<PAGE>
                                
                         UNITED  STATES
              SECURITIES  AND  EXCHANGE  COMMISSION
                     Washington, D.C.  20549
                                         
                           FORM  10-Q


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

        For the quarterly period ended December 31, 1996

                               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 0-22018

                  CELESTIAL  SEASONINGS,  INC.
     (Exact name of Registrant as specified in its charter)


              DELAWARE                         84-1097571
   (State or other jurisdiction of          (I.R.S. Employer
   incorporation or organization)         Identification No.)
                                                    

          4600 SLEEPYTIME DRIVE, BOULDER CO  80301-3292
  (Address of principal executive offices, including zip code)

                         (303) 530-5300
      (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  January 31, 1997 the Registrant had 4,050,916  shares  of
Common  Stock, $0.01 Par Value, outstanding. This report on  Form
10-Q contains 14 pages.



<PAGE>
                CELESTIAL  SEASONINGS,  INC.



                            INDEX



PART I - FINANCIAL INFORMATION
------------------------------


                                               PAGE(S)
                                               -------                         
ITEM 1. FINANCIAL STATEMENTS                  
                                              
        Unaudited consolidated income             3
        statements
                                                  
        Unaudited consolidated balance            4
        sheets
                                                  
        Unaudited consolidated statements of      5
        cash flows
                                                  
        Notes to unaudited consolidated          6-7
        financial statements
                                                  
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS    8-10  
        OF FINANCIAL CONDITION AND RESULTS   
        OF OPERATIONS



PART II - OTHER INFORMATION
---------------------------


ITEM 1.  LEGAL PROCEEDINGS                       11
                                                  
                                                  
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K        11
                                                  
                                                  
SIGNATURES                                       12

                          PAGE 2    
                              
                              
<PAGE>
                              
                 CELESTIAL SEASONINGS, INC.
               CONSOLIDATED INCOME STATEMENTS
          (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                         (UNAUDITED)
<TABLE>
<CAPTION>
                              
                                            Three Months Ended
                                               December 31,
                                            ------------------
                                              1996      1995
                                            --------  --------
<S>                                         <C>       <C>
Case volume                                   1,439     1,422
                              
Net sales                                   $25,673   $23,632
Cost of goods sold                            9,074     8,750
                                            -------   -------
  Gross profit                               16,599    14,882
                              
Operating expenses:
  Selling and marketing                      11,715    10,150
  General and administrative                    980     1,052
  Amortization of intangibles                   326       386
                                            -------   -------
    Total operating expenses                 13,021    11,588

Operating income                              3,578     3,294
Interest expense                                181       256
                                            -------   -------             
Income before income taxes                    3,397     3,038
Income taxes                                  1,359     1,186
                                            -------   -------
Net income                                  $ 2,038   $ 1,852
                                            =======   =======
Net income per common share                 $  0.49   $  0.45
                                            =======   =======
Weighted average common shares                4,122     4,095
                                            =======   =======
</TABLE>
                              
   See accompanying notes to unaudited consolidated financial statements.

                              PAGE 3

<PAGE>

                          CELESTIAL  SEASONINGS,  INC.
                         CONSOLIDATED  BALANCE  SHEETS
                               (IN THOUSANDS)
                                (UNAUDITED)
                              
                                  ASSETS
<TABLE>
<CAPTION>
                                                 December 31,   September 30,
                                                    1996            1996
                                                 ------------   -------------
<S>                                                <C>             <C> 
Current assets:
  Cash and cash equivalents                        $ 2,374         $   204
  Accounts receivable, net of allowance
   (Dec. - $239 Sept. -  $148)                      10,087           8,133
  Inventory                                          6,723           6,808
  Deferred income taxes                                 71               7
  Prepaid income taxes                                   -             470
  Prepaid expenses                                     644             889
                                                  --------         -------
  Total current assets                              19,899          16,511
                                                 
Property, plant and equipment, net                  16,872          16,871
Intangible assets, net                              13,314          13,514
Goodwill, net                                        6,360           6,430
Deferred income taxes                                  215             287
Other assets                                         1,235           1,290
                                                   -------         -------
Total assets                                       $57,895         $54,903
                                                   =======         =======
                 LIABILITIES AND STOCKHOLDERS' EQUITY
                              
Current liabilities:
  Accounts payable                                 $ 5,587         $ 3,754
  Accrued liabilities and wages                      5,380           4,462
  Accrued income taxes                                 874               -
  Accrued interest payable                              43              52
  Current portion of long-term debt                    367             361
                                                   -------         -------
    Total current liabilities                       12,251           8,629
                              
Long-term debt                                       6,365           9,057
                              
Commitments
                              
Stockholders' equity:
  Common stock, $.01 par value - 
    authorized 15,000,000 shares;
      Dec. - issued 4,055,916 shares, 
        outstanding 4,050,916 shares
      Sept. - issued 4,054,472 shares, 
        outstanding 4,049,472 shares                    41              41
  Capital surplus                                   33,314          33,290
  Retained earnings                                  6,019           3,981
  Treasury stock, 5,000 shares of common 
    stock at cost                                      (95)            (95)
                                                   -------         -------
    Total stockholders' equity                      39,279          37,217
                                                   -------         -------
Total liabilities and stockholders' equity         $57,895         $54,903
                                                   =======         =======
</TABLE>

   See accompanying notes to unaudited consolidated financial statements.

                                 PAGE 4

<PAGE>

                        CELESTIAL SEASONINGS, INC.
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (IN THOUSANDS)
                                (UNAUDITED)
<TABLE>
<CAPTION>
                              
                                                      Three Months Ended
                                                         December 31,
                                                      ------------------
                                                        1996      1995
                                                      --------  --------
<S>                                                    <C>       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                             $ 2,038   $ 1,852
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation                                           273       247
    Amortization of intangibles                            326       386
    Amortization of financing fees                          50        56
    Deferred income taxes                                    8         -
  Changes in operating assets and liabilities:
    Accounts receivable                                 (1,954)   (3,180)
    Inventory                                               85      (280)
    Prepaid expenses                                       245       120
    Accounts payable                                     1,833     3,386
    Accrued liabilities and wages                          918       167
    Accrued income taxes                                 1,344       589
    Accrued interest payable                                (9)       (6)
                                                       -------   -------  
Net cash provided by operating activities                5,157     3,337
                                                       -------   -------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures                                    (274)     (433)
  Increase in intangible assets                            (56)     (129)
  Decrease in other assets                                   5        77
                                                       -------   -------
Net cash used in investing activities                     (325)     (485)
                                                       -------   -------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from common stock issuance                       24        29
  Increase in long-term debt                             2,285       800
  Reduction in long-term debt                           (4,971)   (3,338)
                                                       -------   -------
Net cash used in financing activities                   (2,662)   (2,509)
                                                       -------   -------
NET INCREASE IN CASH AND CASH EQUIVALENTS                2,170       343
                               
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD           204       375
                                                       -------   -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD             $ 2,374   $   718
                                                       =======   =======
CASH PAID FOR INTEREST                                 $   133   $   193
CASH PAID FOR INCOME TAXES                             $     6   $   597
                              
</TABLE>
                              
    See accompanying notes to unaudited consolidated financial statements.
                              
                                 PAGE 5

<PAGE>

               CELESTIAL  SEASONINGS,  INC.
  NOTES  TO  UNAUDITED  CONSOLIDATED  FINANCIAL  STATEMENTS


1.   GENERAL

      Basis  of Presentation - Each fiscal quarter  includes
thirteen weeks. The Company's first fiscal quarter  ends  on
the  last  Saturday of December. For presentation  purposes,
however,  the  first fiscal quarter is presented  as  if  it
ended on December 31.

     The unaudited consolidated financial statements include
the   accounts   of   the  Company  and  its   subsidiaries.
Intercompany balances have been eliminated in consolidation.
Certain  reclassifications have been made to  the  Company's
fiscal  1996 financial statements to conform them to  fiscal
1997 classifications.

       Interim   Financial  Information  -   The   financial
information  contained herein is unaudited but includes  all
normal  and  recurring adjustments which, in the opinion  of
management,  are necessary to present fairly the information
set  forth.  The unaudited consolidated financial statements
should   be   read  in  conjunction  with  the  consolidated
financial  statements which are included  in  the  Company's
Annual Report on Form 10-K for the year ended September  30,
1996. The Company's business is seasonal; therefore, results
for  interim  periods  are  not  necessarily  indicative  of
results  to  be expected for the fiscal year of the  Company
ending  September 30, 1997. The Company believes  that  this
Quarterly Report filed on Form 10-Q is representative of its
financial position, its results of operations and  its  cash
flows  for  the  periods ended December 31,  1996  and  1995
covered thereby.

2.   DETAIL OF INVENTORY ACCOUNTS

<TABLE>
<CAPTION>
                                     December 31,        September 30,
                                        1996                 1996
                                     ------------        -------------
<S>                                     <C>                 <C>
Raw materials and supplies              $4,784              $4,486
Work in process                            711                 888
Finished goods                           1,718               1,665
                                        ------              ------
                                         7,213               7,039
Less inventory reserves                    490                 231
                                        ------              ------  
Total                                   $6,723              $6,808
                                        ======              ======
</TABLE>
                              
                                  PAGE 6

<PAGE>


3.   LEGAL  PROCEEDINGS

      On May 5, 1995, a purported stockholder of the Company
filed a lawsuit, Schwartz v. Celestial Seasonings, Inc. et. al., 
                 ----------------------------------------------
in  the United States  District  Court  for  the District of
Colorado  (Civil Action Number:  95-K-1045),  in  connection
with  disclosures  by the Company concerning  the  Company's
license agreement with Perrier Group of America, Inc.  which
was  terminated  on  January 1, 1995.  In  addition  to  the
Company,  the complaint names as defendants certain  of  the
Company's   present  and  former  directors  and   officers,
PaineWebber,  Inc.,  Shearson/Lehman  Brothers,  Inc.,   and
Vestar/Celestial   Investment  Limited   Partnership.    The
complaint,  which was pled as a class action  on  behalf  of
persons  who acquired the Company's common stock  from  July
12, 1993 through May 18, 1994, sought money damages from the
Company and the other defendants for the class in the amount
of  their  loss on their investment in the Company's  common
stock,  punitive damages, costs and expenses of the  action,
and such other relief as the court may order.

     On November 6, 1995, the federal district court granted
a  motion by the Company and the other defendants to dismiss
the  case.   The court's order became final on December  11,
1995,  after  the  plaintiff failed to amend  the  complaint
within  the  time  permitted by  the  district  court.   The
plaintiff has appealed the district court's decision to  the
United States Court of Appeals for the Tenth Circuit. Due to
the  uncertainties inherent in the litigation  process,  the
Company is unable to predict the outcome of this matter.

                            PAGE 7

<PAGE>

                    CELESTIAL  SEASONINGS,  INC.
       MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL
               CONDITION  AND  RESULTS  OF OPERATIONS

SEASONALITY

      The Company's business is seasonal and its quarterly results of
operations reflect the results of increased demand for the  Company's
hot  tea  products  in the cooler months of the year.  The  following
table  sets forth selected unaudited quarterly consolidated financial
and operational data for the five most recent quarters.

<TABLE>
<CAPTION>
                                             Quarter Ended
                        ----------------------------------------------------
                        Fiscal 1997               Fiscal 1996
                        ----------- ----------------------------------------
                          Dec. 31    Sept. 30   June 30   Mar. 31   Dec. 31
                        ----------- ---------- --------- --------- --------- 
                                             (in thousands)
 <S>                      <C>        <C>       <C>       <C>       <C>
 Case sales                 1,439        832       647     1,437     1,422
 Net sales                $25,673    $14,587   $10,829   $23,950   $23,632
 Gross profit              16,599      8,536     5,840    15,195    14,882
 Operating income (loss)    3,578        906      (139)    4,929     3,294
 Operating margin            13.9%       6.2%     (1.3)%    20.6%     13.9%
 Net income (loss)        $ 2,038    $   466   $  (136)  $ 2,841   $ 1,852
 Percent of fiscal year 
   net sales                 N/A        20.0%      14.8%    32.8%     32.4%

</TABLE>
                                  
      The  Company  has experienced quarterly fluctuations  in  sales
volume and operating results when compared to previous years due to a
number   of  factors,  including  the  timing  of  trade  promotions,
advertising  and consumer promotional expenditures.  The Company,  as
is  common  in the tea industry, offers trade promotions for  limited
time periods on specific items in order to provide incentives for the
purchase  and promotion of products.  The impact on case  sales  from
period  to  period  due  to  the timing  and  extent  of  such  trade
promotions can be significant.

RESULTS OF OPERATIONS

      The  following  table is derived from the  Company's  unaudited
consolidated  statements of operations for the periods indicated  and
presents  (i) the results of operations as a percentage of net  sales
and  (ii)  the percentage change in the dollar amounts of  each  item
from the prior period.

<TABLE>
<CAPTION>

                                                           Period-to-Period
                            Percentage of Net Sales      Increase/(Decrease)
                            -----------------------      -------------------
                              Three Months Ended          Three Months Ended
                                 December 31,                December 31,
                              ------------------          ------------------
                                1996      1995               1996 to 1995
                              --------  --------          ------------------   
 <S>                           <C>        <C>                    <C>
 Net sales                     100.0%     100.0%                 8.6%
 Cost of goods sold             35.3       37.0                  3.7
                               -----      -----
 Gross profit                   64.7       63.0                 11.5
 Selling and marketing          45.6       43.0                 15.4
 General and administrative      3.8        4.5                 (6.8)
 Amortization of intangibles     1.3        1.6                (15.5)
                               -----      -----
 Operating income               14.0       13.9                  8.6
 Interest expense                0.7        1.1                (29.3)
                               -----      -----
 Income before income taxes     13.3       12.8                 11.8
 Income taxes                    5.3        5.0                 14.6
                               -----      -----
 Net income                      8.0%       7.8%                10.0%
                               =====      =====

</TABLE>

                                    PAGE 8

<PAGE>
                                  
THREE MONTHS ENDED DECEMBER 31, 1996 COMPARED TO THE THREE MONTHS ENDED
DECEMBER 31, 1995

      Net  sales.  Net sales for the three months ended December  31,
1996  increased  8.6%  to $25.7 million from $23.6  million  for  the
comparable  period  in  fiscal 1996. Case  sales  increased  1.2%  to
1,439,000  cases  from  1,422,000 cases. Case sales  growth  was  the
result  of  a  3.9%  increase  in sales of  the  Company's  herb  and
specialty   black   dry   tea  products  and  the   contribution   of
nutraceutical product sales. Net sales of dry tea products for fiscal
1997  reflect a price increase which was implemented during the third
quarter   of  fiscal  1996.  The  Company's  nutraceutical   products
contributed net sales of approximately $0.7 million during the  first
quarter  of  fiscal 1997, a 73.7% increase from fiscal 1996.   Fiscal
1996  case and net sales reflect sales of bottled iced tea, a product
now  licensed  to Royal Crown Company, Inc. and not included  in  the
comparable period of fiscal 1997.

      Gross  profit. Gross profit for the three months ended December
31,  1996 increased 11.5% to $16.6 million from $14.9 million for the
comparable  period in fiscal 1996. The Company's gross profit  margin
increased  to 64.7% from 63.0% for the comparable prior year  period.
The  increase in gross margin is primarily due to increased sales  of
the  Company's  higher  margin hot herb  tea  products  in  its  more
profitable  channels  of  distribution. In  addition,  the  Company's
nutraceutical  products realized higher gross margins  during  fiscal
1997, as compared to fiscal 1996, due to greater efficiencies.

      Selling  and marketing expenses. Selling and marketing expenses
for the three months ended December 31, 1996 increased 15.4% to $11.7
million from $10.2 million for the comparable period in fiscal  1996,
and  increased as a percentage of net sales to 45.6% from 43.0%.  The
increase  in  selling  and marketing expenses primarily  was  due  to
increased advertising and trade promotion expenses.

      General and administrative expenses. General and administrative
expenses for the three months ended December 31, 1996 decreased  6.8%
from  the  comparable  period in fiscal  1996,  and  decreased  as  a
percentage  of  net  sales  to  3.8% from  4.5%.   The  decrease  was
primarily   due   to  temporary  reductions  and  spending   controls
implemented  by  the  Company which resulted in reduced  expenses  in
several areas.

       Amortization  of  intangibles.  Amortization  of  intangibles,
including  amortization of goodwill and other intangible  assets  for
the  three months ended December 31, 1996, decreased 15.5%  from  the
comparable  period in fiscal 1996.  Amortization of  intangibles  was
lower  for  fiscal  1997,  as compared to  fiscal  1996,  as  certain
intangible  assets became fully amortized or were written off.  These
reductions were partially offset by increases in amortization on  new
additions   to  artwork  and  plates  resulting  from  the  Company's
continued development of new products and improved packaging

      Operating  income. Operating income for the three months  ended
December  31, 1996, increased 8.6% to $3.6 million from $3.3  million
for  the  comparable  period in fiscal 1996. Operating  income  as  a
percentage of net sales remained relatively unchanged.

      Interest  expense. Interest expense for the three months  ended
December 31, 1996 declined 29.3% from the comparable period in fiscal
1996  primarily  as a result of reduced outstanding  borrowings.  The
Company  extinguished  its  bank debt during  the  quarter.  Interest
expense  for  the  three  months ended December  31,  1996  primarily
relates  to  Industrial  Revenue  Bonds  which  are  secured  by  the
Company's facility and fees relating to continued availability of the
Company's bank credit facility.

      Income  taxes.  Income tax expense for the three  months  ended
December  31,  1996  increased 14.6% from the  comparable  period  in
fiscal 1996, primarily due to increased pre-tax income.

                               PAGE 9

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     The operations of the Company historically have been funded with
a  combination of internally generated funds and external borrowings.
Purchases  of  inventory,  marketing  expenditures  and  support   of
accounts  receivable  have historically been,  and  are  expected  to
remain,  the  Company's principal recurring uses  of  funds  for  the
foreseeable  future. The Company's other principal uses of  funds  in
the  future  will  be  the development of new or  existing  products,
including the Company's iced teas and nutraceutical products, and the
possible  acquisition of brands, product lines or other  assets.  The
Company  expects  its  primary sources of financing  for  its  future
business  activities  will be funds from operations  plus  borrowings
under  the credit facility. The Company currently believes that funds
from  operations  and  funds  expected  to  be  available  under  the
Company's  credit  facility  are likely  to  be  sufficient  to  meet
operating  and capital requirements unless a significant  acquisition
is made.

      Cash  and cash equivalents increased $2.2 million for the three
months ended December 31, 1996. Cash provided by operating activities
was  $5.2  million for the three months ended December 31, 1996.  The
Company's  investing  and  financing activities  used  cash  of  $0.3
million  and  $2.7 million, respectively, for the three months  ended
December 31, 1996.

      The  Company  incurred  capital expenditures  of  approximately
$330,000  during the three months ended December 31, 1996,  including
$274,000 primarily for factory and computer equipment and $56,000 for
the  design  and development of new packaging artwork.   The  Company
anticipates  making  capital expenditures of approximately  $1.75  to
$2.0 million in fiscal 1997.

OTHER DEVELOPMENTS

      The  Company incurred legal expenses of approximately  $400,000
during  the  quarter associated with a lawsuit against  a  competitor
relating  to trade dress infringement and unfair competition  claims.
On  January  13,  1997,  judgment was entered in  the  United  States
District  Court  for  the  District of Colorado  which  absolved  the
competitor  of  any  claims,  and  there  were  no  monetary  damages
assessed. The Company believes that additional legal costs associated
with this lawsuit are not expected to exceed $300,000.

      The  statements contained in this Quarterly Report on Form 10-Q
which  are  not  historical facts, including,  but  not  limited  to,
statements  found  under  the captions "Results  of  Operations,"
"Liquidity and Capital Resources" and "Other Developments" above, are 
forward-looking statements that involve a number of risks and 
uncertainties. The actual results of the future events described in 
such forward-looking statements could differ materially from those 
stated in such forward-looking statements. Among the factors that could
cause actual results to differ materially are the risks and uncertainties
discussed  in  this Quarterly Report, including, without  limitation,
the portions of such reports under the captions referenced above, and
the  uncertainties  set  forth from time to  time  in  the  Company's
filings with the Securities and Exchange Commission, and other public
statements. Such risks and uncertainties include, without limitation,
seasonality,  interest  in the Company's products,  general  economic
conditions, consumer trends, costs and availability of raw materials,
competition and the effect of governmental regulation.

                                PAGE 10

<PAGE>

PART II   OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS
--------------------------

     The  information  in  Note 3 to the Unaudited Consolidated  Financial
Statements included in Part I is incorporated herein.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------
                                  
(a)  Exhibits
     --------

Exhibit No.                       Description
-----------                       -----------   
   23.1      - Report   of  Deloitte  &  Touche  LLP  on  consolidated
               financial statements
        

(b) Reports on Form 8-K
    -------------------

    There were no reports on Form 8-K for the quarter ended December 31, 1996.


                                 PAGE 11

<PAGE>

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.



                    CELESTIAL SEASONINGS, INC.
                    (Registrant)

February 7, 1997    By: /s/ Darrell F. Askey
                       ---------------------
                            Darrell F. Askey
                            Vice  President  - Finance,  Secretary  and
                            Treasurer
                            (Principal Financial Officer)

                               PAGE 12

<PAGE>

                          INDEX TO EXHIBITS


The following exhibits are filed pursuant to Item 601 of Regulation S-K.

                                                  Sequentially
Exhibit                                             Numbered
  No.                  Description                    Pages
-------                -----------                ------------
  23.1    - Report of Deloitte & Touche LLP on         14
            consolidated financial statements          
                                                      
                           PAGE 13