SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                           ---------------------------


                          AMENDMENT NO. 1 TO FORM 10-K
                                       ON
                                   FORM 10-K/A

(Mark One)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

    For the fiscal year ended December 31, 1997

|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

                         Commission file number 1-10726

                       ----------------------------------


                          WINSTAR COMMUNICATIONS, INC.
             (Exact name of registrant as specified in its charter)


      DELAWARE                                           13-3585278
(State of Incorporation)                    (I.R.S. Employer Identification No.

                                 230 Park Avenue
                            New York, New York 10169
                                 (212) 584-4000
          (Address, including zip code, and telephone number, including
                  area code, of registrant's executive offices)

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                                  Common Stock
                   Rights to Purchase Series B Preferred Stock

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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 |_|

     Check  if  disclosure  of  delinquent  filers  in  response  to item 405 of
Regulation  S-K is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.  |X|

     Issuer's revenues for its most recent fiscal year: $79,631,000

     State the aggregate market value of the voting stock held by non-affiliates
computed by reference  to the price at which the stock was sold,  or the average
bid and asked  prices of such stock,  as of a specified  date within the past 60
days: As of March 27, 1998, the aggregate  market value of such stock was $1,599
million.

     State the number of shares  outstanding  of each of the  issuer's  class of
common  equity,  as of the latest  practicable  date: As of March 27, 1998,  the
number of shares of Common Stock outstanding was 37,217,000.


                                        

<PAGE>



Item 10.  Directors and Executive Officers of the Registrant

     The directors and executive officers of the Company are:

     William J.  Rouhana,  Jr., 45, has been a director of the Company since its
inception,  its  Chairman  of the  Board  since  February  1991,  and its  Chief
Executive  Officer since May 1994. Mr. Rouhana was President and Chief Executive
Officer of WinStar  Companies,  Inc., a merchant  banking firm which  focused on
media  and  telecommunications   investments  ("WinStar  Companies"),   and  its
affiliates from 1983 until November 1995. Through WinStar Companies,  he served,
from  August  1987 to  February  1989,  as Vice  Chairman of the Board and Chief
Operating Officer of Management Company Entertainment Group, Inc., a diversified
distributor of entertainment  products and, thereafter,  as its Vice Chairman of
the Board until May 1990. Mr. Rouhana was in private legal practice from 1977 to
1984,  specializing in the financing of entities  involved in the development of
entertainment  products and information services.  Mr. Rouhana was Vice Chairman
of the Board of Governors of the United Nations  Association through 1997 and is
a member of the Board of Directors of Business Executives for National Security.
He is a Phi Beta Kappa  graduate of Colby  College,  a Thomas J.  Watson  Fellow
(1972-1973) and a graduate of Georgetown University School of Law.

     Nathan  Kantor,  55, has been a director of the Company  since October 1994
and President and Chief  Operating  Officer of the Company since September 1995.
Since its formation in November  1990,  Mr. Kantor had been the President of ITC
Group, Inc. ("ITC"),  a company which specializes in the development of emerging
competitive  telecommunications  companies. Mr. Kantor, through ITC, coordinated
all of the Company's  telecommunications  operations from June 1994 to September
1995 when he became  President and Chief  Operating  Officer of the Company,  at
which time services  provided by ITC to the Company  ceased.  Mr. Kantor also is
currently  the  Chairman  of the  Board  and Chief  Executive  Officer  of Image
Telecommunications  Corp., a company  involved in the development of information
and video  servers.  From January 1985 to December 1990, he was President of MCI
Telecommunications Corporation (Northeast Division). Mr. Kantor was a founder of
MCI International, Inc., and served as its President and Chief Operating Officer
from its founding in July 1982 to December  1984.  From 1972 to 1982, Mr. Kantor
held a number of senior management positions with MCI Communications,  including
Vice President of National Operations. Mr. Kantor is a graduate of Florida State
University and the United States Military Academy at West Point.

     Steven G. Chrust, 48, has been a director of the Company since January 1994
and has been  employed  by the  Company as its Vice  Chairman of the Board since
January  1995,  in which  capacity he is  responsible  for  strategic  planning,
financing and corporate  development.  Mr. Chrust is also currently  Chairman of
ALTS, the trade organization of alternative local exchange carriers. He has been
the President of SGC Advisory Services,  Inc., a discretionary  money-management
services firm  specializing  in the  telecommunications  and technology  sector,
since he founded it in October  1992.  From August 1987 to September  1992,  Mr.
Chrust was a  director  of AMNEX,  Inc.,  an  operator  services  long  distance
company,  and served as its Chairman of the Board,  Chief Executive  Officer and
President  between  October  1990 and October  1992.  From  August 1985  through
December  1989,  Mr.  Chrust  was the  Executive  Vice  President  of  Executone
Information Systems,  Inc., a  telecommunications  equipment company. Mr. Chrust
was Director of Technology  Research and a stockholder of Sanford C. Bernstein &
Co., Inc., a Wall Street investment firm, where he was ranked in the top tier of
telecommunications  analysts  for more than ten  years  and as the  first-ranked
analyst in that  sector  for five  consecutive  years.  He was  associated  with
Sanford C.  Bernstein & Co.,  Inc.,  from 1970 through 1985.  From November 1993
until  February  1996,  Mr.  Chrust was a director  of  American  Communications
Services, Inc., a fiber optic-based competitive access provider. Mr. Chrust is a
graduate of Baruch College.

     James I. Cash,  50, has been a director of the Company  since January 1997.
Professor Cash has been a member of the faculty of Harvard Business School since
1976,  having  taught in its  Masters  of  Business  Administration,  Management
Development and Advanced Management programs. Professor Cash currently serves as
a trustee for  Massachusetts  General  Hospital and the  Massachusetts  Computer
Software  Council,  overseer  for The  Gardner  Museum and the Boston  Museum of
Science,  and is a member  of the Board of  Directors  of  Cambridge  Technology
Partners, The Chubb Corporation, General Electric Company, Knight-Ridder,  Inc.,
State Street  Bank and Trust Company  and Tandy  Corporation. Professor Cash has

                                        2

<PAGE>



authored  numerous  articles and several books on topics  related to information
technology  and corporate  management  and structure and writes a regular column
for Information  Week magazine.  Professor Cash is a graduate of Texas Christian
University,  Purdue  University's  Graduate School of Mathematical  Sciences and
Purdue University's Krannert Graduate School of Management.

     Bert Wasserman, 65, has been a director of the Company since June 1995. Mr.
Wasserman  was Executive  Vice  President  and Chief  Financial  Officer of Time
Warner,  Inc.  ("Time Warner") from January 1990 to December 1994 and was also a
director of Time Warner from January  1990 to March 1993.  Mr.  Wasserman  was a
member  of the  Office  of the  President  and was  also a  director  of  Warner
Communications,  Inc.  ("Warner  Communications"),  from 1981 to 1990, when that
company merged with Time Warner, and had served Warner Communications in various
capacities  beginning  in 1966.  Mr.  Wasserman  serves as a member  of  various
boards, including:  several investment companies in the Dreyfus Family of Funds;
Lillian Vernon Corp., a catalog seller of home products; Mountasia Entertainment
International,  Inc., an operator of family recreation  centers;  The New German
Fund, a New York Stock Exchange listed mutual fund operated by Deutsche Bank AG;
and IDT Corp., a provider of  telecommunications  services,  including  Internet
access and long distance  services.  Mr.  Wasserman also served as a director on
the Chemical Bank National  Advisory Board until Chemical Bank merged with Chase
Manhattan  Bank in March 1996.  He is a graduate of Baruch  College and Brooklyn
Law School.

     Steven B. Magyar,  49, has been a director of the Company  since June 1993.
Since May 1994, Mr. Magyar has been  operating a private  business he owns which
specializes in financial  services for high net worth  individuals  and business
owners. From 1989 to May 1994, Mr. Magyar was a regional vice president of CIGNA
Insurance  Co. and during the  preceding  fifteen  years held various  sales and
sales  management  positions  with  CIGNA.  Mr.  Magyar  has  served on  CIGNA's
strategic  business  development  committee and has been a guest lecturer at New
York  University.  Mr. Magyar also is a Certified Life Underwriter and Chartered
Financial  Consultant  with the American  College of Insurance.  Mr. Magyar is a
member of the General Agents and Managers Association,  the National Association
of  Underwriters  and the  American  Society  of CLU and ChFC.  Mr.  Magyar is a
graduate of Colby College.

     William J. vanden Heuvel, 67, has been a director of the Company since June
1995.  Since 1984, he has served as Senior Advisor to Allen & Co., an investment
banking firm,  as well as counsel to the law firm Stroock & Stroock & Lavan.  He
served  as a  director  of Time  Warner  from  1981 to 1993 and  currently  is a
director of Zemex Corp., a New York Stock Exchange listed company engaged in the
mining and exploitation of industrial  minerals.  Ambassador  vanden Heuvel also
has been a member of the IRC Group,  a Washington  D.C.-based  consulting  group
made up of former United States ambassadors, since 1981. He has been Chairman of
the Board of Governors of the United Nations  Association  since 1993. From 1979
to 1981,  Ambassador  vanden Heuvel  served as United  States  Deputy  Permanent
Representative  to the United  Nations.  From 1977 to 1979,  he served as United
States Ambassador to the European Office of the United Nations and various other
international organizations.  He was Special Assistant to United States Attorney
General  Robert F.  Kennedy  from 1961 to 1964.  Ambassador  vanden  Heuvel is a
graduate of Deep Springs College, Cornell University and Cornell Law School.

     Timothy R.  Graham,  48,  has served as  Executive  Vice  President  of the
Company since October 1994. From October 1990 through September 1994, Mr. Graham
was engaged in the private practice of law and served in various capacities with
National  Capital  Management   Corporation,   a  company  engaged  through  its
subsidiaries  in various  businesses,  including  the  ownership  of real estate
rental properties,  industrial manufacturing and insurance matters, including as
Corporate  Secretary  and as President of its primary real estate and  insurance
subsidiaries.  During that period,  Mr. Graham also acted in various  capacities
for WinStar  Services,  Inc., a wholly owned  subsidiary  of WinStar  Companies.
Prior to 1990,  Mr.  Graham  was a partner  in the law firm of Nixon,  Hargrave,
Devans & Doyle, specializing in corporate finance,  regulatory and business law.
Mr. Graham was a Securities  Law Editor of Barrister  magazine,  an American Bar
Association  publication,  from  1985  to 1986  and has  authored  a  number  of
publications,  including  "Public  Offerings  in the  United  States by  Foreign
Companies" and "Financing of Foreign  Companies through United States Securities
Markets."  Mr.  Graham  also  is a  member  of  the  Board  of  Advisors  of the
Instructional Television Station of the Archdiocese of New York. Mr. Graham is a
graduate of Fordham Law School and the Georgetown  University  School of Foreign
Service.

                                        3

<PAGE>



     Charles T. Dickson,  43, has served as Executive  Vice  President and Chief
Financial  Officer of the Company since  December  1997.  For the preceding four
years,  Mr.  Dickson  served as Chief  Financial  Officer of General  Instrument
Corporation.  From 1984 to 1993,  Mr.  Dickson  held  numerous  positions at MCI
Communications Corp., including Vice President, Finance and Administration,  for
the National Accounts Division.  From 1979 to 1984, Mr. Dickson was a consultant
with ICF,  Inc.  providing  financial  analysis  to  clients  in the  energy and
telecommunications industries. Mr. Dickson is a Phi Beta Kappa graduate of Clark
University and received a masters degree in public policy from the University of
California at Berkeley.

     The Company  pays each outside  director  $500 for his  attendance  at each
meeting of a committee of which he is a member and $1,000 for his  attendance at
each meeting of the Board. In addition,  on January 13th of each year during the
term of the Company's  1992  Performance  Equity Plan (the "1992 Equity  Plan"),
assuming  there are enough shares then available for grant under the 1992 Equity
Plan, each person who is then a director of the Company is awarded stock options
to purchase 10,000 shares of the Company's Common Stock at the fair market value
thereof (as  determined in the  accordance  with the 1992 Equity  Plan),  all of
which  options are  immediately  exercisable  as of the date of grant and have a
term of ten years.


Item 11. Executive Compensation

     The following table shows the compensation for the years ended December 31,
1997 and 1996 and the ten month  period ended  December 31, 1995,  earned by (i)
William  J.  Rouhana,  Jr.,  the  Chairman  and Chief  Executive  Officer of the
Company,  (ii) Steven G. Chrust,  Nathan Kantor and Timothy R. Graham,  the next
most highly  compensated  executive  officers of the  Company  whose  individual
compensation  exceeded  $100,000 during the year ended December 31, 1997,  (iii)
Fredric E. von Stange,  the Company's  former Executive Vice President and Chief
Financial Officer,  whose individual  compensation  exceeded $100,000 during the
year ended December 31, 1997, and (iv) Charles T. Dickson, the Company's current
Executive Vice President and Chief Financial  Officer whose  employment with the
Company commenced in December 1997.

<TABLE>
<CAPTION>
                                            SUMMARY COMPENSATION TABLE


                                                                     Annual
                                                                  Compensation               Long Term Compensation
                                                             -------------------------------------------------------------  
                                                                                           Restricted
                                                             Salary            Bonus         Stock              Options
  Name and principal position            Fiscal Year(1)        ($)             ($)(2)      Awards($)           (# Shares)
-------------------------------------    --------------      ------           --------     ---------      ----------------
<S>                                         <C>                <C>            <C>           <C>            <C>
William J. Rouhana, Jr.                     12/31/97            483,658        500,000       --               10,000(3)(4)
 Chairman of the Board and                  12/31/96            410,076        400,000       --              135,000(2)(4)
 Chief Executive Officer                    12/31/95            266,250        575,000       --              460,000(4)(5)

Steven G. Chrust                            12/31/97            336,924        225,000       --               10,000(4) 
 Vice Chairman of the Board                 12/31/96            317,809        225,000       --               45,000(2)(4) 
                                            12/31/95            275,652        225,000       --               10,000(4)
Nathan Kantor                               12/31/97            448,085        450,000       --               10,000(4)
 President and Chief Operating Officer      12/31/96            370,769        300,000       --               60,000(2)(4)
                                            12/31/95             99,692(6)     342,500(6) 1,237,500          710,000(4)(7)
Timothy R. Graham                           12/31/97            225,000        225,000       --                         0
 Executive Vice President                   12/31/96            217,788        125,000       --               25,000(2)
                                            12/31/95            158,654         75,000       --               50,000(5)

Charles T. Dickson (8)                      12/31/97             11,923         30,000       --              250,000(8)
  Executive Vice President and              12/31/96                 --             --       --                    --
  Chief Financial Officer                   12/31/95                 --             --       --                    --

Fredric E. von Stange(9)                    12/31/97            313,462        132,000       --               31,875(5)
                                            12/31/96            260,711        150,000       --               35,000(2)(5)
                                            12/31/95            187,692        200,000       --              235,000(3)(5)
                                         ---------------  ------------- -------------- --------------- -------------------

</TABLE>

                                        4

<PAGE>



------------------------------

(1)  Represents  ten-month  period with  respect to  information  for the period
     ended December 31, 1995.

(2)  Represents  bonuses paid or stock options granted as  compensation  for the
     year  indicated,  the payment or grant of which was made in the  subsequent
     calendar year.

(3)  Does not include  options granted to Mr. Rouhana in 1998 in connection with
     the renewal of his employment agreement. See "Employment Arrangements."

(4)  Includes or  represents  options to purchase  10,000 shares of Common Stock
     granted annually to directors of the Company under the 1992 Equity Plan.

(5)  Represents  options to purchase shares of Common Stock granted  pursuant to
     the terms of the holder's employment agreement in effect for such year. See
     "Employment Arrangements."

(6)  Mr.  Kantor   became  an  employee  of  the  Company  in  September   1995.
     Accordingly, he was paid only a portion of his annual salary during the ten
     months ended December 31, 1995. See "Employment Arrangements." In addition,
     for the ten months ended December 31, 1995, the Company paid  $1,046,084 to
     ITC Group,  Inc., a consulting  firm of which Mr.  Kantor was the President
     and  principal  stockholder,  for  services  rendered  during that  period,
     including providing the Company the services of up to 12 consultants at any
     given time.

(7)  Represents  options  granted  under  the terms of Mr.  Kantor's  employment
     agreement. See "Employment Arrangements."

(8)  Mr. Dickson's employment with the Company commenced on December 1, 1997. On
     that  date,  he was  granted  options  to  purchase  250,000  shares of the
     Company's Common Stock at an exercise price of $17 per share. These options
     vest in five equal annual installments commencing December 1, 1998 and have
     a term extending five years from the date of vesting.

(9)  Mr. von Stange  resigned  as  Executive  Vice  President,  Chief  Financial
     Officer and director of the Company effective November 14, 1997.

     The Company cannot determine,  without  unreasonable effort or expense, the
specific amount of certain personal benefits  afforded to its employees,  or the
extent to which  benefits are  personal  rather than  business.  The Company has
concluded that the aggregate  amounts of such personal  benefits which cannot be
specifically  or precisely  ascertained  do not in any event exceed,  as to each
individual  named in the  preceding  table,  the lesser of $50,000 or 10% of the
compensation reported in the preceding table for such individual,  and that such
information  set  forth  in  the  preceding  table  is not  rendered  materially
misleading by virtue of the omission of the value of such personal benefits.




                                        5

<PAGE>



                              OPTION GRANTS IN 1997

     The following table sets forth certain  information  concerning  individual
grants of stock options during 1997 to each of the named executive officers:

<TABLE>
<CAPTION>
                                    
                                                                                                   Potential Realizable
                                                                                                     Value At Assumed
                                                                                                   Annual Rates of Stock
                                                                                                   Price Appreciation for
                                       Individual Grants                                                Option Term
-----------------------------------------------------------------------------------------------   -------------------------
                                  Number of
                                  Securities    Percent of Total
                                  Underlying    Options Granted     Exercise or
                                   Options      to Employees in      Base Price     Expiration          5%           10%
             Name                 Granted (#)    Fiscal Year (%)         ($)            Date            ($)          ($)
-----------------------------    ------------   ----------------    -----------     ----------      ----------   ----------
<S>                                 <C>               <C>              <C>           <C>             <C>          <C>        
William J. Rouhana, Jr.             10,000            0.26             16.75         1/12/07          105,339       266,951
 Chairman of the Board and         125,000            3.22             12.00           (1)            510,143     1,157,341
 Chief Executive Officer           -------            ----                                            -------     ---------
                                   135,000            3.48                                            615,482     1,424,292
                                   =======            ====                                            =======     =========
Steven G. Chrust                    10,000            0.25             16.75         1/12/07          105,339       266,951
 Vice Chairman of the Board         35,000            0.90             12.00           (1)            142,845       324,055
                                    ------            ----                                            -------       -------
                                    45,000            1.15                                            278,184       591,006
                                    ======            ====                                            =======       =======
Nathan Kantor
 President and Chief                10,000            0.26             16.75         1/12/07          105,339       266,951
 Operating Officer                  50,000            1.29             12.00           (1)            204,057       462,936
                                    ------            ----                                            -------       -------
                                    60,000            1.55                                            309,396       729,887
                                    ======            ====                                            =======       =======
Timothy R. Graham
 Executive Vice President           25,000            0.64             12.00           (1)            102,028       231,468

Charles T. Dickson
 Executive Vice President and      250,000            6.44             17.00           (2)          2,247,819     5,099,535
 Chief Financial Officer

Fredric E. von Stange(3)            10,000            0.26             16.75         1/12/07          105,339       266,951
                                    25,000            0.64             12.00           (1)            102,028       231,468
                                    21,875            0.56             20.94           (4)            288,038       729,946
                                    ------            ----                                            -------       -------
                                    56,875            1.46                                            495,405     1,228,365
                                                      ====                                            =======     =========

------------------------------  -------------- ------------------  -------------- -------------- ------------  ------------
</TABLE>

------------------

(1)  These options vest in five equal annual  installments  commencing March 14,
     1997 and have a term extending five years from the date of vesting.

(2)  Reflects  stock  options  granted  to Mr.  Dickson in  connection  with the
     commencement of his employment with the Company on December 1, 1997.  These
     options vest in five equal annual installments  commencing December 1, 1998
     and have a term extending five years from the date of vesting.

(3)  Mr. von Stange  resigned  as  Executive  Vice  President,  Chief  Financial
     Officer and director of the Company effective November 14, 1997.

(4)  These options vest in five equal annual installments  commencing October 6,
     1998 and have a term extending five years from the date of vesting.




                                        6

<PAGE>



                     AGGREGATED OPTION EXERCISES IN 1997 AND
                          FISCAL YEAR-END OPTION VALUES

     The following table sets forth certain information  concerning exercises of
stock options during 1997 by each of the named executive officers and the fiscal
year-end value of unexercised options held by such persons.


<TABLE>
<CAPTION>
                                  Shares          Value           Number of Securities           Value of Unexercised
                                 Acquired     Realized ($'s      Underlying Unexercised        In-The-Money Options at
                                    On        in thousands)    Options At Fiscal Year-End        Fiscal Year-End (1)
                                 Exercise                                  (#)                    ($'s in thousands)
         Name                      (#)
---------------------------     ----------   ---------------   ----------------------------- ------------------------------
                                                               Exercisable    Unexercisable    Exercisable    Unexercisable
                                                               -----------    -------------    -----------    -------------
<S>                              <C>              <C>          <C>             <C>               <C>           <C>
William J. Rouhana, Jr.
 Chairman of the Board and         --              --            626,666         183,334           9,594         4,597
 Chief Executive Officer

Steven G. Chrust (2)
 Vice Chairman of the Board      60,000            489           531,667         308,333           8,432         4,732

Nathan Kantor
 President and Chief               --              --            918,699         199,999          14,007         2,858
 Operating Officer

Timothy R. Graham
 Executive Vice President        50,000            428           215,000          20,000           4,011           259

Charles T. Dickson
 Executive Vice President          --              --               0            250,000             0           1,984
 and  Chief Financial Officer

Fredric E. von Stange (3)          --              --            345,209          36,666           5,674           366
                              -------------- ---------------  -------------  ---------------  -------------- ----------------
</TABLE>
------------------------

(1)  Represents  the difference  between the aggregate  market value at December
     31, 1997 of the Common Stock underlying the options,  based on a last sales
     price of $24.94 on that date, and the options' aggregate exercise price.

(2)  Includes options exercised and options owned by Mr. Chrust and SGC.

(3)  Mr. von Stange  resigned  as  Executive  Vice  President,  Chief  Financial
     Officer and director of the Company effective November 14, 1997.

Employment Arrangements

     William  J.  Rouhana,  Jr. had  served as  Chairman  of the Board and Chief
Executive  Officer of the Company from May 1994 to February 1995 through WinStar
Services,  an entity which had a  management  agreement  with the  Company.  The
management agreement was terminated on February 28, 1995 and Mr. Rouhana entered
into a three-year employment agreement with the Company to serve as its Chairman
of the Board and Chief Executive  Officer effective March 1, 1995. On January 6,
1998,  Mr.  Rouhana and the  Company  entered  into a new three year  employment
agreement,  effective March 1, 1998, pursuant to which Mr. Rouhana will continue
to serve as the Company's Chairman of the Board and Chief Executive Officer. The
employment agreement provides for a minimum annual base salary of $537,500, with
annual  increases as agreed upon by the Company and Mr. Rouhana.  The employment
agreement  also provides that Mr.  Rouhana is eligible for an annual cash bonus,
payable at the discretion of the Compensation  Committee,  not to exceed 150% of
his base  salary then in effect.  At the time of  execution  of this  employment
agreement,  Mr.  Rouhana was granted:  (i)  immediately  exercisable  options to
purchase  300,000  shares of Common  Stock for $26 per share,  the closing  sale
price of the Common Stock on the day  immediately  preceding the agreement date;
(ii) options to purchase 300,000 shares of Common Stock which vest on January 6,
1999, of which 100,000 are  exercisable  at a price of $26 per share and 200,000


                                        7

<PAGE>


are  exercisable  at a price of $39 per share;  and (iii)  options  to  purchase
300,000  shares of Common Stock which vest on January 6, 2000,  of which 100,000
are  exercisable  at a price of $26 per share and 200,000 are  exercisable  at a
price of $52 per share.

     Nathan Kantor became  President and Chief Operating  Officer of the Company
in September 1995, when he entered into a three-year  employment  agreement with
the Company.  The employment agreement provides for a minimum annual base salary
of $320,000 during the first year,  $336,000 during the second year and $352,800
during the third year. The employment  agreement  allows Mr. Kantor to devote up
to 25% of his  business  time to  serve  as  Chairman  of the  Board  and  Chief
Executive  Officer of Image Telecom,  a company  involved in the  development of
information and video servers. In connection with his employment agreement,  Mr.
Kantor was also  granted  immediately  exercisable  options to purchase  350,000
shares of Common  Stock for $8.25 per share and  additional  options to purchase
350,000  shares of Common  Stock for $8.25 per  share,  vesting  in three  equal
annual  installments  commencing  in  September  1996.  The Company  also issued
150,000  restricted  shares  of Common  Stock to Mr.  Kantor.  In May 1996,  the
Company  agreed to  accelerate  the  vesting of such  restricted  shares and Mr.
Kantor  utilized  such  shares to pay the  option  exercise  price of options to
purchase 233,302 shares of Common Stock.  Pursuant to the re-load feature of the
option  agreement  governing  such options,  Mr.  Kantor was granted  options to
purchase an additional 150,000 shares of Common Stock at an exercise price equal
to the market price of the Common Stock on such date.

     Steven G. Chrust  became the Vice  Chairman  of the Board in January  1995,
when he entered into a five-year  employment  agreement  with the  Company.  The
employment  agreement,  as amended,  provides  for an annual  salary of $325,000
during the first year,  $300,000  during the second and third years and $305,000
during the fourth and fifth years. In connection with his employment  agreement,
the Company  granted Mr.  Chrust  options to purchase  600,000  shares of Common
Stock for $8.00 per share, vesting in five equal annual installments  commencing
in January 1996.

     In April 1998,  the Company  entered into  Executive  Severance  Agreements
(each a "Severance  Agreement")  with each of the named  executive  officers and
certain other senior officers of the Company and its subsidiaries. The Severance
Agreement generally provides that, if during the two years following a Change of
Control or  potential  Change of Control of the Company  (each as defined in the
Severance  Agreement),   either  (A)  the  covered  executive's   employment  is
terminated by the Company (other than due to the executive's death or Disability
or for  Cause,  as  defined  in the  Severance  Agreement)  or (B)  the  covered
executive  terminates his or her employment with the Company for Good Reason (as
defined in the Severance  Agreement),  then such  executive  will be entitled to
receive certain severance benefits,  including a cash severance payment equal to
one and one-half times the aggregate of (i) such executive's  annual base salary
then in effect plus (ii) such executive's average full-year bonus over the prior
two years.  Additional  benefits to which a covered  executive would be entitled
include  continued  medical and other  insurance  benefits  for one and one-half
years following termination and career outplacement  services. As defined in the
Severance  Agreement,  "Change of Control of the Company" generally means that a
third party has acquired  35% or more of the  Company's  voting  stock  (whether
through a stock purchase, exchange, tender offer or merger) or substantially all
of the Company's  assets.  A "potential  Change of Control of the Company" would
occur if: (w) an  agreement is entered  into,  the  consummation  of which would
result in a Change of Control of the  Company;  (x) a third party makes a public
announcement of an intention to take action that, if  consummated,  would result
in a Change of Control of the Company; (y) the Company's Stockholder Rights Plan
is triggered; or (z) the Board makes a good faith determination that a potential
Change of Control of the Company has occurred.  The  Severance  Agreement has an
initial term of three years and renews  automatically  for  successive  one year
terms unless the Company notifies the covered  executive within six months prior
to the end of the then current term that the Severance  Agreement will terminate
at the end of such term.

     Effective  November  14,1997,  Fredric E. von Stange  resigned as Executive
Vice  President,  Chief  Financial  Officer  and a director of the  Company.  In
connection  therewith,  he  and  the  Company  entered  into a  Separation  from
Employment and Consulting  Agreement,  terminating his employment agreement then
in effect. In consideration for the benefits provided by this agreement, Mr. von
Stange waived his rights under such employment  agreement,  released the Company
from any  claims he might have  against it  relating  to his  employment  or the
termination thereof and agreed to certain  non-competition and other restrictive
covenants.  Mr. von Stange  also  agreed to provide  consulting  services to the
Company for a two year  period.  During  such term the Company  will pay Mr. von
Stange  an  annual  fee  equal  to  his  salary at the termination date plus his

                                        8

<PAGE>



bonus payment for 1996, payable in equal bi-weekly  installments.  Such payments
will be  accelerated  in the event of a change in  control of the  Company.  All
unvested  stock  options  held by Mr.  von Stange at the  effective  date of the
agreement  will  continue  to vest  over the  term of the  agreement  and  those
remaining unvested on the agreement's expiration date will vest at that time. In
addition,  Mr. von Stange will continue to receive  certain  insurance and other
benefits during the term of this agreement.

Compensation Committee Interlocks and Insider Participation

     The  Board's  Compensation  Committee  is  composed  of  Mr.  Rouhana,  the
Company's  Chairman and Chief Executive  Officer,  Mr. Magyar, Mr. vanden Heuvel
and Professor Cash. No executive officer of the Company sits on the compensation
committee  of  another  entity,  one of whose  executive  officers  serves  as a
director of the Company or on the Company's Compensation Committee, nor does any
executive  officer of the Company serve as a director of another entity,  one of
whose executive officers serves on the Company's Compensation Committee.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

     The table  and  accompanying  footnotes  on the  following  pages set forth
certain  information  as of April 30,  1998 with  respect  to the  common  stock
ownership of (i) those  persons or groups who  beneficially  own more than 5% of
the  Company's  Common  Stock,  (ii) each  director  of the  Company,  (iii) the
Company's  Chief  Executive  Officer  and each of the  Company's  next four most
highly  compensated  executive officers whose individual  compensation  exceeded
$100,000 in the year ended December 31, 1997 (the "named  executive  officers"),
and (iv) all directors and executive officers of the Company as a group (in each
case, based upon information furnished by such persons).  Shares of Common Stock
issuable upon exercise of options which are currently exercisable or exercisable
within 60 days of the date of the record date for the Meeting have been included
in the  following  table.  

<TABLE>
<CAPTION>
                                                            Number of Shares                   Percent
Name and Address of Beneficial Owner                       Beneficially Owned            Beneficially Owned
------------------------------------                       -------------------           ------------------
<S>                                                            <C>                              <C> 
William J. Rouhana, Jr. (1)                                    1,923,840(2)                     5.04

Nathan Kantor (1)                                              1,044,269(3)                     2.74

Steven G. Chrust (1)                                             608,667(4)                     1.61

Timothy R. Graham (1)                                            445,853(5)                     1.19

Charles T. Dickson (1)                                                 0(6)                       -

Steven B. Magyar
 Two Pine Point
 Lloyd Harbor, New York 11742                                     69,206(7)                       *

William J. vanden Heuvel
 812 Park Avenue
 New York, New York 10021                                         97,500(8)                       *

Bert Wasserman
 126 East 56th Street
 New York, New York 10022                                        100,000(9)                       *


</TABLE>


                                        9

<PAGE>

<TABLE>
<CAPTION>

                                                            Number of Shares                   Percent
Name and Address of Beneficial Owner                       Beneficially Owned            Beneficially Owned
-------------------------------------------               --------------------          --------------------
<S>                                                         <C>                             <C> 
James I. Cash
 Harvard University
 Graduate School of Business Administration
 Baker Library 187, Soldiers Field Road
 Boston, Massachusetts 02163                                     40,000(10)                       *

All Directors and Executive
 Officers as a Group (9 persons)                              4,329,335(11)                     10.77
</TABLE>

----------------------------

*    Less than 1%.

(1)  The address of this person is c/o WinStar  Communications,  Inc.,  230 Park
     Avenue, New York, New York 10169.

(2)  Includes  986,667  shares of Common Stock issuable upon exercise of certain
     options.  Does not include (i) 58,333 shares of Common Stock  issuable upon
     exercise of options  which  become  exercisable  in July 1998,  (ii) 75,000
     shares of Common  Stock  issuable  upon  exercise of options  which  become
     exercisable in three equal annual installments commencing in April 1999 and
     (iii)  600,000  shares of Common Stock  issuable  upon  exercise of options
     which become exercisable in two equal annual installments in March 1999 and
     2000.  Mr.  Rouhana  has agreed  that,  during the term of Nathan  Kantor's
     employment  agreement with the Company,  he would vote all shares of Common
     Stock he controls in favor of Mr. Kantor as a director of the Company.

(3)  Includes  948,697  shares of Common Stock issuable upon exercise of certain
     options.  Does not include (i) 116,667 shares of Common Stock issuable upon
     exercise of other options which become  exercisable in September 1998, (ii)
     33,333  shares of Common  Stock  issuable  upon  exercise of options  which
     become  exercisable  in August 1998 or (iii) 30,000  shares of Common Stock
     issuable upon exercise of options which become  exercisable  in three equal
     annual installments commencing in April 1999.

(4)  Includes  (i) 12,000  shares of Common  Stock owned by the pension plan for
     SGC Advisory Services,  Inc., a money management services firm specializing
     in the  telecommunications  and technology  sectors, of which Mr. Chrust is
     President  and owner  ("SGC"),  and (ii)  538,667  shares  of Common  Stock
     issuable upon  exercise of certain  options  owned by Mr.  Chrust,  SGC and
     members of his family.  Does not include (A) 247,000 shares of Common Stock
     issuable upon exercise of other  options  which become  exercisable  in two
     equal annual installments  commencing in January 1999, (B) 33,333 shares of
     Common  Stock   issuable  upon  exercise  of  other  options  which  become
     exercisable in July 1998 or (C) 21,000 shares of Common Stock issuable upon
     exercise  of  options  which  become  exercisable  in  three  equal  annual
     installments commencing in April 1999.

(5)  Includes  220,000  shares of Common Stock issuable upon exercise of certain
     options.  Does not include  15,000  shares of Common  Stock  issuable  upon
     exercise  of  options  which  become  exercisable  in  three  equal  annual
     installments commencing in April 1999.

(6)  Does not include  250,000  shares of Common Stock issuable upon exercise of
     options  exercisable  in  five  equal  annual  installments  commencing  in
     December 1998.

(7)  Includes  (i) 1,000 shares of Common  Stock owned by Mr.  Magyar's  spouse,
     over which Mr. Magyar disclaims beneficial ownership,  (ii) 1,670 shares of
     Common Stock owned by benefit plans of which Mr. Magyar is the sole trustee
     and primary  beneficiary,  and (iii) 50,000 shares of Common Stock issuable
     upon exercise of certain options.


                                       10

<PAGE>



(8)  Includes  90,000  shares of Common Stock  issuable upon exercise of certain
     options.  Also includes 500 shares owned by Mr. vanden Heuvel's spouse,  as
     to which he disclaims beneficial ownership.

(9)  Includes  90,000  shares of Common Stock  issuable upon exercise of certain
     options.

(10) Represents  40,000 shares of Common Stock issuable upon exercise of certain
     options.  Does not include  20,000  shares of Common  Stock  issuable  upon
     exercise of options which become exercisable in January 1999.

(11) Includes  shares  referred to as being  included in notes (2) through (10).
     Excludes shares referred to in such notes as being excluded.

     Section  16(a) of the  Securities  Exchange  Act of 1934,  as amended  (the
"Exchange  Act"),  requires the Company's  directors and executive  officers and
persons who beneficially own more than ten percent of the Company's Common Stock
to file with the Securities and Exchange  Commission  ("SEC") initial reports of
ownership  and  reports of  changes  in  ownership  of Common  Stock.  Executive
officers,  directors and greater- than-ten percent  stockholders are required by
SEC  regulations  to furnish the Company  with copies of all such  reports  they
file. To the Company's  knowledge,  based solely on review of the copies of such
reports  furnished  to the  Company and  written  representations  that no other
reports were  required,  during the year ended  December  31, 1997,  all filings
under Section 16(a) were made as required.


Item 13.  Certain Relationships and Related Transactions

         Not Applicable

                                       11

<PAGE>


                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
caused this Amendment to be signed on its behalf by the  undersigned,  thereunto
duly authorized, on the 29th day of April, 1998,

                                            WINSTAR COMMUNICATIONS, INC.



                                             /s/ Joseph P. Dwyer
                                         By:__________________________________
                                             Joseph P. Dwyer
                                             Vice President - Finance



                                       12