING OF PERIOD                          119,851      48,048

CASH AND CASH EQUIVALENTS
  AT END OF PERIOD                               $108,388    $ 84,843

SUPPLEMENTAL CASH FLOW INFORMATION
  Cash paid for interest                          $19,156     $ 3,303
                                                       
     Cash paid for income taxes                               $ 3,050

 See accompanying notes to consolidated condensed financial statements.


                                       Page 5<PAGE>



                 CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)

1.  The Consolidated  Condensed Financial Statements included herein  have been
prepared by Circuit Research Labs,  Inc. ("CRL" or the  "Company"), pursuant to
the rules  and regulations  of the  Securities  and Exchange  Commission.   The
Consolidated Condensed Balance Sheet as of March 31,  1998 and the Consolidated
Condensed Statements of Operations  for the three  months ended March  31, 1998
and 1997 and the Consolidated Condensed Statements of Cash  Flows for the three
months ended March 31, 1998 and 1997 have been prepared without audit.

Certain  information  and  note  disclosures  normally  included  in  financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate  to make the information
presented not misleading.   It is  suggested that these  Consolidated Condensed
Financial Statements  be read  in conjunction with  the consolidated  financial
statements and notes thereto  included in the  Company's Annual Report  on Form
10-KSB for the year ended December 31, 1997.

In the opinion of  management, the Consolidated Condensed  Financial Statements
for the  unaudited interim  periods presented herein  include all  adjustments,
consisting only of  normal recurring adjustments,  necessary to present  a fair
statement of the results of operations for such interim periods.  Net operating

results for any interim period may not be comparable to the same interim period
in previous  years,  nor necessarily  indicative  of the  results  that may  be
expected for the full year. 

2. The following is a reconciliation of the numerators and denominators of
basic and diluted earnings per share computations for income from continuing
operations for the three month period ended March 31, 1997 as required by 
Statement of Financial Accounting Standards (SFAS) No. 128 Earnings per Share. 
For the three months ended March 31, 1998, the results of 14,062 total 
related to options to purchase common stock were not used for computing 
diluted earnings per share because the result would be antidelutive.       
 
                              


                                       Page 6<PAGE>



   Three months ended March 31, 1997
                              Income       Shares        Per Share 
                              (Numerator) (Denominator)   Amount  
   Basic 
   Income available to common 
   stockholders                $     813    597,682      $  0.00 
   Effect of dilutive stock 
   options                                    3,923

   Diluted 
   Income available to common 
   stockholders

   and assumed conversions    $     813     601,605     $  0.00 

3. The Company adopted SFAS No. 130, Reporting Comprehensive Income, on January
1, 1998. Comprehensive income for the three months ended March 31, 1998 and
1997 was the same as net income for these periods.

4.  Ronald R. Jones, who was the President and a Director and Chief Executive
Officer of the Company, died on January 1, 1998. At a special meeting of the
Board of Directors of the Company on January 2, 1998, Gary D. Clarkson was
appointed President and Chief Executive Officer.  Mr. Clarkson had been the
Secretary/Treasurer and a Director of the Company, and was co-founder of the
Company with Ronald Jones in 1974.

On February 6, 1998, the Company received $1,033,000 as proceeds of an
insurance policy payable upon the death of Ronald Jones.
Pursuant to an agreement between the Company and Ronald Jones, the 
Company  repurchased all of Ronald Jones' 187,500 shares from the estate of
Ronald Jones for the price of approximately $181,640 on May 5, 1998. 

5. Until March 31, 1998, Circuit  Research Labs, Inc. was listed on the
NASDAQ Small Cap market. NASDAQ has raised its requirements for continued
listing. It now requires among other criteria, a public float of 500,000
shares, and the Company's public float is approximately 295,000 shares. "Public
float" is defined as shares that are not held directly or indirectly by any
officer or director of the issuer and by any other person who is the beneficial
owner of more than 10% of the total shares outstanding. NASDAQ also requires a
minimum market value of the public float to be $1,000,000. The bid price on
March 31, 1998 for the Company's common stock was $2.00. The highest bid price
in 1997 was $2.19. The market value of the Company's public float at
March 31, 1998 was approximately $590,000. In addition, the Company did not
meet other new monetary tests. While the Company's common shares are no longer
listed on the NASDAQ Small Cap market, as of April 1, 1998, the shares have
been listed on the OTC Bulletin Board.  




                                       Page 7<PAGE>



Item.  2

                 CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES


                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS



      Liquidity and Capital Resources 



      The Company  had  net working  capital  of $2,027,000  and  the ratio  of
current assets to current  liabilities was 16.00  to 1 at  March 31, 1998. At
December 31, 1997,  the Company  had net  working capital  of $1,068,000  and a
current ratio of 6.00 to  1. In February 1998, the  Company received $1,033,000
as proceeds of an insurance policy  payable upon the death of  Ronald R. Jones.
In March 1998,  the Company  paid off  the balance,  plus accrued  interest and
early payment premium, on   the mortgage  note collateralized by  the Company's
operating facility.

      Securities increased from  $90,000 at  December 31,  1997 to $948,000  at
March 31, 1998.  The increase  was the result of the proceeds  of the insurance
policy mentioned above.  The estimated fair  value of the  Company's securities
approximated cost at March 31, 1998.

      Accounts receivable of $181,000 at March 31, 1998 was $69,000 higher than
the December 31,  1997 balance of  $112,000. The increase  was due to  a higher
percentage of  credit  sales  versus prepaid  sales  in  1998 compared  to  the
previous period.  

      Total inventories  were $864,000  at  March 31,  1998  compared to  total
inventories of $883,000  at December 31,  1997. The decrease  is the  result of
management's continuing effort to reduce overall inventories. 

      The Company  believes  its future  liquidity   needs  will  be met  by  a
combination of  cash  generated from  operating  activities,  the reduction  of
investments, and existing  cash balances. The  Company presently does  not have
any commitments for capital expenditures.




                                       Page 8<PAGE>



                 CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      Results of Operations

      Net sales for the first quarter of 1998 totaled  $517,000 compared to the
first  quarter sales in  1997 of $511,000. The Company  continues to experience
slower demand  across its  product lines,  in both  domestic and  international
markets. 

      Cost of goods sold was 42% of net sales for the first quarter ended March
31, 1998 which was comparable to 40% for the same period in 1997. 

      Selling, general and administrative  expenses were $222,000 in  the first
quarter of 1998  compared to  selling, general  and administrative  expenses of
$248,000 for the first quarter of 1997 representing a  10% decrease due to less
international travel.

      Research and development  expense in  the first quarter of 1998  totaled
$56,000, compared to the 1997 first quarter total of $51,000. 

      Proceeds from officers life  insurance in excess of cash surrender value
of $1,001,000 was the result of the proceeds of an insurance policy payable
upon the death of Ronald R. Jones.

      Interest and  other  income  of $2,800  for  the  first quarter  of  1998
compared to $1,600 for the first quarter of 1997. 

      Interest expense of $19,000 for the first quarter of 1998 consists of the
interest cost  on  the  long-term  mortgage  collateralized  by  the  Company's
headquarters facility plus the  early payment premium  which was paid  when the
note was paid in full in  March 1998. Interest expense of $3,300  for the first
quarter of 1997 consists  only of the interest cost on the  long-term mortgage.

      Net income for the first  quarter of 1998 was $1,003,000 compared  to net
income of $ 800 for the first quarter  of 1997. $1,001,000 of  the net income
for the first quarter of 1998 was the result  of the proceeds from the insurance
policy in excess of the cash surrender value payable upon the death of Ronald R.
Jones.

      The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a 2
digit year is commonly referred to as the Year 2000 compliance issue. The
Company expects to be Year 2000 compliant by year end 1998 by continuing to
upgrade its current accounting and financial software. The Company's accounting
software for its financial systems is under a maintenance contract which covers
Year 2000 compliance, so no additional costs are expected to be incurred. 

      This 10QSB includes "forward-looking" statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Management's anticipation
of future events is based upon assumptions regarding levels of competition,
research and development results, raw material markets, the markets in which

                                       Page 9<PAGE>



the Company operates, and stability of the regulatory environment. Any of these
assumptions could prove inaccurate, and therefore there can be no assurance
that the forward-looking information will prove to be accurate.





                                       Page 10<PAGE>




                 CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES




                         Part II. OTHER INFORMATION

Item 5. Other Information

The Company's common shares are no longer listed on the NASDAQ Small Cap
market, but as of April 1, 1998, the shares have been listed on the OTC
Bulletin Board.  

On May 5, 1998,  pursuant to an agreement between the Company and Ronald R.
Jones, the Company repurchased all of Ronald R. Jones' 187,500 shares from
the estate of Ronald R. Jones for the price of  $181,640.

Item 6.  Exhibits and Reports on Form 8-K

      (a) Exhibits included herein - None.

      (b) Reports on Form 8-K - 8-K filed on January 8, 1998 
                                8-K filed on February 19, 1998



                                       Page 11<PAGE>



                 CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES


                                  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 hereunto duly authorized.




                                        Registrant

                                        CIRCUIT RESEARCH LABS, INC.

                                        DATE:  May 14, 1998
                                        BY /s/Gary D. Clarkson       
                                        Gary D. Clarkson

                                        President (Authorized Officer for 
                                        signature)





                                       Page 12<PAGE>