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

                                    FORM 10-Q

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

     For the quarterly period ended September 30, 1998
                                                          OR

( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
     EXCHANGE ACT OF 1934

     For the transition period from                  to 
                                    ----------------    ---------------

                           Commission File No. 1-12825

                           MORTON INTERNATIONAL, INC.
                           --------------------------

             (Exact Name of Registrant as Specified in its Charter)


               Indiana                                 36-4140798
----------------------------------------   ------------------------------------
(State of Incorporation or Organization)   (I.R.S. Employer Identification No.)


100 North Riverside Plaza, Chicago, Illinois                      60606-1596
--------------------------------------------                      ----------
Address of Principal Executive Offices)                           (Zip Code)

Registrant's Telephone Number                                    (312) 807-2000
-----------------------------                                    --------------

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                Yes   X   No     
                                    -----    -----

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practical date.

            Class                           Outstanding at September 30, 1998
----------------------------                ---------------------------------
Common Stock, $1.00 par value                        121,342,273 shares


<PAGE>


                           MORTON INTERNATIONAL, INC.
                          QUARTERLY REPORT ON FORM 10-Q




                                                                          INDEX
                                                                          PAGE
                                                                          -----
PART I.  FINANCIAL INFORMATION:
-------------------------------
Item 1.  Financial Statements (Unaudited)

               Consolidated Statements of Income and Retained
                      Earnings - Three months ended
                      September 30, 1998 and 1997                          3

               Consolidated Balance Sheets - September 30, 1998
                      and June 30, 1998                                    4

               Consolidated Statements of Cash Flows -
                      Three months ended September 30, 1998 and 1997       5

               Notes to Consolidated Financial Statements -
                      September 30, 1998                                  6-7

Item 2.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations                             7-10

PART II.  OTHER INFORMATION
---------------------------

Item 6.  Exhibits and Reports on Form 8-K                                 10

SIGNATURE                                                                 10

                                       2

<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)
-----------------------------------------

                           MORTON INTERNATIONAL, INC.
       CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (UNAUDITED)
                       (IN MILLIONS EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                        Three Months Ended
                                                                             September 30
                                                            -------------------------------------------
                                                                  1998                     1997
                                                            ------------------      -------------------
<S>                                                         <C>                     <C>

Net sales                                                 $             593.8     $              601.3
Interest, royalties and sundry income                                     6.2                     10.1
                                                            ------------------      -------------------
                                                                        600.0                    611.4
Deductions from income:
   Cost of products sold                                                403.6                    408.8
   Selling, administrative and general expense                          100.8                     94.9
   Research and development expense                                      14.9                     14.4
   Interest expense                                                       6.4                      5.6
   Amortization of goodwill                                               3.3                      3.0
                                                            ------------------      -------------------
                                                                        529.0                    526.7
                                                            ------------------      -------------------

Income before income taxes                                               71.0                     84.7
Income taxes                                                             25.6                     30.5
                                                            ------------------      -------------------
Net income                                                               45.4                     54.2

Retained earnings at beginning of period                              1,840.3                  1,706.0
Cash dividends:  $.13  per share for the
  three months ended September 30, 1998 and
  $.12 per share for the three months ended
  September 30, 1997                                                    (16.3)                   (16.3)
Exercise of stock options                                                ( .1)                    (4.6)
                                                            ------------------      -------------------

Retained earnings at end of period                        $           1,869.3     $            1,739.3
                                                            ==================      ===================

Basic earnings per share                                  $               .36     $                .40
                                                            ==================      ===================
Diluted earnings per share                                $               .36     $                .39
                                                            ==================      ===================
Shares used in computation (in thousands)
  Basic earnings per share                                            124,787                  135,796
                                                            ==================      ===================
  Diluted earnings per share                                          125,760                  137,888
                                                            ==================      ===================

</TABLE>


See notes to consolidated financial statements.


                                        3

<PAGE>


                           MORTON INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEETS
                                  (IN MILLIONS)

<TABLE>
<CAPTION>
                                                                       September 30             June 30
                                                                           1998                   1998
                                                                      --------------        -------------
                                                                       (Unaudited)
<S>                                                                   <C>                   <C>

ASSETS
------
Current assets
   Cash and cash equivalents                                         $         154.2        $        138.0
   Receivables                                                                 478.3                 468.6
   Inventories                                                                 419.5                 381.0
   Prepaid expenses and other                                                  125.6                 125.4
                                                                      ---------------       ---------------
          Total current assets                                               1,177.6               1,113.0
                                                                      ---------------       ---------------

Other assets
   Cost in excess of net assets of businesses
     acquired, less amortization                                               366.4                 357.4
   Investments in affiliates                                                    92.6                  73.9
   Miscellaneous                                                               128.0                 121.9
                                                                      ---------------       ---------------
                                                                               587.0                 553.2
                                                                      ---------------       ---------------

Property, plant and equipment, at cost                                       1,849.0               1,773.1
   Less allowances for depreciation                                            950.6                 891.4
                                                                      ---------------       ---------------
                                                                               898.4                 881.7
                                                                      ---------------       ---------------
                                                                     $       2,663.0       $       2,547.9
                                                                      ===============       ===============

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------

Current liabilities
   Notes payable and current portion of long-term debt               $         186.5       $          22.6
   Accounts payable                                                            229.2                 215.6
   Accrued salaries, wages and other compensation                               53.9                  52.1
   Other accrued expenses                                                      154.8                 159.3
   Income taxes                                                                 39.6                  22.1
                                                                      ---------------       ---------------
          Total current liabilities                                            664.0                 471.7
                                                                      ---------------       ---------------

Long-term debt, less current portion                                           222.3                 222.5
Deferred income taxes                                                           68.3                  60.9
Accrued postretirement benefits other than pensions                            158.1                 157.9
Other noncurrent liabilities                                                   107.0                 103.8
                                                                      ---------------       ---------------
         Total noncurrent liabilities                                          555.7                 545.1
                                                                      ---------------       ---------------

Shareholders' equity
   Preferred  Stock (par value $1.00 per share)  Authorized - 25.0 shares,  none
     issued
   Common Stock (par value $1.00 per share)
     Authorized - 500.0 shares
     Issued-140.1 shares at September 30 and June 30, 1998                     140.1                 140.1
   Retained earnings                                                         1,869.3               1,840.3
   Accumulated other comprehensive income                                       (5.7)                (19.2)
   Unamortized restricted stock award                                           ( .7)                 ( .7)
                                                                      ---------------       ---------------
                                                                             2,003.0               1,960.5
   Less cost of common stock in treasury-18.8  shares
    at September 30, 1998 and  13.3 shares at June 30, 1998                    559.7                 429.4
                                                                      ---------------       ---------------
          Total shareholders' equity                                         1,443.3               1,531.1
                                                                      ---------------       ---------------
                                                                     $       2,663.0       $       2,547.9
                                                                      ===============       ===============
</TABLE>


See notes to consolidated financial statements.

                                       4

<PAGE>


<PAGE>
                           MORTON INTERNATIONAL, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                  (IN MILLIONS)
<TABLE>
<CAPTION>

                                                                                      Cash Provided (Used)
                                                                                       Three Months Ended
                                                                                            September 30
                                                                             -------------------------------------
                                                                                   1998                   1997
                                                                             -------------          --------------
<S>                                                                          <C>                    <C>

Operating Activities
--------------------
  Net Income                                                                $        45.4          $         54.2
  Adjustments to reconcile income from continuing operations
    to net cash provided by operating activities:
      Depreciation and amortization                                                  34.7                    33.8
      Deferred income taxes                                                           1.8                      .1
      Undistributed earnings of affiliates                                           (1.4)                   (2.0)
      Changes in operating assets and liabilities net
        of effects of businesses acquired
          Receivables                                                                12.6                    (4.2)
          Inventories and prepaid expenses                                          (27.4)                  (40.6)
          Accounts payable and accrued expenses                                      (6.4)                  (13.3)
          Accrued income taxes                                                       16.0                     6.6
          Other - net                                                                (4.8)                    1.3
                                                                             -------------          --------------
            Net cash provided by operating activities                                70.5                    35.9
                                                                             -------------          --------------

Investing Activities
--------------------
  Purchase of property, plant and equipment                                         (25.6)                  (35.1)
  Proceeds from property and other asset disposals                                     .3                     4.5
  Net cash invested in businesses acquired                                          (30.7)                      -
  Investment in affiliates                                                              -                    (2.9)
                                                                             -------------          --------------
            Net cash used for investing activities                                  (56.0)                  (33.5)
                                                                             -------------          --------------

Financing Activities
--------------------
  Purchase of common stock for treasury                                            (130.8)                 (141.4)
  Net increase of short-term notes payable                                          159.3                     7.3
  Repayment of long-term debt                                                        ( .1)                   ( .1)
  Stock option transactions                                                            .2                     4.4
  Dividends paid                                                                    (16.3)                  (16.3)
                                                                             -------------          --------------
            Net cash provided (used) for financing activities                        12.3                  (146.1)
                                                                             -------------          --------------

Effect of foreign exchange rate changes on cash
  and cash equivalents                                                              (10.6)                    2.5
                                                                             -------------          --------------
Increase (decrease) in cash and cash equivalents                                     16.2                  (141.2)
Cash and cash equivalents at beginning of year                                      138.0                   430.3
                                                                             -------------          --------------
Cash and cash equivalents at end of period                                  $       154.2          $        289.1
                                                                             =============          ==============

</TABLE>


See notes to consolidated financial statements.


                                        5

<PAGE>


                           MORTON INTERNATIONAL, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


Basis of Presentation
---------------------

The interim  financial  statements  have been  prepared in  accordance  with the
instructions to Form 10-Q and Rule 10-01 of Regulation SX and therefore,  do not
include all information and footnotes required by generally accepted  accounting
principles for complete financial statements. In the opinion of management,  all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair  presentation  have been included.  Operating  results for the three months
ended  September  30, 1998 are not  necessarily  indicative of the results to be
expected  for the fiscal year ending June 30,  1999.  It is  suggested  that the
financial  statements be read in  conjunction  with the  consolidated  financial
statements  and  notes  thereto  included  in the  Company's  Annual  Report  to
Shareholders  and Annual  Report on Form 10-K for the fiscal year ended June 30,
1998.

Earnings Per Share
------------------

The  numerators  for the  earnings  per share  disclosures  on the  accompanying
unaudited  Consolidated  Statements of Income and Retained Earnings are the same
as the income numbers shown on that  Statement.  Following is the computation of
the denominator for the basic and diluted earnings per share calculations:

                                                        Three months ended
                                                           September 30    
                                                    -----------------------
                                                          (in thousands)
                                                      1998            1997
                                                      ----            ----
      Denominator for basic earnings per share       124,787        135,796
         -weighted average shares outstanding
      Dilutive effect of employee stock options          973          2,092
                                                    --------       --------
      Denominator for diluted earnings per share     125,760        137,888
                                                    ========       ========

Comprehensive Income
--------------------

As of July 1, 1998, the Company adopted the Financial Accounting Standards Board
Statement No. 130, "Reporting  Comprehensive  Income." Statement 130 establishes
new  rules  for the  reporting  and  display  of  comprehensive  income  and its
components;  however,  the  adoption  of this  Statement  had no  impact  on the
Company's net income.  Statement 130 requires  unrealized gains or losses on the
Company's foreign currency translation adjustments, which prior to adoption were
reported   separately  in  shareholders'   equity,   to  be  included  in  other
comprehensive  income.  The June 30, 1998  Consolidated  Balance  Sheet has been
reclassified to conform to the requirements of Statement 130.

The components of comprehensive  income, net of tax, for the three month periods
ended September 31, 1998 and 1997 are as follows:
                                                         1998            1997
                                                         ----            ----
                                                             (in millions)
   Net income                                            $45.4          $54.2
   Foreign currency translation adjustments               13.5           (1.8)
                                                         -----          -----
   Comprehensive income                                  $58.9          $52.4
                                                         =====          =====
                                       6

<PAGE>


Accumulated other comprehensive income on the accompanying  Consolidated Balance
Sheets is net of deferred  income tax benefits of $5.5 million and $16.7 million
at September 30 and June 30, 1998, respectively.

Acquisitions
------------

In the first quarter of fiscal 1999, the Company acquired  seventy-five  percent
of Poliolchimica S.p.A.  ("Poliolchimica"),  a producer of polyester resins. The
Company also  acquired the Comiel  division,  a producer of  polyesters  and wax
lubricants for polyvinyl chloride and other plastics, from Reagens Comiel S.p.A.
The purchase price for these Italian businesses was $30.7 million.  Assuming the
acquisitions had been effective as of July 1, 1997, unaudited pro forma data for
the three  months  ended  September  30,  1998 and 1997 would not be  materially
different in relation to consolidated results presented herein.

Inventories
-----------

Inventories  are  stated at the lower of cost  (principally  last-in,  first-out
method) or market. Components of inventories are as follows:

                                                   Sept. 30        June 30
                                                     1998            1998
                                                   --------        --------
                                                        (in millions)
     Finished products and work-in-process           $326.9          $294.6
     Materials and supplies                            92.6            86.4
                                                     ------          ------
                                                     $419.5          $381.0
                                                     ======          ======

New Accounting Pronouncement
----------------------------

In June 1998, the Financial Accounting Standards Board issued Statement No. 133,
"Accounting for Derivative  Instruments and Hedging  Activities." It requires an
entity to recognize  derivatives  as either assets or liabilities in the balance
sheet and measure  those  instruments  at fair market  value.  The  statement is
effective  for fiscal  years  beginning  after  June 15,  1999.  The  Company is
currently assessing the effect the statement will have on its financial position
and results of operations in the period of adoption.

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

Results of Operations
---------------------

Net  income  for the first  quarter of fiscal  1999 was $45.4  million,  down 16
percent from $54.2 million for the first quarter of fiscal 1998. The comparisons
in  this  quarter  versus  last  year's  strong  first  quarter  were  difficult
considering  the impact of the Asian  problems,  pricing  declines  in  selected
chemical  product  lines as well as ice control  salt.  First  quarter  sales of
$593.8  million  declined  1 percent  compared  to $601.3  million  in the first
quarter of fiscal 1998.  Diluted  earnings per share for the quarter of 36 cents
compares to 39 cents for the same period in fiscal 1998.

In the first  quarter  of fiscal  1999,  specialty  chemicals  sales were down 2
percent to $426.3  million  versus  $433.7  million in the same period of fiscal
1998. For the total chemical business, volume slipped by approximately 1 percent
while price/mix declined 2 and a half percent. Offsetting those were a 2 percent
increase  in sales due to  acquisitions.  The  impact of  foreign  exchange  was
neutral in the quarter versus last year's first quarter. First quarter operating
earnings for specialty  chemicals were $64.4 million, a 12 percent decrease from
the first quarter of fiscal 1998.

                                       7

<PAGE>


Among those  chemical  product  lines  which  showed  sales  growth in the first
quarter  of  fiscal  1999  were  packaging  adhesives  due to the  Poliolchimica
acquisition,  industrial adhesives,  waterbased polymers, performance chemicals,
dyes,  powder  coatings and  industrial  coatings.  The combined  sales of these
product  lines  contributed  65 percent of the  group's  total  sales and grew 5
percent over the first quarter of fiscal 1998. Product lines contributing to the
improvement in chemical group earnings included waterbased polymers, performance
chemicals,  dyes and North American powder coatings.  Earnings for these product
lines  constituted  40 percent of the group's  total  earnings and  collectively
showed a 21 percent improvement over the first quarter of fiscal year 1998.

Salt sales for the first quarter of fiscal 1999 were $167.5  million,  flat with
last year's first quarter  sales.  North American salt sales were modestly ahead
of last year for the same period.  North  American ice control salt sales were 5
percent below last year for the quarter;  however,  non-ice  control salt sales,
particularly  water  conditioning  salt products,  contributed to Salt's overall
performance.  European  salt sales were 4 percent below prior year for the first
quarter.  Salt  operating  earnings  were $22.8  million in the first quarter of
fiscal 1999,  down 16 percent from $27.0  million in the first quarter of fiscal
1998.  Operating  earnings  declined  in the first  quarter due in large part to
lower current year  production  levels of ice control salt.  Also, the impact of
two strikes in the  quarter,  one in Rittman,  Ohio,  and the other at Salins du
Girard in the south of France, contributed to the reduced earnings. Both strikes
were settled after  approximately two weeks.  Operating margins for salt were 14
percent in the first  quarter  of fiscal  1999  versus 16  percent  for the same
period in fiscal 1998,  reflecting the lower operating  margins of both European
and North American Salt operations.

Company  total  corporate  costs were 7 percent  higher in the first  quarter of
fiscal 1999 versus the same period of last  fiscal  year.  Although  the company
maintained tight control over corporate administrative costs in the quarter, net
interest  costs  increased by $2.7 million,  mostly due to a decline in interest
income as the company purchased its shares.

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

Operating  activities  were a source of cash in the  three  month  period  ended
September  30,  1998 and  1997,  providing  $70.5  million  and  $35.9  million,
respectively.

Income from operations was $45.4 million during the first quarter of fiscal 1999
versus  $54.2  million  for the same period of fiscal  1998.  In the first three
months of the current  fiscal  year,  depreciation  and  amortization  was $34.7
million,  up $.9  million  from the same  period of the prior  year.  Changes in
operating assets and liabilities resulted in a use of $10.0 million in the first
quarter  of fiscal  1999  compared  to a $50.2  million  use of cash last  year.
Receivables  were a source of cash in fiscal 1999 of $12.6 million  versus a use
in 1998 of $4.2  million.  Inventories  and prepaid  expenses used $13.2 million
less cash this year.

Investing  activities  in the first  quarter of fiscal  1999  generated  a $56.0
million use of funds  compared to $33.5 million use of funds for the same period
last year.  Capital  spending  accounted for a use of funds of $25.6 million for
the first quarter of fiscal year 1999 versus $35.1 for the first quarter of last
year.  Expansion related to certain chemical products as well as basic upkeep of
the salt and chemical manufacturing facilities continue to be the major areas of
capital spending.

                                       8

<PAGE>


The acquisition of two Italian  chemical  companies,  Poliolchimica  and Comiel,
required a use of $30.7 million in the first quarter of the current fiscal year.
There were no business acquisitions in the first three months of fiscal 1998.

Financing activities for the three month period ending September 30, 1998 were a
$12.3 million  source of funds  compared to a $146.1 million use of funds during
the same  period  in the  prior  year.  Accounting  for most of the  change  was
short-term notes payable,  which resulted in a source of funds of $159.3 million
for the first  quarter of fiscal 1999  versus a source of funds of $7.3  million
for the same period of fiscal 1998.  This increase was primarily  related to the
short-term  financing of the stock repurchases for the quarter. The common stock
repurchase  program  resulted  in a use of funds of $130.8  million in the first
quarter of fiscal 1999 and $141.4  million  during the same period of last year.
At the end of the September 30, 1998 quarter,  the Company had  repurchased  9.8
million shares under the current 10 million share authorization. The balance was
acquired in early October. Since the spinoff in May 1997, Morton has repurchased
19.8 million shares as of September 30, 1998 bringing the shares  outstanding to
121.3  million at that  date.  On  October  22,  1998,  the  Company's  Board of
Directors approved the repurchase of an additional 8.0 million shares. Dividends
paid were $16.3 million at the end of the first quarter of fiscal 1999 and 1998.

The Company's current ratio was 1.8 at September 30, 1998, versus a 2.4 ratio at
June 30, 1998. Total debt as a percentage of total  capitalization  at September
30, 1998 was 21.3 percent compared to 13.3 percent at June 30, 1998.

As of September 30, 1998,  the Company has unexpended  authorizations  for fixed
asset acquisitions of $86.8 million.  These  authorizations  relate primarily to
chemical  facility  expansion,  product  improvements and facility upgrades on a
company-wide basis.

Estimated cash flow from operations and current financial  resources,  including
financing  capacity,   are  expected  to  be  adequate  to  fund  the  Company's
anticipated  working  capital  requirements,   fixed  asset  spending,  dividend
payments, business acquisitions and share repurchases in the foreseeable future.

Euro Conversion
---------------

The euro is scheduled  to be  introduced  on January 1, 1999,  at which time the
conversion rates between existing sovereign currencies ("legacy currencies") and
the euro  will be set for the  participating  European  Monetary  Union  states.
However, the legacy currencies in those states will continue to be used as legal
tender  through  January 1, 2002.  Thereafter,  the  legacy  currencies  will be
canceled and euro bills and coins will be used in the participating states.

Transition  to the euro  creates a number of issues  for the  Company.  Business
issues that must be addressed  include product pricing policies and ensuring the
continuity of business and financial  contracts.  Finance and accounting  issues
include the conversion of accounting systems,  statutory records,  tax books and
payroll  systems to the euro,  as well as  conversion of bank accounts and other
treasury and cash management activities.

The Company is addressing these transition  issues and currently does not expect
the  transition  to the euro and the  costs to be  incurred  to have a  material
effect on its liquidity, financial condition or results of operations.

                                       9

<PAGE>


Forward Looking-Cautionary Statement
------------------------------------

Except  for  the  historical   information  and  discussions  contained  herein,
statements   contained  in  this  Form  10-Q  may  constitute  "forward  looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995. These statements reflect  management's current expectations and involve
a number of risks and  uncertainties.  Actual  results  could differ  materially
depending  on a variety  of  factors,  including  the  risks  and  uncertainties
discussed in the Company's  Annual Report on Form 10-K filed with the Securities
and Exchange Commission on September 21, 1998.

                           PART II - OTHER INFORMATION


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

(1)    Exhibits (numbered in accordance with Item 601 of Regulation S-K).

    (27) (a) Financial Data Schedules for the first quarter of fiscal 1999. (27)
    (b) Financial Data Schedules restated for fiscal 1998.

(2)    Reports on Form 8-K.

     The Company did not file any 8-K Reports  during the fiscal  quarter  ended
     September 30, 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.


                                                 MORTON INTERNATIONAL, INC.
                                            ------------------------------------
                                                          (Registrant)


Date:  November  9, 1998                 BY:   /s/ L. N. Liszt
     --------------------                   ------------------------------------
                                   L. N. Liszt
                                   Controller
                                             (Principal Accounting Officer)

                                       10