UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

                Annual Report Pursuant to Sec. 13 or 15(d) of the
                         Securities Exchange Act of 1934

For the Fiscal Year Ended 12/31/97                  Commission File Number 0-774

                           DANIEL GREEN COMPANY
           (Exact name of registrant as specified in its charter)

MASSACHUSETTS                                             15-0327010
(State or other jurisdiction or incorporation           (IRS Employer
   or organization                                 Identification Number)

ONE MAIN ST., DOLGEVILLE, NEW YORK                  13329
(Address of principal executive offices)          (Zip Code)

Registrant's telephone number, including area code:        (315)-429-3131

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

Title of each class                Name of each exchange on which registered
         None                                        None

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

         COMMON STOCK, $2.50 PAR VALUE PER SHARE
                  (Title of Class)

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

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

Revenues of the Registrant for the Fiscal Year Ended December 31, 1997:
                     Net Sales of $19,663,142

Aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
registrant:
                 $4,241,209 as of March 18, 1998
<PAGE>
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practical date:

CLASS                                        OUTSTANDING AT MARCH 18, 1998
COMMON STOCK, $2.50 PAR VALUE                     1,698,329 shares


List hereunder the following  documents,  if incorporated by reference,  and the
part of the Form 10-KSB into which the document is incorporated:
Annual Report to Stockholders, December 31, 1997              Part II
Definitive Proxy Statement Dated March 3, 1998                Part I, Part III

                                     PART I

Item 1. Description of Business

         The  registrant  and  its   predecessors   have  been  engaged  in  the
manufacture  and sale of quality  leisure  footwear since 1882. The Daniel Green
slipper is one of the oldest and best known in the footwear industry.  Materials
in Daniel Green slippers include satin, rayon,  corduroy,  nylon, brocade, felt,
polyurethane and several types of leather.

         Women's slippers and leisure footwear,  which normally account for over
80% of the registrant's  annual sales,  retail within a price range varying from
$19.00 to $76.00 a pair, while men's slippers are sold at prices ranging between
$20.00 to $48.00 a pair. Overall,  the registrant produces about 65 to 75 styles
of slippers and leisure  footwear,  many of which change from year to year.  The
registrant designs most of its own products,  having for many years maintained a
style research department.  Approximately 40 styles are imported and produced by
overseas  manufacturers.  The registrant  owns the  trademarks  Comfy(R) and Dee
Gee(R) and sells its shoes under the label "Daniel Green Leisure Footwear".

         Most of the slippers and leisure  footwear sold by the  registrant  are
manufactured in its plants in Dolgeville, New York (more fully described in Item
2  -  Property).   During  1997,  the  registrant  started  to  consolidate  its
manufacturing  operations and in 1998,  the  registrant  will operate its entire
domestic manufacturing within one facility,  excluding warehousing and importing
activity.  The  registrant  has  experienced  no difficulty in obtaining the raw
materials  needed to  manufacture  its  products and does not have a practice of
entering into long-term purchase commitments.

         The  registrant's  products are sold directly to retailers  through its
own sales force  which  covers the entire  United  States.  Approximately  4,600
stores carry Daniel Green Company slippers and leisure footwear,  including most
of the major department stores in the country. Seven major customers represented
41% of the registrant's business in 1997. These same customers

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<PAGE>
represented 46% of sales in 1996 and 42% in 1995. Due to the uncertain nature of
the retail industry, the loss of any one or more customer would have a material
adverse effect on the registrant's business.

         The   registrant   advertises   its  products   through  a  cooperative
advertising  program  and for many  years has built  its  advertising  campaigns
around the trademark  Comfy(R).  It avoids granting restricted or exclusive shoe
sales  arrangements,  believing that  distribution of its products  requires the
greatest  number  of  outlets.   However,   the  registrant  has  a  contractual
arrangement  with  one of its  major  customers  to  provide  selected  footwear
products.  Private label  products are sold to a number of customers by internal
management and several companies account for a majority of this business.

     The  registrant's  business  is a  seasonal  one.  By  offering a June 10th
payment date to customers buying slippers for shipments  between January 1st and
May 1st, the registrant has been able to encourage  customers to replenish their
core stock  programs on an earlier basis.  Dating  privileges are also given for
payment on May 10th for all Spring  casuals  shipped  between  November 25th and
March 24th, and a November 10th dating for Fall casuals shipped between June 1st
and September 1st.  However,  inclusive of this dating program,  the majority of
the  registrant's  sales are generated during the latter half of the year. In an
effort to promote holiday sales,  the registrant has offered a Christmas  dating
which allows  customers to pay on December  10th for orders of slippers  shipped
between June 1st and October 1st.

         The  registrant  experiences  severe  competition  in the  sale  of its
slippers from other manufacturers of leisure footwear,  particularly imports. It
maintains an active  research and  development  staff which  concentrate  on the
introduction  and release of new products into the market place.  The registrant
is not aware of any patents  held by others  which might  materially  affect its
ability to compete.

         The registrant believes that a definite competitive  advantage attaches
to its ownership of the registered trademarks Comfy(R) and Dee Gee(R) which have
been used by the registrant for many years.

         The  registrant  knows of no  material  effects  that  compliance  with
federal,  state and local provisions  regulating the discharge of materials into
the environment may have upon the capital expenditures, earnings and competitive
position of the registrant.

         The registrant has enjoyed a good relationship  with  approximately 275
employees,  most of whom are full time. All of the registrant's employees,  with
the exception of field salesmen, are employed in Dolgeville, New York.

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<PAGE>
         The amount of  registrant's  backlog  orders  believed to be firm as of
December  31,  1997  is  approximately  $643,000,  compared  with  approximately
$1,389,000  and  approximately  $543,000  as  of  December  31,  1996  and  1995
respectively.  All  backlog  orders are  expected  to be filled  within the next
fiscal year. The backlog orders are a normal aspect of the registrant's business
due to its seasonal nature.

Item 2. Description of Properties.

         The registrant's  executive  offices and  manufacturing  facilities are
located in Dolgeville, New York. This site consists of approximately 15 acres of
land on which there is a group of multi-story buildings containing approximately
337,000 square feet of floor space. These buildings are constructed  principally
of wood and limestone. The principal buildings were built between 1882 and 1890.

         The  registrant's  real property,  equipment and other fixed assets are
maintained in good condition and actively utilized.

         Registrant  believes  that its  plants,  which  contain  a  variety  of
machinery  for the  manufacture  of leisure  footwear,  are adequate to maintain
present production output.

         All registrant's buildings are owned by the registrant.  The registrant
leases production and office equipment which expire at various dates through the
year 2001.

Item 3. Legal Proceedings.

         None

Item 4. Submission of Matters to a Vote of Security Holders.

         This  information is contained in the definitive  proxy statement dated
March 3, 1998 which has been filed with the  Commission,  and is incorporated by
reference in this Form 10-KSB Annual Report.

                                     Part II

Item 5.  Market  for the  Registrant's  Common  Stock  and  Related  Stockholder
         Matters.

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<PAGE>
         This information is contained in the 1997 Annual Report to Stockholders
which was previously filed with the Commission, and is incorporated by reference
in this Form 10-KSB Annual Report as Exhibit 13.

Item 6. Management's Discussion and Analysis or Plan of Operations.

         This information is contained in the 1997 Annual Report to Stockholders
which was previously filed with the Commission, and is incorporated by reference
in this Form 10-KSB Annual Report as Exhibit 13.

Item 7. Financial Statements.

         The required financial  statements together with the Report of Deloitte
& Touche LLP dated  January 30, 1998,  is contained in the 1997 Annual Report to
Stockholders which was previously filed with the Commission, and is incorporated
by reference in this Form 10-KSB Annual Report as Exhibit 13.


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; Compliance
        with Section 16(a) of the Exchange Act.

         This  information is contained in the Definitive  Proxy Statement dated
March 3, 1998, which has been filed with the Commission,  and is incorporated by
reference in this Form 10-KSB Annual Report.

Item 10. Executive Compensation.

         This  information is contained in the Definitive  Proxy Statement dated
March 3, 1998, which has been filed with the Commission,  and is incorporated by
reference in this Form 10-KSB Annual Report.

Item 11. Security Ownership of Certain Beneficial Owners and Management.


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<PAGE>
         This  information is contained in the Definitive  Proxy Statement dated
March 3, 1998, which has been filed with the Commission,  and is incorporated by
reference in this Form 10-KSB Annual Report.

Item 12. Certain Relationships and Related Transactions.

         This  information is contained in the Definitive  Proxy Statement dated
March 3, 1998, which has been filed with the Commission,  and is incorporated by
reference in this Form 10-KSB Annual Report.

                                     PART IV


Item 13. Exhibits, List, and Reports on Form 8-K.

         (a).     Exhibits

                  (13)     1997 Annual Report to Stockholders

                  (21)     Subsidiary of the registrant



         (b).     Reports on Form 8-K.

                  There were no reports  filed on Form 8-K for the quarter ended
                  December 31, 1997.







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<PAGE>


                                   SIGNATURES


         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.



                                     DANIEL GREEN COMPANY
                                          (Registrant)



DATE: March 31, 1998                 By: /s/ James R. Riedman
                                         James R. Riedman,
                                         Chairman and Chief Executive
                                         Officer

                                     By: /s/ Stanley W. Kabot
                                         Stanley W. Kabot,
                                         Chief Financial Officer &
                                           Treasurer


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

                                    DIRECTORS


/s/ Edward Bloomberg                                 /s/ Steven DePerrior
Edward Bloomberg                                     Steven DePerrior


/s/ David T. Griffith                                /s/ Gregory Harden
David T. Griffith                                    Gregory Harden


/s/ Gary E. Pflugfelder                              /s/ James R. Riedman
Gary E. Pflugfelder                                  James R. Riedman



DATE:  March 31, 1998

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