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 July 4, 1998 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      


                                    NONE

                   Former name, former address and former
                  fiscal year, if changed since last report.


Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.  YES  XX  NO     

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


                 Class                   Outstanding at July 4, 1998  
Class A Voting Stock - $1,000 par value              3,810  shares
Class B Stock        - $1,000 par value              2,650  shares
Class C Stock        - $  100 par value          2,301,870  shares



                             ACE HARDWARE CORPORATION

INDEX


Part I. - Financial Information:                                  Page No.


	Consolidated Balance Sheets -  
   July 4, 1998 and December 31, 1997                                1


 Consolidated Statements of Earnings - Twenty-six Weeks and 
   Thirteen Weeks Ended July 4, 1998 and Six Months and
   Three Months Ended June 30, 1997                                  2


	Consolidated Statements of Cash Flows - Twenty-six Weeks  
   Ended July 4, 1998 and Six Months Ended June 30, 1997             3


 Notes to Consolidated Financial Statements                        4 & 5


	Management's Discussion and Analysis of Financial
   Condition and Results of Operations                             6 & 7


Part II. - Other Information                                         8 

   


                             PART I.  FINANCIAL INFORMATION
                                ACE HARDWARE CORPORATION
                               CONSOLIDATED BALANCE SHEETS

                                               July 4,        December 31,
                                                1998             1997
                                                    (000's omitted)

 ASSETS

Current Assets:
Cash                                       $      46,492    $      14,171
Accounts Receivable, Net                         450,840          364,541
Merchandise Inventory                            331,747          338,509
Prepaid Expenses and Other Current Assets         16,675           11,966
                                           --------------   --------------
Total Current Assets                             845,754          729,187

Property and Equipment, Net                      235,069          242,979
Other Assets                                       7,104            4,405
                                           --------------   --------------
Total Assets                               $   1,087,927    $     976,571
                                           ==============   ==============

LIABILITIES AND MEMBER DEALERS' EQUITY

Current Liabilities:
Current Installment of Long-Term Debt      $       7,402    $       7,515
Short-Term Borrowings                             43,990           42,000
Accounts Payable                                 525,843          423,499
Patronage Dividends Payable in Cash               16,721           29,943
Patronage Refund Certificates Payable             10,362           13,636
Accrued Expenses                                  50,520           53,583
                                           --------------   --------------
Total Current Liabilities                        654,838          570,176

Notes Payable                                    117,221           96,815
Patronage Refund Certificates Payable             46,137           49,044
Other Long-Term Liabilities                       17,069           14,722
                                           --------------   --------------
Total Liabilities                                835,265          730,757
                                                              
Member Dealers' Equity:                                       
Class A Stock of $1,000  Par Value                 3,963            3,874
Class B Stock of $1,000  Par Value                 6,499            6,499
Class C Stock of $100 Par Value                  236,613          213,609
Class C Stock of $100  Par Value, Issuable        12,633           22,366
Additional Stock Subscribed, Net of Unpaid           220              383
Retained Earnings and Contributed Capital          6,741            6,649
                                           --------------   --------------
Total Member Dealers' Equity                     266,669          253,380
Less: Treasury Stock, at Cost                     14,007            7,566
                                           --------------   --------------
Total Member Dealers' Equity                     252,662          245,814
                                           --------------   --------------
Total Liabilities and Member Dealers       $   1,087,927    $     976,571
                                           ==============   ==============

See accompanying notes to consolidated financial statements.


<TABLE>
                                                                             ACE HARDWARE CORPORATION
                                                                        CONSOLIDATED STATEMENTS OF EARNINGS
                                                                                                                         
                                        Thirteen Weeks Ended   Three Months Ended      Twenty-six Weeks Ended  Six Months Ended
                                               July 4,               June 30,                  July 4,            June 30,
                                                1998                  1997                      1998                1997           
                                                              (000's omitted)                                 (000's omitted)
<S>                                        <C>                  <C>                        <C>                <C> 
Net Sales                                   $   829,569          $   788,567                $  1,550,972       $  1,430,704
Cost of Sales                                   761,008              725,269                   1,429,905          1,321,127
                                            ------------         ------------               -------------      -------------
    Gross Profit                                 68,561               63,298                     121,067            109,577
                                              
Operating Expenses:
    Warehouse and Distribution                    8,266                8,299                      19,312             19,757
    Selling, General and Administrative          19,088               18,247                      38,445             36,107
    Retail Success and Development                7,537                6,604                      14,347             12,550
                                            ------------         ------------               -------------      ------------- 
    Total Operating Expenses                     34,891               33,150                      72,104             68,414
    
    Operating Income                             33,670               30,148                      48,963             41,163
    Interest Expense                             (4,294)              (4,059)                     (8,149)            (7,666)
    Other Income, Net                             1,159                1,653                       2,782              2,857
    Income Taxes                                   (665)                (871)                     (1,348)            (1,181)
                                            ------------         ------------               -------------      -------------       
Net Earnings                                $    29,870          $    26,871                $     42,248       $     35,173
                                            ============         ============               =============      ============= 
Distribution of Net Earnings:
    Patronage Dividends                     $    29,568          $    26,342                $     42,156       $     34,563
    Retained Earnings                               302                  529                          92                610
                                            ------------         ------------               -------------      -------------  
Net Earnings                                $    29,870          $    26,871                $     42,248       $     35,173
                                            ============         ============               =============      =============

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


<TABLE>
                                                                        ACE HARDWARE CORPORATION
                                                                    CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                              Twenty-six Weeks Ended   Six Months Ended
                                                                      July 4,               June 30,
                                                                       1998                   1997
                                                                             (000's omitted)
<S>                                                             <C>                      <C>      
Operating Activities:
      Net Earnings                                              $     42,248             $     35,173

   Adjustments to reconcile net earnings
   to net cash provided by operating activities:
      Depreciation                                                    10,812                    9,578
      Loss on sale of property and equipment                             415                      203
      Increase in accounts receivable, net                           (86,299)                 (72,910)
      Decrease in merchandise inventory                                6,762                   28,473
      Increase in prepaid expenses and other current assets           (4,709)                  (3,944)
      Increase in accounts payable and
         accrued expenses                                             99,281                   67,450
      Increase in other long-term liabilities                          2,347                    2,587
                                                                  -----------            -------------  
   Net Cash Provided By Operating Activities                          70,857                   66,610

Investing Activities:
      Purchases of property and equipment                            (11,460)                 (35,666)
      Proceeds from sale of property and equipment                     8,143                      145
      Increase in other assets                                        (2,699)                  (3,927)
                                                                  -----------            -------------
   Net Cash Used In Investing Activities                              (6,016)                 (39,448)

Financing Activities:
      Proceeds (Payments) of short-term borrowings                     1,990                   (6,097)
      Proceeds from notes payable                                     25,713                   32,464
      Principal payments on long-term debt                            (5,420)                  (3,145)
      Payments on refund certificates and
         patronage financing programs                                (18,983)                 (18,790)
      Proceeds from sale of common stock                                 564                      736
      Repurchase of common stock                                      (6,441)                  (5,633)
      Payments of cash portion of patronage dividend                 (29,943)                 (28,178)
                                                                -------------            -------------
   Net Cash Provided By Financing Activities                         (32,520)                 (28,643)
                                                                -------------            -------------
   Increase (Decrease) in Cash and Cash Equivalents                   32,321                   (1,481)
                                  
   Cash and Cash Equivalents at Beginning of Period                   14,171                   12,657
                                                                -------------            ------------- 
   Cash and Cash Equivalents at End of Period                   $     46,492             $     11,176
                                                                =============            =============

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


	
                            ACE HARDWARE CORPORATION
                 	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1)	General

	The accompanying consolidated financial statements have not been examined 
 by independent public accountants except for the December 31, 1997 balance 
 sheet but in the opinion of the Company reflect all adjustments necessary 
 to present fairly the financial position as of July 4, 1998 and June 30, 
 1997 and the results of operations and cash flows for the twenty-six weeks 
 then ended.  These interim figures are not necessarily indicative of the 
 results to be expected for the full year.

2)	Patronage Dividends

	The Company operates as a cooperative organization and will pay patronage 
 dividends to consenting member dealers based on the earnings derived from 
 business done with such dealers.  It has been the practice of the Company 
 to distribute substantially all patronage sourced earnings in the form of 
 patronage dividends. 

	Net earnings and patronage dividends will normally be similar since patronage 
 sourced net earnings is paid to consenting member dealers.  International 
 dealers signed under a Retail Merchant Agreement are not eligible for 
 patronage dividends and related earnings or loss are not included in 
 patronage sourced earnings.

3)	Reclassifications

	Certain financial statement reclassifications have been made to prior year 
 and prior quarter amounts to conform to comparable classifications followed 
 in 1998.

4)  	Notes Payable
	
 In March 1998, the Company entered into a $25,000,000 loan agreement due 
 February 9, 2010.  The note bears interest at 6.61% per annum, payable 
 annually. Annual principle payments commence on February 9, 2006 and 
 continue through 2010.

5)  	Fiscal Year
					
 Effective January 1, 1998, the Board of Directors approved a change to the 
 Company's fiscal year from December 31 to the Saturday nearest December 31. 
 Accordingly, the second quarter of 1998 consists of thirteen weeks ending 
 July 4, 1998.

6)	Year 2000
	
 A detailed plan has been established to identify and track progress on the 
 identification of systems, changing of non-compliant systems and testing of 
 those systems for Year 2000 compliance.  Project completion is planned for 
 the middle of 1999.  In addition, a plan is being developed for all devices 
 (time clocks, power systems, etc.) within the Company.  The Company expects 
 its Year 2000 date conversion project to be completed on a timely basis.

	The Company expects to incur internal staff costs as well as incremental 
 consulting and other expenses related to infrastructure and facilities 
 enhancements necessary to prepare the systems for the Year 2000.  A 
 significant portion of these costs will represent the re-deployment of 
 existing information technology resources.  Based upon an initial 
 investigation, the Company estimates that such costs could range between 
 $3,000,000 and $5,000,000.
 	
	To date, correspondence has been received from the Company's primary vendors
 that plans are being developed to address processing of transactions in the 
 Year 2000. However, there can be no assurance that the systems of other 
 companies on which the Company's system rely will be converted timely or that
 any such failure to convert by another company would not have an adverse 
 effect on the Company's systems.	



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

Thirteen Weeks Ended July 4, 1998 compared to Three Months Ended June 30, 1997.

Results of Operations

Net sales increased 5.2% in 1998 primarily due to increased existing retailer 
volume, targeted efforts on new store development and conversions to the Ace 
program.  Price deflation in the lumber category negatively impacted second
quarter sales results.

Gross profit increased 8.3% vs. 1997, and increased as a percent of sales due 
to increased handling charges from sales mix shifts, increased cash and vendor
discounts and gross profit from the Company's manufacturing, retail and Cana-
dian operations.

Warehouse and distribution expenses decreased slightly vs. 1997 due to 
increased traffic and freight consolidations income, partially offset by 
increased warehousing costs absorbed into inventory and wage increases to sup-
port increased warehouse sales volume.

Selling, general and administrative expenses increased $841,000 or 4.6%, 
however, decreased as a percent of sales due primarily to increased data 
processing expenses offset by increased convention income.

Retail success and development expenses increased $933,000 or 14.1%, and 
increased as a percent of sales.  Retail store development costs partially 
offset by increased advertising income generated the second quarter expense 
increase.

Interest expense increased $235,000 vs. 1997 due to additional long-term debt 
issued during 1998 to fund long-term capital investments.

Other income decreased $494,000 vs. 1997 primarily due to a loss on the sale 
of property and equipment and lower retailer service charges.


Twenty-six Weeks Ended July 4, 1998 compared to Six Months Ended June 30, 1997.

Results of Operations

Net sales increased 8.4% in 1998 primarily due to increased existing retailer 
volume, targeted efforts on new store development and conversions to the Ace 
program.  Additionally, four additional workdays are included in the 1998 
results.  

Gross profit increased 10.5% vs. 1997, and increased as a percent of sales 
due to increased handling charges from sales mix shifts, and higher cash and 
vendor discounts. Gross profit from the Company's retail and Canadian operations
also contributed to increased year-to-date gross profit.

Warehouse and distribution expenses decreased $445,000 vs. 1997 due to 
increased traffic and freight consolidations income, partially offset by 
wage increases to support increased warehouse sales volume.

Selling, general and administrative expenses increased $2.3 million or 6.5%, 
however, decreased as a percent of sales due primarily to increased data 
processing expenses.

Retail success and development expenses increased $1.8 million or 14.3%.  
Retail store development costs partially offset by increased advertising income
generated the year-to-date expense increase.

Interest expense increased $483,000 vs. 1997 due to additional dealer dating 
programs and long-term debt issued during 1998 to fund long-term capital 
investments.

Income taxes increased $167,000 primarily due to improved profitability of 
the Company's non-patronage operations.

Liquidity and Capital Resources

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




                          PART II. OTHER INFORMATION
                           ACE HARDWARE CORPORATION


Item 4.	Submission of Matters to a Vote of Security Holders
	
  The following information is furnished with respect to matters submitted 
  to a vote of the stockholders of the registrant at a meeting thereof held 
  during the quarter covered by this report:

        (a)  Date of meeting: June 1, 1998 - said meeting was an annual meeting.

        (b)  1.  The following directors were elected at said                   
                 meeting for a three year term expiring in 2001:

                                Daniel L. Gust
                                Howard J. Jung
                                Mario R. Nathusius

             2.  The following directors were reelected at said
                 meeting for a three year term expiring in 2001:

                                Lawrence R. Bowman 
                                Roger E. Peterson

             3.  The names of the other directors other than the
                 above elected directors whose terms of office as directors 
                 continue after the meeting are:

                                 Eric R. Bibbens, II
                                 D. William Hagan
                                 Jennifer C. Anderson
                                 Mark Jeronimus
                                 Jon R. Weiss
                                 John E. Kingrey
                                 J. Thomas Glenn


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

        (b)  There were no reports on Form 8-K filed for the twenty-six 
             weeks ended July 4, 1998. 




SIGNATURE







Pursuant to the requirements of the Securities Exchange Act of 1934, the 
registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.






    ACE HARDWARE CORPORATION      




       LORI L. BOSSMANN                      DATE    AUGUST 14, 1998
       Lori L. Bossmann
  Vice President, Controller

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