<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, 1997

                               OR

     [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934

     For the transition period from __________ to __________

                 Commission file number 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 30, 1998 the Registrant had 4,132,563  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      
        OF FINANCIAL CONDITION AND RESULTS      8-10
        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,
                                      ------------------------
                                        1997            1996
                                      --------        --------
<S>                                   <C>             <C>
Case volume                              1,491           1,439

Net sales                             $ 27,400        $ 25,673

Cost of goods sold                      10,131           9,074
                                      --------        --------
  Gross profit                          17,269          16,599
Operating expenses:
  Selling and marketing                 11,619          11,715
  General and administrative             1,575             980
  Amortization of intangibles              320             326
                                      --------        --------
    Total operating expenses            13,514          13,021

Operating income                         3,755           3,578

Interest expense                           116             181
                                      --------        --------
Income before income taxes               3,639           3,397

Income taxes                             1,401           1,359
                                      --------        --------
Net income                            $  2,238        $  2,038
                                      ========        ========
Earnings per share:
  Net income per common share         $   0.55        $   0.50
                                      ========        ========
  Weighted average common shares         4,062           4,051
                                      ========        ========
Earnings per share-assuming dilution:
  Net income per common share         $   0.53        $   0.49
                                      ========        ========
  Weighted average common shares         4,250           4,122
                                      ========        ========
</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,
                                                        1997           1997
                                                    ------------  -------------
<S>                                                     <C>          <C>
Current assets:
 Cash and cash equivalents                              $  4,794     $  2,829
 Accounts receivable, net of allowance
   (Dec. - $242 Sept. - $165)                             10,888        7,755
 Inventory                                                 9,714        8,410
 Deferred income taxes                                       201          200
 Prepaid expenses                                            385          641
                                                        --------     --------
  Total current assets                                    25,982       19,835

Property, plant and equipment, net                        16,779       17,085
Intangible assets, net                                    13,059       13,236
Goodwill, net                                              6,080        6,150
Deferred income taxes                                        279          263
Other assets                                               1,767        1,802
                                                        --------     --------
Total assets                                            $ 63,946     $ 58,371
                                                        ========     ========
                    LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable                                       $  4,916     $  4,160
 Accrued liabilities and wages                             5,882        4,584
 Accrued income taxes                                      1,355           99
 Accrued interest payable                                     31           31
 Current portion of long-term debt                           383          373
                                                        --------     --------
  Total current liabilities                               12,567        9,247

Long-term debt                                             5,975        6,073

Commitments

Stockholders' equity:
 Common stock, $.01 par value -
  authorized 15,000,000 shares;
    Dec. - issued 4,073,865 shares,
      outstanding 4,064,965 shares
    Sept. - issued 4,068,491 shares,
      outstanding 4,059,591 shares                            41           41
 Capital surplus                                          33,655       33,540
 Retained earnings                                        11,883        9,645
 Treasury stock, 8,900 shares of common stock at cost       (175)        (175)
                                                        --------     --------
  Total stockholders' equity                              45,404       43,051
                                                        --------     --------
Total liabilities and stockholders' equity              $ 63,946     $ 58,371
                                                        ========     ========
</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,
                                                  ------------------
                                                    1997      1996
                                                  --------  --------
<S>                                               <C>       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                        $  2,238  $  2,038
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation                                           324       273
Amortization of intangibles                            320       326
Amortization of financing fees                          49        50
Deferred income taxes                                  (17)        8
Changes in operating assets and liabilities:
Accounts receivable                                 (3,133)   (1,954)
Inventory                                           (1,304)       85
Prepaid expenses                                       256       245
Accounts payable                                       756     1,833
Accrued liabilities and wages                        1,298       918
Accrued income taxes                                 1,256     1,344
Accrued interest payable                                 -        (9)
                                                  --------  --------
Net cash provided by operating activities            2,043     5,157
                                                  --------  --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                                   (18)     (274)
Increase in intangible assets                          (73)      (56)
(Increase) Decrease in other assets                    (14)        5
                                                  --------  --------
Net cash used in investing activities                 (105)     (325)
                                                  --------  --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock issuance                    115        24
Increase in long-term debt                               -     2,285
Reduction in long-term debt                            (88)   (4,971)
                                                  --------  --------
Net cash provided by (used in) financing activities     27    (2,662)
                                                  --------  --------

NET INCREASE IN CASH AND CASH EQUIVALENTS            1,965     2,170

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD     2,829       204
                                                  --------  --------

CASH AND CASH EQUIVALENTS AT END OF PERIOD        $  4,794  $  2,374
                                                  ========  ========

CASH PAID FOR INTEREST                            $     61  $    133
CASH PAID FOR INCOME TAXES                        $    162  $      6
</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.

       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,
1997. 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, 1998. 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,  1997  and  1996
covered thereby.

      Earnings  Per Share - In accordance with Statement  of
Financial  Accounting  Standards  No.  128,  "Earnings   per
Share,"  the  increase in weighted average common  shares  -
assuming  dilution is due to the application of the treasury
share  method for outstanding stock options. The application
of  the  treasury  share method resulted  in  an  additional
188,000  and 71,000 weighted average shares for the quarters
ended December 31, 1997 and 1996, respectively.

2.   DETAIL OF INVENTORY ACCOUNTS
<TABLE>
<CAPTION>

                             December 31,      September 30,
                                 1997              1997
                             ------------      -------------
<S>                            <C>                <C>
Raw materials and supplies     $ 5,704            $ 4,924
Work in process                  2,233              1,393
Finished goods                   2,764              2,431
                               -------            -------
                                10,701              8,748
Less inventory reserves            987                338
                               -------            -------
Total                          $ 9,714            $ 8,410
                               =======            =======
</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  appealed  the district court's  decision  to  the
United States Court of Appeals for the Tenth Circuit.

      On  September  5,  1997, the Tenth  Circuit  Court  of
Appeals  reversed  the decision of the district  court.  The
Appeals  Court found that the plaintiff's complaint  alleged
sufficient  facts to support his claim. The  case  has  been
returned to the district court for further proceedings.  The
Company  and  the  other defendants filed a  new  motion  to
dismiss  the  case on different legal grounds.  Due  to  the
uncertainties  inherent  in  the  litigation  process,   the
Company is unable to predict the outcome of this matter.

4.   SUBSEQUENT  EVENT

     On January 15, 1998, the Company acquired Mountain Chai
Company,   a  manufacturer  and  distributor  of   chai,   a
traditional Indian-style tea. The effects of the transaction
are  not  material  and are not included  in  the  financial
statements presented.

                            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 1998                 Fiscal 1997
                    -----------  ------------------------------------------
                      Dec. 31     Sept. 30   June 30    Mar. 31    Dec. 31
                    -----------  ---------- ---------  ---------  ---------
                                      (in thousands)
<S>                   <C>         <C>       <C>        <C>        <C>
Case sales               1,491         855       656      1,491      1,439
Net sales             $ 27,400    $ 15,916  $ 11,589   $ 25,861   $ 25,673
Gross profit            17,269       9,439     6,401     16,994     16,599
Operating income         3,755         898       221      4,969      3,578
Operating margin          13.7%        5.6%      1.9%      19.2%      13.9%
Net income            $  2,238    $    545  $     74   $  3,007   $  2,038
Percent of fiscal year
  net sales               N/A         20.1%     14.7%      32.7%      32.5%
</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,
                              ------------------        ------------------
                                1997      1996             1997 to 1996
                              --------  --------        ------------------
<S>                            <C>       <C>                  <C>
Net sales                      100.0%    100.0%                6.7%
Cost of goods sold              37.0      35.3                11.6
                               ------    ------           
Gross profit                    63.0      64.7                 4.0
Selling and marketing           42.4      45.6                (0.8)
General and administrative       5.7       3.8                60.7
Amortization of intangibles      1.2       1.3                (1.8)
                               ------    ------
Operating income                13.7      14.0                 4.9
Interest expense                 0.4       0.7               (35.9)
                               ------    ------
Income before income taxes      13.3      13.3                 7.1
Income taxes                     5.1       5.3                 3.1
                               ------    ------
Net income                       8.2%      8.0%                9.8%
                               ======    ======
</TABLE>
                                         PAGE 8
                       
<PAGE>
           
THREE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO THE THREE MONTHS
ENDED DECEMBER 31, 1996

      Net  sales.  Net sales for the three months ended December  31,
1997  increased  6.7%  to $27.4 million from $25.7  million  for  the
comparable  period  in  fiscal 1997. Case  sales  increased  3.6%  to
1,491,000 cases from 1,439,000 cases. Net sales and case sales growth
was  primarily  the  result  of  increased  sales  of  the  Company's
specialty  black  dry tea products. The Company's dietary  supplement
products  contributed net sales of approximately $0.9 million  during
the first quarter of fiscal 1998, a 28.8% increase from fiscal 1997.

      Gross  profit. Gross profit for the three months ended December
31,  1997 increased 4.0% to $17.3 million from $16.6 million for  the
comparable  period in fiscal 1997. The Company's gross profit  margin
as  a  percent  of  sales  decreased to  63.0%  from  64.7%  for  the
comparable prior year period. The decrease in gross profit margin  as
a  percent  of  sales  is  primarily due to increased  sales  of  the
Company's  lower  margin specialty black tea  products,  as  well  as
increased sales in channels of distribution with lower margins.

      Selling  and marketing expenses. Selling and marketing expenses
for  the  three  months ended December 31, 1997  remained  relatively
unchanged from the comparable period in fiscal 1997, and decreased as
a percentage of net sales to 42.4% from 45.6%.

      General and administrative expenses. General and administrative
expenses for the three months ended December 31, 1997 increased 60.7%
from  the  comparable  period in fiscal  1997,  and  increased  as  a
percentage  of  net  sales  to  5.7% from  3.8%.   The  increase  was
primarily  due to legal fees associated with a shareholder's  lawsuit
(see  note  3),  increased personnel costs and expenses  incurred  in
connection with the Company's acquisition efforts.

       Amortization  of  intangibles.  Amortization  of  intangibles,
including  amortization of goodwill and other intangible  assets  for
the  three  months  ended  December  31,  1997,  remained  relatively
unchanged from the comparable period in fiscal 1997.

      Operating  income. Operating income for the three months  ended
December  31, 1997, increased 4.9% to $3.8 million from $3.6  million
for  the comparable period in fiscal 1997, primarily due to increased
net sales. Operating income as a percentage of net sales decreased to
13.7%   from   14.0%,   primarily  due  to  increased   general   and
administrative expenses.

      Interest  expense. Interest expense for the three months  ended
December 31, 1997 declined 35.9% from the comparable period in fiscal
1997  primarily  as a result of reduced outstanding  borrowings.  The
Company extinguished its bank debt during the first quarter of fiscal
1997.  Interest expense for the three months ended December 31,  1997
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, 1997 increased 3.1% from the comparable period in fiscal
1997, 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.
Other  than funding ongoing operations, the Company's principal  uses
of funds in the future will be the development of new or existing tea
and  dietary  supplement  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 credit facilities. The
Company  currently  believes that funds  from  operations  and  funds
expected  to  be available under the Company's credit facilities  are
likely  to  be  sufficient to meet operating and capital requirements
unless  a significant acquisition is made. If necessary, the  Company
believes it can increase availability under its credit facilities.

      Cash  and cash equivalents increased $2.0 million for the three
months ended December 31, 1997. Cash provided by operating activities
was  $2.0  million for the three months ended December 31, 1997.  The
Company's  investing  activities used cash  of  $0.1  million,  while
financing  activities provided cash of $27,000 for the  three  months
ended December 31, 1997.

      The  Company  incurred  capital expenditures  of  approximately
$91,000  during  the three months ended December 31, 1997,  including
$18,000 primarily for factory and computer equipment and $73,000  for
the  design  and development of new packaging artwork.   The  Company
currently  anticipates making capital expenditures  of  approximately
$2.2 million in fiscal 1998.

OTHER DEVELOPMENTS

     On January 15, 1998, the Company acquired Mountain Chai Company,
a  manufacturer  and distributor of chai, a traditional  Indian-style
tea.  The  effects of this transaction are not material and  are  not
included in the financial statements presented.

      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, 1997.

                                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 6, 1998    By: /s/ Darrell F. Askey
                            ---------------------
                         Darrell F. Askey
                         Vice President - Finance and Chief Financial
                            Officer
                         (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        
            consolidated financial statements          14
                                                      
                          PAGE 13