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 the Period ended September 30, 2000 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
   (Address of principal executive offices)            (Zip code)


 Registrant's telephone number, including area code    (630) 990-6600


                          NOT APPLICABLE


               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, 2000
 ---------------------------------------  ---------------------------------
 Class A Voting Stock - $1,000 par value             4,045 shares
 Class B Stock        - $1,000 par value             6,499 shares
 Class C Stock        - $  100 par value         2,642,648 shares







                         ACE HARDWARE CORPORATION

                                  INDEX


 Part I. - Financial Information:                                  Page No.
                                                                   --------

     Item 1. Condensed Consolidated Financial Statements


        Condensed Consolidated Balance Sheets -
            September 30, 2000 and January 1, 2000                     1

        Condensed Consolidated Statements of Earnings and
            Condensed Consolidated Statements of Comprehensive
            Income - Thirty-nine Weeks and Thirteen Weeks Ended
            September 30, 2000 and October 2, 1999                     2

        Condensed Consolidated Statements of Cash Flows -
            Thirty-nine Weeks Ended September 30, 2000 and
            October 2, 1999                                            3

        Notes to Condensed Consolidated Financial Statements        4 - 6


     Item 2. Management's Discussion and Analysis of Financial
        Condition and Results of Operations                         7 - 9


     Item 3. Quantitative and Qualitative Disclosures About
        Market Risk                                                   10


 Part II. - Other Information


     Item 1. Legal Proceedings                                        11

     Item 2. Changes in Securities and Use of Proceeds                11

     Item 3. Defaults Upon Senior Securities                          11

     Item 4. Submission of Matters to a Vote of Security Holders      11

     Item 5. Other Information                                        11

     Item 6. Exhibits and Reports on Form 8-K                         11


                    PART I.  FINANCIAL INFORMATION
                       ACE HARDWARE CORPORATION
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                            (000's omitted)


                                            September 30,      January 1,
                                                2000              2000
                                            -------------    -------------
                                             (Unaudited)
           ASSETS
[S]                                         [C]              [C]
Current Assets:
Cash and Cash Equivalents                   $      47,573    $      35,422
Accounts Receivable, Net                          370,188          370,879
Merchandise Inventory                             442,837          373,090
Prepaid Expenses and Other Current Assets          15,455           13,341
                                            -------------     ------------
Total Current Assets                              876,053          792,732

Property and Equipment, Net                       256,100          247,174
Other Assets                                       54,601           41,578
                                            -------------     ------------
Total Assets                                $   1,186,754     $  1,081,484
                                            =============     ============

       LIABILITIES AND MEMBER DEALERS' EQUITY

Current Liabilities:
Current Installment of Long-Term Debt        $      4,874     $      4,067
Short-Term Borrowings                             148,797           49,869
Accounts Payable                                  453,206          449,497
Patronage Dividends Payable in Cash                26,132           38,173
Patronage Refund Certificates Payable               4,792              373
Accrued Expenses                                   68,128           69,990
                                             ------------     ------------
Total Current Liabilities                         705,928          611,969

Notes Payable                                     108,409          111,895
Patronage Refund Certificates Payable              63,616           55,257
Other Long-Term Liabilities                        24,714           22,400
                                             ------------     ------------
Total Liabilities                                 902,667          801,521

Member Dealers' Equity:
Class A Stock of $1,000  Par Value                  4,045            3,856
Class B Stock of $1,000  Par Value                  6,499            6,499
Class C Stock of $100  Par Value                  264,265          241,226
Class C Stock of $100  Par Value, Issuable         17,008           21,648
Additional Stock Subscribed, Net of Unpaid
 Portion                                              395              498
Retained Earnings (Deficit)                        (1,949)             594
Contributed Capital                                13,485           13,485
Accumulated Other Comprehensive Income               (668)             291
                                             ------------     ------------
Total Member Dealers' Equity                      303,080          288,097
Less: Treasury Stock, at Cost                      18,993            8,134
                                             ------------     ------------
Total Member Dealers' Equity                      284,087          279,963

Total Liabilities and Member Dealers' Equity $  1,186,754     $  1,081,484
                                             ============     ============

See accompanying notes to condensed consolidated financial statements.


                                              ACE HARDWARE CORPORATION
                                   CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                                 (000's omitted)
                                                   (Unaudited)
<TABLE>

                                                 Thirteen Weeks Ended                        Thirty-nine Weeks Ended
                                                 --------------------                        -----------------------
                                           September 30,          October 2,           September 30,            October 2,
                                                2000                 1999                   2000                   1999
                                           --------------        -------------         --------------         -------------

<S>                                        <C>                   <C>                   <C>                    <C>
Net Sales                                  $      718,933        $     787,104         $    2,227,058         $   2,468,637
Cost of Sales                                     648,615              714,281              2,019,848             2,263,100
                                           --------------        -------------         --------------         -------------
    Gross Profit                                   70,318               72,823                207,210               205,537

Operating Expenses:
    Warehouse and Distribution                      7,282                5,720                 21,398                19,394
    Selling, General and Administration            21,197               22,284                 66,131                65,928
    Retail Success and Development                 16,715               15,512                 52,332                38,972
                                           --------------        -------------         --------------         -------------
    Total Operating Expenses                       45,194               43,516                139,861               124,294
                                           --------------        -------------         --------------         -------------
    Operating Income                               25,124               29,307                 67,349                81,243

    Interest Expense                               (5,842)              (4,088)               (15,808)              (12,525)
    Other Income, net                               3,043                1,490                 10,016                 7,426
    Income Taxes                                       60                 (352)                   718                (1,189)
                                           --------------        -------------         --------------         -------------
Net Earnings                               $       22,385        $      26,357         $       62,275         $      74,955
                                           ==============        =============         ==============         =============
Distribution of Net Earnings:
    Patronage Dividends                    $       23,153        $      27,129         $       64,818         $      77,021
    Retained Earnings                                (768)                (772)                (2,543)               (2,066)
                                           --------------        -------------         --------------         -------------
Net Earnings                               $       22,385        $      26,357         $       62,275         $      74,955
                                           ==============        =============         ==============         =============
</TABLE>

<TABLE>
                                           CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                                                (000's omitted)
                                                                  (Unaudited)


                                                   Thirteen Weeks Ended                         Thirty-nine Weeks Ended
                                                   --------------------                         -----------------------
                                            September 30,          October 2,            September 30,           October 2,
                                                2000                 1999                    2000                   1999
                                           --------------         --------------         --------------         --------------
<S>                                       <C>                    <C>
Net Earnings                              $       22,385         $       26,357         $       62,275         $       74,955
Foreign currency translation, net                   (402)                   766                   (959)                   868
                                           --------------         --------------         --------------         --------------
Comprehensive Income                      $       21,983         $       27,123         $       61,316         $       75,823
                                           ==============         ==============         ==============         ==============

See accompanying notes to condensed consolidated financial statements.
</TABLE>

                            ACE HARDWARE CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (000's omitted)
                                  (Unaudited)
<TABLE>

                                                     Thirty-nine Weeks Ended       Thirty-nine Weeks Ended
                                                           September 30,                  October 2,
                                                               2000                          1999
                                                           -------------                -------------
<S>                                                        <C>                          <C>
Operating Activities:
      Net Earnings                                         $      62,275                $      74,955

   Adjustments to reconcile net earnings
   to net cash provided by operating activities:
      Depreciation                                                18,384                       17,396
      Decrease in accounts receivable, net                           691                       30,131
      Increase in merchandise inventory                          (69,747)                     (37,290)
      Increase in prepaid expenses and other                      (2,114)                      (2,869)
           current assets
      Increase (Decrease) in accounts payable and                  1,846                       (3,934)
           accrued expenses
      Increase in other long-term liabilities                      2,314                        2,793
                                                           -------------                -------------
   Net Cash Provided by Operating Activities                      13,649                       81,182

Investing Activities:
      Purchases of property and equipment, net                   (36,974)                     (27,723)
      Proceeds from sale of property and equipment                 9,664                          325
      Increase in other assets                                   (13,982)                     (19,421)
                                                           -------------                -------------
   Net Cash Used In Investing Activities                         (41,292)                     (46,819)

Financing Activities:
      Proceeds of short-term borrowings, net                      98,928                       30,000
      Principal payments on long-term debt                        (2,679)                      (6,207)
      Payments on refund certificates and
           patronage financing programs                           (8,900)                     (32,643)
      Proceeds from sale of common stock                           1,477                          147
      Repurchase of common stock                                 (10,859)                      (9,170)
      Payments of cash portion of patronage dividend             (38,173)                     (34,826)
                                                           -------------                -------------
   Net Cash Provided By (Used In) Financing Activities            39,794                      (52,699)
                                                           -------------                -------------
   Increase (Decrease) in Cash and Cash Equivalents               12,151                      (18,336)

   Cash and Cash Equivalents at Beginning of Period               35,422                       53,901
                                                           -------------                -------------
   Cash and Cash Equivalents at End of Period              $      47,573                $      35,565
                                                           =============                =============

See accompanying notes to condensed consolidated financial statements.
</TABLE>




                       ACE HARDWARE CORPORATION

           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


     1)   General

          The  condensed  consolidated interim period  financial
          statements presented herein do not include all of  the
          information   and  disclosures  required   in   annual
          financial  statements and have not  been  audited,  as
          permitted  by  the  rules  and  regulations   of   the
          Securities  and  Exchange  Commission.  The  condensed
          consolidated   interim  period  financial   statements
          should   be  read  in  conjunction  with  the   annual
          financial  statements included  in  the  Ace  Hardware
          Corporation Annual Report on Form 10-K as  filed  with
          the  Securities and Exchange Commission on  March  17,
          2000.  In  the opinion of management, these  financial
          statements  have  been  prepared  in  conformity  with
          generally  accepted accounting principles and  reflect
          all  adjustments necessary for a fair statement of the
          results  of operations and cash flows for the  interim
          periods  ended September 30, 2000 and October 2,  1999
          and  of  it's  financial position as of September  30,
          2000.  All  such adjustments are of a normal recurring
          nature.  The  results of operations for  the  thirteen
          week and thirty-nine week periods ended September  30,
          2000   and   October  2,  1999  are  not   necessarily
          indicative  of the results of operations  for  a  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  losses  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
          2000.




                               -4-
     4)   Segments

          The Company is principally engaged as a wholesaler  of
          hardware  and related products and manufactures  paint
          products.   The Company identifies segments  based  on
          management  responsibility  and  the  nature  of   the
          business  activities of each component of the Company.
          The  Company  measures segment  earnings as  operating
          earnings  including  an allocation for  administrative
          expenses,   interest   expense   and   income   taxes.
          Information regarding the identified segments and  the
          related reconciliation to consolidated information  is
          as follows:



<TABLE>
                                                          Thirty-nine Weeks Ended
                                                            September 30, 2000
                                    ----------------------------------------------------------------------------

                                                                                 Elimination
                                                         Paint                   Intersegment
                                       Wholesale     Manufacturing     Other      Activities      Consolidated
                                       ---------     -------------     -----      ----------      ------------
<S>                                    <C>                  <C>        <C>          <C>              <C>
Net Sales from External Customers      2,177,560            16,687     32,811            -           2,227,058
Intersegment Sales                        19,211            83,051        -         (102,262)              -
Segment Earnings (Loss)                   56,035             8,463     (2,048)          (175)           62,275


                                                          Thirty-nine Weeks Ended
                                                            October 2, 1999
                                     ---------------------------------------------------------------------------
                                                                                 Elimination
                                                         Paint                   Intersegment
                                       Wholesale     Manufacturing     Other      Activities      Consolidated
                                       ---------     -------------     -----      ----------      ------------
<S>                                    <C>                  <C>        <C>          <C>              <C>
Net Sales from External Customers      2,432,348            18,763     17,526            -           2,468,637
Intersegment Sales                        18,298            85,107        -         (103,405)              -
Segment Earnings (Loss)                   68,195             8,544     (1,474)          (310)           74,955


                                                          Thirteen Weeks Ended
                                                            September 30, 2000
                                     ---------------------------------------------------------------------------
                                                                                 Elimination
                                                         Paint                   Intersegment
                                       Wholesale     Manufacturing     Other      Activities      Consolidated
                                       ---------     -------------     -----      ----------      ------------
<S>                                      <C>                <C>        <C>           <C>               <C>
Net Sales from External Customers        702,241             4,979     11,713            -             718,933
Intersegment Sales                         7,245            26,397        -          (33,642)              -
Segment Earnings (Loss)                   20,181             2,815       (551)           (60)           22,385


                                                          Thirteen Weeks Ended
                                                            October 2, 1999
                                     ---------------------------------------------------------------------------
                                                                                 Elimination
                                                          Paint                  Intersegment
                                       Wholesale     Manufacturing     Other      Activities      Consolidated
                                       ---------     -------------     -----      ----------      ------------
<S>                                      <C>                <C>        <C>           <C>               <C>
Net Sales from External Customers        772,690             6,370     8,045             -             787,104
Intersegment Sales                         7,073            28,593       -           (35,666)              -
Segment Earnings (Loss)                   23,871             3,186      (610)            (90)           26,357

</TABLE>








                               -5-
     5)   Business Combination

          On  June  30, 1999 the Company entered into a business
          combination  agreement with Builder Marts of  America,
          Inc.  (BMA) to combine the LBM Division of the Company
          with   BMA.    Under  this  agreement,   the   Company
          contributed defined business assets (primarily  vendor
          rebate receivables, fixed assets and inventories)  for
          a  non-controlling  interest in the  combined  entity.
          The investment in the combined entity is accounted for
          under   the   equity   method   of   accounting.   The
          accompanying consolidated financial statements include
          the  financial results of the LBM Division through the
          closing  date  of  August  2, 1999.  Accordingly,  the
          accompanying financial statements for the  thirty-nine
          weeks ended September 30, 2000 do not include activity
          for the LBM Division of the Company.







                              -6-

                    ACE HARDWARE CORPORATION
                    ------------------------
    PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
    -------------------------------------------------------
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS
         ---------------------------------------------

Thirteen  Weeks  Ended  September 30, 2000 compared  to  Thirteen
-----------------------------------------------------------------
Weeks Ended October 2, 1999.
----------------------------

Results of Operations

The total sales decrease for the quarter of 8.7% was affected  by
the business combination of Ace LBM with BMA. As a result of this
transaction,  LBM  sales are not reported  within  the  Company's
sales  results  after  August 2, 1999.   Excluding  LBM,    sales
increased  1.0% in 2000 primarily  due  to  retailer  conversions
to  the  Ace program.    Domestically,  basic   business    sales
increased  1.5%   while  international   basic   business   sales
declined 9.8% for the quarter.

Gross profit decreased $2.5 million but increased as a percent of
total sales from 9.3% in 1999 to 9.8% in 2000. The increase,  as
a  percent  of  sales, results primarily from the loss  of  lower
margin  LBM sales volume since August 1999. Basic business  gross
profit  decreased slightly for the quarter as a percent of  basic
business  sales  due  to  higher warehousing  costs absorbed into
inventory and   sales  mix  shifts    towards  the  lower  margin
direct ship  sales  category.   Higher   vendor  rebates combined
with higher Corporate store   gross  profit  partially offset the
gross profit decline for the quarter.

Warehouse  and distribution expenses increased $1.6 million  over
1999  and increased as a percent of total sales from 0.7% in 1999
to  1.0%  in  2000. As a percent to basic business  sales,  these
costs  increased  from 0.8% in 1999 to 1.0% in 2000.  Pre-opening
costs  for  the Loxley, Alabama distribution facility and  higher
distribution  wages  due  to  rate  increases  drove  the  higher
warehouse expenses for the quarter.

Selling,  general and  administrative  expenses   decreased  $1.1
million or  4.9%  due to decreased printing costs and  lower  LBM
Division costs.   Higher  information technology  costs partially
offset these expense decreases.

Retail  success and development expenses increased  $1.2  million
due  to  higher Corporate store expenses resulting from operating
additional  Corporate  stores  in  2000.  Additional   costs   to
merchandise  Ace retailer stores also contributed to the  current
quarter increase.

Interest  expense  increased $1.8 million due to  higher  average
borrowing  levels  and  increased interest rates.  The  increased
borrowing  levels  result from  the  construction and stocking of
the   Loxley,   Alabama   distribution   center  and    increased
retailer dating programs.




                               -7-



                    ACE HARDWARE CORPORATION
                    ------------------------
    PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
    -------------------------------------------------------
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS
         ---------------------------------------------

Thirty-nine  Weeks Ended September 30, 2000 compared  to  Thirty-
-----------------------------------------------------------------
nine Weeks Ended October 2, 1999.
---------------------------------

Results of Operations

The  total  sales decrease of 9.8% was affected by  the  business
combination of Ace LBM with BMA. As a result of this transaction,
LBM  sales  are  not reported within the Company's sales  results
after  August  2,  1999.  Excluding  LBM,  sales increased  6.2%
in  2000  primarily due  to  increased  existing retailer volume,
targeted efforts on new store development   within  our  retailer
base, conversions to the  Ace  program  and  additional  sales to
non-members.  Domestic  and  international  basic  business sales
increased 6.4% and 1.6%, respectively.

Gross profit increased $1.7 million and increased as a percent of
total sales from 8.3% in 1999 to 9.3% in 2000. The increase, as a
percent of sales, results primarily from the loss of lower margin
LBM  sales  volume  since August 1999. Basic business  (excluding
LBM)  gross  profit  decreased slightly as  a  percent  of  basic
business  sales (9.3% in 2000 vs. 9.5% in 1999) due to  a  sales
mix shift towards the lower margin direct ship sales category and
higher  warehousing  costs  absorbed  into  inventory.  Increased
Corporate  store  gross  profit driven  by  higher  sales  volume
partially offset the year-to-date gross profit decline.

Warehouse  and distribution expenses increased $2.0 million  over
1999  and increased as a percent of total sales from 0.8% in 1999
to  1.0%  in  2000. As a percent of basic business  sales,  these
costs   increased  from  0.9%  in  1999  to  1.0% in 2000. Higher
distribution   wages  required to  support  the  increased  sales
volume  combined  with  pre-opening  costs  associated for a  new
Loxley,   Alabama  distribution  facility are partially offset by
higher logistics income.

Selling,  general and administrative expenses increased $203,000,
or  0.3% and increased as a percent of total sales due to  higher
information technology costs and expenses associated with opening
the  Loxley,  Alabama distribution facility. Lower  LBM  Division
costs partially offset these expense increases.

Retail  success and development expenses increased $13.4  million
primarily  due  to  operating  costs  associated  with  operating
additional Corporate stores. Excluding Corporate store  operating
expenses,  retail success and development expenses  are  up  $7.0
million  or 21.4% due to increased retail field personnel  costs,
costs  to  support  retail  computer  initiatives  and  costs  to
merchandise  Ace  retailer stores. Additional  paint  advertising
costs also contribute to the year-to-date expense increase.





                               -8-



Interest  expense  increased $3.3 million due to  higher  average
borrowing  levels  and  increased interest rates.  The  increased
borrowing  levels  result from the construction  of  the  Loxley,
Alabama   distribution  center  and  increased  retailer   dating
programs.

Other  income  increased  $2.6 million primarily  due  to  income
realized on non-controlling investments in affiliates and  higher
income on retailer loan programs.

Income  tax  expense  decreased due to  lower  income  from  non-
patronage   activities.  Operating  losses   from   non-patronage
activities resulted in a net income tax benefit in 2000.

Liquidity and Capital Resources
-------------------------------

The Company expects that existing and internally generated funds,
along  with  new  and established lines of credit  and  long-term
financing,  will  continue to be sufficient  in  the  foreseeable
future to finance the Company's working capital requirements  and
patronage dividend and capital expenditures programs.




                               -9-
Item 3.   Quantitative and Qualitative Disclosures About Market
          Risk

          There  have been no material changes in the  Company's
          market  risk during the thirty-nine week period  ended
          September 30, 2000. For additional information,  refer
          to Item 7a in the Company's Annual Report on Form 10-K
          for the year ended January 1, 2000.




                                -10-
                          PART II. OTHER INFORMATION


Item 1.   Legal Proceedings

          None.

Item 2.   Changes in Securities and Use of Proceeds

          None.

Item 3.   Defaults Upon Senior Securities

          None.

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

          None.

Item 5.   Other Information

          None.

Item 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits

                 27.1 Financial Data Schedule.

          (b)  Reports on Form 8-K

                 None.









                               -11-
                            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
    ------------------------



       RITA D. KAHLE                    DATE   November 14, 2000
       Rita D. Kahle
  Executive Vice President

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
























                               -12-