UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                    FORM 10-K

           [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended: December 31, 1999

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934

For the transition period from:                   to:
                                ----------------      -----------------


                         Commission File Number: 1-7211

                              IONICS, INCORPORATED

               (Exact name of registrant as specified in its charter)

         MASSACHUSETTS                             04-2068530
(State or other jurisdiction of         (IRS Employer Identification Number)
 incorporation or organization)

65 Grove Street, Watertown, Massachusetts          02472
(Address of principal executive offices)         (Zip Code)

       Registrant's telephone number, including area code: (617) 926-2500


Securities registered pursuant to Section 12(b) of the Act:

               Title of each class: Common Stock, $1 par value

       Name of each exchange on which registered: New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

                                      None
                                (Title of Class)

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 by check mark if disclosure of delinquent  filers  pursuant to Item
405 of Regulation  S-K is not contained  herein,  and will not be contained,
to the best of registrant's  knowledge,  in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.    [ ]

<PAGE>


State the aggregate market value of the voting and non-voting common equity held
by  non-affiliates  of the  registrant.  The  aggregate  market  value  shall be
computed by reference to the price at which the common  equity was sold,  or the
average bid and asked  prices of such  common  equity,  as of a  specified  date
within 60 days prior to the date of filing.  The  aggregate  market value of the
Common Stock of the registrant held by  non-affiliates  as of March 17, 2000 was
$417,918,073 (15,845,235 shares at $26 3/8 per share) (includes shares owned by
a trust for the indirect  benefit of a non-employee  director,  and by a trust
for the indirect benefit of a spouse of a non-employee director).

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the registrant's classes of
common  stock,  as of  the  latest  practicable  date.  As of  March  17,  2000,
16,228,620 shares of Common Stock, $1 par value, were issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the 1999 Annual
Report to Stockholders.                        Parts I, II
                                    (for Item 201 information) and IV

Portions of the Definitive Proxy
Statement for the Annual Meeting
of Stockholders to be held on
May 2, 2000                                     Part III

<PAGE>





                                     PART I

         Statements in this Annual Report on Form 10-K which are not  historical
facts,  so-called  "forward  looking  statements," are made pursuant to the safe
harbor  provisions  of the  Private  Securities  Litigation  Reform Act of 1995.
Readers are  cautioned  that all  forward-looking  statements  involve risks and
uncertainties,  including  those  detailed  in the  Company's  filings  with the
Securities and Exchange Commission.

ITEM 1.  BUSINESS

         Ionics,  Incorporated  ("Ionics," or the  "Company") is a leading water
purification  company  engaged  worldwide  in the  supply  of water and of water
treatment equipment through the use of proprietary separations  technologies and
systems.  Ionics' products and services are used by the Company or its customers
to desalt  brackish water and seawater,  to purify and supply bottled water,  to
treat water in the home, to manufacture and supply water treatment chemicals and
ultrapure water, to process food products, recycle and reclaim process water and
wastewater, and to measure levels of waterborne contaminants and pollutants. The
Company's customers include industrial companies, consumers,  municipalities and
other  governmental  entities,  and  utilities.  Unless  the  context  indicates
otherwise,  the terms  "Ionics" and  "Company" as used herein  includes  Ionics,
Incorporated and all its subsidiaries.

         The  Company's  business  activities  are now reported in four business
group  segments.  This  segmentation  reflects a change  from  three  reportable
segments  which the  Company  provided  in periods  prior to 1998.  The  current
reporting reflects the business group structure which the Company put into place
in the latter part of 1998. The business  group  structure is based upon defined
areas of management  responsibility  with respect to markets,  applications  and
products.  These  business  group  segments are the  Equipment  Business  Group,
Ultrapure Water Group,  Consumer Water Group, and Instrument  Business Group. In
1999,  these  segments  accounted  for  approximately  39%,  26%,  27%  and  8%,
respectively,  of  the  Company's  total  revenues.  Approximately  44%  of  the
Company's 1999 revenues were derived from foreign sales or operations.

         Over fifty years ago,  the Company  pioneered  the  development  of the
ion-exchange  membrane and the  electrodialysis  process.  Since that time,  the
Company has  expanded  its  separations  technology  base to include a number of
membrane and  non-membrane-based  separations processes which the Company refers
to as The Ionics Toolbox(R). These separations processes include electrodialysis
reversal (EDR),  reverse  osmosis (RO),  ultrafiltration  (UF),  microfiltration
(MF),  electrodeionization (EDI), electrolysis, ion exchange, carbon adsorption,
and  thermal  processes  such as  evaporation  and  crystallization,  as well as
solvent extraction and recovery  processes.  The Company believes that it is the
world's leading  manufacturer of  ion-exchange  membranes and of  membrane-based
systems for the desalination of water.

         The Company was  incorporated in  Massachusetts  in 1948. The Company's
principal  executive  offices  are  located  at  65  Grove  Street,   Watertown,
Massachusetts 02472.

Financial Information About Business Segments

         The information contained in Note 15 of Notes to Consolidated Financial
Statements contained in the Company's Annual Report to Stockholders for the year
ended December 31, 1999 is incorporated herein by reference.

Equipment Business Group

         The  Equipment  Business  Group  accounted  for  approximately  39%  of
revenues in 1999.  This segment  provides  technologies,  treatment  systems and
services for seawater  desalination,  brackish  water  desalination,  wastewater
reuse and  recycle,  potable  water and high purity  water.  In  addition,  this
segment  includes  the  Company's  custom  fabrication  activities  and food and
chemical processing activities.


<PAGE>


         Desalination and Related Water Treatment Equipment

         Opportunities  for the sale of desalination and related water treatment
equipment  arise from  changes in the needs of people and  municipalities,  from
industrial shifts and growth, and from environmental concerns. With less than 1%
of the total water on the planet  fresh and usable,  desalination  has played an
important role in creating new water sources.

         The Company sells a wide spectrum of products and systems to serve this
market which utilize  technologies  including  EDR, ion  exchange,  EDI, RO, UF,
ozonation and carbon adsorption.  Depending on the customers' needs, the Company
provides  standardized  versions  of  systems  utilizing  one  or  more  of  the
technologies  mentioned,  or can supply complete turnkey plants that may include
standardized  models as well as peripheral water treatment  equipment,  complete
engineering  services,   process  and  equipment  design,  project  engineering,
commissioning, operator training and field service.

         Wastewater Treatment Equipment

         The  market  for  wastewater  treatment,  recycle  and  reuse has shown
significant  growth as world demand for water of specified  quality continues to
increase  and as  regulations  limiting  waste  discharges  to  the  environment
continue to mount. The wastewater  market is increasingly  driven by the concept
of total water management, which involves the recognition that the water streams
which enter, leave or become part of a process can be managed to achieve overall
economic  efficiencies.  Ionics services the wastewater  market with proprietary
brine  concentrators  and  crystallizers,   traditional   wastewater   treatment
equipment, and special EDR membrane-based concentrators for recycle and reuse.

         The Company  designs,  engineers and  constructs  brine  concentrators,
evaporators  and  crystallizers  which are used to clean,  recover  and  recycle
wastewater,  particularly  in "zero  liquid  discharge"  industrial  uses.  Such
systems may also  incorporate EDR membrane systems as  preconcentrators.  Ionics
also  holds  a  license  for a  patented  solvent  extraction  technology  which
separates contaminated sludges,  sediments and soils into oil, water and solids.
This  technology  has potential  use for cleanup of toxic  organic  materials at
contaminated sites.

     Ionics  also  designs,  engineers  and  constructs  customized  systems for
industrial wastewater customers which may include conventional treatment systems
as well as advanced  separation  technologies such as EDR, RO,  electrolysis and
MF. Typical industrial customers are power stations,  chemical and petrochemical
plants,  metal-working  and automobile  factories,  textile  manufacturers and a
variety of other industrial  applications.  The Company also provides custom and
packaged  sewage  treatment  systems for  municipalities.  In 1999,  the Company
received a contract  for a large RO  treatment  system  from the City of Corona,
California  to  assist  the  City  in  meeting  stringent  wastewater  discharge
requirements.

         Drinking Water Supply

         Ionics'  position as a seller of purified or treated  water has evolved
from its traditional role as a supplier of water treatment equipment. In certain
situations,  opportunities  are  available for the Company to provide a complete
service package involving financing, construction,  operation and maintenance of
water treatment facilities.

         Ionics, through its wholly owned subsidiary, Ionics Iberica, S.A., owns
and operates a 5.5 million  gallon per day capacity  brackish water EDR facility
and a 3.6 million  gallon per day RO seawater  facility on Grand Canary  Island,
Spain. Under long-term contracts, the Company is selling the desalted water from
both facilities to the local water utility for distribution.

         The Company's wholly owned subsidiary,  Ionics (Bermuda) Ltd., owns and
operates a 600,000  gallon per day EDR  brackish  water  desalting  plant on the
island of Bermuda.  This plant supplies  fresh water under a long-term  contract
with  Watlington  Waterworks  Ltd.,  a Bermuda  corporation  partially  owned by
Ionics.


<PAGE>


         In September 1999, the Company  announced that a $120 million  Trinidad
seawater  desalination  project  contract had been awarded to a Trinidad project
company  established in furtherance of a joint venture between the Company and a
Trinidadian  entity.  Project  financing  has not yet  been  obtained  for  this
project.  If project  financing upon acceptable  terms is obtained,  the Company
through  a  local  subsidiary  will  execute  an  engineering,  procurement  and
construction contract awarded to it.

         Through  its Ionics  Aqua Design  subsidiaries,  the  Company  owns and
operates  more than 30  desalination  plants on a number of  Caribbean  islands,
which  provide  drinking  water to hotels,  resorts and  governmental  entities.
Drinking  water on these  islands is usually  supplied  pursuant to water supply
contracts  with terms  ranging  from five to ten  years.  In 1999,  the  Company
engaged in  construction  of  desalination  facilities  in Bonaire and  Barbados
pursuant to contracts awarded in 1998. The Barbados facility, which is owned and
operated by a Barbados affiliate  controlled by the Company,  started
up in the first quarter of 2000, and is the largest brackish water  desalination
facility in the Caribbean. Under an agreement with the Barbados Water Authority,
the controlled  affiliate  will supply water over a 15-year term.  Also in 1999,
the Company  signed a water supply  agreement with the  government-owned  public
utility in Curacao for the expansion of an existing seawater  desalination plant
owned and  operated  by the  Company,  and  started up a  seawater  desalination
facility on Anguilla.

         Chemical Supply

         The Company uses its Cloromat(R) electrolytic membrane-based technology
to  produce  sodium   hypochlorite  and  related   chlor-alkali   chemicals  for
industrial, commercial and other non-consumer applications. The Company's wholly
owned  Australian  subsidiary,  Elite  Chemicals  Pty.  Ltd.  (Elite),  utilizes
Cloromat  systems to produce  sodium  hypochlorite  on-site in Brisbane  for the
industrial,  commercial and janitorial supply of bleach products,  and to supply
sodium hypochlorite to treat the City of Brisbane's drinking water supply. Elite
has recently expanded its distribution of bleach products to the Sydney area.

         Food Processing

         Under an agreement  with a major U.S.  dairy  cooperative,  the Company
oversees whey processing activities at two plants owned by the cooperative,  and
receives a processing fee based on the production of demineralized  whey for its
services.  Included  in the  equipment  being  utilized  by the Company at these
plants are its Electromat(R) electrodialysis systems.

         Custom Fabricated Products

         At its  Bridgeville,  Pennsylvania  facility,  the  Company  fabricates
specially designed products for industrial and defense-related applications. The
Company's experience and expertise in design, welding, machining and assembly to
meet  exceptionally  fine  tolerances  have been utilized to fabricate  products
ranging from intricate small parts to large multi-ton  assemblies.  In 1999, the
Company  received a first-stage  contract for the fabrication of storage systems
to contain spent nuclear fuel at a decommissioned U.S. nuclear energy plant.

Ultrapure Water Group

         The  Ultrapure  Water  Group  accounted  for  approximately  26% of the
Company's  1999  revenues.  This  segment  provides  equipment  and services for
specialized  industrial users of ultrapure water,  such as companies in the life
sciences,  microelectronics and power industries.  Ultrapure water is water that
has  been  purified  by a series  of  processes  to the  degree  that  remaining
impurities are measured in parts per billion or trillion.

         Ultrapure Water Equipment

         The demand for  technologically  advanced ultrapure water equipment and
systems has increased as the  industries  which use ultrapure  water have become
more knowledgeable about their quality  requirements.  Ultrapure water needs are
particularly important in the semiconductor, pharmaceutical, petroleum and power
generation industries. The semiconductor industry in particular has increasingly
demanded  higher purity water as the circuits on silicon wafers have become more
densely packed.


<PAGE>


         The  Company  supplies  sophisticated  ultrapure  water  systems  which
utilize a  combination  of  ion-exchange,  EDI,  RO and UF  technologies.  These
systems are either  trailer-mounted  or  land-based  and vary from  standardized
modules  to large  multimillion  dollar  systems,  depending  on the  customer's
requirements.  In 1998, the Company was awarded an order for an ultrapure  water
system  utilizing  the Company's  EDI  technology to be located in Beijing,  the
first such  installation  in China.  This facility  started up in 1999.  Also in
1999,  the Company  received a contract for an ultrapure  water system for a new
semiconductor facility in Singapore.

         Included  in the  equipment  sold by the  Ultrapure  Water Group is the
Company's  Ozgen(R)  ozone-generation  equipment,  which  is being  utilized  by
semiconductor plants as well as for swimming pool and aquarium disinfection.

         The  Company  established  the Ionics  Life  Sciences  division  at the
beginning  of 1999 to expand its  delivery  of  ultrapure  water  equipment  and
services to the pharmaceutical and biotechnology industries.

         Ultrapure Water Supply

         In industries such as power generation, semiconductors, pharmaceuticals
and  biotechnology,  ultrapure  water is critical to product  quality and yield.
Depending on the  composition  and quantity of the  impurities  to be removed or
treated,  any one of several  membrane  separations  methods  can be utilized to
provide ultrapure water to the customer. Ionics has pioneered in the application
of three membrane  technologies  (EDR, RO and UF) combined  together in a mobile
system called the "triple membrane" trailer (TMT) for use in the commercial
processing of ultrapure water.  Ionics provides ultrapure water services and
the production and sale of ultrapure water from trailer-mounted units at
customer sites.

         The Company's EDI technology is becoming  increasingly  utilized in the
production  of  ultrapure  water.  EDI  is a  continuous,  electrically  driven,
membrane-based water purification process which produces ultrapure water without
the use of strong chemical regenerants,  such as sulfuric acid and caustic soda,
which are commonly required. The Company's TMT-II trailers utilize a combination
of EDI, RO and UF technologies and represent what the Company believes to be the
most advanced technology used in the commercial processing of ultrapure water.

         At the  end of  1999,  Company-owned  or  operated  equipment  for  the
production of ultrapure  water and other  purified  process water under contract
with  companies  in various  industries  had a total  capacity of  approximately
25,000 gallons per minute.

         The Company has been expanding its ultrapure water  activities into the
Asian market.  In November 1997, the Company  acquired a majority  interest in a
Malaysian  company,  now  called  Ionics  Enersave  Engineering  Sdn Bhd,  which
provides  ultrapure  water services and systems to the southeast Asian and China
markets.   The  Company  established  an  ultrapure  water  sales,  service  and
regeneration  facility in Singapore  in 1998,  and opened an office in Taiwan in
1999.

         One of the Company's  important  ultrapure water service  activities is
ion-exchange  regeneration  services,  which are  provided at four U.S. and four
overseas locations. In addition to commissioning the Singapore facility in 1998,
the Company  began  operations  in 1999 at a 66,000  square foot building in San
Jose,  California which contains resin  regeneration,  manufacturing and service
facilities.   The  Company  also  provides  system  sanitization  and  high-flow
deionization services at customer sites.

Consumer Water Group

         This business  group segment  accounted  for  approximately  27% of the
Company's 1999 revenues. The Company's consumer water products serve the bottled
water, home water purification, and consumer bleach-based product market areas.


<PAGE>


         Aqua Cool(R) Pure Bottled Water

         Ionics  entered  the bottled  water  business  in 1984.  The  Company's
strategy is to utilize its proprietary  desalination and purification technology
to produce a brand of drinking water, Aqua Cool(R) Pure Bottled Water, which can
be reproduced with uniform  consistency  and high quality at numerous  locations
around  the  world.  Distribution  operations  have  been  established  at eight
Company-owned  locations  throughout  England;  at  18  Company-owned  locations
serving a number of metropolitan areas in the eastern,  southeastern and central
United States; and, through joint ventures, in Bahrain, Kuwait and Saudi Arabia.
The Company's  business focuses on the sale of Aqua Cool in five-gallon  bottles
to a variety of commercial and residential  customers.  The Company has recently
expanded its  product-line  to include  office coffee service and other services
complementary to bottled water distribution.

         At the end of 1999,  there  were a total of 30 Aqua  Cool  distribution
centers in the United States and overseas,  supplied with Aqua Cool Pure Bottled
Water by nine regional water purification and bottling  facilities,  supplying a
customer base of  approximately  135,000.  Early in 1999,  the Company  acquired
Aquarelle SA, a French bottled water  distributor with five locations in France,
with the  intent of  expanding  the  Company's  bottled  water  operations  into
continental Europe.

         Home Water Purification Systems

         Point-of-Use Devices

         The Company  participates  in the  "point-of-use"  market for over- and
under-the-sink water purifiers through the sale of RO and activated carbon-based
filtering  devices,  and  through  the  manufacture  and  sale of  HYgene(R),  a
proprietary,  EPA-registered,   silver-impregnated  activated  carbon  filtering
medium. The Company  incorporates HYgene, which is designed to prevent bacterial
build-up while providing the capability of removing undesirable tastes and odors
from the water supply,  into its own bacteriostatic  water conditioners and also
sells HYgene to manufacturers of household point-of-use water filters.

         Point-of-Entry Devices

         Ionics'   point-of-entry  water  products  include  ion-exchange  water
conditioners to "soften" hard water,  and chemicals and media for filtration and
treatment.  The Company sells its products,  under the General  Ionics and other
brand names,  through both independent  distributorships  and wholly owned sales
and service dealerships.

         In 1998,  the Company  introduced  a new line of  bacteriostatic  water
conditioning  systems.  In 1999,  the Company  commenced  operations  in Galway,
Ireland, to provide  bacteriostatic  water conditioning  systems to the European
marketplace.

         Bleach-Based Consumer Products

         The Company's Elite Consumer  Products  division operates a Cloromat(R)
facility  to produce  and  distribute  bleach-based  products  for the  consumer
market,  primarily  one-gallon  bleach products under private label or under the
Company's  own  "Elite(R)",   "Super  ValueTM"  and  "UltraPureTM"  brands,  and
methanol-based   automobile  windshield  wash  solution.  These  operations  are
conducted in a 129,000  square foot  manufacturing  facility  located in Ludlow,
Massachusetts.


<PAGE>


Instrument Business Group

         The Company's  Instrument Business Group accounted for approximately 8%
of the  Company's  1999  revenues.  This business  segment  comprises the Ionics
Instrument  Division  located  in  Watertown,   Massachusetts,   Ionics  Sievers
Instruments,  located  in  Boulder,  Colorado,  and Ionics  Agar  Environmental,
located in Herzlia,  Israel.  The Company has become a leading  manufacturer  of
instruments  that measure total organic carbon across the water  "spectrum" from
ultrapure water to wastewater. The Sievers(R) Model 400 TOC analyzer is the only
on-line TOC  analyzer  designed  specifically  to comply with new United  States
Pharmacopoeia   (USP)   requirements  for  determining   water  quality  in  the
pharmaceutical  industry.  In 1999,  Ionics  Sievers  introduced  TOC  analyzers
sensitive to the  parts-per-trillion  range, designed specifically for ultrapure
water measurement in the semiconductor and power generation industries.

         In addition to the Sievers product line, the Company offers a full line
of the Company's TOC monitors for process water and wastewater applications. The
Company's other instrument  products,  which are used both in the laboratory and
on-line,  measure and detect, among other things, total carbon,  sulfur,  nitric
oxide,  chemical  oxygen demand and total oxygen demand.  The Company also sells
instruments  for the  measurement  of  dissolved  metals and  specific  chemical
analyzers for ammonia, phosphates, nitrates and chlorine.

         With the acquisition of Ionics Agar  Environmental in 1999, the Company
now also offers a line of instruments for the detection of thin layers of oil on
water. The Company's  Leakwise(R)  oil-on-water  detection systems are used by a
range of industries from refining to power generation.

Other Information Concerning the Business of the Company

         Raw Materials and Sources of Supply

         All raw materials  and parts and supplies  essential to the business of
the Company can  normally  be  obtained  from more than one source.  The Company
produces the  membranes  required for its equipment and systems that use the ED,
EDR, MF, UF, RO and EDI  processes.  Membranes  used for the RO process are also
purchased  from outside  suppliers and are normally  available  from  multiple
sources.

         Patents and Trademarks

         The Company believes that its products, know-how, servicing network and
marketing  skills are more significant to its business than trademarks or patent
protection of its technology. Nevertheless, the Company has a policy of applying
for  patents  both in the United  States and  abroad on  inventions  made in the
course  of its  research  and  development  work for which a  commercial  use is
considered  likely.  The Company owns numerous United States and foreign patents
and trademarks and has issued licenses thereunder,  and currently has additional
pending patent  applications.  Of the  approximately 80 outstanding U.S. patents
held  by  the  Company,  a  substantial  portion  involves  membranes,  membrane
technology and related separations processes such as ED and EDR, RO, UF and EDI.
The Company  does not believe  that any of its  individual  patents or groups of
related patents, nor any of its trademarks, is of sufficient importance that its
termination or abandonment,  or the  cancellation of licenses  extending  rights
thereunder, would have a material adverse effect on the Company.

         Seasonality

         The  activities  of the  Company's  businesses  are  not of a  seasonal
nature, other than certain activities of the Consumer Products segment.  Bottled
water sales and bleach  products for swimming  pool use tend to increase  during
the summer months.  Also,  sales levels for automobile  windshield wash solution
increase in the winter months.

         Customers

         The nature of the Company's  business is such that it frequently has in
progress  large  contracts  with one or more  customers  for specific  projects;
however, there is no one customer whose purchases account for 10% or more of the
Company's  consolidated  revenues  and whose loss would have a material  adverse
effect on the Company and its subsidiaries taken as a whole.


<PAGE>


         Backlog

         The Company's  backlog of firm orders was  $241,332,000 at December 31,
1999 and $189,917,000 at December 31, 1998. For multi-year  contracts,  the
Company includes in reported  backlog the revenues  associated with the first
five years of the contract.  For multi-year  contracts which are not otherwise
included in backlog, the Company includes in backlog up to one year of revenues.
The Company expects to fill  approximately 63% of its December 31, 1999 backlog
during 2000. The Company does not believe that there are any seasonal  aspects
to its backlog figures.

         Government Contracts

         The  Company  does  not  believe  that  any of  its  sales  under  U.S.
Government  contracts or subcontracts  during 1999 are subject to renegotiation.
The Company has not had adjustments to its negotiated  contract prices,  nor are
any proceedings pending for such adjustments.

         Research and Development

         The Company is actively  engaged in research and  development  directed
toward products for use in water purification,  processing and measurement,  and
separations  technology.  The Company's  research and development  expenses were
approximately $7,066,000 in 1999, $6,635,000 in 1998 and $5,410,000 in 1997.

         Competition

         The  Company  experiences  competition  from a variety of sources  with
respect to virtually  all of its products,  systems and  services,  although the
Company knows of no single entity that competes with it across the full range of
its products and services.  Competition  in the markets served by the Company is
based on a number of factors, which may include price, technology,  applications
experience, know-how, availability of financing, reputation, product warranties,
reliability, service and distribution.

         With respect to the Company's  Equipment  Business  Group,  there are a
number  of  companies,   including  several  sizable  chemical  companies,  that
manufacture membranes, but not equipment.  There are numerous smaller companies,
primarily  fabricators,  that build water treatment and desalination  equipment,
but which generally do not have their own  proprietary  membrane  technology.  A
limited  number of companies  manufacture  both  membranes  and  equipment.  The
Company  has  numerous   competitors  in  its   conventional   water  treatment,
instruments and fabricated products business lines.

         In 1998, the International  Desalination  Association released a report
providing data regarding the manufacturers of desalination equipment.  According
to the report,  which covered land-based water desalination  plants delivered or
under construction as of December 31, 1997, with a capacity to produce 100 cubic
meters  (approximately 25,000 gallons) or more of fresh water daily, the Company
ranked first in terms of the cumulative  number of such plants sold, having sold
1,742 plants of such capacity,  more than the next three manufacturers combined.
In addition, the Company ranked first in the total capacity of such plants sold.

         With respect to the Ultrapure Water Group business segment, the Company
competes with  suppliers of ultrapure  water services on a national and regional
basis, and with other manufacturers of membrane-related equipment.

         With respect to the Company's  Consumer Water Group  business  segment,
there are  numerous  bottled  water  companies  which  compete with the Company,
including several which are much larger than the Company.  Most of the Company's
competitors in point-of-entry  and point-of-use  products for the home are small
assemblers,  serving local or regional markets.  However, there are also several
large companies competing nationally in these markets.

         In the case of its  silver-impregnated  activated carbon product lines,
the Company knows of two competitors with which it competes on a national basis.

         The Company  competes  with many  suppliers of bleach and  bleach-based
cleaning  products and automobile  windshield  wash for the consumer  market,  a
number of which are much larger than the Company.


<PAGE>


         The  Company  is unable to state with  certainty  its  relative  market
position in all aspects of its business.  Many of its competitors have financial
and other resources greater than those of the Company.

         Environmental Matters

         Continued  compliance by the Company and its subsidiaries with federal,
state and local  provisions  regulating  the  discharge  of  materials  into the
environment  or  otherwise  relating to the  protection  of the  environment  is
expected to have no material effect upon capital  expenditures,  earnings or the
competitive position of the Company or any of its subsidiaries.

         In May 1998, a wholly owned  California  subsidiary  of the Company was
notified  by the U.S.  Environmental  Protection  Agency  ("EPA")  that it was a
potentially responsible party (PRP) in connection with the Operating Industries,
Inc. Superfund  Site in Monterey  Park,  California.  Because of its relatively
small volumetric  contribution of waste to the site, the subsidiary was eligible
to participate in a de minimis  settlement,  and in January 1999 made a full and
timely payment of $13,685 in settlement.

         The Company is one of  approximately  1,000 PRPs at a Superfund site at
Solvent Recovery  Services of New England in Southington,  Connecticut (the "SRS
Site").  The Company's  volumetric  ranking in comparison to the total volume of
wastes  treated  at the SRS Site is  approximately  0.5%.  A  non-time  critical
removal action,  consisting of containment,  pumping,  and treatment of the most
heavily  contaminated  non-bedrock  ground  water,  was  completed in 1995.  The
Company's  share of combined  assessments  to date against all PRPs for non-time
critical  removal  actions  and other work  totals  approximately  $60,000.  The
ultimate site clean-up cost is currently not expected to exceed $59 million,  of
which the  Company's  share  would not exceed  $308,000  including  the  amounts
already assessed against the Company.  While it is too soon to predict the scope
and cost of the final  clean-up  remedy that the EPA will  select,  based on the
Company's small volumetric  ranking and the identities of the larger PRPs, which
include many substantial  companies,  the Company believes that its liability in
this  matter  will not have a material  effect on the  Company or its  financial
position.

         During 1995, the Company  acquired certain real property in Maryland to
accommodate  expansion of the Elite bleach-based  consumer  chemicals  business.
Prior to its  acquisition  by the Company,  the property had been  determined to
have some  contamination  of soil and  ground  water.  In  conjunction  with the
purchase,  the  Company  worked  closely  with the  Maryland  Department  of the
Environment  and, based upon an  environmental  study completed by a third party
consultant,  reached a preliminary agreement regarding treatment. Based upon the
costs of  treatment  identified  by the  consultant,  the Company has provided a
conservative accrual,  recorded as part of the cost of the property. The Company
believes that additional liability associated with treatment of the property, if
any, will not have a material effect on the Company or its financial condition.

         Certain  former  operations  of a division of the Company have been the
subject  of  an   investigation   into  possible   violations  of  environmental
regulations  by the  Office  of the  Attorney  General  of the  Commonwealth  of
Massachusetts. See Item 3, Legal Proceedings, page I-10.

         The  Company  has never  had a  product  liability  claim  grounded  in
environmental  liability,  and  believes  that the  nature of its  products  and
business makes such a claim unlikely.

         Employees

         The  Company and its  consolidated  subsidiaries  employ  approximately
2,600  full-time  persons.  None of the Company's  employees are  represented by
unions or have entered into workplace  agreements  with the Company,  except for
the employees of the Company's  Australian  subsidiary and certain  employees of
the Company's Spanish  subsidiary.  The Company considers its relations with its
employees to be good.


<PAGE>


         Foreign Operations

         The Company's sales to customers in foreign countries primarily involve
desalination  systems,  ultrapure water systems,  water and wastewater treatment
systems,  Cloromat  systems,  products and services  related to these  foregoing
systems,  instruments and bottled water. The Company seeks to minimize financial
risks relating to its international  operations.  Wherever possible, the Company
obtains  letters of credit or similar  payment  assurances  denominated  in U.S.
dollars.  If  U.S.  dollar  payments  cannot  be  secured,  the  Company,  where
appropriate, enters into foreign currency hedging transactions. The Company also
uses foreign sources for equipment parts and may borrow funds in local (foreign)
currencies to offset the asset risk of foreign currency devaluation. Net foreign
currency transaction gains/(losses)  included in income before income taxes and
minority  interest  totaled $11,000 in 1999,  $(28,000) in 1998, and $100,000 in
1997.

         The Company engages in certain foreign operations both directly and
through the following wholly owned subsidiaries: Ionics Acapulco S.A.; Ionics
(Bermuda) Ltd.; Ionics Iberica, S.A.; Ionics (U.K.) Limited; Ionics Italba,
S.p.A.; Ionics Nederland B.V.; Elite Chemicals Pty. Ltd.; Ionics France S.A.;
Resources Conservation Co. International; Ionics (Korea) Inc.; Favourable
Trading Ltd.(Ireland); Aqua Design, Inc., including its subsidiaries and
affiliates; Ionics Asia-Pacific Pte Ltd.; Ionics Taiwan, Inc.; Ionics Watertec
Pty. Ltd.; Ionics Foreign Sales Corporation Limited; Aquarelle S.A. (acquired
in early 1999); and Ionics Agar Environmental Ltd. (acquired in early 1999). In
1997, the Company acquired, through its Spanish subsidiary, a 55% ownership
interest in Ionics Enersave Engineering Sdn Bhd, a Malaysian corporation with
subsidiary operations in China.

         The  Company  also  engages  in  various  foreign   operations  through
investments  in  affiliated  companies  and  joint  venture  relationships.  The
activities  include  the  production,  sale and  distribution  of bottled  water
through a 40% owned affiliate in Bahrain, a 40% owned affiliate in Saudi Arabia,
and a 49% owned affiliate in Kuwait.

         In addition, the Company has a 26% ownership interest in Watlington
Waterworks, Limited in Bermuda.  Watlington collects, treats and distributes
water throughout Bermuda for both potable and non-potable uses.  The Company
also has a 50% ownership interest in Yuasa-Ionics Co., Ltd., Tokyo, Japan,
which among its activities serves as a distributor of certain of the Company's
products in Japan; and, through Ionics Iberica, S.A., 20% interests in Aguas
Tratadas de Cadereyta, S.A. de C.V. and Aguas Tratadas de Madero, S.A. de C.V.,
companies organized to provide water treatment services in Mexico.  Through its
Italian subsidiary, the Company has a 75% ownership interest (increased from
50% at the end of 1999) in Agrinord S.r.l., an Italian company engaged in waste
treatment operations.  In 1999, the Company acquired a controlling interest in
Ionics Freshwater Ltd., a Barbados corporation which owns and operates a major
brackish water desalination facility in Barbados.

         Further geographical and financial information concerning the Company's
foreign  operations  appears  in Notes 1, 5, 8, 13,  14 and 15 to the  Company's
Consolidated  Financial Statements included as part of the Company's 1999 Annual
Report to Stockholders, which Notes are incorporated herein by reference.

Financial Information About Geographic Areas

         The information contained in Note 15 of Notes to Consolidated Financial
Statements contained in the Company's Annual Report to Stockholders for the year
ended December 31, 1999 is incorporated herein by reference.


<PAGE>


ITEM 2.  PROPERTIES

         The   Company's   executive   offices   are   located   in   Watertown,
Massachusetts. Manufacturing and other operations are carried out in a number of
locations.  The following table provides certain information as to the Company's
principal general offices and manufacturing facilities:




                  Business Segment            Property      Approximate Square
 Location         Utilizing the Location      Interest      Feet of Floor Space
 --------         ---------------------       --------      -------------------

Watertown, MA     Equipment Business Group      Owned             134,000
(headquarters)    Instrument Business Group
                  Consumer Water Group

Watertown, MA     Equipment Business Group      Owned             127,000
                  Consumer Water Group

Bridgeville, PA   Equipment Business Group      Owned              77,000

Canonsburg, PA    Equipment Business Group      Leased             88,000

Elkton, MD        Consumer Water Group          Owned             234,000

Ludlow, MA        Consumer Water Group          Owned             129,000

San Jose, CA      Ultrapure Water Group         Owned              66,000

Boulder, CO       Instrument Business Group     Leased             74,000

London, England   Consumer Water Group          Owned              36,000

         The  Company  also  owns or  leases  smaller  facilities  in which  its
business  segments conduct  business.  The Company makes use primarily of leased
facilities for its Aqua Cool bottled water distribution centers. The majority of
these facilities contain less than 10,000 square feet.

         The Company  considers the business  facilities  that it utilizes to be
adequate for the uses to which they are being put.

ITEM 3.  LEGAL PROCEEDINGS

         The Company is involved in the normal course of its business in various
litigation  matters.  Although the Company is unable to determine at the present
time whether it will have any liability in any of the pending  matters,  some of
which are in the pre-trial discovery stages, the Company believes generally that
it has  meritorious  defenses and that none of the pending  matters will have an
outcome material to the financial condition or business of the Company.

         The Attorney  General of the  Commonwealth  of  Massachusetts  has been
conducting an investigation  into certain former operations of a division of the
Company  during  portions  of the years  1991  through  1995.  The  Company  has
cooperated  with this  investigation  of possible  violations  of  environmental
statutes and regulations  that relate to one facility that ceased  operations in
1995. The Company  cannot predict the outcome of this matter,  but it may result
in administrative, civil or criminal charges and/or monetary payments.


<PAGE>



         On March 27, 1998,  the Company was served with a summons and complaint
in  connection  with a lawsuit now captioned  United States Filter  Corporation,
U.S.  Filter/Ionpure,  Inc.,  IP  Holding  Company,  Millipore  Corporation  and
Millipore Investment Holdings Limited v. Ionics, Incorporated, filed in the U.S.
District Court, District of Massachusetts  (Boston).  Plaintiffs allege that the
Company is infringing a certain reissue patent,  which issued on March 10, 1998,
by making, selling, offering to sell and using the Company's electrodeionization
(EDI) systems within the United States. On June 10, 1999, the Company was served
with a second summons and complaint  alleging  infringement  of six  EDI-related
patents issued earlier than the reissue patent which is the subject of the first
lawsuit. The Company, which pioneered the development of the EDI process over 30
years ago and holds a number of patents related to EDI technology, believes that
it has valid defenses to plaintiffs' infringement claims in both proceedings and
intends  vigorously  to  defend  itself  in  this  litigation,  which  is in the
discovery stages.

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

         No matters  were  submitted  to a vote of security  holders  during the
fourth quarter of the fiscal year covered by this report.


<PAGE>



                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Reference is made to the Company's  Annual Report to  Stockholders  for
the year ended December 31, 1999. The  information set forth on page 37 entitled
"Common Stock Price Range" and on the inside back cover of such Annual Report is
hereby incorporated by reference.

ITEM 6.  SELECTED FINANCIAL DATA

        Reference is made to the Company's Annual Report to Stockholders for the
year ended  December  31,  1999.  The  information  set forth on page 37 of such
Annual Report entitled  "Statement of Operations  Data" and "Balance Sheet Data"
is hereby incorporated by reference.

Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION

        Reference is made to the Company's Annual Report to Stockholders for the
year ended December 31, 1999. The  information  set forth on pages 17 through 21
of such Annual Report entitled "Management's  Discussion and Analysis of Results
of Operations and Financial Condition" is hereby incorporated by reference.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         Derivative Instruments

         The Company had no foreign exchange  contracts  outstanding at December
31, 1999.  The Company has no other  derivative  financial  instruments or other
financial and commodity  instruments  for which fair value  disclosure  would be
required  under SFAS No. 119. The Company holds no investment  securities  which
would require disclosure of market risk.

         Market Risk

         The  Company's  primary  market  risk  exposures  are in the  areas  of
interest  rate risk and  foreign  currency  exchange  rate risk.  The  Company's
investment   portfolio  of  cash   equivalents   is  subject  to  interest  rate
fluctuations,  but the Company  believes  this risk is not  material  due to the
short-term  nature of these  investments.  At December 31, 1999, the Company had
$25.5 million of short-term debt and $8.4 million of long-term debt outstanding.
The major  portion of this debt has  variable  interest  rates  and,  therefore,
interest rate risk.  However,  a hypothetical  increase of 10% in these interest
rates for a one-year  period would result in additional  interest  expense after
taxes that would not be material in the  aggregate.  The  Company's  exposure to
foreign currency  exchange rate  fluctuations has been and is expected to remain
modest due to the fact that the operations of its international subsidiaries are
primarily conducted in their respective local currencies.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         Reference is made to the Company's  Annual Report to  Stockholders  for
the year  ended  December  31,  1999.  The  consolidated  balance  sheets of the
Registrant as of December 31, 1999 and 1998, the related consolidated statements
of operations,  cash flows and stockholders' equity for the years ended December
31,  1999,  1998 and 1997,  and the related  notes with the  opinion  thereon of
PricewaterhouseCoopers LLP, independent accountants, on pages 21 through 36, and
Selected   Quarterly   Financial  Data   (unaudited)  on  page  37,  are  hereby
incorporated by reference.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

        This item is not applicable to the Company.


<PAGE>



                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The information required by Item 10 with respect to directors is hereby
incorporated by reference from the Company's  definitive proxy statement for the
Annual Meeting of Stockholders to be held May 2, 2000, filed with the Securities
and Exchange Commission on March 29, 2000.

         The information regarding executive officers is as follows:


                       Age as of
Name                  March 1, 2000        Positions Presently Held
----                  -------------        ------------------------

Arthur L. Goldstein        64         President, Chief Executive Officer
                                      and Director since 1971; Chairman
                                      of the Board since 1990

Robert J. Halliday         45         Chief Financial Officer since August 1992;
                                      Executive Vice President and Chief
                                      Operating Officer since February 25, 2000

William E. Katz            75         Executive Vice President since 1983;
                                      Director since 1961

John P. Bergeron           48         Vice President since February 23, 1999;
                                      Treasurer since November 1997

Edward J. Cichon           45         Vice President, Equipment Business Group
                                      since July 1998

Alan M. Crosby             47         Vice President, Consumer Products Group
                                      since March 20, 2000

Stephen Korn               54         Vice President, General Counsel and Clerk
                                      since September 1989

Theodore G. Papastavros    66         Vice President since 1975; Vice President,
                                      Strategic Planning since February 1990

Michael W. Routh           52         Vice President, Instrument Business Group
                                      (commencing April 3, 2000)

------------------
* Member of Executive Committee

         There  are no  family  relationships  between  any of the  officers  or
directors.  Executive  officers of the Company  are  appointed  each year at the
annual meeting of Directors.

         Except for Messrs. Cichon and Routh, all of the above executive
officers have been employed by the Company in various capacities for more than
five years.  Prior to joining the Company in July 1998, Mr. Cichon served as a
Senior Vice President of Metcalf & Eddy, Inc., a water and wastewater
engineering and services firm, where he was employed for 18 years.  Mr. Routh
served as President of the Baird Division of Thermo Instrument Systems, Inc.
from 1995-1997, and General Manager of the Spectroscopy Division of BioRad
Laboratories, Inc. from 1998 to March 2000.

<PAGE>



ITEM 11.  EXECUTIVE COMPENSATION

         The information required by Item 11 is hereby incorporated by reference
from  the  Company's  definitive  proxy  statement  for the  Annual  Meeting  of
Stockholders  to be held May 2, 2000,  filed with the  Securities  and  Exchange
Commission on March 29, 2000.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information required by Item 12 is hereby incorporated by reference
from  the  Company's  definitive  proxy  statement  for the  Annual  Meeting  of
Stockholders  to be held May 2, 2000,  filed with the  Securities  and  Exchange
Commission on March 29, 2000.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information required by Item 13 is hereby incorporated by reference
from  the  Company's  definitive  proxy  statement  for the  Annual  Meeting  of
Stockholders  to be held May 2, 2000,  filed with the  Securities  and  Exchange
Commission on March 29, 2000.


<PAGE>



                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)1. Financial Statements

      See Index to Financial and Financial  Statement Schedules on page IV-8.
      The  Financial  Statement  Schedules  are filed as part of this  Annual
      Report on Form 10-K.

2.    Financial Statement Schedules

      See Index to Financial Statements and Financial Statement Schedules on
      page IV-8.

3.    Exhibits

      Exhibit No.       Description

3.0   Articles of Organization and By-Laws

      3.1    Restated Articles of Organization filed April 16, 1986        *
             (filed as Exhibit 3.1 to the Company's Annual Report
             on Form 10-K for the year ended December 31, 1997).


     3.1(a)  Amendment to Restated Articles of Organization                *
             filed June 19, 1987 (filed as Exhibit 3.1(a) to the
             Company's Annual Report of Form 10-K for the year
             ended December 31, 1997).

     3.1(b)  Amendment to Restated Articles of Organization                *
             filed May 13, 1988 (filed as Exhibit 3.1(b) to
             Registration Statement No. 33-38290 on Form S-2
             effective January 24, 1991).

     3.1(c)  Amendment to Restated Articles of Organization                *
             filed May 8, 1992 (filed as Exhibit 3.1 to the
             Company's Quarterly Report on Form 10-Q for the
             quarterly period ending June 30, 1996).

     3.1(d)  Amendment to Restated Articles of Organization                *
             filed May 8, 1998 (filed as Exhibit 3.1 to the
             Company's Quarterly Report on Form 10-Q for the
             quarterly period ending March 31, 1998).


<PAGE>


     3.2     By-Laws, as amended through November 14, 1997                 *
             (filed as Exhibit 3.2 to the Company's Annual Report
             on Form 10-K for the year ended December 31, 1997)

4.0  Instruments defining the rights of security holders, including indentures

     4.1     Renewed Rights Agreement, dated as of August 19, 1997         *
             between Registrant and BankBoston N.A. (filed as
             Exhibit 1 to the Company's Current Report on Form 8-K
             dated August 27, 1997).

     4.2     Form of Common Stock Certificate (filed as Exhibit 4.2        *
             to the Company's Annual Report on Form 10-K for the
             year ended December 31, 1997)

10.0 Material Contracts

     10.1    1979 Stock Option Plan,  as amended  through                  *
             February 22, 1996  (filed as Exhibit  10.1
             to the Company's  Annual Report on Form 10-K
             for the year ended December 31, 1995).

     10.2    1986 Stock Option Plan for Non-Employee Directors,            *
             as amended through February 19, 1997 (filed as Exhibit
             10.2 to the Company's Annual Report on Form 10-K
             for the year ended December 31, 1996).

     10.3    Amended  and   Restated   Credit   Agreement                  *
             between the Company and the First National
             Bank of Boston dated as of December 31, 1992
             (filed  as  Exhibit  10.3  to the  Company's
             Annual  Report for the year  ended  December
             31, 1997).

     10.3(1) Amendment Agreement No. 1, dated as of December               *
             31, 1995, to Amended and Restated Credit Agreement
             between the Company and The First National Bank of
             Boston (filed as Exhibit 10.2(1) to the Company's Annual
             Report on Form 10-K for the year ended December 31,
             1995).

     10.3(2) Amendment Agreement No. 2, dated as of December               *
             31,  1998,  to Amended and  Restated  Credit
             Agreement between the Company and BankBoston
             N.A.   (filed  as  Exhibit  10.3(2)  to  the
             Company's Annual Report on Form 10-K for the
             year ended December 31, 1998).


<PAGE>




     10.4    Operating  Agreement  dated as of  September  27,             *
             1989 between the Company  and  Aqua  Cool
             Enterprises, Inc. (filed as Exhibit 10.4 to the
             Company's Annual Report on Form 10-K for the year
             ended December 31, 1997).

     10.5    Term Lease Master Agreement dated as of September             *
             27, 1989 between the Company and Aqua Cool Enterprises,
             Inc. (filed as Exhibit 10.5 to the Company's Annual Report
             on Form 10-K for the year ended December 31, 1997).

     10.6    Option Agreement dated as of September 27, 1989               *
             among the Company, Aqua Cool Enterprises, Inc.
             and the other parties named therein (filed as Exhibit
             to the Company's registration statement on Form
             S-2, No. 33-38290, effective January 24, 1991).

     10.7    1994 Restricted Stock Plan (filed as Exhibit 10.12            *
             to the Company's Annual Report on Form 10-K dated
             March 30, 1995).

     10.8    1997 Stock Incentive Plan (filed as Exhibit 10.12             *
             to the Company's Annual Report on Form 10-K dated
             December 31, 1996).

     10.9    Ionics, Incorporated Supplemental Executive                   *
             Retirement Plan effective as of January 1, 1996
             (filed as Exhibit 10.9 to the Company's Annual
             Report on Form 10-K dated December 31, 1997).

     10.10   Form of Employee Retention Agreement dated                    *
             February 24, 1998 between the Company and
             certain officers of the Company and its
             subsidiaries (filed as Exhibit 10.10 to the
             Company's Annual Report on Form 10-K dated
             December 31, 1997).

     10.11   1998 Non-Employee Directors Fee Plan (filed                   *
             as Exhibit 10.1 to the Company's Quarterly
             Report on Form 10-Q for the quarterly period
             ending September 30, 1998).



<PAGE>



13.0 Annual Report to Stockholders of the Company for
     the yearended   December  31,  1999   (constituting
     the following sections:  Management's  Discussion and
     Analysis of Results of  Operations  and Financial
     Condition;  Report  of  Independent  Accountants;
     Consolidated Statements of Operations; Consolidated
     Balance Sheets; Consolidated Statements of Cash Flow;
     Consolidated Statements of  Stockholders' Equity;
     Notes to Consolidated Financial  Statements;  Selected
     Financial Data; Board of Directors;  Corporate Officers;
     Location of Principal Subsidiaries, Offices and Affiliates
     Worldwide; Corporate Headquarters; Trading Information;
     Form 10-K Annual Report; Annual Meeting; Auditors; and
     Transfer Agent and Registrar).

21.0 Subsidiaries of the Registrant.

23.0 Consents

23.1 Consent of PricewaterhouseCoopers LLP to incorporation by
     reference of that firm's  report  dated  February
     22,  2000,  which is  included  on page 21 of the
     Registrant's Annual Report to Stockholders for the
     year ended December 31, 1999.

24.0 Power of Attorney.

27.0 Financial Data Schedule.                                           **
--------------------------------
*   incorporated herein by reference
**  for electronic purposes only


<PAGE>



(b) Reports on Form 8-K

    No reports on Form 8-K were filed by the Registrant during
    the last quarter of fiscal 1999.

    Undertaking

    For purposes of complying with the amendments to the rules
    governing  Form S-8  effective  July 13,  1990  under  the
    Securities Act of 1933, the undersigned  hereby undertakes
    as follows,  which  undertaking  shall be  incorporated by
    reference  into  Registrant's  registration  statements on
    Form  S-8  Nos.  33-14194,   33-5814,   33-2092,  2-72936,
    2-82780,   2-   64255,   33-41598,   33-54293,   33-59051,
    333-05225, 333-29135, and 33-54400.

    Insofar as indemnification  for liabilities  arising under
    the  Securities Act of 1933 may be permitted to directors,
    officers  and   controlling   persons  of  the  registrant
    pursuant to the foregoing  provisions,  or otherwise,  the
    registrant  has been  advised  that in the  opinion of the
    Securities and Exchange Commission such indemnification is
    against  public  policy  as  expressed  in the Act and is,
    therefore,  unenforceable.  In the event  that a claim for
    indemnification  against such liabilities  (other than the
    payment by the registrant of expenses  incurred or paid by
    a  director,   officer  or   controlling   person  of  the
    registrant in the successful  defense of any action,  suit
    or proceeding)  is asserted by such  director,  officer or
    controlling person in connection with the securities being
    registered,  the registrant will, unless in the opinion of
    its  counsel  the matter has been  settled by  controlling
    precedent,  submit to a court of appropriate  jurisdiction
    the question whether such indemnification by it is against
    public policy as expressed in the Act and will be governed
    by the final adjudication of such issue.


<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) 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.

                                  IONICS, INCORPORATED
                                  (Registrant)

                                  By:  /s/Arthur L. Goldstein
                                       ----------------------
                                       Arthur L. Goldstein,
                                       Chairman of the Board,
                                       President and Chief
                                       Executive Officer

                                       Date:    March 29, 2000



         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.

Date: March 29, 2000              By: /s/Arthur L. Goldstein
                                      ----------------------
                                      Arthur L. Goldstein,
                                      Chairman of the Board,
                                      President and
                                      Chief Executive Officer
                                      (principal executive
                                      officer) and Director


Date: March 29, 2000              By: /s/Robert J. Halliday
                                      ---------------------
                                      Robert J. Halliday,
                                      Executive Vice President,
                                      Chief Operating Officer
                                      and Chief Financial Officer
                                      (principal financial officer
                                      and principal accounting officer)



<PAGE>



Date: March 29, 2000               By: /s/Douglas R. Brown
      --------------                   -------------------
                                       Douglas R. Brown, Director


Date: March 29, 2000               By: /s/William L. Brown
      --------------                   -------------------
                                       William L. Brown, Director


Date: March 29, 2000               By: /s/Arnaud de Vitry d'Avaucourt
      --------------                   ------------------------------
                                       Arnaud de Vitry d'Avaucourt, Director

Date: March 29, 2000               By: /s/Kathleen F. Feldstein
      --------------                   ------------------------
                                       Kathleen F. Feldstein, Director


Date: March 29, 2000               By: /s/William E. Katz
      --------------                   ------------------
                                       William E. Katz, Director


Date: March 29, 2000               By: /s/John J. Shields
      --------------                   ------------------
                                       John J. Shields, Director


Date: March 29, 2000               By: /s/Carl S. Sloane
      --------------                   -----------------
                                       Carl S. Sloane, Director


Date: March 29, 2000               By: /s/Daniel I.C. Wang
      --------------                   -------------------
                                       Daniel I.C. Wang, Director


Date: March 29, 2000               By: /s/Mark S. Wrighton
      --------------                   -------------------
                                       Mark S. Wrighton, Director


Date: March 29, 2000               By: /s/Allen S. Wyett
      --------------                   -----------------
                                       Allen S. Wyett, Director



<PAGE>




                              IONICS, INCORPORATED

         INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

                                                                    PAGES

Report of Independent Accountants                                    21*

Financial Statements:

       Consolidated Statements of Operations for the
       Years Ended December 31, 1999, 1998 and 1997                  22*

       Consolidated Balance Sheets as of
       December 31, 1999 and 1998                                    23*

       Consolidated Statements of Cash Flows for the
       Years Ended December 31, 1999, 1998 and 1997                  24*

       Consolidated Statements of Stockholders' Equity for
       the Years Ended December 31, 1999, 1998 and 1997              25*

       Notes to Consolidated Financial Statements                 26-36*


Supporting  Financial Statement Schedules for the years ended December 31, 1999,
1998 and 1997:

       Schedule II - Valuation and Qualifying Accounts             IV-9


Report of Independent Accountants on Financial
Statement Schedule                                                IV-10

------------------

All other  schedules  are  omitted  because  the  amounts  are  immaterial,  the
schedules  are not  applicable,  or the  required  information  is  shown in the
financial statements or the notes thereto.

*  Page  references are to the Annual Report to  Stockholders of the Company for
   the year ended  December 31,  1999,  which pages are  incorporated  herein by
   reference.


<PAGE>

<TABLE>
<CAPTION>


                              IONICS, INCORPORATED

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                                     Additions      Additions
                    Balance at       Charged to     Due to
                    End of           Costs and      Acquired                        Balance at
                    Prior Year       Expenses       Businesses      Deductions(A)   End of Year
                    ----------       --------       ----------      ----------      -----------
<S>              <C>               <C>            <C>            <C>              <C>
Allowance for doubtful accounts
and uncollectible notes receivable:

Years ended:

December 31, 1999  $2,891,000        $2,643,000     $  6,000       $1,920,000       $3,620,000
                   ==========        ==========     ========       ==========       ==========

>
December 31, 1998  $2,289,000        $1,319,000     $      0       $  717,000       $2,891,000
                   ==========        ==========     ========       ==========       ==========

December 31, 1997  $2,858,000        $1,408,000     $ 40,000       $2,017,000       $2,289,000
                   ==========        ==========     ========       ==========       ==========


</TABLE>


(A) Deductions result primarily from the write-off of accounts.


<PAGE>



                        REPORT OF INDEPENDENT ACCOUNTANTS
                         ON FINANCIAL STATEMENT SCHEDULE

To the Board of Directors of Ionics, Incorporated:

         Our audits of the consolidated financial statements referred to in our
report dated February 22, 2000 appearing in the 1999 Annual Report to Share-
holders of Ionics, Incorporated (which report and consolidated financial state-
ments are incorporated by reference in this Annual Report on Form 10-K) also
included an audit of the financial statement schedule listed in Item 14(a)(2)
of this Form 10-K.  In our opinion, this financial statement schedule presents
fairly, in all material respects, the information set forth therein when read
in conjunction with the related consolidated financial statements.


/s/PricewaterhouseCoopers LLP
Boston, Massachusetts
February 22, 2000


<PAGE>




                                  EXHIBIT INDEX

                                                             Sequentially
Exhibit                                                      Numbered
No.          Description                                     Page


3.0          Articles of Organization and By-Laws

             3.1    Restated Articles of Organization filed       *
                    April 16, 1986 (filed as Exhibit 3.1 to the
                    Company's Annual Report on Form 10-K for the
                    year ended December 31, 1997).

             3.1(a) Amendment to the Restated Articles of         *
                    Organization filed June 19, 1987 (filed
                    as Exhibit 3.1(a) to the Company's Annual
                    Report on Form 10-K for the year ended
                    December 31, 1997).

             3.1(b) Amendment to Restated Articles of             *
                    Organization  filed  May 13,  1988
                    (filed  as  Exhibit 3.1(b) to  Registration
                    Statement No. 33-38290 on Form
                    S-2 effective January 24, 1991).

             3.1(c) Amendment to Restated Articles of             *
                    Organization filed May 8, 1992
                    (filed as Exhibit 3.1 to the Company's
                    Quarterly Report on Form 10-Q for the quarterly
                    period ending June 30, 1996).

             3.1(d) Amendment to Restated Articles of             *
                    Organization filed May 8, 1998
                    (filed as Exhibit 3.1 to the Company's
                    Quarterly Report on Form 10-Q for the
                    quarterly period ending March 31, 1998).

             3.2    By-Laws, as amended through November 14,      *
                    1997 (filed as Exhibit 3.2 to the Company's
                    Annual Report on Form 10-K for the year ended
                    December 31, 1997).

4.0          Instruments defining the rights of security holders, including
             indentures

             4.1    Renewed Rights Agreement, dated as of         *
                    August 19, 1997 between Registrant and
                    BankBoston N.A. (filed as Exhibit 1 to
                    dated August 27, 1997).

             4.2    Form of Common Stock Certificate (filed as    *
                    Exhibit 4.2 to the Company's Annual Report
                    on Form 10-K for the year ended
                    December 31, 1997).


<PAGE>


10.0         Material Contracts

             10.1  1979 Stock Option Plan, as amended through     *
                   February 22, 1996 (filed as Exhibit 10.1 to
                   the Company's Annual Report on Form 10-K for
                   the year ended December 31, 1995).

             10.2  1986 Stock Option Plan for Non-Employee        *
                   Directors, as amended through February 19,
                   1997 (filed asExhibit 10.2 to the Company's
                   Annual Report on Form 10-K for the year
                   ended December 31, 1996).

             10.3  Amended and Restated Credit Agreement between  *
                   the Company and the First National Bank of
                   Boston dated as of December 31, 1992 (filed as
                   Exhibit 10.3 to the Company's Annual Report
                   for the year ended December 31, 1997).

           10.3(1) Amendment Agreement No. 1, dated as of         *
                   December 31, 1995, to Amended and Restated
                   Credit Agreement between the Company and The
                   First National Bank of Boston (filed as Exhibit
                   10.3(1) to the Company's Annual Report on Form 10-K
                   for the year ended December 31, 1995).

           10.3(2) Amendment Agreement No. 2, dated as of         *
                   December 31, 1998, to Amended and Restated
                   Credit Agreement between the Company and
                   BankBoston N.A. (filed as Exhibit 10.3(2) to the
                   Company's Annual Report on Form 10-K for the
                   year ended December 31, 1998).

            10.4   Operating Agreement dated as of September 27,  *
                   1989 between the Company and Aqua Cool
                   Enterprises, Inc. (filed as Exhibit 10.4 to
                   the Company's Annual Report on Form 10-K for
                   the year ended December 31, 1997).

            10.5   Term Lease Master Agreement dated as of        *
                   September 27, 1989 between the Company and
                   Aqua Cool Enterprises, Inc. (filed as
                   Exhibit 10.5 to the Company's Annual Report on
                   Form 10-K for the year ended December 31, 1997).

            10.6   Option Agreement dated as of September 27,     *
                   1989 among the Company, Aqua Cool Enterprises,
                   Inc.and the other parties named therein
                   (filed as Exhibit 10.6 to the Company's
                   registration statement on Form S-2, No. 33-38290,
                   effective January 24, 1991).

            10.7   1994 Restricted Stock Plan (filed as Exhibit   *
                   10.12 to the Company's Annual Report on Form
                   10-K dated March 30, 1995).

            10.8   1997 Stock Incentive Plan (filed as Exhibit    *
                   10.12  to the Company's Annual Report on Form
                   10-K dated December 31, 1996).

            10.9   Ionics, Incorporated Supplemental Executive    *
                   Retirement Plan effective as of January 1,
                   1996(filed as Exhibit 10.9 to the Company's Annual
                   Report on Form 10-K dated December 31, 1997).

           10.10  Form of Employee Retention Agreement dated      *
                  February 24, 1998 between the Company and
                  certain officers of the Company and its
                  subsidiaries (filed as Exhibit 10.10 to the
                  Company's Annual Report on Form 10-K dated
                  December 31, 1997).

           10.11  1998 Non-Employee Directors Fee Plan (filed     *
                  as Exhibit 10.1 to the Company's Quarterly
                  Report on Form 10-Q for the quarterly period
                  ending September 30, 1998).

13.0     Annual Report to Stockholders of the Company for the
         year ended December 31, 1999 (constituting the following
         sections: Management's Discussion and Analysis of Results
         of Operations and Financial Condition; Report of Independent
         Accountants; Consolidated Statements of Operations; Consolidated
         Balance Sheets; Consolidated Statements of Cash Flow; Consolidated
         Statements of Stockholders' Equity; Notes to Consolidated Financial
         Statements; Selected Financial Data; Board of Directors;
         Corporate Officers; Location of Principal Subsidiaries, Offices
         and Affiliates Worldwide; Corporate Headquarters; Trading Information;
         Form 10-K Annual Report; Annual Meeting; Auditors; and Transfer
         Agent and Registrar.)

21.0     Subsidiaries of the Registrant

23.0     Consents

         23.1   Consent of PricewaterhouseCoopers  LLP to incorporation
                by reference of that firm's  report dated  February 22,
                2000,  which is included on page 21 of the Registrant's
                Annual  Report  to  Stockholders  for  the  year  ended
                December 31, 1999.

24.0   Power of Attorney.

27.0   Financial Data Schedule.                                **

--------------------------------
*    incorporated herein by reference
**   for electronic purposes only