SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549

                                 FORM 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 or 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For Quarter ended September 30, 1997 Commission File Number 2-63880


                             ACE HARDWARE CORPORATION
               (Exact name of registrant as specified in its charter)
                                     
                                     
             DELAWARE                               36-0700810
  (State or other jurisdiction of                  (I.R.S. Employer
  incorporation or organization)                  Identification No.)


   2200 Kensington Court, Oak Brook, IL                 60523-2100
  (Address of principal executive offices)              (Zip code)
  
  
  Registrant's telephone number, including area code    (630) 990-6600


                                   NONE
                  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 the past 90 days. YES  XX  NO

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the period covered by this report.


                 Class                  Outstanding at September 30, 1997
Class A Voting Stock - $1,000 par value              3,945  shares
Class B Stock        - $1,000 par value              2,760  shares
Class C Stock        - $  100 par value          2,167,810  shares


                        ACE HARDWARE CORPORATION
                                   INDEX
                                     
                                     
                                     
                                     
Part I. - Financial Information:                                 Page No.


    Consolidated Balance Sheets -
      September 30, 1997 and December 31, 1996                      1
    
    Consolidated Statements of Earnings - Nine Months and Three
      Months Ended September 30, 1997 and 1996                      2
    
    Consolidated Statements of Cash Flows - Nine Months Ended
      September 30, 1997 and 1996                                   3

    Notes to Consolidated Financial Statements                      4

    Management's Discussion and Analysis of Financial
      Condition and Results of Operations                         5 - 7


Part II. - Other Information                                        8






                      PART I.  FINANCIAL INFORMATION
                         ACE HARDWARE CORPORATION
                        CONSOLIDATED BALANCE SHEETS
                                     
                                     
                                            September 30,    December 31,
                                                 1997             1996
                                                    (000's omitted)
ASSETS

Current Assets:
Cash                                        $   10,812        $   12,657
Accounts Receivable, Net                       350,258           347,248
Merchandise Inventory                          329,318           327,145
Prepaid Expenses and Other Current Assets       13,717            11,880
                                            ----------        ----------  
Total Current Assets                           704,105           698,930
                                            
Property and Equipment, Net                    242,033           213,534
Other Assets                                     9,877             3,911
                                            ----------        ----------
Total Assets                                $  956,015        $  916,375
                                            ==========        ==========

LIABILITIES AND MEMBER DEALERS' EQUITY

Current Liabilities:
Current Installment of Long-Term Debt       $    7,642        $    6,727
Short-Term Borrowings                           77,500            71,000
Accounts Payable                               380,464           394,070
Patronage Dividends Payable in Cash             21,977            28,178
Patronage Refund Certificates Payable           13,614            14,138
Accrued Expenses                                50,167            36,349
                                            ----------        ----------
Total Current Liabilities                      551,364           550,462

Notes Payable                                   98,446            71,837
Patronage Refund Certificates Payable           43,082            49,639
Other Long-Term Liabilities                     15,424            11,074
                                            ----------        ----------
Total Liabilities                              708,316           683,012

Member Dealers' Equity:
Class A Stock of $1,000  Par Value               4,124             3,937
Class B Stock of $1,000  Par Value               6,499             6,499
Class C Stock of $100  Par Value               224,992           196,742
Class C Stock of $100  Par Value, Issuable      20,479            26,474
Additional Stock Subscribed,
     Net of Unpaid Portion                         320               502
Retained Earnings and Contributed Capital        7,152             6,415
                                            ----------        ----------
Total Member Dealers' Equity                   263,566           240,569
Less: Treasury Stock, at Cost                   15,867             7,206
                                            ----------        ----------
Total Member Dealers' Equity                   247,699           233,363

Total Liabilities and Member Dealers Equity $  956,015        $  916,375
                                            ==========        ==========

See accompanying notes to consolidated financial statements.




                                      -1-




                           ACE HARDWARE CORPORATION
                      CONSOLIDATED STATEMENTS OF EARNINGS
                                     
                                     
                                Three Months Ended       Nine Months Ended
                                Sept 30,   Sept 30,      Sept 30,  Sept 30,
                                  1997       1996          1997      1996
                                  (000's omitted)          (000's omitted)

Net Sales                       $734,353  $712,597   $2,165,057  $2,020,220
Cost of Sales                    673,932   656,030    1,995,059   1,867,283
     Gross Profit                 60,421    56,567      169,998     152,937

Operating Expenses:
    Warehouse and Distribution     9,764     9,456       29,521      26,960
    Selling, General
       and Administrative         18,224    16,862       54,331      49,124
    Retail Success
       and Development             7,764     5,949       20,314      18,065
                                --------  --------   ----------  ----------
    Total Operating Expenses      35,752    32,267      104,166      94,149

    Operating Income              24,669    24,300       65,832      58,788

    Interest Expense              (3,537)   (3,235)     (11,202)     (8,100)
    Other Income, Net              1,285     1,142        4,143       3,279
    Income Taxes                    (505)     (368)      (1,687)     (1,020)
                                --------  --------   ----------  ----------
Net Earnings                    $ 21,912  $ 21,839   $   57,086  $   52,947
                                ========  ========   ==========  ==========
Distribution of Net Earnings:
     Patronage Dividend        $ 21,785   $ 21,666   $   56,349  $   53,996
     Retained Earnings              127        173          737      (1,049)
                               --------   --------   ----------  ----------
Net Earnings                   $ 21,912   $ 21,839   $   57,086  $   52,947
                               ========   ========   ==========  ==========

See accompanying notes to consolidated financial statements.


                                     
                                     
                                     
                                      -2-
                                     
                                     



                         ACE HARDWARE CORPORATION
                   CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                     Nine Months Ended
                                                        September, 30
                                                      1997         1996
                                                       (000's omitted)
Operating Activities:
    Net Earnings                                    $ 57,086     $ 52,947

Adjustments to reconcile net earnings
to net cash provided by operating activities:
    Depreciation                                      14,296       13,060
    Loss (Gain) on sale of property and equipment        212          (22)
    Increase in accounts receivable, net              (3,010)     (31,836)
    Increase in merchandise inventory                 (2,173)     (78,903)
    Increase in prepaid expenses
       and other current                              (1,837)      (3,920)
    Increase in accounts payable
       and accrued expenses                              212       56,921
    Increase in other long-term liabilities            4,350        2,430
                                                    --------     --------      
   Net Cash Provided By Operating Activities          69,136       10,677

Investing Activities:
    Purchases of property and equipment              (43,161)     (26,178)
    Proceeds from sale of property and equipment         154           53
    Decrease (Increase) in other assets               (5,966)          45
                                                    --------     --------
   Net Cash Used In Investing Activities             (48,973)     (26,080)

Financing Activities:
    Proceeds from short-term borrowings                6,500       40,500
    Proceeds from notes payable                       33,016       20,808
    Principal payments on long-term debt              (5,492)      (5,821)
    Payments on refund certificates and
       patronage financing programs                  (20,974)     (19,257)
    Proceeds from sale of common stock                 1,781        1,176
    Repurchase of common stock                        (8,661)      (7,715)
    Payments of cash portion of patronage dividend   (28,178)     (23,522)
                                                    --------     --------     
   Net Cash Provided By (Used In)
    Financing Activities                             (22,008)       6,169

   Decrease in Cash and Cash Equivalents              (1,845)      (9,234)

   Cash and Cash Equivalents at Beginning of Period   12,657       12,853
                                                    --------     --------
   Cash and Cash Equivalents at End of Period       $ 10,812     $  3,619
                                                    ========     ========
                                     
See accompanying notes to consolidated financial statements.



                                     
                                     
                                     
                                     -3-
                                     
                                     

                                     
                                     
                         ACE HARDWARE CORPORATION
                                     
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                     
                                     
    1)   General

         The  accompanying consolidated financial statements have not been
         examined by independent public accountants except for the
         December 31, 1996 balance sheet but in the opinion of the Company
         reflect all adjustments necessary to present fairly the financial
         position as of September 30, 1997 and 1996 and the results of
         operations and cash flows for the nine months then ended.  These
         interim figures are not necessarily indicative of the results to
         be expected for the full year.
         
    2)   Patronage Dividends
         
         The Company operates as a cooperative organization and will pay
         patronage dividends to consenting member dealers based on the
         earnings derived from business done with such dealers.  It has
         been the  practice of the Company to distribute substantially all
         patronage sourced earnings in the form of patronage dividends.
         
         Net earnings and patronage dividends will normally be similar
         since patronage sourced net earnings is paid to consenting member
         dealers.  International dealers signed under a Retail Merchant
         Agreement are not eligible for patronage dividends and related
         earnings or loss are not included in patronage sourced earnings.

    3)   Reclassifications
         
         Certain financial statement reclassifications have been made to
         prior year and prior quarter amounts to conform to comparable
         classifications followed in 1997.

    4)   Notes Payable
         
         In March 1997, the Company entered into a $30,000,000 loan
         agreement due March 25, 2009.  The note bears interest at 7.55%
         per annum, payable quarterly.  Annual principle payments commence
         on March 25, 2005 and continue through 2009.
         
         
                                     

                                     
                                     
                                     -4-
                                     
                                     



                         ACE HARDWARE CORPORATION
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                     
Three Months Ended September 30, 1997, compared to Three Months Ended
September 30, 1996.

Results of Operations

Net sales increased 3.1% primarily due to increased existing dealer volume,
targeted efforts on new store development and conversions to the Ace program.

Gross profit increased 6.8% vs. 1996, and increased as a percent of sales due
to increased cash and vendor discounts, improved product and manufacturing
gross profit and increased handling charges due to a shift in sales mix.
Gross profit on the Company's retail operations also contributed to increased
1997 gross profit.

Warehouse and distribution expenses increased $308,000 or 3.3% and remained
consistent as a percent of sales versus 1996.  Start-up and shutdown costs
for the replacement of an existing facility are partially offset by increased
traffic and freight consolidations income.

Selling, general and administrative expenses increased $1.4 million or 8.1%
and as a percent of sales due to increased data processing expenses and
start-up and shutdown costs for the opening and closure of facilities in
August 1997.

Retail success and development expenses increased $1.8 million or 30.5% and
as a percent of sales due to increased advertising expenses and expenses for
the Company's retail operations.

Interest expense increased $302,000 vs. 1996 due to increased borrowings,
additional dealer dating programs and higher interest rates.

Income taxes increased $137,000 primarily due to improved profitability of
the Company's non-patronage operations.





                                      -5-






                        ACE HARDWARE CORPORATION
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF
             FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Nine Months Ended September 30, 1997 compared to Nine Months Ended
September 30, 1996.

Results of Operations

Net sales increased 7.2% in 1997 primarily due to increased existing dealer
volume, targeted efforts on new store development and conversions to the Ace
program and the June 1996 start-up of Canadian operations.

Gross profit increased 11.2% vs. 1996, and increased as a percent of sales due
to increased levels of vendor discounts, improved product and manufacturing
gross profit and gross profit realized from Canadian operations.

Warehouse and distribution expenses increased $2.6 million or 9.5% due to
costs for the operation of one additional domestic and two Canadian facilities
opened in mid 1996 partially offset by increased traffic revenues.  Costs for
the replacement of an existing facility also contributed to the increase.

Selling, general and administrative expenses increased $5.2 million or 10.6%
and as a percent of sales due to Canadian operation costs and increased data
processing expenses.

Retail success and development expenses increased $2.2 million or 12.4% and
as a percent of sales primarily due to increased expenses associated with
the Company's retail operations and lower retailer computer systems income
partially offset by increased advertising income.

Interest expense increased $3.1 million vs. 1996 due to increased borrowings,
additional dealer dating programs and higher interest rates.  Additional long-
term debt was issued in the first quarter to fund long-term capital
investments.  Other income increased due to increased penalty charges.

Income taxes increased $667,000 vs. 1996 due to improved profitability of
the Company's non-patronage operations.





                                     -6-
                                     




Liquidity and Capital Resources

The company expects that internally generated funds, along with new and
established lines of credit and long-term financing, will be the primary
financing sources for capital expenditures in the future.

                                     
                                     

                                     
                                     
                                     -7-
                                     
                                     


                                     

                        PART II. OTHER INFORMATION
                         ACE HARDWARE CORPORATION
                                     
                                     
                                     
                                     
Item 6.    Exhibits and Reports on Form 8-K

           (b)  There were no reports on Form 8-K filed for the
                three month period ended September 30, 1997.
             
             
             
                                     

                                     
                                     
                                    -8-
                                     
                                     
                                     
                                     
                                     
                                     
                                     
                                 SIGNATURE
                                     
                                     
                                     
                                     
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.




    ACE HARDWARE CORPORATION




       LORI L. BOSSMANN                      DATE: 11/14/97
       Lori L. Bossmann
  Vice President, Controller

(Principal Accounting Officer, and duly
 authorized Officer of the registrant)
 
 
 
 



                                     -9-