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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
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                             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, 1999

                                       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 Number 0-24758

                            MICRO LINEAR CORPORATION
             (Exact name of Registrant as specified in its charter)

                    Delaware                          94-2910085
          (State or other jurisdiction of           (I.R.S. Employer
          Incorporation or organization)         Identification Number)

                 2092 Concourse Drive                       95131
                 San Jose, California                    (Zip Code)
                 (Address of principal executive
                            offices)

     Indicate by check mark whether the  Registrant (1) has filed all reports 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 [ ]

     The number of shares of the  Registrant's  Common Stock  outstanding  as of
September 30, 1999 was 11,029,966.


<PAGE>

<TABLE>
<CAPTION>
                                                       TABLE OF CONTENTS

                                                                                                     Page
       PART I.       FINANCIAL INFORMATION

       Item 1.       Financial Statements
                    <S>                                                                              <C>
                     Consolidated Condensed Statements of Operations for the three and nine
                     months ended September 30, 1999 and 1998.................................        3

                     Consolidated Condensed Balance Sheets at September 30, 1999 and December         4
                     31, 1998................................................

                     Consolidated Condensed Statements of Cash Flows for the nine months ended
                     September 30, 1999 and 1998..............................................        5

                     Notes to Consolidated Condensed Financial Statements.....................        6


       Item 2.       Management's Discussion and Analysis of Financial Condition and Results of
                     Operations...............................................................        9

       Item 3.       Quantitative and Qualitative Disclosures about Market Risk...............        15


       PART II.      OTHER INFORMATION

       Item 1.       Legal Proceedings........................................................        16

       Item 6.       Exhibits and Reports on Form 8-K.........................................        18

       SIGNATURES.............................................................................        19

</TABLE>
<PAGE>
<TABLE>
<CAPTION>



                                                PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                                                  MICRO LINEAR CORPORATION
                                       CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                                         (Unaudited)
                                          (In thousands, except per share amounts)

                                                                             Three Months Ended            Nine Months Ended
<S>                                                                                <C>            <C>            <C>           <C>
                                                                         September 30,  September 30,  September 30,  September 30,
                                                                              1999           1998           1999           1998
  Net revenues.......................................................     $12,113        $11,758        $34,289        $35,742
  Cost of revenues...................................................       5,829          5,919         17,096         18,171
   Gross profit......................................................       6,284          5,839         17,193         17,571
  Operating expenses:
   Research and development..........................................       3,608          2,855         10,457          9,006
   Selling, general and administrative...............................       2,569          2,876          8,149          8,067
   Legal settlement and related costs................................       1,408             --          1,408             --
                                                                            7,585          5,731         20,014         17,073
   Income (loss) from operations.....................................      (1,301)           108         (2,821)           498
  Interest and other income..........................................         371            372          1,142          1,100
  Interest expense...................................................         (62)           (65)          (187)          (198)
   Income (loss) before taxes........................................        (992)           415         (1,866)         1,400
  Provision (benefit) for income taxes...............................        (635)           150         (1,194)           504
   Net income (loss).................................................      $ (357)         $ 265          $(672)          $896

  Net Income (loss) Per Share:
  Basic:
   Net income (loss) per share.......................................      $(0.03)         $0.02         $(0.06)         $0.08
   Weighted average number of shares used in per share computation...      11,014         11,642         10,976         11,661
  Diluted:
   Net income (loss) per share.......................................      $(0.03)         $0.02         $(0.06)         $0.07
   Weighted average number of shares used in per share computation...      11,014         11,992         10,976         12,101
<FN>
                           See accompanying notes to unaudited consolidated condensed financial statements.
</FN>
</TABLE>
                                                                  3
<PAGE>
<TABLE>
<CAPTION>

                                      MICRO LINEAR CORPORATION
                                 CONSOLIDATED CONDENSED BALANCE SHEETS
                                              (Unaudited)
                                            (In thousands)
<S>                                                                                                   <C>                     <C>
                                                                                            September 30,            December 31,
                                                                                                 1999                    1998
Assets
Current assets:
   Cash and cash equivalents...........................................................         $ 4,792                 $ 6,393
   Short-term investments..............................................................          23,361                  22,937
   Accounts receivable, net............................................................           5,565                   5,476
   Inventories.........................................................................           5,991                   7,260
   Other current assets................................................................           5,990                   5,670
     Total current assets..............................................................          45,699                  47,736
Property, plant and equipment, net ....................................................          20,300                  21,140
Other assets...........................................................................             486                     568
       Total assets....................................................................         $66,485                 $69,444

Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable....................................................................          $4,192                $  3,030
   Deferred income on shipments to distributors........................................           2,744                   2,739
   Other accrued liabilities...........................................................           1,441                   4,075
   Current portion of long-term debt...................................................             173                   2,791
     Total current liabilities.........................................................           8,550                  12,635
Long-term debt.........................................................................           2,827                      --
Commitments and contingencies
Stockholders' equity:
   Preferred stock.....................................................................              --                      --
   Common stock........................................................................              14                      14
   Additional paid-in capital..........................................................          54,610                  54,125
   Retained earnings...................................................................          20,717                  21,389
   Treasury stock......................................................................         (20,233 )               (18,719 )
     Total stockholders' equity........................................................          55,108                  56,809
       Total liabilities and stockholders' equity......................................         $66,485                 $69,444

<FN>
                      See accompanying notes to unaudited consolidated condensed financial statements.
</FN>
</TABLE>

                                                              4
<PAGE>
<TABLE>
<CAPTION>

                                                  MICRO LINEAR CORPORATION
                                       CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                                         (Unaudited)
                                                       (In thousands)

                                                                               Nine Months Ended
<S>                                                                            <C>                     <C>
                                                                     September 30,           September 30,
                                                                          1999                   1998
Cash provided by operating activities...........................              $2,539                  $8,129

Investing activities:
   Capital expenditures.........................................              (2,617 )                (2,432 )
   Proceeds from sale of equipment..............................                 115                      --
   Purchases of short-term investments..........................             (32,826 )               (32,092 )

   Sales of short-term investments..............................              32,402                  30,460
     Net cash used in investing activities.......................             (2,926 )                (4,064 )

Financing activities:
   Principal payments of debt...................................                (121 )                  (151 )
   Proceeds from issuance of common stock.......................                 421                     963
   Acquisition of treasury stock................................              (1,514 )                (3,267 )
     Net cash used in financing activities.......................             (1,214 )                (2,455 )

Net increase (decrease) in cash and cash equivalents............              (1,601 )                 1,610
Cash and cash equivalents at beginning of period................               6,393                   5,210
Cash and cash equivalents at end of period......................             $ 4,792                 $ 6,820

<FN>
                   See accompanying notes to unaudited consolidated condensed financial statements.
</FN>
</TABLE>
                                                              5
<PAGE>

                            MICRO LINEAR CORPORATION

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

1)   Micro Linear Corporation (the "Company") designs, develops and markets high
     performance  analog and mixed signal integrated  circuits for a broad range
     of applications within the communications,  computer and industrial markets
     for sale primarily in North America,  Asia and Europe. The Company operates
     in a single industry segment.

2)   The accompanying  interim financial  statements are unaudited and have been
     prepared by the Company in accordance  with generally  accepted  accounting
     principles  and contain all  adjustments  (consisting  of normal  recurring
     adjustments) to fairly present the financial  information  included.  While
     the  Company  believes  that  the  disclosures  are  adequate  to make  the
     information not misleading, it is suggested that these financial statements
     be read in  conjunction  with the Company's  Annual Report on Form 10-K for
     the year ended December 31, 1998. The results of operations for the interim
     periods shown in this report are not  necessarily  indicative of results to
     be expected for the fiscal year.


3)   For financial  reporting  purposes,  the Company's  fiscal year ends on the
     Sunday  closest to December 31.  Fiscal year 1998 ended on January 3, 1999.
     The Company's fiscal quarters are 13 weeks in length.  The third quarter of
     1999 ended on October 3, 1999. For presentation  purposes, the accompanying
     unaudited   consolidated   condensed  financial  statements  refer  to  the
     quarters' calendar month end for convenience.

     The Company  exclusively  uses the U.S. dollar as its functional  currency.
     Foreign  currency  transaction  gains and losses are  included in income as
     they occur. The effect of foreign currency  exchange rate  fluctuations was
     not significant. The Company does not use derivative instruments.

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and the  reported  amounts of revenues  and expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.

4)   During the three months ended  September 30, 1999, two customers  accounted
     for 23% and 13% of total sales, respectively.  During the nine months ended
     September 30, 1999, two customers accounted for 25% and 11% of total sales,
     respectively.

5)   Supplemental Financial Information:

     Inventories consist of the following (in thousands):

                                            September 30,       December 31,
                                                1999                1998
          Raw materials.............          $    8              $  314
          Work-in-process...........           4,326               4,906
          Finished goods............           1,657               2,040
                                              $5,991              $7,260

     Property, plant and equipment consist of the following (in thousands):
<TABLE>
<CAPTION>

<S>                                                                                <C>                 <C>
                                                                         September 30,        December 31,
                                                                             1999                 1998
          Land............................................                $  2,850             $  2,850
          Buildings and improvements......................                   9,982                9,904
          Machinery and equipment.........................                  36,161               33,736
                                                                            48,993               46,490
          Accumulated depreciation and amortization.......                  28,693               25,350
          Net property, plant and equipment...............                 $20,300              $21,140
</TABLE>
                                       6
<PAGE>

       NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)
                                  (Unaudited)


6)   Cash payments for income taxes and interest  expense  totaled  $261,000 and
     $187,000, respectively, for the nine months ended September 30, 1999.


7)   The  Company's  provision  for taxes on income is based on estimates of the
     levels of income and certain deductions  expected for the year which may be
     subject to change.  The  Company's  effective  tax rate for the  nine-month
     period of 1999 was a benefit of 64%, compared to a provision of 36% for the
     same  period in 1998,  which  differs  from the  statutory  income tax rate
     primarily  due to state  income  taxes and federal  research  credits.  The
     reason for the higher  effective  tax rate in the first nine months of 1999
     is the  greater  impact  that the  Federal  R&D Tax Credit  and  California
     Investment Tax Credit is expected to have on the 1999 tax provision.


8)   From January  1996  through  September  1999,  the Company had  repurchased
     2,696,900 shares of its common stock for a total cost of $20.2 million. The
     Company's  common stock  buy-back  program was terminated at the end of the
     first quarter of 1999.

9)   The  Company  uses  the  net  income  per  share  calculation   methodology
     prescribed  by Statement of Financial  Accounting  Standards No. 128 ("SFAS
     128").  SFAS 128 requires  presentation of basic and diluted net income per
     share.  Basic net  income  per share is  computed  by  dividing  net income
     available to common stockholders (numerator) by the weighted average number
     of common shares outstanding  (denominator)  during the period and excludes
     the dilutive  effect of stock  options.  Diluted net income per share gives
     effect to all  dilutive  potential  common  stock  outstanding  during  the
     period.  In computing diluted net income per share, the average stock price
     for the period is used in  determining  the number of shares  assumed to be
     purchased from the exercise of stock options.

     Following is a  reconciliation  of the numerators and  denominators  of the
     basic and diluted income per share  computations for the periods  presented
     below (in thousands except per share data):

<TABLE>
<CAPTION>

                                                Three Months Ended September 30,
<S>                                       <C>                                    <C>
                                          1999                                   1998
                                                        Per-                                    Per-
                             Income        Shares     Share         Income         Shares     Share
                          (Numerator)  (Denominator)   Amount     (Numerator)  (Denominator)   Amount
    Basic Income (Loss)
        Per Share:

     Net income (loss)
         available           $(357)        11,014     $(0.03)        $265          11,642     $0.02
          to common
       stockholders

  Effect of dilutive
  securities:                                  --                                     350
    Stock options

  Diluted Income (Loss)
  Per Share:
  Net income (loss)
  available to common
  stockholders               $(357)        11,014     $(0.03)        $265          11,992     $0.02
  Assuming dilution

</TABLE>
                                       7
<PAGE>


       NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                Nine Months Ended September 30,
<S>                                       <C>                                    <C>
                                          1999                                   1998
                                                        Per-                                    Per-
                             Income        Shares     Share         Income         Shares     Share
                          (Numerator)  (Denominator)   Amount     (Numerator)  (Denominator)   Amount
    Basic Income (Loss)
        Per Share:
     Net income (loss)
         available           $(672)         10,976    $(0.06)        $896       11,661        $0.08
          to common
       stockholders

  Effect of dilutive
  securities:                                  --                                  440
    Stock options

  Diluted Income (Loss)
  Per    Share:
  Net income (loss)
  available
    to common                $(672)         10,976    $(0.06)        $896       12,101        $0.07
  stockholders
    assuming dilution

</TABLE>
     Options to purchase  274,792 shares of common stock were  outstanding as of
     September 30, 1999, but were not reflected in the  computations  of diluted
     earnings  per share  because the Company  recorded a net loss in the period
     and to do so would have been anti-dilutive.


10)  Prior to  September  1999,  the  Company  had a note that bore  interest at
     9.125%  per  annum  and was  secured  by a deed of trust  on the  Company's
     principal  facilities.  The note  required  monthly  principal and interest
     payments of  approximately  $36,000  through  October 1999,  with a balloon
     payment of  approximately  $2,639,000  due October 31,  1999.  In September
     1999, the Company  refinanced this note with a new note of $3,000,000.  The
     new note  bears  interest  at 7.59% per annum and is  secured  by a deed of
     trust on the Company's  principal  facilities.  The note  requires  monthly
     principal and interest  payments of  approximately  $36,000 through October
     2004,  with a balloon payment of  approximately  $1,780,000 due November 1,
     2004. As of September 30, 1999, $3,000,000 was outstanding under the loan.

11)  In April  1998,  the  Accounting  Standards  Executive  Committee  released
     Statement of Position ("SOP") No. 98-5, "Reporting on the Costs of Start-up
     Activities.  SOP No. 98-5 is  effective  for fiscal years  beginning  after
     December 15, 1998 and requires  companies to expense all costs  incurred or
     unamortized in connection  with start-up  activities.  The adoption of this
     SOP did not have any effect on the  Company's  results of operations as the
     Company has expensed such start-up costs in prior years.

     In  March  1998,  the  Accounting  Standard  Executive  Committee  released
     Statement  of  Position  ("SOP")  No.  98-1  "Accounting  for the  Costs of
     Computer  Software  Developed or Obtained for Internal Use". SOP No.98-1 is
     effective for financial statements for periods beginning after December 15,
     1998.  Direct  external  costs,   directly  related  internal  payroll  and
     payroll-related  cost and interest expenses associated with the application
     development  stage  are   capitalizable.   Upgrades  and  enhancements  are
     capitalized  if they meet  certain  criteria.  Training,  maintenance,  and
     data-conversion  costs are expensed.  The adoption of this SOP did not have
     any significant effect on the Company's results of operations.

12)  In  September  1999,  the  Company  issued  a press  release  announcing  a
     settlement  of a  lawsuit.  The  terms of  settlement  in this  matter  are
     confidential,  however,  the Company took a $1.4 million charge  reflecting
     settlement  and  associated  litigation  costs  in  the  third  quarter.  A
     discussion of certain  pending legal  proceedings  is included in Item 1 of
     Part II of the Company's Form 10-Q for the fiscal  quarter ended  September
     30,  1999.  The Company  believes  that the final  outcome of such  matters
     discussed  will  not  have a  material  adverse  effect  on  the  Company's
     consolidated financial position or results of operations.  No assurance can
     be given,  however, that these matters will be resolved without the Company
     becoming  obligated to make  payments or to pay other costs to the opposing
     party,  with the  potential  for having an adverse  effect on the Company's
     financial position or its results of operations.

                                       8


<PAGE>
Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

     This report on Form 10-Q  contains  forward-looking  statements  within the
meaning of Section  27A of the  Securities  Act of 1933 and  Section  21E of the
Securities Exchange Act of 1934. The forward-looking statements contained herein
are  subject  to  certain  factors  that could  cause  actual  results to differ
materially from those projected in the forward-looking  statements. Such factors
include,  but are not limited to, the factors set forth below and  elsewhere  in
this Form 10-Q.

Results of Operations

 Net Revenues

     Net  revenues  were  $12.1  million  for the third  quarter  of 1999,  a 3%
increase  over net revenues of $11.8 million for the third quarter of 1998 and a
7% increase over net revenues of $11.3  million for the second  quarter of 1999.
The  increase  in net  revenues  over the third  quarter  of 1998 and the second
quarter of 1999 is primarily  attributable  to higher turns demand and continued
strong domestic  distribution  resales.  Net revenues were $34.2 million for the
first nine months of 1999, a 4% decrease  over net revenues of $35.7 million for
the first nine  months of 1998.  The  decline in net  revenues in the first nine
months of 1999  compared to the first nine months of 1998 was  primarily  due to
lower demand for mature networking products in the communications market.

     The Company serves three principal  markets,  computer,  communications and
industrial.  Net  revenues for the third  quarter of 1999  compared to the third
quarter of 1998  increased  36% and 27% in the computer and  industrial  market,
respectively,  and decreased 13% in the communications  market. Net revenues for
the third quarter of 1999 compared to the second  quarter of 1999  increased 19%
in the computer and  industrial  market and  decreased 1% in the  communications
market.  Net  revenues  for the first nine months of 1999  compared to the first
nine months of 1998 increased 31% and 26% in the computer and industrial market,
respectively, and decreased 21% in the communications market.

     The  communications  market  includes  the  computer  networking  equipment
("networking")   sub-market.   Sales  of  products  to  the  networking   market
constitutes  a substantial  portion of the Company's net revenues.  Net revenues
for the third quarter of 1999 in the networking  sub-market decreased 14% and 2%
compared to the third quarter of 1998 and second quarter of 1999,  respectively.
Sales of the Company's  networking  products accounted for approximately 48% and
59% of net revenues in the first nine months of 1999 and 1998, respectively. The
networking sub-market is characterized by intense competition,  relatively short
product life cycles and rapid technological change. In addition,  the networking
sub-market   has  undergone  a  period  of  rapid  growth,   price  erosion  and
consolidation  in recent years.  The Company  expects its dependency on sales to
network equipment  manufacturers to continue for the near future.  The Company's
business and results of  operations  have in the past and would in the future be
materially and adversely affected in the event of a significant  slowdown in the
computer networking equipment market.

     International net revenues were $5.4 million,  or 45% of net revenues,  for
the third quarter of 1999, compared to $4.1 million, or 35% of net revenues, for
the third  quarter of 1998 and $4.3  million,  or 38% of net  revenues,  for the
second quarter of 1999. International revenues were $14.5 million, or 42% of net
revenues,  for the first nine months of 1999,  compared to $15.0 million, or 42%
of  net  revenues,   for  the  first  nine  months  of  1998.  The  increase  in
international  revenues  for the third  quarter  of 1999  compared  to the third
quarter of 1998 and the second  quarter  of 1999 was due to the  combination  of
higher direct product  demand for the Company's  products in Asia and Europe and
increased Asia Pacific subcontract work for domestic customers.

     Domestic  distributor  revenues were  approximately 30% of net revenues for
the third quarter of 1999, 25% of net revenues for the third quarter of 1998 and
37% of net  revenues  for the  second  quarter  of  1999.  Domestic  distributor
revenues  were  approximately  31% and 21% of net  revenues  for the first  nine
months of 1999 and first nine months of 1998,  respectively.  During  1998,  the
Company added a second national domestic distributor.  The Company expects sales
from both domestic and international  distributors to increase in the future. In
this regard,  several of the  Company's OEM  (Original  Equipment  Manufacturer)
customers have moved their  manufacturing  operations to subcontractors  and, in
turn,  are  placing  their  orders  through  distributors.  The  Company  defers
recognition of revenue  derived from sales to domestic  distributors  until such
distributors  resell the products to their  customers.  Revenue is recognized by
the Company upon shipment to international representatives, but the gross margin
on these  shipments  is deferred  until  international  distributors  notify the
Company of product sales to end users.

                                       9
<PAGE>
 Gross Margin

     The  Company's  gross  margin is affected  by the volume of product  sales,
price,  product  mix,  manufacturing  utilization,   product  yields,  inventory
obsolescence  and the mix of sales to OEM's and to  distributors.  The Company's
gross margin has been and will continue to be periodically  affected by expenses
incurred  in  connection   with  start-up  and   installation   of  new  process
technologies at outside manufacturing foundries.

     The  Company's  gross margin  increased to 52% in the third quarter of 1999
from 50% in the third quarter of 1998 and second  quarter of 1999. The Company's
gross margin increased to 50% for the first nine months of 1999 from 49% for the
first nine months of 1998.  The  Company's  gross  margin  improved in the third
quarter of 1999 compared to the third quarter of 1998 and the second  quarter of
1999 primarily due to a favorable change in product mix.

     The Company's  gross margin is adversely  impacted by the costs  associated
with  installing  new  processes  at its  foundries.  Although  the  Company has
recently  been able to mitigate the adverse  impact on gross  margin  associated
with new wafer manufacturing  process costs by relying upon process technologies
existing at its outside  wafer  foundries,  there can be no  assurance  that the
Company  will not be  required  to incur  significant  expenses in the future to
develop, or obtain access to, advanced process  technologies and to transfer and
install such  technologies  at one or more of its foundries,  which could have a
material adverse effect on gross margin in the future.

     The Company  currently  purchases its wafers from three wafer suppliers.  A
substantial  majority of the  Company's  wafer supply is obtained from two wafer
suppliers.  The  Company's  products are assembled and packaged by four vendors.
Any delays or  interruptions  due to such  factors  as  inadequate  capacity  or
unavailable raw materials in the Company's  wafer suppliers or assembly  vendors
could materially and adversely affect product  shipments.  The Company purchases
nearly all of its BiCMOS wafers from two wafer foundries,  the majority of which
are supplied by one wafer foundry in Taiwan.  Although both wafer  foundries are
qualified to supply the Company with BiCMOS  wafers,  the  Company's  short-term
BiCMOS wafer  supply could be  materially  and  adversely  affected if the wafer
foundry in Taiwan is unable to meet the Company's wafer supply.  The Company did
not experience  any disruption in wafer supply due to the recent  earthquakes in
Taiwan.

 Research and Development Expenses

     Research  and  development  expenses  include  costs  associated  with  the
definition,  design and development of standard and semi-standard products, tile
arrays  and  standard  cells.  The  Company  expenses  prototype  wafers and new
production mask sets related to new products as research and  development  costs
until products based on new designs are fully  characterized  by the Company and
are demonstrated to support published data sheets and satisfy reliability tests.
The Company  believes that the development  and  introduction of new products is
critical to its future success.  Research and development  expenses such as mask
and  silicon  costs that are  related to the  development  of new  products  can
fluctuate  from  quarter to  quarter  due to the  timing of the  product  design
process.

     Research  and  development  expenses  were  $3.6  million,  or  30%  of net
revenues, for the third quarter of 1999, compared to $2.9 million, or 24% of net
revenues,  for  the  third  quarter  of 1998  and  $3.3  million,  or 30% of net
revenues, for the second quarter of 1999. Research and development expenses were
$10.4  million,  or 30% of net  revenues,  for the  first  nine  months of 1999,
compared to $9.0 million,  or 25% of net  revenues,  in the first nine months of
1998. The increase in research and development  expenses in absolute  dollars in
the third  quarter of 1999  compared to the third  quarter of 1998 is  primarily
attributable to increased  prototype  product costs  associated with new product
and the addition of personnel associated with the Company's new design center in
Scotland.  The increase in research and development expenses in absolute dollars
in the third quarter of 1999 compared to the second quarter of 1999 is primarily
attributable  to new  contract  research  and  development  costs and  increased
prototype  product  costs  associated  with new  product  development  offset by
decreased payroll expenses. The increase in research and development expenses in
absolute  dollars in the first nine  months of 1999  compared  to the first nine
months of 1998 is primarily attributable to the addition of personnel associated
with the Company's  new design  center in Scotland.  During the first quarter of
1999, the Company  announced the  establishment  of a new development  center in
Scotland.  Staffing at this site  consists of seven  designers.  Staffing at the
Company's  development  center in England totals nine. The Company believes that
the timely  development  and  introduction  of new  products  is critical to its
future success.

                                       10
<PAGE>
Selling, General and Administrative

     Selling,  general and administrative  expenses were $2.6 million, or 21% of
net revenues,  for the third quarter of 1999  (excluding the  settlement  charge
related to a lawsuit), compared to $2.9 million, or 24% of net revenues, for the
third quarter of 1998 and $2.7 million,  or 24% of net revenues,  for the second
quarter of 1999. Selling, general and administrative expenses were $8.1 million,
or 24% of net  revenues,  for the  first  nine  months  of 1999  (excluding  the
settlement charge related to a lawsuit), compared to $8.1 million, or 23% of net
revenues,  for the first nine  months of 1998.  The  one-time  legal  settlement
charge of $1.4 million in the third quarter of 1999 includes both settlement and
associated litigation costs.

     The decrease in absolute  dollars in the third  quarter of 1999 compared to
the  third  quarter  of 1998 is  primarily  attributable  to  decrease  in sales
commissions and reduced staffing.  The decrease in absolute dollars in the third
quarter of 1999 compared to the second quarter of 1999 is primarily attributable
to decreased staffing levels and lower data book costs. The first nine months of
1999  expenses  compared  to those for the first  nine  months of 1998  remained
relatively flat, with increased payroll expenses offset by lower data book costs
and business  conference  expenses.  The Company  expects  selling,  general and
administrative  expenses  will remain  relatively  constant as a  percentage  of
revenues.

 Interest and Other Income and Interest Expense

     Interest  and other  income was $0.4  million  for each of the first  three
quarters  of  1999  and  the  third  quarter  of  1998.   Interest  expense  was
insignificant  for the first nine  months of 1999 and the first  nine  months of
1998.

 Provision for Income Taxes

     The  Company's  provision  for taxes on income is based on estimates of the
levels of income and  certain  deductions  expected  for the year,  which may be
subject to change. The Company's effective tax rate for the first nine months of
1999 was a benefit of 64%, compared to a provision of 36% for the same period in
1998,  which differs from the statutory  income tax rate  primarily due to state
income taxes and federal research  credits.  The reason for the higher effective
tax rate in the first  quarters of 1999 is the  greater  impact that the Federal
R&D Tax Credit and  California  Investment Tax Credit is expected to have on the
1999 tax provision.

Liquidity and Capital Resources

     During the last several years,  the Company has financed its operations and
capital requirements principally through cash flows from operations.  Operations
provided  $2.5  million  of net cash  during  the first  nine  month of 1999,  a
decrease of $5.6 million over the first nine month of 1998.  The decrease in the
first nine months of 1999  compared to the first nine month of 1998 is primarily
attributable to lower net income (loss) and accrued liabilities partially offset
by lower inventories.

     Cash used in  investing  activities  for the first  nine  months of 1999 is
attributable  to capital  expenditures  of $2.6  million  and net  purchases  of
short-term  investments of $0.4 million.  The Company  currently expects capital
expenditures for the year of 1999 to be approximately $3.5 million.

     Financing  activities for the first nine months of 1999 consisted primarily
of the repurchase of the Company's  Common Stock for $1.5 million.  From January
1996 through September 30, 1999, the Company had repurchased 2,696,900 shares of
its common stock at an aggregate  cost of $20.2  million.  The Company's  common
stock buy-back program was terminated at the end of the first quarter of 1999.

     Working  capital was $37.1  million as of September  30, 1999,  compared to
$35.1 million as of December 31, 1998 and includes cash and cash  equivalents of
$4.8 million and  short-term  investments  of $23.4  million as of September 30,
1999.

     The Company anticipates that its existing cash resources and cash generated
from operations will fund necessary  purchases of capital  equipment and provide
adequate  working  capital for at least the next twelve  months.  The  Company's
liquidity is affected by many factors,  including,  among others,  the extent to
which the Company pursues  additional wafer  fabrication  capacity from existing
foundry suppliers or new suppliers,  capital expenditures,  and the level of the
Company's  product  development  efforts,  and  other  factors  related  to  the
uncertainties of the industry and global economies. Accordingly, there can be no

                                       11
<PAGE>
assurance  that  events in the  future  will not  require  the  Company  to seek
additional  capital  sooner  or,  if so  required,  that  such  capital  will be
available on terms acceptable to the Company.

Other Factors Affecting Future Operating Results

     The Company's quarterly and annual operating results are affected by a wide
variety of factors  that could  materially  and  adversely  affect  revenues and
profitability,  including the Company's access to advanced process technologies,
the timing and extent of process  development  costs,  the Company's  ability to
introduce  new  products  on a timely  basis,  the  volume  and timing of orders
received,  market acceptance of the Company's and its customers'  products,  the
timing of new  product  announcements  and  introductions  by the Company or its
competitors,  changes  in the mix of  products  sold,  the  timing and extent of
research and  development  expenses,  the  availability  and cost of wafers from
outside foundries,  fluctuations in manufacturing  yields,  competitive  pricing
pressures  and cyclical  semiconductor  industry  conditions.  A majority of the
Company's  net revenues are derived from sales of a limited  number of products.
Historically,   average  selling  prices  in  the  semiconductor  industry  have
decreased over the life of any particular product. Competitive pricing pressures
are expected to continue in the future, especially in the communications market,
which includes the networking sub-market, and may have a material adverse effect
on the  Company's  gross  margin.  The Company's  business is  characterized  by
short-term orders and shipment  schedules,  and customer orders typically can be
canceled or rescheduled without significant penalty to the customer.  Due to the
absence of substantial  noncancellable  backlog, the Company typically plans its
production and inventory levels based on internal  forecasts of customer demand,
which are highly unpredictable and can fluctuate substantially. In addition, the
Company is limited in its  ability to reduce  costs  quickly in  response to any
revenue shortfalls.  As a result of the foregoing or other factors, there can be
no  assurance  that the Company will not  experience  material  fluctuations  in
future  operating  results on a quarterly or annual basis which would materially
and adversely affect the Company's business,  financial condition and results of
operations.

     The  markets  for  the  Company's   products  are  characterized  by  rapid
technological  change  and  frequent  new  product   introductions.   To  remain
competitive, the Company must develop or obtain access to advanced semiconductor
process  technologies in order to reduce die size,  increase die performance and
functional  complexity,  and improve  yields.  Semiconductor  design and process
methodologies  are  subject  to  rapid  technological  change,  requiring  large
expenditures for research and  development.  If the Company is unable to develop
or obtain  access to  advanced  wafer  processing  technologies  as they  become
needed, or is unable to define,  design,  develop and introduce  competitive new
products on a timely basis, its future operating  results will be materially and
adversely  affected.  In  addition,  if the  Company is unable to  transfer  and
install  such new  process  technologies  to one or more of its  foundries  in a
timely  manner,  its business and results of operations  could be materially and
adversely affected.

     The semiconductor  industry is characterized by rapid technological change,
cyclical market patterns,  significant  price erosion,  periods of over-capacity
and  production  shortages,  variations  in  manufacturing  costs and yields and
significant  expenditures  for capital  equipment and product  development.  The
industry has from time to time experienced  depressed business  conditions.  The
Company  may  experience  substantial  period-to-period  fluctuations  in future
operating  results due to general  semiconductor  industry  conditions  or other
factors.

Year 2000 Readiness Disclosure

     The "Year 2000 issue"  arises  because most  computer  systems and programs
were designed to handle only a two-digit  year, not a four-digit  year. When the
Year 2000 begins,  these computers may interpret "00" as the year 1900 and could
either  stop  processing   date-related   computations  or  could  process  them
incorrectly.  The Company has implemented, for all of its information systems, a
year 2000 date conversion project to address all necessary code changes, testing
and  implementation  and accordingly  does not anticipate any internal Year 2000
issues from its own information systems,  databases or programs. The Company has
also  implemented  a Year 2000 date  conversion  project to  address  machinery,
equipment and other items used in the operations of the Company.

     The Company has a comprehensive  Year 2000 project designed to identify and
assess the risks associated with its information systems,  products,  operations
and  infrastructure,  and  suppliers  that are not Year 2000  compliant,  and to
develop, implement, and test remediation and contingency plans to mitigate these
risks.  The project  comprises four phases:  (1)  identification  of risks,  (2)
assessment of risks,  (3) development of remediation and contingency  plans, and
(4) implementation and testing. In addition,  the Company provides its customers
with  information  on the Year 2000 project and the  progress  made towards Year
2000 compliance.

                                     12

<PAGE>
     INFORMATION  SYSTEMS.  The Company's current enterprise  information system
has been  remediated  and was fully tested in May 1998 and determined to be Year
2000 compliant.

     The required changes to the Company's information systems and items used in
the operations of the Company were completed in September 1999.  Total Year 2000
related external costs pertaining to its information systems were $64,000.  None
of the Company's other information  technology  projects have been deferred as a
result of the Company's Year 2000 compliance efforts.

     PRODUCTS.  The Company has assessed the capabilities of all of its products
sold to customers.  Based on the assessments made to date, none of the Company's
products are affected by Year 2000 issues.

     OPERATIONS AND INFRASTRUCTURE. Machinery and equipment and other items used
in the  operations  and  facilities  of the Company  have been  inventoried  and
assessed for Year 2000  compliance.  The  assessment to date has not yielded any
major areas of concern. The assessment process was completed in September 1998.

     SUPPLIERS. The Company has evaluated its supplier base to determine whether
Year 2000  issues  affecting  suppliers  will  adversely  impact  the  Company's
operations.  Although the Company does not anticipate  any business  disruptions
based on the assurances  made by these  suppliers,  the Company will continue to
assess and monitor key suppliers through the year 2000 transition period.

     CUSTOMERS.  The  Company  established  a  Global  Year  2000  Desk  at  its
headquarters  in California to handle all customer  requests for  compliance and
survey  information,  and for other general information related to the Company's
Year 2000 programs.

     GENERAL AND RISK FACTORS.  Although the Company has completed its Year 2000
project,  unforeseen  risks and delays may cause  disruption  in  manufacturing,
order  processing and  distribution  services or lead to additional  costs.  The
Company  believes  that its  greatest  potential  risks for Year 2000 issues are
associated with its information  systems and systems  embedded in its operations
and infrastructure, for which the Company has developed a contingency plan.

     Internal costs  incurred for the Year 2000 project are being tracked;  they
principally  consist of payroll and related costs. The Company's total costs are
immaterial.

     As the Year 2000 project  continues,  the Company may  discover  additional
Year 2000 problems; may not be able to develop,  implement,  or test remediation
or  contingency  plans;  or may find that the costs of these  activities  exceed
current expectations and become material.  In many cases, the Company is relying
on assurances from suppliers that new and upgraded information systems and other
products  will be  Year  2000  compliant.  The  Company  plans  to test  certain
third-party  products,  but  cannot be sure that its tests will be  adequate  or
that,  if problems are  identified,  they will be addressed by the supplier in a
timely and satisfactory way.

     Because  the  Company  uses  a  variety  of  information  systems  and  has
additional  systems embedded in its operations and  infrastructure,  the Company
cannot  be  sure  that  all  of  its  systems  will  work  together  in  a  Year
2000-compliant fashion. Furthermore, the Company cannot be sure that it will not
suffer business  interruptions,  either because of its own Year 2000 problems or
those of its  customers  or  suppliers  whose  Year  2000  problems  may make it
difficult or impossible for them to fulfill their commitments to the Company. If
the Company fails to satisfactorily resolve Year 2000 issues in a timely manner,
it could be exposed to claims by third parties.

     The Company has evaluated the various  types of  contingency  plans such as
procedures for dealing with disruptions of internal business systems,  plans for
factory  shutdowns and  identification  of alternative  material  vendors in the
event of Year 2000 related  disruption  in supply.  Contingency  evaluation  and
planning  will  continue  through  1999.  The  Company  cannot  assure  that any
contingency  plans in effect  at the time of a system  failure  will  adequately
address the immediate or long term effects of a failure,  or that such a failure
would not have a material adverse impact on our operations or financial  results
in spite of prudent planning.

                                       13
<PAGE>
     The Company could be adversely  impacted by Year 2000 issues faced by major
distributors,  suppliers, customers, vendors and financial service organizations
with which the Company  interacts.  The Company is  continuing  to evaluate Year
2000-related  risks  and  corrective  actions.  At  this  time,  the  Year  2000
compliance  expense and related  potential effect of the Company's  earnings are
estimated to be insignificant.  However, the risks associated with the Year 2000
problem are pervasive and complex,  can be difficult to identify and to address,
and can result in material  adverse  consequences  to the  Company.  Even if the
Company,  in a timely manner,  completes all of its assessments,  identifies and
tests remediation plans believed to be adequate,  and develops contingency plans
believed to be adequate,  some  problems may not be  identified  or corrected in
time to prevent material adverse consequences to the Company.

                                       14
<PAGE>
Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

     The Company's investment portfolio consisted of U.S. government obligations
and commercial  paper  typically with  maturities of less than 12 months.  These
securities are subject to interest rate risk and will decline in value if market
interest  rates  increase.  The Company has the ability to hold its fixed income
investments  until  maturity  and,  therefore,  the Company  would not expect to
recognize such an adverse impact in income or cash flows.

Foreign Currency Exchange Rate Risk

     The Company has international sales and research and development facilities
and is,  therefore,  subject to foreign  currency rate  exposure.  The Company's
foreign  currency risks are mitigated  principally  by maintaining  only minimal
foreign  currency  balances.  To date,  the  exposure to the Company  related to
exchange rate  volatility  has not been  significant.  However,  there can be no
assurance that there will not be a material impact in the future.

     For further  discussion of risk factors,  refer to the Company's  filing on
Form 10-K with the Securities and Exchange Commission.

                                       15
<PAGE>
PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

     In December 1995, Pioneer Magnetics,  Inc. ("Pioneer") filed a complaint in
the Federal District Court for the Central District of California  alleging that
certain of the Company's  integrated circuits violate a Pioneer patent.  Pioneer
is seeking  monetary  damages and an  injunction  against  such  alleged  patent
violation.  The Company has denied any  infringement  and filed a  counter-claim
seeking  invalidity  of the patent.  The court held a patent claim  construction
hearing on November 9, 1998. The court subsequently  issued a claim construction
opinion that is favorable to Micro Linear.  The court  ordered  Pioneer to brief
additional claim elements.  The final claim  construction  hearing took place on
July 19, 1999.  The court has issued a tentative  order also  favorable to Micro
Linear. The parties anticipate filing a stipulated judgment of Non-Infringement,
which would result in a termination  of the district  court action against Micro
Linear.  Pioneer may appeal such judgment. The court has not set a trial date or
a discovery cutoff date.

     On February 24,  1997, a former  employee of Micro Linear filed a complaint
in the Superior Court of California,  County of Santa Clara,  alleging breach of
contract and employment discrimination.  On June 5, 1997, the case was dismissed
and the parties agreed to submit the dispute to  arbitration.  As of October 27,
1999, no arbitration  date had been scheduled.  The Company denies all liability
and intends to vigorously defend its actions in the arbitration.

     On September 4, 1998,  NetVantage,  Inc.  ("NetVantage")  filed a complaint
relating  to the  Company's  sale of  part  ML6692  to  NetVantage  through  the
Company's distributor, Insight Electronics, in the Superior Court of California,
County of Los  Angeles,  alleging  causes of action for: (1) breach of contract,
(2)  breach  of  express   warranty,   (3)   breach  of  implied   warranty   of
merchantability,  (4) breach of implied  warranty  of fitness,  (5)  intentional
misrepresentation,  (6) negligent  misrepresentation,  (7)  negligence,  and (8)
breach of implied  covenant of good faith and fair  dealing.  NetVantage  sought
compensatory  damages  of no less than  $6.0  million,  additional  compensatory
damages  according  to proof,  attorneys'  fees and  costs,  plus  interest.  On
February  12,  1999,  NetVantage  filed  a  first  amended  complaint  in  which
NetVantage withdrew its causes of action for intentional  misrepresentation  and
negligent misrepresentation but realleging the remaining causes of action of the
original  complaint.  On  February  26,  1999,  the  Company  filed an answer to
NetVantage's  complaint  denying  the  causes of action and  asserting  numerous
affirmative  defenses. On the same day, Insight Electronics filed its answer and
also filed a cross-complaint against NetVantage,  alleging causes of action for:
(1)  breach of  express  contract,  (2)  breach of  implied  contract,  (3) open
account,  and (4) quantum valebant,  seeking  compensatory  damages in excess of
$41,400, attorneys' fee and costs, plus interest. On October 1, 1999 the parties
reached an out of court  settlement  of this action.  The terms of settlement in
this matter are  confidential,  however,  the Company took a $1.4 million charge
reflecting  settlement and associated  litigation  costs in the third quarter of
1999 and the action has been dismissed .

     On December 16, 1998,  Accton  Technology  Corporation  ("Accton")  filed a
complaint  relating to the Company's sale of part ML6692 to Accton,  against the
Company in the Superior  Court of  California,  County of Santa Clara,  alleging
causes of action for:  (1) breach of contract,  (2) breach of express  warranty,
(3)  breach of  implied  warranty  of  merchantability,  (4)  breach of  implied
warranty of fitness for particular  purpose,  (5) fraud and  deceit-concealment,
(6)  negligent  misrepresentation,  (7)  negligent  interference  with  economic
advantage,  and (8)  declaratory  relief  to  establish  the  right  to  implied
contractual  indemnity.  Accton  seeks  compensatory  damages  in excess of $7.0
million,  exemplary damages  according to proof,  attorneys' fees and costs, and
prejudgment and postjudgment interest. On February 10, 1999, the Company filed a
demurrer  and  motion to strike  attacking  the legal  sufficiency  of  Accton's
complaint.  On April 20,  1999,  the same day  scheduled  for the hearing on the
demurrer, Accton filed its Amended Complaint,  which rendered the demurrer moot.
Accton's Amended Complaint  alleges  essentially the same claims as its original
Complaint,  but pleads the breach of contract  and fraud and deceit  claims with
somewhat more specificity,  as well as alleging additional factual  information.
The Company filed a demurrer to Accton's  Amended  Complaint which was overruled
on July 8, 1999. The Company filed its answer to Accton's  Amended  Complaint on
July 27,  1999.  A discovery  hearing  was set for May 7, 1999 on the  Company's
motion for protective order and Accton's motion to compel and for sanctions. The
Company's  motion for protection order was granted by the Court, as was Accton's
motion to compel.  Accton's  request for sanctions  was denied.  On May 7th, the
Company produced documents responsive to Accton's document request.  Depositions
have been  ongoing  since late May and are  expected  to  continue  for  several
months.  The Company  served Accton with initial  discovery in early May and has
received  responses  and  documents  from Accton.  The Company has  subsequently
served Accton with additional discovery,  and expects to receive these responses
from  Accton  in  Late  November.  Further,  Hewlett-Packard  Company,  Accton's
customer,  has also produced documents in response to the Company's  desposition
subpoena.  Numerous Accton personnel have been noticed for deposition,  but have
                                       16
<PAGE>

not yet been deposed by the Company.  At the initial  status  conference on July
13, 1999, the court ordered the parties to mediation, and set a mediation status
conference  for  October,  14,  1999.  Due  to  scheduling  conflicts  with  the
NetVantage  matter,  both parties later agreed to set the mediation for December
16, 1999 before Hon. William T. Betineli (Ret.).  At the subsequent  October 14,
1999 mediation status  conference,  the court set a trial setting conference for
December 7, 1999, at which time a trial date will likely be scheduled.

     Although the Company believes that the resolution of these actions will not
have a material adverse effect on the Company's  financial  condition or results
of  operations,  there can be no assurance that such actions will be resolved in
the  Company's  favor or that an  unfavorable  resolution  would not  materially
adversely effect the Company's financial condition or results of operations.

     From time to time,  the  Company  has  received,  and in the  future it may
receive,  correspondence  from  certain  vendors,  distributors,   customers  or
end-users of its products  regarding  disputes with respect to contract  rights,
product  performance  or other  matters  that  occur in the  ordinary  course of
business.  There  can  be no  assurance  that  any of  such  disputes  will  not
eventually  result in litigation or other actions involving the Company or as to
the outcome of such disputes.

                                       17
<PAGE>
Item 6.  Exhibits and Reports on Form 8-K

  (a) Exhibits

        27.1     Financial Data Schedule


  (b) Reports on Form 8-K

        None

                                       18
<PAGE>
                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

































                                  MICRO LINEAR CORPORATION

Date: November 16, 1999           By:  /s/ J. PHILIP RUSSELL
                                  J. Philip Russell
                                  Chief Financial Officer
                                  (Principal Financial and Accounting Officer)

                                       19