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

                             FORM 10-K

[x]  ANNUAL REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2001

Or

[ ]  TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from _____________ to ________________

Commission file Number:  2-88927

                    FIRST KEYSTONE CORPORATION
      (Exact name of registrant as specified in its Charter)

       PENNSYLVANIA                           23-2249083
(State or other jurisdiction of            I.R.S. Employer
incorporation or organization)         Identification Number)

111 West Front Street,                         18603
Berwick, Pennsylvania                        (Zip Code)
(Address of principal
  executive offices)

Registrant's telephone number, including area code:  (570) 752-3671

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

Securities registered pursuant to Section 12(g) of the Act:  Common
Stock, par value $2.00 per share

     Indicate by check mark whether the Registrant (1) filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 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______

     Indicate by check mark if there is no disclosure of delinquent
filers in response to Item 405 of Regulation S-K 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]

     The aggregate market value of the voting stock held by non-affiliates
      on the Registrant based on the closing price as of March
12, 2002, was approximately $47,861,000.

     The number of shares outstanding of the issuer's Common Stock,
as of March 16, 2001, was 2,833,727 shares of Common Stock, par
value $2.00 per share.


                DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Registrant's 2002 definitive Proxy Statement
are incorporated by reference in Part III of this Report.  In
addition, portions of the Annual Report to Stockholders of the
Registrant for the year ended December 31, 2001, are incorporated
by reference in Part II of this Report.


<PAGE>

                    FIRST KEYSTONE CORPORATION
                             FORM 10-K

                         Table of Contents

Part I                                                  Page
______                                                  ____

Item 1.     Business                                     1
Item 2.     Properties                                   8
Item 3.     Legal Proceedings                            10
Item 4.     Submission of Matters to a
              Vote of Security Holders                   10


Part II
_______

Item 5.     Market for Registrant's Common
              Equity and Related
              Stockholder Matters                        10
Item 6.     Selected Financial Data                      11
Item 7.     Management's Discussion and
              Analysis of Financial Condition
              and Results of Operations                  12
Item 7A.     Quantitative and Qualitative
              Disclosure amount Market Risk              12
Item 8.     Financial Statements and
              Supplementary Data                         12
Item 9.     Changes in and Disagreements
              with Accountants on Accounting
              and Financial Disclosure                   12


Part III
________

Item 10.     Directors and Executive Officers
               of the Registrant                         12
Item 11.     Executive Compensation                      13
Item 12.     Security Ownership of Certain
               Beneficial Owners
               and Management                            13
Item 13.     Related Party Transactions                  13


Part IV
_______

Item 14.     Exhibits, Financial Statement
               Schedules, and Reports on
               Form 8-K                                  13
             Signatures                                  17
             Exhibit 11                                  20
             Exhibit 13                                  22
             Exhibit 21                                  23
             Exhibit 23                                  24


                               i

<PAGE>

                    FIRST KEYSTONE CORPORATION
                             FORM 10-K

                              PART I


      Forward Looking Statements
      __________________________

      The management of First Keystone Corporation  has made
forward-looking statements in this annual report on Form 10-K.
These forward-looking statements may be subject to risks and
uncertainties.  Forward-looking statements include the information
concerning possible or assumed future results of operations of the
Corporation and its subsidiary, The First National Bank of Berwick
(the "Bank").  When words such as "believes," "expects,"
"anticipates" or similar expressions occur in this annual report,
management is making forward-looking statements.

      Shareholders should note that many factors, some of which are
discussed elsewhere in this annual report, could affect the future
financial results of the Corporation and its subsidiary, both
individually and collectively, and could cause those results to
differ materially from those expressed in the forward-looking
statements contained in this annual report on Form 10-K.  These
factors include the following:

      * operating, legal and regulatory risks;

      * economic, political and competitive forces affecting our
        banking, securities, asset management and credit services
        businesses; and

      * the risk that our analyses of these risks and forces could
        be incorrect and or that the strategies developed to
        address them could be unsuccessful.

      The Corporation undertakes no obligation to publicly revise or
update these forward-looking statements to reflect events or
circumstances that arise after the date of this report.  Readers
should carefully review the risk factors described in other
documents that are filed periodically with the Securities and
Exchange Commission.


ITEM 1.    BUSINESS

      First Keystone Corporation is a Pennsylvania business
corporation, and a bank holding company, registered with and
supervised by the Board of Governors of the Federal Reserve System.
The Corporation was incorporated on July 6, 1983, and commenced
operations on July 2, 1984, upon consummation of the acquisition of
all of the outstanding stock of The First National Bank of Berwick.
Since commencing operations, the Corporation's business has
consisted primarily of managing and supervising the Bank, and its
principal source of income has been dividends paid by the Bank.
The Corporation has one wholly-owned subsidiary, the Bank, which
has a commercial banking operation and trust department as its
major lines of business.  Greater than 95% of the company's revenue
and profit came from the commercial banking department for the
years ended December 31, 2001, 2000, and 1999, and was the only
reportable segment.  At December 31, 2001, the Corporation had
total consolidated assets, deposits and stockholders' equity of
approximately $393.5 million, $294.7 million and $39.7 million,
respectively.

      The Bank was organized in 1864.  The Bank is a national
banking association that is a member of the Federal Reserve System.
Its deposits are insured by the Federal Deposit Insurance (FDIC)
Corporation to


                                1

<PAGE>

the maximum extent of the law.  The Bank, has nine branch locations
(five branches within Columbia County, three branches within
Luzerne County, and one in Montour County, Pennsylvania), and is a
full service commercial bank providing a wide range of services to
individuals and small to medium sized businesses in its
Northeastern and Central Pennsylvania market area.  The Bank's
commercial banking activities include accepting time, demand, and
savings deposits and making secured and unsecured commercial, real
estate and consumer loans.  Additionally, the Bank also provides
personal and corporate trust and agency services to individuals,
corporations, and others, including trust investment accounts,
investment advisory services, mutual funds, estate planning, and
management of pension and profit sharing plans.

      Supervision and Regulation
      __________________________

      The Corporation is subject to the jurisdiction of the
Securities and Exchange Commission  and of state securities laws
for matters relating to the offering and sale of its securities.
The Corporation is currently subject to the SEC's rules and
regulations relating to company's whose shares are registered under
Section 12 of the Securities Exchange Act of 1934, as amended.

      The Corporation is also subject to the provisions of the Bank
Holding Company Act of 1956, as amended , and to supervision by the
Federal Reserve Board.  The Bank Holding Company Act requires the
Corporation to secure the prior approval of the Federal Reserve
Board before it owns or controls, directly or indirectly, more than
5% of the voting shares of substantially all of the assets of any
institution, including another bank.

      The Bank Holding Company Act also prohibits acquisitions of
control of a bank holding company, such as the Corporation, without
prior notice to the Federal Reserve Board.  Control is defined for
this purpose as the power, directly or indirectly, to direct the
management or policies of a bank holding company or to vote 25% (or
10%, if no other person or persons acting on concert, holds a
greater percentage of the Common Stock) or more of the
Corporation's Common Stock.

      The Corporation is required to file an annual report with the
Federal Reserve Board and any additional information that the
Federal Reserve Board may require pursuant to the Bank Holding
Company Act.  The Federal Reserve Board may also make examinations
of the Corporation and any or all of its subsidiaries.

      The Bank is subject to federal and state statutes applicable
to banks chartered under the banking laws of the United States, to
members of the Federal Reserve System and to banks whose deposits
are insured by the FDIC.  Bank operations are also subject to
regulations of the Office of the Comptroller of the Currency (OCC),
the Federal Reserve Board and the FDIC.

      The primary supervisory authority of the Bank is the OCC,
which regulates and examines the Bank.  The OCC has the authority
under the Financial Institutions Supervisory Act to prevent a
national bank from engaging in an unsafe or unsound practice in
conducting its business.

      Federal and state banking laws and regulations govern, among
other things, the scope of a bank's business, the investments a
bank may make, the reserves against deposits a bank must maintain,
loans a bank makes and collateral it takes, and the activities of a
bank with respect to mergers and consolidations and the
establishment of branches.

      As a subsidiary of a bank holding company, the Bank is subject
to certain restrictions imposed by the Federal Reserve Act on any
extensions of credit to the bank holding company or its
subsidiaries, on investments in the stock or other securities of
the bank holding company or its subsidiaries and on


                                2

<PAGE>

taking such stock or securities as collateral for loans.  The
Federal Reserve Act and Federal Reserve Board regulations also
place certain limitations and reporting requirements on extensions
of credit by a bank to principal shareholders of its parent holding
company, among others, and to related interests of such principal
shareholders.  In addition, such legislation and regulations may
affect the terms upon which any person becoming a principal
shareholder of a holding company may obtain credit from banks with
which the subsidiary bank maintains a correspondent relationship.

      Under the Federal Deposit Insurance Act , the OCC possesses
the power to prohibit institutions regulated by it (such as the
Bank) from engaging in any activity that would be an unsafe or
unsound banking practice or would otherwise be in violation of the
law.

      Permitted Non-Banking Activities
      ________________________________

      The Federal Reserve Board permits bank holding companies to
engage in non-banking activities so closely related to banking,
managing or controlling banks as to be a proper incident thereto.
The Corporation does not at this time engage in any of these non-banking
        activities, nor does the Corporation have any current plans
to engage in any other permissible activities in the foreseeable
future.

      Legislation and Regulatory Changes
      __________________________________

      From time to time, various types of federal and state
legislation have been proposed that could result in additional
regulations of, and restrictions on, the business of the Bank.  It
cannot be predicted whether any such legislation will be adopted or
how such legislation would affect the business of the Bank.  As a
consequence of the extensive regulation of commercial banking
activities in the United States, the Bank's business is
particularly susceptible to being affected by federal legislation
and regulations that may increase the costs of doing business.

      From time to time, legislation is enacted which has the effect
of increasing the cost of doing business, limiting or expanding
permissible activities or affecting the competitive balance between
banks and other financial institutions.  No prediction can be made
as to the likelihood of any major changes or the impact such
changes might have on the Corporation and its subsidiary bank.
Certain changes of potential significance to the Corporation which
have been enacted recently and others which are currently under
consideration by Congress or various regulatory agencies are
discussed below.

      Federal Deposit Insurance Corporation Improvement Act of 1991
      _____________________________________________________________

      The Federal Deposit Insurance Corporation Improvement Act
established five different levels of capitalization of financial
institutions, with "prompt corrective actions" and significant
operational restrictions imposed of institutions that are capital
deficient under the categories.  The five categories are:

      *  well capitalized
      *  adequately capitalized
      *  undercapitalized
      *  significantly undercapitalized, and
      *  critically undercapitalized.

      To be considered well capitalized, an institution must have a
total risk-based capital ratio of at least 10%, a Tier 1 risk-based
capital ratio of at least 6%, a leverage capital ratio of 5%, and
must not be subject to any order or directive requiring the
institution to improve its capital level.  An institution falls
within the adequately capitalized category if it has a total
         risk-based capital ratio of at least 8%, a Tier 1


                                3

<PAGE>

risk-based capital ratio of at least 4%, and a leverage capital
ratio of at least 4%.  Institutions with lower capital levels are
deemed to be undercapitalized, significantly undercapitalized or
critically undercapitalized, depending on their actual capital
levels.  In addition, the appropriate federal regulatory agency may
downgrade an institution to the next lower capital category upon a
determination that the institution is in an unsafe or unsound
condition, or is engaged in an unsafe or unsound practice.
Institutions are required under FDICIA to closely monitor their
capital levels and to notify their appropriate regulatory agency of
any basis for a change in capital category.  On December 31, 2001,
the Corporation and the Bank exceeded the minimum capital levels of
the well capitalized category.

      Regulatory oversight of an institution becomes more stringent
with each lower capital category, with certain "prompt corrective
actions" imposed depending on the level of capital deficiency.

      Other Provisions of FDICIA
      __________________________

      Each depository institution must submit audited financial
statements to its primary regulator and the FDIC, which reports are
made publicly available.  In addition, the audit committee of each
depository institution must consist of outside directors and the
audit committee at "large institutions" (as defined by FDIC
regulation) must include members with banking or financial
management expertise.  The audit committee at "large institutions"
must also have access to independent outside counsel.  In addition,
an institution must notify the FDIC and the institution's primary
regulator of any change in the institutions independent auditor,
and annual management letters must be provided to the FDIC and the
depository institution's primary regulator.  The regulations define
a "large institution" as one with over $500 million in assets,
which does not include the Bank.  Also, under the rule, an
institution's independent auditor must examine the institution's
internal controls over financial reporting and perform agreed-upon
procedures to test compliance with laws and regulations concerning
safety and soundness.

      Under FDICIA, each federal banking agency must prescribe
certain safety and soundness standards for depository institutions
and their holding companies.  Three types of standards must be
prescribed:

      *  asset quality and earnings
      *  operational and managerial, and
      *  compensation

Such standards would include a ratio of classified assets to
capital, minimum earnings, and, to the extent feasible, a minimum
ratio of market value to book value for publicly traded securities
of such institutions and holding companies.  Operational and
managerial standards must relate to:

      *  internal controls, information systems and internal
        audit systems
      *  loan documentation
      *  credit underwriting
      *  interest rate exposure
      *  asset growth, and
      *  compensation, fees and benefits

      FDICIA also sets forth Truth in Savings disclosure and
advertising requirements applicable to all depository institutions.


                                4

<PAGE>

      REAL ESTATE LENDING STANDARDS.  Pursuant to the FDICIA, the
OCC and other federal banking agencies adopted real estate lending
guidelines which would set loan-to-value ratios for different types
of real estate loans.  A LTV ratio is generally defined as the
total loan amount divided by the appraised value of the property at
the time the loan is originated.  If the institution does not hold
a first lien position, the total loan amount would be combined with
the amount of all senior liens when calculating the ratio.  In
addition to establishing the LTV ratios, the guidelines require all
real estate loans to be based upon proper loan documentation and a
recent appraisal of the property.

      Regulatory Capital Requirements
      _______________________________

      The federal banking regulators have adopted certain risk-based
capital guidelines to assist in the assessment of the capital
adequacy of a banking organization's operations for both
transactions reported on the balance sheet as assets and
transactions, such as letters of credit, and recourse agreements,
which are recorded as off balance sheet items.  Under these
guidelines, nominal dollar amounts of assets and credit equivalent
amounts of off balance sheet items are multiplied by one of several
risk adjustment percentages, which range from 0% for assets with
low credit risk, such as certain U.S. Treasury securities, to 100%
for assets with relatively high credit risk, such as business
loans.


<TABLE>

      The following table presents the Corporation's capital ratios
at December 31, 2001:

<CAPTION>

                                                     (In Thousands)

                                                    <c>
Tier I Capital                                                  $ 38,962
Tier II Capital                                                    3,221
Total Capital                                                     42,183

Adjusted Total Average Assets                                    398,149
Total Adjusted Risk-Weighted Assets <F1>                         259,503

Tier I Risk-Based Capital Ratio <F2>                              15.01%
Required Tier I Risk-Based Capital Ratio                           4.00%
Excess Tier I Risk-Based Capital Ratio                            11.01%

Total Risk-Based Capital Ratio <F3>                               16.26%
Required Total Risk-Based Capital Ratio                            8.00%
Excess Total Risk-Based Capital Ratio                              8.26%

Tier I Leverage Ratio <F4>                                         9.79%
Required Tier I Leverage Ratio                                     4.00%
Excess Tier I Leverage Ratio                                       5.79%
_____________________
<FN>
<F1>
Includes off-balance sheet items at credit-equivalent values less intangible
assets.
<F2>
Tier I Risk-Based Capital Ratio is defined as the ratio of Tier I Capital to
Total Adjusted Risk-Weighted Assets.
<F3>
Total Risk-Based Capital Ratio is defined as the ratio of Tier I and Tier II
Capital to Total Adjusted Risk-Weighted Assets.
<F4>
Tier I Leverage Ratio is defined as the ratio of Tier I Capital to Adjusted
Total Average Assets.

</FN>
</TABLE>


                                5

<PAGE>

 The Corporation's ability to maintain the required levels of
capital is substantially dependent upon the success of
Corporation's capital and business plans; the impact of future
economic events on the Corporation's loan customers; and the
Corporation's ability to manage its interest rate risk and
investment portfolio and control its growth and other operating
expenses.  See also, the information under the caption "Capital
Strength" appearing on page 37 of Registrant's 2001 Annual Report,
included in Exhibit 13.

 Effect of Government Monetary Policies
 ______________________________________

 The earnings of the Corporation are and will be affected by
domestic economic conditions and the monetary and fiscal policies
of the United States government and its agencies.

 The monetary policies of the Federal Reserve Board have had,
and will likely continue to have, an important impact on the
operating results of commercial banks through its power to
implement national monetary policy in order to, among other things,
curb inflation or combat a recession.  The Federal Reserve Board
has a major effect upon the levels of bank loans, investments and
deposits through its open market operations in United States
government securities and through its regulations of, among other
things, the discount rate on borrowings of member banks and the
reserve requirements against member bank deposits.  It is not
possible to predict the nature and impact of future changes in
monetary and fiscal policies.

 Effects of Inflation
 ____________________

 Inflation has some impact on the Bank's operating costs.
Unlike industrial companies, however, substantially all of the
Bank's assets and liabilities are monetary in nature.  As a result,
interest rates have a more significant impact on the Bank's
performance than the general levels of inflation.  Over short
periods of time, interest rates may not necessarily move in the
same direction or in the same magnitude as prices of goods and
services.

 Environmental Regulation
 ________________________

 There are several federal and state statutes that regulate the
obligations and liabilities of financial institutions pertaining to
environmental issues.  In addition to the potential for attachment
of liability resulting from its own actions, a bank may be held
liable, under certain circumstances, for the actions of its
borrowers, or third parties, when such actions result in
environmental problems on properties that collateralize loans held
by the bank.  Further, the liability has the potential to far
exceed the original amount of the loan issued by the Bank.
Currently, neither the Corporation nor the Bank is a party to any
pending legal proceeding pursuant to any environmental statute, nor
are the Corporation and the Bank aware of any circumstances that
may give rise to liability under any such statute.

 Interest Rate Risk
 __________________

 Federal banking agency regulations specify that the bank's
capital adequacy include an assessment of the bank's interest rate
risk  exposure.  The standards for measuring the adequacy and
effectiveness of a banking organization's Interest Rate Risk (IRR)
management includes a measurement of Board of Directors and senior
management oversight, and a determination of whether a banking
organization's procedures for comprehensive risk management are
appropriate to the circumstances of the specific banking
organization.  The First National Bank of Berwick has internal IRR
models that are used to measure and monitor IRR.  Additionally, the
regulatory agencies have been assessing IRR


                                6

<PAGE>

on an informal basis for several years.  For these reasons, the
Corporation does not expect the addition of IRR evaluation to the
agencies' capital guidelines to result in significant changes in
capital requirements for The First National Bank of Berwick.

 The Gramm-Leach-Bliley Act of 2000
 __________________________________

 On November 12, 2000, President Clinton signed into law the
Gramm-Leach-Bliley Act of 2000, which is also known as the
Financial Services Modernization Act.  The act repeals some
Depression-era banking laws and will permit banks, insurance
companies and securities firms to engage in each others' businesses
after complying with certain conditions and regulations which are
yet to be finalized.  The act grants to community banks the power
to enter new financial markets as a matter of right that larger
institutions have managed to do on an ad hoc basis.  At this time,
our company has no plans to pursue these additional possibilities.

 Our company does not believe that the Financial Services
Modernization Act will have an immediate positive or negative
material effect on our operations.  However, the act may have the
result of increasing the amount of competition that our company
faces from larger financial service companies, many of whom have
substantially more financial resources than our company, which may
now offer banking services in addition to insurance and brokerage
services.

 History and Business - Bank
 ___________________________

 The Bank's legal headquarters are located at 111 West Front
Street, Berwick, Pennsylvania.

 As of December 31, 2001, the Bank had total assets of
$393,472,000, total shareholders' equity of $39,696,000 and total
deposits and other liabilities of $353,776,000.

 The Bank engages in a full-service commercial banking
business, including accepting time and demand deposits, and making
secured and unsecured commercial and consumer loans.  The Bank's
business is not seasonal in nature.  Its deposits are insured by
the FDIC to the extent provided by law.  The First National Bank of
Berwick has no foreign loans or highly leveraged transaction loans,
as defined by the Federal Reserve Board.  Substantially all of the
loans in The First National Bank of Berwick's portfolio have been
originated by The First National Bank of Berwick.  Policies adopted
by the Board of Directors are the basis by which The First National
Bank of Berwick conducts its lending activities.

 At December 31, 2001, the Bank had 109 full-time employees and
32 part-time employees.  In the opinion of management, the Bank
enjoys a satisfactory relationship with its employees.  The Bank is
not a party to any collective bargaining agreement.

 Competition - Bank
 __________________

 The Bank competes actively with other area commercial banks
and savings and loan associations, many of which are larger than
the Bank, as well as with major regional banking and financial
institutions.  The Bank's major competitors in Columbia and Luzerne
counties are:

 *  First Columbia Bank & Trust Co. of Bloomsburg
 *  PNC Bank, N.A.
 *  Columbia County Farmers National Bank of Bloomsburg
 *  M & T Bank
 *  FNB Bank of Danville, and


                                7

<PAGE>

 *  First Susquehanna Bank

In the county of Montour, credit unions are our major competitors
along with M & T Bank, FNB Bank of Danville and First Federal Bank.
The Bank is generally competitive with all competing financial
institutions in its service area with respect to interest rates
paid on time and savings deposits, service charges on deposit
accounts and interest rates charged on loans.

 Concentration
 _____________

 The Corporation and the Bank are not dependent for deposits
nor exposed by loan concentrations to a single customer or to a
small group of customers the loss of any one or more of whom would
have a materially adverse effect on the financial condition of the
Corporation or the Bank.


ITEM 2.   DESCRIPTION OF PROPERTIES

     The Corporation owns no property other than through its
subsidiary.  These are:


<TABLE>
<CAPTION>

                                          Type of       Square
Location                     Ownership    Footage       Use
          ________                        _________     _______   ___

                          <c>          <c>           <c>

Columbia County, PA

111 W. Front Street,
Berwick                      Owned        12,500        Administrative
                                                                  office, banking
                                                                  and trust services.

105 Market Street            Leased       4,000         Computer/
(second floor)               Annual                     accounting
                                          Rental                  department.
                                          $33,268


2nd & Market Streets,        Owned        Land Area     No buildings,
Berwick                                   1.45 Acres    held for possible
                                                                  expansion. Present
                                                                  use, parking.


701 Freas Avenue,
Berwick                      Owned        3,744         Banking services.


Giant Market                 Leased       500           Banking services.
50 Briar Creek Plaza         Annual
                                          Rental
                                          $30,000


                                     8

    <PAGE>


<CAPTION>

                                          Type of       Square
Location                     Ownership    Footage       Use
          ________                        _________     _______   ___

                          <c>          <c>           <c>

Columbia County, PA

2401 New Berwick
Highway, Bloomsburg          Leased       2,000         Banking services.
                                          Annual
                                          Rental
                                          $40,000


U.S. Route 11 &              Owned        Land Area     No buildings,
Central Road,                             1.11 Acres    held for expansion.
Bloomsburg                                                        Present use,
                                                                  rental.


Third & Race Streets,        Owned        2,500         Banking services.
Mifflinville



Luzerne County, PA

Salem Township               Owned        3,700         Banking services.
400 Fowler Avenue,
Berwick


West Third Street,           Leased       2,300         Banking services.
Nescopeck                    Annual
                                          Rental
                                          $12,000


1540 Sans Souci Highway      Owned        4,000         Banking services.
Wilkes-Barre



Montour County, PA

Giant Market                 Leased       500           Banking services.
328 Church Street            Annual
Danville                     Rental
                                          $25,000

</TABLE>



     It is Management's opinion that the facilities currently
utilized are suitable and adequate for the Corporation's current
and immediate future purposes.


                                9

<PAGE>

ITEM 3.   LEGAL PROCEEDINGS

    The Corporation and/or the Bank are defendants in various
legal proceedings arising in the ordinary course of their business.
However, in the opinion of management of the Corporation and the
Bank, there are no proceedings pending to which the Corporation and
the Bank is a party or to which their property is subject, which,
if determined adversely to the Corporation and the Bank, would be
material in relation to the Corporation's and Bank's individual
profits or financial condition, nor are there any proceedings
pending other than ordinary routine litigation incident to the
business of the Corporation and the Bank.  In addition, no material
proceedings are pending or are known to be threatened or
contemplated against the Corporation and the Bank by government
authorities or others.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    Not applicable.



                              Part II


ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS

    The Corporation's Common Stock is traded in the over-the-counter
            market on the OTC Bulletin Board under the symbol "FKYS".
The following table sets forth:

*   The quarterly high and low prices for a share of the
    Corporation's Common Stock during the periods indicated as
    reported to the management of the Corporation and
*   Quarterly dividends on a share of the Common Stock with respect
    to each quarter since January 1, 2000.

The following quotations represent prices between buyers and
sellers and do not include retail markup, markdown or commission,
and may not necessarily reflect actual transactions.

<TABLE>
<CAPTION>

                                 Stock Prices              Dividends
                               High         Low            Declared
                               ____         ___            ________

                            <c>          <c>            <c>
2000:
First quarter                  $21.25       $17.50         $.19
Second quarter                 $19.50       $17.75         $.19
Third quarter                  $18.25       $17.00         $.19
Fourth quarter                 $17.13       $15.88         $.20

2001:
First quarter                  $16.75       $13.50         $.20
Second quarter                 $19.00       $14.38         $.20
Third quarter                  $26.50       $18.25         $.20
Fourth quarter                 $21.19       $19.00         $.21

</TABLE>


 As of December 31, 2001, the Corporation had approximately 620
shareholders of record.


                                10

<PAGE>

 The Corporation has paid dividends since commencement of
business in 1984.  It is the present intention of the Corporation's
Board of Directors to continue the dividend payment policy;
however, further dividends must necessarily depend upon earnings,
financial condition, appropriate legal restrictions and other
factors relevant at the time the Board of Directors of the
Corporation considers dividend policy.  Cash available for dividend
distributions to shareholders of the Corporation must initially
come from dividends paid by the Bank to the Corporation.
Therefore, the restrictions on the Bank's dividend payments are
directly applicable to the Corporation.

 Dividend Restrictions on the Bank
 _________________________________

 The OCC rules govern the payment of dividends by national
banks.  Consequently, the Bank, which is subject to these rules,
may not pay dividends from capital (unimpaired common and preferred
stock outstanding) but only from retained earnings after deducting
losses and bad debts therefrom.  To the extent that (1) the Bank
has capital surplus in an amount in excess of common capital and
(2) the Bank can prove that such surplus resulted from prior period
earnings, the Bank, upon approval of the OCC, may transfer earned
surplus to retained earnings and thereby increase its dividend
capacity.

 The Bank may not pay any dividends on its capital stock during
a period in which it may be in default in the payment of its
assessment for a deposit insurance premium due to the FDIC, nor may
it pay dividends on Common Stock until any cumulative dividends on
the Bank's preferred stock (if any) have been paid in full.  The
Bank has never been in default in the payments of its assessments
to the FDIC; and the Bank has no outstanding preferred stock.  In
addition, under the Federal Deposit Insurance Act (912 U.S.C.
Section 1818), dividends cannot be declared and paid if the OCC
obtains a cease and desist order because, in the opinion of the
OCC, such payment would constitute an unsafe and unsound banking
practice.  As of December 31, 2001, there was $5,754,356 in
unrestricted retained earnings and net income available at the Bank
that could be paid as a dividend to the Corporation under the
current OCC regulations.

 Dividend Restrictions on the Corporation
 ________________________________________

 Under the Pennsylvania Business Corporation Law of 1988, as
amended , the Corporation may not pay a dividend if, after giving
effect thereto, either:

 *    The Corporation would be unable to pay its debts as they
      become due in the usual course of business or;
 *    The Corporation's total assets would be less than its
       total liabilities.

 The determination of total assets and liabilities may be based
upon:

 *    Financial statements prepared on the basis of generally
      accepted accounting principles,
 *    Financial statements that are prepared on the basis of
      other accounting practices and principles that are
      reasonable under the circumstances, or;
 *    A fair valuation or other method that is reasonable under
      the circumstances.


ITEM 6.   SELECTED FINANCIAL DATA

 The information under the caption "Summary of Selected
Financial Data" appearing on page 2 of the Corporation's Annual
Report to Shareholders for the year ended December 31, 2001, which
page is included in Exhibit 11 hereto, is incorporated in its
entirety by reference in response to this Item 6.


                                11

<PAGE>

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS

 The information under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations"
appearing on pages 26 through 42 of the Corporation's Annual Report
to Shareholders for the year ended December 31, 2001, which pages
are included in Exhibit 13 hereto, is incorporated in its entirety
by reference in response to this Item 7.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

 The information under the caption "Quantitative and
Qualitative Disclosure about Market Risk" appearing on page 38
through 40 of the Corporation's Annual Report to Shareholders for
the year ended December 31, 2001, which pages are included in
Exhibit 13 hereto, is incorporated in its entirety by reference in
response to this Item 7A.


ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 The Corporation's Consolidated Financial Statements and notes
thereto appearing on pages 4 through 25 of the Corporation's Annual
Report to Shareholders for the year ended December 31, 2001, which
pages are included in Exhibit 13 hereto, are incorporated in their
entirety by reference in response to this Item 8.


ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE

 Not Applicable.



                             PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

 The information under the captions "Information As To Nominees
and Directors" and "Principal Officers of the Bank" appearing on
pages 7, 8, 9, and 20, respectively, is incorporated here by
reference of First Keystone Corporation's proxy statement for its
2002 annual meeting of shareholders scheduled for April 16, 2002.
The information under the caption "Section 16(A) Beneficial
Ownership Reporting Compliance" is as follows:

                SECTION 16(A) BENEFICIAL OWNERSHIP
                       REPORTING COMPLIANCE

 Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the corporation's officers and directors, and
persons who own more than 10% of the registered class of the
corporation's equity securities, to file reports of ownership of
the corporation's common stock and changes in such


                                12

<PAGE>

ownership with the Securities and Exchange Commission ("SEC").
Officers, directors and greater than 10% shareholders are required
by SEC regulation to furnish the corporation with copies of all
Section 16(a) forms they file.

 Based solely on its review of copies of Section 16(a) forms
received by it, or written representations from reporting persons
that no Forms 5 were required for those persons, the corporation
believes that during the period January 1, 2001, through December
31, 2001, its officers, directors and reporting shareholders were
in compliance with all filing requirements applicable to them.


ITEM 11.  EXECUTIVE COMPENSATION

 The information under the caption "Executive Compensation"
appearing on pages 15 through 18 is incorporated here by reference
of First Keystone Corporation's proxy statement for its 2002 annual
meeting of shareholders scheduled for April 16, 2002.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

 The information under the caption "Principal Beneficial Owners
of the Corporation's Stock" appearing on pages 5 and 6 is
incorporated here by reference of First Keystone Corporation's
proxy statement for its 2002 annual meeting of shareholders
scheduled for April 16, 2002.


ITEM 13.  RELATED PARTY TRANSACTIONS

 The information under the caption "Related Party Transactions"
appearing on pages 19 and 20 is incorporated here by reference of
First Keystone Corporation's proxy statement for its 2002 annual
meeting of shareholders scheduled for April 16, 2002.



                              PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
          ON FORM 8-K

 (a)  1.  The Registrant's consolidated financial statements
and notes thereto as well as the applicable reports of the
independent certified public accountants are filed at Exhibit 13
hereto and are incorporated in their entirety by reference under
this Item 14(a)1.

      2.  All schedules are omitted because they are not
applicable or the required information is shown in the financial
statements or notes thereto.

      3.  The exhibits required by Item 601 of the Regulation
S-K are included under Item 14(c) hereto.


                                13

<PAGE>

 (b)  The Corporation filed the following report on Form 8-K
during the last quarter of the year ended December 31, 2001:





Date of Report          Item        Description

November 16, 2001         5         Press release of First
                                    Keystone Corporation dated
                                    October 25, 2001, announcing
                                    the appointment of Don E.
                                    Bower to the Board of
                                    Directors.

                                    Press Release of First
                                    Keystone Corporation dated
                                    November 1, 2001, announcing
                                    the appointment of Timothy K.
                                    Kishbach to the position of
                                    Vice President of The First
                                    National Bank of Berwick.

 (c)  Exhibits required by Item 601 of Regulation S:


                                14

<PAGE>

Exhibit Number Referred to
Item 601 of Regulation S-K       Description of Exhibit
__________________________       ______________________

2                                None.

3i                               Articles of Incorporation, as
                                 amended (Incorporated by
                                 reference to Exhibit 3(i) to
                                 the Registrant's Report on Form
                                 10-Q for the quarter ended
                                 March 31, 2001)

3ii                              By-Laws, as amended
                                 (Incorporated by reference to
                                 Exhibit 3(ii) to the
                                 Registrant's Report on Form 10-Q for
                                           the quarter ended March
                                 31, 2001)

9                                None.

10.1                             Supplemental Employee
                                 Retirement Plan (Incorporated
                                 by reference to Exhibit 10 to
                                 Registrant's Annual Report on
                                 Form 10-K for the year ended
                                 December 31, 2000)

10.2                             Management Incentive
                                 Compensation Plan (Incorporated
                                 by reference to Exhibit 10 to
                                 Registrant's Report on Form
                                 10-Q for the quarter ended
                                 September 30, 2001)

10.3                             Profit Sharing Plan
                                 (Incorporated by reference to
                                 Exhibit 10 to Registrant's
                                 Report on Form 10-Q for the
                                 quarter ended September 30,
                                 2001)

10.4                             First Keystone Corporation 1998
                                 Stock Incentive Plan
                                 (Incorporated by reference to
                                 Exhibit 10 to Registrant's
                                 Report on Form 10-Q for the
                                 quarter ended September 30,
                                 2001)

11                               Computation of Earnings Per
                                 Share for the fiscal year-ended
                                 2001, 2000, and 1999

12                               Statement of Computation of
                                 Ratios (See the information
                                 appearing on page 2 of
                                 Registrant's Summary of
                                 Selected Financial Data, which
                                 page is included in Exhibit 11
                                 and pages  27 and 37 of
                                 Registrant's 2001 Annual
                                 Report, which pages are
                                 included in Exhibit 13.)



                                15

<PAGE>

13                               Excerpts from Annual Report to
                                 Shareholders for Fiscal Year
                                 Ended December 31, 2001.

21                               List of Subsidiaries of the
                                 Corporation

23                               Consent of Independent
                                 Auditors.


                                16

<PAGE>

                            SIGNATURES


 Pursuant to the requirements of Section 13 or 15(d) 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.


FIRST KEYSTONE CORPORATION
 (Registrant)


By:        /s/ J. Gerald Bazewicz
      J. Gerald Bazewicz
      President and Chief Executive Officer

Date: March 27, 2002


 Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.



By:        /s/ John L. Coates
      John L. Coates
      Secretary and Director

Date: March 27, 2002



By:        /s/ J. Gerald Bazewicz
      J. Gerald Bazewicz
      President, Chief Executive
      Officer and Director
      (Chief Executive Officer
          and Principal Financial Officer)

Date: March 27, 2002


                                17

<PAGE>

By:        /s/ John E. Arndt
      John E. Arndt
      Director

Date: March 27, 2002



By:        /s/ Budd L. Beyer
      Budd L. Beyer
      Director

Date: March 27, 2002



By:        /s/ Don E. Bower
      Don E. Bower
      Director

Date: March 27, 2002



By:        /s/ Robert E. Bull
      Robert E. Bull
      Chairman of the Board
         and Director

Date: March 27, 2002



By:        /s/ Dudley P. Cooley
      Dudley P. Cooley
      Director

Date: March 27, 2002



By:        /s/ Frederick E. Crispin, Jr.
      Frederick E. Crispin, Jr.
      Director

Date: March 27, 2002


                                18

<PAGE>

By:        /s/ Jerome F. Fabian
      Jerome F. Fabian
      Director

Date: March 27, 2002



By:        /s/ David R. Saracino
      David R. Saracino
      Treasurer and Assistant Secretary
      (Principal Accounting Officer)

Date: March 27, 2002



By:        /s/ Robert J. Wise
      Robert J. Wise
      Vice Chairman of the Board
         and Director

Date: March 27, 2002


                                19