Page 1 of 36
                              Index to Exhibits-Pages 24-32

             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  June 29, 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 July 31,
1997:  26,107,133 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 and twenty-six weeks ended 
         June 29, 1997 and June 30, 1996
         (Unaudited) . . . . . . . . . . . . . . . . . . . .3

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

       Consolidated Condensed Statements of
       Stockholders' Equity
         Twenty-six weeks ended June 29, 1997
         and June 30, 1996 (Unaudited) . . . . . . . . . . .6

       Consolidated Condensed Statements of
       Cash Flows
         Twenty-six weeks ended June 29, 1997
         and June 30, 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 . . . . . . . . . . . . . . . . .21
Item 4.  Submission of Matters to a Vote of
           Security Holders. . . . . . . . . . . . . . . . .22
Item 6.  Exhibits and Reports on Form 8-K. . . . . . . . . .23







                           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>             <C>             <C>
                                                           Thirteen        Thirteen       Twenty-Six      Twenty-Six
                                                          Weeks Ended     Weeks Ended     Weeks Ended     Weeks Ended
                                                         June 29, 1997   June 30, 1996   June 29, 1997   June 30, 1996
                                                          (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)

Net Sales                                                  $  185,792      $  208,119      $  360,506      $  407,401

Operating Costs and Expenses:
  Cost of sales                                               156,286         168,810         304,345         330,046
  Selling and administrative                                   20,778          22,391          39,082          43,507
  Depreciation                                                  6,633           7,009          13,304          14,145
  Restructuring                                                 1,154              (9)          1,809          (4,684)

                                                              184,851         198,201         358,540         383,014

Income from Operations                                            941           9,918           1,966          24,387

Other Income (Expense):
  Interest income                                                 631              77             819             173
  Interest expense                                             (3,724)         (4,115)         (7,407)         (7,952)

                                                               (3,093)         (4,038)         (6,588)         (7,779)

Income (Loss) before Income Taxes (Benefit) and Equity 
  in Earnings (Losses) of Unconsolidated Affiliate             (2,152)          5,880          (4,622)         16,608

Income Taxes (Benefit)                                           (684)          1,764          (1,672)          5,519

Income (Loss) before Equity in Earnings (Losses)
  of Unconsolidated Affiliate                                  (1,468)          4,116          (2,950)         11,089

Equity in Earnings (Losses) of Unconsolidated Affiliate           397            (414)           (116)           (202)

Net Income (Loss)                                          $   (1,071)     $    3,702      $   (3,066)     $   10,887


Income (Loss) Available to Common Shareholders:
  Net Income (Loss)                                        $   (1,826)     $    2,982      $   (4,541)     $    9,447

Earnings (Loss) Per Share - Fully Diluted:
  Net Income (Loss)                                            $ (.07)         $  .11           $ (.17)         $ .34 

Weighted Average Common Shares and
  Common Share Equivalents Outstanding -
  Fully Diluted                                                26,102          27,446          26,170          27,451

</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>      
                                                               June 29,      June 30,      December 29,
       ASSETS                                                    1997          1996           1996
                                                             (Unaudited)   (Unaudited)       (Note)
   Current Assets:
     Cash                                                      $  4,999      $  5,250      $    1,018

     Accounts receivable - trade, less provision for
       doubtful accounts $1,500; $3,000; $3,000                  21,186        76,322          49,073

     Subordinated note receivable                                39,491             -               -

     Inventories:
       Greige and finished goods                                 87,551        95,528          94,635
       Work in process                                           12,405        11,848          10,793
       Raw materials                                             16,972        12,126           7,231
       Supplies and other                                        13,042        32,003          26,874

                                                                129,970       151,505         139,533

     Other current assets                                        10,425        16,434          14,794

              Total Current Assets                              206,071       249,511         204,418

   Investments in Unconsolidated Affiliates                      34,028        36,656          34,144

   Other Assets                                                  38,982        41,721          40,746



   Property, Plant and Equipment:
     Land                                                        11,883        18,398          17,880
     Buildings                                                   82,679        81,821          83,048
     Machinery and equipment                                    315,305       307,497         319,271
     Other                                                       34,254        31,004          34,143

                                                                444,121       438,720         454,342

       Less accumulated depreciation                            204,488       195,315         203,664

              Property, Plant and Equipment-Net                 239,633       243,405         250,678



                                                              $ 518,714     $ 571,293     $   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>     

                                                                June 29,      June 30,      December 29,
      LIABILITIES AND STOCKHOLDERS' EQUITY                        1997          1996           1996
                                                              (Unaudited)   (Unaudited)       (Note)

Current Liabilities:
   Notes payable                                               $       -     $  10,143     $     5,267
   Current maturities of long-term debt                           10,714        11,105          10,754
   Accounts payable - trade                                       32,292        34,802          27,113
   Sundry accounts payable and accrued expenses                   49,519        44,444          52,770
   Deferred income taxes                                          24,421        27,235          23,667

      Total Current Liabilities                                  116,946       127,729         119,571

Long-Term Debt                                                   150,148       161,439         149,968

Deferred Items:
   Deferred income taxes                                          38,300        40,041          40,066
   Other deferred items                                           10,519         9,967          10,130

                                                                  48,819        50,008          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 26,099,533 shares;
      1996, 27,439,733 shares and 26,301,233 shares                2,610         2,744           2,630
   Capital in excess of par                                       61,483        71,579          62,995
   Retained earnings                                             108,811       127,861         114,706
   Currency translation adjustment                                (8,498)       (8,462)         (8,475)

                Total Stockholders' Equity                       202,801       232,117         210,251






                                                               $ 518,714     $ 571,293     $   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
                 TWENTY-SIX WEEKS ENDED JUNE 29, 1997 AND JUNE 30, 1996
                        (amounts in thousands, except share data)
                                       (Unaudited)
<TABLE>
<S>                                          <C>          <C>          <C>            <C> 
                                                Class A Preferred
                                                      Stock                    Common Stock
                                              Shares        Amount        Shares        Amount

Balance, December 29, 1996                     383,948     $  38,395    26,301,233     $    2,630
Net loss                                             -             -             -              -
Currency translation adjustment                      -             -             -              -
Class A Preferred Stock -
  Employee Stock Ownership Plan:
  Cash dividends paid                                -             -             -              -
Common Stock: 
  Purchase of common shares                          -             -      (201,700)           (20)

Balance, June 29, 1997                         383,948     $  38,395    26,099,533     $    2,610



                                                Class A Preferred
                                                      Stock                    Common Stock
                                              Shares        Amount        Shares        Amount

Balance, December 31, 1995                     383,948     $  38,395    27,380,409     $    2,738
Net income                                           -             -             -              -
Currency translation adjustment -
  Sale of stock of affiliate                         -             -             -              -
Class A Preferred Stock -
  Employee Stock Ownership Plan:
  Cash dividends paid                                -             -             -              -
Common Stock: 
  Options exercised                                  -             -        61,800              6
  Purchase of common shares                          -             -        (2,476)             -

Balance, June 30, 1996                         383,948     $  38,395    27,439,733     $    2,744
</TABLE>

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

Item 1.  (continued)
                          CONE MILLS CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
                  TWENTY-SIX WEEKS ENDED JUNE 29, 1997 AND JUNE 30, 1996
                         (amounts in thousands, except share data)
                                       (Unaudited)

<TABLE>
<S>                                        <C>            <C>           <C>         
                                             Capital in                   Currency
                                              Excess       Retained      Translation
                                              of Par       Earnings      Adjustment

Balance, December 29, 1996                  $   62,995     $ 114,706     $  (8,475)
Net loss                                             -        (3,066)            -
Currency translation adjustment                      -             -           (23)
Class A Preferred Stock -
  Employee Stock Ownership Plan:
  Cash dividends paid                                -        (2,829)            -
Common Stock: 
  Purchase of common shares                     (1,512)            -             -

Balance, June 29, 1997                      $   61,483     $ 108,811     $  (8,498)



                                             Capital in                   Currency
                                              Excess       Retained      Translation
                                              of Par       Earnings      Adjustment

Balance, December 31, 1995                  $   71,090     $ 119,825     $  (9,923)
Net income                                           -        10,887             -
Currency translation adjustment -
  Sale of stock of affiliate                         -             -         1,461
Class A Preferred Stock -
  Employee Stock Ownership Plan:
  Cash dividends paid                                -        (2,851)            -
Common Stock: 
  Options exercised                                515             -             -
  Purchase of common shares                        (26)            -             -

Balance, June 30, 1996                      $   71,579     $ 127,861     $  (8,462)

</TABLE>
See Notes to Consolidated Financial Statements.
                                          Page 6a
<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>  
                                                                       Twenty-Six       Twenty-Six
                                                                       Weeks Ended      Weeks Ended
                                                                      June 29, 1997    June 30, 1996
                                                                       (Unaudited)      (Unaudited)

Cash Flows Provided By (Used In) Operating Activities                  $     2,316      $    (2,442)

Cash Flows from Investing Activities:
   Proceeds from divestitures (a)                                           19,529           40,053
   Capital expenditures                                                    (10,739)         (12,072)
   Other                                                                     2,064            2,561

     Net cash provided by investing activities                              10,854           30,542

Cash Flows from Financing Activities:
   Net (payments) borrowings - short-term loans                             (5,267)           1,268
   Increase (decrease) in checks issued in excess of deposits                  522          (21,402)
   Other                                                                    (4,444)          (3,052)

     Net cash used in financing activities                                  (9,189)         (23,186)

     Net increase in cash                                                    3,981            4,914

Cash at Beginning of Period                                                  1,018              336

Cash at End of Period                                                  $     4,999      $     5,250


(a)Divestitures:
   Inventories                                                         $    12,034      $    14,926
   Property, plant and equipment                                             6,262           21,516
   Other                                                                     1,199           (1,073)
   Gain on sale                                                                 34            4,684

     Proceeds from sale                                                $    19,529      $    40,053


Supplemental Disclosures of Additional Cash Flow Information:

Cash payments for:
   Interest, net of interest capitalized                               $     7,489      $     8,043

   Income taxes, net of refunds                                        $    (3,409)     $     4,872

Supplemental Schedule of Noncash Investing and Financing Activities:

   Receivable recorded from divestitures                               $     2,298      $     4,449



</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
                        JUNE 29, 1997



Note 1.  Basis of Financial Statement Preparation

     The Cone Mills Corporation (the "Company") consolidated
     condensed financial statements for June 29, 1997 and June
     30, 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 June 29, 1997, June 30,
     1996, and December 29, 1996, and the related consolidated
     condensed statements of operations for the respective
     thirteen and twenty-six weeks ended June 29, 1997 and
     June 30, 1996, and stockholders' equity and cash flows
     for the twenty-six weeks then ended.  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 June 29, 1997 and June 30, 1996 and
     related consolidated condensed statements of operations
     for the thirteen and twenty-six 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 June 29, 1997, the Company had sold accounts
     receivable of $77 million, less a $2 million provision
     for doubtful accounts receivable, to Cone Receivables,
     LLC.  The Company currently has a subordinated note
     receivable from Cone Receivables, LLC of $39 million.

Note 3.  Long-Term Debt
<TABLE>
<S>                              <C>        <C>        <C> 
                                            June 29, 1997       
                                              Current
                                    Total    Maturity   Long-Term
                                       (amounts in thousands)   

8% Senior Note                    $ 64,286   $ 10,714   $ 53,572
8-1/8% Debentures                   96,576          -     96,576

Total                             $160,862   $ 10,714   $150,148

                                            June 30, 1996       
                                              Current           
                                    Total    Maturity   Long-Term
                                       (amounts in thousands)   

8% Senior Note                    $ 75,000   $ 10,714   $ 64,286
8-1/8% Debentures                   96,132          -     96,132
Capital Lease Obligation             1,291        353        938
Other                                  121         38         83

Total                             $172,544   $ 11,105   $161,439
</TABLE>
Note 4.   Class A Preferred Stock

     The 1998 dividend rate for Class A Preferred Stock is
     7.85%, payable March 31, 1998.
                           Page 9

<PAGE>
FORM 10-Q

Item 1.   (continued)

    NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Note 5.  Earnings (Loss) Per Share
<TABLE>
<S>                         <C>        <C>       <C>        <C> 
                                   Thirteen           Thirteen
                                  Weeks Ended        Weeks Ended
                                 June 29, 1997       June 30, 1996  
                                          Fully                Fully
                               Primary   Diluted   Primary    Diluted 
                                     (amounts in thousands,
                                     except per share data)

Net income (loss)            $ (1,071)  $(1,071)  $  3,702   $ 3,702 
Less:  Class A Preferred
       dividends               (  755)   (  755)     ( 720)    ( 720)

Adjusted net income (loss)   $ (1,826)  $(1,826)  $  2,982   $ 2,982 

Weighted average common
 shares outstanding            26,102    26,102     27,407    27,407 
Common share equivalents            
 from assumed exercise
 of outstanding options,
 less shares assumed
 repurchased                        -         -         39        39 
 
Weighted average common
 shares and common share
 equivalents outstanding       26,102    26,102     27,446    27,446 

Earnings (loss) per common
 share and common share
 equivalent                    $( .07)   $( .07)    $  .11    $  .11
</TABLE>

                                    Page 10
<PAGE>
FORM 10-Q

Item 1.   (continued)

    NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


Note 5. Earnings (Loss) Per Share (continued)
<TABLE>
<S>                         <C>        <C>       <C>        <C>    
                                 Twenty-Six          Twenty-Six
                                 Weeks Ended         Weeks Ended
                                June 29,1997        June 30, 1996   
                                          Fully                Fully
                               Primary   Diluted   Primary    Diluted 
                                     (amounts in thousands,
                                     except per share data)

Net income (loss)            $ (3,066)  $(3,066)  $10,887    $10,887 
Less:  Class A Preferred
       dividends               (1,475)   (1,475)    (1,440)   (1,440)

Adjusted net income (loss)   $ (4,541)  $(4,541)  $  9,447   $ 9,447 

Weighted average common
 shares outstanding            26,170    26,170     27,394    27,394 
Common share equivalents            
 from assumed exercise
 of outstanding options,
 less shares assumed
 repurchased                        -         -         57        57 
 
Weighted average common
 shares and common share
 equivalents outstanding       26,170    26,170     27,451    27,451 

Earnings (loss) per common
 share and common share
 equivalent                    $( .17)   $( .17)    $  .34    $  .34
</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.  Divestitures

     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 June 30, 1996. Gain of $4.7 million
     from disposal of this division was recognized in the
     first quarter 1996 financial statements as a
     restructuring item.

     In May 1997, the Company completed the sale of
     substantially all the assets of its real estate
     operations, including those of its subsidiary Cornwallis
     Development Co.  Proceeds of $19.5 million were received
     in the second quarter of 1997.  A reserve was established
     in the Company's fourth quarter 1996 financial statements
     to adjust the carrying value of these assets to estimated
     net realizable value.  The gain recognized upon the
     disposition of these assets in the second quarter of 1997
     was insignificant.

Note 7.  Restructuring Activities

     Restructuring costs of $1.8 million were incurred in the
     first six months 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

Second Quarter Ended June 29, 1997 Compared with Second
Quarter Ended June 30, 1996.

While U.S. consumer spending in apparel and home furnishings
has  increased in 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 second quarter of 1997 were $185.8 million, down
10.7%, as compared with sales of $208.1 million for the second
quarter of 1996. After eliminating the sales of business units
included in the Company's restructuring plan, sales decreased
approximately 8%. Lower sales in denim products accounted for
the decrease. International sales, primarily denims, were
$43.0 million, or 23% of total sales, as compared with $53.2
million, or 26% of sales, for the second quarter of 1996. 

Cone Mills had a net loss for the second quarter of 1997 of
$1.1 million, or $.07 per share after preferred dividends,
which included a pre-tax charge of $1.2 million associated
with the consolidation of Granite Finishing into Carlisle
Finishing operations. For comparison, second quarter 1996 net
income was $3.7 million, or $.11 per share. 

Gross profit for the second quarter of 1997 (net sales less
cost of sales and depreciation) was 12.3% 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. 

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. 

                           Page 13
<PAGE>
FORM 10-Q

Item 2.   (continued)
<TABLE>
<S>                   <C>       <C>        <C>      <C>


                                  Second Quarter          
                             1997                 1996     
                          (Dollar amounts in millions)
NET SALES 
   Apparel(1)          $ 159.1    85.6%     $ 180.8   86.9%
   Home Furnishings(2)    26.7    14.4         27.3   13.1
     Total             $ 185.8   100.0%     $ 208.1  100.0%

OPERATING INCOME (LOSS)(3)
   Apparel             $   6.2     3.9%     $  13.0    7.2%
   Home Furnishings       (3.2)  (12.1)        (2.2)  (8.0)
   Restructuring          (1.2)    -            -      -
</TABLE>
(1)  Apparel includes synthetic fabrics net sales of $3.6
     million in 1996. 
(2)  Home furnishings includes real estate's net sales of $0.8
     million in 1997, and Olympic's, Greeff's and real
     estate's net sales of $3.2 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
   second quarter of 1997 were $159.1 million, down 12.0% from
   the second quarter of 1996. Excluding sales of the
   synthetic fabrics business, which was sold in January of
   1997, apparel fabric segment sales were down approximately
   10%. Lower denim sales because of lower volume and prices
   accounted for the decrease. Average denim prices were down
   in the second 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 second quarter of 1997, the apparel segment had
   operating income of $6.2 million, or 3.9% of sales, as
   compared with income of $13.0 million, or 7.2% of sales, in
   the second quarter of 1996. All apparel manufacturing
   facilities operated at less than capacity as the Company
   attempted to control inventory levels. 

                           Page 14
<PAGE>
FORM 10-Q

Item 2.   (continued)

   Home Furnishings. For the second quarter of 1997, home
   furnishings segment sales were $25.9 million as compared
   with $24.1 million in the second quarter of 1996, excluding
   Olympic, Greeff and real estate. Higher sales of Cone
   Jacquards accounted for the increase. The home furnishings 
   segment had an operating loss of $3.2 million compared with
   a loss of $2.2 million for the second 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 $22.4 million for the second quarter of 1996 to $20.8
million in the second quarter of 1997, the result of the sale
of the real estate, Greeff and synthetic fabric operations as
well as a cost reduction program to reduce selling and
administrative expenses. Selling and administrative expenses
were 11.2% of sales in the second quarter of 1997 as compared
with 10.8% in the second quarter of 1996. The percentage
increase is primarily the result of the lower sales level in
1997. 

Interest expense for the second quarter of 1997 was $3.7
million, down 10% from the second quarter of 1996, primarily
the result of lower borrowings. 

Equity in the income of Parras Cone, the joint venture plant
in Mexico, was $0.4 million, as compared with a loss of $0.4
million in the second quarter of 1996. The increase in income
was primarily the result of 1997 improved operating levels and
efficiencies. 

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

Six Months Ended June 29, 1997 Compared with Six Months Ended
June 30, 1996.

For the first six months of 1997, Cone Mills experienced
value-added denim inventory adjustments with certain customers

                           Page 15
<PAGE>
FORM 10-Q

Item 2.   (continued)

and weak fashion demand for decorative prints. For the first
six months of 1996, the Company experienced strong demand for
value-added denim apparel fabrics and weak markets for
specialty sportswear and home furnishings fabrics. 

Sales for the first six months of 1997 were $360.5 million,
down 11.5%, as compared with sales of $407.4 million for the
first six months 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 were partially offset by increased
specialty sportswear and jacquard sales. International sales,
primarily denims, were 24% of total sales, as compared with
26% for the first six months of 1996. 

Cone Mills had a net loss for the first six months of 1997 of
$3.1 million, or $.17 per share after preferred dividends,
which included a pre-tax charge of $1.8 million associated
with the consolidation of the Granite operations into
Carlisle. For comparison, for the first six months of 1996 net
income was $10.9 million, or $.34 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 six months of 1997 (net sales less
cost of sales and depreciation) was 11.9% of sales, as
compared with 15.5% for the comparable 1996 period. The
decrease was primarily the result of lower average denim
prices including mix changes to more basic denim products with
lower prices and margins and cost inefficiencies associated
with operating plants at less than capacity. 

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>  
                                    Six Months            
                             1997                 1996     
                           (Dollar amounts in millions)
NET SALES 
   Apparel(1)          $ 307.4    85.3%     $ 346.5   85.1%
   Home Furnishings(2)    53.1    14.7         60.9   14.9
     Total             $ 360.5   100.0%     $ 407.4  100.0%

OPERATING INCOME (LOSS)(3)
   Apparel             $  12.3     4.0%     $  26.0    7.5%
   Home Furnishings       (6.8)  (12.7)        (4.1)  (6.7)
   Restructuring          (1.8)    -            4.7    -
</TABLE>
                           Page 16
<PAGE>
FORM 10-Q

Item 2.   (continued)

(1)  Apparel includes synthetic fabrics net sales of $2.7
     million and $9.6 million in 1997 and 1996, respectively. 
(2)  Home furnishings includes Greeff's and real estate's net
     sales of $2.2 million in 1997, and Olympic's, Greeff's
     and real estate's net sales of $11.0 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
   six months of 1997 were $307.4 million, down 11.3% from the
   first six months of 1996. Excluding sales of the synthetic
   fabrics business, which was sold in January of 1997,
   apparel fabric segment sales were down approximately 10%.
   Lower denim sales because of lower volume and prices
   partially offset by higher specialty sportswear sales
   accounted for the decrease. Average denim prices were down
   in the first six months of 1997 as a result of a mix shift
   to more basic denims and price pressure from temporary
   industry supply and demand imbalances. 

   For the first six months of 1997, the apparel segment had
   operating income of $12.3 million, or 4.0% of sales, as
   compared with income of $26.0 million, or 7.5% of sales, in
   the first six months of 1996. 

   Home Furnishings. For the first six months of 1997, home
   furnishings segment sales were $50.9 million, excluding
   Olympic, Greeff and real estate, as compared with $49.9
   million in the first six months of 1996. Increased sales of
   Cone Jacquards was partially offset by lower sales in Cone
   Finishing and Cone Decorative Fabrics. The home furnishings
   segment had an operating loss of $6.8 million compared with
   a loss of $4.1 million for the first six months of 1996.
   Home furnishings results were negatively impacted by weak
   decorative fabrics markets. 

Total Company selling and administrative expenses declined
from $43.5 million for the first six months of 1996 to $39.1
million in the first six months of 1997, the result of the
sale of the Olympic, Greeff, real estate and synthetic fabric
operations as well as a cost reduction program to reduce
selling and administrative expenses. Selling and
administrative expenses were 10.8% of sales in the first six
months of 1997 as compared with 10.7% in the first six months
of 1996. 
                           Page 17
<PAGE>
FORM 10-Q

Item 2.   (continued)


Interest expense for the first half of 1997 was $7.4 million,
down 7% from the first half of 1996. 

For the first half of 1997, the income tax benefit as a
percent of the taxable loss was 36.2% for the first half of
1997 compared with income taxes of 33.2% for the first half of
1996. Both periods reflect tax benefits resulting from
operation of the Company's foreign sales corporation. 


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

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
June 29, 1997, the Company had funds available of $80 million
under its Revolving Credit Facility. 

During the first half of 1997, the Company generated cash from
operating activities before changes in working capital of $9.5
million as compared with $22.4 million in the first half of
1996. Working capital uses in the first half of 1997 were $7.2
million, primarily increases in accounts receivable. Other
uses of cash in the first half of 1997 included $10.7 million
for capital expenditures, $1.5 million for the repurchase of
common stock and $2.8 million for preferred stock dividends. 

During the second quarter of 1997, the Company completed the
sale of substantially all of the assets of its real estate
operation, including those of its subsidiary Cornwallis
Development Co., for approximately $20 million. Proceeds of
the sale were used to repay short-term borrowings and for
general corporate purposes. 

                           Page 18
<PAGE>
FORM 10-Q

Item 2.   (continued)

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 has Board
authorization to purchase up to an additional 0.8 million
shares of common stock. The Company's Revolving Credit
Facility matures in August of 1997. The Company has signed
commitments from its banks for a three year $80 million
successor facility with terms and conditions not materially
different from the existing facility. 

On June 29, 1997, the Company's long-term capital structure
consisted of $150.1 million of long-term debt and $202.8
million of stockholders' equity. For comparison, on June 30,
1996, the Company had $161.4 million of long-term debt and
$232.1 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 June 29, 1997 and 43% on June 30, 1996. 

Accounts and note receivables on June 29, 1997, were $60.7
million, down from $76.3 million at June 30, 1996. At June 29,
1997, the Company had sold accounts receivable of $77 million
to Cone Receivables, LLC, an unconsolidated subsidiary, which
subsequently sold $40 million of these accounts receivables to
an unrelated party.  In addition to the $40 million received
for the sale of these receivables, the Company also has
received a $39 million subordinated note receivable from Cone
Receivables, LLC. At June 30, 1996, the Company had sold $38
million of accounts receivable to an unrelated party. 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 (See Note 2 of Notes to Consolidated Condensed
Financial Statements). Receivables, including those sold
pursuant to the Receivables Purchase Agreement, represented 50
days of sales outstanding at June 29, 1997 and 51 days at June
30, 1996.

Inventories on June 29, 1997, were $130.0 million, down $21.5
million from June 30, 1996 levels. The decrease was primarily
due to the sale of operating units partially offset by
increases in raw material levels. 
                           Page 19
<PAGE>
FORM 10-Q

Item 2.   (continued)

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 half of
1997 was $10.7 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,
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 
                           Page 20
<PAGE>
FORM 10-Q

Item 2.   (continued)

   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 1.  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
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 

                           Page 21
<PAGE>
FORM 10-Q

Item 1.   (continued)

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
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 4.  Submission of Matters To A Vote Of Security Holders

   Cone Mills Corporation's Annual Meeting of Shareholders was
held May 13, 1997. The proposals voted upon and the results of
the voting were as follows:

1.   Election of three Class II Directors for a three-year
     term.
                                                              Broker
                       For     Against Abstentions Withheld  Non-Votes
J. Patrick Danahy  20,723,446  126,065       0          0      N/A
Jeanette C. Kimmel 20,694,212  155,299       0          0      N/A
John W. Rosenblum  20,699,162  150,349       0          0      N/A

2.   Ratification of the appointment of McGladrey & Pullen as
     independent auditors for the Corporation for the fiscal 
     year ending December 28, 1997.
                                                               Broker
                      For     Against Abstentions Withheld  Non-Votes
                   20,818,860  20,106    10,545        0       N/A

                           Page 22
<PAGE>
FORM 10-Q



Item 6.  Exhibits and Reports on Form 8-K

(a)  The exhibits to this Form 10-Q are listed in the
     accompanying Index to Exhibits.

(b)  Reports on Form 8-K.

     None

                           Page 23
<PAGE>

FORM 10-Q              INDEX TO EXHIBITS

Exhibit                                            Sequential
  No.     Description                               Page No. 

* 2.1(a)  Purchase Agreement between Registrant
          and Cone Receivables LLC dated as of
          March 25, 1997,field as Exhibit 2.1(l)
          to Registrant's report on Form 10-Q
          for the quarter ended March 30, 1997.

* 2.1(b)  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, filed as Exhibit 2.1(m) to
          Registrant's report on Form 10-Q 
          for the quarter ended March 30, 1997.
          
* 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 24
<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 25
<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     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.

          Exhibits
            Exhibit A1      Form of Buyer Lease
            Exhibit A2      Form of Buyer Lease
            Exhibit B       Form of Holdback Escrow
                             Agreement

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

Exhibit                                            Sequential
  No.       Description                             Page No. 

            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

* 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.
                           Page 27
<PAGE>
FORM 10-Q              INDEX TO EXHIBITS

Exhibit                                            Sequential
  No.       Description                             Page No. 

* 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 28
<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(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.

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

Exhibit                                            Sequential
  No.       Description                             Page No. 

* 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.

* 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, filed as Exhibit
            4.4(f) to the Registrant's report on
            Form 10-Q for the quarter ended
            March 30, 1997.

  4.4(g)    Amendment No. 6 to Credit Agreement
            dated as of June 27, 1997 to the

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

Exhibit                                            Sequential
  No.       Description                             Page No. 

            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.                           34

* 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.

* 4.8(a)    First Amendment to the Cone Mills
            Corporation 1983 ESOP dated
            May 9, 1995,  filed as Exhibit 4.9(a)
                           Page 31
<PAGE>
FORM 10-Q              INDEX TO EXHIBITS

Exhibit                                            Sequential
  No.       Description                             Page No. 

            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                    36




                             
* Incorporated by reference to the statement or report
indicated.
                           Page 32
<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  August 11, 1997         /s/ Anthony L. Furr          
                              Anthony L. Furr
                              Vice President and
                              Chief Financial Officer

                           Page 33