FORM 10-Q


                   SECURITIES AND EXCHANGE COMMISSION

                       WASHINGTON, DC  20549


               Quarterly Report under Section 13 or 15(d)

                 of the Securities Exchange Act of 1934


For Quarter Ended March 31, 1997      Commission File Number 2-36877


                           IREX CORPORATION


Pennsylvania                                                    23-1712949

120 North Lime Street, Lancaster                                     17603

Registrant's Telephone Number, Including Area Code, (717) 397-3633




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       


                 Common Shares Outstanding (Single Class) 386,078

IREX CORPORATION AND SUBSIDIARIES




PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements.

The condensed financial statements included herein have been prepared by Irex
Corporation (the "Company"), without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission.  Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations.

The financial information presented herein reflects all adjustments (consisting
only of normal recurring adjustments) which are, in the opinion of management,
necessary for a fair presentation of the results for the interim periods
presented.  Certain prior period amounts have been reclassified to conform with
the current presentation.  The results for interim periods are not necessarily
indicative of the results to be expected for the full year.


IREX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited)


                                               Three Months Ended March 31
                                                   1997           1996     
                                             (Dollars in Thousands Except
                                               Per Common Share Amounts)

Contracting Revenues                          $   30,645     $   32,467 

Distribution and Other Revenues                   33,676         30,312
     Total Revenues                               64,321         62,779

Cost of Revenues                                  50,177         49,660
     Gross Profit                                 14,144         13,119

Selling, General and Administrative Expenses      13,499         13,132

     Operating Income (Loss)                         645            (13)

Interest Expense, Net                                458            452

     Income (Loss) Before Income Taxes               187           (465)

Income Tax Provision (Benefit)                        92           (167)

Net Income (Loss)                              $      95      $    (298)

     Less Dividend Requirements
      for Preferred Stock                           (245)          (245)

NET LOSS APPLICABLE
     TO COMMON STOCK                           $    (150)     $    (543)


Average Common Shares Outstanding                385,768        394,107


Net Loss Per Common Share                      $   (0.39)     $   (1.38)



IREX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited)
                                                March 31     December 31
                                                  1997           1996
             ASSETS                                 (In Thousands)
          
Cash and Cash Equivalents                       $  1,351     $    193
Receivables, Net                                  51,579       53,520
Inventories                                       14,470       14,125
Actual Costs and Estimated Earnings on
    Contracts in Process in Excess of Billings     4,512        5,130
Prepaid Income Taxes                               1,130           -
Other Prepaid Expenses                               740        1,022
Deferred Income Taxes                              4,759        4,759

     Total Current Assets                         78,541       78,749
Property and Equipment, Net                        3,090        3,082
Non-Current Deferred Income Taxes                  3,425        3,425
Other Assets                                          65           69

               TOTAL ASSETS                     $ 85,121     $ 85,325 


     LIABILITIES AND SHAREHOLDERS' INVESTMENT

Notes Payable                                   $ 13,347     $ 12,169
Current Portion of Long-Term Debt                  3,257        3,257
Accounts Payable                                  10,984       10,617
Billings in Excess of Actual Costs and 
     Estimated Earnings on Contracts in Process    2,624        2,786
Accrued Workers' Compensation Insurance            1,807        2,795
Accrued Liabilities                               12,561       12,814
Accrued Income Taxes                                 -            198

     Total Current Liabilities                    44,580       44,636

Long-Term Debt (Less Current Portion)              9,286        9,286

Non-Current Liabilities                            9,127        9,127

Redeemable Preferred Stock                        10,490       10,490

Capital Stock                                      1,028        1,028
Paid-in Surplus                                      454          459
Retained Earnings                                 28,960       29,110
Cumulative Translation Adjustments                  (176)        (165)
Treasury Stock at Cost                           (18,628)      18,646)

     Total Shareholders' Investment               11,638       11,786

          TOTAL LIABILITIES AND 
          SHAREHOLDERS' INVESTMENT              $ 85,121     $ 85,325



IREX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

                                                Three Months Ended March 31  
                                                     1997        1996
                                                      (In Thousands)
Cash Flows from Operating Activities

Net income (loss)                                   $   95      $  (298)
Reconciliation of net income (loss) to net
 cash provided by operating activities
     Depreciation and amortization                    216           233
     Provision for losses on accounts receivable      177            96

Decrease (increase) in current assets
     Receivables                                    1,764         1,732
     Inventories                                     (345)         (323)
     Prepaid income taxes and other prepaid expenses (848)         (280)
     Actual costs and estimated earnings on contracts
       in process in excess of billings (net)         456          (366)
Increase (decrease) in current liabilities
     Accounts payable                                367            445
     Accrued income taxes                           (198)           -
     Accrued liabilities and other liabilities       1,241)       1,731

          Net cash provided by
            operating activities                       443        2,970

Cash Flows from Investing Activities

     Net additions to property and equipment        (224)          (236)
     (Increase) decrease in other assets                (7)          33

          Net cash used for investing activities       (231)       (203)

Cash Flows from Financing Activities

     Net borrowings from (payments to)
       revolving lines of credit                    1,178        (2,406)
     Dividends paid                                  (245)         (245)
       Reissuance of common stock                         13          8

          Net cash provided by
            (used for) financing activities              946     (2,643)

Net increase in Cash and Cash Equivalents           1,158           124

Cash and Cash Equivalents at Beginning of Period         193        411

Cash and Cash Equivalents at End of Period          $  1,351    $   535



IREX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(1)  The consolidated financial statements include the accounts of Irex
Corporation (the "Company") and its subsidiaries, all of which are wholly  
owned.  All significant intercompany accounts and transactions have been
eliminated in consolidation.

The Company is engaged in the business of thermal insulation contracting
throughout the United States and Canada.  Allied activities include the direct
sale of insulation and acoustical materials, the fabrication of insulation
materials, and interior contracting.

(2)  The Company has authorization for 2,000,000 shares of its common stock with
a par value of $1.00 per share.  At March 31, 1997 1,028,633 shares were issued,
386,078 shares were outstanding and 642,555 shares were held, at cost, in
Treasury stock.

(3)  All highly liquid investments with a maturity of three months or less at
the time of purchase are considered to be cash equivalents.  The Company's
income tax and interest payments for the first three months of 1997 and 1996
were:


                                               1997            1996
          Income Taxes:                    $1,420,000       $ 749,000
          Interest:                        $  183,000       $ 115,000


(4)  In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 128, "Earnings Per Share."  Although early
application of the standard is prohibited, footnote disclosure of pro forma
earnings per share amounts is permitted.  Basic earnings per share, as computed
under the new Statement, are unchanged from those amounts reported for the three
months ended March 31, 1997 and 1996.  Diluted earnings per share are $(0.39)
and $(1.37), respectively, for these same periods.


IREX CORPORATION AND SUBSIDIARIES
March 31, 1997 and 1996
Management's Discussion and Analysis of
Financial Condition and Results of Operations


Results of Operations

The Company reported income from operations of $645,000 in the first quarter of
1997, which is substantially improved over the ($13,000) operating loss reported
for the first quarter of 1996.  These  results represent the Company's best
start since 1991 and were achieved in the seasonally lower revenue first
quarter, which is typically the weakest of the year for the Company.

After the preferred stock dividend requirement, net losses applicable to common
shareholders was ($150,000) or ($0.39) per share for the first quarter of 1997. 
The comparable period of 1996 showed net losses of ($543,000) or ($1.38) per
share.

The following table presents for the periods indicated certain items in the
Company's consolidated statements of operations as a percentage of total
revenue:
 
                                               Three Months Ended
                                                    March 31
                                               1997          1996

     Contracting Revenues                      47.6%         51.7%
     Distribution and Other Revenues           52.4%         48.3%
     Total Revenue                            100.0%        100.0%

     Gross Profit Margin                       22.0%        20.9%
     Income (Loss) from Operations              1.0%        (0.0%)
     Net Income (Loss) Before
       Preferred Dividend                       0.1%        (0.5%)

Revenues

Total revenues in 1997 increased 2.5% as compared to the first quarter of 1996. 
For the three months ended March 31, 1997, total revenues were $64,321,000
versus $62,779,000 for the comparable period last year.  Contracting revenues
amounted to $30,645,000 for the three-month period ended March 31, 1997, a 5.6%
decline from the $32,467,000 reported for the similar period in 1996.  The
decrease is primarily attributable to the Company's principal contracting
subsidiary, ACandS, Inc., as it continues to work through the transition after
restructuring its operations in 1996.


Distribution revenues continue to grow, increasing 11.1% over the first quarter
of 1996.  Revenues improved to $33,676,000 for the three months ended March 31,
1997 as compared to $30,312,000 for the three months ended March 31, 1996.  Five
branches that were opened during the last three quarters of 1996 provided almost
40% of the revenue growth, and contributed to a new sales record for the
distribution business in the first quarter ended March 31, 1997.  As shown in
the table above, distribution revenues accounted for 52.4% of total revenues in
the first quarter of 1997 as compared to 48.3% in the first quarter of 1996.

Gross Profit

Gross profit was $14,144,000 for the quarter ended March 31, 1997, an increase
of $1,025,000 or 7.8% over the $13,119,000 shown for the first three months of
1996.  Gross profit margins were 22.0% and 20.9%, respectively, for the three
months ended March 31, 1997 and 1996.  Contracting margins improved while
distribution margins remained relatively unchanged.  As a result, the growth in
distribution revenues accounted for approximately 70% of the increase in overall
gross profit dollars.

Selling, General and Administrative Expenses

Selling, general and administrative (operating) expenses were 21.0% of revenues
for the three-month period ended March 31, 1997, virtually unchanged from the
20.9% reported for the comparable prior-year period.  Operating expenses
amounted to $13,499,000, an increase of 2.8% over the $13,132,000 incurred in
last year's first quarter.  While the contracting businesses experienced a
decrease in operating expenses, the overall increase of $367,000 can be
attributed to the expansion of the distribution operation with five new branches
as noted earlier.

Financial Condition and Liquidity

At March 31, 1997, the Company has working capital of $34.0 million and
stockholders' equity (excluding preferred stock) of $11.6 million.  Working
capital at December 31, 1996 was $34.1 million and stockholders' equity was
$11.8 million.  The $1.9 decrease in accounts receivable from $53.5 million
reported at December 31, 1996 again reflects that the first quarter is typically
the Company's weakest in terms of revenue, so collection activity on amounts
billed in the last quarter of 1996 has reduced the balance.

Total debt outstanding at March 31, 1997 was $25.9 million as compared to $24.7
million at December 31, 1996.  Long-term debt, excluding current portion, is
$9.3 million at March 31, 1997.  Available short-term lines of credit as of
March 31, 1997 were $21.3 million and remain adequate to provide sufficient
liquidity for operations.  Outstanding balances under these unsecured lines of
credit were $11.9 million, a decrease of $0.3 million from December 31, 1996.


PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

The Company's ACandS, Inc. subsidiary is one of a number of defendants in
pending lawsuits filed by approximately 93,000 individual claimants seeking
damages for injuries allegedly caused by exposure to asbestos fibers in insu-
lation products used at one time by ACandS in its business.  ACandS has defenses
to these actions, including defenses based on the fact it is primarily a
contracting company in the business of installing products manufactured by
others.  During the first quarter of 1997, ACandS was served with cases
involving 6,892 individual plaintiffs.  In 1996, ACandS was served with cases
involving approximately 37,777 individual plaintiffs.  Of the 1996 filings,
24,564 were served in the first half of the year.  There were 44,904 new
plaintiffs in 1995; 18,122 new plaintiffs in 1994; and  20,542 new plaintiffs
in 1993. 

The large number of filings in 1995 and 1996 includes 35,067 in Texas, 10,661
in West Virginia, and 11,143 from the Maritime Legal Clinic.  The Texas filings
are predominantly on behalf of out-of-state claimants.  Efforts during 1995 to
reform tort rules in Texas appeared to initially spur potential claimants to
file before any reforms became effective.  The reforms which were enacted did
not significantly limit the out-of-state filings, and such filings from expanded
screening programs continued during 1996.  West Virginia filings diminished
substantially in the second half of 1996 after the cut off for participation in
a pending consolidated trial passed.  Most of the Maritime Legal Clinic filings
have already been administratively dismissed.

It is the pattern in this litigation for suits to be filed as the result of mass
screenings of individuals employed at a particular facility, through a
particular union local, or by a particular employer.  It is ACandS's experience
that such suits are often filed with little investigation as to whether the
claimant ever had any causative exposure to asbestos-containing products
associated with the various named defendants.  Because of this pattern,
historically, about half of the cases filed against ACandS have been closed
without payment.  As the scope of the mass screening programs has increased, the
degree of illness of the claimants has appeared to diminish.

The defense of the cases pending against ACandS is now being handled by the
Travelers/Aetna Property Casualty Corp. with the participation of other insurers
that wrote coverage for ACandS.  Virtually all of ACandS's liability and defense
costs for these cases are being paid by ACandS's insurance carriers.

Since the beginning of 1981, approximately 138,000 individual claims against
ACandS have been settled, dismissed or otherwise resolved.  Although payments
in individual cases have varied considerably, ACandS's percentage of the
aggregate liability payments for those cases has been small.  As a result,
ACandS's average resolution cost for closed cases is very low.  The resolution
cost per closed case in recent years has been consistent with long-term
averages.  Bankruptcy filings by a number of companies which had been
significant defendants in asbestos cases have not significantly increased the
cost of resolving cases. 

On July 29, 1991, the Judicial Panel on Multidistrict Litigation ordered that
all asbestos-related bodily injury cases pending in the Federal trial courts and
not then in trial should be transferred to Judge Charles R. Weiner in the United
States District Court for the Eastern District of Pennsylvania for coordinated
or consolidated pretrial proceedings.  These proceedings involved less than  
one-fourth of the cases then pending against ACandS.

Subsequently, on January 15, 1993, certain plaintiffs' counsel and the members
of the Center for Claims Resolution (an organization of 20 asbestos litigation
defendants) filed a class action complaint, answer and settlement agreement
involving all previously unasserted claims by individuals who have been
occupationally exposed to asbestos fibers, which was assigned to Judge Weiner
as related to the Multidistrict Litigation proceedings.  The District Court
approved the settlement, but the U.S. Court of Appeals, in an order dated May
10, 1996, vacated the District Court's order and directed decertification of the
class.  The U.S. Supreme Court has agreed to hear an appeal of the Court of
Appeals' decision.  Argument has been held, and the Court is expected to rule
later this year.  On July 25, 1996, the U.S. Court of Appeals for the Fifth
Circuit approved a class settlement of future asbestos cases against Fiberboard
Corporation.  A Supreme Court petition has also been filed in this case.  It is
uncertain what impact these decisions will have on the asbestos-related bodily
injury litigation.
  
Although the large number of pending cases, the continued efforts of certain
courts to clear dockets through consolidated or class proceedings, the
bankruptcy filings by defendants, efforts toward national solutions, the trans-
fer of federal cases to the United States District Court for the Eastern Dis-
trict of Pennsylvania, and the Center for Claims Resolution and Fiberboard class
actions render prediction uncertain, ACandS expects that its percentage of
liability payments will continue to be relatively small.
 
ACandS has secured the commitment through final settlement agreements of a very
large percentage of the very substantial insurance coverage applicable to its
asbestos-related bodily injury claims.  ACandS believes it will secure
additional coverage, if needed, from those insurers which have not to date
settled with ACandS.

Given the number of currently pending cases and the rate of new filings, it is
anticipated that the aggregate amount to be paid by all defendants for  
asbestos-related bodily injury claims will be very large.  Nevertheless, as
noted, ACandS's percentage of aggregate liability payments is expected to 
remain small.  Management, therefore, believes that ACandS's insurance 
coverage is adequate to ensure that these actions will not have a material  
adverse effect on the long-term business or financial position of the Company.

ACandS is also one of a number of defendants in six actions by the owners of
schools and other buildings seeking to recover costs associated with the
replacement or treatment of installed asbestos-containing products.  These cases
involve school buildings, public buildings, and office buildings.  One of the
cases is an alleged class action.

ACandS has substantial defenses to the actions, including defenses based upon
the character of its operations and the fact that ACandS did not manufacture the
asbestos-containing products involved.  Moreover, ACandS potentially has indem-
nification and/or contribution claims against the product manufacturers.  To
date, ACandS has been dismissed from 102 cases, largely on the basis it had no
connection with the products at issue in the claimants' buildings, and has
agreed to settle 15 claims.  The aggregate amount paid has been very small in
the context of this litigation.  ACandS was not served with any new building-
related cases in 1995, 1996 or the first quarter of 1997.  Since 1990, only
three new building-related cases have been served on ACandS.

The Travelers/Aetna Property Casualty Corp. is currently providing ACandS with
a defense in these building cases, as well as paying settlements when 
necessary.  Coverage based on policies of the Travelers Insurance Companies is
furnished pursuant to a settlement agreement, but coverage based on Aetna 
Casualty and Surety Co. policies is subject to asserted reservations of rights
to later contest both the availability and the amount of coverage.  Required
payments, nevertheless, continue to be made on the Aetna policies.  

Decisions in litigation involving insurance coverage available for other
defendants in asbestos building cases have thus far varied widely.  The
appellate rulings which have fully considered coverage issues for asbestos
building claims to date provide significant coverage for policyholders.  The
decisions are consistent with ACandS's view that the trend in the courts is to
provide broad coverage for asbestos building cases.

Although the availability of coverage for existing and future suits is not
resolved, and the aggregate potential loss from these suits may be significant,
management believes that ACandS's defenses, potential indemnification and/or
contribution rights and insurance coverage are adequate to ensure that these
actions will not have a material adverse effect on the long-term business or
financial position of the Company.

From time to time, the Company and its subsidiaries are also parties as both
plaintiff and defendant to various claims and litigation arising in the normal
course of business, including claims concerning work performed under various
contracts.  In the opinion of management, the outcome of such claims and
litigation will not materially affect the Company's long-term business,
financial position or results of operations.



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.


IREX CORPORATION



Date    May 14, 1997   

        B. C. Werner              
Director, Management Accounting
Duly Authorized Signer