UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D C  20549
                                   FORM 10-Q



(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     For the quarterly period ended June 30, 1998

                                      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 1-1463


                          UNION CARBIDE CORPORATION               
            (Exact name of registrant as specified in its charter)


            New York                                           13-1421730    
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                             Identification No.)


 39 Old Ridgebury Road,  Danbury, CT                           06817-0001
(Address of principal executive offices)                       (Zip Code)


                                 203-794-2000                    
               Registrant's telephone number, including area code


                                                                           
             (Former name, former address and former fiscal year,
                        if changed since last report.)


Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.        Yes    X    No _______


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

           Class                                 Outstanding at July 31, 1998
Common Stock, $1 par value                             135,269,257 shares


              Total number of sequentially numbered pages in this filing,
                including exhibits thereto:  28

<PAGE>
                   UNION CARBIDE CORPORATION AND SUBSIDIARIES

                                     INDEX




PART I. FINANCIAL INFORMATION

                                                                         PAGE
  Financial Statements

    Condensed Consolidated Statement of Income - 
      Quarter ended June 30, 1998 and 1997.........................        3

    Condensed Consolidated Statement of Income - 
      Six months ended June 30, 1998 and 1997......................        4

    Condensed Consolidated Balance Sheet - 
      June 30, 1998 and December 31, 1997..........................        5

    Condensed Consolidated Statement of Cash Flows -
      Six months ended June 30, 1998 and 1997......................        6

  Notes to Condensed Consolidated Financial Statements.............       7-12

  Management's Discussion and Analysis of Financial Condition
    and Results of Operations......................................      13-20



PART II. OTHER INFORMATION

  Item 1.  Legal Proceedings.......................................       21

  Item 6.  Exhibits and Reports on Form 8-K........................       21

  Signature........................................................       22

  Exhibit Index....................................................       23



All statements in this quarterly report on Form 10-Q that do not reflect 
historical information are forward looking statements within the meaning of 
the Private Securities Litigation Reform Act of 1995.  Such forward looking 
statements are subject to risks and uncertainties.  Important factors that 
could cause actual results to differ materially from those discussed in such 
forward looking statements include the supply/demand balance for the 
corporation's products; customer inventory levels; competitive pricing 
pressures; feedstock costs; changes in industry production capacities and 
operating rates; currency exchange rates; interest rates; global economic 
conditions, particularly in Asia; disruption in railroad and other 
transportation facilities; competitive technology positions; failure by the 
corporation to achieve technology objectives; and failure by the corporation 
to achieve cost reduction targets or complete projects on schedule.


<PAGE>
<TABLE>
                        PART I. FINANCIAL INFORMATION

                  UNION CARBIDE CORPORATION AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
                                                         Millions of dollars
                                                     (Except per share figures)
                                                       Quarter ended June 30,  
                                                           1998        1997
<S>                                                      <C>         <C>
NET SALES                                                $ 1,459     $ 1,666

  Cost of sales, exclusive of depreciation and
    amortization                                           1,087       1,220
  Research and development                                    36          41
  Selling, administration and other expenses(a)               72          75
  Depreciation and amortization                               98          87
  Partnership income                                          27          37
  Other income - net                                          10          11

INCOME BEFORE INTEREST EXPENSE AND PROVISION FOR
  INCOME TAXES                                               203         291
  Interest expense                                            29          19

INCOME BEFORE PROVISION FOR INCOME TAXES                     174         272
  Provision for income taxes                                  51          79

INCOME OF CONSOLIDATED COMPANIES AND PARTNERSHIPS            123         193
  Minority interest                                            1           5
  Income (loss) from corporate investments 
    carried at equity                                         (4)          3

NET INCOME                                                   118         191
  Preferred stock dividend, net of income taxes                -           3

NET INCOME - COMMON STOCKHOLDERS                         $   118     $   188

Earnings per common share
  Basic                                                  $  0.87     $  1.46
  Diluted                                                $  0.85     $  1.28
Cash dividends declared per common share                 $  0.2250   $  0.1875

           

(a) Selling, administration and other expenses include:
      Selling                                            $    23     $    31
      Administration                                          29          34
      Other expenses                                          20          10
                                                         $    72     $    75

<FN>
The Notes to Condensed Consolidated Financial Statements on Pages 7 through 12 
should be read in conjunction with this statement.
</FN>
</TABLE>

<PAGE>
<TABLE>
                    UNION CARBIDE CORPORATION AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
                                                         Millions of dollars
                                                     (Except per share figures)
                                                      Six months ended June 30,
                                                           1998        1997
<S>                                                      <C>         <C> 
NET SALES                                                $ 3,020     $ 3,304

  Cost of sales, exclusive of depreciation and
    amortization                                           2,248       2,451
  Research and development                                    73          81
  Selling, administration and other expenses(a)              156         155
  Depreciation and amortization                              193         169
  Partnership income                                          64          72
  Other income - net                                          21          18

INCOME BEFORE INTEREST EXPENSE AND PROVISION FOR
  INCOME TAXES                                               435         538
  Interest expense                                            56          38

INCOME BEFORE PROVISION FOR INCOME TAXES                     379         500
  Provision for income taxes                                 110         145

INCOME OF CONSOLIDATED COMPANIES AND PARTNERSHIPS            269         355
  Minority interest                                            2           8
  Income (loss) from corporate investments 
    carried at equity                                         (7)          1

NET INCOME                                                   260         348
  Preferred stock dividend, net of income taxes                -           5

NET INCOME - COMMON STOCKHOLDERS                         $   260     $   343

Earnings per common share
  Basic                                                  $  1.91     $  2.63
  Diluted                                                $  1.86     $  2.31
Cash dividends declared per common share                 $  0.450    $  0.375

           

(a) Selling, administration and other expenses include:
      Selling                                            $    49     $    62
      Administration                                          58          63
      Other expenses                                          49          30
                                                         $   156     $   155

<FN>
The Notes to Condensed Consolidated Financial Statements on Pages 7 through 12 
should be read in conjunction with this statement.
</FN>
</TABLE>
<PAGE>
<TABLE>
                 UNION CARBIDE CORPORATION AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEET
<CAPTION>
                                                     Millions of dollars 
                                                      June 30,  Dec. 31,
                                                        1998      1997  
<S>                                                   <C>        <C>
ASSETS
  Cash and cash equivalents                           $   38     $   20
  Notes and accounts receivable                        1,002        993
  Inventories                                            619        604
  Other current assets                                   248        249
  Total current assets                                 1,907      1,866

  Property, plant and equipment                        8,003      7,707
  Less: Accumulated depreciation                       4,061      3,927
  Net fixed assets                                     3,942      3,780

  Companies carried at equity                            706        690
  Other investments and advances                          69         73
  Total investments and advances                         775        763

  Other assets                                           497        555

  Total assets                                        $7,121     $6,964


LIABILITIES AND STOCKHOLDERS' EQUITY
  Accounts payable                                    $  230     $  273
  Short-term debt and current portion of
    long-term debt                                       381        429
  Accrued income and other taxes                          46         75
  Other accrued liabilities                              658        727
  Total current liabilities                            1,315      1,504

  Long-term debt                                       1,705      1,458
  Postretirement benefit obligation                      457        464
  Other long-term obligations                            663        738
  Deferred credits                                       475        419
  Minority stockholders' equity in consolidated
    subsidiaries                                          35         33
  Stockholders' equity:
    Common stock - authorized - 500,000,000 shares
                 - issued     - 154,609,669 shares       155        155
    Additional paid-in capital                            56         47
    Other equity adjustments                              (5)        (3)
    Retained earnings                                  3,273      3,074
    Accumulated other comprehensive loss                (105)      (101)
    Unearned employee compensation - ESOP                (70)       (80)
    Less: Treasury stock, at cost-19,273,271 shares
                (17,666,164 shares in 1997)              833        744
  Total stockholders' equity                           2,471      2,348
  Total liabilities and stockholders' equity          $7,121     $6,964
<FN>
The Notes to Condensed Consolidated Financial Statements on Pages 7 through 12 
should be read in conjunction with this statement.
</FN>
</TABLE>

<PAGE>
<TABLE>
                 UNION CARBIDE CORPORATION AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
                                                    Millions of dollars
                                                 Six months ended June 30, 
                                                     1998         1997 
                                                  Increase (decrease) in
                                                cash and cash equivalents
<S>                                                 <C>          <C>
OPERATIONS
  Net income                                        $ 260        $ 348 
  Noncash charges (credits) to net income 
    Depreciation and amortization                     193          169 
    Deferred income taxes                              98           37 
    Other                                              44          (10) 
  Increase in working capital(a)                     (207)        (153)
  Long-term assets and liabilities                    (36)           6
Cash Flow From Operations                             352          397
INVESTING
  Capital expenditures                               (357)        (328) 
  Investments, advances and acquisitions
    (excluding cash acquired)                         (23)         (43) 
  Sale of fixed and other assets                        6            1
Cash Flow Used for Investing                         (374)        (370)
FINANCING
  Change in short-term debt (3 months or less)        (73)         (41)  
  Proceeds from short-term debt                        25           20
  Proceeds from long-term debt                        248           14
  Repayment of long-term debt                          (3)         (20)
  Issuance of common stock                             24           25 
  Purchase of common stock                           (129)        (176)
  Proceeds from subsidiary preferred stock              -          246
  Payment of dividends                                (61)         (66)
  Other                                                 9          (13)
Cash Flow From (Used for) Financing                    40          (11)
  Effect of exchange rate changes on cash and
  cash equivalents                                      -           (1)
  Change in cash and cash equivalents                  18           15
  Cash and cash equivalents beginning-of-period        20           57 
Cash and cash equivalents end-of-period             $  38        $  72 

Cash paid for interest and income taxes
  Interest (net of amount capitalized)              $  54        $  38 
  Income taxes                                      $  24        $  60 

_____________

(a) Net change in certain components of working capital (excluding 
    non-cash expenditures):

(Increase) decrease in current assets
  Notes and accounts receivable                 $  (1)       $ (31)
  Inventories                                     (15)          (3) 
  Other current assets                              -            6 
Decrease in payables and accruals                (191)        (125)
Increase in working capital                     $(207)       $(153)

<FN>
The Notes to Condensed Consolidated Financial Statements on Pages 7 through 12 
should be read in conjunction with this statement.
</FN>
</TABLE>

<PAGE>
                    UNION CARBIDE CORPORATION AND SUBSIDIARIES
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.  Consolidated Financial Statements

In the opinion of management, the accompanying unaudited condensed 
consolidated financial statements include all adjustments necessary for a 
fair statement of the results for the interim periods.  These adjustments 
consist of only normal recurring adjustments.  The accompanying 
statements should be read in conjunction with the Notes to Financial 
Statements of Union Carbide Corporation and Subsidiaries ("the 
corporation" or "UCC") in the 1997 annual report to stockholders.

Unrealized gains and losses resulting from translating foreign 
subsidiaries' assets and liabilities into U.S. dollars generally are 
recognized as part of "Comprehensive income", as described in Note 2, and 
are included in "Accumulated other comprehensive loss" on the Condensed 
Consolidated Balance Sheet until such time as the subsidiary is sold or 
substantially or completely liquidated.  Translation gains and losses 
relating to operations located in Latin American countries, where 
hyperinflation exists, and to international operations using the U.S. 
dollar as their functional currency are included in the Condensed 
Consolidated Statement of Income.  Effective January 1, 1998, Brazil is 
no longer considered a hyperinflationary economy.

Marketable securities have been reclassified from "Cash and cash 
equivalents" to "Other current assets" to conform to the current period's 
presentation.


2.  Comprehensive Income

In the first quarter of 1998, the corporation adopted Statement of 
Financial Accounting Standards ("Statement") No. 130, "Reporting 
Comprehensive Income," which establishes standards for reporting and 
displaying comprehensive income and its components in a full set of 
general-purpose financial statements.  The financial statements for 
earlier periods have been reclassified to reflect application of the 
provisions of Statement No. 130. 

(In millions of dollars)                   Quarter Ended   Six Months Ended
                                              June 30,          June 30,   
                                             1998    1997      1998    1997

Net income                                  $ 118   $ 191     $ 260   $ 348
Other comprehensive income/(loss):
  Unrealized gains/(losses) on 
    available-for-sale securities, net of 
    reclassification adjustment, net of tax    (2)      2         4      (1)
  Foreign currency translation adjustments    (16)     (1)       (8)    (17)

Total comprehensive income                  $ 100   $ 192     $ 256   $ 330



<PAGE>
3.  Earnings Per Share
<TABLE>
<CAPTION>
 (In millions of dollars                         Quarter Ended June 30,   Six Months Ended June 30,
  except per share amounts)                        1998         1997          1998         1997
<S>                                               <C>          <C>           <C>          <C>
Basic -
  Net income                                      $ 118        $ 191         $ 260        $ 348
      Less: Dividends on ESOP shares, pre-tax         -            3             -            6
            Appreciation on ESOP shares 
              redeemed for cash                       -            7             -           12
  Net income - common stockholders,
    for basic calculation                         $ 118        $ 181         $ 260        $ 330

  Weighted average number of shares 
    outstanding for basic calculation          136,132,527  124,687,095   136,502,193  125,542,213

  Earnings per share                              $0.87        $1.46         $1.91        $2.63

Diluted -
  Net income - common stockholders, 
    for basic calculation                         $ 118        $ 181         $ 260        $ 330
      Add: Dividends on ESOP shares, pre-tax          -            3             -            6
  Net income - common stockholders,
    for diluted calculation                       $ 118        $ 184         $ 260        $ 336

  Weighted average number of shares 
    outstanding for basic calculation          136,132,527  124,687,095   136,502,193  125,542,213
      Add: Effect of stock options               3,772,915    4,074,872     3,653,583    4,151,185
           Shares issuable upon conversion of 
             UCC's convertible ESOP shares               -   15,593,263             -   15,722,461
                                               139,905,442  144,355,230   140,155,776  145,415,859

  Earnings per share                              $0.85        $1.28         $1.86        $2.31
</TABLE>

4.  Inventories
                                                     Millions of dollars  
                                                     June 30,     Dec. 31,
                                                       1998         1997  
Raw materials and supplies                            $   103      $   135
Work in process                                            49           62
Finished goods                                            467          407
                                                      $   619      $   604


5.  Long-Term Debt

In June 1998 the corporation completed a $250 million public offering of 
6.25 percent debentures due June 15, 2003.  These debentures pay interest 
semi-annually in June and December.


6.  Common Stock

Since inception of its 60 million common share repurchase program through 
June 30, 1998, the corporation has repurchased 52.0 million shares 
(2.7 million during the first six months of 1998) at an average effective 
price of $35.36 per share.  The corporation intends to acquire additional 
shares from time to time at prevailing market prices, at a rate consistent 
with the combination of corporate cash flow and market conditions.  


<PAGE>
In conjunction with the corporation's common stock buyback program, put 
options were sold in a series of private placements entitling the holders 
to sell 12.9 million shares of common stock to UCC, at specified prices 
upon exercise of the options.  Since inception of this program, through 
June 30, 1998, options representing 9.8 million common shares have expired 
unexercised, while options representing 3.1 million shares were exercised 
for $129 million, or an average price of $40.94 per share.  There were no 
outstanding options at June 30, 1998.

Premiums received since the inception of the program, recorded as 
additional paid-in capital, have reduced the average price of repurchased 
shares from $35.62 per share to $35.36 per share.


7.  Commitments and Contingencies

The corporation has entered into three major agreements for the purchase 
of ethylene-related products and two other purchase agreements in the U.S. 
and Canada.  The net present value of the fixed and determinable portion 
of these obligations at June 30, 1998 totaled $272 million.

The corporation is subject to loss contingencies resulting from 
environmental laws and regulations, which include obligations to remove or 
remediate the effects on the environment of the disposal or release of 
certain wastes and substances at various sites.  The corporation has 
established accruals in current dollars for those hazardous waste sites 
where it is probable that a loss has been incurred and the amount of the 
loss can be reasonably estimated.  The reliability and precision of the 
loss estimates are affected by numerous factors, such as different stages 
of site evaluation, the allocation of responsibility among potentially 
responsible parties and the assertion of additional claims.  The 
corporation adjusts its accruals as new remediation requirements are 
defined, as information becomes available permitting reasonable estimates 
to be made, and to reflect new and changing facts.

At June 30, 1998, the corporation had established environmental remediation 
accruals in the amount of $237 million.  These accruals have two components, 
estimated future expenditures for site investigation and cleanup and 
estimated future expenditures for closure and postclosure activities.  In 
addition, the corporation had environmental loss contingencies of 
$151 million.

The corporation has sole responsibility for the remediation of 
approximately 40 percent of its environmental sites.  These sites are well 
advanced in the investigation and cleanup stage.  The corporation's 
environmental accruals at June 30, 1998 included $185 million for these 
sites, of which $74 million was for estimated future expenditures for site 
investigation and cleanup and $111 million was for estimated future 
expenditures for closure and postclosure activities.  In addition, 
$83 million of the corporation's environmental loss contingencies related 
to these sites.  The two sites with the largest total potential cost to 
the corporation are nonoperating sites.  Of the above accruals, these 
sites accounted for $36 million, of which $17 million was for estimated 
future expenditures for site investigation and cleanup and $19 million was 
for estimated future expenditures for closure and postclosure activities.  
In addition, $51 million of the above environmental loss contingencies 
related to these sites.

<PAGE>
The corporation does not have sole responsibility at the remainder of its 
environmental sites.  All of these sites are in the investigation and 
cleanup stage.  The corporation's environmental accruals at June 30, 1998 
included $52 million for estimated future expenditures for site 
investigation and cleanup at these sites.  In addition, $68 million of the 
corporation's environmental loss contingencies related to these sites.  
The largest of these sites is also a nonoperating site.  Of the above 
accruals, this site accounted for $9 million for estimated future 
expenditures for site investigation and cleanup.  In addition, $9 million 
of the above environmental loss contingencies related to this site.

In 1997, worldwide expenses of continuing operations related to 
environmental protection for compliance with Federal, state and local laws 
regulating solid and hazardous wastes and discharge of materials to air 
and water, as well as for waste site remedial activities, totaled $100 
million.  Expenses in 1996 and 1995 were $110 million and $138 million, 
respectively.  While estimates of the costs of environmental protection 
for 1998 are necessarily imprecise, the corporation estimates that the 
level of these expenses will be similar to that experienced in 1997.

The corporation has severally guaranteed 45 percent (approximately 
$582 million at June 30, 1998) of EQUATE Petrochemical Company's debt and 
working capital financing needs until certain completion and financial 
tests are achieved.  If these tests are met, a $54 million several 
guarantee will provide ongoing support thereafter.  The corporation also 
severally guaranteed certain sales volume targets until EQUATE's sales 
capabilities are proved.  In addition, the corporation has pledged its 
shares in EQUATE as security for EQUATE's debt.  The corporation has 
political risk insurance coverage for its equity investment and, through 
September 30, 1998, substantially all of its guarantee of EQUATE's debt.  
The corporation is in the process of extending the political risk 
insurance for its debt guarantee through March 31, 1999.

The corporation had additional contingent obligations at June 30, 1998 of 
$61 million, of which $27 million related to guarantees of debt.

The corporation is one of a number of defendants named in approximately 
4,900 lawsuits in both Federal and state courts, some of which have more 
than one plaintiff, involving silicone breast implants.  The corporation 
was not a manufacturer of breast implants but did supply generic bulk 
silicone materials to certain manufacturers.  Also, the corporation in 
1990 acquired and in 1992 divested the stock of a small specialty 
silicones company that, among other things, supplied silicone gel 
intermediates and silicone dispersions for breast implants.  In 1993, 
most of the suits that were brought in Federal courts were consolidated 
for pre-trial purposes in the United States District Court, Northern 
District of Alabama.

In 1995, the District Court approved a settlement program proposed by 
certain defendants, including the corporation.  In August 1997, the court 
ruled that all claims based solely on the supply of generic bulk silicone 
materials should be dismissed against the corporation.  That decision is 
final with respect to cases in Federal courts, but does not affect the 
corporation's participation in the settlement program.  The corporation 
believes that after probable insurance recovery neither the settlement nor 
litigation outside the settlement will have a material adverse effect on 
the consolidated financial position of the corporation.

<PAGE>
In addition to the above, the corporation and its consolidated subsidiaries 
are involved in a number of legal proceedings and claims with both private 
and governmental parties.  These cover a wide range of matters including, 
but not limited to, product liability; trade regulation; governmental 
regulatory proceedings; health, safety and environmental matters; 
employment; patents; contracts and taxes.  In some of these legal 
proceedings and claims, the cost of remedies that may be sought or damages 
claimed is substantial.

The corporation has recorded nonenvironmental litigation accruals of 
$119 million, and related insurance recovery receivables of $114 million.  
At June 30, 1998, the corporation had nonenvironmental litigation loss 
contingencies of $68 million. 

While it is impossible at this time to determine with certainty the 
ultimate outcome of any of the legal proceedings and claims referred to in 
this note, management believes that adequate provisions have been made for 
probable losses with respect thereto and that such ultimate outcome, after 
provisions therefor, will not have a material adverse effect on the 
consolidated financial position of the corporation, but could have a 
material effect on consolidated results of operations in a given quarter 
or year.  Should any losses be sustained in connection with any of such 
legal proceedings and claims, in excess of provisions therefor, they will 
be charged to income in the future.


8.  Other Accounting Changes

Effective January 1, 1998 the corporation adopted Statement No. 131, 
"Disclosures About Segments of an Enterprise and Related Information," and 
Statement No. 132, "Employers' Disclosures about Pensions and Other 
Postretirement Benefits."  These Statements address presentation and 
disclosure matters and will have no impact on the corporation's financial 
position or results of operations.  As required by Statement 131 and 
Statement 132, compliance with the respective reporting disclosures will 
be reflected in the corporation's 1998 Annual Report on Form 10-K.

In 1998, the Financial Accounting Standards Board issued Statement 
No. 133, "Accounting for Derivative Instruments and Hedging Activities."  
It requires that an entity recognize all derivative instruments as either 
assets or liabilities in the statement of financial position and measure 
those instruments at fair value.  This statement is effective for all 
fiscal quarters of fiscal years beginning after June 15, 1999.  The 
corporation is currently evaluating the effect this statement will have on 
its financial position and results of operations in the period of 
adoption.

In 1998, the American Institute of Certified Public Accountants ("AICPA") 
issued Statement of Position ("SOP") 98-1, "Accounting for the Costs of 
Computer Software Developed or Obtained for Internal Use."  SOP 98-1 is 
effective for financial statements for fiscal years beginning after 
December 15, 1998.  The corporation is currently evaluating the effect 
this SOP will have on its financial position and results of operations in 
the period of adoption.


<PAGE>
Also in 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of Start-up 
Activities."  This SOP requires the expensing of certain costs such as pre-
operating expenses and organizational costs associated with the corporation's 
start-up activities, and is effective for years beginning after December 15, 
1998.  The effect of adoption is required to be accounted for as a cumulative 
effect of change in accounting principle. The corporation is still evaluating 
the effect of this statement on its results of operations and financial 
position.  The corporation anticipates that the amount recognized as a 
cumulative effect of change in accounting principle may be material to the 
results of operations in the quarter in which the SOP is adopted, but should 
not be material to the corporation's annual results of operations.

The corporation may consider early adoption of one or more of the 
preceding pronouncements.



<PAGE>
              MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                          AND RESULTS OF OPERATIONS

Overview

The corporation reported second quarter 1998 net income available to common 
stockholders of $118 million, or $0.85 per diluted share, ($0.87 per basic 
share). For the first six months of 1998, net income available to common 
stockholders was $260 million, or $1.86 per diluted share, ($1.91 per basic 
share).  

For the corresponding quarter in 1997, the corporation reported net income 
available to common stockholders of $188 million, or $1.28 per diluted share, 
($1.46 per basic share).  For the first six months of 1997, net income 
available to common stockholders was $343 million, or $2.31 per diluted share, 
($2.63 per basic share).

The corporation's earnings for the quarter and six month periods ended June 
30, 1998 decreased compared to the same periods in 1997.  Decreases in net 
sales and operating profit were driven by reduced customer volumes, primarily 
in solvents, intermediates and monomers and polyethylene resin product lines, 
coupled with declines in Basic Chemicals & Polymers average selling prices.  
The effect of reduced average selling prices and volumes was partially offset 
by lower raw material costs as compared with the three and six month periods 
ended June 30, 1997.  Operating profit for both the three and six month 
periods ended June 30, 1998 was additionally impacted negatively by variations 
in quarterly licensing sales activity both for the corporation as well as the 
corporation's UOP joint venture, while net income available to common 
stockholders for the same periods was further impacted by additional interest 
expense and increased losses associated with the start-up of EQUATE, the 
corporation's Kuwait-based petrochemical joint venture.

Average selling prices for the Basic Chemical & Polymers segment are likely to 
continue to decline in the third quarter of 1998 reflecting the combined 
impact of reduced Asian demand and additional industry capacity.  As a result, 
the corporation anticipates that Basic Chemicals & Polymers operating profit 
will decrease compared with the second quarter of 1998.  Operating profit for 
the Specialties & Intermediates segment will likely benefit from declines in 
raw material costs but will continue to be negatively impacted by the Asian 
economic downturn and the effect of a strong dollar.  The corporation's share 
of earnings for UOP is anticipated to be below prior year levels in the third 
quarter, followed by improvement in the fourth quarter.  The corporation's 
share of loss from corporate investments carried at equity will likely 
increase somewhat in the third quarter assuming continued deterioration of 
average selling prices of Basic Chemicals & Polymers products.  

The 1997 Union Carbide Corporation EPS Incentive Plan is designed to grant 
awards to a limited number of senior managers if the corporation achieves 
$4.00 or more diluted earnings per share performance during 1999 and 2000. 

<PAGE>
The plan requires these senior managers to put an amount equivalent to a 
portion of their annual base pay at risk, should diluted earnings per share 
not equal or exceed $4.00 in the years 1999 and 2000.  Because of the Asian 
crisis and other reasons, there is increasing uncertainty as to whether the 
goal of $4.00 is attainable, at least for 1999.  Therefore, while the 
corporation has not ruled out meeting that goal in either 1999 or 2000, there 
can be no assurance that the goal will be met.  Failure to meet the 
requirements of the plan will result in forfeiture of the amounts at risk.

The corporation regularly reviews its assets, including investments, with the 
objective of maximizing the deployment of resources.  In this regard, 
strategies or transactions implemented could result in material nonrecurring 
gains and losses.

Results of Operations

Net sales decreased 12.4 percent in the second quarter and 8.6 percent in the 
first half of 1998, compared to the same periods in 1997.  Average selling 
prices declined 10.3 percent for the second quarter and 6.3 percent for the 
first half of 1998 compared to the same periods in 1997.  While average 
selling prices decreased most significantly in the Basic Chemicals & Polymers 
segment, pricing in the Specialties & Intermediates segment was adversely 
affected by Asian economic conditions and the effect of the strengthening U.S. 
dollar on foreign exchange rates.  Customer volume declined 2.5 percent for 
the second quarter and 2.3 percent for the first half of 1998 as compared to 
similar periods in 1997 due mainly to declines in polyethylene, attributable 
in part to Gulf Coast railroad distribution problems, and to declines in 
solvents, intermediates and monomers, resulting from demand weakness in Asia.

Variable margin (net sales less variable manufacturing and distribution costs) 
was 45.6 percent and 45.3 percent for the current three and six month periods, 
respectively, compared to 44.5 percent and 43.4 percent, respectively, for the 
same periods in 1997.  These increases are related to changes in product mix 
within the Specialties & Intermediates segment toward the sale of higher 
margin items, offset by variable margin declines in the Basic Chemicals & 
Polymers products as average selling prices dropped at a faster rate than raw 
material costs.


Industry Segments

The corporation's operations are classified into two main business segments, 
Specialties & Intermediates and Basic Chemicals & Polymers. The Specialties & 
Intermediates segment includes the corporation's specialty chemicals and 
polymers product lines, licensing and solvents and chemical intermediates.  
The Basic Chemicals & Polymers segment includes the corporation's ethylene 
and propylene manufacturing operations as well as the production of first 
level ethylene and propylene derivatives - polyethylene, polypropylene, 
ethylene oxide and ethylene glycol.  The corporation's noncore operations and 
financial transactions are included in the Other segment.

Information about the corporation's operations in its business segments for 
the second quarter and six month periods of 1998 and 1997 follows. Sales of 
the Basic Chemicals & Polymers segment include intersegment sales, principally 
ethylene oxide, which are made at the estimated market value of the products 
transferred.  Operating profit represents income before interest expense and 
provision for income taxes.

<PAGE>
                                            Quarter ended     Six months ended
                                               June 30,           June 30,
Millions of dollars                         1998     1997      1998     1997 

                               Sales

Specialties & Intermediates                $1,060   $1,139    $2,180   $2,261
Basic Chemicals & Polymers                    480      604       998    1,201
Intersegment Eliminations                     (81)     (77)     (158)    (158)
Total                                      $1,459   $1,666    $3,020   $3,304

                          Operating Profit

Specialties & Intermediates                $  166   $  191    $  368   $  375 
Basic Chemicals & Polymers                     42      101        78      163
Other                                          (5)      (1)      (11)       - 
Total                                      $  203   $  291    $  435   $  538

                   Depreciation and Amortization

Specialties & Intermediates                $   61   $   55    $  121   $  106
Basic Chemicals & Polymers                     37       32        72       63
Total                                      $   98   $   87    $  193   $  169

                        Capital Expenditures

Specialties & Intermediates                $  131   $  103    $  221   $  191
Basic Chemicals & Polymers                     80       87       136      137
Total                                      $  211   $  190    $  357   $  328


Net sales of the Specialties & Intermediates segment decreased $79 million, or 
6.9 percent in the current quarter over the same quarter in 1997, and 
$81 million, or 3.6 percent in the current six month period as compared to the 
same six months of 1997.  Operating profit for the second quarter of 1998 
declined 13.1 percent to $166 million, from $191 million for the same quarter 
of 1997; operating profit was $368 million for the first half of 1998, versus 
$375 million for the comparable period in 1997.  For the three month period 
ended June 30, 1998, this segment's volume declined 3.1 percent, compared to 
the same period in 1997, coupled with a decline in average selling prices of 
3.9 percent.  For the first six months of 1998, average selling prices 
decreased 3.3 percent as compared to the same period of 1997, while volume 
remained essentially constant.  The most significant declines, for both the 
three and six month periods, are related to the solvents, intermediates and 
monomers product lines where the effect of the Asian economic downturn has 
significantly reduced volumes and average selling prices.

Net sales of the Basic Chemicals & Polymers segment decreased $124 million, or 
20.5 percent in the current quarter over the same quarter of 1997 and 
$203 million, or 16.9 percent in the first half of 1998 over the first half of 
1997.  Operating profit declined by $59 million, or 58.4 percent and 
$85 million, or 52.1 percent in the current quarter and the six month period 
ended June 30, 1998, respectively, compared to the same periods in 1997.  
These decreases were the result of a 23.0 percent and 15.7 percent decrease in 
average selling prices in the quarter and first six months of 1998, 
respectively, versus the comparable periods of 1997.  In addition to the 
decline in the average selling prices, customer volume levels decreased

<PAGE>
1.6 percent and 4.6 percent for the same periods.  Declines in customer 
volumes and average selling prices are related to declining market conditions 
of the industry coupled with difficulties in transporting commodity 
polyethylene resin products, via rail, from the corporation's U.S. Gulf Coast 
facilities.  Seasonal volume increases in ethylene glycol in North America and 
lower raw material costs mitigated the overall effect of these declines.

Partnership income decreased $10 million for the second quarter of 1998 
compared to the second quarter of 1997 due to variations in quarterly sales 
activity within UOP and continued costs, principally research and development, 
of Univation.  For the first half of 1998 partnership income decreased 
$8 million, as compared to the same period in 1997.  This decline represents a 
full six months of losses for Univation in 1998, compared to only three months 
of losses in 1997, coupled with decreased earnings in Petromont due to 
industry declines in average selling prices for polyethylene.

Depreciation and amortization increased $11 million to $98 million for the 
second quarter and $24 million to $193 million for the first half of 1998, 
compared to similar periods in 1997.  The increase is principally the result 
of depreciation associated with completed capital projects.

Interest expense increased $10 million to $29 million for the second quarter 
of 1998 compared to the second quarter a year ago and increased $18 million in  
the first half of 1998 compared to the first half of 1997, as the result of 
increased debt levels and a reduction in capitalized interest associated with 
the corporation's capital program.

Income (loss) from corporate investments carried at equity decreased 
$7 million to a loss of $4 million in the second quarter of 1998, from income 
of $3 million in the second quarter of 1997.  For the first half of 1998, 
income (loss) from corporate investments carried at equity was a loss of 
$7 million compared to income of $1 million in the first half of 1997.  Lower 
earnings in the three and six month periods are mainly attributable to reduced 
earnings in Polimeri Europa as lower average selling prices of resin products 
more than offset increases in volumes and lower raw material costs. 

Estimates of future expenses related to environmental protection for 
compliance with Federal, state and local laws regulating solid and hazardous 
wastes and discharge of materials to air and water, as well as for waste site 
remedial activities have not changed materially since December 31, 1997.  The 
reliability and precision of the loss estimates are affected by numerous 
factors, such as different stages of site evaluation, the allocation of 
responsibility among potentially responsible parties and the assertion of 
additional claims.  The corporation's environmental exposures are discussed in 
more detail in the "Commitments and Contingencies" footnote to the financial 
statements on pages 9 through 11 of this report on Form 10-Q.

The corporation is named as one of a number of defendants in lawsuits 
involving silicone gel breast implants.  The corporation supplied bulk 
silicone materials to certain companies that at various times were involved in 
the manufacture of breast implants.  These cases are discussed in more detail 
in the "Commitments and Contingencies" footnote to the financial statements on 
pages 9 through 11 of this report on Form 10-Q.


<PAGE>
Accounting Changes

Effective January 1, 1998 the corporation adopted Statement of Financial 
Accounting Standards ("Statement") No. 130, "Reporting Comprehensive Income," 
Statement No. 131, "Disclosures About Segments of an Enterprise and Related 
Information," and Statement No. 132, "Employers' Disclosures about Pensions 
and Other Postretirement Benefits."  These statements address presentation and 
disclosure matters and will have no impact on the corporation's financial 
position or results of operations.  The corporation has complied with the 
disclosure requirements of Statement 130 in the "Comprehensive Income" 
footnote to the financial statements on page 7 of this report on Form 10-Q.  
As required by Statement 131 and Statement 132, compliance with the respective 
reporting disclosures will be reflected in the corporation's 1998 Annual 
Report on Form 10-K.

In 1998, the Financial Accounting Standards Board issued Statement No. 133, 
"Accounting for Derivative Instruments and Hedging Activities."  It requires 
that an entity recognize all derivative instruments as either assets or 
liabilities in the statement of financial position and measure those 
instruments at fair value.  This statement is effective for all fiscal 
quarters of fiscal years beginning after June 15, 1999.  The corporation is 
currently evaluating the effect this statement will have on its financial 
position and results of operations in the period of adoption.

In 1998, the American Institute of Certified Public Accountants ("AICPA") 
issued Statement of Position ("SOP") 98-1, "Accounting for the Costs of 
Computer Software Developed or Obtained for Internal Use."  SOP 98-1 is 
effective for financial statements for fiscal years beginning after December 
15, 1998.  The corporation is currently evaluating the effect this SOP will 
have on its financial position and results of operations in the period of 
adoption.

Also in 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of Start-up 
Activities."  This SOP requires the expensing of certain costs such as pre-
operating expenses and organizational costs associated with the corporation's 
start-up activities, and is effective for years beginning after December 15, 
1998.  The effect of adoption is required to be accounted for as a cumulative 
effect of change in accounting principle. The corporation is still evaluating 
the effect of this statement on its results of operations and financial 
position.  The corporation anticipates that the amount recognized as a 
cumulative effect of change in accounting principle may be material to the 
results of operations in the quarter in which the SOP is adopted, but should 
not be material to the corporation's annual results of operations.

The corporation may consider early adoption of one or more of the preceding 
pronouncements.


Year 2000 Issue

Most of the corporation's computer and process control systems were designed 
to use only two digits to represent years.  Thus they may not recognize "00" 
as representing the year 2000, but rather 1900, which could result in errors 
or system failures.  These systems must be corrected in a timely manner to 
remain functional.


<PAGE>
The corporation is addressing the year 2000 issue in several ways.  Since 
1995, the corporation has expended significant funds to upgrade the bulk of 
its domestic commercial computer systems to enhance the information available 
to the corporation.  This upgrade will correct the year 2000 issue for the 
computer systems it replaces.  The upgrade is being implemented in three 
parts, the first of which, covering finance and control, commenced operation 
in January 1998.  The second part, plant maintenance and material management, 
is currently being implemented on a plant by plant basis and is scheduled for 
completion by year end.  The third part, supply chain, will be implemented in 
the fourth quarter of this year.  Additionally, the infrastructure to support 
the international commercial system upgrade will be implemented in the third 
quarter of 1999 and will correct most of the year 2000 international 
infrastructure problems. 

A project to consolidate environmental compliance reporting is underway, and 
is scheduled to be completed in 1999.  This new system will also correct year 
2000 problems for those systems it replaces.

The corporation is addressing the year 2000 issues in the balance of its 
domestic and international internal processes, including hardware, software 
and control systems.  The corporation has inventoried and prioritized 
potentially affected systems and several different repair projects are 
underway.  For example, repairs to the corporation's international finance and 
order management system, which began in 1997, have already been implemented in 
many of the corporation's world area offices, with the balance to be completed 
by year end.  Other projects are at various stages based largely upon the 
importance of the system to the corporation and the size and complexity of the 
repairs.  To a large extent, the path forward is known for systems with 
problems and projects have been or are being defined to correct them.  The 
corporation estimates its external worldwide expenditures related to this year
2000 work could range between $50 and $60 million over the life of the project.
The corporation expects approximately 55 percent of the estimated expenditures 
will relate to repairing or upgrading current systems and 45 percent will 
relate to replacement of existing hardware and software.  To date 
approximately $7 million of this amount has been incurred.  The estimates 
explained in this paragraph do not include the upgrade of commercial systems 
and the environmental compliance project noted above.  The corporation expects 
to have resolved internal systems year 2000 issues that could impact 
operational sustainability by the third quarter of 1999.

Union Carbide is also reviewing its external relationships to address 
potential year 2000 impacts arising from interfaces with customers, suppliers 
and service providers.  The corporation is currently communicating with its 
significant suppliers and key customers to assess their ability to meet their 
sales and purchasing obligations despite the year 2000 issue, and will 
continue to monitor this into the year 2000.

Contingency plans are being considered and will be in place, as required, by 
the third quarter of 1999 in the event that the corporation is at risk in 
regard to suppliers, customers or its own internal hardware and software.  
Contingency plans will include, but will not be limited to, consideration of 
alternative sources of supply, customer communication plans, and plant and 
business response plans.

The corporation believes the year 2000 project will be completed prior to the 
year 2000.  However, considerable work remains to be accomplished in a limited 
period of time and unforeseen difficulties may arise which could adversely 
affect the corporation's ability to complete its systems modifications

<PAGE>
correctly, completely, on time and/or within its cost estimate.  In addition, 
there can be no assurance that customers, suppliers and service providers on 
which the corporation relies will resolve their year 2000 issues accurately, 
thoroughly and on time. Failure to complete the year 2000 project by the year 
2000 could have a material adverse affect on future operating results or 
financial condition.


Financial Condition - June 30, 1998 

Cash flow from operations for the first six months of 1998 was $352 million, 
down from $397 million in the first six months of 1997.  The decline results 
primarily from an increase in working capital primarily attributable to a 
decrease in payables and accruals and an increase in long-term assets and 
liabilities partially offset by an increase in the total of net income and 
non-cash charges (credits) to net income.

Cash flow used for investing totaled $374 million, an increase of $4 million 
from $370 million in the comparable period of 1997 principally due to lower 
investments, advances and acquisitions in 1998, offset by an increase in 
capital expenditures.  Funding of major capital projects in the first half of 
1998 included continuing work on an olefins expansion, a new butanol unit and 
a new CARBOWAX polyethylene glycol and TERGITOL surfactants facility, an 
ethanolamine unit and an olefins expansion, all at Taft, La., a new olefins 
facility, being built jointly with NOVA Chemicals Ltd., and a polyolefins 
project, both in Canada, as well as the upgrade of information technology 
infrastructure.  Major capital projects funded in the first six months of 1997 
included work on the new CARBOWAX polyethylene glycol and TERGITOL surfactants 
facility, an ethanolamine unit and olefins expansion, all at Taft, La., and 
the continuing work on the corporation's upgrade of information technology 
infrastructure.

Cash flow from financing in the first half of 1998 was $40 million in 
comparison to cash flow used for financing of $11 million in the first half of 
1997.  The first half of 1998 included net proceeds of $248 million from the 
issuance of 6.25 percent public debentures, due June 15, 2003, compared to the 
first half of 1997 which included $246 million net proceeds from the issuance 
of preferred stock of a subsidiary.  Common stock repurchases for the first 
six months of 1998 totaled 2.7 million shares for cash of $126 million under 
the existing common stock repurchase program.  Additional common stock 
repurchases, not included in the repurchase program, totaled $3 million in 
cash.  The corporation intends to acquire additional shares from time to time 
at prevailing market rates consistent with the combination of corporate cash 
flow and market conditions.  Cash dividends for the first half of 1998 totaled 
$61 million, while net repayments of debt, excluding the June 1998 issuance of 
public debentures, totaled $51 million.  

In April 1998, the corporation and PETRONAS, the national oil company of 
Malaysia, agreed to form three joint venture companies that will build and 
operate a 600,000 metric-tons-per-year ethylene plant, a 385,000 
metric-tons-per-year ethylene oxide plant, and a multiple Specialties & 
Intermediates derivatives plant in Kerteh, Terengganu, Malaysia.  The joint 
ventures' primary marketing focus will be in Southeast Asia.  The corporation 
anticipates funding its approximate $500 million share of the cost of the 
complex through its 2001 planned startup date with internally generated funds 
and external debt.


<PAGE>
The corporation's ratio of debt to total capital increased to 45.4 percent at 
June 30, 1998 from 44.2 percent at December 31, 1997.  At June 30, 1998 there 
were no outstanding borrowings under the existing major bank credit agreement 
aggregating $1 billion.  The corporation filed with the Securities and 
Exchange Commission a shelf registration statement covering $500 million of 
public debentures which became effective on July 31, 1998.

<PAGE>
                         PART II. OTHER INFORMATION


Item 1.  Legal Proceedings

         See Note 7 to the corporation's consolidated financial statements
         on pages 9 through 11 of this report on Form 10-Q.


Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits

              The following exhibits are filed as part of this report:

                   3 - Restated Articles of Incorporation, amended
                       as of June 25, 1998.

                  27 - Financial Data Schedule.

         (b)  No reports on Form 8-K were filed for the three months ended
              June 30, 1998.



<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.


                                                 UNION CARBIDE CORPORATION
                                                       (Registrant)




Date:  August 13, 1998                       By: /s/John K. Wulff     
                                                 JOHN K. WULFF
                                                 Vice-President, Chief
                                                 Financial Officer and
                                                 Controller


<PAGE>
                                EXHIBIT INDEX



Exhibit                                                             Page
  No.                             Exhibit                            No. 

   3        Restated Articles of Incorporation, amended as of
            June 25, 1998                                            24

  27        Financial Data Schedule                                  28