==========================================================================

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549


                                   FORM 10-Q/A


               Quarterly Report Pursuant to Section 13 or 15(d)
                    of the Securities Exchange Act of 1934
                for the quarterly period ended August 1, 1998

                        Commission File Number 0-19558


                     CENTIGRAM COMMUNICATIONS CORPORATION
            (Exact name of registrant as specified in its charter)


           Delaware                                   94-2418021
   (STATE OF INCORPORATION)                        (I.R.S. EMPLOYER
                                                IDENTIFICATION NUMBER)

                             91 East Tasman Drive
                          San Jose, California 95134
                   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)


      Registrant's telephone number, including area code:  (408) 944-0250





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
                                     ----      ----

The number of outstanding shares of the Registrant's Common Stock as of
August 28, 1998 was 7,171,000.

 ==========================================================================



<PAGE>

Part 1.  Financial Information
Item 1.   Financial Statements
                  Centigram Communications Corporation
             Condensed Consolidated Balance Sheets (Restated)
             (In thousands, except share and per share data)
<TABLE>
<CAPTION>

                                                    August 1,    November 1,
                                                    1998         1997
                                                    -----------  -----------
                                                    (Unaudited)    (Note)
<S>                                                 <C>          <C>
ASSETS
Current assets:
    Cash and cash equivalents....................      $15,958      $19,791
    Short-term investments.......................       36,303       32,262
    Trade receivables, net.......................       15,856       21,637
    Inventories..................................        5,494        9,060
    Other current assets.........................        1,473        2,370
                                                    -----------  -----------
        Total current assets.....................       75,084       85,120
Property and equipment, net......................        6,847       12,893
Intangible assets, net...........................        6,829        1,468
Deposits and other assets........................        2,320          439
                                                    -----------  -----------
                                                       $91,080      $99,920
                                                    ===========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable.............................       $5,183       $6,925
    Accrued compensation.........................        4,705        5,141
    Accrued expenses and other liabilities.......       12,227        4,069
    Warranty and retrofit reserves...............        1,660        2,161
                                                    -----------  -----------
        Total current liabilities................       23,775       18,296

Commitments and contingencies
Stockholders' equity:
    Preferred stock, $.001 par value, 1,000,000
        authorized; none outstanding.............        --           --
    Common stock, $.001 par value, 25,000,000
        authorized; 7,171,000 and 7,110,000
        outstanding and capital in excess of
        par value................................       90,626       90,724
    Treasury stock, at cost......................       (6,036)      (2,427)
    Accumulated deficit..........................      (17,520)      (6,670)
    Unrealized gain on investments...............          331           68
    Cumulative translation adjustments...........          (96)         (71)
                                                    -----------  -----------
        Total stockholders' equity...............       67,305       81,624
                                                    -----------  -----------
                                                       $91,080      $99,920
                                                    ===========  ===========


<FN>
Note: The balance sheet at November 1, 1997 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.  See accompanying notes.
</FN>
</TABLE>
<PAGE>















































                        Centigram Communications Corporation
             Condensed Consolidated Statements of Operations (Restated)
                  (In thousands, except per share data - unaudited)
<TABLE>
<CAPTION>
                                        Quarter Ended       Nine Months Ended
                                   ----------------------  ----------------------
                                   August 1,   August 2,   August 1,   August 2,
                                   1998        1997        1998        1997
                                   ----------  ----------  ----------  ----------
<S>                                <C>         <C>         <C>         <C>
Net revenue.......................   $18,143     $27,010     $57,503     $79,822

Cost and expenses:
  Costs of goods sold.............     8,837      11,549      28,061      33,731
  Research and development........     4,056       4,959      14,143      16,103
  Selling, general and
     administrative...............     9,826      11,640      31,648      34,175
  Non-recurring charges...........    10,600         --       10,600       3,563
                                   ----------  ----------  ----------  ----------
                                      33,319      28,148      84,452      87,572
                                   ----------  ----------  ----------  ----------
Operating loss....................   (15,176)     (1,138)    (26,949)     (7,750)
Other income, net.................    15,074       4,437      16,403       5,501
                                   ----------  ----------  ----------  ----------
Income (loss) before income taxes.      (102)      3,299     (10,546)     (2,249)
Provision for income taxes........       164         150         304         226
                                   ----------  ----------  ----------  ----------
Net income (loss).................     ($266)     $3,149    ($10,850)    ($2,475)
                                   ==========  ==========  ==========  ==========

Basic and diluted earnings (loss)
per share.........................    ($0.04)      $0.45      ($1.56)     ($0.36)
                                   ==========  ==========  ==========  ==========

Shares used for basic earnings
(loss) per share..................     6,885       6,934       6,966       6,963
                                   ==========  ==========  ==========  ==========

Shares used for diluted earnings
(loss) per share...................    6,885       7,019       6,966       6,963
                                   ==========  ==========  ==========  ==========

</TABLE>
                        See accompanying notes.
<PAGE>










                         Centigram Communications Corporation
            Condensed Consolidated Statements of Cash Flows (Restated)
                               (In thousands - unaudited)
<TABLE>
<CAPTION>
                                                        Quarter Ended
                                                    ----------------------
                                                    August 1,   August 2,
                                                    1998        1997
                                                    ----------  ----------
<S>                                                 <C>         <C>
Cash and equivalents, beginning of period.........    $19,791     $12,668
                                                    ----------  ----------
Cash flows from operations:
    Net loss......................................    (10,850)     (2,475)
    Write-off of purchsed in-process technology...      5,000        --
    Gain on sale of business units................    (14,302)     (3,598)
    Depreciation and amortization.................      5,591       6,943
    Trade receivables.............................      2,003       2,713
    Inventories...................................        666       1,544
    Other assets..................................       (977)        703
    Accounts payable..............................     (2,135)       (858)
    Accrued expenses and other liabilities........      5,306       2,435
                                                    ----------  ----------
                                                       (9,698)      7,407
                                                    ----------  ----------
Cash flows from investing:
    Purchase of short-term investments............    (35,088)   (101,043)
    Proceeds from sales and maturities of
      short-term investments......................     31,310     110,061
    Proceeds from the sale of CPE business unit...    26,849        --
    Purchase of property and equipment............     (1,817)     (5,783)
    Purchase of other assets......................       --          (905)
    Acquisition of TTC............................    (11,558)       --
                                                    ----------  ----------
                                                        9,696       2,330
                                                    ----------  ----------
Cash flows from financing:
    Proceeds from sale of common stock............      3,267       1,991
    Principal payments on capital leases..........        (78)       (114)
    Acquisition of treasury stock.................     (7,020)     (2,958)

                                                    ----------  ----------
                                                       (3,831)     (1,081)
                                                    ----------  ----------
Net change in cash and equivalents................     (3,833)      8,656
                                                    ----------  ----------
Cash and equivalents, end of period...............    $15,958     $21,324
                                                    ==========  ==========
</TABLE>
                          See accompanying notes.
<PAGE>




                  Centigram Communications Corporation
   Notes to Condensed Consolidated Financial Statements (Restated) (Unaudited)


Basis of Presentation

        The accompanying condensed consolidated financial statements have 
been prepared by the Company without audit and reflect all adjustments 
(consisting of normal recurring adjustments) which are, in the opinion of 
management, necessary to reflect a fair statement of the results for the 
interim periods.  For further information, refer to the audited 
Consolidated Financial Statements and footnotes included in the Company's 
Annual Report on Form 10-K for the fiscal year ended November 1, 1997.  
The results of operations for the three and nine month periods ended 
August 1, 1998 may not necessarily be indicative of the results for the 
fiscal year ending October 31, 1998 or any future period.

Acquisition and Revision of Purchase Price Allocation

        On June 24, 1998, the Company acquired substantially all of the 
assets of The Telephone Connection, Inc. ("TTC") for approximately $11.6 
million, including transaction costs of $0.4 million.  This acquisition 
was accounted for as a business combination using the purchase method of 
accounting.  In accordance with Accounting Principles Board Opinion No. 
16, "Accounting for Business Combinations," the costs of these 
acquisitions were allocated to the assets acquired and the liabilities 
assumed (including in-process research and development ("IPR&D") based 
on their estimated fair values using valuation methods believed to be 
appropriate at the time.  The amount was computed using a discounted cash 
flow analysis on the anticipated income stream of the related product 
sales.  The discounted cash flow analysis was based on management's 
forecast of future revenues, costs of revenues, and operating expenses 
related to the products and technologies purchased from TTC.  The amount 
allocated to IPR&D of $8.4 million was expensed in the period in which 
the acquisition was consummated in accordance with FASB Interpretation 
No. 4, "Applicability of FASB Statement No. 2 to Business Combinations 
Accounted for by the Purchase Method."  Subsequent to the acquisition 
and the issuance of the Company's condensed financial statements for the 
quarter ended August 1, 1998, the staff of the SEC in its September 9, 
1998 letter to the American Institute of Certified Public Accountants set 
forth their views on the valuation of IPR&D.  The Company has reallocated 
the previously reported purchase price based on its understanding and 
interpretations of the issues set forth in the aforementioned letter.  
The reallocation reduced the amount previously written-off as IPR&D from 
$8.4 million to $5.0 million and increased goodwill and other intangible 











assets by the same amount.  The effect of these adjustments on previously 
reported unaudited condensed consolidated financial statements for the 
three and nine months ended August 1, 1998 and as of August 1, 1998 are as
follows:
<TABLE>
<CAPTION>
                                           Quarter Ended      Nine Months Ended
                                      --------------------- ---------------------
                                          As                    As
(in thousands, except per share data)  Reported   Restated   Reported   Restated
------------------------------------- ---------- ---------- ---------- ----------
<S>                                   <C>        <C>        <C>        <C>
Purchased in-process research 
  and development...................     $8,400     $5,000     $8,400     $5,000
Loss from operations................   ($18,576)  ($15,176)  ($30,349)  ($26,949)
Net loss............................    ($3,666)     ($266)  ($14,250)  ($10,850)
Basic and diluted net loss per
  share.............................     ($0.53)    ($0.04)    ($2.05)    ($1.56)

<CAPTION>
                                          August 1, 1998
                                      ---------------------
                                          As
(in thousands)                         Reported   Restated
------------------------------------- ---------- ----------
<S>                                   <C>        <C>
Intangible assets, net..............     $3,429     $6,829
Accumulated deficit.................   ($20,920)  ($17,520)

</TABLE>


Inventories

        Inventories consisted of (in thousands):

                                      August 1,  November 1,
                                      1998       1997
                                      ---------- ----------
  Raw materials.....................     $1,991     $3,005
  Work-in-process...................      2,024      2,274
  Finished goods....................      1,479      3,781
                                      ---------- ----------
                                         $5,494     $9,060
                                      ========== ==========

Non-Recurring Charges

        In December 1997, as disclosed in the Company's Form 10-K, 
representatives of Lucent Technologies ("Lucent") informed the Company 
that they believed that the Company's products may infringe upon certain 
patents issued to Lucent, and that Lucent was seeking compensation for 
any past infringement by the Company.  The Company has continued to 
evaluate the assertions of Lucent and on August 25, 1998 signed a letter 
of intent pursuant to which the Company expects to pay Lucent $9.2 
million during its fourth quarter to settle this dispute.  During the 
third quarter the Company accrued $7.6 million as additional costs, of 
which $5.6 million was recorded as a non-recurring charge and $2.0 
million, which is attributable to the CPE business, was recorded against 
the gain on the transaction and included in other income.  A portion of 
the proposed settlement amount totaling $1.6 million will be reflected, 
when paid, as prepaid royalties and will be amortized to cost of goods 
sold over the future royalty period.

        During the quarter ended May 3, 1997 the Company recorded charges
 of approximately $3.6 million, consisting of $2.4 million in restructuring 
charges and $1.2 million in expenses associated with the termination of 
acquisition discussions with Voice-Tel Enterprises and Voice-Tel Network 
("Voice-Tel").  The restructuring charges noted above represent 
termination benefits for approximately 40 employees from all functions of 
the Company and costs associated with the resignation of the Company's 
president.

Other Income, Net

        On May 8, 1998, the Company licensed and sold certain Customer 
Premise Equipment ("CPE") business unit assets to Mitel Corporation 
("Mitel") for a total purchase price of $26.8 million in cash, and 
Mitel assumed certain of the Company's liabilities.  The Company recorded 
a pre-tax gain of approximately $14.3 million on this sale.

        On June 29, 1997, the Company sold it's Text-to-Speech business to 
Learnout & Hauspie Speech Products ("L&H") for $5.0 million in L&H common 
stock.  The Company recorded a pre-tax gain computed as the difference 
between the fair market value of the shares received at closing and the 
net carrying value of related Text-to-Speech tangible and intangible 
assets, of approximately $3.6 million during the third quarter and 
subsequently sold this L&H stock for an additional gain of approximately 
$0.3 million.  























Earnings (Loss) Per Share (Restated)

        In February 1997, the Financial Accounting Standards Board issued 
Statement No. 128, "Earnings per Share," (FAS 128), which was required 
to be adopted on December 31, 1997.  The Company adopted this statement 
in its first quarter ended January 31, 1998.  The following table sets 
forth the computation of basic and diluted earnings (loss) per share.  
The quarter and nine months ended August 2, 1997 have been restated in 
accordance with FAS 128.

<TABLE>
<CAPTION>
                                                                Nine Months
                                           Quarter Ended          Ended
                                      --------------------- ---------------------
                                      August 1,  August 2,  August 1,  August 2,
(in thousands, except per share data) 1998       1997       1998       1997
------------------------------------- ---------- ---------- ---------- ----------
<S>                                   <C>        <C>        <C>        <C>
Numerator:
  Net income (loss)..................     ($266)    $3,149   ($10,850)   ($2,475)
                                      ========== ========== ========== ==========
Denominator:
  Denominator for basic EPS -
    weighted average shares..........     6,885      6,934      6,966      6,963
  Effect of dilutive securities:
    Employee stock options...........        --         85         --         --
                                      ---------- ---------- ---------- ----------
  Denominator for diluted EPS -
    adjusted weighted average shares.     6,885      7,019      6,966      6,963
                                      ========== ========== ========== ==========

Basic earnings (loss) per share......    ($0.04)     $0.45     ($1.56)    ($0.36)
                                      ========== ========== ========== ==========

Diluted earnings (loss) per share....    ($0.04)     $0.45     ($1.56)    ($0.36)
                                      ========== ========== ========== ==========
</TABLE>

        Options were outstanding during the three and nine month periods 
ended August 1, 1998 and the nine months ended August 2, 1997 but were 
excluded from the computation of diluted net loss per share because the 
effect in these periods would have been anti-dilutive.













Pro Forma Information (Restated)

        The following pro forma summary represents the combined results of 
operations of the Company, plus the purchase of substantially all of the 
assets of TTC as adjusted to reflect the amortization of tangible and 
intangible assets acquired in the purchase, less the sale of the CPE 
business unit, as if each of these transactions had occurred at the 
beginning of fiscal 1997.  The pro forma summary results exclude the gain 
realized on the CPE sale transaction and exclude the non-recurring charge 
of the write-off of the purchased in-process technology acquired in the 
TTC asset purchase transaction.  This summary does not purport to be 
indicative of what operating results would have been had these 
transactions been made as of the beginning of fiscal 1997 nor are they 
necessarily indicative of future operating results. 

                                                   Nine Months Ended
                                                 ---------------------
(in thousands, except per share data)               1998       1997
-------------------------------------            ---------- ----------
Net revenue...................................     $46,606    $51,885
Loss before income taxes .....................    ($22,368)  ($11,976)
Net loss......................................    ($22,672)  ($12,202)
Basic and diluted loss per share .............      ($3.25)    ($1.75)

































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

        The following discussion contains forward-looking statements 
regarding future events or the future financial performance of Centigram 
that involve risks and uncertainties. These statements include but are 
not limited to statements related to changes in Centigram's research and 
development and selling, general and administrative expenses, Centigram's 
effective tax rate, Centigram's expenditures for capital equipment, 
sufficiency of Centigram's cash reserves and settlement of Centigram's 
dispute with Lucent Technologies.  Actual results could differ materially 
from those anticipated in these forward-looking statements as a result of 
certain factors, including those set forth in this Management's 
Discussion and Analysis of Financial Condition and Results of Operations 
under "Certain Trends and Uncertainties," and elsewhere herein.

        Centigram designs, manufactures and markets wireless and wireline 
messaging, enhanced services and communication systems that integrate 
voice and facsimile on the Company's communications server and provide 
access to this multimedia information through a telephone or a PC.  
Centigram's applications all operate on common hardware and software 
platforms based on industry-standard hardware and software which is the 
Company's implementation of its Modular Expandable System Architecture 
(MESA). Centigram's system architecture enables a user generally to 
expand the capacity of a system in cost-effective increments from the 
Company's smallest to its largest system configuration. 

         Centigram's systems can be integrated with wireline and wireless 
switches and paging terminal systems.  Such systems are used for 
switching telephone calls and integrating voice and facsimile messaging 
in a variety of service provider environments.  In addition, Centigram 
systems located at different sites can be linked together in a digital 
network.

Sale of CPE Business Unit 

         On May 8, 1998, the Company licensed or sold certain assets to 
Mitel Corporation ("Mitel") and Mitel assumed certain liabilities 
related to the Company's customer premise equipment voicemail and unified 
messaging ("CPE") business for a purchase price of $26.8 million in 
cash.  As part of this sale ("CPE Sale"), the Company agreed until May 
8, 2001, not to compete in the CPE market and until April 2000 to provide 
Mitel on an OEM basis large port count systems as required until Mitel 
develops this internal capability.  During the fourth quarter of fiscal 
1998, Mitel commenced arbitration proceedings against the Company 
alleging that Centigram has not delivered all materials required to be 
delivered in connection with the CPE sale.  Centigram believes the 
allegations are without merit and intends to vigorously defend against 
them.

Acquisition and Revision of Purchase Price Allocation

        On June 24, 1998, the Company acquired substantially all of the 
assets of The Telephone Connection, Inc. ("TTC") for approximately $11.6 
million, including transaction costs of $0.4 million.  This acquisition 
was accounted for as a business combination using the purchase method of 
accounting. Subsequent to the acquisition and the issuance of the 
Company's condensed financial statements for the quarter ended August 1, 
1998, the staff of the SEC in its September 9, 1998 letter to the 
American Institute of Certified Public Accountants set forth their views 
on the valuation of IPR&D.  The Company has reallocated the previously 
reported purchase price based on its understanding and interpretations of 
the issues set forth in the aforementioned letter.  The reallocation 
reduced the amount previously written-off as IPR&D from $8.4 million to 
$5.0 million and increased goodwill and other intangible assets by the 
same amount.  The effect of these adjustments on previously reported 
unaudited condensed consolidated financial statements for the three and 
nine months ended August 1, 1998 and as of August 1, 1998 are as follows:

<TABLE>
<CAPTION>
                                           Quarter Ended      Nine Months Ended
                                      --------------------- ---------------------
                                          As                    As
(in thousands, except per share data)  Reported   Restated   Reported   Restated
------------------------------------- ---------- ---------- ---------- ----------
<S>                                   <C>        <C>        <C>        <C>
Purchased in-process research 
  and development...................     $8,400     $5,000     $8,400     $5,000
Loss from operations................   ($18,576)  ($15,176)  ($30,349)  ($26,949)
Net loss............................    ($3,666)     ($266)  ($14,250)  ($10,850)
Basic and diluted net loss per
  share.............................     ($0.53)    ($0.04)    ($2.05)    ($1.56)

<CAPTION>
                                          August 1, 1998
                                      ---------------------
                                          As
(in thousands)                         Reported   Restated
------------------------------------- ---------- ----------
<S>                                   <C>        <C>
Intangible assets, net..............     $3,429     $6,829
Accumulated deficit.................   ($20,920)  ($17,520)

</TABLE>


Pro Forma Combined Condensed Statements of Operations (Restated)

        The following pro forma statements represent the combined results 
of operations of the Company, plus the purchase of substantially all of 
the assets of TTC as adjusted to reflect the amortization of tangible and 
intangible assets acquired in the purchase, less the sale of the CPE 
business unit, as if each of these transactions had occurred at the 
beginning of fiscal 1997.  The pro forma summary results exclude the gain 
realized on the CPE sale transaction and exclude the non-recurring charge 
of the write-off of the purchased in-process technology acquired in the 
TTC asset purchase transaction.  This summary does not purport to be 
indicative of what operating results would have been had these 
transactions been made as of the beginning of fiscal 1997 nor are they 
necessarily indicative of future operating results.

<TABLE>
<CAPTION>
                                        Quarter Ended       Nine Months Ended
                                   ----------------------  ----------------------
(in thousands, except per share    August 1,   August 2,   August 1,   August 2,
 data)                             1998        1997        1998        1997
---------------------------------- ----------  ----------  ----------  ----------
<S>                                <C>         <C>         <C>         <C>
Net revenue.......................   $18,266     $18,375     $46,606     $51,885

Cost and expenses:
  Costs of goods sold.............     9,024       8,025      23,520      22,278
  Research and development........     4,371       4,837      13,676      15,728
  Selling, general and
     administrative...............    10,024       9,540      28,313      28,166
  Non-recurring charges...........     5,600         --        5,600       3,263
                                   ----------  ----------  ----------  ----------
                                      29,019      22,402      71,109      69,435
                                   ----------  ----------  ----------  ----------
Operating loss....................   (10,753)     (4,027)    (24,503)    (17,550)
Other income, net.................       779       4,453       2,135       5,574
                                   ----------  ----------  ----------  ----------
Income (loss) before income taxes.    (9,974)        426     (22,368)    (11,976)
Provision for income taxes........       164         150         304         226
                                   ----------  ----------  ----------  ----------
Net income (loss).................  ($10,138)       $276    ($22,672)   ($12,202)
                                   ==========  ==========  ==========  ==========

Basic and diluted earnings (loss)
per share.........................    ($1.47)      $0.04      ($3.25)     ($1.75)
                                   ==========  ==========  ==========  ==========

Shares used for basic earnings
(loss) per share..................     6,885       6,934       6,966       6,963
                                   ==========  ==========  ==========  ==========

Shares used for diluted earnings
(loss) per share...................    6,885       7,019       6,966       6,963
                                   ==========  ==========  ==========  ==========
</TABLE>

Results of Operations

        Net revenue for the third quarter of fiscal 1998 was $18.1 million, 
which was 33% lower than net revenue for the corresponding quarter of 
fiscal 1997.  The decrease in net revenue from the third quarter of 1997 
reflects lower sales of small and large systems and MobileManager 
products offset in part by higher sales of upgrade and expansion 
products.  This decrease was primarily due to reduced sales volumes, due 
to the CPE Sale.  As a result of the sale of the CPE business unit during 
the third quarter and other factors, the Company expects revenue for 1998 
to be less than revenue for fiscal 1997.  Sales to international 
customers were 46% of revenues for the third quarter as compared to 47% 
in the similar period of 1997.  Net revenue for the first nine months of 
fiscal 1998 was $57.5 million, which was 28% lower than net revenue for 
the comparable 1997 period.  This decrease in revenue is attributable to 
essentially the same factors as noted above.  Sales to international 
customers were 47% of revenues for the first nine months of fiscal 1998 
as compared to 49% for the similar period of fiscal 1997. 

        On a pro forma basis, net revenue was $18.3 million and $46.6 
million versus $18.4 million and $51.9 million for the three and nine 
month periods of 1998 and 1997, respectively.  These decreases in net 
revenue reflect lower sales of large system products to international 
customers in Europe and the Pacific Rim.

         Gross margin was 51.3% and 57.2% of net revenue in the third 
quarters of 1998 and 1997, respectively.  This 5.9% decrease from the 
prior year's third quarter reflects reduced sales of and lower margins in 
the Company's large systems products because of increased competitive 
pricing pressures, partially offset by a favorable mix of increased sales 
and margins of systems expansion products.  For the first nine months of 
fiscal 1998 the gross margin was 51.2% of net revenue as compared to 
57.7% for the first nine months of fiscal 1997.  This 6.5% decrease 
reflects essentially the same factors as noted above in the comparison of 
the third quarter of fiscal 1998 to the third quarter of fiscal 1997.  
See "Certain Trends and Uncertainties."

         On a pro forma basis, gross margin was 50.6% and 49.5% versus
56.3% and 57.1% for the three and nine month periods of 1998 and 1997, 
respectively.  These decreases in year over year pro forma gross margins 
reflect essentially the same factors as noted above.

        Research and development ("R&D") expenses decreased 18% in the 
third quarter of 1998 as compared to the corresponding quarter of 1997 
and represented 22% and 18% of net revenue, respectively.  These 
reductions in R&D expenses reflect savings resulting from lower R&D 
staffing levels and related costs due to the CPE Sale.  For the first 
nine months of fiscal 1998, R&D spending was down 12% as compared to the 
comparable period in fiscal 1997 and represented 25% and 20% of net 
revenue, respectively.  These decreases in absolute dollars reflect lower 
payroll expenses and other costs resulting from lower staffing levels due 
to the CPE Sale.  The Company believes that ongoing development of new 
products and features is required to maintain and enhance its competitive 
position and accordingly, the Company expects to continue to invest in 
R&D.

        On a pro forma basis, R&D expenses decreased $0.5 million and $2.1 
million for the three and nine month periods of 1998 and 1997, 
respectively.  These reductions in pro forma R&D spending reflect savings 
from lower R&D staffing levels and related costs.  Also, expenses were 
higher in fiscal 1997 resulting from the release in the first quarter of 
the Series 6 platform without comparable expenses in fiscal 1998.

        Selling, general and administrative ("SG&A") expenses for the 
third quarter were 16% below the SG&A expenses for the third quarter of 
fiscal 1997.  These decreases reflect primarily reduced sales, marketing 
and customer support expenses, including decreases in salaries and 
related costs due to the CPE sale and other reductions in average 
headcount.  SG&A expenses represented 54%, and 43% of net revenue the 
third quarter of 1998 and 1997, respectively.  SG&A expenses for the 
first nine months of fiscal 1998 were down 7% from the prior year and 
represented 55% and 43% of net revenues for 1998 and 1997, respectively. 
 This decrease reflects the same factors as noted above. 

         On a pro forma basis, SG&A expenses increased $0.5 and $0.1 million 
for the three and nine month periods of 1998 and 1997, respectively.  
These increases reflect increased sales and marketing expenses.

         Non-recurring charges were $10.6 million for the three and nine 
month periods of 1998 and zero and $3.6 million for the comparable 
periods in 1997.  For 1998 these non-recurring charges consisted of $5.0 
million for the write-off of purchased in-process technology acquired in 
the purchase of The Telephone Connection, Inc. on June 24, 1998 as this 
technology had not reached technological feasibility and had no 
alternative use and $5.6 million associated with the Company's patent 
dispute with Lucent Technologies.  (See Acquisition and Revision of 
Purchase Price Allocation.)  For 1997, these charges consisted of $2.4 
million in restructuring expenses and $1.2 million associated with the 
termination of acquisition discussions with Voice-Tel Enterprises and 
Voice-Tel Network ("Voice-Tel").  The restructuring expenses represented 
termination benefits for approximately 40 employees from all functions of 
the Company and costs associated with the resignation of the Company's 
president.

        Other income, net was $15.1 million and $16.4 million and $4.4 
million and $5.5 million for the three and nine month periods of 1998 and 
1997, respectively.  In addition to the Company's net investment income, 
other income in the 1998 periods included the $14.3 million gain on the 
sale of the CPE business unit and in 1997 periods the $3.9 million gain on 
the sale of the Text-to-Speech business.

        The Company recorded a provision for income taxes for the three and 
nine month periods of fiscal 1998 and 1997 for anticipated foreign income 
tax liabilities.  No income tax benefit has been recorded for the losses 
incurred in the first nine months of fiscal 1998 and 1997, respectively, 
because realization of the deferred tax assets arising as a result of the 
losses sustained are dependent upon future taxable income, the amount and 
timing of which are uncertain.  Accordingly, a valuation allowance has 
been established to fully offset the deferred tax assets resulting from 
the losses incurred.

Liquidity and Capital Resources

        Cash and cash equivalents and short-term investments at August 1, 
1998 were $52.3 million, increasing $5.9 million from the second quarter 
balance of $46.4 million and increasing $0.2 million from the year end 
balance.

        For the first nine months ended August 1, 1998 the net cash used 
for operating activities was $9.7 million.  Trade receivables decreased 
$2.0 million from the year-end balance primarily due to reduced revenues 
in the third quarter as compared to the last quarter in fiscal 1997.  
Days sales outstanding (computed using quarterly revenues) were 78 days 
in the third quarter as compared to 68 days at end of fiscal 1997.  This 
increase in days sales outstanding was primarily due to extended payment 
terms to certain international customers.  Inventory levels at August 1, 
1998 were $0.7 million lower than the year-end balance due to improved 
management of the Company's inventory stocking levels.  The Company 
expects investments in receivables and inventories will continue to 
represent a significant portion of working capital. 

        In December 1997, as disclosed in the Company's Form 10-K, 
representatives of Lucent Technologies ("Lucent") informed the Company 
that they believed that the Company's products may infringe upon certain 
patents issued to Lucent, and that Lucent was seeking compensation for 
any past infringement by the Company.  The Company has continued to 
evaluate the assertions of Lucent and on August 25, 1998 signed a letter 
of intent pursuant to which the Company expects to pay Lucent $9.2 
million during its fourth quarter to settle this dispute.

        During the first nine months ended August 1, 1998, the Company made 
capital expenditures of approximately $1.8 million.  These expenditures 
consisted primarily of purchases of computer equipment, software, and 
engineering lab equipment.  The Company currently expects to spend 
approximately $3.0 million for capital equipment during fiscal 1998.  On 
April 15, 1997 the Company's Board of Directors authorized a stock 
repurchase program whereby up to one million shares of its Common Stock 
may be repurchased in the open market from time-to-time.  During the 
first nine months of 1998 the Company purchased under this repurchase 
program approximately 800,000 shares at a cost of $7.0 million.  The 
Company presently believes, notwithstanding its accumulated deficit, that 
its existing cash and short-term investments and amounts available under 
its line of credit, will be sufficient to support the Company's working 
capital, capital equipment purchase requirements, and stock repurchase 
program at least through fiscal 1999.

        The Company's principal sources of liquidity as of August 1, 1998 
consisted of $52.3 million of cash and cash equivalents and short-term 
investments and $15.0 million available under the Company's bank line of 
credit which expires May 29, 1999.  This bank line requires the Company 
to maintain certain financial ratios, minimum working capital, minimum 
tangible net worth, and financial performance, and requires the bank's 
consent for the payment of cash dividends.  There were no borrowings 
outstanding under the bank line as of August 1, 1998.

Certain Trends and Uncertainties        

        The Company has in the past experienced and will likely in the 
future experience substantial fluctuations in quarterly operating 
results.  The Company generally has no long-term order commitments from 
its customers, and a significant portion of bookings and shipments in any 
quarter have historically occurred near the end of the quarter.  
Accordingly, the Company has historically operated with very little 
backlog, and net revenue has been difficult to predict. In addition, the 
portion of backlog shippable in the next quarter varies over time.  As a 
result, revenue in future quarters will depend largely on the level of 
orders received during such quarters. 

        If new order bookings do not meet expected levels, or if the 
Company experiences delays in shipments at the end of a quarter, 
operating results will be adversely affected, and these developments may 
not become apparent to the Company until near or at the end of a quarter. 
 Net revenue can also be affected by product sales mix, distribution mix, 
the size and timing of customer orders and shipments, customer returns 
and reserves provided therefor, competitive pricing pressures, the 
effectiveness of key distributors and the Company's sales force in 
selling the Company's products, changes in distributor inventory levels, 
the ability of the Company's joint marketing partners to ship products 
during the quarter, the timing of new product introductions by the 
Company and its competitors, regulatory approvals, and the availability 
of components for the Company's products, each of which is difficult to 
predict accurately.  Each of such factors has in the past affected the 
Company's revenue.  The Company has in the past experienced higher than 
usual headcount turnover which has had an adverse effect on the Company's 
booking levels. There can be no assurance that such turnover will not 
continue in future periods.  Any failure by the Company to attract, 
retain and train additional sales and other personnel could have a 
material adverse effect on the Company's business and results of 
operations.

        A significant portion of the Company's net revenue is attributable 
to a limited number of customers.  The Company's top five customers, 
representing a combination of major distributors and service providers, 
accounted for approximately 58% and 31% of the Company's net revenue in 
the three and nine month periods of fiscal 1998 and the 34% and 27% for 
the similar periods in fiscal 1997, respectively, although the Company's 
five largest customers were not the same in the two periods.  The Company 
has no long-term order commitments from any of its customers.  Any 
material reduction in orders from one or more of such customers or the 
cancellation or deferral of any significant portion of backlog could have 
an adverse effect on net revenue and operating results.  Such 
concentration of sales typically results in a corresponding concentration 
of accounts receivable.  Although the Company has established reserves 
for uncollectible accounts, the inability of any large customer to pay 
the Company could have a material adverse impact on the Company's 
financial position, results of operations and cash flows.

        Approximately 46% of the Company's sales in the third fiscal 
quarter ended August 1, 1998 consisted of sales outside of the United 
States.  The Company's international sales are subject to a number of 
additional risks generally associated with international sales, including 
the effect on demand for the Company's products in international markets 
as the results of any strengthening or weakening of the U.S. dollar, the 
effect of currency fluctuations on consolidated multinational financial 
results, state imposed restrictions on the repatriation of funds, import 
and export duties and restrictions, the need to modify products for local 
markets, and the logical difficulties of managing multinational 
operations.  In particular, the Company's sales in Asia have been 
adversely affected in recent quarters by financial difficulties in that 
region and may be so adversely affected in the future.

        The Company's gross margin can be affected by a number of factors, 
including changes in product configuration and mix including the volume 
of OEM products, distribution channel and customer mix, cost and 
availability of parts and components, royalty obligations to suppliers of 
licensed software, provisions for warranty, retrofits, and excess and 
obsolete inventory, customer returns, and competitive pressures on 
pricing.  The Company has experienced increasing competitive pricing 
pressure in its markets and expects this pricing pressure to continue.  
Further, distributors purchase products at discounts, and the Company's 
margins can therefore vary depending upon the mix of distributor and 
direct end user sales in any particular fiscal period.  While the Company 
anticipates that its sales mix will continue to fluctuate in future 
periods, with the sale of the CPE business unit in the third quarter of 
1998, the Company anticipates selling an increasing percentage of sales 
through direct sales rather than through distribution.

         The Company's future success will depend in part upon the ability 
of the Company to continue to introduce new features and products as the 
Company's markets evolve, new technologies become available, and 
customers demand additional functionality.  The Company's competitors 
continue to add functionality to their products, and any failure by the 
Company to introduce in a timely manner new products and features that 
meet customer requirements would adversely affect the Company's operating 
results and cash flows.  The Company's ability to develop such new 
features and products depends in large measure on its ability to hire and 
retain qualified technical talent and outside contractors in highly 
competitive markets for such services.  There can be no assurance that 
the Company's product development efforts will be successful, or that it 
will be able to introduce new products in a timely manner.  Any material 
additional delays in the introduction and market acceptance of such 
products would be adverse to the Company's business.  Moreover, 
customers' expectations of the introduction of new products by the 
Company or its competitors can adversely affect sales of current 
products.  In addition, upon the introduction of new products, the 
Company could be subject to higher customer returns with respect to prior 
generations of products, which could adversely affect the Company's 
financial position, operating results and cash flows.

        The Company presently uses third parties to perform printed circuit 
board and subsystem assembly.  In addition, although the Company has not 
experienced significant problems with third-party manufacturers in the 
past, there can be no assurance that such problems will not develop in 
the future.  Although the Company generally uses standard parts and 
components for its products, certain microprocessors, line cards, 
application cards and other semiconductor devices and other components 
are available from sole sources.  Other components, including power 
supplies, disk drives, certain other semiconductor devices and 
subcontracted line card assemblies, are presently available or acquired 
from a single source or from limited sources.  The Company has been 
notified by suppliers that certain components will no longer be 
manufactured.  To date, the Company has been able to obtain adequate 
supplies of these components in a timely manner from existing sources or, 
when necessary, from alternative sources of supply although such 
alternatives have resulted in increased costs to the Company.  However, 
the inability to develop such alternative sources if and as required in 
the future, to obtain sufficient sole or limited source components as 
required, or to locate alternatives to discontinued parts would have a 
material adverse affect on the Company's operating results and cash 
flows.  In addition, the Company's products are dependent on the QNX 
software operating system, a multitasking, real-time operating system for 
Intel microprocessor-based computers.  In future periods, the Company's 
products may become increasingly dependent on software licensed from 
third party suppliers. There can be no assurance such licenses will 
continue to be available to the Company as needed or at commercially 
reasonable prices.

        In addition, a number of other companies, including competitors of 
the Company, hold patents in the same general area as the technology used 
by the Company.  The Company from time to time has received, and may 
receive in the future, letters alleging infringement of patent rights by 
the Company's products.  For example, in December 1997, representatives 
of Lucent informed the Company that they believed that the Company's 
products may infringe upon certain patents issued to Lucent, and that 
Lucent was seeking compensation for any past infringement by the Company. 
 The Company has continued to evaluate the assertions of Lucent, and on 
August 25, 1998 signed a letter of intent to settle this dispute.  
Lucent, or any other third party, alleging infringement, could seek an 
injunction prohibiting the Company from selling some or all of its 
products, which would have an immediate, adverse impact in the Company's 
business, financial condition and results of operations.  There can be no 
assurance that the Company would prevail in any litigation to enjoin the 
Company from selling its products on the basis of such alleged 
infringement, or that the Company would be able to license any valid and 
infringed patents on reasonable terms, or at all.

        The Company has conducted a review of its internal computer 
systems, as well as the Company's product line, to identify the systems 
that could be affected by the "Year 2000" issue and has developed an 
implementation plan to resolve the issue.  The Year 2000 problem is the 
result of computer programs being written using two digits (rather than 
four) to define the applicable year.  Software programs that have time-
sensitive software may recognize a date using "00" as the year 1900 
rather than the year 2000.  This could result in a major system failure 
or miscalculations.  If modifications are not made in a timely manner, 
the Company or its customers may be unable to implement appropriate Year 
2000 solutions, which could have a material adverse affect on the 
Company's business, financial condition or results of operations.
        In recent years, stock markets have experienced extreme price and 
volume trading volatility.  This volatility has had a substantial effect 
on the market prices of securities of many high technology companies for 
reasons frequently unrelated to the operating performance of the specific 
companies.  These broad markets fluctuations may adversely affect the 
market price of the Company's common stock.  In addition, the trading 
price of the Company's common stock could be subject to wide fluctuations 
in response to quarter-to-quarter variations in operating results, 
announcements of new products or technological innovations by the Company 
or its competitors, and general conditions in the computer and 
communications industries.



<PAGE>








PART II - OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

        (a)     Exhibits.

                27.1 Financial Data Schedule (Restated).

        (b)     Reports on Form 8-K.

                May 8, 1998, sale of CPE business unit to Mitel; amended to 
                include pro forma financial statements, with an 8-K/A on July 
                15, 1998.

                June 1, 1998, disclosing the effect of adoption of FAS128, 
                "Earnings per Share" on the Annual Report on Form 10-K for 
                the fiscal year ended November 1, 1997 and prior periods.

                June 24, 1998, purchase of The Telephone Connection, Inc.; 
                amended to include pro forma financial statements, with an
                8-K/A on September 2, 1998.




<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.


                                CENTIGRAM COMMUNICATIONS CORPORATION
                                              (Registrant)




Date:  January 8, 1999            By:    /s/ Robert L. Puette      
                                         -------------------------------
                                         Robert L. Puette
                                         President and Chief Executive 
                                         Officer


Date:  January 8, 1999            By:    /s/ Thomas E. Brunton 
                                         -------------------------------
                                         Thomas E. Brunton 
                                         Sr. Vice President and
                                         Chief Financial Officer