U.S. Securities and Exchange Commission
Washington, D.C.  20549

    (X)  ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934 (Fee Required)

For the twelve month period ended     September 30, 1998          

Commission file number            0-643               

Corning Natural Gas Corporation                   

(Name of small business issuer in its charter)

           New York                                16-0397420             

(State or other jurisdiction of        (I.R.S. Employer Identification No.)
incorporation or organization)

330 W. William St., Corning NY                         14830             
(Address of principal executive offices)             (Zip Code)

Issuer's telephone number    (607) 936-3755   

Securities registered under Section 12(b) of the Exchange Act:  None

Securities registered under Section 12(g) of the Exchange Act:

                     Common Stock - $5.00 par value                          
(Title of class)

    Check whether the issurer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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                           

    Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-ISV.   (X)

Revenues for 12 month period ended September 30, 1997 $16,673,295

The aggregate market value of the 330,739 shares of the Common Stock held by
non-affiliates of the Registrant at the $20 average of bid and asked prices
as of November 1, 1998 was $6,614,780.


Number of shares of Common Stock outstanding as of the close of business on
November 1, 1998 - 460,000.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Registrant's Annual Report to Shareholders for the twelve month
period ended September 30, 1998, and definitive proxy statement and notice of
annual meeting of shareholders, dated February 1 , 1998, are incorporated by
reference into Part I, Part II and Part II hereof.

Information contained in this Form 10-KSB and the Annual Report to
shareholders for fiscal 1998 period which is incorporated by reference
contains certain forward looking comments which may be impacted by factors
beyond the control of the Company, including but not limited to natural gas
supplies, regulatory actions and customer demand.  As a result, actual
conditions and results may differ from present expectations.

CORNING NATURAL GAS CORPORATION
FORM 10-KSB
For the 12 Month Period Ended September 30, 1998
Part I

ITEM 1 - DESCRIPTION OF BUSINESS
(a)  Business Development
Corning Natural Gas Corporation (the "Company" or "Registrant"), incorporated
in 1904, is a natural gas utility.  The Company purchases its entire supply of
gas, and distributes it through its own pipeline distribution and transmission
systems to residential, commercial, industrial and municipal customers in the
Corning, New York area and to two other gas utilities which service the Elmira
and Bath, New York areas.  The Company is under the jurisdiction of the Public
Service Commission of New York State which oversees and sets rates for New
York gas distribution companies.  The Company also sells, leases and services
appliances, primarily gas burning, through its wholly owned subsidiary,
Corning Natural Gas Appliance Corporation.
(b)  Business of Issuer
    (1)  The Company maintains a gas supply portfolio of numerous contracts
and is not dependent on a single supplier.  Additionally, the Company has
capabilities for storing 793,000 Mcf through storage operations with two of
its suppliers.  The Company had no curtailments during fiscal 1998 and expects
to have an adequate supply available for its customers during fiscal 1999
providing that no abnormal conditions or actions occur.
    (2)  The Company is franchised to supply gas service in all the
political subdivisions in which it operates.
    (3)  Since the Company's business is seasonal by quarters, sales for
 each quarter of the year vary and are not comparable.  Sales for different
periods vary depending on variations in temperature, but the Company's Weather
Normalization Clause (WNC) serves to stabilize net revenue from the effects of
temperature variations.  The WNC allows the Company to adjust customer
billings to compensate for fluctuations in net revenue caused by temperatures
which are higher or lower than the thirty year average temperature for the
period.  Degree days, which represent the number of degrees that the average
daily temperature falls below 65 degrees Fahrenheit, totaled 5,979 for the
period October 1, 1997 through September 30, 1998 and 6,831 for the same
period ended September 30, 1997.
    (4)  The Company has three major customers, Corning Incorporated, New
York State Electric & Gas (NYSEG), and Bath Electric, Gas & Water Systems
(BEGWS).  The loss of any of these customers could have a significant impact
on the Company's financial results.
    (5)  Historically, the Company's competition in the residential market
has been primarily from electricity in cooking, water heating and clothes
drying, and to a very small degree, in heating.  The price of gas remains low
in comparison to that of electricity in the Company's service territory and
the Company's competitive position in the residential market continues to be
very strong.  Approximately 99% of the Company's general service customers
heat with gas.
    In recent years competition from oil has developed in the industrial
 market.  The Company has been able to counteract much of this competition, to
date, through the transportation of customer owned gas for a transportation
charge.  The customer arranges for their own gas supply, then moves it through
the Company's facilities for a transportation fee.  The Company's
transportation rate is equal to the lowest unit rate of the appropriate rate
classification, exclusive of gas costs, hence the profit margin is maintained.
    Additionally, under an increasingly deregulated environment there is
opportunity for the Company to increase revenue by selling its upstream
pipeline capacity to transportation customers.  The Company is authorized to
retain 15% of such revenue and 85% is returned to firm customers in the form
of lower gas costs.  Transportation customers that pay for this capacity are
virtually assured that their supply will not be interrupted.  Revenues derived
from the resale of this capacity were $159,872 for 12 months ended September
30, 1998 and $242,289 for the 12 months ended September 30, 1997.
    For those willing to bear some risk, the Company has an interruptible
transportation rate for its large industrial customers whereby the customer
may elect to avoid payment of demand charges but bears the risk of partial or
total upstream interruption of service during certain periods.  To maintain
industrial load in the event that oil prices temporarily drop below the
equivalent gas price, the Company continues to maintain a flexible
transportation rate schedule.  This flexible rate has been used infrequently
since its inception.
    
    On November 3, 1998 the New York State Public Service Commission (PSC)
issued a Policy Statement in which they provided their view as to how to best
ensure a competitive market, eliminate barriers to competition, provide
guidance to LDC's and marketers and address customer inertia.  A detailed
discussion appears in the Industry Restructuring section of the enclosed
Annual Report to Shareholders.
    (6)  The Company believes compliance with present federal, state and
local provisions relating to the protection of the environment will not have
any material adverse effect on capital expenditures, earnings and financial
position of the Company and its subsidiary.
    (7)  Seventy-seven persons were employed by the Company in 1998 versus
seventy-six for the previous year. 

ITEM 2 - DESCRIPTION OF PROPERTY
    The Company completed the construction of a new office building at 330
West William Street, Corning, NY in the fall of 1991.  This structure is
physically connected to the operations center built three years earlier.  The
Company had outgrown its general offices at 27 East Denison Parkway.  The
property has been sold, and the gain on the sale was returned to ratepayers. 
    The Company's pipeline system is thoroughly surveyed each year.  Any
necessary replacements are included in the construction budget.  Approximately
105 miles of transmission main, 287 miles of distribution main, 13,800
services and 86 measuring and regulating stations, along with various other
property are distributed throughout the service area.  All of the above
described property is owned by the Company, except for one short section of
10" gas main which is under a long-term lease and is used primarily to serve
Corning Incorporated.  All of the above described property which is owned by
the Company is adequately insured, and is subject to the lien of the Company's
first mortgage indenture.

ITEM 3 - LEGAL PROCEEDINGS
    The Company is not a party to any material pending legal proceedings,
nor is the Company aware of any problems of any consequence which it
anticipates may result in legal proceedings.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    No matters were submitted to a vote of security holders during the third
quarter of 1998.

Additional Item
Executive Officers of the Registrant
(Including Certain Significant Employees)

                                    Business Experience              Years
Served
Name                    Age       During Past 5 Years           In This Office

Thomas K. Barry        53    Chairman of the Board of Directors          5
                                       President & C.E.O                       
      
     14   
Edgar F. Lewis          61   Senior Vice President - Operations         18

Kenneth J. Robinson 54  Executive Vice President                    7

Phyllis J. Groeger  58  Secretary                                  11   

Thomas S. Roye          45   Vice President - Administration             7

Gary K. Earley      44 Treasurer                                               
  7

Term of office is for one year.  (Normally from April to April)


Part II
ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
    The principal market on which the Registrant's common stock is traded,
the range of high and low bid quotations for each quarterly period during the
past two years, the amount and frequency of dividends, and a description of
restrictions upon the Registrant's ability to pay dividends, appear in the
table below.  The number of stockholders of record of the Registrant's Common
Stock was 355 at September 30, 1998.  The high and low bid quotations reflect
inter-dealer prices, without retail markup, markdown or commission and may not
represent actual transactions.

MARKET PRICE - (OTC)
                                                                            
Dividend
Quarter Ended                          High                Low            Paid 
    
March 31, 1997               22                21 1/2      $ .32
June 30, 1997                            21 1/4      20                .32
September 30, 1997               21 1/4      20              .32
December 31, 1997                                     .325      
March 31, 1998                         $                   $                   
$
 .325
June 30, 1998                                                               .325
September 30, 1998                                                .325  
  
    The Company incurred $4,700,000 in new long-term debt in 1997.  The
proceeds of this new issue were used to pay off $3.1 million in short-term
debt and retire a 10% First Mortgage Bond with a balance of $1.6 million.  The
new debt is an unsecured senior note at 7.9 percent interest with a maturity
date of September 25, 2017.  Canada Life Assurance Company of Toronto is the
debt holder; interest payments are made quarterly with sinking fund payments
as follows:  $355,000 annually starting September, 2006 with a $795,000
payment due September 1, 2017.


ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
    Management's discussion of financial condition and results of operations
of the Company appears in the 1998 Annual Report to Shareholders which is
incorporated by reference.

ITEM 7 - FINANCIAL STATEMENTS
    The consolidated financial statements, together with the independent
auditors' report thereon of KPMG Peat Marwick LLP dated November 7, 1998 are
included in the 1998 Annual Report to Shareholders attached hereto, and are
incorporated in this Form 10-KSB by reference thereto.

ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None

Part III
ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
    The information required regarding the executive officers of the
Registrant is included in Part 1 under "Additional Item".

ITEM 10 - EXECUTIVE COMPENSATION
    The information required regarding the compensation of the executive
officers appears in the Definitive Proxy Statement attached hereto.

ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
    The information required regarding the security ownership of certain
beneficial owners and management appears in the Definitive Proxy Statement
attached hereto.

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    The information required regarding certain relationships and related
transactions appears in the Definitive Proxy Statement attached hereto.

Part IV

ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

    The following exhibits are filed with this Form 10-KSB or incorporated
    herein by reference:  (Exhibit numbers correspond to numbers assigned to
      exhibits in Item 601 of Regulation S-B)

Exhibit  Name of Exhibit                                             

 3            A copy of the Corporation's Articles of Incorporation,
              as currently in effect, including all amendments, was
         filed with the Company's Form 10-K for December 31, 1987.

 3       A copy of the Corporation's complete by-laws, as
              currently in effect, was filed with the Corporation's
         report on Form 10-Q for the quarter ended March 31, 1984.

10       A copy of the "Agreement Between Corning Natural Gas
         Corporation and Local 139", dated September 1, 1998
         was filed with Form 10-KSB for September 30, 1998.
                                  
10       Consulting Agreement and Employment Contracts with
         three executive officers were filed with the Company's
              Form 10-K for December 31, 1987.

10       A copy of the Service Agreement with CNG
              Transmission Corporation was filed with the Company's
      Form 10-KSB for December 31, 1993.

10       A copy of the Sales Agreement with Bath Electric, Gas
              and Water was filed with the Company's Form 10-K for
         December 31, 1989.

10       A copy of the Transportation Agreement between the Company
              and New York State Electric and Gas Corporation was filed
              with the Company's Form 10-KSB for December 31, 1992.            
    

10       A copy of the Transportation Agreement between the
         Company and Corning Incorporated was filed with the
         Company's Form 10-KSB for December 31, 1992.

10       A copy of the Service Agreement with Columbia Gas
    Transmission Co. was filed with the Company's
      10-KSB for December 31, 1993.    
                                                      
13       A copy of the Corporation's Annual Report to
         Shareholders for 1998, is filed herewith.                         

22       Information regarding the Company's sole subsidiary was
         filed as Exhibit 22 with the Company's Form 10-K for
           the period ended December 31, 1981.

28       Corning Natural Gas Corporation Proxy Statement is
         filed herewith.                              
                   
99       Order from the U.S. Bankruptcy Court, Northern District of
       New York re:  Approval of Acquisition of Finger Lakes Gas Company
    was filed with the Company's 10-KSB for the period ended December
    31, 1995.

99       Order from the Public Service Commission of New York State
    re:Approval of Acquisition of Finger Lakes Gas Company was filed
    with the Company's 10-KSB for the period ended December 31, 1995.          
    
     
(b) Reports on Form 8-K

    The Company filed no reports on Form 8-K during the three month period
ended September 30, 1998.

SIGNATURES

    In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.


                        CORNING NATURAL GAS CORPORATION                        
              (R
egistrant)    



                              
Date   December 21, 1998       THOMAS K. BARRY
                                            Thomas K. Barry, Chairman of the
                               Board, President and C.E.O.



                                  
Date   December 21, 1998       GARY K. EARLEY
                               Gary K. Earley, Treasurer



    In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.


Date       December 21, 1998        J.E. BARRY                          
                                                   J.E. Barry, Director



Date   December 21, 1998       DONALD R. PATNODE               
                                                  Donald R. Patnode, Director  
    



Date   December 21, 1998       J.A. FINLEY                           
                                                  J.A. Finley, Director