FORM 10-Q

                    SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C.  20549
                         _______________________

     (Mark One)
     [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                     SECURITIES EXCHANGE ACT OF 1934

     For the quarterly period ended December 31, 1995

                                    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 0-14796

                      FHP INTERNATIONAL CORPORATION
                          a Delaware Corporation
              I.R.S. Employer Identification No. 33-0072502

           9900 Talbert Avenue, Fountain Valley, CA  92708-8000
           (Address of principal executive offices)  (Zip Code)
                              (714) 963-7233
           (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 ___.


      The  registrant had 40,476,738 shares of common stock, par value
$0.05 per share, outstanding at February 7, 1996.



                 The Exhibit Index Appears on Page 17<PAGE>

                      PART 1 - FINANCIAL INFORMATION


Item 1.  Financial Statements

                      FHP INTERNATIONAL CORPORATION
                       CONSOLIDATED BALANCE SHEETS
                               (unaudited)

                                  ASSETS

(amounts in thousands,                     December 31,        June 30,
 except share data)                            1995             1995
                                          _____________     ___________


Cash and cash equivalents                  $  351,283       $  299,144
Short-term investments                        144,993          157,220
Accounts receivable                           149,499          141,840
Prepaid expenses and other
 current assets                               127,307           44,091
Deferred income taxes                          31,984           31,984
                                          ___________       ___________

 Total current assets                         805,066          674,279

Property and equipment, net                   233,248          229,765
Assets held for sale (Note 5)                  78,804          138,164
Long-term investments                          54,137           71,492
Restricted investments                         97,528          105,482
Goodwill and other intangibles,
 net                                        1,043,601        1,059,507
Other assets, net                              37,806           37,127
                                          ___________       ___________


Total assets                               $2,350,190       $2,315,816
                                          ===========       ===========
__________

See accompanying notes to consolidated financial statements.<PAGE>

                      FHP INTERNATIONAL CORPORATION
                       CONSOLIDATED BALANCE SHEETS
                               (unaudited)

                   LIABILITIES AND STOCKHOLDERS' EQUITY

(amounts in thousands,                     December 31,        June 30,
 except share data)                           1995               1995
                                          _____________     ___________
Current portion of long-term
 obligations                               $   30,095        $  30,168
Accounts payable                               66,449           64,762
Medical claims payable                        370,197          341,222
Accrued salaries and employee
 benefits                                      78,624           77,716
Unearned premiums                             209,661          207,961
Restructuring reserve (Note 5)                 11,323           15,038
Income taxes payable and other
 current liabilities                           42,120           15,791
                                          ____________      ___________
 Total current liabilities                    808,469          752,658

Long-term obligations                         290,299          337,817
Other liabilities                              93,096           85,200
                                          ____________      ___________
 Total liabilities                          1,191,864        1,175,675
                                          ____________      ___________
Commitments and contingencies
  (Note 4)

Stockholders' equity:

 Series A Convertible and Series B
   Preferred Stock, $0.05 par value;
   40,000,000 shares authorized (Note 3)        1,052            1,056
 Common Stock, $0.05 par value;
   100,000,000 shares authorized;
   issued and outstanding 40,415,849
   and 40,220,941 shares at December 31,
   1995 and June 30, 1995, respectively         2,021            2,011
 Paid-in capital                              929,693          927,882
 Unrealized holding gains (losses) on
   available-for-sale investments, net of
   tax effect of $(266) at
   December 31, 1995 and $1,232 at
   June 30, 1995                                  289           (1,446)

 Retained earnings                            225,271          210,638
                                          ____________     ____________
 Total stockholders' equity                 1,158,326        1,140,141
                                          ____________     ____________
 Total liabilities and
    stockholders' equity                   $2,350,190       $2,315,816
                                          ============     ============
__________

See accompanying notes to consolidated financial statements.


                      FHP INTERNATIONAL CORPORATION
                    CONSOLIDATED STATEMENTS OF INCOME
                               (unaudited)


                                                   For The
(amounts in thousands,                       Three Months Ended
 except per share data)                          December 31,

                                              1995             1994
                                          ___________      ___________

Revenues                                 $1,015,746        $  954,407
                                          ___________      ___________
Expenses:
 Primary health care                        831,071           759,987
 Other health care                           29,865            29,681
 General, administrative and
    marketing                               127,751           126,079
 Provision for restructuring                  3,900
                                          ___________      ___________

Total expenses                              992,587           915,747
                                          ___________       ___________

Operating income                             23,159            38,660

Interest income                               9,163             7,263
Interest expense                             (5,963)           (6,429)
                                          ___________      ___________

Income before income taxes                   26,359            39,494
Provision for income taxes                   12,438            18,167
                                          ___________       ___________

Net income                                   13,921            21,327
Preferred Stock dividends                     6,608             6,630
                                          ___________       ___________
Net income attributable to
 Common Stock                              $  7,313          $ 14,697
                                          ===========      ===========
Primary earnings per share
 attributable to Common Stock (Note 2)     $   0.18          $   0.36
                                          ===========      ===========
Weighted average number of common
 shares and common share equivalents         41,289            41,234
                                          ===========      ===========

__________

See accompanying notes to consolidated financial statements.

                      FHP INTERNATIONAL CORPORATION
                    CONSOLIDATED STATEMENTS OF INCOME
                               (unaudited)


                                                  For The
(amounts in thousands,                        Six Months Ended
 except per share data)                         December 31,

                                              1995           1994
                                         ___________        ___________

Revenues                                 $2,020,379        $1,908,747
                                         ___________        ___________
Expenses:
 Primary health care                      1,650,042         1,522,995
 Other health care                           60,710            55,704
 General, administrative and
    marketing                               252,877           254,152
 Provision for restructuring                  9,659
                                         ___________        ___________

Total expenses                            1,973,288         1,832,851
                                         ___________        ___________

Operating income                             47,091            75,896

Interest income                              18,299            14,535
Interest expense                            (12,387)          (12,566)
                                         ___________        ___________

Income before income taxes                   53,003            77,865
Provision for income taxes                   25,155            35,818
                                         ___________        ___________

Net income                                   27,848            42,047
Preferred Stock dividends                    13,215            12,135
                                         ___________        ___________
Net income attributable to
 Common Stock                            $   14,633        $   29,912
                                         ===========        ===========
Primary earnings per share
 attributable to Common Stock (Note 2)   $     0.36        $     0.73
                                         ===========        ===========
Weighted average number of common
 shares and common share equivalents         41,146            41,044
                                         ===========        ===========
Fully diluted earnings per share
 (Note 2)                                       -          $     0.72
                                         ===========        ===========
Fully diluted weighted average number
 of common shares and common share
 equivalents                                    -              58,005
                                         ===========        ===========

__________

See accompanying notes to consolidated financial statements.
<PAGE>
                      FHP INTERNATIONAL CORPORATION
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (unaudited)


                                                  For The
                                                Six Months Ended
(amounts in thousands)                          December 31,

                                             1995             1994
                                         ___________       ___________

Operating Activities

 Net income                                 $27,848           $ 42,047
 Adjustments to reconcile
   net income to net cash
   provided by operating activities:
    Provision for restructuring               9,659
    Depreciation and amortization            36,714             41,048
    Increase in allowance for doubtful
      accounts                                1,782              2,589
    Loss on disposal of equipment                48              1,648
    Deferred income taxes                                         (522)
    Effect on cash of changes
      in operating assets and
      liabilities:
      Accounts receivable                    (9,441)           (25,895)
      Prepaid expenses and other
        current assets                        3,784             (6,854)
      Other assets                           (2,621)              (476)
      Accounts payable                        1,687                279
      Medical claims payable                 28,975             31,596
      Accrued salaries and
        employee benefits                       908              1,807
      Deferred premiums                       1,700            145,933
      Other liabilities                      (5,668)           (38,728)
                                         ___________        ___________
 Net cash provided by operating
    activities                               95,375            194,472
                                         ___________        ___________
Investing Activities

 Purchases of available-for-sale
   investments                             (112,706)          (236,197)
 Proceeds from sales/maturities
   of available-for-sale investments        154,216            247,984
 Loss on sale of
   available-for-sale investments               258                476
 Gain on sale of
   available-for-sale investments              (999)             (200)
 Purchases of property and
   equipment                                (28,747)           (26,745)
 Proceeds from sales of assets held for sale  1,228
                                         ___________        ___________
 Net cash provided by (used in) investing
   activities                                13,250            (14,682)
                                         ___________        ___________
                                   

                      FHP INTERNATIONAL CORPORATION
             CONSOLIDATED STATEMENTS OF CASH FLOWS(continued)
                               (unaudited)


                                                   For The
                                                Six Months Ended
(amounts in thousands)                           December 31,

                                              1995            1994
                                         ___________        ___________
Financing Activities

 Payments on long-term
   obligations                              (45,088)               (75)
 Exercise of stock options                    3,797              4,577
 Cash dividends paid to preferred
   shareholders                             (13,215)           (12,952)
 Redemption of Series B Preferred
   Stock                                     (1,980)
                                          ___________       ___________
Net cash used in
 financing activities                       (56,486)            (8,450)
                                          ___________       ___________

Increase in cash and
 cash equivalents                            52,139            171,340
Cash and cash equivalents at
 beginning of period                        299,144             60,571
                                          ___________       ___________

Cash and cash equivalents at end
 of period                                 $351,283           $231,911
                                          ===========       ===========
Supplemental cash flow information:
 Interest payments                         $ 10,603           $ 11,191
 Income tax payments (net of
   refunds)                                $ 27,072           $ 43,240



__________

See accompanying notes to consolidated financial statements.






                     FHP INTERNATIONAL CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (unaudited)



NOTE 1.  Organization and Accounting Policies

     FHP International Corporation (the "Company"), through its direct
and  indirect subsidiaries, delivers managed health care services  and
sells   indemnity  medical,  group  life,  and  workers'  compensation
insurance.

      Interim  periods are viewed as an integral part  of  the  annual
period  of  the  Company.  Accordingly, the results  for  the  interim
periods  reported are based on the accounting principles and practices
followed by the Company as presented in its Annual Report on Form 10-K
for  the year ended June 30, 1995.  In the opinion of management,  all
adjustments necessary to fairly present the financial position and the
results  of operations for the six months ended December 31, 1995  and
1994 are included in these consolidated financial statements.

NOTE 2.  Earnings Per Share

      Primary earnings per share attributable to Common Stock for  the
six  months ended December 31, 1995 and 1994 are computed by  dividing
net  income  after  Preferred Stock dividends by the weighted  average
number  of  common  shares and dilutive common  stock  options  (using
average  market price), which are considered common share equivalents,
outstanding during the periods.

      Fully  diluted  earnings  per share for  the  six  months  ended
December  31,  1994 assume the conversion of the Series  A  Cumulative
Convertible Preferred Stock, the elimination of the related  Preferred
Stock  dividend  requirement and market price as of  the  end  of  the
quarter for dilutive common stock options.

NOTE 3.  Preferred Stock

      The issued and outstanding, and aggregate liquidation preference
of the Company's two series of preferred stock are as follows:


                      December 31, 1995            June 30, 1995
                     -------------------- ----------------------------

                                                            Series B
                         Series A             Series A      Adjustable
                        Cumulative            Cumulative      Rate
                        Convertible           Convertible   Cumulative
                       -------------          --------------------------

Issued and outstanding    21,040,307            21,040,307      79,218

Aggregate liquidation
preference              $526,032,000          $526,027,000  $1,999,000

      The  Company redeemed all of its outstanding Series B  Preferred
Stock at Stated Value in December 1995.


NOTE 4.  Commitments and Contingencies

      During  the  ordinary course of business, the  Company  and  its
subsidiaries  have  become  a party to pending  and  threatened  legal
actions and proceedings, a significant number of which involve alleged
claims  of medical malpractice.  Management is of the opinion,  taking
into  account  its  insurance coverage and  reserves  that  have  been
established, that the outcome of the currently known legal actions and
proceedings  will  not, singly or in the aggregate,  have  a  material
effect on the consolidated financial position or results of operations
or cash flows of the Company and its subsidiaries.

NOTE 5.  Restructuring Charge

      In  June,  1995,  the  Company's Board of Directors  approved  a
restructuring  plan  involving  the  discontinuance  of  services  and
programs that do not meet the Company's strategic and economic  return
objectives, a reduction in workforce, and the creation of a subsidiary
physician  practice  management company,  Talbert  Medical  Management
Corporation ("TMMC").  TMMC became operational January 1, 1996.

      The  Board  of  Directors also decided  to  sell  the  Company's
Fountain  Valley, California hospital campus and its Salt  Lake  City,
Utah  hospital campus and other nonproductive real estate. The Company
has  sold  its Fountain Valley, California hospital campus  for  gross
proceeds of $87 million.  The gross proceeds were deposited in  escrow
and  will  be  released  to the Company upon the  purchaser  obtaining
certain  operating licenses, which are expected to be obtained  before
the  end  of the current fiscal year.  The receivable created by  this
escrow  has been included in prepaid expenses and other current assets
in the Consolidated Balance Sheet, as of December 31, 1995.

     During six months ended December 31, 1995, the Company recorded a
pretax  restructuring  charge  of  approximately  $9.7  million  ($6.0
million,  net  of tax) in the accompanying Consolidated Statements  of
Income.  Included in this charge are the costs of employee separations
(approximately $4.7 million), and certain other costs associated  with
the  Company's  restructuring  of its operations  (approximately  $5.0
million).   Affected  employees were notified prior  to  December  31,
1995.   Assets  identified  as  those  to  be  sold  as  part  of  the
restructuring have been reclassified as assets held for  sale  in  the
accompanying Consolidated Balance Sheets as of December 31, 1995,  and
June 30, 1995, and are expected to be disposed of by the end of fiscal
year 1996.

                                   


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

      In  June,  1995,  FHP International Corporation  ("FHP"  or  the
"Company")  announced  an internal restructuring  (the  "Restructuring
Plan")  of  its operations.  The Restructuring Plan was formulated  in
response  to the intensely competitive environment in the HMO industry
and  continued  declining membership in its Company  operated  medical
facilities.  The  Restructuring Plan consists of  the  sale  or  other
disposition of the Company's owned and operated hospitals and other in-
patient  facilities;  certain  nonproductive  real  estate  and  other
assets;  a reduction in the Company's work force; and the creation  of
three  distinct business segments:  1) a physician practice management
company,  Talbert  Medical  Management Corporation  ("TMMC");  2)  the
contract  model health maintenance organization ("HMO");  and  3)  the
Company's  group  life, health and accident and workers'  compensation
insurance and related products (collectively, the "Insurance  Group").
Costs  associated with restructuring, including administrative facility
closure  costs and  employee  separation costs, resulted in  pretax 
charges  against earnings  of  approximately $75.1 million in  the  fourth
quarter  of fiscal  year 1995, and $5.8 million and $3.9 million in the
first  and second  quarters  of  fiscal  year 1996, respectively.   Net
proceeds available  from the sales of assets will be used for various
corporate purposes including the reduction of indebtedness.

      The  Company has made the following progress with regard to  the
Restructuring Plan:

     *    Disposition of Assets

          The  Company  has sold its Fountain Valley, California,
          hospital  campus  for gross proceeds  of  $87  million.
          Proceeds   will  be  released  from  escrow  upon   the
          purchaser  obtaining certain operating licenses,  which
          are  expected to be obtained before the end  of  fiscal
          year  1996.  The transaction was recorded in the second
          quarter of fiscal year 1996 and had no material  affect
          on  operating  results  for the  second  quarter.   The
          campus  includes  primary and  specialty  care  medical
          clinics  and other buildings. The transaction  included
          the lease of the primary and specialty care clinics  by
          TMMC.   In  January, 1996, the Company  signed  a  non-
          binding  letter of intent for the sale of the Company's
          acute  care hospital and surrounding campus located  in
          Salt  Lake  City, Utah.  Also, the Company has  reached
          agreements to transfer the operations of its two  other
          in-patient  facilities to other  operators  during  the
          second  half of fiscal year 1996.  The Company  expects
          to  complete  sales of other assets and certain  vacant
          land by the end of fiscal year 1996.
     
     *    Work Force Reductions
     
          The Company reduced its work force by approximately 250
          employees in the three month period ended December  31,
          1995.  This reduction was in addition to reductions  of
          approximately 750 employees between June and September,
          1995.  In addition, the approximately 700 employees  of
          the Company's Fountain Valley hospital became employees
          of the Purchaser effective with the transaction.
     
     *    TMMC
          
          The  Restructuring Plan included the creation of  TMMC,
          operational January 1, 1996, as a new subsidiary of the
          Company,  together  with the creation  of  several  new
          professional  corporations (the "PCs").   Approximately
          4,100 of the Company's employees, including health care
          professionals, became employees of TMMC or of  the  PCs
          on  January 1, 1996.  At the same time: 1) TMMC  leased
          or  subleased all of the Company's medical centers  and
          related assets located in California, Arizona, Utah and
          Nevada;  and 2) the Company's HMO contracted  with  the
          PCs  to  provide health care services to  approximately
          20%  of  the  Company's HMO members  who  were  already
          receiving  health  care in the  medical  centers.   The
          contractual arrangements between the Company's HMO  and
          the  PCs  are financially similar to existing contracts
          between   the  HMO  and  other  contract  health   care
          providers.   Also,  the  PCs  entered  into   long-term
          practice  management  agreements  with  TMMC,   thereby
          enabling  the  PCs and TMMC to do business  with  other
          payors  and  HMOs, as well as with the  Company's  HMO.
          These  third  party  arrangements will  allow  TMMC  to
          utilize excess capacity in the medical centers.
          
                                   
                 Three Months Ended December 31, 1995
         Compared to the Three Months Ended December 31, 1994

Revenue and Membership

      The  Company  generates substantially all of  its  revenue  from
premiums received for health care services provided to the HMO members
of  its  wholly-owned subsidiaries.  Total revenue for the three-month
period  ended  December 31, 1995, was $1,016 million  increasing  6.5%
over revenue of $954 million for the same period in the previous year.
The   Company's   commercial  and  senior  enrollment  each   generate
approximately  half  of  the  Company's HMO  revenue.   The  Company's
ability  to increase its commercial HMO premium rates during the  last
two fiscal years and the first two fiscal quarters of fiscal year 1996
were  adversely impacted by intense competition in all  the  Company's
major markets, particularly in California.  In addition, certain large
employer  groups and other purchasers of health care services continue
to  demand minimal increases or reductions in premium rates.  Downward
pressure on premium rates is expected to continue in fiscal year  1996
in all of the Company's major service areas.  A substantial portion of
the  Company's HMO commercial premium rate increases becomes effective
in January of each year.

       Total  HMO  membership grew 5.1% to approximately 1,825,000  at
December 31, 1995, from approximately 1,737,000 at December 31,  1994.
During  fiscal  year 1995, the Company experienced  slower  membership
growth  than  in prior years, due primarily to intense competition  in
all  its  key  markets.  The membership growth rate of 5.1%  shows  an
improvement over the Company's membership growth rate of 3.9% for  the
prior  fiscal  year;  however,  growth  is  slower  than  the  Company
experienced  in earlier years, and is slower than the HMO industry  in
general.

      From  December 31, 1994, to December 31, 1995, total  commercial
membership increased by 64,000 or 4.7% from approximately 1,375,000 to
approximately  1,439,000.  The  Company's  ability  to  increase   its
commercial membership during the last two fiscal years and  the  first
and second quarters of fiscal year 1996 has been adversely impacted by
intense  competition in all the Company's major markets,  particularly
in California.

     Senior membership grew by 24,000 or 6.6% to approximately 386,000
at December 31, 1995, from approximately 362,000 at December 31, 1994.
Almost  all  of  the  Company's senior HMO revenue is  generated  from
premiums   paid   to  the  Company  by  the  Health   Care   Financing
Administration  ("HCFA").  Revenue per senior member is  substantially
higher  than revenue per commercial member because senior members  use
substantially more health care services.  In September of  each  year,
HCFA  announces  the annual Medicare rate increases that  will  become
effective  on January 1 of the subsequent year.  These rate  increases
vary  geographically and become the basis for determining the  amounts
that  HCFA  will  pay  to the Company.  For calendar  year  1995,  the
Company  received  an average 5.8% rate increase.  For  calendar  year
1996, the Company will receive an average 5.1% rate increase.

Cost of Health Care

      Health  care costs increased 9.0% to $861 million for the  three
months ended December 31, 1995, from $790 million for the three months
ended December 31, 1994, due to operational growth and cost increases.
Health  care  costs  increased  as a  percentage  of  revenue  by  2.1
percentage points, to 84.8% from 82.7% for the same three month period
in  the  prior  fiscal year.   The increase as a  percent  of  revenue
resulted  primarily  from lower commercial premium  rates  and  higher
health care costs in almost all states in which the Company operates.

General, Administrative and Marketing Costs

       General,  administrative  and  marketing  ("G  &  A")  expenses
increased  by $2 million or 1.3% to $128 million for the  three  month
period ended December 31, 1995, from $126 million for the three  month
period  ended December 31, 1994.  The small increase is the result  of
higher  sales  and  marketing  costs,  offset  by  cost  savings  from
workforce  reductions and other cost controls.  Further reductions  in
the  Company's work force may take place in the second half of  fiscal
year  1996.  G & A expenses for the three month period ended  December
31, 1995, decreased as a percentage of revenue to 12.6% from 13.2% for
the same period in the prior fiscal year.

Interest Income

      Net  interest income was $3 million for the three  month  period
ended December 31, 1995, as compared to $1 million for the three month
period  ended December 31, 1994.  Net interest income increased  year-
over-year  primarily  because of growth in  the  Company's  investment
portfolio and lower debt.
                                   
                                   
                  Six Months Ended December 31, 1995
           Compared to the Six Months Ended December 31, 1994

Revenue and Membership

     Revenue for the six month period ended December 31, 1995, totaled
$2,020 million, increasing 5.8% over revenue of $1,909 million for the
same  period  in  the  previous fiscal year.  Membership  and  revenue
growth  have both been constrained by intense competition in  all  the
Company's major markets and by downward pressure on commercial premium
rate increases

Cost of Health Care

      Health care costs increased 8.4% to $1,711 million for the  six-
month  period  ended December 31, 1995, from $1,579  million  for  the
comparable  six-month  period ended December 31,  1994.   Health  care
costs  during the six-month period ended December 31, 1995,  increased
to  84.7%  of total revenue from 82.7% of total revenue for  the  same
period last year.  Cost of health care has been increasing relative to
revenues  as  competitive  pressures have slowed  the  growth  of  the
Company's  revenues;  also, the Company has been  experiencing  higher
health care costs in almost all its major markets.

General, Administrative and Marketing Costs

      G  & A expenses decreased 0.5% to $253 million for the six-month
period  ended December 31, 1995, from $254 million for the same period
in  the previous year, primarily due to cost reductions resulting from
the  Company's Restructuring Plan.  G & A expenses were 12.5% of total
revenue for the six-month period ended December 31, 1995, versus 13.3%
of total revenue for the comparable period in the previous year.

Interest Income

     Net interest income was $6 million for the six-month period ended
December 31, 1995, compared to $2 million for the same period  in  the
previous fiscal year.  Net interest income increased $4 million  year-
over-year   primarily  as  the  result  of  growth  in  the  Company's
investment portfolio and lower debt.

Liquidity and Capital Resources

      The Company's consolidated cash, cash equivalents and short-term
investments  increased by $40 million to $496 million at December  31,
1995,  from  $456  million at June 30, 1995.  The total  reflects  the
receipt  in December, 1995, of approximately $167 million of  premiums
from  HCFA due on January 1, 1996, for medical services to be provided
to senior members in January, 1996.  (The Company's June 30, 1995 cash
balances were similarly affected.)  Other major sources of cash during
the  six month period ended December 31, 1995, included cash generated
from  operations  (net of the early receipt of HCFA premiums)  of  $80
million, and net transfers of $7 million from long-term and restricted
investments.   Major  uses  of cash during  the  period  included  $29
million  for  capital  expenditures, $13 million for  preferred  stock
dividends,  and  $45  million of debt repayment.   Also,  the  Company
redeemed  all  of  its  outstanding  Series  B  Preferred  Stock   for
approximately $2 million.

      The  Company  entered into a $350 million  Credit  Agreement  in
March,  1994.   The Credit Agreement, as amended, provides  for  a  $200
million Revolving Credit Loan and a $150 million Term Loan.  The  Term
Loan  and Revolving Credit Loan carry interest rates currently ranging
from  6.1% to 6.3% based on LIBOR rate borrowings.  The Term  Loan  is
repayable  at  the  rate of $15 million every six months.   The  first
repayment  was made on September 29, 1995.  The final payment  is  due
March  31,  2000.  The Credit Agreement contains financial  and  other
covenants,  including limitations on indebtedness,  liens,  dividends,
sale and lease-back transactions, and certain other transactions.

      The Company's ability to make a payment on, or repayment of, its
obligations  under the Notes, the Credit Agreement, and the  Preferred
Stock  is  significantly dependent upon the receipt of  funds  by  the
Company  from  the  Company's direct and indirect subsidiaries.  These
subsidiary  payments  represent:  (a)  fees  for  management  services
rendered by the Company to the subsidiaries; and (b) cash dividends by
the  subsidiaries to the Company.  Nearly all of the subsidiaries  are
subject  to  HMO regulations or insurance regulations (the  "Regulated
Subsidiaries").   Each  of  the Regulated Subsidiaries  must  meet  or
exceed  various  fiscal  standards  imposed  by  HMO  regulations   or
insurance regulations.  These fiscal standards may, from time to time,
impact  the  amount  of  funds paid by one or more  of  the  Regulated
Subsidiaries to the Company.

      The  Company  believes the payments referred  to  above  by  the
Regulated   Subsidiaries,  together  with  other  financing   sources,
including  the  Credit Agreement, should be sufficient to  enable  the
Company  to  meet its payment obligations (totaling approximately  $75
million  annually)  under  the Notes, the  Credit  Agreement  and  the
Company's  Preferred Stock.  The Company believes that cash flow  from
operations,  the Credit Agreement and existing cash balances  will  be
sufficient to continue to fund operations and capital expenditures for
the foreseeable future.

Also, sales of real property under the Restructuring Plan are expected
to  generate net cash to the Company.  As stated above, gross proceeds
of $87 million from the sale of the Company's Fountain Valley hospital
campus  were  deposited  into escrow.  These proceeds,  together  with
interest earned, should be available to the Company before the end  of
fiscal  year  1996.  Cash generated from this and other real  property
sales  under the Restructuring Plan will be used for various corporate
purposes including the reduction of indebtedness.

Effects of Regulatory Changes and Inflation

      Effective  January  1,  1996, the Company  received  an  average
premium  rate increase from HCFA of approximately 5.1% for its  senior
HMO members.  Over calendar years 1994 and 1995, annual senior premium
increases  from  HCFA were approximately 2.0% and 5.8%,  respectively.
The  Company  evaluates the effects of HCFA premium adjustments on its
liquidity  and  capital  resources, and incorporates  the  actual  and
anticipated impact of such adjustments into its planning process.

      The Company has been experiencing significant downward pressures
on  commercial  HMO  premium rates, due to  competition  and  counter-
inflationary measures by large commercial employers attempting to hold
their  costs down.  Also, in recent years health care costs have  been
rising at a rate higher than that for consumer goods as a whole, as  a
result of inflation, new technology and medical advances.  The Company
believes  that  internal  cost control measures  and  financial  risk-
sharing arrangements with its contract medical providers will help  to
mitigate  the effects of inflation on its operations.  However,  there
can be no assurance that the Company's efforts to reduce the impact of
the increasing cost of health care will be as successful in the future
as  they  have been in the past, or that the Company will be  able  to
obtain  premium rate increases in the commercial sector in  the  short
term.





                       PART II - OTHER INFORMATION



Item 1.     Legal Proceedings.

       Information relating to certain litigation as set forth in Note
4  of  Notes to Consolidated Financial Statements in Part  I  of  this
report is incorporated herein by this reference.

Item 2.     Changes in Securities.

       None.

Item 3.     Defaults Upon Senior Securities.

       None.

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

                  (a)  The Annual Meeting of Stockholders was held  on
               November 16, 1995.

                 (b)   Richard  M. Burdge, Sr., Robert C.  Maxson  and
            Robert  W.  Jamplis  were elected as  Directors  to  serve
            three  year  terms ending in 1998.  Other Directors  whose
            terms of office continued after the meeting were Burke  F.
            Gumbiner,  Warner Heineman, Jack R. Anderson, Westcott  W.
            Price III and Joseph F. Prevratil.

                 (c)  The Stockholders elected Richard M. Burdge,  Sr.
            as  a  Director  by vote of 26,662,427 for  and  1,105,161
            authority  withheld.  The Stockholders elected  Robert  C.
            Maxson  as  a  Director by a vote of  26,695,250  for  and
            1,072,340  authority  withheld.  The Stockholders  elected
            Robert  W.  Jamplis as a Director by a vote of  26,674,004
            for and 1,093,584 authority withheld.

                  (d)    The  Stockholders  approved  by  a  vote   of
            16,995,622 for, 8,445,855 against, 119,684 abstaining  and
            1,193,565 broker non-votes, the ratification and  approval
            of amendments to the Company's Executive Incentive Plan.

                  (e)    The  Stockholders  approved  by  a  vote   of
            27,569,862  for, 99,360 against and 98,365 abstaining  the
            ratification of the appointment of Deloitte  &  Touche  as
            independent  auditors of the Company for the  fiscal  year
            ending June 30, 1996.

Item 5.     Other Information.

       None.

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

                  (a)  Exhibits.  See Index to Exhibits at page 17  of
            this report.

                 (b)   Reports  on  Form 8-K.  None filed  during  the
            second quarter of Fiscal 1996.




                                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.


                           FHP INTERNATIONAL CORPORATION


Dated:  February 12, 1996     By: /s/   Kenneth S. Ord
                                Senior Vice President and
                                Chief (Principal) Financial Officer


                            INDEX TO EXHIBITS



Exhibit
Number


         4.1  Registrant  agrees  to  furnish  to  the  Commission  upon
       request  a  copy of each instrument with respect to  issues  of
       long-term  debt  of  the Registrant, the  authorized  principal
       amount  of  which  does  not exceed  10%  of  total  assets  of
       Registrant.

          11.1   Statement Re:  Computation of Earnings Per Share.

          27.1   Financial Data Schedule.