Page 1 of 165
                              Index to Exhibits-Pages 21-31

             SECURITIES AND EXCHANGE COMMISSION
                   Washington, D.C.  20549

                          FORM 10-Q

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

For the quarterly period ended  March 30, 1997 

                             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    1-3634    


                    CONE MILLS CORPORATION                   
   (Exact name of registrant as specified in its charter)

    North Carolina                       56-0367025          
(State or other jurisdiction of         (I.R.S. Employer
  incorporation or organization)        Identification No.)

3101 North Elm Street, Greensboro, North Carolina   27408    
(Address of principal executive offices)      (Zip Code)

                        (910) 379-6220                       
    (Registrant's telephone number, including area code)

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

Number of shares of common stock outstanding as of May 1,
1997:  26,099,533 shares.

                           Page 1
<PAGE>
FORM 10-Q

                   CONE MILLS CORPORATION

                            INDEX

                                                          Page
                                                          Number

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

       Consolidated Condensed Statements of Operations
         Thirteen weeks ended March 30, 1997 and
         March 31, 1996
         (Unaudited) . . . . . . . . . . . . . . . . . . . 3

       Consolidated Condensed Balance Sheets
         March 30, 1997 and March 31, 1996
         (Unaudited) and December 29, 1996 . . . . . . . . 4 & 5

       Consolidated Condensed Statements of
       Stockholders' Equity
         Thirteen weeks ended March 30, 1997 and
         and March 31, 1996 (Unaudited). . . . . . . . . . 6

       Consolidated Condensed Statements of
       Cash Flows
         Thirteen weeks ended March 30, 1997 and
         and March 31, 1996 (Unaudited). . . . . . . . . . 7

       Notes to Consolidated Condensed Financial
       Statements (Unaudited). . . . . . . . . . . . . . . 8

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations . . 13


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings . . . . . . . . . . . . . . . . 18
Item 6.  Exhibits and Reports on Form 8-K. . . . . . . . . 20

                           Page 2
<PAGE>
FORM 10-Q
PART I
Item 1.

                          CONE MILLS CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

                       (amounts in thousands, except per share data)
<TABLE>
<S>                                                                       <C>               <C>
                                                                              Thirteen          Thirteen
                                                                             Weeks Ended       Weeks Ended
                                                                           March 30, 1997    March 31, 1996
                                                                             (Unaudited)       (Unaudited)

Net Sales                                                                    $   174,714      $    199,282

Operating Costs and Expenses:
  Cost of sales                                                                  148,059           161,236
  Selling and administrative                                                      18,304            21,116
  Depreciation                                                                     6,671             7,136
  Restructuring                                                                      655            (4,675)

                                                                                 173,689           184,813

Income from Operations                                                             1,025            14,469

Other Income (Expense):
  Interest income                                                                    188                96
  Interest expense                                                                (3,683)           (3,837)

                                                                                  (3,495)           (3,741)

Income (Loss) before Income Taxes (Benefit) and Equity
  in Earnings (Loss) of Unconsolidated Affiliate                                  (2,470)           10,728

Income Taxes (Benefit)                                                              (988)            3,755

Income (Loss) before Equity in Earnings (Loss) of 
  Unconsolidated Affiliate                                                        (1,482)            6,973

Equity in Earnings (Loss) of Unconsolidated Affiliate                               (513)              212

Net Income (Loss)                                                            $    (1,995)     $      7,185

Income (Loss) Available to Common Shareholders:
  Net Income (Loss)                                                          $    (2,715)     $      6,465

Earnings (Loss) Per Share - Fully Diluted:
  Net Income (Loss)                                                               $ (.10)            $ .24 

Weighted Average Common Shares and
  Common Share Equivalents Outstanding -
  Fully Diluted                                                                   26,237            27,462

</TABLE>
See Notes to Consolidated Condensed Financial Statements.

                                                             Page 3
<PAGE>
FORM 10-Q

Item 1.  (continued)
                        CONE MILLS CORPORATION AND SUBSIDIARIES
                         CONSOLIDATED CONDENSED BALANCE SHEETS

                 (amounts in thousands, except share and par value data)
<TABLE>
<S>                                                           <C>             <C>             <C>
                                                                 March 30,       March 31,     December 29,
       ASSETS                                                      1997            1996           1996
                                                               (Unaudited)     (Unaudited)       (Note)
   Current Assets:
     Cash                                                      $     1,148     $     1,447     $     1,018

     Accounts receivable - trade, less provision for
       doubtful accounts $1,250; $3,000; $3,000                     27,862          78,747          49,073

     Subordinated note receivable                                   31,292               -               -

     Inventories:
       Greige and finished goods                                    93,131          92,823          94,635
       Work in process                                              12,060          13,143          10,793
       Raw materials                                                14,300          11,794           7,231
       Supplies and other                                           26,000          32,599          26,874

                                                                   145,491         150,359         139,533

     Other current assets                                           12,716          13,781          14,794

              Total Current Assets                                 218,509         244,334         204,418

   Investments in Unconsolidated Affiliates                         33,631          37,087          34,144

   Other Assets                                                     39,819          41,815          40,746



   Property, Plant and Equipment:
     Land                                                           17,672          18,398          17,880
     Buildings                                                      83,025          81,821          83,048
     Machinery and equipment                                       320,577         304,024         319,271
     Other                                                          34,284          30,605          34,143

                                                                   455,558         434,848         454,342

       Less accumulated depreciation                               205,869         191,243         203,664

              Property, Plant and Equipment-Net                    249,689         243,605         250,678



                                                               $   541,648     $   566,841     $   529,986

</TABLE>
   Note:  The balance sheet at December 29, 1996, has been
   derived from the audited financial statements at that date.

   See Notes to Consolidated Condensed Financial Statements.

                                                      Page 4
<PAGE>
FORM 10-Q

Item 1.  (continued)
                       CONE MILLS CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED CONDENSED BALANCE SHEETS

                (amounts in thousands, except share and par value data)
<TABLE>
<S>                                                         <C>            <C>              <C>
                                                               March 30,      March 31,      December 29,
      LIABILITIES AND STOCKHOLDERS' EQUITY                       1997           1996            1996
                                                             (Unaudited)    (Unaudited)        (Note)

  Current Liabilities:
    Notes payable                                             $   25,190     $   11,391      $    5,267
    Current maturities of long-term debt                          10,754         11,096          10,754
    Accounts payable - trade                                      33,055         33,124          27,113
    Sundry accounts payable and accrued expenses                  44,121         44,779          52,770
    Deferred income taxes                                         23,594         26,317          23,667

      Total Current Liabilities                                  136,714        126,707         119,571

  Long-Term Debt                                                 150,079        161,420         149,968

  Deferred Items:
    Deferred income taxes                                         40,598         40,849          40,066
    Other deferred items                                          10,229          9,934          10,130

                                                                  50,827         50,783          50,196





  Stockholders' Equity:
    Class A Preferred Stock - $100 par value; authorized
      1,500,000 shares; issued and outstanding 383,948
      shares - Employee Stock Ownership Plan                      38,395         38,395          38,395
    Class B Preferred Stock - no par value; authorized 
      5,000,000 shares                                                 -              -               -
    Common Stock - $.10 par value; authorized 42,700,000
      shares; issued and outstanding 26,119,133 shares;
      1996, 27,383,933 shares and 26,301,233 shares                2,612          2,738           2,630
    Capital in excess of par                                      61,625         71,100          62,995
    Retained earnings                                            109,879        124,160         114,706
    Currency translation adjustment                               (8,483)        (8,462)         (8,475)

                Total Stockholders' Equity                       204,028        227,931         210,251



                                                              $   541,648     $  566,841     $  529,986
</TABLE>

  Note:  The balance sheet at December 29, 1996, has been
  derived from the audited financial statements at that date.

  See Notes to Consolidated Condensed Financial Statements.

                                                    Page 5
<PAGE>
FORM 10-Q
Item 1.  (continued)
                              CONE MILLS CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
                       THIRTEEN WEEKS ENDED MARCH 30, 1997 AND MARCH 31, 1996
                             (amounts in thousands, except share data)
                                          (Unaudited)
<TABLE>
<S>                                        <C>       <C>         <C>           <C>        <C>         <C>         <C>      
                                             Class A Preferred                             Capital in                Currency
                                                  Stock                 Common Stock         Excess     Retained   Translation
                                            Shares      Amount      Shares       Amount      of Par     Earnings    Adjustment

    Balance, December 29, 1996              383,948   $  38,395   26,301,233    $  2,630   $  62,995   $ 114,706     $  (8,475)
    Net loss                                      -           -            -           -           -      (1,995)            -
    Currency translation adjustment               -           -            -           -           -           -            (8)
    Class A Preferred Stock -
      Employee Stock Ownership Plan:
      Cash dividends paid                         -           -            -           -           -         (55)            -
      Dividends accrued                           -           -            -           -           -      (2,777)            -
    Common Stock: 
      Purchase of common shares                   -           -     (182,100)        (18)     (1,370)          -             -

    Balance, March 30, 1997                 383,948   $  38,395   26,119,133    $  2,612   $  61,625   $ 109,879     $  (8,483)




                                             Class A Preferred                             Capital in                Currency
                                                  Stock                 Common Stock         Excess     Retained   Translation
                                            Shares      Amount      Shares       Amount      of Par     Earnings    Adjustment

    Balance, December 31, 1995              383,948   $  38,395   27,380,409    $  2,738   $  71,090   $ 119,825     $  (9,923)
    Net income                                    -           -            -           -           -       7,185             -
    Currency translation adjustment -
      Sale of stock of affiliate                  -           -            -           -           -           -         1,461
    Class A Preferred Stock -
      Employee Stock Ownership Plan:
      Cash dividends paid                         -           -            -           -           -      (2,850)            -
    Common Stock: 
      Options exercised                           -           -        6,000           -          36           -             -
      Purchase of common shares                   -           -       (2,476)          -         (26)          -             -

    Balance, March 31, 1996                 383,948   $  38,395   27,383,933    $  2,738   $  71,100   $ 124,160     $  (8,462)

</TABLE>

    See Notes to Consolidated Condensed Financial Statements.
                                                   Page 6
<PAGE>
FORM 10-Q

Item 1. (continued)

                           CONE MILLS CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

                                  (amounts in thousands)
<TABLE>
<S>                                                                  <C>              <C>
                                                                        Thirteen         Thirteen
                                                                       Weeks Ended      Weeks Ended
                                                                      March 30, 1997   March 31, 1996
                                                                       (Unaudited)      (Unaudited)

Cash Flows Used In Operating Activities                                $    (8,044)     $   (16,647)

Cash Flows from Investing Activities:
   Proceeds from divestiture (a)                                                 -           40,053
   Capital expenditures                                                     (6,556)          (5,341)
   Other                                                                      (275)           1,486

     Net cash (used in) provided by investing activities                    (6,831)          36,198

Cash Flows from Financing Activities:
   Net payments - short-term loans                                          19,923            2,516
   Decrease in checks issued in excess of deposits                          (3,475)         (17,502)
   Other                                                                    (1,443)          (3,454)

     Net cash provided by (used in) financing activities                    15,005          (18,440)

     Net increase in cash                                                      130            1,111

Cash at Beginning of Period                                                  1,018              336

Cash at End of Period                                                  $     1,148      $     1,447


(a)Divestiture:
   Inventories                                                                          $    14,926
   Property, plant and equipment                                                             21,516
   Other                                                                                     (1,064)
   Gain on sale                                                                               4,675

     Proceeds from sale                                                                 $    40,053


Supplemental Disclosures of Additional Cash Flow Information:

Cash payments for:
   Interest, net of interest capitalized                               $     7,045      $     7,495

   Income taxes, net of refunds                                        $    (3,714)     $       103

Supplemental Schedule of Noncash Investing and Financing Activities:

   Receivable recorded from sale of division                           $     2,703      $     4,449

   Liability incurred for dividend payable                             $     2,777      $         -

</TABLE>

See Notes to Consolidated Condensed Financial Statements.

                                                    Page 7
<PAGE>
FORM 10-Q

Item 1.  (continued)



           CONE MILLS CORPORATION AND SUBSIDIARIES
    NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                       MARCH 30, 1997



Note 1.  Basis of Financial Statement Preparation

     The Cone Mills Corporation (the "Company") consolidated
     condensed financial statements for March 30, 1997 and
     March 31, 1996 are unaudited, but in the opinion of
     management reflect all adjustments necessary to present
     fairly the consolidated condensed balance sheets of Cone
     Mills Corporation and Subsidiaries at March 30, 1997,
     March 31, 1996, and December 29, 1996, and the related
     consolidated condensed statements of operations,
     stockholders' equity and cash flows for the thirteen
     weeks ended March 30, 1997 and March 31, 1996.  All
     adjustments are of a normal recurring nature.  The
     results are not necessarily indicative of the results to
     be expected for the full year.

     These statements should be read in conjunction with the
     audited financial statements and related notes included
     in the Company's annual report on Form 10-K for fiscal
     1996.
 
     Inventories are stated at the lower of cost or market. 
     The last-in, first-out (LIFO) method is used to value
     inventories of most domestically produced goods.  The
     first-in, first-out (FIFO) or average cost methods are
     used to value all other inventories.  Because amounts for
     inventories under the LIFO method are based on an annual
     determination of quantities as of the year-end, the
     inventories at March 30, 1997 and March 31, 1996 and
     related consolidated condensed statements of operations
     for the thirteen weeks then ended are based on certain
     estimates relating to quantities and cost as of the end
     of the fiscal year.

Note 2.  Securitization of Accounts Receivable

     On March 25, 1997, the Company entered into a one year
     agreement with the subsidiary of a major financial
     institution ("the purchaser") and Cone Receivables, LLC,

                           Page 8
<PAGE>
FORM 10-Q

Item 1.   (continued)

    NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


     a wholly owned subsidiary of Cone Mills Corporation,
     which allows the sale of up to $40 million undivided
     interest in eligible accounts receivable by Cone
     Receivables, LLC.  Cone Receivables, LLC, a qualifying
     special-purpose entity, meets the requirements for
     accounts receivable securitization in accordance with
     SFAS 125, "Accounting for Transfers and Servicing of
     Financial Assets and Extinguishments of Liabilities", and
     therefore is not a consolidated entity of Cone Mills. 
     Cone Mills accounts for the sale of receivables to Cone
     Receivables, LLC, as a true sale in accordance with SFAS
     125.

     At March 30, 1997, the Company had sold gross accounts
     receivable of $67 million, net of a $2 million provision
     for doubtful accounts receivable, to Cone Receivables,
     LLC.  The Company received $34 million in cash and a note
     receivable of $31 million.

     The Company acts as an agent for Cone Receivables, LLC,
     and the purchaser by performing record keeping and
     collection functions of receivables sold. The discount on
     receivables sold to Cone Receivables, LLC, is computed
     based upon a variable rate and the term of the
     receivables sold.  The discount on the sale of
     receivables is included in cost of sales.

     The provision for doubtful accounts receivable was
     reduced by $2 million to reflect the sale of receivables
     and their related provision to Cone Receivables, LLC. The
     remaining provision for doubtful accounts is deemed to be
     sufficient for receivables which are not securitized.

                           Page 9
<PAGE>
FORM 10-Q

Item 1.   (continued)

    NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS



Note 3.  Long-Term Debt
<TABLE>
<S>                             <C>        <C>        <C>     
                                           March 30, 1997      
                                             Current
                                   Total    Maturity   Long-Term
                                      (amounts in thousands)   

8% Senior Note                   $ 64,286    $10,714   $ 53,572
8-1/8% Debentures                  96,465          -     96,465
Other                                  82         40         42

Total                            $160,833    $10,754   $150,079

                                           March 31, 1996      
                                             Current           
                                   Total    Maturity   Long-Term
                                      (amounts in thousands)   

8% Senior Note                   $ 75,000    $10,714   $ 64,286
8-1/8% Debentures                  96,021          -     96,021
Capital Lease Obligation            1,374        344      1,030
Other                                 121         38         83

Total                            $172,516    $11,096   $161,420
</TABLE>

Note 4.   Class A Preferred Stock

     The dividend for Class A Preferred Stock payable March
     31, 1997, has been included in accrued expenses at March
     30, 1997. The 1998 dividend rate for Class A Preferred
     Stock is 7.85%, payable March 31, 1998.

                           Page 10
<PAGE>
FORM 10-Q
Item 1.   (continued)

    NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
<TABLE>
<S>                         <C>       <C>       <C>        <C>
Note 5.  Earnings (Loss) Per Share

                                  Thirteen           Thirteen
                                 Weeks Ended        Weeks Ended
                                 March 30, 1997    March 31, 1996  
                                         Fully                Fully
                              Primary   Diluted   Primary    Diluted 
                                    (amounts in thousands,
                                    except per share data)
Income (loss) from
 continuing operations       $(1,995)  $(1,995)  $  7,185   $ 7,185 
 Less:  Class A Preferred
        dividends             (  720)   (  720)     ( 720)    ( 720)

Adjusted net income (loss)   $(2,715)  $(2,715)  $  6,465   $ 6,465 

Weighted average common
 shares outstanding           26,237    26,237     27,381    27,381 
Common share equivalents            
 from assumed exercise
 of outstanding options,
 less shares assumed
 repurchased                       -         -         75        81 
 
Weighted average common
 shares and common share
 equivalents outstanding      26,237    26,237     27,456    27,462 

Earnings (loss) per common
 share and common share
 equivalent                   $( .10)   $( .10)    $  .24    $  .24
</TABLE>
Primary and fully diluted earnings (loss) per share have been
computed by dividing the net earnings (loss) available to
common stockholders by the sum of the weighted average common
shares and common share equivalents outstanding.  Common share
equivalents have been excluded when they would be
antidilutive.

                           Page 11
<PAGE>
FORM 10-Q

Item 1.   (continued)


    NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


Note 6.  Sale of Division

     In January 1996, the Company completed the sale of its
     polyurethane products division. The Company sold all
     inventory and substantially all of the property, plant,
     and equipment of this division. Proceeds of $40.1 million
     had been received at March 31, 1996. Gain of $4.7 million
     from disposal of this division was recognized in the
     first quarter 1996 financial statements as a
     restructuring item.


Note 7.  Restructuring Activities

     Restructuring costs of $0.7 million, incurred in the
     first quarter of 1997, related to the consolidation of
     operations from Cone's Granite Finishing Plant to its
     Carlisle facility.  Additional restructuring costs will
     be incurred during 1997 as the consolidation of
     facilities continues and the Granite plant is eventually
     closed.

                           Page 12
<PAGE>
FORM 10-Q

Item 2.

                   MANAGEMENT'S DISCUSSION
             AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

OPERATING RESULTS

First Quarter Ended March 30, 1997 Compared with First Quarter
Ended March 31, 1996.

While U.S. consumer spending in apparel and home furnishings
increased in the first quarter of 1997, Cone Mills continued
to experience value-added denim inventory adjustments in
certain customer segments and weak fashion demand for
decorative prints. 

Sales for the first quarter of 1997 were $174.7 million, down
12.3%, as compared with sales of $199.3 million for the first
quarter of 1996. After eliminating the sales of business units
included in the Company's restructuring plan, sales were off
approximately 8%. Lower sales in denim products and decorative
prints more than offset increased specialty sportswear sales.
International sales, primarily denims, were $44.5 million, or
25% of total sales, as compared with $52.6 million, or 26% of
sales, for the first quarter of 1996. 

Cone Mills had a net loss for the first quarter of 1997 of
$2.0 million, or $.10 per share after preferred dividends,
which included a pre-tax charge of $0.7 million associated
with the consolidation of the Granite operations into
Carlisle. For comparison, first quarter 1996 net income was
$7.2 million, or $.24 per share, including a pre-tax gain of
$4.7 million related to the sale of the Olympic Products
Division. 

Gross profit for the first quarter of 1997 (net sales less
cost of sales and depreciation) was 11.4% of sales, as
compared with 15.5% for the previous year. The decrease was
primarily the result of mix changes to more basic denim
products with lower margins, cost inefficiencies associated
with operating plants at less than capacity and pricing
pressures associated with temporary supply and demand
imbalances arising from excess inventories. 

                           Page 13
<PAGE>
FORM 10-Q

Item 2.   (continued)

Business Segments. Cone operates in two principal business
segments, apparel fabrics and home furnishings products. The
following table sets forth certain net sales and operating
income (loss) information. 
<TABLE>
<S>                   <C>      <C>        <C>      <C>
                                  First Quarter          
                             1997                1996    
                          (Dollar amounts in millions)
NET SALES 
  Apparel(1)           $ 148.4   84.9%     $ 165.7   83.2%
  Home Furnishings(2)     26.3   15.1         33.6   16.8
     Total             $ 174.7  100.0%     $ 199.3  100.0%

OPERATING INCOME (LOSS)(3)
  Apparel              $   6.1    4.1%     $  13.0    7.8%
  Home Furnishings        (3.5) (13.4)        (1.9)  (5.7)
  Restructuring            (.7)   -            4.7    -
</TABLE>
(1)  Apparel includes synthetic fabrics net sales of $2.7
     million and $6.0 million in 1997 and 1996, respectively.
(2)  Home furnishings includes Greeff's and real estate's net
     sales of $1.4 million in 1997, and Olympic's, Greeff's
     and real estate's net sales of $7.8 million in 1996. 
(3)  Operating income (loss) excludes general corporate
     expenses. Percentages reflect operating income (loss) as
     a percentage of segment net sales. 

  Apparel Fabrics. Apparel fabric segment sales for the first
  quarter of 1997 were $148.4 million, down 10.5% from the
  first quarter of 1996. Excluding sales of the synthetic
  fabrics business, which was sold in January of 1997,
  apparel fabric segment sales were down approximately 9%.
  Lower denim sales because of lower volume and prices
  accounted for the decrease. Average denim prices were down
  in the first quarter of 1997 as a result of a mix shift to
  more basic denims and price pressure from temporary
  industry supply and demand imbalances arising from excess 
  inventories. While unit sales of denim products continue to
  be strong at retail, excessive inventory build-up in
  certain segments are resulting in weak near-term sales of
  denim fabrics. Sales of specialty sportswear were up as
  compared with 1996.

  For the first quarter of 1997, the apparel segment had
  operating income of $6.1 million, or 4.1% of sales, as
  compared with income of $13.0 million, or 7.8% of sales, in

                             Page 14
<PAGE>
FORM 10-Q

Item 2.   (continued)

  the first quarter of 1996. All apparel manufacturing
  facilities operated at less than capacity as the Company
  attempted to control inventory levels. 

  Home Furnishings. For the first quarter of 1997, home
  furnishings segment sales were $24.9 million, excluding
  Olympic, Greeff and real estate, as compared with $25.8
  million in the first quarter of 1996. Lower sales in Cone
  Finishing and Cone Decorative Fabrics, partially offset by
  increased sales of Cone Jacquards, accounted for the
  decrease. The home furnishings segment had an operating
  loss of $3.5 million compared with a loss of $1.9 million
  for the first quarter of 1996. Home furnishings results
  were negatively impacted by the finishing division
  operating at less than capacity. 

Total Company selling and administrative expenses declined
from $21.1 million for the first quarter of 1996 to $18.3
million in the first quarter of 1997, the result of the sale
of the Olympic, Greeff and synthetic fabric operations as well
as a cost reduction program to reduce selling and
administrative expenses. Selling and administrative expenses
were 10.5% of sales in the first quarter of 1997 as compared
with 10.6% in the first quarter of 1996. 

Interest expense for the first quarter of 1997 was $3.7
million, down 4% from the first quarter of 1996. 

Equity in loss of Parras Cone, the joint venture plant in
Mexico, was $0.5 million. The loss was primarily the result of
operating at levels less than capacity. 

Even though the Company has seen some improvement in both
denim and specialty sportswear markets, second quarter results
will continue to be impacted by curtailed manufacturing
operating schedules and weak denim and home furnishings sales.
However, Cone continues to implement a five-point
profitability improvement program which includes focusing on
core businesses, aggressive marketing, cost reduction, the
reconfiguration of manufacturing operations and capital
conservation. 

Liquidity and Capital Resources

The Company's principal long-term capital components consist
of $64.3 million outstanding under a Note Agreement with The
Prudential Insurance Company of America (the "Term Loan"), its

                           Page 15
<PAGE>
FORM 10-Q

Item 2.   (continued)

8 1/8% Debentures issued on March 15, 1995 and due March 15,
2005 (the "Debentures"), and stockholders' equity. Primary
sources of liquidity are internally generated funds, an $80
million Credit Agreement with a group of banks with Morgan
Guaranty Trust Company of New York ("Morgan Guaranty") as
Agent Bank (the "Revolving Credit Facility"), and the $40
million Receivables Purchase Agreement (the "Receivables
Purchase Agreement") with Delaware Funding Corporation, an
affiliate of Morgan Guaranty. The Receivables Purchase
Agreement is a one year agreement entered into on March 25,
1997 with Delaware Funding Corporation and Cone Receivables,
LLC, a wholly owned subsidiary of Cone Mills Corporation. On
March 30, 1997, the Company had funds available of $86 million
under its Revolving Credit Facility and Receivables Purchase
Agreement.

During the first quarter of 1997, the Company generated cash
from operating activities before changes in working capital of
$6.1 million as compared with $11.9 million in the first
quarter of 1996. Working capital uses in the first quarter of
1997 were $14.1 million. Other uses of cash in the first
quarter of 1997 included $6.6 million for capital expenditures
and $1.4 million for the repurchase of 0.2 million shares of
common stock. 

Subsequent to the end of the first quarter of 1997, the
Company completed the sale of substantially all of the assets
of its real estate operation, including Cornwallis Development
Co., for approximately $20 million. Proceeds of the sale will
be used to repay short-term borrowings and for general
corporate purposes. 

The Company believes that the proceeds from the sale of its
real estate business, together with Cone's internally
generated operating funds and funds available under its credit
facilities, will be sufficient to meet its working capital,
capital spending, potential stock repurchases, and financing
needs for the foreseeable future. The Company's Revolving
Credit Facility matures in 1997. Based upon discussions with
financial institutions, management believes the Company can
enter into successor facilities that will provide adequate
liquidity with terms and conditions acceptable to the Company.

                           Page 16
<PAGE>
FORM 10-Q

Item 2.   (continued)

On March 30, 1997, the Company's long-term capital structure
consisted of $150.1 million of long-term debt and $204.0
million of stockholders' equity. For comparison, on March 31,
1996, the Company had $161.4 million of long-term debt and
$227.9 million of stockholders' equity. Long-term debt
(including current maturities of long-term debt) as a
percentage of long-term debt and stockholders' equity was 44%
on March 30, 1997 and 43% on March 31, 1996. 

Accounts and note receivables on March 30, 1997, were $59.2
million, down from $78.7 million at March 31, 1996. At March
30, 1997, the Company had sold gross accounts receivable of
$67 million, net of a $2 million provision for doubtful
accounts receivable, to Cone Receivables, LLC. The Company
received $34 million in cash and a note receivable of $31
million. At March 31, 1996, the Company had sold $25 million
of accounts receivable. The decrease in accounts and note
receivable was primarily due to lower sales levels, the
collection of receivables from business units sold and the
additional net amounts outstanding under the Receivables
Purchase Agreement. The Company adopted SFAS 125 "Accounting
for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities" during the first quarter of
1997. Receivables, including those sold pursuant to the
Receivables Purchase Agreement, represented 49 days of sales
outstanding at both March 30, 1997 and March 31, 1996. 

Inventories on March 30, 1997, were $145.5 million, down $4.9
million or 3.2% from March 31, 1996 levels. 

Capital spending in 1997 is budgeted at $44 million. Projects
include new weaving machines that replace 1970s vintage
weaving machines, link ring spinning, and additional looms for
the jacquard facility. Capital spending in the first  quarter
of 1997 was $6.6 million. 

The Company has an agreement with CIPSA to purchase up to an
additional 33% of the existing outstanding common stock of
Parras Cone for an amount of $20 million if CIPSA does not
meet certain financial obligations. 

Federal, state and local regulations relating to the workplace
and the discharge of materials into the environment continue
to change and, consequently, it is difficult to gauge the
total future impact of such regulations on the Company. 
Existing government regulations are not expected to cause a
material change in the Company's competitive position, 

                           Page 17
<PAGE>
FORM 10-Q

Item 2.   (continued)

operating results or planned capital expenditures. The Company
has an active environmental committee which fosters protection
of the environment and compliance with laws.

The Company is a party to various legal claims and actions.
Management believes that none of these claims or actions,
either individually or in the aggregate, will have a material
adverse effect on the financial condition of the Company.

"Safe Harbor" Statement under Section 27A of the Securities
Act of 1993, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. 

  Except for the historical information presented, the
  matters disclosed in the foregoing discussion and
  analysis and other parts of this report include forward-
  looking statements. These statements represent the
  Company's current judgment on the future and are subject
  to risks and uncertainties that could cause actual
  results to differ materially. Such factors include,
  without limitation: (i) the demand for textile products,
  including the Company's products, will vary with the U.S.
  and world business cycles, imbalances between consumer
  demand and inventories of retailers and manufacturers and
  changes in fashion trends, (ii) the highly competitive
  nature of the textile industry and the possible effects
  of reduced import protection and free-trade initiatives,
  (iii) the unpredictability of the cost and availability
  of cotton, the Company's principal raw material, and (iv)
  the Company's relationships with Levi Strauss as its
  major customer. For a further description of these risks
  see the Company's 1996 Form 10-K, "Item 1. Business -
  Competition, -Raw Materials and -Customers" and
  "Management's Discussion and Analysis of Results of
  Operations and Financial Condition -- Overview" of the
  Company's 1996 Annual Report to Shareholders incorporated
  by reference into Item 7. of the Form 10-K. Other risks
  and uncertainties may be described from time to time in
  the Company's other reports and filings with the
  Securities and Exchange Commission. 

                           PART II

Item 3.  Legal Proceedings

In November 1988, William J. Elmore and Wayne Comer (the
"Plaintiffs") former employees of the Company, instituted a
class action suit against the Company and certain other
defendants in which the Plaintiffs asserted a variety of 
                           Page 18
<PAGE>
FORM 10-Q


claims related to the Cone Mills Corporation 1983 ESOP (the
"1983 ESOP") and certain other employee benefit plans
maintained by the Company.  In March 1992, the United States
District Court in Greenville, South Carolina entered a
judgment in the amount of $15.5 million (including an
attorneys' fee award) against the Company with respect to an
alleged promise to make additional Company contributions to
the 1983 ESOP and all claims unrelated to the alleged promise
were dismissed.  The Company, certain individual defendants
and the Plaintiffs appealed.

On May 6, 1994, the United States Court of Appeals for the
Fourth Circuit, sitting en banc, affirmed the prior conclusion
of a panel of three of its judges and unanimously reversed the
$15.5 million judgment and unanimously affirmed all of the
District Court's rulings in favor of the Company.  However,
the Court of Appeals affirmed, by an equally divided court,
the District Court's holding that Plaintiffs should be allowed
to proceed on an alternative theory whether, subject to proof
of detrimental reliance, Plaintiffs could establish that a
letter to salaried employees on December 15, 1983 created an
enforceable obligation that could allow recovery on a theory
of equitable estoppel.  Accordingly, the case was remanded to
the District Court for a determination of whether the
Plaintiffs could establish detrimental reliance creating
estoppel of the Company.

On April 19, 1995, the District Court granted a motion by the
Company for summary judgment on the issues of equitable
estoppel and third-party beneficiary of contract which had
been remanded to it by the Court of Appeals.  The court ruled
that the Plaintiffs could not forecast necessary proof of
detrimental reliance.  The District Court, however, granted
Plaintiffs motion to amend the complaint insofar as they
sought to pursue a "new" claim for unjust enrichment, but
denied their motion to amend so far as they sought to add
claims for promissory estoppel and unilateral contract.  The
court further denied the Company's motion to decertify the
class.

The District Court held a hearing on July 24, 1995 to decide
on the merits Plaintiffs' lone remaining claim of unjust
enrichment, and in an order entered September 25, 1995, the
District Court dismissed that claim with prejudice.  On
October 20, 1995, the Plaintiffs appealed to the Court of
Appeals from the April 19, 1995 and September 25, 1995 orders
of the District Court.  Oral argument on Plaintiffs' appeal
was held in the Court of Appeals on October 31, 1996.  Due to 

                           Page 19
<PAGE>
FORM 10-Q

Item 3.   (continued)


the uncertainties inherent in the litigation process, it is
not possible to predict the ultimate outcome of this lawsuit. 
However, the Company has defended this matter vigorously, and
it is  the opinion of the Company's management that the
probability is remote that this lawsuit, when finally
concluded, will have a material adverse effect on the
Company's financial condition or results of operations.


Item 6.  Exhibits and Reports for Form 8-K

  None.

                          Page 20
<PAGE>
FORM 10-Q              INDEX TO EXHIBITS

Exhibit                                              Sequential
  No.      Description                               Page No. 

* 2.1      Receivables Purchase Agreement dated
           as of August 11, 1992, between the
           Registrant and Delaware Funding
           Corporation filed as Exhibit 2.01 to 
           the Registrant's report on Form 8-K
           dated August 13, 1992.

* 2.1(a)   Amendment to Receivables Purchase
           Agreement dated April 4, 1994, between
           the Registrant and Delaware Funding 
           Corporation filed as Exhibit 2.1 to
           the Registrant's report on Form 8-K
           dated March 1, 1995.

* 2.1(b)   Amendment to Receivables Purchase 
           Agreement dated June 7, 1994, between
           the Registrant and Delaware Funding
           Corporation filed as Exhibit 2.2 to
           the Registrant's report on Form 8-K
           dated March 1, 1995.

* 2.1(c)   Amendment to Receivables Purchase
           Agreement dated as of June 30, 1994, 
           between the Registrant and Delaware
           Funding Corporation filed as Exhibit
           2.1 to the Registrant's report on
           Form 10-Q for the quarter ended
           July 3, 1994.

* 2.1(d)   Amendment to Receivables Purchase
           Agreement dated as of November 15, 1994,
           between the Registrant and Delaware
           Funding Corporation filed as Exhibit
           2.4 to the Registrant's report on
           Form 8-K dated March 1, 1995.

* 2.1(e)   Amendment to Receivables Purchase
           Agreement dated as of June 30, 1995,
           between the Registrant and Delaware
           Funding Corporation filed as Exhibit
           2.1(e) to the Registrant's report on
           Form 10-Q for the quarter ended
           July 2, 1995.

                              Page 21
<PAGE>
FORM 10-Q              INDEX TO EXHIBITS

Exhibit                                              Sequential
  No.      Description                               Page No. 

* 2.1(f)   Amendment to Receivables Purchase
           Agreement dated as of December 31,
           1995, between the Registrant and
           Delaware Funding Corporation, 
           filed as Exhibit 2.1(f) to the
           Registrant's report on Form 10-K
           for the year ended December 31, 1995.

* 2.1(g)   Amendment to Receivables Purchase
           Agreement and Letter Agreement
           referred to therein dated as of
           June 24, 1996, between the Registrant
           and Delaware Funding Corporation filed
           as Exhibit 2.1(g) to Registrant's report
           on Form 10-K for the quarter ended
           June 30, 1996.

* 2.1(h)   Amendment to Receivables Purchase
           Agreement dated as of June 30, 1996,
           between the Registrant and Delaware
           Funding Corporation filed as Exhibit
           2.1(h)to the Registrant's report on
           Form 10-Q for the quarter ended
           September 29, 1996.

* 2.1(i)   Amendment to Receivables Purchase
           Agreement dated as of August 26, 1996,
           between the Registrant and Delaware
           Funding Corporation filed as Exhibit
           2.1(i) to the Registrant's report on
           Form 10-Q for the quarter ended
           September 29, 1996.

* 2.1(j)   Amendment to Receivables Purchase
           Agreement dated as of September 29,
           1996, between the Registrant and
           Delaware Funding Corporation filed
           as Exhibit 2.1(j) to the Registrant's
           report on Form 10-Q for the quarter
           end September 29, 1996.

  2.1(k)   Omnibus Termination and Release dated
           as of March 26, 1997, between the
           Registrant and Delaware Funding
           Corporation terminating the
           Receivables Purchase Agreement.                33

                             Page 22 
<PAGE>
FORM 10-Q              INDEX TO EXHIBITS

Exhibit                                              Sequential
  No.      Description                               Page No. 


  2.1(l)   Purchase Agreement between Registrant
           and Cone Receivables LLC dated as of
           March 25, 1997.                                36

  2.1(m)   Receivables Purchase Agreement dated
           as of March 25, 1997, among Cone
           Receivables LLC, as Seller, the
           Registrant, as Servicer, and
           Delaware Funding Corporation, as
           buyer.                                         76
           
* 2.2(a)   Investment Agreement dated as of 
           June 18, 1993, among Compania Industrial
           de Parras, S.A. de C.V., Sr. Rodolfo
           Garcia Muriel, and Cone Mills 
           Corporation, filed as Exhibit 2.2(a)
           to Registrant's report on Form 10-Q for 
           the quarter ended July 4, 1993, with
           exhibits herein numbered 2.2(b),(c),
           (d), (f), (g), and (j) attached.

* 2.2(b)   Commercial Agreement dated as of June
           25, 1993, among Compania Industrial de
           Parras, S.A. de C.V., Cone Mills
           Corporation and Parras Cone de Mexico,
           S.A., filed as Exhibit 2.2(b) to 
           Registrant's report on Form 10-Q for the
           quarter ended July 4, 1993.

* 2.2(c)   Guaranty Agreement dated as of June 25,
           1993, between Cone Mills Corporation and
           Compania Industrial de Parras, S.A. de
           C.V., filed as Exhibit 2.2(c) to 
           Registrant's report on Form 10-Q for the
           quarter ended July 4, 1993.                      

* 2.2(d)   Joint Venture Agreement dated as of
           June 25, 1993, between Compania 
           Industrial de Parras, S.A. de C.V., and
           Cone Mills (Mexico), S.A. de C.V. filed as
           Exhibit 2.2(d) to Registrant's report on  
           Form 10-Q for the quarter ended 
           July 4, 1993.

                              Page 23
<PAGE>
FORM 10-Q              INDEX TO EXHIBITS

Exhibit                                              Sequential
  No.      Description                               Page No. 

* 2.2(e)   First Amendment to Joint Venture
           Agreement dated as of June 14, 1995,
           between Compania Industrial de Parras,
           S.A. de C.V., and Cone Mills (Mexico),
           S.A. de C.V., filed as Exhibit 2.2(e)
           to the Registrant's report on Form 10-Q
           for the quarter ended July 2, 1995.

* 2.2(f)   Joint Venture Registration Rights
           Agreement dated as of June 25, 1993,
           among Parras Cone de Mexico, S.A.,
           Compania Industrial de Parras, S.A. de
           C.V. and Cone Mills (Mexico),
           S.A. de C.V. filed as Exhibit 2.2(e)
           to Registrant's report on Form 10-Q
           for the quarter ended July 4, 1993.

* 2.2(g)   Parras Registration Rights Agreement 
           dated as of June 25, 1993, between Compania
           Industrial de Parras, S.A. de C.V. and
           Cone Mills Corporation filed as Exhibit 
           2.2(f) to the Registrant's report on Form
           10-Q for the quarter ended July 4, 1993.

* 2.2(h)   Guaranty Agreement dated as of June 14,
           1995, between Compania Industrial de
           Parras, S.A. de C.V. and Cone Mills
           Corporation filed as Exhibit 2.2(h) to
           the Registrant's report on Form 10-Q
           for the quarter ended July 2, 1995.

* 2.2(i)   Guaranty Agreement dated as of June 15,
           1995, between Cone Mills Corporation
           and Morgan Guaranty Trust Company of
           New York filed as Exhibit 2.2(I) to
           the Registrant's report on Form 10-Q
           for the quarter ended July 2, 1995.

* 2.2(j)   Support Agreement dated as of June 25,
           1993, among Cone Mills Corporation, Sr.
           Rodolfo L. Garcia, Sr. Rodolfo Garcia
           Muriel and certain other person listed
           herein ("private stockholders") filed 
           as Exhibit 2.2(g) to Registrant's
           report on Form 10-Q for the quarter
           ended July 4, 1993.                       

                              Page 24
<PAGE>
FORM 10-Q              INDEX TO EXHIBITS

Exhibit                                              Sequential
  No.      Description                               Page No. 

* 2.2(k)   Call Option dated September 25, 1995,
           between Registrant and SMM Trust, 1995
           - M, a Delaware business trust, filed
           as Exhibit 2.2(k) to the Registrant's
           report on Form 10-Q for the quarter
           ended October 1, 1995.                    

* 2.2(l)   Put Option dated September 25, 1995,
           between Registrant and SMM Trust, 1995
           - M, a Delaware business trust, filed
           as Exhibit 2.2(l) to the Registrant's
           report on Form 10-Q for the quarter
           ended October 1, 1995.

* 2.2(m)   Letter Agreement dated January 11, 1996
           among Registrant, Rodolfo Garcia Muriel,
           and Compania Industrial de Parras,
           S.A. de C.V., filed as Exhibit 2.2(m) to
           the Registrant's report on Form 10-K
           for the year ended December 31, 1995.

* 2.3      Asset Purchase Agreement dated as
           of December 2, 1994 between the
           Registrant, Lancer Industries, Inc.
           and M.P.M. Transportation, Inc.,
           filed as Exhibit 2 to the Registrant's
           Current Report on Form 8-K dated
           December 2, 1994.

* 2.4      Olympic Division Acquisition Agreement
           by and among Vitafoam Incorporated,
           British Vita PLC, and Registrant
           dated January 19, 1996 with related
           Lease Agreement, Lease Agreement and
           Option to Purchase, Sublease Agreement,
           Services Agreement, License Agreement And
           Hold Back Escrow Agreement, each
           dated January 22, 1996.  The Acquisition
           Agreement and related agreements were
           filed as Exhibit 2.4 to the Registrant's
           report on Form 10-K for the year ended
           December 31, 1995. The following
           exhibits and schedules to the Acquisition
           Agreement have been omitted. The 
           Registrant hereby undertakes to furnish
           supplementally a copy of such omitted
           exhibit or schedule to the Commission upon
           request.
                              Page 25
<PAGE>
FORM 10-Q              INDEX TO EXHIBITS

Exhibit                                              Sequential
  No.      Description                               Page No. 

           Exhibits
           Exhibit A1      Form of Buyer Lease
           Exhibit A2      Form of Buyer Lease
           Exhibit B       Form of Holdback Escrow
                            Agreement
           Exhibit C1      Facility 1
           Exhibit C2      Facility 2
           Exhibit C3      Facility 3
           Exhibit C4      Facility 4
           Exhibit C5      Facility 5
           Exhibit C6      Facility 6
           Exhibit D       Form of Sublease Agreement
           Exhibit E       Form of Opinion of Buyer's
                            Counsel
           Exhibit F       Form of Opinion of Seller's
                            Counsel
           Exhibit G       Form of Assumption Agreement
           Exhibit H       Form of Services Agreement
           Exhibit I       Inventory Valuation Principles
           Exhibit J       Form of License Agreement

           Schedules
           Schedule 1.1(a) Excluded Assets
           Schedule 1.1(b) Tangible Fixed Assets
           Schedule 2.8    Assigned Contracts
           Schedule 2.10   Allocation of Purchase
                            Price
           Schedule 4.3    Consents and
                            Authorizations
           Schedule 4.7    Contracts by Category
           Schedule 4.9    Litigation
           Schedule 4.11   Tax Matters
           Schedule 4.12   Licenses and Permits
           Schedule 4.14   Tangible Personal
                            Property
           Schedule 4.15   Employees and Wage Rates
           Schedule 4.16   Insurance Policies
           Schedule 4.17   Intellectual Property
           Schedule 4.18   Licenses to Intellectual
                            Property; Third-party
                            Patents
           Schedule 4.19   Purchases from One Party
           Schedule 4.22   Real Property
           Schedule 4.23   Business Names
           Schedule 4.24   Environmental Matters
           Schedule 9.4    Facility 5 Remediation Plan      

                              Page 26
<PAGE>
FORM 10-Q              INDEX TO EXHIBITS

Exhibit                    Sequential
  No.      Description                               Page No. 
 
* 4.1      Restated Articles of Incorporation of
           the Registrant effective August 25, 1993,
           filed as Exhibit 4.1 to Registrant's
           report on Form 10-Q for the quarter ended
           October 3, 1993.

* 4.2      Amended and Restated Bylaws of Registrant,
           Effective June 18, 1992, filed as Exhibit
           3.5 to the Registrant's Registration
           Statement on Form S-1 (File No. 33-46907).

* 4.3      Note Agreement dated as of August 13, 1992,
           between Cone Mills Corporation and The
           Prudential Insurance Company of America,
           with form of 8% promissory note attached,
           filed as Exhibit 4.01 to the Registrant's
           report on Form 8-K dated August 13, 1992.

* 4.3(a)   Letter Agreement dated September 11, 1992,
           amending the Note Agreement dated August 13,
           1992, between the Registrant and The
           Prudential Insurance Company of America
           filed as Exhibit 4.2 to the Registrant's
           report on Form 8-K dated March 1, 1995.

* 4.3(b)   Letter Agreement dated July 19, 1993,
           amending the Note Agreement dated
           August 13, 1992, between the Registrant
           and The Prudential Insurance Company of
           America filed as Exhibit 4.3 to the
           Registrant's report on Form 8-K dated
           March 1, 1995.

* 4.3(c)   Letter Agreement dated June 30, 1994,
           amending the Note Agreement dated
           August 13, 1992, between the Registrant
           and The Prudential Insurance Company of
           America filed as Exhibit 4.4 to the
           Registrant's report on Form 8-K dated
           March 1, 1995.

* 4.3(d)   Letter Agreement dated November 14, 1994,
           amending the Note Agreement dated 
           August 13, 1992, between the Registrant
           and The Prudential Insurance Company of
           America filed as Exhibit 4.5 to the
           Registrant's report on Form 8-K dated
           March 1, 1995.
                              Page 27
<PAGE>
FORM 10-Q              INDEX TO EXHIBITS

Exhibit                                              Sequential
  No.      Description                               Page No. 

* 4.3(e)   Letter Agreement dated as of June 30,
           1995, amending the Note Agreement dated
           August 13, 1992, between the Registrant
           and The Prudential Insurance Company
           of America filed as Exhibit 4.3(e) to
           the Registrant's report on Form 10-Q
           for the quarter ended July 2, 1995.

* 4.3(f)   Letter Agreement dated as of June 30,
           1995, between the Registrant and
           The Prudential Insurance Company
           of America superseding Letter Agreement
           filed as Exhibit 4.3(e) to the
           Registrant's report on Form 10-Q 
           for the quarter ended July 2, 1995.       

* 4.3(g)   Letter Agreement dated as of March 30,
           1996, between the Registrant and The
           Prudential Insurance Company of 
           America filed as Exhibit 4.3(g) to the
           Registrant's report on Form 10-Q for
           the quarter ended March 31, 1996.
 
* 4.3(h)   Letter Agreement dated as of January
           31, 1997, between the Registrant and
           The Prudential Insurance Company of
           America filed as Exhibit 4.3(h) to
           the Registrant's report on Form 10-K
           for the year ended December 29, 1996.

* 4.4      Credit Agreement dated as of August 13,
           1992, among Cone Mills Corporation,
           the banks listed therein and Morgan
           Guaranty Trust Company of New York,
           as Agent, with form of note attached
           filed as Exhibit 4.02 to the Registrant's
           report on Form 8-K dated August 13, 1992.

* 4.4(a)   Amended and Restated Credit Agreement
           dated November 18, 1994, among the 
           Registrant, various banks and Morgan
           Guaranty Trust Company of New York,
           as Agent, filed as Exhibit 4.1
           to the Registrant's report on Form 8-K
           dated March 1, 1995.

                              Page 28
<PAGE>
FORM 10-Q              INDEX TO EXHIBITS

Exhibit                                              Sequential
  No.      Description                               Page No. 

* 4.4(b)   Amendment to Credit Agreement dated as of
           June 30, 1995, amending the Amended and
           Restated Credit Agreement dated 
           November 18, 1994, among the Registrant,
           various banks and Morgan Guaranty Trust
           Company of New York, as Agent filed as
           Exhibit 4.4(b) to the Registrant's 
           report on Form 10-Q for the quarter 
           ended July 2, 1995.

* 4.4(c)   Amendment No. 2 to Credit Agreement
           dated as of December 31, 1995, amending
           the Amended and Restated Credit 
           Agreement dated November 18, 1994,
           among the Registrant, various banks
           and Morgan Guaranty Trust Company
           of New York, as Agent, filed as 
           Exhibit 4.4(c) to the Registrant's
           report on Form 10-K for year ended
           December 31, 1995.

* 4.4(d)   Amendment No. 3 to Credit Agreement
           dated as of June 30, 1996 to the
           Amended and Restated Credit
           Agreement dated as of November 18,
           1994, among the Registrant, various
           banks and Morgan Guaranty Trust
           Company of New York, as Agent, filed
           as Exhibit 4.4(d) to the Registrant's
           report on Form 10-Q for the quarter 
           ended September 29, 1996.

* 4.4(e)   Amendment No. 4 to Credit Agreement
           dated as of September 29, 1996 to
           the Amended and Restated Credit 
           Agreement dated as of November 18,
           1994, among the Registrant, various
           banks and Morgan Guaranty Trust
           Company of New York, as Agent, filed
           as Exhibit 4.4(e) to the Registrant's
           report on Form 10-Q for the quarter
           ended September 29, 1996.

                              Page 29
<PAGE>
FORM 10-Q              INDEX TO EXHIBITS

Exhibit                                              Sequential
  No.      Description                               Page No. 

  4.4(f)   Amendment No. 5 to Credit Agreement
           dated as of March 30, 1997, to the
           Amended and Restated Credit Agreement
           dated as of November 18, 1994, among
           the Registrant, various banks and
           Morgan Guaranty Trust Company of
           New York, as Agent.                           163

* 4.5      Specimen Class A Preferred Stock
           Certificate, filed as Exhibit 4.5
           to the Registrant's Registration 
           Statement on Form S-1(File No. 33-46907).

* 4.6      Specimen Common Stock Certificate,
           effective June 18, 1992, filed as
           Exhibit 4.7 to the Registrant's
           Registration Statement on Form S-1
           (File No. 33-46907).

* 4.7      The 401(k) Program of Cone Mills
           Corporation, amended and restated 
           effective December 1, 1994, filed as
           Exhibit 4.8 to the Registrant's
           report on Form 10-K for year ended
           January 1, 1995.                            

* 4.7(a)   First Amendment to the 401(k)
           Program of Cone Mills Corporation
           dated May 9, 1995, filed as 
           Exhibit 4.8(a) to the Registrant's
           report on Form 10-K for year ended
           December 31, 1995.

* 4.7(b)   Second Amendment to the 401(k)
           Program of Cone Mills Corporation
           dated December 5, 1995, filed as 
           Exhibit 4.8(b) to the Registrant's
           report on Form 10-K for year ended
           December 31, 1995.

* 4.8      Cone Mills Corporation 1983 ESOP as
           amended and restated effective
           December 1, 1994, filed as Exhibit 4.9
           to the Registrant's report on Form 10-K
           for year ended January 1, 1995.

                              Page 30
<PAGE>
FORM 10-Q              INDEX TO EXHIBITS

Exhibit                                              Sequential
  No.      Description                               Page No. 

* 4.8(a)   First Amendment to the Cone Mills
           Corporation 1983 ESOP dated
           May 9, 1995,  filed as Exhibit 4.9(a)
           to the Registrant's report on Form 10-K
           for year ended December 31, 1995.

* 4.8(b)   Second Amendment to the Cone Mills
           Corporation 1983 ESOP dated
           December 5, 1995,  filed as 
           Exhibit 4.9(b) to the Registrant's
           report on Form 10-K for year ended
           December 31, 1995.

* 4.9      Indenture dated as of February 14,
           1995, between Cone Mills Corporation
           and Wachovia Bank of North Carolina,
           N.A. as Trustee, filed as Exhibit 4.1
           to Registrant's Registration Statement
           on Form S-3 (File No. 33-57713).

 27        Financial Data Schedule                       165



                             
* Incorporated by reference to the statement or report indicated.

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<PAGE>
FORM 10-Q





                         SIGNATURES


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



                              CONE MILLS CORPORATION
                              (Registrant)





Date   May 13, 1997           /s/ Anthony L. Furr          
                              Anthony L. Furr
                              Vice President and
                              Chief Financial Officer


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