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 September 30, 1997
                         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                      September 30, 1997
             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
                September 30, 1997 (Unaudited) and
                December 31, 1996                             2

              Consolidated Condensed Statements of
                Operations - Three and nine months ended
                September 30, 1997 and 1996 (Unaudited)       4

              Consolidated Condensed Statements of Cash

                Flows -  Nine months ended September 30,
                1997 and 1996 (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          11

          Signatures                                         12



                                       Page 1<PAGE>



                          PART I. FINANCIAL INFORMATION

      Item 1. Financial Statements

                  CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES

                      CONSOLIDATED CONDENSED BALANCE SHEETS

                                              September 30,  December 31,
                                                  1997         1996     
                                              (Unaudited)
      ASSETS


      CURRENT ASSETS:
          Cash and cash equivalents             $   67,827    $   48,048
          Securities available-for-sale             59,356       167,961
          Accounts receivable, less allowance
          for doubtful accounts of $12,520 
          (1997) and $16,520 (1996)                237,426       189,616

          Inventories:
             Raw materials and supplies            266,879       335,072
             Work in process                       287,888       314,291
             Finished goods                        362,421       306,559


             Total inventories                     917,188       955,922

          Prepaid expenses and other                54,801        69,628

             Total current assets                1,336,598     1,431,175

      PROPERTY, PLANT AND EQUIPMENT:
          Land                                     130,869       130,869
          Building and improvements                497,004       497,004
          Furniture and fixtures                   399,148       397,546
          Machinery and equipment                  629,547       616,081


          Total                                  1,656,568     1,641,500
          Less accumulated depreciation          1,113,197     1,062,936

             Property, plant and equipment - net   543,371       578,564


      OTHER ASSETS - NET                           161,991       159,851

      TOTAL                                     $2,041,960    $2,169,590


                                                       (continued)

                                       Page 2<PAGE>



                  CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES

                      CONSOLIDATED CONDENSED BALANCE SHEETS


                                              September 30,  December 31,
                                                  1997         1996      
                                              (Unaudited)
      LIABILITIES AND STOCKHOLDERS' EQUITY

      CURRENT LIABILITIES:
          Accounts payable                      $  105,917   $    64,650

          Accrued salaries and benefits             43,846        65,699
          Accrued professional fees                  8,361        21,976
          Customer deposits                          3,961        40,432
          Other accrued expenses and liabilities    17,860        31,826
          Long-term debt - current portion          18,145        15,228

             Total current liabilities             198,090       239,811


      LONG-TERM DEBT - LESS CURRENT PORTION        103,566       122,287

      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                        433,296       500,484
             Total stockholders' equity          1,740,304     1,807,492

      TOTAL                                     $2,041,960    $2,169,590

      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    Nine Months Ended
                                    September 30,       September 30,
                                   1997       1996      1997      1996

      NET SALES                  $557,549  $631,295 $1,574,688 $1,869,587


      COST OF GOODS SOLD          267,040   270,308    751,228    775,893

          Gross profit            290,509   360,987    823,460  1,093,694

      OPERATING EXPENSES:
          Selling, general and 
          administrative          252,787   238,270    725,130    762,236
          Research and 
          development              52,501    58,419    157,714    211,087

          Total operating 
          expenses                305,288   296,689    882,844    973,323

      (LOSS)  INCOME FROM 
      OPERATIONS                  (14,779)   64,298    (59,384)   120,371

      OTHER INCOME (EXPENSE):
          Interest and other 
          income                    1,147     4,215      4,923     12,681
          Interest expense         (3,151)   (3,529)   ( 9,677)   (15,816)

          Total other (expense) 
          income                   (2,004)      686     (4,754)    (3,135)

      (LOSS) INCOME BEFORE INCOME
      TAXES                       (16,783)   64,984    (64,138)   117,236

      INCOME TAX  EXPENSE               0         0      3,050         50

      NET (LOSS) INCOME         $ (16,783)$  64,984 $  (67,188) $ 117,186
                                         
      (LOSS) INCOME PER 
      COMMON SHARE                  $(.03)    $ .11      $(.11)      $.20
                                                           
      WEIGHTED AVERAGE NUMBER
      OF COMMON SHARES OUTSTANDING 597,682  597,682     597,682   597,682
                                                                        
           See accompanying notes to consolidated condensed financial
      statements.
                                       Page 4<PAGE>



                  CIRCUIT RESEARCH LABS, INC. and SUBSIDIARIES

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                                      Nine Months Ended
                                                      September 30,
                                                        1997       1996  
      OPERATING  ACTIVITIES:

      NET  (LOSS) INCOME                            $ (67,188)  $117,186
      ADJUSTMENTS TO RECONCILE NET
      (LOSS) INCOME

      TO NET CASH USED IN OPERATING ACTIVITIES:
         Depreciation and amortization                 58,306     69,199
         Changes in assets and liabilities:
            Accounts receivable                       (47,810)   (81,579)
              Inventories                              38,734   (142,969)
            Prepaid expenses and other assets           4,642      5,864
            Accounts payable, accrued expenses 
           and customer deposits                      (44,638)   ( 8,079)

      NET CASH USED IN OPERATING ACTIVITIES           (57,954)   (40,378)
          
      INVESTING ACTIVITIES:
         Purchase of securities                      (118,833)  (146,970)

         Proceeds from sale or maturity of 
         securities                                   227,438    242,880
         Capital expenditures                         (15,068)    (5,967)
         Payments received on stockholders' notes                  1,081

      NET CASH PROVIDED BY INVESTING ACTIVITIES        93,537     91,024

      FINANCING ACTIVITIES:
         Principal payments on  long-term debt        (15,804)   (21,851)

      NET INCREASE IN CASH AND CASH EQUIVALENTS        19,779     28,795

      CASH AND CASH EQUIVALENTS
         AT BEGINNING OF PERIOD                        48,048     25,974

      CASH AND CASH EQUIVALENTS
         AT END OF PERIOD                            $ 67,827   $ 54,769

      SUPPLEMENTAL CASH FLOW INFORMATION
         Cash paid for interest                       $ 9,677    $15,816
         Cash paid for income taxes                   $ 3,050
         Test equipment transferred from Inventories
         to Engineering Equipment                              $ 45,290

     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 September 30, 1997 and the Consolidated Condensed Statements
      of Operations for the three and nine months ended September 30,
      1997 and 1996 and the Consolidated Condensed Statements of Cash
      Flows for the nine months ended September 30, 1997 and 1996 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, 1996.

      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. Certain reclassifications were
      made to the 1996 financial statements to conform with the 1997
      presentation.

      2. In February 1997, the Financial Accounting Standards Board
      ("FASB") issued Statement of Financial Accounting Standards
      ("SFAS") No. 128, "Earnings per Share", effective for both interim
      and annual periods ending after December 15, 1997. This standard
      specifies the computation, presentation and disclosure of earnings
      per share for entities with publicly held common stock or potential
      common stock. The Company will  provide the required disclosures in
      its year-end report. The effect on the Company's earnings per share
      disclosure is not material for the periods presented. 

      The FASB also issued SFAS No. 130 "Reporting Comprehensive Income"
      and SFAS No. 131 "Disclosures about Segments of an Enterprise and
      Related Information". SFAS No. 130 is effective for fiscal years
      beginning after December 15, 1997. The standard changes the
      reporting of certain items currently reported in the equity section
      of the balance sheet. The Company is currently evaluating what

                                       Page 6<PAGE>



      impact this standard will have on the Company's financial
      statements. SFAS No. 131 is effective for fiscal years beginning
      after December 15, 1997. This standard requires that public
      companies report certain information about operating segments in
      their financial statements. It also establishes related disclosures
      about products and services, geographic areas, and major customers.
      The Company is currently evaluating what impact this standard will
      have on its financial statements.

      3. It is anticipated that the Company's common shares will no
      longer be listed on the NASDAQ Small Cap market, but after February
      23, 1998, the shares will be listed on the OTC Bulletin Board.  See
      Part II, Other Information, Item 5 of this report for additional
      information.


                                       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 $1,139,000 and the
      ratio of current assets to current liabilities was 6.7 to 1 at
      September 30, 1997.  At December 31, 1996, the Company had net
      working capital of $1,191,000 and a current ratio of 6.0 to 1.

            Securities decreased from $168,000 at December 31, 1996 to
      $59,000 at September 30, 1997. The maturity of certain investments
      was used to meet working capital requirements. The estimated fair
      value of the Company's securities approximated cost at September
      30, 1997.

            Accounts  receivable  of $237,000  at September  30, 1997  was
      $47,000  higher  compared  to  the  December  31,  1996  balance  of
      $190,000.  The increase  was due  to a  higher percentage  of credit
      sales verses prepaid sales in 1997 compared to the previous period.

            Total  inventories of $917,000 at September  30, 1997 compared
      to  total inventories of $956,000 at December 31, 1996. The decrease
      is  the result of  management's continuing effort to  reduce overall
      inventories. 

            The  Company's credit agreement expired on   July 1, 1996, and
      since it  had not been used, the Company did not pursue its renewal.
      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 third quarter of 1997 totaled $558,000 and
      were 12% lower than the third quarter sales in 1996 of $631,000.
      The Company continues to experience slower demand across its
      product lines, in both domestic and international markets. 

            Cost of goods sold was 48% of net sales for the third quarter
      ended September 30, 1997 which was comparable to 43% for the same
      period in 1996. The increase is the result of the expected lower
      profit margins in the Desert Assemblies division. The profit margin
      on CRL's main product lines for the third quarter ended September
      30, 1997 was 61% which was consistent with the same period of 1996.

            Selling, general and administrative expenses were $253,000 in
      the third quarter of 1997 compared to selling, general and
      administrative expenses of $238,000 for the third quarter of 1996.
     
            Research and development expense in the third quarter of 1997
      totaled $53,000,  compared to the 1996 third quarter total of
      $58,000. The decrease was the result of shifting personnel from
      engineering to production in order to fill a vacancy in production.
       
             Interest and other income of $1,100 for the third quarter of
      1997 compared to $4,200 for the third quarter of 1996. The lower
      interest income was the result of the Company having less funds
      invested in securities.

            Interest expense consists of the interest cost on the
      long-term mortgage collateralized  by the Company's headquarters
      facility.

            Net loss for the third quarter of 1997 was $17,000 compared
      to net income of $65,000 for the third quarter of 1996.

            Year-to-date net sales were approximately $295,000 lower in
      1997 as compared to the same period in 1996. The decrease was due
      to slower sales across CRL's product lines, in both domestic and
      international markets. The Company also had a large single
      international order in 1996 that contributed to the difference.
      Cost of goods sold was 48% of net sales for the nine months ended
      September 30, 1997 compared to 42% for the same period in 1996. The
      increase was the result of a temporary increase in production costs
      on CRL's main product line. The cost of goods sold for CRL's main
      product line year-to-date 1997 was 38% compared to 1996
      year-to-date cost of goods sold of 35%. The decrease in gross
      profit was offset by a $90,000 decrease in operating expenses for

                                       Page 9<PAGE>



      the nine months ended September 30, 1997 compared to the same
      period in 1996. The result of the decrease in sales, increase in
      percentage of cost of goods sold, and the decrease in operating
      expenses was a $67,000 loss from operations for the first nine
      months of 1997, compared to a $117,000 profit for the same period
      of 1996. 

            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 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

      Circuit  Research Labs, Inc. is currently listed on the NASDAQ
      Small Cap market under the symbol CRLI. NASDAQ is raising its
      requirements for continued listing. It will require 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 will require a minimum market value of the public float to
      be $1,000,000. The bid price on November 11, 1997 for the Company's
      common stock was $1 5/16. The highest bid price in 1997 
      was $1 5/8. The present market value of the Company's public float
      is approximately $388,000.

      In addition, the Company may not meet other new monetary tests.

      Based on present information, the Company will not be able to
      meet these new NASDAQ requirements which go into effect February
      23, 1998. 

      The Company's shares will be offered the services of another
      quotation service - the OTC Bulletin Board. 
      It is anticipated that the shares will be listed on the OTC
      Bulletin Board after February 23, 1998.

      Item 6.  Exhibits and Reports on Form 8-K

            (a) Exhibits included herein - None.

            (b) Reports on Form 8-K - None



                                       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:  November 12, 1997
                                              BY /s/Gary D. Clarkson    
                                              Gary D. Clarkson

                                              Treasurer (Authorized 
                                              Officer for signature)

                                       Page 12<PAGE>