UNITED STATES
                          SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C. 20549

                                   FORM 10-Q

[X]   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934 For the Quarterly Period Ended March 31, 1999

[ ]   Transition report pursuant to Section 13 or 15(d) of the
      Securities Exchange Act of 1934 For the transition period from
      __________ to ___________


                        Commission File Number: 0-12254


                      SCIENTIFIC TECHNOLOGIES INCORPORATED
                      ------------------------------------
                                    (Issuer)


          Oregon                                        77-0170363
 -------------------------                ------------------------------
  (State of incorporation)               (I.R.S. Employer Identification Number)


 6550 Dumbarton Circle, Fremont, California                      94555
---------------------------------------------               ----------------
  (Address of principal executive offices)                     (Zip Code)


                               (510) 608-3400
            -----------------------------------------------------
                         (Issuers telephone number)


Check whether the issuer (1) filed all reports required to be filed by Section
13 OR 15(d) of the Securities Exchange Act during the past 12 months (or 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 stock outstanding as of April 30, 1999 was 9,671,432 shares.

<PAGE>







                         PART 1 - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                      SCIENTIFIC TECHNOLOGIES INCORPORATED
                      CONDENSED CONSOLIDATED BALANCE SHEET
                     (In thousands, except per share data)
<TABLE>
<CAPTION>
                                                   March 31,  December 31,
                                                      1999         1998
                                                   -----------  -----------
<S>                                                <C>          <C>
                     Assets                        (unaudited)
Current assets:
    Cash and cash equivalents                         $3,532       $2,577
    Short-term investments                             9,953       10,798
    Accounts receivable, net                           7,722        6,612
    Inventories                                        5,160        5,812
    Deferred income taxes                              1,132        1,132
    Other assets                                         855          345
                                                   -----------  -----------
       Total current assets                           28,354       27,276
Property and equipment, net                            2,608        2,545
                                                   -----------  -----------
       Total assets                                  $30,962      $29,821
                                                   ===========  ===========

              Liabilities and Stockholders' Equity
Current liabilities:
    Trade accounts payable                            $2,021       $2,391
    Payable to Parent                                    268          --
    Accrued expenses                                   2,191        1,972
                                                   -----------  -----------
       Total current liabilities                       4,480        4,363
                                                   -----------  -----------

Stockholders' Equity
    Common stock                                          10           10
    Capital in excess of par value                     5,787        5,787
    Retained earnings                                 20,685       19,661
                                                   -----------  -----------
       Total stockholders' equity                     26,482       25,458
                                                   -----------  -----------
       Total liabilities and stockholders' equity    $30,962      $29,821
                                                   ===========  ===========
</TABLE>
   The accompanying notes are an integral part of these financial statements.
<PAGE>






                      SCIENTIFIC TECHNOLOGIES INCORPORATED
                    CONDENSED CONSOLIDATED STATEMENT OF INCOME
                      (In thousands, except per share data)
                                   (unaudited)
<TABLE>
<CAPTION>
                                     Three Months Ended
                                          March 31,
                                    ---------------------
                                       1999       1998
                                    ---------- ----------
<S>                                 <C>        <C>
Sales                                 $11,560    $11,113
Cost of goods sold                      5,809      5,386
                                    ---------- ----------
  Gross profit                          5,751      5,727
                                    ---------- ----------
Operating expenses
  Selling, general and
    administrative                      3,057      2,904
  Research and development              1,171        635
                                    ---------- ----------
   Total operating expenses             4,228      3,539
                                    ---------- ----------
   Income from operations               1,523      2,188

Interest and other income, net            129        120
                                    ---------- ----------
   Income before income taxes           1,652      2,308

Provision for income taxes                628        877
                                    ---------- ----------
        Net income                     $1,024     $1,431
                                    ========== ==========

 Basic net income per common share      $0.11      $0.15
                                    ========== ==========
 Shares used to compute basic
   net income per common share          9,670      9,639
                                    ========== ==========
 Diluted net income per common share    $0.11      $0.15
                                    ========== ==========
 Shares used to compute diluted
   net income per common share          9,690      9,835
                                    ========== ==========
</TABLE>
  The accompanying notes are an integral part of these financial statements.
<PAGE>








                      SCIENTIFIC TECHNOLOGIES INCORPORATED
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                               (In thousands)
                                 (unaudited)
<TABLE>
<CAPTION>
                                                         Three Months Ended
                                                             March 31,
                                                      -----------------------
                                                          1999        1998
                                                      ----------- -----------
<S>                                                   <C>         <C>
Cash flows from operating activities
  Net income                                              $1,024      $1,432
  Adjustments to reconcile net income to cash
    provided by operating activities:
    Depreciation and amortization                            242         232

    Changes in assets and liabilities:
      Accounts receivable, net                            (1,110)        243
      Inventories                                            652        (156)
      Payable to Parent                                      268         216
      Trade accounts payable                                (370)       (200)
      Accrued expenses                                       219         111
      Other                                                 (510)       (113)
                                                      ----------- -----------
        Cash flows provided by operating activities          415       1,765
                                                      ----------- -----------

Cash flows from investing activities
  Investment in intangibles and fixed assets                (305)       (291)
  Sale (purchase) of short-term investments                  845      (1,953)
                                                      ----------- -----------
        Cash flows used in investing activities              540      (2,244)
                                                      ----------- -----------

Cash flows from financing activities
   Issuance of common stock                                   --          23
                                                      ----------- -----------
        Cash flows used in financing activities               --          23
                                                      ----------- -----------
Change in cash and cash equivalents                          955        (456)

Cash and cash equivalents at beginning of period           2,577       4,559
                                                      ----------- -----------
Cash and cash equivalents at end of period                $3,532      $4,103
                                                      =========== ===========

Supplemental disclosure of cash flow information:
  Cash paid to the Parent for income taxes                  $628        $877
                                                      =========== ===========
</TABLE>
  The accompanying notes are an integral part of these financial statements.
<PAGE>


                 SCIENTIFIC TECHNOLOGIES INCORPORATED
             NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

          The consolidated financial statements as of March 31, 1999 and the 
three months ended March 31, 1999 and 1998 are unaudited. In the opinion 
of management, they reflect all adjustments (consisting only of normal 
recurring adjustments) necessary for a fair statement of the results of 
these periods but may not necessarily be indicative of the results to be 
expected for the full fiscal year. Certain information and footnote 
disclosures normally included in financial statements prepared in 
accordance with generally accepted accounting principles have been 
consolidated or omitted pursuant to the rules and regulations of the 
Securities and Exchange Commission. We suggest that these consolidated 
financial statements be read in conjunction with the financial 
statements and notes thereto included in Scientific Technologies 
Incorporated's Annual Report to Shareholders on Form 10-K for the year 
ended December 31, 1998.

   1. INVENTORIES
    Inventories consist of the following (in thousands):

                                               March 31,    December 31,
                                                 1999           1998
                                             ------------   ------------
         Finished goods                         $1,703           $2,421
         Work in process                           769              482
         Subassemblies                             595              541
         Raw materials                          $2,093            2,368
                                             ------------   ------------
                                                $5,160           $5,812
                                             ============   ============

2. NET INCOME PER SHARE
A reconciliation of the numerators and denominators of the basic and 
diluted income per common share computations is provided below.

                                           (In Thousands)       (Per Share)
1999                                    Income        Shares       Amount
--------------------------------------------------------------------------
Basic earnings per share calculation    $1,024         9,670        $0.11
Effect of dilutive securities
          Stock options                    -              20           -
                                         -----         -----         ----
Diluted earnings per share calculation  $1,024         9,690        $0.11
                                         =====         =====         ====

1998                                    Income        Shares       Amount
--------------------------------------------------------------------------
Basic earnings per share calculation    $1,431         9,639        $0.15
Effect of dilutive securities
          Stock options                    -             196           -
                                         -----         -----         ----
Diluted earnings per share calculation  $1,431         9,835        $0.15
                                         =====         =====         ====
3. DIVIDEND PAID
         On March 3, 1999, the Company declared a cash dividend of $.0475 
per share on all outstanding shares of its common stock. This dividend 
was paid on April 1, 1999 to shareholders of record on March 19, 1999. 
Approximately 86% of the outstanding common stock of the Company is 
beneficially owned by Scientific Technology Incorporated, a California 
corporation under common control with the Company. Dividends paid to 
Scientific Technology Incorporated were applied to the Payable to Parent 
account. 

4. COMPREHENSIVE INCOME
        For the three months ended March 31, 1999 and 1998, there is no 
difference between net income and comprehensive income.


<PAGE>

ITEM 2 . MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
--------------------------------------------------------------------------
RESULTS OF OPERATIONS
----------------------
       This interim report on Form 10-Q contains trend analysis and 
other forward-looking statements within the meaning of Section 27A of 
the Securities Act of 1933 and Section 21E of the Securities Act of 
1934. Such statements include expectations, beliefs, intentions or 
strategies regarding future operating results, future expenditures, 
future cash requirements, and future industry conditions and involve 
risks and uncertainties. The Company's actual results could differ 
materially from those projected in such forward-looking statements as a 
result of many factors, including, without limitation, those set forth 
under this section, the section entitled "Business Factors" below and 
elsewhere in this report on Form 10Q.

Results of Operations

       Scientific Technologies Incorporated designs, manufactures and 
distributes electrical and electronic industrial controls. The Company's 
products include safety light guards, profiling scanners, factory 
automation sensors, controls, components, microcomputers, fiber optics, 
power monitoring devices, safety mats, and other electronic equipment 
supplied to industrial automation, commercial and defense customers. 

        Sales for the three months ended March 31, 1999 increased 4% to 
$11,560,000 from $11,113,000 in the first quarter of 1998. This was 
primarily the result of increased acceptance of STI's products leading 
to an overall increase in units shipped.

        Gross margin as a percent of sales was 50% during the first quarter 
of 1999 compared to 52% for the comparable 1998 quarter. This was 
attributable to a change in product mix wherein sales of products with a 
lower relative gross margin increased as a percentage of total sales. 

        Selling, general and administrative expenses increased 5% to 
$3,057,000 in the first quarter of 1999 from $2,904,000 in first quarter 
of 1998. This was the result of increased selling expenses associated 
with the higher levels of revenue, as well as increased advertising and 
outside service expenses. Selling, general and administrative expenses 
as a percent of sales remained constant at 26% in the first quarter of 
1999 and the comparable 1998 quarter.

       Reflecting the Company's continuing commitment to new product 
development, research and development expenses increased 84% to 
$1,171,000 in 1999 from $635,000 in 1998. Research and development 
expenses were 10% of sales for the three months ended March 31, 1999 
compared to 6% for the comparable 1998 period. The Company anticipates 
that it will continue to make substantial investments in research and 
development in subsequent quarters.

Liquidity and Capital Resources

        At March 31, 1999 the Company's working capital was $23,874,000, a 
4% increase from the $22,913,000 reported at December 31, 1998. This was 
due to positive cash flows from operations, resulting in increased 
accounts receivable and lower accounts payable, which offset increased 
Payable to Parent, accrued expenses, lower inventories and short-term 
investments. 

        Available bank borrowings were $6,100,000 at March 31, 1999. The 
Company believes that cash from operations, together with its cash 
resources and available bank borrowings, will be sufficient to fund its 
working capital requirements for the next twelve months. 

Year 2000 Compliance

      The Company believes that it has completed upgrading its 
information systems to Year 2000 compliant versions, and therefore does 
not anticipate any internal Year 2000 issues from its own information 
systems. However, the Company cannot assure you that all of its products 
will contain all of the necessary data code changes to prevent 
processing errors potentially arising from calculations using the Year 
2000 date, or that disruptions relating to the Year 2000 will not occur. 
Furthermore, the Company could be adversely impacted by Year 2000 issues 
faced by major distributors, suppliers, customers, vendors and financial 
service organizations. An assessment of the impact that third parties 
that are not Year 2000 compliant may have on the operations of the 
Company is expected to be completed in the second quarter of 1999.

Business Factors

        Because of the variety of factors and uncertainties affecting the 
Company's operating results, past financial performance and historic 
trends may not be a reliable indicator of future performance. These 
factors, as well as other factors affecting the Company's operating 
performance, may result in significant volatility in the Company's 
common stock price. Among the factors which could affect future results:

Variability of operating results
        The Company has experienced fluctuations in annual and quarterly 
operating results and anticipates that these fluctuations will continue. 
These fluctuations are caused by a number of factors, including the 
level and timing of customer orders, the mix of products sold, 
fluctuations in complementary third party products with which STI 
products are sold, the timing of operating expenditures and general 
economic conditions in the U.S. and abroad, particularly in Asia and 
Europe.

Seasonality
        The industrial manufacturing equipment industry can be subject to 
seasonality. This is also true with respect to European markets where 
business activity declines due to vacations taken in the summer months.

Competition
        The market for industrial sensors is highly competitive. Many of the 
Company's competitors have substantially greater name recognition and 
technical, marketing and financial resources than the Company. 
Competitive pressures could reduce market acceptance of the Company's 
products and result in price reductions and increases in expenses.

Rapid technological change and new product development
      The Company's future success will depend on its ability to enhance 
its current products, develop new products and respond to emerging 
industry standards, all on a timely and cost-effective basis. The 
introduction of new products also requires the Company to devote 
substantial resources in order to manage the transition from older 
products in order to minimize disruption of customer orders, avoid 
excessive levels of older product inventories and ensure that adequate 
supplies of new products can be delivered to meet customer demands.

Dependence on indirect distribution channel
        A majority of the Company's products are sold through third party 
distributors, system integrators and original equipment manufacturers. 
These resellers are not required to offer the Company's products 
exclusively and there can be no assurance that any of the Company's 
resellers will continue to offer the Company's products. 

International sales
        The Company's international sales may be disrupted by currency 
fluctuations or other international events beyond the Company's control, 
including political or regulatory changes and changes in general 
economic conditions.

Protection and Enforcement of Intellectual Property Rights
        The Company relies on a combination of patent, trademark and trade 
secret laws and contractual restrictions to establish and protect 
certain proprietary rights in its products and services. There can be no 
assurance that the Company's patents, trademarks, or contractual 
arrangements or other steps taken by the Company to protect its 
intellectual property will prove sufficient to prevent misappropriation 
of the Company's technology or defer independent third party development 
of similar technologies. Moreover, there can be no assurance that the 
technology licenses granted to the Company from its Parent will continue 
to be available. The loss of any of the Company's proprietary technology 
could require the Company to obtain technology of lower quality or 
performance standards or at greater cost, which could materially 
adversely affect the Company's business, results of operations and 
financial condition. Furthermore, the laws of certain foreign countries 
may not protect the Company's products, services or intellectual 
property rights to the same extent as do the laws of the United States. 

Risks Associated with Potential Acquisitions, Investments or Other 
Ventures
      The Company may acquire or make investments in complementary 
businesses, technologies, services or products if appropriate 
opportunities arise. From time to time, the Company has discussions and 
negotiations with other companies regarding acquiring or investing in 
such companies' businesses, products, services or technologies, and the 
Company regularly engages in such discussions and negotiations in the 
ordinary course of its business. Subsequent to March 31, 1999, the 
Company acquired Lundahl Instruments, Inc. There can be no assurance 
that the Company  will be able to identify future suitable acquisition 
or investment candidates, or if it does identify suitable candidates, 
that it will be able to make such acquisitions or investments on 
commercially acceptable terms or at all. If the Company acquires or 
invests in another company, it could have difficulty in assimilating 
that company's personnel, operations, technology and software. In 
addition, the key personnel of the acquired company may decide not to 
work for the Company. If the Company makes acquisitions, it could have 
difficulty in integrating the acquired products, services or 
technologies in its operations. These difficulties could disrupt the 
Company's ongoing business, distract its management and employees, 
increase its expenses and adversely affect its result of operations. 
Furthermore, the Company may incur indebtedness or issue equity 
securities to pay for any future acquisitions. The issuance of equity 
securities would be dilutive to the Company's existing shareholders.

<PAGE>






























PART II - OTHER INFORMATION


Item 6. EXHIBITS AND REPORTS ON FORM 8-K. 

(a)  The following documents are filed as a part of this Report:

        Exhibit  3.1 - Articles of Incorporation, as amended, are 
                       incorporated by reference to the Registrant's
                       Registrant's Form 10-K for the year ended December 
                       31, 1988, Exhibit 3.1.

        Exhibit  3.3 - By-Laws are incorporated by reference to the 
                       Registrant's Form 10-K for the year ended December 
                       31, 1985, Exhibit 3.

        Exhibit  4.1 - 1997 Employee Stock Purchase Plan is incorporated 
                       by reference to the Registrant's Registration 
                       Statement on Form S-8 dated October 2, 1998.

        Exhibit  4.2 - 1997 Stock Plan is incorporated by reference to the 
                       Registrant's Registration Statement on Form S-8 dated 
                       October 2, 1998.

        Exhibit 10.1 - Lease agreement dated February 21, 1995 for 6550 
                       Dumbarton Circle, Fremont, California 94555,
                       is incorporated by reference to the Registrant's
                       Form 10-KSB for the year ended December 31, 1994,
                       Exhibit 10.4

        Exhibit 10.2 - Bank agreement dated November 29, 1994 with Bank of 
                       The West is incorporated by reference to the Registrant's
                       Form 10-KSB for the year ended December 31, 1994,
                       Exhibit 10.3.

        Exhibit 10.3 - Amendment dated May 31, 1998 to Bank Agreement 
                       dated November 29, 1994 is incorporated by 
                       reference to the Registrant's Form 10-K for
                       the year ended December 31, 1998, Exhibit 10.3.

        Exhibit 10.4 - Lease agreement dated November 21, 1995  is 
                       is incorporated by reference to the Registrant's
                       Form 10-KSB for the year ended December 31, 1995,
                       Exhibit 10.4

        Exhibit 10.5 - Agreement dated January 1, 1997 with Scientific 
                       Technology Inc. for the purchase of the level 
                       sensor product line.

        Exhibit 21.1 - Subsidiaries of the Registrant  is incorporated by 
                       reference to the Registrant's Form 10-K 
                       for the year ended December 31, 1998, Exhibit 21.1

        Exhibit 23.1 - Consent of Independent Accountants is incorporated 
                       by reference to the Registrant's Form 10-K for 
                       the year ended December 31, 1998, Exhibit 23.1

        Exhibit 24.1 - Power of Attorney is incorporated by reference to 
                       the Registrant's Form 10-K for the year ended 
                       ended December 31, 1998, Exhibit 24.1 

        Exhibit 27.0 - Financial Data Schedule.

(b)   No Reports on Form 8-K were filed during the first quarter of 
1999.
<PAGE>











































                                    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.




                                            SCIENTIFIC TECHNOLOGIES INCORPORATED
                                            ------------------------------------
                                                        Registrant


Date:     May 13, 1999                            /s/Joseph J. Lazzara
       -----------------                       ---------------------------------
                                                     Joseph J. Lazzara
                                               President and Chief Executive
                                                          Officer
                                                 (Principal Executive and
                                                     Financial officer)







Date:     May 13, 1999                           /s/ Richard O. Faria
       -----------------                     ----------------------------------
                                                     Richard O. Faria
                                                  Vice-President, Finance &
                                                      Administration
                                                (Principal Accounting Officer)