FORM 10-Q
                                 
                SECURITIES AND EXCHANGE COMMISSION
                     Washington, D. C.  20549


(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
  SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended           March 31, 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.                 0-13295



                 CATERPILLAR FINANCIAL SERVICES CORPORATION
      (Exact name of Registrant as specified in its charter)


           DELAWARE
37-1105865
(State or other jurisdiction of
(I.R.S. Employer Identification No.)
incorporation or organization)
                                 
                                 
       3322 WEST END AVENUE, NASHVILLE, TENNESSEE 37203-0983
             (Address of principal executive offices)


        Registrant's telephone number, including area code:
                          (615) 386-5800
   The Registrant complies with the conditions set forth in General
Instruction (H)(1)(a) and (b) of Form 10-Q is therefore filing this
form with the reduced disclosure format.

    Indicate by a 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

    At March 31, 1998 one share of common stock of the Registrant
was outstanding.
      HIGHLIGHTS:  FIRST QUARTER 1998 VS. FIRST QUARTER 1997
                                 
  Caterpillar Financial Services Corporation reported record
  revenues and new retail financing activity.

  Revenues were a record $221.6 million, an increase of $38.6
  million or 21% from last year.

  Profit was $23.8 million, a $3.2 million or 12% decrease
  compared with 1997.  This decrease was the result of increased
  provision for credit losses due to the volume of new business and
  an increase in interest expense.

  New retail financing business was a first quarter record of
  $1,246.1 million, an increase of $392.7 million or 46% from 1997.

  In January, Caterpillar Financial Services Corporation entered into
  an agreement to purchase trade receivables from Caterpillar Inc. on
  a weekly basis.  The initial purchase was $874.4 million.  The
  outstanding balance at March 31, 1998 was $814.0 million.


     James S. Beard, vice president of Caterpillar Inc. and
president of Caterpillar Financial Services Corporation said, "Cat
Financial had an exceptional first quarter.  We are pleased with
our record growth and the excellent credit quality of our
portfolio."


                                 
                                 
                                 



            Caterpillar Financial Services Corporation

          Form 10-Q for the Quarter Ended March 31, 1998

                               Index

PART I.  FINANCIAL INFORMATION                               Page
No.


Item 1.  Financial Statements (Unaudited)

          Consolidated Statement of Financial Position
4

          Consolidated Results of Operations
5

          Consolidated Statement of Changes in Equity
6

     Consolidated Statement of Cash Flows                        7


Item 2.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations
8-10



PART II.  OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K
11

Signatures
12



                  PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

  In addition to our accompanying unaudited consolidated financial
statements, we suggest that you read our Annual Report on Form 10-
K. Although not incorporated by reference in this document,
additional information about us is available in our 1997 Annual
Report and on our web page http://www.CAT.com.  The documents
mentioned above are available by writing to:  Legal Dept.,
Caterpillar Financial Services Corp.; 3322 West End Ave.;
Nashville, TN 37203.
  
  We believe this information reflects all adjustments, including
normal and recurring accruals, necessary to fairly present the
consolidated statements of financial position, results of
operations, changes in equity, and cash flows for the periods
presented.  The results for interim periods do not necessarily
indicate the results we expect for the year.
            Caterpillar Financial Services Corporation
                                 
           Consolidated Statement Of Financial Position
                            (Unaudited)
                       (Millions of Dollars)
                                       March     Dec. 31,     March
                                        31,                    31,
                                        1998       1997       1997
Assets:                                                      
  Cash and cash equivalents                  $           $         $
                                          25.7        41.5      30.9
  Finance receivables                                               
    Wholesale notes receivable         1,232.4       497.9     385.8
    Retail notes receivable            1,978.2     1,852.1   1,624.6
    Investment in finance receivables  5,408.4     4,993.6   4,561.1
                                       8,619.0     7,343.6   6,571.5
                                                                    
    Less: Unearned income                719.9       661.8     621.5
          Allowance for credit losses     99.3        83.5      79.2
                                       7,799.8     6,598.3   5,870.8
                                                                    
  Equipment on operating leases,                                    
    less accumulated depreciation        585.0       558.7     526.8
  Deferred income taxes                    4.9         4.6       3.2
  Other assets                           341.1       223.7     178.5
Total assets                          $8,756.5    $7,426.8   $6,610.
                                                                   2
                                                                    
                                                                    
Liabilities and stockholder's equity:                               
  Payable to dealers and others       $  114.0   $    84.9         $
                                                                80.3
  Payable to Caterpillar Inc. -           62.8       243.5     308.0
Borrowings
  Payable to Caterpillar Inc. - Other      2.8         4.1       2.4
  Accrued interest payable                87.4        47.3      62.4
  Income taxes payable                    65.2        81.4      51.5
  Other liabilities                       33.3        22.2      26.7
  Short-term borrowings                2,877.0     2,731.5   2,471.3
  Current maturities of long-term      1,344.0     1,087.9   1,122.5
debt
  Long-term debt                       3,204.4     2,274.2   1,732.8
  Deferred income taxes                   31.9        38.7      40.1
Total liabilities                      7,822.8     6,615.7   5,898.0
                                                                    
  Common stock - $1 par value                                       
    Authorized: 2,000 shares                                        
    Issued and outstanding: one share    495.0       395.0     345.0
  Retained Earnings                      466.5       442.7     375.6
  Foreign currency translation          (27.8)      (26.6)     (8.4)
adjustment
Total stockholder's equity               933.7       811.1     712.2
                                                                    
Total liabilities and stockholder's   $8,756.5    $7,426.8   $6,610.
equity                                                             2
            Caterpillar Financial Services Corporation
                                 
                Consolidated Results of Operations
                            (Unaudited)
                       (Millions of Dollars)
                                      Three Months Ended
                                      March       March
                                       31,         31,
                                       1998        1997
Revenues:                                                
  Wholesale finance                   $  19.8           $
                                                      5.5
  Retail finance                        139.4       118.1
  Rental                                 48.2        41.6
  Other                                  14.2        17.8
        Total revenues                  221.6       183.0
                                                         
Expenses:                                                
  Interest                              105.5        79.5
  Depreciation                           37.7        31.9
  General, operating, and                25.6        21.3
administrative
  Provision for credit losses            15.3         8.6
  Other expense                            .2          .1
        Total expenses                  184.3       141.4
                                                         
Profit before income taxes               37.3        41.6
                                                         
Provision for income taxes               13.5        14.6
        Profit                         $ 23.8           $
                                                     27.0
                                                         

            Caterpillar Financial Services Corporation
                                 
            Consolidated Statement Of Changes in Equity
                            (Unaudited)
                       (Millions of Dollars)

Three Months Ended
                              March 31,            March 31,
                                 1998                1997
                                                             
Retained earnings:                                              
  Balance at January 1     $  442.7            $  348.6         
     Profit                    23.8  $  23.8       27.0     27.0
  Balance at March 31      $  466.5            $  375.6         
                                                                
Accumulated other                                               
comprehensive income:
  Balance at January 1            $                   $         
                             (26.6)                 1.8
  Foreign currency            (1.2)    (1.2)     (10.2)   (10.2)
translation adjustment
  Comprehensive income                     $             $  16.8
                                        22.6
  Balance at March 31     $  (27.8)                   $         
                                                  (8.4)
                                                                
  Balance at January 1     $  395.0            $  345.0         
      Equity capital from     100.0                   -         
Caterpillar
  Balance at March 31        $495.0            $  345.0         
                                                                
Total equity               $  933.7             $ 712.2         

            Caterpillar Financial Services Corporation
                                 
               Consolidated Statement Of Cash Flows
                            (Unaudited)
                       (Millions of Dollars)
                                                   Three Months
                                                     Ended
                                              March 31,  March 31,
                                                1998       1997
Cash flows from operating activities:                    
  Profit                                          $23.8    $  27.0
  Adjustments for non-cash items:                                 
    Depreciation                                   37.7       31.9
    Provision for credit losses                    15.3        8.6
    Other                                         (4.2)          -
  Change in assets and liabilities:                               
    Receivables from customers and others        (60.1)     (41.0)
    Deferred income taxes                         (6.8)      (1.4)
    Payable to dealers and others                  29.3      (6.6)
    Payable to Caterpillar Inc. - Other           (2.8)      (0.3)
    Accrued interest payable                       40.0       23.3
    Income taxes payable                         (16.2)       11.1
    Other, net                                    (8.5)        7.7
      Net cash provided by operating               47.5       60.3
activities
                                                                  
Cash flows from investing activities:                             
  Additions to property and equipment            (89.5)     (72.3)
  Disposals of equipment                           31.9       34.4
  Additions to finance receivables            (3,258.7)  (1,299.7)
  Collections of finance receivables            1,715.6      679.2
  Proceeds from sales of receivables              340.2      326.1
  Other, net                                         .1          -
      Net cash used for investing activities  (1,260.4)    (332.3)
                                                                  
Cash flows from financing activities:                             
  Additional paid-in capital                      100.0          -
  Payable to Caterpillar Inc. - borrowings      (179.2)      157.5
  Proceeds from long-term debt                  1,466.5      472.4
  Payments on long-term debt                    (280.0)    (218.2)
  Short-term borrowings, net                       93.9    (133.8)
      Net cash provided by financing            1,201.2      277.9
activities
                                                                  
Effect of exchange rate changes on cash           (4.1)      (2.0)
                                                                  
Net change in cash and cash equivalents          (15.8)        3.9
                                                                  
Cash and cash equivalents at beginning of          41.5       27.0
year
                                                                  
Cash and cash equivalents at end of year       $   25.7    $  30.9
                                                                  
Cash paid for interest                          $  79.1    $  51.9
  
  
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition
  THREE MONTHS ENDED MARCH 31, 1997 VS. THREE MONTHS ENDED MARCH
31, 1998
  
REVENUES
  Total revenues for the first quarter of 1998 were a record
$221.6 million.  The increase of $38.6 million over the same period
last year was primarily the result of continued portfolio growth.
  
  The annualized interest rate on finance receivables was 8.7 %
for the first quarter of 1998 compared with 8.6% for the first
quarter of 1997.  The tax benefits of governmental lease purchase
contracts and tax-oriented leases are not included in these
annualized interest rates.
  
  Other revenue of $14.2 million for the first quarter of 1998
included securitization-related revenue, fees, and other
miscellaneous revenue.  The decrease of $3.6 million, as compared
to the first quarter of 1997, was primarily due to securitization
revenue.
  
EXPENSES
  Interest expense for the first quarter increased $26.0 million
over the same period last year.  This increase was primarily the
result of increased borrowings and a higher borrowing rate.  The
average interest rate on borrowed funds was 6.1% for the first
quarter of 1998 as compared to 5.8% for the first quarter of 1997
due primarily to market rates at the time of borrowing.
  
  Depreciation expense increased  $5.8 million over the first
quarter of 1997 due to new operating lease business.  Net equipment
on operating leases increased $26.3 million over the first quarter
of 1997.
  
  General, operating, and administrative expenses increased $4.3
million during the first quarter of 1998 as compared to the same
period last year.  This increase is primarily due to staff-related
expenses and other expenses incurred due to increased new business
and to service the larger managed portfolio.  The number of full-
time employees increased to 730 at March 31, 1998, an increase of
136 from last year's first quarter.
  
  The effective income tax rate for the first quarter of 1998 was
36% as compared to 35% for the first quarter of 1997.
  
PROFIT
  Profit for the first quarter of 1998 was $23.8 million, a $3.2
million decrease from the first quarter of 1997.  This decrease is
primarily the result of increased interest expense and increased
provision for credit losses.
  
PORTFOLIO
   The portfolio value was $8,418.0 million at March 31, 1998, an
increase of $1,992.1 million over the same period last year.
  
  During the first quarter of 1998 we financed new retail business
transactions totaling $1,246.1 million as compared to $853.4
million during the first quarter of 1997.  This increase resulted
primarily from financing an increased percentage of deliveries of
Caterpillar product in North America.
  
  In January 1998, we entered into an agreement with Caterpillar
Inc. ("Caterpillar") to purchase certain U.S. dealer receivables
from Caterpillar at a discount.  Under this agreement Caterpillar
will continue to service the receivables.  On a weekly basis, we
use a portion of the collections from these receivables to purchase
more receivables.  At March 31, 1998, the balance of receivables
owned by us and serviced by Caterpillar was $814.0 million, which
is classified as wholesale notes receivable.
  
  At March 31, 1998, we serviced $1,254.7 million in receivables
sold to others which consist of $550.0 million in wholesale
receivables, under a revolving asset-backed securitization
agreement, and $704.7 million of installment sale contracts.
  
ALLOWANCE FOR CREDIT LOSSES
  The following table shows activity related to the Allowance for
Credit Losses:
  
                                         March 31,    March 31,
                                              1998         1997
Balance at beginning of year               $  83.5      $  74.4
Provision for credit losses                   15.3          8.6
Receivables written off, net of                 .4        (2.9)
recoveries
Foreign currency translation adjustment         .1         (.9)
                                           $  99.3      $  79.2
  
  The provision for credit losses increased $6.7 million over the
first quarter of 1997 primarily due to record new business.
  
  Receivables that were past due over 30 days were 1.6% of the
total receivables at March 31, 1998, as compared to 2.7% at March
31, 1997.  We will continue to monitor the allowance for credit
losses to provide for an amount we believe is adequate, after
considering the value of any collateral, to cover uncollectible
receivables.
  
CAPITAL RESOURCES AND LIQUIDITY
  
  Operations for the first quarter of 1998 were funded with a
combination of bank borrowings, commercial paper, equity capital
invested by Caterpillar Inc., medium-term notes and retained
earnings.
  
At March 31, 1998, we had the following credit lines available:
  
Short-term credit lines from banks.  These credit lines total
 $577.1 million and will be eligible for renewal at various dates
 throughout 1998.  They are used for bank borrowings and as
 support for our outstanding commercial paper and commercial paper
 guarantees.  At March 31, 1998, we had $138.2 million outstanding
 against these credit lines.
  
Variable amount lending agreements with Caterpillar.  Under these
 agreements, we may borrow up to $788.2 million from Caterpillar,
 and Caterpillar may borrow up to $533.2 million from us.  The
 agreements are in effect for indefinite periods of time and may
 be changed or terminated by either party with 30 days' notice.
 We had borrowings of $62.8 million outstanding at March 31,1998
 and $243.5 million at December 31, 1997, but had no loans
 receivable under these agreements.

Two syndicated revolving credit lines.  The two revolving credit
 lines totaling $2,500.0 million are shared with Caterpillar with
 the following allocation:
  
                           Five-year       364-day         Total
                            Facility      Facility
   Caterpillar                $187.5   $      62.5   $     250.0
   Caterpillar Financial     1,687.5         562.5       2,250.0
   Services Corp.
   Total                  $  1,875.0    $    625.0    $  2,500.0
  
  
 We can request a change to this distribution to maintain the
 required amount of support for our outstanding commercial paper
 and guarantees of commercial paper.  At March 31, 1998, there
 were no borrowings under these lines.
  
European revolving credit line.  This $1.0 billion credit line
 supports our Euro-commercial paper program.  Under this program,
 commercial paper is issued by Caterpillar International Finance
 plc, our Irish subsidiary, with our guarantee.  At March 31,
 1998, there were no borrowings under this credit line.

  Total outstanding borrowings at  March 31,1998 was $7,488.2
million, an increase of $1,151.1 million over December 31, 1997.
Outstanding borrowings primarily include:
  
      $4,507.5 million of medium-term notes
      $2,680.7 million of commercial paper
      $138.2 million of bank borrowings

  In January, Caterpillar Inc. contributed an additional $100.0 million of
equity capital.  Our debt-to-equity ratio at  March 31, 1998 was
8.0 to 1 as compared to 7.8 to 1 at December 31, 1997.

DERIVATIVES
  
  We use interest rate derivative financial instruments and
currency derivative financial instruments to manage interest rate
and foreign currency exchange risks that we may encounter as a part
of our normal business.  We do not use these instruments for
trading purposes.
  
Interest rate derivatives.  We use interest rate swap agreements to
 manage the risk of changes in interest rates, allowing us to gain
 competitive and economic advantages by minimizing funding costs
 regardless of the direction interest rates move. At March 31,
 1998, we had interest rate swap contracts outstanding with
 notional amounts totaling $2,028.8 million and terms up to five
 years.  These contracts change:
  
      $1,493.2 million of floating rate debt to fixed rate debt
      $417.5 million of fixed rate debt to floating rate debt
      $118.1 million of floating rate debt to floating rate debt
       having different characteristics
  
Foreign currency derivatives.  We use foreign exchange contracts to
 minimize potential risk of fluctuating exchange rates. These
 contracts have terms that generally range up to three months.  At
 March 31, 1998, we had foreign exchange contracts totaling
 $1,077.5 million, $3.6 million of which were with Caterpillar.
 They hedge:

      foreign currency denominated receivables and debt of
       international subsidiaries
      a portion of our net investment in Thailand

















                PART II.  OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits

Exhibit No.    Description
12             Statement setting forth computation of Ratio of
               Profit to Fixed Charges.
               
27             Financial Data Schedule


     (b)  Reports on Form 8-K


                         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.



         Caterpillar Financial Services Corporation
                        (Registrant)






Date:  April  30, 1998           By:       /s/K.C. Springer
                                         K.C. Springer, Controller and
                                         Principal Accounting Officer





Date:  April 30, 1998           By:       /s/J.S. Beard
                                     J.S. Beard,President