<PAGE>
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549
                                                                  

                                   FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                    FOR THE QUARTER ENDED January 31, 1998
                           COMMISSION FILE NO. 1-9015
                                                                  

                               MORGAN KEEGAN, INC.                     
            (Exact name of Registrant as specified in its charter)

          
        Tennessee                                        62-1153850     
(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization)                      Identification No.)

     Fifty Front Street
     Memphis, Tennessee                                  38103
 (Address of principal executive                      (Zip Code)
 offices)                

                               901-524-4100             
           (Registrant's telephone number, including area code)
 
                                    N/A 
(Former name, former address and former fiscal year,
 if changed since last report)

  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 at 
least the past 90 days.  Yes  X     No     .

 APPLICABLE ONLY TO ISSUERS INVOLVED
 IN BANKRUPTCY PROCEEDINGS DURING
 THE PRECEDING FIVE YEARS:

  Indicate by check mark whether the registrant has filed
 all documents and reports required
to be filed by sections 12, 13 or 15(d) of the Securities 
Exchange Act of 1934 subsequent
to the distribution of securities under a plan confirmed 
by a court.  YES       NO     

APPLICABLE ONLY TO CORPORATE ISSUERS:

   Indicate the number of shares outstanding of each 
of the issuer's classes of Common
Stock, as of the latest practical date.

Class                               Outstanding at January 31, 1998
Common Stock $.625 par value                       32,937,354               

<PAGE>
INDEX

MORGAN KEEGAN, INC. and Subsidiaries



Part I.  FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

  Consolidated Statements
    of Financial Condition. . . . . . . . January 31, 1998 and July 31, 1997

  Consolidated Statements
    of Income . . . . . . . . . . . . . . Three months and six months ended
                                          January 31, 1998 and 1997

  Consolidated Statements
    of Cash Flows . . . . . . . . . . . . Six months ended
                                          January 31, 1998 and 1997

  Notes to Consolidated
    Financial Statements. . . . . . . . . January 31, 1998

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



Part II.  Other Information

Item 1.  Legal proceedings

Item 2.  Changes in Securities

Item 3.  Defaults upon Senior Securities

Item 4.  Submission of Matters to a Vote of Security Holders

Item 5.  Other Information

Item 6.  Exhibits and Reports on Form 8-K

Signatures

<PAGE>
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
MORGAN KEEGAN, INC. and Subsidiaries
                                               January 31         July 31
                                                  1998             1997  
                                               (unaudited) 
                                                     (in thousands)
<TABLE>                                            <C>             <C>
ASSETS
  Cash                                        $   14,495      $   22,423
  Securities segregated for regulatory
    purposes, at market                          295,700         280,100
  Deposits with clearing organizations 
    and others                                     9,049           9,153 
  Receivable from brokers and dealers and
    clearing organizations                        34,465          37,730
  Receivable from customers                      417,853         358,020 
  Securities purchased under agreements
    to resell                                     49,485         146,881
  Securities owned, at market                    307,052         275,611
  Memberships in exchanges, at cost
    (market value-$4,679,000 at 1-31-98;
     $4,202,000 at 7-31-97)                          719             719
  Furniture, equipment and leasehold
    improvements, (less allowances for
    depreciation and amortization $16,745,000
    at 1-31-98; $16,257,000 at 7-31-97)           22,457          24,062
  Building and improvements, at cost (less
    allowance for depreciation $644,000
    at 7-31-97)                                                   19,356   
  Other assets                                    57,754          34,202

                                              $1,209,029      $1,208,257

LIABILITIES AND STOCKHOLDERS' EQUITY
  Short-term borrowings                       $  121,100      $      570
  Mortgage note payable                                           19,714
  Commercial paper                                41,312         106,930
  Payable to brokers and dealers and
    clearing organizations                        19,859          12,718
  Payable to customers                           627,049         583,922
  Customer drafts payable                         16,363          17,362
  Securities sold under agreements to  
    repurchase                                     4,132          97,417
  Securities sold, not yet purchased,     
    at market                                     58,822          94,298
  Other liabilities                               80,788          71,606
                                                 969,425       1,004,537  
Stockholders' equity
  Common Stock, par value $.625 per share:
  authorized 100,000,000 shares; 
  32,937,354 shares issued and outstanding
  at 1-31-98; 31,652,142 at 7-31-97               20,586          19,782
  Additional paid-in capital                      15,797           1,048
  Retained earnings                              203,221         182,890
                                                 239,604         203,720

                                              $1,209,029      $1,208,257
</TABLE>
See accompanying notes.

<PAGE>
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

MORGAN KEEGAN, INC. and Subsidiaries

                               Three Months Ended       Six Months Ended 
                                   January 31              January 31
                                (in thousands, except per share amounts)

<TABLE>                           <C>       <C>           <C>       <C>
                                 1998      1997          1998      1997 

REVENUES
  Commissions                  $23,632   $19,884      $ 52,083   $ 36,297
  Principal transactions        26,521    28,635        57,723     56,739
  Investment banking            19,707    14,121        35,502     23,489
  Interest                      17,847    15,644        35,743     30,378
  Investment management fees     4,969     1,753         9,612      3,401
  Other                          3,896     3,490         7,106      7,638
          TOTAL                 96,572    83,527       197,769    157,942

EXPENSES
  Compensation                  47,675    41,772        98,122     79,266
  Floor brokerage and
     clearance                   1,302     1,174         2,898      2,432
  Communications                 5,426     5,280        10,990     10,712
  Travel and promotional         2,780     2,262         5,559      4,165
  Occupancy and equipment
     costs                       4,752     3,977         9,154      7,421
  Interest                      11,957    10,769        24,455     21,104
  Taxes, other than income 
     taxes                       3,187     2,546         5,092      4,011
  Other operating expense        1,491     1,073         2,810      2,408
                                78,570    68,853       159,080    131,519


INCOME BEFORE INCOME TAXES      18,002    14,674        38,689     26,423
INCOME TAX EXPENSE               6,600     5,400        14,500      9,800

NET INCOME                     $11,402   $ 9,274      $ 24,189   $ 16,623

NET INCOME PER SHARE:
     Basic                     $  0.35   $  0.30      $   0.75   $   0.54
     Diluted                   $  0.35   $  0.30      $   0.75   $   0.54

DIVIDENDS PER SHARE            $  0.06   $  0.05      $   0.12   $   0.10


WEIGHTED AVERAGE COMMON
 SHARES OUTSTANDING:
     Basic                      32,444    30,877        32,281     30,778
     Diluted                    32,627    31,048        32,457     30,933

<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
MORGAN KEEGAN, INC. and Subsidiaries
                                                       Six Months Ended
                                                          January 31
                                                     1998           1997  
                                                       (in thousands)

</TABLE>
<TABLE>                                              <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Income                                      $ 24,189        $16,623 
  Adjustments to reconcile net income to
      cash used for operating activities:
    Depreciation and amortization                    4,816          3,012
    Deferred income taxes                           (4,790)          (670)
    Amortization of gain on sale of building
      and related assets                              (460)          
    Amortization of restricted stock                 1,500          1,500 
                                                    25,255         20,465
 (Increase) decrease in operating assets:
  Receivable from brokers and dealers and
    clearing organizations                           3,265        (13,126)
  Deposits with clearing organizations and others      104         (1,513) 
  Receivable from customers                        (59,833)           172
  Securities segregated for regulatory purposes    (15,600)       (39,600)  
  Securities owned                                 (31,441)       (98,775)
  Other assets                                     (18,762)        (6,504)
Increase (decrease) in operating liabilities:
  Payable to brokers and dealers and clearing
    organizations                                    7,141             33
  Payable to customers                              43,127         47,153
  Customer drafts payable                             (999)        (1,453)
  Securities sold, not yet purchased               (35,476)         5,039
  Other liabilities                                 (3,943)        (5,907)
                                                  (112,417)       (114,481) 
    Cash used for operating activities             (87,162)       (94,016)

CASH FLOWS FROM FINANCING ACTIVITIES
  Commercial paper                                 (65,618)        37,776
  Mortgage note payable                            (19,714)          (116)
  Issuance of Common Stock                          14,053          3,555
  Retirement of Common Stock                                         (142)  
  Dividends paid                                    (3,858)        (2,850)
  Short-term borrowings                            120,530         50,170
  Securities purchased under agreements to resell   97,396        (33,004)
  Securities sold under agreements to repurchase   (93,285)        42,567
    Cash provided by financing activities           49,504         97,956
 
CASH FLOWS FROM INVESTING ACTIVITIES
  Payments for furniture, equipment and
    leasehold improvements                          (4,852)        (6,813)
  Proceeds from sale of building and related
    assets                                          34,582                 
    Cash provided by (used for) investing
      activities                                    29,730        (6,813)
      Decrease in Cash                              (7,928)        (2,873) 
Cash at Beginning of Period                         22,423         17,156
Cash at End of Period                             $ 14,495       $ 14,283

</TABLE>
Income tax payments were approximately $22,963,000 and 
$9,792,000 for the
six month period ending January 31, 1998, and 1997, respectively.  
Interest payments
 were approximately $24,758,000 and $20,872,000 for the same
 periods, respectively.

See accompanying notes. 

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MORGAN KEEGAN, INC. and Subsidiaries

January 31, 1998

NOTE A - BASIS OF PRESENTATION

The consolidated financial statements include the accounts of 
Morgan Keegan, Inc. and
its wholly owned subsidiaries (collectively referred to as the 
Registrant).  The
accompanying unaudited consolidated financial statements 
have been prepared in
accordance with the instructions to Form 10-Q and Rule 10-01 
of Regulation S-X.
Accordingly, they do not include all of the information and 
footnotes required by
generally accepted accounting principles for complete 
financial statements.  In the
opinion of management, all adjustments (consisting of
 normal recurring accruals)
considered necessary for a fair presentation have been 
included.  Operating results
for the six months ended January 31, 1998, are not necessarily 
indicative of the
results that may be expected for the year ending 
July 31, 1998.  For further
information, refer to the financial statements and 
notes hereto included in the
Registrant's annual report on Form 10-K for the
 year ended July 31, 1997.

NOTE B - NET CAPITAL REQUIREMENT

As a registered broker/dealer and member of the New 
York Stock Exchange, 
the registrant's brokerage subsidiary, Morgan Keegan 
& Company, Inc. 
(M.K. & Co.) is subject to the Securities and Exchange 
Commission's (SEC) 
uniform net capital rule.  The broker/dealer subsidiary
 has elected to operate 
under the alternative method of the rule, which prohibits 
a broker/dealer from 
engaging in any securities transactions when its net 
capital is less than 2% of 
its aggregate debit balances, as defined, arising from 
customer transactions.  
The SEC may also require a member firm to reduce 
its business and restrict 
withdrawal of subordinated capital if its net capital 
is less than 4% of aggregate 
debit balances, and may prohibit a member firm from 
expanding its business and 
declaring cash dividends if its net capital is less than 
5% of aggregate debit balances.  
At January 31, 1998, M.K. & Co. had net capital of 
$146,741,276 which was 
34% of its aggregate debit balances and $138,154,973
in excess of the 2% net 
capital requirement.

NOTE C - INCOME TAXES

The principal reason for the difference between the 
Registrant's effective tax rate 
and the federal statutory rate is the non-taxable interest 
earned on municipal bonds.

NOTE D - EFFECT OF FASB STATEMENT NO. 128

In 1997, the Financial Accounting Standards Board issued 
Statement No. 128, 
"Earnings per Share."  Statement No. 128 replaced the 
previously reported primary 
and fully diluted earnings per share with basic and diluted
 earnings per share.  
Unlike primary earnings per share, basic earnings per 
share excludes any dilutive 
effects of options, warrants and convertible securities.  
Diluted earnings per share
 is very similar to the previously reported fully diluted 
earnings per share.  
All earnings per share amounts for all periods have 
been presented, and 
where necessary, restated to conform to the Statement 
No. 128 requirements.

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MORGAN KEEGAN, INC. and Subsidiaries


The following table sets forth the computation of basic 
and diluted earnings per share:

                                Three Months Ended       Six Months Ended
                                    January 31              January 31
                                 1998        1997        1998        1997 

<TABLE>                         <C>         <C>          <C>         <C>
Numerator

  Net Income                $11,401,769  $9,273,758  $24,189,350 $16,622,575

Denominator

  Denominator for basic 
   earnings per share - 
   weighted average shares   32,443,664  30,876,811   32,281,245  30,777,726

 
  Effect of dilutive
   securities - stock
   options                      183,051     170,774      175,543     155,082

  Denominator for diluted
   earnings per share - 
   adjusted weighted
   average shares and 
   assumed conversations     32,626,715  31,047,585   32,456,788  30,932,808

  Basic earnings per share  $      0.35 $      0.30  $      0.75 $      0.54
  Diluted earnings per
   share                    $      0.35 $      0.30  $      0.75 $      0.54


<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS
  OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MORGAN KEEGAN, INC. and Subsidiaries

Morgan Keegan, Inc. (The Registrant) operates a full service regional 
brokerage business through its principal subsidiary, Morgan Keegan & 
Company, Inc. (M.K. & Co.).  M.K. & Co. is involved in the highly 
competitive business of origination, underwriting, distribution, trading 
and brokerage of fixed income and equity securities and also provides 
investment advisory services.  While M.K. & Co. regularly participates 
in the trading of some derivative securities for its customers, this trading 
is not a major portion of M.K. & Co.'s business.  M.K. & Co. typically
does not underwrite high yield securities, and normally is not involved 
in bridge loan financings or any other ventures that management believes 
may not be appropriate for its strategic approach.  Many highly volatile
factors affect revenues, including general market conditions, interest rates, 
investor sentiment and world affairs, all of which are outside the Registrant's 
control.  However, certain expenses are relatively fixed.  As a result, net 
earnings can vary significantly from quarter to quarter, regardless of
 management's efforts to enhance revenues and control costs.

This Form 10-Q may contain or incorporate by reference statements which 
may constitute "forward-looking statements" within the meaning of Section 
27A of the Securities Act of 1933, as amended and Section 21E of the 
Securities Exchange Act of 1934, as amended.  Prospective investors are 
cautioned that any such forward-looking statements are not guarantees for 
future performance and involve risks and uncertainties, and that actual
 results may differ materially from those contemplated by such 
forward-looking statements.

The Registrant is evaluating Year 2000 compliance issues including vendors,
 software and other systems to determine that internal and external concerns 
are addressed to meet the Year 2000 deadline.  A committee has been setup
to over see this evaluation and implementation includes key personnel from 
various aspects of the Registrant's business activities.  The committee is
projecting full compliance by the end of current fiscal year with on going 
testing throughout 1999.  The cost of implementing Year 2000 compliance 
issues is not expected to be material to the Registrant's consolidated 
results of operations or financial condition. 


Results of Operations

The Registrant recognized the second highest level of revenues and 
net income for the quarter ended January 31, 1998.  Revenues for the 
quarter were $96,572,000--16% higher than the second quarter of fiscal 
1997 when revenues were $83,527,000.  The largest component of the 
increase was a 40% increase in investment banking revenues.  Follow-on 
offering activity remained high throughout the quarter as many of the 
Registrant's clients took advantage of the current markets to finance 
their expansion efforts.

Operating expenses increased to $78,570,000 compared to $68,854,000 
in the same period a year ago.  This $9,716,000 increase is attributable 
to a 14% increase in compensation and an 11% increase in interest expense.  
Both increases are in proportion to the increase in trading volume.


<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS
  OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MORGAN KEEGAN, INC. and Subsidiaries

Results of Operations (continued)

Net income for the quarter increased to $11,402,000, or $.35 per share, 
versus $9,274,000, $.30 per share a year ago.   Market conditions 
continued to be favorable throughout the quarter with the Dow Jones
Industrial Average hovering at 8000.

Total revenues for the six months ended January 31, 1998, totaled 
$197,769,000 or 25% higher than the same period of the previous year
 when revenues were $157,942,000.  The most significant increases 
were noted in commission income, investment banking revenues and 
investment advisory revenues.  These increases are the result of the 
bullish market conditions and continued growth of the Registrant's
 retail branch system.

Year-to-date operating expenses increased 21% to $159,080,000 from 
$131,519,000 for the six months ended January 31, 1997.  Factors 
contributing to this increase include a 24% increase in compensation 
and a 16% increase in interest cost.  These increases are relative to 
the increase in revenues and trading volumes.

Net income for the six months was $24,189,000 or $.75 per share
 which is well ahead of last year's record pace when net income 
equaled $16,623,000 or $.54 per share.


Liquidity and Capital Resources

High liquidity is reflected in the Registrant's statement of financial 
condition with approximately 93% of its assets consisting of cash or 
assets readily convertible into cash.  Financing resources include the 
Registrant's equity capital, commercial paper, short-term borrowings, 
repurchase agreements and other payables.  For the six month period 
ended January 31, 1998, cash flows used for operating activities were 
$87,162,000 primarily due to a $59,833,000 increase in receivables
 from customers.

Cash flows from financing activities were $49,504,000 for the six
months ended January 31, 1998.  Changes in securities owned, 
customer receivables and  broker receivables directly affect the 
financing activities.

Investing activities resulted in a $29,730,000 increase in cash flows 
for the current period versus a $6,813,000 decrease in the previous 
year.  The increase is a result of the sale of the home office building 
in the month of October 1997 for approximately $36 million dollars.

At January 31, 1998, the Registrant's broker/dealer subsidiary, which 
is regulated under the SEC's uniform net capital rule, had net capital 
of $146,741,276 which was $138,154,973 in excess of the 2% net 
capital requirement.  During the quarter, the Registrant declared 
and paid cash dividends of $.06 per share on the shares outstanding.   


<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS
  OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MORGAN KEEGAN, INC. and Subsidiaries

Liquidity and Capital Resources (continued)

As previously disclosed in Form 10-Q filed for the quarter ended 
October 31, 1997, the Registrant declared and paid a 3-for-2 
stock split accounted for as a stock dividend.  This stock split 
increased the number of shares outstanding by 10,756,101 shares.  
All per share information has been restated for the stock split.   

The Registrant is authorized to repurchase its own stock under
the stock repurchase program begun in November 1993.   No 
stock has been repurchased under the plan year-to-date.  Since 
inception of the repurchase program, the Registrant has
repurchased 5,158,184 shares for $30,801,989.

<PAGE>
MORGAN KEEGAN, INC. and Subsidiaries
PART II OTHER INFORMATION

Item 1.  Legal proceedings

         Morgan Keegan & Company, Inc. is subject to various claims
         incidental to its securities business.  While the ultimate
         resolution of pending litigation and claims cannot be predicted
         with certainty, based upon the information currently known,
         management is of the opinion that it has meritorious defenses 
         and has instructed its counsel to vigorously defend such lawsuits
         and claims, and that liability, if any, resulting from all 
         litigation will have no material adverse effect on the Registrant's
         consolidated financial condition or results of operations.

Item 2.  Changes in Securities

         None

Item 3.  Defaults upon Senior Securities

         None

Item 4.  Submission of Matters to a Vote of Security Holders

         On November 25, 1997, at the Registrant's annual meeting of its
         shareholders, 81% of the 32,273,616 shares outstanding at
         October 3, 1997 were represented by proxy.  A quorum as
         declared present for the conduct of business and the following
         proposals were voted on:

         Proposal 1:  Election of the directors from the following
         nominees to serve the registrant for the ensuing year:

              Allen B. Morgan, Jr.            John W. Stokes, Jr.
              William W. Deupree, Jr.         Kenneth F. Clark, Jr.
              Joseph C. Weller                James E. Harwood
              Donald Ratajczak                Harry Phillips

         Results of vote:  99.9% of the votes cast were in favor of this
         proposal.

Item 5.  Other Information

         None

Item 6.  Exhibits and Reports on Form 8-K

         a.  Exhibits

             11.  Computation of Earnings per Share

                   None

         b.  Reports on Form 8-K

             No reports were filed during the quarter on Form 8-K




<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.

                                        Morgan Keegan, Inc.
                                           Registrant



                                  BY     /S/Joseph C. Weller       
                                             Joseph C. Weller
                                             EVP, CFO, Sec.-Treas.


Date:       March 16, 1998    

</Page>



 

 








</TABLE>