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, 1998          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) 408,384

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
                                                 1998            1997
                                            (Dollars in Thousands Except
                                              Per Common Share Amounts)

Contracting Revenues                           $  30,433     $  30,645 

Distribution and Other Revenues                   40,858        33,676 

          Total Revenues                          71,291        64,321

Cost of Revenues                                  56,110        50,177 
          Gross Profit                            15,181        14,144

Selling, General and Administrative Expenses      14,007        13,499 

          Operating Income                         1,174           645 

Interest Expense, Net                                490           458 

          Income Before Income Taxes                 684           187 

Income Tax Provision                                 270            92 

Net Income                                     $     414     $      95 

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

NET INCOME (LOSS) APPLICABLE
  TO COMMON STOCK                              $     169     $    (150)


Average Common Shares Outstanding - Basic        396,326       385,768

Stock Options Issued to Employees 
   and Directors                                   4,724         3,092 

Average Common Shares Outstanding - Diluted      401,050       388,860 


Income (Loss) Per Common Share - Basic         $    0.43     $   (0.39)

Income (Loss) Per Common Share - Diluted       $    0.42     $   (0.39)



                  IREX CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS    
                            (Unaudited)
                                                 March 31    December 31
                                                  1998           1997
     ASSETS                                          (In Thousands)

Cash and Cash Equivalents                       $    321      $    374
Receivables, Net                                  57,513        54,835
Inventories                                       18,051        16,138
Actual Costs and Estimated Earnings on
   Contracts in Process in Excess of Billings      5,027         4,421
Prepaid Income Taxes                                 826           225
Other Prepaid Expenses                               761           733
Deferred Income Taxes                              4,391         4,391 

          Total Current Assets                    86,890        81,117

Property and Equipment, Net                        3,740         3,240
Non-Current Deferred Income Taxes                  3,170         3,170
Other Assets                                       1,647         1,018 

          TOTAL ASSETS                          $ 95,447      $ 88,545 


LIABILITIES AND SHAREHOLDERS' INVESTMENT

Notes Payable                                   $ 20,550      $ 18,224
Current Portion of Long-Term Debt                  1,871         1,876
Accounts Payable                                  14,972        10,502
Billings in Excess of Actual Costs and Estimated
   Earnings on Contracts in Process                2,855         2,797
Accrued Workers' Compensation Insurance            2,990         2,604
Accrued Liabilities                               11,559        12,831 

          Total Current Liabilities               54,797        48,834 

Long-Term Debt (Less Current Portion)              7,493         7,504 

Non-Current Liabilities                            8,647         8,644 

Redeemable Preferred Stock                        10,490        10,490 

Capital Stock                                      1,028         1,028
Paid-in Surplus                                      405           449
Retained Earnings                                 30,761        30,663
Cumulative Translation Adjustments                  (202)         (213)
Treasury Stock at Cost                           (17,972)      (18,854)

          Total Shareholders' Investment          14,020        13,073 


TOTAL LIABILITIES AND 
   SHAREHOLDERS' INVESTMENT                     $ 95,447      $ 88,545 



                    IREX CORPORATION AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                                Unaudited
                                             Three Months Ended March 31
                                                     1998      1997
                                                     (In Thousands)
Cash Flows from Operating Activities:

Net income                                          $   414  $    95
Reconciliation of net income to net
 cash provided by operating activities
     Depreciation and amortization                      302      216
     Provision for losses on accounts receivable        233      177 

(Increase) decrease in current assets 
     Receivables                                       (798)   1,764 
     Inventories                                        289     (345)
     Prepaid income taxes and other prepaid expenses    (28)    (848)
     Actual costs and estimated earnings on contracts
       in process in excess of billings (net)          (548)     456 
Increase (decrease) in current liabilities
     Accounts payable                                 4,715      367
     Accrued income taxes                              (601)    (198)
     Accrued liabilities and other liabilities       (1,128)  (1,241)

          Net cash provided by
            operating activities                      2,850      443 

Cash Flows from Investing Activities:

     Net additions to property and equipment           (188)    (224)
     Acquisition of a certain business
          Assets                                     (4,908)       0
          Intangibles                                  (650)       0
     Decrease (increase) in other assets                 11       (7)

          Net cash used for investing activities     (5,735)    (231)

Cash Flows from Financing Activities:

     Net borrowings from revolving lines of credit    2,326    1,178
     Payments on long-term debt                         (16)       0 
     Dividends paid                                    (245)    (245)
     Exercise of stock options                          767        0 
       Reissuance of common stock                         0       13 

          Net cash provided by financing activities   2,832      946 

Net (decrease) increase in Cash and Cash Equivalents    (53)   1,158

Cash and Cash Equivalents at Beginning of Period        374      193 

Cash and Cash Equivalents at End of Period         $    321  $ 1,351 




                     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 consists of two business units.  The distribution unit
is primarily a distributor and fabricator of mechanical insulation,
architectural/acoustical products and specialty products.  The companies
in the specialty contracting unit primarily engage in mechanical
insulation, abatement, fire protection and interior finish 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, 1998 1,028,633
shares were issued, 408,384 shares were outstanding and 620,249 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
1998 and 1997 were:

                                              1998         1997
            Income Taxes:                  $ 871,000    $1,420,000
            Interest:                      $ 298,000    $  183,000

(4)     The Company completed one acquisition during the first quarter
of 1998 for cash consideration of approximately $5,558,000.  Certain
assets were acquired from a company primarily engaged in the 
distribution business.  The acquisition was accounted for using the
purchase method of accounting, and the financial statements reflect the
results of operations and cash flows of the operation from the date of
acquisition.

(5)     On January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS
130).  SFAS 130 establishes standards for reporting and displaying
comprehensive income and its components.  Comprehensive income, as
defined by SFAS 130, is the total of net income and all other non-owner
changes in equity.  Total comprehensive income for the three months
ended March 31, 1998 and 1997 was $425,000 and $84,000, respectively. 
The difference between net income and comprehensive income for the above
periods is due to cumulative translation adjustments.

(6)     On April 13, 1998, the Company announced that its wholly owned
subsidiary, Specialty Products & Insulation Co. (SPI), had filed a
registration statement with the Securities and Exchange Commission
relating to the initial public offering of 2,000,000 shares of SPI's
Common Stock.  The Company had previously announced the spin-off of SPI
through a pro rata distribution of all of the capital stock of SPI to
the shareholders of the Company.  The spin-off will occur immediately
prior to the initial public offering.  Following the spin-off and
initial public offering, SPI will be an independent company.



                      IREX CORPORATION AND SUBSIDIARIES
                           March 31, 1998 and 1997

                   Management's Discussion and Analysis of
                 Financial Condition and Results of Operations

The Company's operating income increased 82.0% in 1998 to $1,174,000
from $645,000 achieved in the first quarter of 1997.  While the first
quarter results are typically the Company's weakest due to seasonally
lower revenue, this year's reported operating income represents the best
start since 1986.

Net income applicable to common shareholders, after the dividend
requirement for preferred stock, was $169,000, or $0.43 per share, in
1998 as compared to a net loss of  $(150,000), or $(0.39) per common
share, in 1997.  The significant improvement was mostly attributable to
improved operating income performance
in the Company's contracting businesses.

The following table presents, for the periods indicated, certain items
in the Company's consolidated statements of operations as a percentage
of total revenues:

                                              Three Months Ended
                                                   March 31
                                               1998        1997

     Contracting Revenues                      42.7%       47.6%
     Distribution and Other Revenues           57.3%       52.4%
          Total Revenues                      100.0%      100.0%

          Gross Profit Margin                  21.3%       22.0%
          Income from Operations                1.6%        1.0%
          Net Income Before
          Preferred Dividend                    0.6%        0.1%

Revenues

Total revenues increased 10.8% to $71,291,000 in 1998 from $64,321,000
in 1997.  Contracting revenues were relatively flat, decreasing less
than one percent to $30,433,000 from $30,645,000 in the first quarter of
1997.  Distribution revenues increased $7,182,000, or 21.3%, to
$40,858,000 in 1998 from $33,676,000 in the first three months of 1997. 
Three acquisitions completed since October of 1997 accounted for
approximately 60% of the increase in distribution revenues.  Another 10%
of the increase was attributable to three startup distribution centers
that began operations during the first six months of 1997.  As shown in
the table above, the Company's distribution revenues have grown from
52.4% of total revenues in 1997 to 57.3% in 1998.

Gross Profit

Gross profit increased 7.3% to $15,181,000 in 1998 from $14,144,000 in
1997 as a result of the higher revenue base previously noted.  The
percentage increase, however, was below that of total revenues because
the Company's gross profit margin dropped slightly to 21.3% in 1998 from
22.0% in 1997.  The decrease in the overall gross profit margin was
attributable to the contracting unit.  There are two primary reasons for
the reduction in contracting margins: (1) competitive pricing pressures
on lump-sum contracts and, (2) although the emphasis on job site safety
has continued the recent trend of favorable workers'
compensation/insurance claims experience, the first quarter of 1998 did
not reflect the benefit from reversing a portion of the related self-insurance 
reserve as occurred during the first quarter of 1997.  Distribution margins
were relatively unchanged.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (SG&A) decreased to 19.6%
of total revenues in 1998 from 21.0% in 1997.  In terms of absolute
dollars, SG&A increased 3.8% to $14,007,000 in the first quarter of 1998
from $13,499,000 in last year's first three months.  The contracting
unit reduced SG&A by $886,000 as the focus shifted to creating an
overhead structure that will allow the regional and area operations to
respond to customer needs with competitively-priced services.  The
distribution unit experienced a $1,394,000 increase in SG&A as strategic
growth of the business continued forward.  The three acquisitions and
four startup distribution centers noted earlier contributed
approximately 58% of the SG&A increase.

Financial Condition and Liquidity

At March 31, 1998, the Company had working capital of $32.1 million and
stockholders' equity (excluding preferred stock) of $14.0 million. 
Working capital at December 31, 1997 was $32.3 million and stockholders'
equity was $13.1 million.  The increase in accounts receivable and
inventories as compared to the amounts reported at December 31, 1997 was
primarily attributable to an acquisition completed on March 1, 1998.

Total debt outstanding at March 31, 1998 was $29.9 million as compared
to $27.6 million at December 31, 1997.  Long-term debt, excluding
current portion, was $7.5 million at March 31, 1998.  Available short-term 
lines of credit as of March 31, 1998 were $36.3 million and remain adequate
to provide sufficient liquidity for operations.  Outstanding balances under
these unsecured lines of credit were $20.6 million, an increase of $2.3 million
from December 31, 1997.


As indicated earlier in Note 6 to the consolidated financial statements,
the Company plans to spin off SPI through a pro rata distribution of all
of the capital stock of SPI to the shareholders of the Company.  After
the spin-off, the Company expects that funds from operations and
available lines of credit will provide sufficient liquidity to meet its
working capital requirements.


Year 2000 Issue

The Company's ability to conduct its day-to-day operations is dependent
in part on an integrated software program and data-based system
(collectively, the System).  The System serves as a critical tool in
carrying out functions in several key areas of the business, including
inventory management, contract management, pricing, sales, financial
reporting and personnel administration.

The Company has assessed the System and determined that modifications
are required to properly utilize dates beyond December 31, 1999.  The
Company had already committed to upgrade the System in order to renew
the vendor maintenance agreement (under which the company receives
technical support), and believes the upgrade will substantially resolve
Year 2000 issues in the System.  The Company will utilize both internal
and external resources to replace, reprogram and test software for Year
2000 compliance and plans to complete the conversion prior to December
31, 1998.  These costs arising through the normal course of business
will be expensed as incurred.  In relation to hardware within the System
(primarily desktop computers networked to a central location),
management does not have an estimate of the cost to replace these items.

The Company does not currently have any information concerning Year 2000
compliance status of its suppliers and customers.  In the event that any
of the Company's significant suppliers or customers does not
successfully and timely achieve Year 2000 compliance, the Company's
business or operations could be adversely affected.


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 108,000 individual claimants
seeking damages for injuries allegedly caused by exposure to asbestos
fibers in insulation 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 1998, ACandS was served with cases involving 7,603 individual
plaintiffs.  In 1997, ACandS was served with cases involving
approximately 31,489 individual plaintiffs.  There were 37,777 new
plaintiffs in 1996; 44,904 new plaintiffs in 1995; and 18,122 new
plaintiffs in 1994. 

The great majority of the filings in 1995, 1996 and 1997 appear to be
the direct result of screenings and other mass solicitation efforts.  Of
the claims filed during the period, approximately two thirds were filed
in either Texas, West Virginia or by the Maritime Legal Clinic.  Most of
the Maritime Legal Clinic filings have been administratively dismissed,
West Virginia filings were reduced substantially during the second half
of 1996 and 1997 and on May 29, 1997 Texas enacted tort reform
legislation designed to limit the filings in Texas by non-Texas
plaintiffs.

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 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 159,000 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 a
group of 20 asbestos litigation defendants filed a class action
complaint 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.  On June 25, 1997, the U.S.
Supreme Court affirmed dismissal of the class action and settlement,
finding that the case did not meet the requirements of the rules
permitting class actions. 

Although the large number of pending cases, the continued efforts of
certain courts to clear dockets through consolidated proceedings, the
bankruptcy filings by defendants, efforts toward national solutions, and
the transfer of federal cases to the United States District Court for
the Eastern District of Pennsylvania 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
most 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.  Two insurers which wrote significant
applicable coverage for ACandS have encountered financial difficulties
in recent years, in part because of asbestos and environmental
liabilities, but ACandS does not believe these difficulties will affect
the adequacy of the coverage available to it.

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 five 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 indemnification and/or contribution claims against the
product manufacturers.  To date, ACandS has been dismissed from 103
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 has not been served with any new building-related
cases since 1994 .  Since 1990, only three new building-related cases
have been served on ACandS.

The Travelers 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 policies of Aetna Casualty and Surety Co. (now part of
Travelers) 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.

On August 27, 1997, the U.S. Occupational, Safety and Health
Administration issued a Citation and Notification of Penalty to Centin
Corporation for alleged regulatory violations involving asbestos
abatement work at Wright Patterson Air Force Base.  Centin has reached
an agreement in principle, subject to appropriate approvals, for
resolution of the Citation in payment of a civil fine of $105,000.

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 the alleged Wright Patterson Air Force Base violations, as
well as claims and litigation arising in the normal course of business,
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, 1998                            /S/B. C. Werner            
                                               

                                                B. C. Werner
                                                 Controller
                                           Duly Authorized Signer