SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


            X    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
         -------
                 THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended SEPTEMBER 30, 2000
                                               ------------------

                     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 1-14762

                            THE SERVICEMASTER COMPANY
             (Exact name of registrant as specified in its charter)

      Delaware                                          36-3858106
(State or other jurisdictionof                (IRS Employer Identification No.)
 incorporation or organization)



One ServiceMaster Way, Downers Grove, Illinois                 60515-1700
(Address of principal executive offices)                      (Zip Code)

                                  630-271-1300

              (Registrant's telephone number, including area code)


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
shares: 299,755,658 shares of common stock on November 6, 2000.



                                       1
<PAGE>

                                  TABLE OF CONTENTS

                                                                            Page
                                                                             NO.
                                                                           -----
THE SERVICEMASTER COMPANY (Registrant) -


PART I.  FINANCIAL INFORMATION

Consolidated Statements of Income for the three and
   nine months ended September 30, 2000 and September 30, 1999                 2

Consolidated Statements of Financial Position
   as of September 30, 2000 and December 31, 1999                              3


Consolidated Statements of Cash Flows for the nine months
   ended September 30, 2000 and September 30, 1999                             4

Notes to Consolidated Financial Statements                                     5

Management Discussion and Analysis of Financial Position
   and Results of Operations                                                   8


PART II.  OTHER INFORMATION

Item 1:  Legal Proceedings                                                    13

Item 5:  Other Information                                                    14

Item 6:  Exhibits and Reports on Form 8-K                                     15

Signature                                                                     16


                                       2
<PAGE>



                                             PART I. FINANCIAL INFORMATION

                                               THE SERVICEMASTER COMPANY

                                           CONSOLIDATED STATEMENTS OF INCOME

                                         (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>


                                           Three Months Ended           Nine Months Ended
                                              September 30,               September 30,

                                          2000            1999          2000          1999
                                     -------------  -------------  -------------   -----------
<S>                                   <C>            <C>            <C>            <C>
OPERATING REVENUE..................   $ 1,586,260    $ 1,584,225    $ 4,559,124    $ 4,236,361

OPERATING COSTS AND EXPENSES:
Cost of services rendered
   and products ...................     1,237,853      1,224,340      3,554,787      3,292,992
sold
Selling and administrative expenses       241,218        226,898        659,849        589,615
Other, net (1) ....................          --             --             --           85,500
                                      -----------    -----------    -----------    -----------
Total operating costs and expenses      1,479,071      1,451,238      4,214,636      3,968,107
                                      -----------    -----------    -----------    -----------

OPERATING INCOME ..................       107,189        132,987        344,488        268,254


NON-OPERATING EXPENSE (INCOME):
Interest ..........................        35,503         30,083        103,048         80,921
expense
Interest and investment income ....        (9,026)       (10,125)       (19,675)       (19,395)
Minority interest income ..........        (2,700)          --           (9,062)          --
                                      -----------    -----------    -----------    -----------

INCOME BEFORE INCOME TAXES ........        83,412        113,029        270,177        206,728
Provision for income taxes ........        35,928         46,392        114,311         86,447
                                      -----------    -----------    -----------    -----------

NET INCOME ........................   $    47,484    $    66,637    $   155,866    $   120,281
                                      ===========    ===========    ===========    ===========

PER SHARE

   Basic (1) (2) ..................   $       .16    $       .21    $       .51    $       .39
                                      ===========    ===========    ===========    ===========
   Diluted (1) (2) ................   $       .16    $       .21    $       .51    $       .38
                                      ===========    ===========    ===========    ===========

 DIVIDENDS PER SHARE ..............   $       .10    $       .09    $       .28    $       .27
                                      ===========    ===========    ===========    ===========
</TABLE>


(1) In the second quarter of 1999, the Company realized an after-tax gain of $30
million ($50.1 million pretax)  relating to the sales of its Premier  automotive
business  and  its  remaining  15  percent  interest  in  ServiceMaster   Energy
Management  and  recorded a one-time  after-tax  charge of $81  million  ($135.6
million pretax) relating to its Diversified Health Services business.  Excluding
the impact of these items, net income and earnings per share were as follows:
<TABLE>
<CAPTION>


                                                 Three Months Ended        Nine Months Ended
                                                     September 30,           September 30,

                                                2000         1999          2000         1999
                                             -----------  -----------  -----------   -----------

<S>                                          <C>          <C>          <C>           <C>
Net income before non-recurring items, net   $  47,484    $  66,637    $  155,866    $  171,581
Per share before non-recurring items, net:
   Basic .................................   $     .16    $     .21    $      .51    $      .56
                                             ==========   ==========   ===========   ===========
   Diluted ...............................   $     .16    $     .21    $      .51    $      .55
                                             ==========   ==========   ===========   ===========
</TABLE>

(2) Basic earnings per share are calculated  based on 301,594 shares and 311,158
shares for the three months ended September 30, 2000 and 1999,  respectively and
303,876 shares and 307,106  shares for the nine months ended  September 30, 2000
and 1999,  respectively.  Diluted  earnings  per share are  calculated  based on
303,363 shares and 317,502 shares for the three months ended  September 30, 2000
and 1999, respectively and 307,317 shares and 314,589 shares for the nine months
ended September 30, 2000 and 1999, respectively.

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



                                       3
<PAGE>



                            THE SERVICEMASTER COMPANY

                  CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                  As of
                                                                       September 30,    December 31,
                                                                           2000             1999
                                                                       ------------    -------------
ASSETS

CURRENT ASSETS:

<S>                                                                   <C>             <C>
Cash and cash equivalents............................................ $      57,609   $       59,834
Marketable securities................................................        52,526           54,376
Receivables, less allowances of $39,847
   and $39,011, respectively.........................................       631,633          558,842
Inventories..........................................................        89,103           82,861
Prepaid expenses and other assets....................................       219,782          203,325
                                                                       ------------    -------------
    Total current assets.............................................     1,050,653          959,238
                                                                       ------------    -------------

PROPERTY AND EQUIPMENT:
   At cost...........................................................       668,211          659,810
   Less:  accumulated depreciation...................................       362,285          341,712
                                                                       ------------    -------------
    Net property and equipment.......................................       305,926          318,098
                                                                       ------------    -------------

INTANGIBLE ASSETS, PRIMARILY TRADE NAMES AND GOODWILL,
   net of accumulated amortization of $402,389
   and $343,316, respectively........................................     2,516,383        2,461,389
NOTES RECEIVABLE, LONG-TERM SECURITIES, AND OTHER ASSETS.............       158,023          131,490
                                                                       ------------    -------------
    Total assets.....................................................$    4,030,985   $    3,870,215
                                                                       ============    =============
</TABLE>

<TABLE>
<CAPTION>

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

<S>                                                                  <C>              <C>
Accounts payable.....................................................$      148,125   $      145,237
Income taxes payable.................................................        86,090            6,479
Accrued liabilities..................................................       295,611          364,851
Deferred revenues....................................................       274,706          257,521
Current portion of long-term obligations.............................        67,603           71,716
                                                                       ------------    -------------
    Total current liabilities........................................       872,135          845,804
                                                                       ------------    -------------

LONG-TERM DEBT.......................................................     1,832,829        1,697,582
OTHER LONG-TERM OBLIGATIONS..........................................       122,548          121,113

SHAREHOLDERS' EQUITY:

Common stock $0.01 par value, authorized 1 billion shares; issued
    and outstanding 300,400 and 307,530 shares, respectively.........         3,004            3,075
Additional paid-in capital...........................................     1,035,990        1,033,568
Retained earnings....................................................       311,757          241,701
Accumulated other comprehensive income...............................         3,209           (1,821)
Restricted stock.....................................................        (2,016)          (2,577)
Treasury stock.......................................................      (148,471)         (68,230)
                                                                       ------------    -------------
    Total shareholders' equity.......................................     1,203,473       1,205,716
                                                                       ------------    -------------
    Total liabilities and shareholders' equity.......................$    4,030,985   $   3,870,215
                                                                       ============    =============
</TABLE>

                            SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



                                       4
<PAGE>


                            THE SERVICEMASTER COMPANY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                 Nine Months Ended
                                                                                   September 30,
                                                                               2000             1999
                                                                          ------------      ------------

<S>                                                                     <C>                <C>
CASH AND CASH EQUIVALENTS AT JANUARY 1................................  $       59,834     $      66,400

CASH FLOWS FROM OPERATIONS:

NET INCOME............................................................         155,866           120,281
    Adjustments to reconcile net income
    to net cash flows from operations:
       Depreciation ..................................................          59,340            47,295
       Amortization...................................................          59,073            51,464
       Non-recurring items, net.......................................               -            85,500
       Deferred 1998 tax payment......................................               -           (78,500)
       Tax refund from 1999 payments..................................          39,000                 -
       Deferred income taxes..........................................          63,539            24,073
       Change in working capital, net of acquisitions:
         Receivables..................................................         (77,144)         (106,890)
         Inventories and other current assets.........................         (26,619)          (30,856)
         Accounts payable.............................................          (9,622)          (21,705)
         Deferred revenues............................................           5,388             9,429
         Accrued liabilities..........................................         (32,650)          (31,088)
       Other, net.....................................................          (1,297)             (335)
                                                                         -------------      -------------
NET CASH PROVIDED FROM OPERATIONS.....................................         234,874            68,668
                                                                         -------------      ------------

MEMO:  NET CASH PROVIDED FROM OPERATIONS EXCLUDING UNUSUAL TAX ITEMS           195,874           147,168

CASH FLOWS FROM INVESTING ACTIVITIES:

    Property additions................................................         (58,709)          (71,875)
    Sale of equipment and other assets...............................            5,950             4,796
    Business acquisitions, net of cash acquired.......................        (131,281)         (452,441)
    Proceeds from business sales and minority interests...............          49,345            68,490
    Payments to sellers of acquired businesses........................         (18,369)           (9,589)
    Notes receivable and financial investments........................         (14,299)          (16,751)
    Net purchases of investment securities............................          (3,424)           (6,500)
                                                                         -------------      ------------
NET CASH USED FOR INVESTING ACTIVITIES................................        (170,787)         (483,870)
                                                                         -------------      -------------

CASH FLOWS FROM FINANCING ACTIVITIES:

    Borrowings, net...................................................         505,942         1,164,916
    Payment of borrowings and other obligations.......................        (386,758)         (692,665)
    Purchase of ServiceMaster stock...................................        (109,617)          (35,174)
    Shareholders' dividends...........................................         (85,810)          (83,072)
    Proceeds from employee share plans................................           9,978            16,019
    Other.............................................................             (47)              500
                                                                         --------------    -------------
NET CASH PROVIDED FROM (USED FOR) FINANCING ACTIVITIES................         (66,312)          370,524
                                                                         --------------     ------------

CASH DECREASE DURING THE PERIOD.......................................          (2,225)          (44,678)
                                                                         -------------      ------------

CASH AND CASH EQUIVALENTS AT SEPTEMBER 30.............................  $       57,609     $      21,722
                                                                         =============      ============
</TABLE>



                            SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



                                       5
<PAGE>

                              THE SERVICEMASTER COMPANY
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  1:  The  consolidated   financial   statements  include  the  accounts  of
ServiceMaster and its significant subsidiaries, collectively referred to as "the
Company".  Intercompany  transactions  and  balances  have  been  eliminated  in
consolidation.

NOTE 2: The consolidated financial statements included herein have been prepared
by the  Company  pursuant to the rules and  regulations  of the  Securities  and
Exchange  Commission.  Certain  information  and footnote  disclosures  normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been condensed or omitted pursuant to such rules and
regulations.  However, the Company believes that the disclosures are adequate to
make the  information  presented  not  misleading.  It is  suggested  that these
consolidated  financial  statements  be read in  conjunction  with the financial
statements and the notes thereto  included in the Company's latest Annual Report
to Shareholders and the Annual Report to the Securities and Exchange  Commission
on Form  10-K for the year  ended  December  31,  1999.  In the  opinion  of the
Company,  all adjustments  necessary to present fairly the financial position of
The  ServiceMaster  Company as of September 30, 2000 and December 31, 1999,  and
the  results of  operations  for the three  month and nine month  periods  ended
September  30,  2000 and  1999,  and the cash  flows for the nine  months  ended
September 30, 2000 and 1999 have been included. The preparation of the financial
statements  requires  management  to  make  certain  estimates  and  assumptions
required under generally  accepted  accounting  principles which may differ from
the actual  results.  The results of operations  for any interim  period are not
necessarily indicative of the results which might be obtained for a full year.

NOTE 3: For interim accounting purposes,  certain costs directly associated with
the  generation of lawn care revenues are initially  deferred and  recognized as
expense  as the  related  revenues  are  recognized.  All such  costs  are fully
recognized within the fiscal year in which they are incurred.

NOTE 4: Basic earnings per share  includes no dilution from options,  debentures
or other financial  instruments and is computed by dividing income  available to
common  stockholders  by the  weighted  average  number of  shares  outstanding.
Diluted  earnings  per share  reflects  the  potential  dilution of  convertible
securities and options to purchase common stock.  The following chart reconciles
both  the  numerator  and  the  denominator  of the  basic  earnings  per  share
computation to the numerator and  denominator of the diluted  earnings per share
computation.


<TABLE>
<CAPTION>

                                               Three Months                       Three Months
                                         Ended September 30, 2000          Ended September 30, 1999
                                       -----------------------------    ------------------------------


(IN THOUSANDS, EXCEPT PER SHARE DATA)    INCOME      SHARES      EPS        INCOME      SHARES     EPS
                                         ------      ------      ---        ------      ------     ---
<S>                                    <C>          <C>        <C>        <C>          <C>       <C>
Basic earnings per share               $ 47,484     301,594    $0.16      $ 66,637     311,158   $0.21
                                                               ======                            ======
Effect of dilutive securities -options        -       1,769                      -       6,344
                                      ----------   ---------              ---------    --------
Diluted earnings per share             $ 47,484     303,363    $0.16      $ 66,637     317,502   $0.21
                                      ==========  ==========   ======     ==========  =========  ======

</TABLE>



                                       6
<PAGE>

<TABLE>
<CAPTION>

                                              Nine Months                        Nine Months
                                        Ended September 30, 2000          Ended September 30, 1999
                                     -------------------------------    ------------------------------

(IN THOUSANDS, EXCEPT PER SHARE DATA)   INCOME      SHARES      EPS        INCOME      SHARES     EPS
                                        ------      ------      ---        ------      ------     ---
<S>                                   <C>           <C>        <C>       <C>           <C>       <C>
Basic earnings per share              $ 155,866     303,876    $0.51     $ 120,281     307,106   $0.39
                                                               ======                           ======
Effect of dilutive securities -options        -       3,441                      -       7,483
                                      ---------     --------             ---------    ---------
Diluted earnings per share            $ 155,866     307,317    $0.51     $ 120,281     314,589   $0.38
                                     ==========   ==========   ======   ==========    ========= ======


</TABLE>


NOTE 5: In the Consolidated  Statements of Cash Flows, the caption Cash and Cash
Equivalents includes investments in short-term,  highly-liquid securities having
a maturity of three  months or less.  Supplemental  information  relating to the
Consolidated  Statements  of Cash Flows for the nine months ended  September 30,
2000 and 1999 is presented in the following table. The increase in interest paid
in 2000 is  primarily  due to  higher  levels  of  debt  outstanding  reflecting
acquisitions  and the timing of payments.  The change in tax payments relates to
the fact that in 2000 the Company received an income tax refund relating to 1999
overpayments.  Last year the Company made the entire federal tax payment related
to the 1998 federal tax obligation.

                                                              (IN THOUSANDS)
                                                            2000         1999
                                                          ---------   ---------
CASH PAID OR (RECEIVED FOR):

Interest expense.......................................  $  108,220  $   84,135
Interest and dividend income...........................  $   (7,647) $  (13,054)
Income taxes...........................................  $    9,836  $  140,852


NOTE 6: Total  comprehensive  income was $42.1 million and $63.9 million for the
three months ended September 30, 2000 and 1999, respectively, and $160.9 million
and $113.4  million  for the nine  months  ended  September  30,  2000 and 1999,
respectively.  Total comprehensive income includes primarily net income, changes
in unrealized gains on marketable securities and translation balances.

NOTE  7:  The  business  of the  Company  is  primarily  conducted  through  the
ServiceMaster  Consumer and  Commercial  Services and  ServiceMaster  Management
Services  operating units. The Consumer and Commercial  Services unit provides a
variety of specialty  services to  residential  and  commercial  customers.  The
Management Services unit provides a variety of supportive management services to
health  care,   education,   and  commercial   accounts.   The  Company  derives
substantially  all of its revenues from customers in the United States with less
than five percent generated in foreign markets.

The Other Operations group includes primarily ServiceMaster Employer Services, a
professional  employer  organization  that provides clients with  administrative
processing of payroll,  insurance,  and other  employee  benefit  programs;  the
Company's headquarters operation; and certain businesses the Company has sold or
discontinued. Segment information as of and for the three months and nine months
ended September 30, 2000 and 1999 are as follows:


                                       7
<PAGE>
<TABLE>
<CAPTION>
                                                          THREE MONTHS
                                                      ENDED SEPTEMBER 30,

----------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)

                                                        CONSUMER &

                                                        COMMERCIAL           MANAGEMENT             OTHER

                      2000                               SERVICES             SERVICES           OPERATIONS        CONSOLIDATED
--------------------------------------------------    -----------------    -----------------    --------------     ---------------
<S>                                                    <C>                  <C>                  <C>                <C>
Revenue                                                $  1,026,816         $   477,624          $   81,820         $ 1,586,260
Operating Income                                       $    102,990         $    14,988          $  (10,789)        $   107,189
Total Assets                                           $  3,505,575         $   236,084          $  289,326         $ 4,030,985

                      1999

--------------------------------------------------
Revenue                                                $    943,585         $   481,947          $  158,693         $ 1,584,225
Operating Income                                       $    115,689         $    21,134          $   (3,836)        $   132,987
Total Assets                                           $  3,298,910         $     215,949        $  276,525         $ 3,791,384

</TABLE>
<TABLE>
<CAPTION>
                                                          NINE MONTHS
                                                      ENDED SEPTEMBER 30,

----------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)

                                                        CONSUMER &

                                                        COMMERCIAL           MANAGEMENT             OTHER

                      2000                               SERVICES             SERVICES           OPERATIONS        CONSOLIDATED
--------------------------------------------------    -----------------    -----------------    --------------     ---------------
<S>                                                    <C>                  <C>                  <C>                <C>
Revenue                                                $  2,819,821         $ 1,419,891          $  319,412         $ 4,559,124
Operating Income                                       $    324,649         $    52,574          $  (32,735)        $   344,488

                      1999

--------------------------------------------------
Revenue                                                $  2,316,436         $ 1,407,745          $  512,180         $ 4,236,361
Operating Income                                       $    318,025         $    58,522          $ (108,293)        $   268,254
Operating Income Excluding Non-Recurring Items         $    318,025         $    58,522          $  (22,793)        $   353,754
</TABLE>


NOTE 8: In December 1999, the  Securities and Exchange  Commission  issued Staff
Accounting Bulletin (SAB) No. 101 "Revenue Recognition in Financial Statements,"
which  was  amended  by SAB No.  101B in June  2000.  SAB  No.101B  delayed  the
implementation  date of SAB  No.101  to the  fourth  quarter  of  2000.  The SAB
provides guidance on the recognition,  presentation and disclosure of revenue in
the  financial  statements.  The Company  intends to adopt the SAB in the fourth
quarter of 2000.  This  accounting  change could affect the Company's  method of
reporting profit from installing its termite baiting systems and could result in
a non-cash,  one-time  unfavorable  adjustment  in the range of $.02 to $.04 per
share.

In 1998, the Financial  Accounting Standards Board issued Statement of Financial
Accounting Standards No.133,  "Accounting for Derivative Instruments and Hedging
Activities."  This  Statement  was  subsequently  amended to defer its effective
date. The Company intends to adopt this Statement in January 2001 as required by
the amended  Statement.  Adoption of this  Statement  is not  expected to have a
material impact on the Company's financial statements.


                                       8
<PAGE>

                              THE SERVICEMASTER COMPANY
                         MANAGEMENT DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

THIRD QUARTER 2000 COMPARED TO THIRD QUARTER 1999

Revenues of $1.6 billion were consistent with third quarter revenues of one year
ago.  Revenue  growth for the quarter was  approximately  three  percent,  after
adjusting for the impact of sold or discontinued  businesses.  Operating  income
decreased 19 percent to $107.2 million,  with margins  decreasing to 6.8 percent
from 8.4  percent.  Included in operating  income are the costs  relating to the
WeServeHomes.com  initiative.  These costs have been  allocated to the Company's
partner,  Kleiner Perkins,  and are reflected as minority  interest income below
the operating income line. Earnings per share for the quarter declined from $.21
to $.16 and net income  decreased  from $66.6  million to $47.5  million.  These
results are in line with the  Company's  projections  that were  discussed  in a
press  release on October 2, 2000.  The results  reflect costs  associated  with
integrating the Company's recently acquired  landscape  businesses and increases
in fuel,  health care and other  labor-related  expenses  in its other  business
units.  Cash  income  per share  (defined  by the  Company  as net  income  with
amortization expense added back) was $.23 per share compared to $.27 last year.

Earnings per share for the full year 2000 are expected to be at the lower end of
the  Company's  previously  indicated  range  of $.62 to $.66  per  share.  This
projection is before any potential  impact  relating to the  interpretation  and
adoption of the Securities and Exchange  Commission's Staff Accounting  Bulletin
No. 101. This accounting  change could affect the Company's  method of reporting
profit  from  installing  its  termite  baiting  systems  and could  result in a
non-cash,  one-time adjustment in a range of $.02 to $.04 per share. The Company
expects profit from operations to improve in 2001.  With  investments to support
growth and higher interest costs, the Company anticipates single-digit growth in
earnings per share for 2001 and a return to a double-digit growth rate in 2002.

The Consumer and  Commercial  Services  business unit  reported  revenue of $1.0
billion, an increase of 9 percent, with operating income declining 11 percent to
$103 million,  reflecting the integration issues in the landscape operations and
higher fuel and other  labor-related  costs in most of its business  units.  The
largest  factor in the  labor-related  costs has been an  increase  in  employee
health care resulting from significantly  higher-than-normal utilization as well
as rate  increases.  TruGreen  ChemLawn,  the  Company's  lawn care  operations,
reported modest revenue increases  reflecting higher customer counts,  increased
productivity and price increases with slightly reduced  profitability  resulting
from higher  labor-related  costs.  TruGreen LandCare,  the commercial landscape
business,  reported strong revenue growth, but reduced  profitability  resulting
from   integration   issues  and  operating  cost  issues   including  fuel  and
labor-related costs. The Company has implemented  organizational changes in this
business  which it  believes  has  strengthened  leadership  at all  levels  and
increased integration with the lawncare business.  The commercial sale forces of
the two organizations have been combined to provide a stronger, more coordinated
approach to growing the  commercial  customer base.  The  integration  will also
support the launch of landscape services to large residential cutomers. Terminix
achieved good revenue growth and lower profitability as a result of the increase
in fuel and labor-related  costs.  During the quarter,  the Company  implemented
leadership  changes and other  measures in  Terminix  Europe to address  factors
which led to a decline  in  profitability.  The

                                       9
<PAGE>

combined American Residential Services  (ARS)/Rescue Rooter operations continued
to  achieve  strong  growth  in  revenues  and  significantly   higher  margins,
reflecting   substantial   improvements  in  the  branch  operations  that  were
performing below expectations at the time of acquisition. This business unit has
also  benefited  from a growing  number of service  work  orders  performed  for
American Home Shield.  American Home Shield posted solid revenue  increases with
increased renewals and expanded direct sales to consumers,  but also experienced
higher  service-related costs, due in part to a change in revenue mix and timing
of certain items. The franchise operations, ServiceMaster Clean and Merry Maids,
achieved strong revenue  increases and  double-digit  profit growth,  reflecting
strong results from the company owned operations and productivity improvements.

The  Management  Services  business  unit  reported  revenues  of $478  million,
consistent with one year ago. Operating income decreased to $15 million from $21
million,  reflecting higher than anticipated  start-up costs in a large hospital
system  sale,  as well as higher  employee  health  care  costs,  and lower than
anticipated  volume of large accounts in the education  market.  The traditional
business and industry  services  continue to achieve  strong  revenue and profit
growth.

The  Company  continues  to  focus  on the  growth  and  investment  in its core
businesses.  During the third  quarter,  the Company sold most of the  remaining
operations  of  its  Diversified  Health  Services  (DHS)  unit,  which  manages
long-term care facilities,  to a company owned and operated by a former group of
senior  managers of DHS. Also during the quarter,  the Company sold its TruGreen
Interior  Plantcare  operations  to Rentokil  Tropical  Plant  Services  for $44
million in cash.  Neither of these transactions is expected to materially affect
ServiceMaster's operating results for the year.

WeServeHomes.com  has now been launched in six major metropolitan  markets,  and
plans  to enter 50 U.S.  markets  in 2001.  The  Company  has  recruited  strong
operating,   marketing,   and  technical   talent  to  support  the  initiative.
WeServeHomes.com   offers   consumer   services   provided   by   ServiceMaster,
complementary services provided by third parties, and expects to offer products,
content and helpful tools which are useful to the busy homeowner.

Cost of  services  rendered  and  products  sold  increased  one percent for the
quarter and  increased as a  percentage  of revenue to 78.0 percent in 2000 from
77.3 percent in 1999,  primarily  reflecting  increases in fuel, health care and
other  labor-related  costs.  Selling and administrative  expenses increased six
percent due to general  business  growth and  acquisitions.  As a percentage  of
revenue,  selling and administrative  expenses increased to 15.2 percent in 2000
from 14.3 percent in 1999.

Interest expense increased from the prior year,  primarily due to increased debt
levels  associated with  acquisitions and share  repurchases.  The tax provision
reflects a higher effective tax rate compared to last year, primarily due to the
non-deductibility  of goodwill  from  acquisitions  completed in 1999 and higher
state tax rates.

NINE MONTHS ENDED SEPTEMBER 30, 2000 AS COMPARED TO SEPTEMBER 30, 1999
----------------------------------------------------------------------

Revenues for the nine months increased eight percent to $4.6 billion,  primarily
reflecting the impact of acquisitions. The revenue growth in the nine months was

                                       10
<PAGE>

stronger  than the third  quarter  reflecting  the  impact  of the new  platform
initiatives  (the LandCare  acquisition was completed in March last year and the
ARS  acquisition  closed at the end of April  last year) and  stronger  internal
growth in the first quarter.  Operating  income  decreased three percent to $344
million  with  operating  margins  declining  to 7.6 percent from 8.4 percent in
1999,  excluding the prior year non-recurring  unusual items.  Operating margins
decreased  primarily  due to  operating  cost issues in the  Company's  recently
acquired  landscape  businesses,  increases  in  fuel,  health  care  and  other
labor-related  costs in its other business  units,  and the expenses  associated
with the WeServeHomes.com  initiative.  Net income,  before non-recurring items,
decreased nine percent for the nine months to $156 million and diluted  earnings
per share,  before  non-recurring  items,  decreased seven percent to $.51. Cash
income per share (defined by the Company as net income with amortization expense
added  back)  decreased  one  percent for the nine months to $.70 per share from
$.71 last year.  During the second  quarter of 1999 the  Company  recorded a net
charge that reduced net income from  ongoing  operations  by $51 million  ($85.5
million pretax).  As a result of this net charge, for the nine months last year,
the Company  reported net income of $120 million and diluted  earnings per share
of $.38.

The Consumer and  Commercial  Services  unit  achieved a 22 percent  increase in
revenue to $2.8  billion and  operating  income of $324.6  million,  two percent
higher than last year.  The segment's  revenue  growth  includes the entire nine
months of  operations  from the LandCare USA and American  Residential  Services
acquisitions  completed last year. TruGreen ChemLawn reported modest revenue and
profit  growth,  reflecting  the benefits of price  increases  and  acquisitions
partially offset by volume challenges,  increases in health care and other labor
costs, and increased fuel and equipment  operating  costs.  Customer counts were
slightly above last year,  with an improved  retention rate.  TruGreen  LandCare
reported   double-digit   revenue   growth  from  both   internal   sources  and
acquisitions,   with  a  significant  decline  in  operating  income  reflecting
integration issues and higher operating and labor-related costs. The Company has
addressed   certain   operating   issues   by   strengthening   the   management
infrastructure  in  troubled  regions and  integrating  aspects of the lawn care
business with the landscape  operations.  Terminix achieved solid revenue growth
and a double-digit increase in profit,  reflecting good increases in new termite
contracts, strong growth in contract renewals and productivity improvements. The
combined ARS/Rescue Rooter operations reported significant increases in revenues
and profits,  reflecting  double-digit  internal  growth at Rescue Rooter and an
additional four months of revenue from the ARS acquisition (which closed in late
April last year).  This business  continues to perform well and reflects  strong
market demand for the services  being  provided.  American Home Shield  reported
double-digit  revenue growth and a more modest  increase in profits,  reflecting
strong growth in higher margin customer  renewals and  direct-to-consumer  sales
partially  offset by higher  service  related costs.  The franchise  operations,
ServiceMaster  Clean and Merry Maids,  reported strong increases in revenues and
profits due to strong growth in both branch and franchise  operations and strong
cost controls.

The Management  Services business unit reported revenue growth of one percent to
$1.4 billion and  operating  income of $53 million,  10 percent below last year.
The  segment's  results  include a $6  million  non-recurring  benefit  from the
resolution of a foreign license  agreement in the second quarter this year. This
business  was  affected  by large  terminations  and the costs to  unwind  these
contracts,  increased  health  care costs,  and  startup  costs from a large new
contract with a for-profit

                                       11
<PAGE>


hospital chain. The Company continues to invest in the Site Service  outsourcing
initiative and is encouraged by its progress.

Cost of services  rendered  and  products  sold  increased  eight  percent,  due
primarily  to  general  business  growth  and  acquisitions.  Cost  of  services
increased as a  percentage  of revenue to 78.0 percent in 2000 from 77.7 percent
in 1999.

Selling and  administrative  expenses  increased 12 percent  reflecting  general
business  growth,  acquisitions  and the investments in  WeServeHomes.com.  As a
percentage of revenue,  selling and  administrative  expenses  increased to 14.5
percent from 13.9 percent in 1999.

Interest expense increased from the prior year,  primarily due to increased debt
levels  associated with acquisitions and share  repurchases.  The tax provision,
before  non-recurring  items,  reflects a higher  effective tax rate compared to
last year, primarily due to the  non-deductibility of goodwill from acquisitions
completed in 1999. Minority interest income primarily reflects the allocation of
costs  to the  Company's  partner,  Kleiner  Perkins,  in  its  WeServeHomes.com
subsidiary.

FINANCIAL POSITION

Net cash provided from operations of $235 million was significantly  higher than
the first nine months of 1999.  There are two  unusual  tax timing  items in the
cash flow  statements:  (i) a $39 million tax refund realized  through the third
quarter of 2000 and (ii) the payment of 1998 taxes in the first quarter of 1999.
Eliminating these items,  cash provided from operations was $196 million,  a $49
million  increase  from 1999,  reflecting  higher  net income and lower  working
capital usage.  Every  Consumer  Services  company  reported an increase in cash
flows from  operations  when compared to the prior year.  The cash flows reflect
improved receivables management in the landscape and HVAC operations. Management
believes that funds generated from operations and other existing  resources will
continue to be adequate to satisfy ongoing working capital needs of the Company.

Accounts and notes receivable increased from year-end levels, reflecting general
business growth and increased  seasonal  activity in the Consumer and Commercial
Services  segment.  Inventories  increased  over year-end  levels as a result of
seasonal impacts.

Prepaids  and  other  assets  have  increased   from  year-end   reflecting  the
seasonality  in the lawn care business.  The lawn care operation  defers certain
marketing  costs  that  are  incurred  earlier  in the  year,  but are  directly
associated  with revenues  realized in subsequent  quarters of the current year.
These  costs  are then  amortized  over the  balance  of the  current  lawn care
production  season,  as the related revenues are recognized.  Deferred  revenues
also grew  reflecting  strong  growth at American  Home Shield and  increases in
customer prepayments for pest control services.

Capital  expenditures which include recurring capital needs are below prior year
levels when the Company funded several large  technology  projects.  The Company
has no material capital commitments at this time.

Intangible   assets   increased   from  year  end,   reflecting  the  effect  of
acquisitions,   primarily  in  the  lawn  care,  landscape,   pest  control  and
HVAC/plumbing businesses.

                                       12
<PAGE>


Debt levels increased due to the seasonal nature of the Company's operating cash
flows combined with the effects of acquisitions,  property additions,  dividends
and  share  repurchases.  The  Company  is party to a number of  long-term  debt
agreements  which  require it to  maintain  compliance  with  certain  financial
covenants,  including  limitations on indebtedness,  restricted payments,  fixed
charge  coverage  ratios,  and net worth.  The Company is in compliance with the
covenants related to these debt agreements.

Total  shareholders'  equity was $1.2 billion at September 30, 2000 and December
31, 1999, reflecting earnings growth offset by cash dividends and treasury share
repurchases. Cash dividends paid directly to shareholders totaled $86 million or
$.28 per share for the nine months ended September 30, 2000. In the quarter, the
Company repurchased $54 million of shares under the repurchase program announced
last year and for the year has  repurchased  $110  million.  In July  2000,  the
Company  announced  that its Board of  Directors  authorized  $350 million for a
share repurchase  program.  This  authorization  replaces the Company's previous
authorization of $150 million  announced in October 1999. At September 30, 2000,
approximately  $305  million  was  available  under  the new  authorization  for
additional  share  repurchases.  The shares will be repurchased over time in the
open market and in privately-negotiated transactions.

THE COMPANY  NOTES THAT  STATEMENTS  THAT LOOK  FORWARD IN TIME,  WHICH  INCLUDE
EVERYTHING OTHER THAN HISTORICAL  INFORMATION,  INVOLVE RISKS AND  UNCERTAINTIES
THAT  AFFECT THE  COMPANY'S  RESULTS OF  OPERATIONS.  FACTORS  WHICH COULD CAUSE
ACTUAL  RESULTS  TO DIFFER  MATERIALLY  FROM  THOSE  EXPRESSED  OR  IMPLIED IN A
FORWARD-LOOKING   STATEMENT  INCLUDE  THE  FOLLOWING  (AMONG  OTHERS):   WEATHER
CONDITIONS ADVERSE TO CERTAIN OF THE COMPANY'S CONSUMER AND COMMERCIAL  SERVICES
BUSINESSES;  THE ENTRY OF ADDITIONAL COMPETITORS IN ANY OF THE MARKETS SERVED BY
THE COMPANY;  LABOR  SHORTAGES;  CONSOLIDATION  OF  HOSPITALS IN THE  HEALTHCARE
MARKET; THE COST AND LENGTH OF TIME TO INTEGRATE ACQUIRED BUSINESSES; UNEXPECTED
CHANGES IN OPERATING COSTS; THE CONDITION OF THE U.S. ECONOMY; AND OTHER FACTORS
DISCUSSED  ABOVE  LISTED  FROM TIME TO TIME IN THE  COMPANY'S  FILINGS  WITH THE
SECURITIES AND EXCHANGE COMMISSION.

                                       13
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1:  LEGAL PROCEEDINGS

In the ordinary  course of  conducting  its business  activities,  ServiceMaster
becomes involved in judicial and  administrative  proceedings which involve both
private parties and governmental authorities.

RAY D. MARTIN V.  SERVICEMASTER.  In June 1996, Ray D. Martin, a former salesman
employed by  ServiceMaster's  Management  Services unit,  filed a lawsuit in the
State Court of Fulton County, Georgia (Civ. Action File No. 96VS114677J),  which
as originally  filed contended that the Company had not paid him the full amount
of commission  due to him on a sale in which he was  involved.  In the course of
the pre-trial  proceedings,  the trial court entered a default  judgment against
the Company,  thereby  leaving the question of damages to be  considered  at the
trial.  In September 1999, the jury awarded the plaintiff  compensatory  damages
and fees of approximately  $1 million and punitive  damages of $135 million.  In
October  1999,  the  Company  filed a motion for  judgment  notwithstanding  the
verdict or, in the alternative, for a new trial. On June 1, 2000 the trial court
entered a new judgment in the amount of $461,440 in compensatory damages and $45
million in punitive damages,  as well as amounts for attorney fees and interest.
The Company filed a notice of appeal that same day. On June 13, 2000, Mr. Martin
filed a notice of  cross-appeal.  Because  the trial court clerk is still in the
process of  preparing  the record,  the appeal has not yet been  docketed in the
court of  appeals,  and the clerk does not expect to finish  preparation  of the
record before January or February of 2001. Accordingly,  it is unlikely that the
appeal  will be fully  briefed  and  argued in the court of  appeals  before the
summer of 2001. ServiceMaster believes that the award of $45 million in punitive
damages is not supported by the facts of the case or by applicable state law and
that the judgment will be reversed by an appellate  court.  Under Georgia law, a
judgment accrues interest at the rate of 12% per annum. The Company continues to
not be able to  reasonably  estimate  the  ultimate  outcome of this  case,  and
accordingly,  minimal expense has been recorded.  In the event that the existing
judgment is sustained,  or the original  judgment is  reinstated,  (which is not
anticipated  by the Company),  it would be likely that the Company's  results of
operations for a particular year may be materially adversely affected.  However,
the Company  believes,  based on advice from legal  counsel,  that the  ultimate
outcome of this litigation is not expected to have a material  adverse effect on
the Company's financial condition or results of operations.

                                       14
<PAGE>


ITEM 5:    OTHER INFORMATION

The  Company's  2001 Annual  Meeting of  Shareholders  is expected to be held on
April 27, 2001.  Pursuant to rules of the  Securities  and  Exchange  Commission
("SEC"),  in order to be considered  for  inclusion in the Company's  2001 proxy
statement,  a shareholder proposal must be received by the Company no later than
November 24, 2000. In addition,  regardless of whether a shareholder proposal is
included in the Company's 2001 proxy  statement,  the Company's bylaws establish
an advance notice  procedure for shareholder  proposals to be brought before the
annual meeting of shareholders,  including  proposed  nominations of persons for
election to the Board of Directors.  Shareholders at the 2001 annual meeting may
consider a proposal  or  nomination  brought by a  shareholder  of record on the
record date to be established  for the 2001 annual meeting and who has given the
Company timely written notice, in proper form, of the shareholder's  proposal or
nomination.  A shareholder  proposal or nomination intended to be brought before
the 2001 annual meeting must be delivered to the Corporate  Secretary no earlier
than the close of  business  on January  13, 2001 and no later than the close of
business on February 12, 2001.  If a timely and proper  shareholder  proposal is
delivered to the Corporate  Secretary,  the proposal is not included in the 2001
proxy  statement,  and the  proposal  is properly  presented  at the 2001 annual
meeting,  the Company may exercise  discretionary  authority  when voting on the
proposal if in the 2001 proxy statement the Company advises  shareholders on the
nature of the  proposal  and how the  Company  intends to vote on the  proposal,
unless the shareholder  satisfies certain SEC requirements,  including mailing a
separate  proxy  statement to the  Company's  shareholders.  All  proposals  and
nominations should be directed to Sandra L. Groman, the Corporate Secretary, One
ServiceMaster Way, Downers Grove, Illinois, 60515.

                                       15
<PAGE>


ITEM 6:    EXHIBITS AND REPORTS ON FORM 8-K

EXHIBIT NO.                DESCRIPTION OF EXHIBIT
-----------               -----------------------
      3(ii)               Bylaws of The  ServiceMaster  Company,  as amended
                          through September 29, 2000  (incorporated  by
                          reference to Exhibit 1.4 of Amendment No. 1 to Form
                          8-A/A (SEC File No.  1-14762)  filed  with the
                          Securities  and Exchange Commission on October 6,
                          2000).



                                       16
<PAGE>


                                    SIGNATURE

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.

Date:  November 14, 2000


                          THE SERVICEMASTER COMPANY
                          (Registrant)

                          By:                    /S/STEVEN C. PRESTON
                             --------------------------------------------------
                                                  Steven C. Preston
                                  Executive V.P. and Chief Financial Officer


                                       17
<PAGE>