SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                   FORM 10-QSB


               Quarterly Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934


For the Quarterly Period Ended:                           Commission File Number
            May 31, 1998                                          1-11038

                 NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION
             (Exact name of registrant as specified in its charter)

           Delaware                                    41-0857886
(State of Incorporation)                 (I.R.S. Employer Identification Number)

                    6680 N. Highway 49, Lino Lakes, MN 55014
                    (Address of principal executive offices)

                                 (612) 784-1250
                         (Registrant's telephone number)


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

                                     YES  [X]         NO [ ]

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

                Class                             Outstanding as of July 7, 1998
Common Stock, $.02 par value                                 4,001,230


                                            "This document consists of eleven 
                                            pages.  One exhibit is being filed."


<PAGE>



PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION

BALANCE SHEETS (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>


                                                                             MAY 31,        AUGUST 31,       MAY 31,
                                                                              1998             1997            1997
ASSETS
<S>                                                                       <C>             <C>             <C>         
CURRENT ASSETS:
   Cash and cash equivalents                                              $  2,271,720    $  3,945,567    $  3,605,505
   Receivables:
      Trade, less allowance for doubtful accounts of $26,000,
         $27,000, and $29,000, respectively                                  1,322,791       1,164,660       1,294,850
      Corporate joint ventures                                                 436,598         517,551         484,650
   Income tax receivable                                                        98,356            --              --
   Inventories                                                                 823,300         841,618         573,536
   Prepaid expenses and other                                                   66,468          77,196          51,708
   Deferred income taxes                                                       240,000         240,000         170,000
                                                                          ------------    ------------    ------------
            Total current assets                                             5,259,233       6,786,592       6,180,249

PROPERTY AND EQUIPMENT, net                                                    979,191         962,328         977,666

OTHER ASSETS:
   Investments in corporate joint ventures                                   2,409,352       2,291,600       2,145,571
   Investment in European holding company                                      257,146         254,639         254,375
   Investment in foreign company                                               139,475         132,000         159,879
   Deferred income taxes                                                       130,000         130,000          90,000
   Other                                                                       603,952         625,544         364,140
                                                                          ------------    ------------    ------------
                                                                             3,539,925       3,433,783       3,013,965
                                                                          ------------    ------------    ------------
                                                                          $  9,778,349    $ 11,182,703    $ 10,171,880
                                                                          ============    ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                                       $    191,728    $    162,477    $    118,338
   Income taxes                                                                   --           376,867         222,414
   Accrued liabilities:
      Payroll                                                                  170,750         230,951         141,326
      Other                                                                    174,596         189,707         134,691
                                                                          ------------    ------------    ------------
            Total current liabilities                                          537,074         960,002         616,769

DEFERRED GROSS PROFIT                                                          118,000         118,000         118,000

STOCKHOLDERS' EQUITY:
   Preferred stock, no par value, authorized 10,000 shares, none issued
    Common stock, $.02 par value per share; authorized
      10,000,000 shares; issued and outstanding 3.999,030,
      4,202,508, and 4,206,308, respectively                                    79,981          84,050          84,126
   Additional paid-in capital                                                4,775,886       5,185,828       5,193,207
   Retained earnings                                                         4,778,490       5,217,221       4,418,164
   Cumulative foreign currency translation adjustments                        (381,275)       (252,591)       (128,579)
                                                                          ------------    ------------    ------------
                                                                             9,253,082      10,234,508       9,566,918
   Notes and related interest receivable from purchase of
      common stock                                                            (129,807)       (129,807)       (129,807)
                                                                          ------------    ------------    ------------
               Total stockholders' equity                                    9,123,275      10,104,701       9,437,111
                                                                          ------------    ------------    ------------
                                                                          $  9,778,349    $ 11,182,703    $ 10,171,880
                                                                          ============    ============    ============

</TABLE>

See notes to financial statements.


<PAGE>


NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION

STATEMENTS OF INCOME (UNAUDITED
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
)

                                                       THREE MONTHS ENDED            NINE MONTHS ENDED
                                                             MAY 31                       MAY 31
                                                 ----------------------------   --------------------------
                                                      1998           1997           1998           1997

<S>                                               <C>            <C>            <C>            <C>        
SALES                                             $ 2,607,271    $ 2,518,582    $ 7,822,455    $ 6,532,957

COST OF GOODS SOLD                                  1,268,043      1,201,326      3,897,220      3,084,004
                                                  -----------    -----------    -----------    -----------

GROSS PROFIT                                        1,339,228      1,317,256      3,925,235      3,448,953

OPERATING EXPENSES:
   Selling                                            317,926        241,033        937,621        832,336
   General and administrative                         376,765        529,735      1,331,530      1,349,132
   Research, engineering, and technical support       132,184        107,199        380,159        326,627
                                                  -----------    -----------    -----------    -----------
                                                      826,875        877,967      2,649,310      2,508,095
                                                  -----------    -----------    -----------    -----------

OPERATING INCOME                                      512,353        439,289      1,275,925        940,858

JOINT VENTURES, EUROPEAN HOLDING
     COMPANY AND FOREIGN COMPANY:
   Equity in income of corporate
     joint ventures, European holding
     company, and foreign company                     147,540        185,740        361,568        469,828
   Fees for technical assistance to
     corporate joint ventures                         477,085        573,841      1,315,385      1,555,212
   Corporate joint venture expense                   (145,754)      (127,034)      (446,027)      (379,029)
                                                  -----------    -----------    -----------    -----------
                                                      478,871        632,547      1,230,926      1,646,011

OTHER INCOME:
   Interest income                                     21,551         36,311        108,858        101,505
   Other income                                          --              113           --            7,997
                                                  -----------    -----------    -----------    -----------
                                                       21,551         36,424        108,858        109,502
                                                  -----------    -----------    -----------    -----------

INCOME BEFORE INCOME TAXES                          1,012,775      1,108,260      2,615,709      2,696,371

INCOME TAXES                                          320,000        375,000        820,000        900,000
                                                  -----------    -----------    -----------    -----------

NET INCOME $                                          692,775    $   733,260    $ 1,795,709    $ 1,796,371
                                                  ===========    ===========    ===========    ===========

NET INCOME PER COMMON SHARE:
   Basic                                          $       .17    $       .17    $       .44    $       .43
                                                  ===========    ===========    ===========    ===========
   Diluted                                        $       .17    $       .17    $       .43    $       .42
                                                  ===========    ===========    ===========    ===========

WEIGHTED AVERAGE COMMON
   SHARES OUTSTANDING:
     Basic                                          4,041,299      4,206,308      4,126,018      4,203,407
                                                  ===========    ===========    ===========    ===========
     Diluted                                        4,111,299      4,274,164      4,181,344      4,266,742
                                                  ===========    ===========    ===========    ===========

</TABLE>

See notes to financial statements.


<PAGE>


NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION

STATEMENTS OF CASH FLOWS (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>


                                                                        NINE MONTHS ENDED
                                                                             MAY 31
                                                                  --------------------------
                                                                      1998           1997
<S>                                                               <C>            <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                     $ 1,795,709    $ 1,796,371
   Adjustments to reconcile net income to net cash provided
       by operating activities:
     Depreciation                                                      89,100         86,175
     Equity income of joint ventures, European holding company,
       and foreign company                                           (361,568)      (469,828)
     Dividends received from joint ventures                           284,461         39,555
     Deferred gross profit                                               --            9,000
     Change in current assets and liabilities:
       Receivables:
         Trade                                                       (158,131)      (166,875)
         Joint ventures                                                80,953         39,927
       Income tax receivable                                          (98,356)          --
       Inventories                                                     18,318         10,676
       Prepaid expenses and other                                      54,320         76,895
       Accounts payable                                                29,251        (36,521)
       Income taxes                                                  (376,867)      (241,286)
       Accrued liabilities                                            (75,312)         1,468
                                                                  -----------    -----------
           Total adjustments                                         (513,831)      (650,814)
                                                                  -----------    -----------
           Net cash provided by operating activities                1,281,878      1,145,557

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                                (105,963)       (83,025)
   Investment in European holding company                                --         (254,375)
   Investments in joint ventures                                     (179,311)      (158,067)
   Increase in other assets                                           (22,000)      (250,000)
                                                                  -----------    -----------
           Net cash used in investing activities                     (307,274)      (745,467)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from exercise of stock options                             56,030         27,228
   Dividends paid                                                    (621,798)      (504,733)
   Repurchase of common stock                                      (2,082,683)       (24,600)
                                                                  -----------    -----------
           Net cash used in financing activities                   (2,648,451)      (502,105)
                                                                  -----------    -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                          (1,673,847)      (102,015)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                    3,945,567      3,707,520
                                                                  -----------    -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                        $ 2,271,720    $ 3,605,505
                                                                  ===========    ===========

</TABLE>

See notes to financial statements.


<PAGE>


NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

1.      INTERIM FINANCIAL INFORMATION

        In the opinion of management, the accompanying unaudited financial
        statements contain all necessary adjustments, which are of a normal
        recurring nature, to present fairly the financial position of Northern
        Technologies International Corporation as of May 31, 1998 and 1997, the
        results of operations for the three and nine months ended May 31, 1998
        and 1997, and the cash flows for the nine months ended May 31, 1998 and
        1997, in conformity with generally accepted accounting principles.

        Effective December 15, 1997, the Company adopted Statement of Financial
        Accounting Standards (SFAS) No. 128, EARNINGS PER SHARE. Net income per
        common share presented for the three and nine months ended May 31, 1997
        have been restated for the adoption of SFAS No. 128. The effect of
        adopting SFAS No. 128 at December 15, 1997, on income per share for the
        three and nine months ended May 31, 1997 was not material.

        These financial statements should be read in conjunction with the
        financial statements and related notes as of and for the year ended
        August 31, 1997 contained in the Company's filing on Form 10-KSB dated
        November 25, 1997 and with Management's Discussion and Analysis of
        Financial Condition and Results of Operations appearing on pages 7
        through 9 of this quarterly report.

2.      INVENTORIES

        Inventories consist of the following:

<TABLE>
<CAPTION>


                                                                 May 31,     August 31,    May 31,
                                                                  1998         1997         1997

<S>                                                            <C>          <C>          <C>       
        Production materials                                   $  315,348   $  276,631   $  142,395
        Work in process                                            75,346       21,301       20,205
        Finished goods                                            432,606      543,686      410,936
                                                               ----------   ----------   ----------
                                                               $  823,300   $  841,618   $  573,536
                                                               ==========   ==========   ==========

3.      PROPERTY AND EQUIPMENT

        Property and equipment consist of the following:

                                                                 May 31,     August 31,    May 31,
                                                                  1998         1997         1997

        Land                                                   $  246,097   $  246,097   $  246,097
        Buildings and improvements                              1,077,671    1,044,996    1,044,996
        Machinery and equipment                                   669,155      603,919      604,935
                                                               ----------   ----------   ----------
                                                                1,992,923    1,895,012    1,896,028
        Less accumulated depreciation                           1,013,732      932,684      918,362
                                                               ----------   ----------   ----------
                                                               $  979,191   $  962,328   $  977,666
                                                               ==========   ==========   ==========

</TABLE>


<PAGE>


4.      INVESTMENTS IN CORPORATE JOINT VENTURES

        During the nine months ended May 31, 1998, the Company invested $179,311
        in foreign joint ventures. The Company has a 50% ownership interest in
        each entity. The entities had no significant operations prior to the
        Company's investment.

5.      STOCKHOLDERS' EQUITY

        During the nine months ended May 31, 1998, the Company purchased and
        retired 220,020 shares of common stock for $2,082,683.

        In November 1997, the Company declared a cash dividend of $.15 per share
        payable on December 15, 1997 to shareholders of record on December 1, 
        1997.

        During the nine months ended May 31, 1998, stock options for the
        purchase of 16,542 shares of the Company's common stock were exercised
        at prices between $3.00 and $6.13 per share.

6.      INCOME PER SHARE

        Basic income per share is computed by dividing net income by the
        weighted average number of common shares outstanding. Diluted income per
        share assumes the exercise of stock options using the treasury stock
        method, if dilutive.



<PAGE>


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION

RESULTS OF OPERATIONS

GENERAL - The Company conducts all foreign transactions based on the U.S.
dollar, except for its investments in foreign joint ventures and foreign
company. The exchange rate differential relating to investments in foreign joint
ventures and foreign company is accounted for under the requirements of SFAS No.
52.

SALES - Net sales increased by $88,689 or 4% during the third quarter of 1998 as
compared to the third quarter of 1997. Net sales increased by $1,289,498 or 20%
during the nine months ended May 31, 1998 compared to the nine months ended May
31, 1997. These changes in sales are due to the volume of corrosion inhibiting
products sold to existing or new customers. There has been no change in product
pricing, introduction of new products, or entry into any particular new markets.

COST OF SALES - Cost of goods sold as a percentage of net sales for the third
quarter of 1998 was 49% compared to 48% for the third quarter of 1997. The cost
of goods sold percentage of net sales was 50% and 47% for the nine months ended
May 31, 1998 and 1997, respectively. Variations are due primarily to the mix of
product sales.

OPERATING EXPENSES - As a percentage of net sales, total operating expenses
decreased to 32% in the third quarter of fiscal 1998 from 35% in the third
quarter of fiscal 1997. Operating expenses were 34% of net sales for the nine
months ended May 31, 1998 and 38% for the nine months ended May 31, 1997.

Operating expense classification percentages of net sales were as follows:


                                  Three Months Ended         Nine Months Ended
                                        May 31                     May 31
                                --------------------        -----------------
                                1998            1997        1998         1997

Selling expense                  12%             10%         12%          13%
General and administrative       15              21          17           20
Research, engineering, and
   technical support              5               4           5            5

Selling expenses increased during the third quarter of fiscal 1998 as compared
to the same period in fiscal 1997 due to increase in staff salaries and related
expenses and travel. These same factors account for the increase in the selling
expense for the nine months ended May 31, 1998 over the same period in fiscal
1997. Selling expenses as a percentage of net sales increased for the three
months ended May 31, 1998 as compared to the same period in 1997 due to the
increased level of net sales in fiscal 1998 not offsetting the effect of
increased fiscal 1998 selling expenses. Selling expenses as a percentage of net
sales decreased for the nine months ended May 31, 1998 as compared to the same
period in fiscal 1997 due to the increased level of net sales in fiscal 1998
offsetting the effect of increased fiscal 1998 selling expenses.

General and administrative expenses decreased during the third quarter of fiscal
1998 as compared to the same period in fiscal 1997 due to decreases in
professional fees and various other expenses. These same factors account for the
decrease in the general and administrative expenses for the nine months ended
May 31, 1998 over the same period in fiscal 1997. General and administrative
expenses as a percentage of net sales decreased for the three and nine months
ended May 31, 1998, as compared to the same period in 1997 due to the increased
level of net sales in fiscal 1998 and the decrease in fiscal 1998 general and
administrative expenses.



<PAGE>


Research, engineering, and technical support expenses increased during the third
quarter of fiscal 1998 as compared to the same period in fiscal 1997 due
primarily to increases in staff salaries and travel. These same factors account
for the increase in research, engineering, and technical support expenses for
the nine months ended May 31, 1998 over the same period in fiscal 1997. Such
expenses, as a percentage of sales were largely unchanged for the three and nine
month periods ended May 31, 1998 as compared to fiscal 1997 periods.

JOINT VENTURES, EUROPEAN HOLDING COMPANY, AND FOREIGN COMPANY - Net earnings
from corporate joint ventures, European holding company, and foreign company
were $478,871 and $1,230,926 for the three and nine months ended May 31, 1998,
respectively, compared to $632,547 and $1,646,011 for the three and the nine
months ended May 31, 1997. This net decrease is due to the strengthening of the
U.S. dollar when compared to the local currencies of the Company's corporate
joint ventures and decreased sales volume at certain of the Company's joint
ventures located in the Pacific Rim.

INCOME TAXES - Income tax expense for the three and nine months ended May 31,
1998 and 1997 was calculated based on management's estimate of the Company's
annual effective income tax rate. The Company's effective income tax rate for
fiscal 1998 and 1997 is lower than the statutory rate primarily due to the
Company's equity in income of corporate joint ventures, European holding
company, and foreign company being recognized based on after tax earnings of
these entities. To the extent joint venture's undistributed earnings are
distributed to the Company, it does not result in any material additional income
tax liability after the application of foreign tax credits.

LIQUIDITY AND CAPITAL RESOURCES

At May 31, 1998, the Company's working capital was $4,722,159, including
$2,271,720 in cash and cash equivalents, compared to working capital of
$5,826,590 and $5,563,480 as of August 31, 1997 and May 31, 1997, respectively.

Net cash provided from operations has been sufficient to meet liquidity
requirements, capital expenditures, research and development cost, and expansion
of operations of the Company's joint ventures. Cash flows from operations for
the nine months ended May 31, 1998 and 1997 was $1,281,878 and $1,145,557,
respectively. The net cash flow from operations for the nine months ended May
31, 1998 and 1997 resulted principally from net income and joint venture
dividends offset by equity income of joint ventures, increased trade
receivables, and payment of income taxes.

Net cash used in investing activities for the nine months ended May 31, 1998 was
$307,274 which resulted from investments in joint ventures, additions to
property and an increase in other assets. Net cash used in investing activities
for the nine months ended May 31, 1997 was $745,467 which resulted from
investments in joint ventures and European holding company, additions to
property, and an increase in other assets.

Net cash used in financing activities for the nine months ended May 31, 1998
resulted from the payment of dividends to stockholders of $621,798 and the
repurchase of common stock of $2,082,683 offset by proceeds of $56,030 from the
exercise of stock options. Net cash used in financing activities for the nine
months ended May 31, 1997 was $502,105 which resulted from the payment of
dividends to stockholders of $504,733 and the repurchase of common stock of
$24,600 offset by proceeds from the exercise of stock options of $27,228.

The Company expects to meet future liquidity requirements with its existing cash
and cash equivalents and from cash flows of future operating earnings and
distributions of earnings and technical assistance fees from the corporate joint
venture investments.

The Company has no long-term debt and no material lease commitments at May 31,
1998.

The Company has no postretirement benefit plan and does not anticipate
establishing any postretirement benefit program.


<PAGE>


RECENTLY ISSUED ACCOUNTING STANDARD

In June 1997, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 130, REPORTING COMPREHENSIVE
INCOME, which establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial statements.
The Company will be required to adopt SFAS No. 130 in fiscal 1999.

In June 1997, the FASB also issued SFAS No. 131, DISCLOSURES ABOUT SEGMENTS OF
AN ENTERPRISE AND RELATED INFORMATION. SFAS No. 131 redefines how operating
segments are determined and requires disclosures of certain financial and
descriptive information about a company's operating segments. The Company
anticipates the adoption of SFAS No. 131 will result in the Company continuing
to operate in one segment. The Company will be required to adopt SFAS No. 131 in
fiscal 1999.



<PAGE>


PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

None

ITEM 2 - CHANGES IN SECURITIES

None

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None

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

None

ITEM 5 - OTHER INFORMATION

None

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

27   Financial Data Schedule


<PAGE>


                                   SIGNATURES


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

                                 NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION


July 13, 1998
                                 /s/ Loren M. Ehrmanntraut
                                 -----------------------------------------------
                                 Loren M. Ehrmanntraut
                                 Chief Financial Officer and Corporate Secretary