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 June 30, 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) 386,359

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)


                                                           Six Months
                                     Second Quarter        Ended June 30
                                    1997       1996       1997       1996   
                               (In Thousands Except Per Common Share Amounts)

Contracting Revenues             $ 30,754   $ 34,665  $  61,399  $  67,132

Distribution and Other Revenues    36,316     32,159     69,992     62,471 

     Total Revenues                67,070     66,824    131,391    129,603

Cost of Revenues                   52,260     51,280    102,437    100,940 

     Gross Profit                  14,810     15,544     28,954     28,663

Selling, General and 
   Administrative Expenses         13,214     13,536     26,713     26,668 

     Operating Income               1,596      2,008      2,241      1,995

Interest Expense, Net                 446        407        904        859 

     Income Before Income Taxes     1,150      1,601      1,337      1,136

Income Tax Provision                  523        699        615        532 

Net Income                       $    627   $    902   $    722   $    604 

     Less: Dividend Requirements
       for Preferred Stock           (245)      (245)      (490)      (490)

NET INCOME APPLICABLE
     TO COMMON STOCK             $    382   $    657   $    232   $    114 



Average Common Shares 
     Outstanding                  386,219    392,307    385,944    393,043

Net Income per Common Share     $    0.99   $   1.67   $   0.60   $   0.29 




                    IREX CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS    
                              (Unaudited)

                                                    June 30     December 31
                                                     1997           1996
                                                        (In Thousands)
ASSETS

Cash and Cash Equivalents                         $  1,010        $    193
Receivables, Net                                    52,692          53,520
Inventories                                         14,160          14,125
Actual Costs and Estimated Earnings on
   Contracts in Process in Excess of Billings        4,121           5,130
Prepaid Income Taxes                                   895               0
Other Prepaid Expenses                                 706           1,022
Deferred Income Taxes                                4,759           4,759 

     Total Current Assets                           78,343          78,749
Property and Equipment, Net                          3,057           3,082
Non-Current Deferred Income Taxes                    3,425           3,425
Other Assets                                            62              69 

TOTAL ASSETS                                      $ 84,887        $ 85,325 

LIABILITIES AND SHAREHOLDERS' INVESTMENT

Notes Payable                                     $ 13,678        $ 12,169
Current Portion of Long-Term Debt                    2,557           3,257
Accounts Payable                                     9,507          10,617
Billings in Excess of Actual Costs and
     Estimated Earnings on Contracts in Process      3,209           2,786
Accrued Workers' Compensation Insurance              1,346           2,795
Accrued Liabilities                                 13,007          12,814
Accrued Income Taxes                                     0             198 

     Total Current Liabilities                      43,304          44,636 

Long-Term Debt (Less Current Portion)                7,429           9,286 

Non-current Liabilities                             11,626           9,127 

Redeemable Preferred Stock                          10,490          10,490 

Capital Stock                                        1,028           1,028
Paid-in Surplus                                        450             459
Retained Earnings                                   29,343          29,110
Cumulative Translation Adjustments                    (173)           (165)
Treasury Stock at Cost                             (18,610)        (18,646)

     Total Shareholders' Investment                 12,038          11,786

TOTAL LIABILITIES AND 
   SHAREHOLDERS' INVESTMENT                      $  84,887       $  85,325


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

                                                   Six Months Ended June 30   
                                                     1997            1996 
                                                        (In Thousands)
Cash Flows from Operating Activities:

Net income                                         $  722           $  604
Reconciliation of net income to net cash
  provided by operating activities
     Depreciation and amortization                    444              439
     (Reduction to) Provision for losses on 
        accounts receivable                           (28)             182

Decrease (increase) in current assets
     Receivables                                      856           (1,673)
     Inventories                                      (35)           ( 717)
     Prepaid income taxes and other prepaid expenses (579)            (607)
     Actual costs and estimated earnings on contracts
       in process in excess of billings, net        1,432              969

Increase (decrease) in current liabilities
     Accounts payable                              (1,110)             908
     Accrued income taxes                            (198)               0
     Accrued liabilities and other liabilities      1,243            1,552 

          Net cash provided by
            operating activities                    2,747            1,657 

Cash Flows from Investing Activities:

     Net additions to property and equipment         (419)            (357)
     Increase (decrease) in other assets               (1)              41 

          Net cash used for investing activities     (420)            (316)

Cash Flows from Financing Activities:

     Net borrowings from revolving lines of credit  1,509            1,773
     Payment on long-term debt                     (2,557)          (2,559)
     Dividends paid                                  (490)            (490)
     Reissuance of common stock                        44                8
     Repurchase of common stock                       (16)             (68)

          Net cash (used for) provided by
            financing activities                    1,510)          (1,336)

Net Increase in Cash and Cash Equivalents             817                5 

Cash and Cash Equivalents at Beginning of Period      193              411 

Cash and Cash Equivalents at End of Period       $  1,010         $    416 

                     IREX CORPORATION AND SUBSIDIARIES
                           June 30, 1997 and 1996

                 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 June 30, 1997, 1,028,633
shares were issued, 386,359 shares were outstanding and 642,274 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 six months of 1997 and 1996
were:

                                                 1997            1996
            Income Taxes:                    $1,708,000       $ 958,000
            Interest:                        $  944,000       $ 910,000

(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 both the six months and second quarters ended June 30, 1997 and
1996.  Diluted earnings per share are $0.59 and $0.29 for the six months and
$0.97 and $1.67 for the second quarters of the respective June 30 periods.


                     IREX CORPORATION AND SUBSIDIARIES
                          June 30, 1997 and 1996

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


Results from Operations:

The Company reported income from operations of $1,596,000 in the second
quarter of 1997, as compared to $2,008,000 income reported in last year's
second quarter.  Although these results represent a 20.5% decrease from the
second quarter of 1996, the strong first quarter performance has contributed
to the best first-half results in six years.  For the six months ended June
30, 1997, operating income amounted to $2,241,000 versus $1,995,000 for the
six months ended June 30, 1996.

After the preferred stock dividend requirement, net income applicable to
common shareholders was $382,000, or $0.99 per share for the second quarter
of 1997.  The comparable period of 1996 indicated net income of $657,000, or
$1.67 per share.  For the six-month period ended June 30, 1997, net income
was $232,000, or $0.60 per common share.  The comparable six months of 1996
showed net income of $114,000, or $0.29 per common share.

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

                                         Three Months          Six Months
                                         Ended June 30        Ended June 30
                                         1997     1996        1997     1996

     Contracting Revenues                45.9%    51.9%       46.7%    51.8%
     Distribution and Other Revenues     54.1%    48.1%       53.3%    48.2%
          Total Revenues                100.0%   100.0%      100.0%   100.0%

     Gross Profit Margin                 22.1%    23.3%       22.0%    22.1%
     Income from Operations               2.4%     3.0%        1.7%     1.5%
          Net Income Before 
            Preferred Dividend            0.9%     1.3%        0.5%     0.5%


Revenues:

Total revenues of $67,070,000 for the three months ended June 30, 1997, are
relatively unchanged from the $66,824,000 for the similar period of a year
ago.  Year-to-date revenues of $131,391,000, a record start for the Company,
reflect a 1.4% increase over the $129,603,000 achieved for the first six
months of 1996.

Contracting revenues were $30,754,000 for the quarter ended June 30, 1997. 
This represents an 11.3% decline from the $34,665,000 reported for the second
quarter of 1996.  Year-to-date revenues slid to $61,399,000 versus
$67,132,000 for the comparable period in 1996.  ACandS, Inc., the Company's
principal contracting subsidiary, has struggled to secure work in certain
geographic areas where operations were more severely affected by the
restructuring undertaken in the latter half of 1996.

Distribution revenues grew to $36,316,000 in the second quarter of 1997, a
$4.2 million increase over the $32,159,000 for the last year's similar
period.  The six-month record total of nearly $70 million is 12% ahead of the
$62,471,000 reported for the first six months of 1996.  Export revenues
accounted for approximately $4.4 million of the six-month increase with the
balance attributable to five branches opened between May 1996 and January
1997.

Gross Profit:

Gross profit for the second quarter ended June 30, 1997 was $14,810,000, a
decrease of $734,000 from the $15,544,000 reported for the comparable quarter
of 1996.  Gross profit margins were 22.1% and 23.3% for the respective
periods, as both contracting and distribution experienced similar decreases. 
For the six months ended June 30, 1997, margins were 22.0%, relatively
unchanged from 22.1% during the same period of 1996.  Contracting margins
improved slightly in these comparable periods while distribution margins
showed a slight decrease, mostly from the lower margin export volume.  The
net result was that gross profit dollars for the six months ended June 30,
1997 increased by $291,000 over the first six months of 1996 as total
revenues were slightly higher for the comparable periods.

Selling, General and Administrative Expenses:

Selling, general and administrative (operating) expenses amounted to
$13,214,000, or 19.7% of revenue, for the quarter ended June 30, 1997. 
Prior-year expenses for the similar period totaled $13,536,000, or 20.3% of
revenues.  For the six-month period ended June 30, operating expenses of
$26,713,000 in 1997 did not change significantly from the $26,668,000 in
1996.  Operating costs for the contracting businesses decreased by $1.1
million, primarily due to the ACandS, Inc. restructuring that was noted
earlier.  The continued expansion of the distribution business, with five new
operations as previously noted, resulted in approximately $0.7 million higher
operating expenses for the year-to-date period ended June 30, 1997 versus the
comparable year-to-date period for 1996.

Financial Condition and Liquidity:

At June 30, 1997, the Company has working capital of $35.0 million and
stockholders' equity (excluding preferred stock) of $12.0 million.  Working
capital at December 31, 1996 was $34.1 million and stockholders' equity was
$11.8 million.

Total debt outstanding at June 30, 1997 was $23.7 million compared to $24.7
million at December 31, 1996.  Available short-term lines of credit as of
June 30, 1997 were $21.3 million and remain adequate to provide sufficient
liquidity for operations.  Outstanding balances under these unsecured lines
of credit were $13.7 million and $12.2 million at June 30, 1997 and December
31, 1996, respectively.  Long-term debt, excluding current portion, is $7.4
million at June 30, 1997.


                         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 100,000 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 half of 1997, ACandS was served
with cases involving 17,032 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 great majority of the filings in 1995, 1996 and the first half of 1997
appear to be the direct result of screenings and other mass solicitation
efforts.  Of the claims filed during the period, over 72% 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 first half of 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 142,000 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.  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.  It is unclear what course the multidistrict proceeding will
now take.

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 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
indemnification 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 half of 1997.  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.


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:  August 13, 1997                     J. E. Pinkerton
                                           Senior Vice President
                                           Finance and Administration

                                           Duly Authorized Signer