SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON D.C. 20549
                   ___________________________
                            FORM 10-K

    [X] Annual Report Pursuant to Section 13 or 15(d) of the
                 Securities Exchange Act of 1934
           For the Fiscal Year Ended December 31, 1998
                               or
  [  ] Transition Report Pursuant to Section 13 or 15(d) of the
                 Securities Exchange Act of 1934
 For the transition period from _____________ to _______________
                                
                 Commission File Number 0-25210

                          NeoPath, Inc.
     (Exact name of registrant as specified in its charter)

Washington                                       91-1436093
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                   Identification No.)

8271 - 154th Avenue NE, Redmond, Washington      98052
(Address of principal executive offices)         (Zip Code)

                         (425) 869-7284
       Registrant's telephone number, including area code
                                
Securities registered pursuant to Section 12(b) of the Act:
                                
                                           Name of each exchange
Title of each class                        on which registered
___________________                        ___________________
        None                                       N/A

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

                  Common Stock, $.01 par value
                        (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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
     
                     Yes [X]        No [  ]

     Indicate 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 registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.  [X]

     Aggregate market value of voting and nonvoting stock held
by non-affiliates of the registrant as of February 25, 1999 was
$68,986,907.

     Number of shares of Common Stock outstanding as of
February 25, 1999:  17,412,504 shares.

               DOCUMENTS INCORPORATED BY REFERENCE
                                
     Portions of the 1998 Annual Report to Shareholders are
incorporated by reference into Part II.

     Part III is incorporated by reference to the definitive
Proxy Statement to be filed in connection with the Company's
Annual Meeting of Shareholders to be held on May 20, 1999.

<PAGE>
                                
                             PART I

Item 1.     BUSINESS

  The following Business section includes "forward-looking
statements" within the meaning of the Private Securities
Litigation Reform Act of 1995.  The Act provides a "safe harbor"
for forward-looking statements to encourage companies to provide
prospective information about themselves so long as they identify
these statement as forward-looking and provide meaningful
cautionary statements identifying important factors that could
cause actual results to differ from the projected results.  All
statements other than statements of historical fact the Company
makes in this document or in any document incorporated by
reference are forward-looking.  In particular, the statements
herein regarding industry prospects and the Company's future
results of operations or financial position are forward-looking
statements.  Forward-looking statements reflect management's
current expectations and are inherently uncertain.  The Company's
actual results may differ significantly from expectations.  The
section entitled "Factors Affecting Future Results and Forward-
Looking Statements" describes some, but not all, of the factors
that could cause these differences.

The Company

  NeoPath, Inc. ("NeoPath" or the "Company"), a Washington
Corporation incorporated in 1989, develops and markets visual
intelligence technology to increase accuracy in medical testing.
NeoPath's initial products include two automated screening
systems that integrate proprietary high-speed morphology
computers, video imaging technology, and sophisticated image
interpretation software to capture and analyze thousands of
microscopic images from a Papanicolaou ("Pap") smear slide for
the early detection of cervical cancer.
 
  The United States Food and Drug Administration (the "FDA")
approved NeoPath's AutoPap(R) 300 QC Automatic Pap Screener
System (the "AutoPap QC") in 1995.  The AutoPap QC is a
rescreening device used for quality control and rescreening of
previously screened Pap smear slides previously screened by
cytotechnologists.  Clinical studies have shown that the AutoPap
QC detects a significantly higher proportion of undetected
abnormal slides than procedures typically employed by clinical
laboratories to meet federal rescreening requirements.
 
  The FDA approved NeoPath's AutoPap(R) Primary Screening System
(the "AutoPap Screener") in May 1998.  The AutoPap Screener uses
the same hardware components as the AutoPap QC, but uses enhanced
software to perform the initial screening of Pap smear slides and
to classify up to 25% of such slides as requiring no further
review.  Clinical studies have shown that the AutoPap Screener
provides statistically significantly better sensitivity and
specificity when compared to existing laboratory practice.
Currently, it is the only instrument approved by the FDA that
allows Pap smear slides to bypass human review.  This feature of
the AutoPap Screener provides customers with an economic
incentive to adopt the technology.
 
  The "AutoPap System" refers to the AutoPap Screener and the
AutoPap QC together.
 
Background

Cancer of the Uterine Cervix

  Cancer of the uterine cervix is one of the most common cancers
among women throughout the world, with approximately 500,000 new
cases reported each year.  The American Cancer Society projected
that, in the United States in 1998, approximately 13,700 new
cases of invasive cervical cancer would be diagnosed and
approximately 4,900 women would die of cervical cancer.  Almost
all deaths due to cervical cancer could be prevented with early-
stage detection and treatment.  Cancer of the uterine cervix is
preceded by a precancerous, curable stage that generally
progresses without symptoms over a period of years until it
reaches an invasive stage.  Treating uterine cervical cancer
after it has reached the invasive stage becomes more difficult
and expensive, and may not be successful.  Industry sources have
estimated that, of the approximately 50 million Pap tests
conducted annually in the United States, approximately 2.5
million, or 5%, are diagnosed with precancerous conditions or
cancer.
  
Page 1
<PAGE>

The Pap Test

  The Pap test, developed in the 1940s by Dr. George N.
Papanicolaou, is a screening procedure for the early detection of
precancerous and cancerous conditions of the uterine cervix.  The
Pap test was designed to identify abnormalities that may progress
to cervical cancer, thereby facilitating early medical
intervention.  If early detection is made, treatment is
relatively inexpensive and almost always successful.  To obtain a
Pap smear, a gynecologist or general practitioner scrapes the
surface of a woman's uterine cervix to collect a sample of cells.
The specimen is smeared onto a microscope slide and preserved
with a fixative agent such as alcohol.  This Pap smear, along
with patient information, is then sent to a clinical laboratory
for further preparation, screening and diagnosis.

  At the laboratory, the specimen, which typically consists of
50,000 to 300,000 cervical cells, is stained to highlight
important cellular features and sealed with a protective
coverslip.  The Pap smear is then placed under a microscope and
examined by a cytotechnologist for signs of abnormality.
Cytotechnologists, medical professionals with special training in
cytology (the study of cells), generally require five to ten
minutes to screen each Pap smear slide and complete related
paperwork.  Typically, about 90% to 95% of all Pap smears are
classified as normal.  In the remaining cases, a cytotechnologist
has detected a suspicious condition that must be reviewed by a
senior cytotechnologist. Those slides confirmed to have signs of
precancerous conditions or cancer, typically about 5% of all
cases, are referred to a cytopathologist, who carefully reviews
the Pap smear and makes a final diagnosis.

  Despite the acknowledged success of the Pap test, there are
certain limitations in the current method of manual Pap smear
review.  Pap smears are subject to a highly variable false-
negative rate (the percentage of abnormal smears that are
misclassified as normal).  In certain laboratories, this false-
negative rate may exceed 25% (that is, one of four abnormal Pap
smears may be misclassified as normal).  Partly because physical
and mental stress escalates with the number of Pap smears
examined, thereby increasing the risk of false-negatives, federal
regulations promulgated under the Clinical Laboratory Improvement
Amendments of 1988 ("CLIA") generally limit the number of slides
that a cytotechnologist may screen each day to no more than 100.
As an additional quality control measure, the CLIA regulations
also require that laboratories rescreen a minimum of 10% of all
Pap smears initially classified as normal.

Treatment

  In the United States, each Pap smear slide is typically
classified in accordance with The Bethesda System for Reporting
Cervical/Vaginal Cytologic Diagnoses.  Any slide classified as
other than normal is considered abnormal and may be precancerous
or cancerous.  Abnormalities evident in Pap smears may indicate
various conditions ranging from atypical squamous cells of
undetermined significance ("ASCUS") and atypical glandular cells
of undetermined significance ("AGUS"), both commonly referred to
as "atypia," and low-grade squamous intraepithelial lesions
("LSILs") to high-grade squamous intraepithelial lesions
("HSILs") and cancer.  A woman whose Pap smear indicates the
presence of HSILs or cancer will typically receive a colposcopic
examination, and if necessary, a biopsy.  Treatment of early-
stage noninvasive cervical cancer, which is relatively curable,
may be accomplished by epithelial treatment in which the
cancerous tissue is removed, for example, by electrocautery.
Once the cancer reaches an invasive stage, the patient's chances
for recovery are diminished and typically require treatment such
as radiation therapy, surgery, or chemotherapy.

Market

  The Company believes that clinical analysis of Pap smears
currently represents the largest nonautomated clinical laboratory
procedure.  Industry statistics indicate that U.S. clinical
laboratories process over 50 million Pap smears annually and that
laboratories outside the United States process more than 60
million Pap smears annually.  Pap smears are generally processed
in hospital-based or independent clinical laboratories.
  
  NeoPath's AutoPap Screener is the only instrument approved by
the FDA that allows Pap smear slides to bypass human review.
This feature of the AutoPap Screener provides customers with an
economic incentive to adopt the technology.  In addition, in
recent years there has been an increasing focus on improving the
quality of women's healthcare.  The Company believes that the
AutoPap System will allow laboratories to better detect
precancerous cervical conditions and cervical cancer, thereby
improving the standard of care for their female patients.
Earlier detection will facilitate more timely treatment and will
lower risks of morbidity and mortality.
 
Page 2
<PAGE>

  Laboratories that fail to accurately identify Pap smears that
contain indications of precancerous conditions or cancer may be
subject to malpractice suits.  Because federal law requires all
Pap smears to be retained by laboratories for five years, these
laboratories face significant exposure to liability.  The Company
believes that use of its AutoPap System will substantially
improve the current quality of practice, thereby enabling those
laboratories that use the AutoPap System to reduce their exposure
to such liability.

Products

  NeoPath's AutoPap Screener and AutoPap QC employ identical
hardware components.  The AutoPap Screener, however, contains
enhanced software, including additional cell-classification
algorithms, that allow it to be used for the initial screening of
Pap smears.

  The AutoPap System is used on-site by general laboratory
personnel and is compatible with a wide range of staining
procedures used on conventionally prepared Pap smear slides.  The
AutoPap System currently requires use of glass coverslips, which
are widely used by most laboratories and provide consistent
optical characteristics.  The AutoPap System analyzes a Pap smear
in approximately the same time as a cytotechnologist.  The
AutoPap System, which holds approximately 300 Pap smear slides at
a time, is easy to load and unload, and is designed to operate
continuously, or with minimal intervention, for up to 24 hours
per day.  The Company provides each clinical laboratory with on-
site training, system documentation, a comprehensive quality
assurance program, and ongoing customer and technical support.
  
  NeoPath believes that its automated image-interpretation
technology has substantial application for other diagnostic tests
that involve microscopic analysis of biological specimens on
glass slides, such as sputum, blood, tissue, or urine samples.
In addition, the Company has identified several other potential
applications for its technology, including automated image
interpretation for lung, breast, bladder and skin cancers. The
Company believes that the technology embodied in the hardware
platform of the AutoPap System is appropriate for other
applications involving analysis of cellular images on microscope
slides.  Developing systems for such applications primarily
involves adapting software algorithms developed for the analysis
of Pap smears to the analysis of other tissue specimens.  The
Company continues to evaluate the indications on which it may
focus future development efforts, including non-medical
applications.
  
  The Company's research and development expenses were $11.3
million, $14.2 million, and $11.2 million in the years ended
December 31, 1998, 1997, and 1996, respectively.

AutoPap Primary Screener System
  
  The FDA approved the AutoPap Screener in May 1998.  The AutoPap
Screener incorporates new diagnostic algorithms (not used in the
AutoPap QC) to improve diagnostic accuracy in the primary
screening of Pap smear slides.  The AutoPap Screener identifies
up to approximately 25% of the lowest-ranking slides as "within
normal limits" and requiring no further review.  The remaining
approximately 75% of slides are subjected to manual screening
with the assistance of the AutoPap ranked review report.  This
ranked review report indicates the relative scores of the
processed slides; at least 15% of the highest-ranking slides that
are classified as within normal limits by manual review undergo
quality control rescreening.
 
  Clinical studies have shown that the AutoPap Screener-assisted
practice identifies more abnormal slides compared to current
practice, and this difference is statistically significant in
favor of the AutoPap Screener-assisted practice.  In addition,
the AutoPap Screener-assisted practice shows improved specificity
(the ability to correctly identify normal slides) over current
practice.
 
Page 3
<PAGE>
 
  The AutoPap Screener has become the Company's principal product
for the Pap smear screening market.  By reducing the number of
Pap smears requiring cytotechnologist review, the AutoPap
Screener increases the number of Pap smears a laboratory can
process, potentially reducing the per-slide processing cost while
improving overall laboratory accuracy.  Because the AutoPap
Screener is an upgrade, designed to incorporate the features of
the AutoPap QC, the AutoPap Screener allows the laboratory to
continue to perform its AutoPap QC-assisted quality control
rescreening without having to process Pap smear slides twice
through the AutoPap System.  Because of the AutoPap Screener's
ability to act as a primary Pap smear screener, the Company
intends to charge higher fee-per-use and sale prices for use of
the AutoPap Screener than for the AutoPap QC.

AutoPap 300 QC Automatic Pap Screener System

  The AutoPap QC is designed to rescreen Pap smears that have
been previously screened and classified as normal by a
cytotechnologist.  Its purpose is to improve the detection of
false-negatives and, thereby, improve diagnostic accuracy.  The
AutoPap QC classifies slides based on their likelihood of being
abnormal; a percentage (10% or more) of those slides showing the
highest potential for abnormality are identified as requiring
additional review by a cytotechnologist qualified to perform
quality control.  The AutoPap QC is intended for use as either a
quality-control or an adjunct rescreening device for previously
manually screened Pap smears.  This flexibility allows
laboratories either to implement the AutoPap QC into their
quality-control procedures or to offer Pap smear rescreening by
the AutoPap QC as an additional service for those women who seek
an additional review of their Pap smears.

  Preclinical and clinical trials demonstrated that the AutoPap
QC, operating in a quality-control mode, showed up to a five-fold
improvement in the detection of false negative slides over a 10%
random selection method.  By the same standard, the AutoPap QC
achieved up to an eight-fold improvement in the detection of
biopsy-confirmed HSIL and cancer slides.  The Company believes
that the substantial improvement over current methodology
demonstrated by the AutoPap QC can result in consistent earlier
detection of precancerous conditions and cancer, thereby
facilitating more timely treatment and reducing the risk of
morbidity and mortality.

Marketing and Sales

  The AutoPap System is the only fully automated Pap smear
screening device to receive regulatory clearance for marketing in
the United States.  The Company believes that use of the AutoPap
System will serve to distinguish its customers' laboratories as
providing a higher quality of Pap smear screening compared to
those laboratories that have not adopted the AutoPap System.
 
  The Company recognizes revenue on either a product sale or fee-
per-use basis (subject to service and license agreements, rental
contracts, and minimum payments on certain fee-per-use
contracts).  Under its fee-per-use program, NeoPath retains
ownership of AutoPap Systems placed at customer sites and
assesses customers a charge for each Pap smear slide processed.

  NeoPath's primary market includes domestic and foreign clinical
laboratories.  Domestic revenues are generated primarily through
NeoPath's direct sales activities; international revenues are
derived primarily through distributors.  Approximately 19% of
NeoPath's revenues in 1998 were from customers outside of the
United States, compared to 51% in 1997 and 45% in 1996.  The
Company's market research indicates that over 35% of all U.S. Pap
smears are screened by the three largest laboratories, including
SmithKline Beecham Clinical Laboratories ("SmithKline"), Quest
Diagnostics Incorporated ("Quest"), and Laboratory Corporation of
America.  Each of these companies operates multiple laboratory
facilities nationwide.
 
  SmithKline has been NeoPath's largest customer, measured by
total AutoPap Systems installed, since the Company commenced
commercial operations in 1996.  SmithKline was also NeoPath's
largest customer in 1998, measured by total revenues.  In October
1998, NeoPath announced an agreement with SmithKline pursuant to
which SmithKline has agreed to adopt the AutoPap Screener
throughout its domestic laboratory organization.  This four-year
contract is intended to enable SmithKline to process 100% of its
Pap smear volume on AutoPap Screeners.  At current AutoPap
processing rates, NeoPath estimates that SmithKline may require
up to 125 AutoPap Screeners to process its nationwide volume of
Pap smears under contract.  As of December 31, 1998, SmithKline
had approximately 70 AutoPap Screeners installed at various
laboratory sites.
 
Page 4
<PAGE>
 
  In February 1999, SmithKline and Quest announced that Quest had
agreed to purchase SmithKline.  The combined entity would be the
largest clinical laboratory company in the world.  NeoPath's
national agreement with SmithKline is binding on successor
organizations, and NeoPath management believes that AutoPap
Systems installed under the SmithKline agreement will continue to
generate revenues in accordance with the underlying agreement.

  NeoPath distributes AutoPap Systems in Japan through an
agreement with Nikon Corporation ("Nikon") whereby Nikon markets
products to customers and handles maintenance and service.
NeoPath provides training for Nikon sales personnel and service
engineers, who in turn train Japanese customers.  The Japanese
market, with approximately 12 million Pap smear tests conducted
annually, is second only to the United States in current
screening volume for a country.  Nikon was NeoPath's largest
customer in 1997 and 1996, based on revenues.

  In addition to regulatory approvals in the United States, the
AutoPap System is approved for primary screening and quality
control rescreening in Japan, Canada, Australia, New Zealand, The
Netherlands, Italy, Hong Kong, Korea, and Taiwan.  In 1997,
NeoPath established NeoPath Europe, located in Belgium, as its
first international branch.
  
  The Company's four largest customers accounted for 41% of total
revenues in 1998, compared to 65% in 1997 and 86% in 1996.
  
  The Company installs the AutoPap System at customer
laboratories.  By providing this on-site service, the Company
believes that clinical laboratories will be better able to
integrate use of the AutoPap System into their normal workflow.
Installing the AutoPap System on site also allows clinical
laboratories to maintain control over patient specimens and
associated data, minimize slide handling and avoid delays in
reporting their test results.

  As the Company's product development efforts improve the
performance and functionality of the AutoPap System, the Company
intends, subject to obtaining applicable regulatory approvals, to
market upgraded product versions to its customers.  The Company
has not yet determined how it will charge for its upgrade
packages, but anticipates that upgrades will result in increases
in its fee-per-use and sale pricing.

Manufacturing

  The Company's manufacturing operations are located at its
headquarters in Redmond, Washington and consist of final
assembly, integration and testing of electronic, mechanical and
optical components and modules comprising the AutoPap System.  In
its manufacturing process, the Company is required to meet and
adhere to all applicable requirements of U.S. and international
regulatory agencies, including Quality Systems Regulations
("QSR"), as promulgated by the FDA.  As part of the FDA
regulatory process, the Company's AutoPap System manufacturing
processes and facilities are subject to periodic FDA QSR
inspections and may be subject to further periodic inspections by
U.S. and foreign regulatory agencies.  See "Governmental
Regulation."  NeoPath's manufacturing operations have produced
sufficient AutoPap Systems to meet customer demand since
commercial operations began in 1996.

  The Company purchases all components for the AutoPap System
from outside vendors.  A major component of the AutoPap System,
the slide tray motion system, is supplied by a sole-source
vendor.  Certain other components, such as the video cameras, are
currently supplied by single source vendors, and components
provided by additional or replacement suppliers would require
some modification to be incorporated into the AutoPap System.
The establishment of additional or replacement sources of supply
for many AutoPap System components cannot be accomplished
quickly, and substitution of components could require regulatory
approval, the receipt of which cannot be assured.  Accordingly, a
vendor's inability to supply acceptable components in a timely
manner and in the quantity required could delay or halt the
Company's manufacture of its products.  Any such delay or
cessation could have a material adverse effect on the Company.
  
Page 5
<PAGE>

Core AutoPap System Technology

  The Company's core AutoPap System technology consists of a
means for acquiring high-quality images through an integrated
high-speed video microscope, comprehensive image interpretation
software to accurately analyze images and classify cells and
slides, and high-speed custom field-of-view ("FOV") computers to
run the software at high speed.  This technology is able to
automatically analyze and extract important features of cellular
material and to classify a specimen based on those features.

High-Speed Video Microscope

  To capture high-quality images, the Company has designed a high-
speed video microscope consisting of an integrated
mechanical/optical system with a custom microscope and video
cameras that focus, capture and digitize images from a Pap smear.
The microscope and three video cameras are stationary while the
platform holding the Pap smear is moved, which allows the camera
system to scan the Pap smear in a continuous, systematic motion.
The Pap smear is illuminated by high-intensity, narrowband light
from a strobe that enhances cell contrast and freezes each image
without interrupting the motion of the platform holding the Pap
smear.

  The mechanical/optical system is controlled by a custom-
designed image capture and focus module that incorporates
specialized integrated circuits and software.  This module
calibrates the image acquisition system, automatically focuses
the system to obtain diagnostically relevant images and adjusts
for the non-uniform background and cell distributions of a
conventional Pap smear.  The image capture and focus module also
digitizes images, evaluates image and focus quality, decides
whether to accept or reject the image for analysis and identifies
the location of a rejected image for a repeat scan.

  The mechanical/optical system generally scans the slide in
three separate operations.  First, it performs a setup, which
consists of locating the slide, identifying the coverslip area
and mapping three-dimensional surface irregularities of the Pap
smear.  The system then captures and analyzes low-magnification
images from the slide in a systematic scan of the slide coverslip
area.  Finally, using information from the low-magnification
scan, the system captures high-magnification images from those
areas of the slide having the greatest diagnostic interest.

Image-Interpretation Software

  NeoPath's image-interpretation software integrates a series of
image-interpretation algorithms to examine slide images and
select and analyze those that are the most relevant indicators of
normality and abnormality.  An image-interpretation algorithm
consists of multiple-step mathematical and algorithmic processes
that detect and classify an object or collection of objects based
on shape, structure, optical density, contextual features and
other measurable characteristics.  The process executed by the
image-interpretation software consists of five steps:  selecting
images from a slide, segmenting the images into objects,
measuring object features, classifying objects and classifying
the slide.

    Selection of Images.  By analyzing images from a low-
  magnification scan of the slide coverslip area, algorithms
  first identify the areas most likely to contain cellular
  material of diagnostic significance.  This information then
  guides the high-speed video microscope to analyze the locations
  of greatest diagnostic interest in a separate high-
  magnification scan.  The AutoPap System also accumulates and
  stores information gathered in this first step for later use in
  the slide classification process.
   
    Segmentation Into Objects.  In the high-magnification scan,
  the AutoPap System locates and segments the well-defined cells
  or group of cells in each image into objects, while excluding
  from further analysis poorly defined objects and obvious
  artifacts (blood, mucus, dust particles and similar matter).
   
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    Measurement of Object Features.  Once objects or groups of
  objects are segmented from other elements of the image,
  algorithms measure more than 100 features from each object.
  Features are characteristics of the objects that independently
  or in combination provide effective discrimination among normal
  cells, artifacts and abnormal cells.  The algorithms
  discriminate on the basis of certain general categories of
  features, including the following:  density, texture, size,
  shape and context.  Density features are measures of the
  optical density of various portions of the cell, such as the
  cytoplasm and nucleus, and the ratios of these densities to
  each other.  Texture is a localized measure of optical density
  variation.  Size features refer to the physical areas of the
  segmented objects and their ratios to each other.  Shape
  features measure the boundary complexity of the segmented
  objects, can differentiate cell types, and are used to
  discriminate among isolated and overlapping objects.  Context
  compares an object to its surroundings and the proximity of
  objects to each other.
   
    Classification of Objects.  Using the measured object
  features, a series of algorithms then classifies the objects
  contained in the images.  Each classification algorithm
  contains multiple stages that proceed from easily identifiable
  objects to increasingly difficult objects, adding more features
  at each level of classification.  Three complementary
  algorithms are used to analyze the cells and cell groupings
  that could indicate normality and abnormality: the single-cell
  algorithm, the group algorithm and the thick-group algorithm.
  An "anomaly likelihood" value is computed at various steps of
  the classification process in which pre-defined thresholds are
  applied to provide "alarms," which identify objects that have a
  higher likelihood of being abnormal cells.  The results of the
  three algorithms are integrated to achieve high overall
  classification accuracy.
   
    Classification of the Slide.  All the gathered and analyzed
  information from objects is compiled in a series of scores that
  are used to classify the slide for purposes of quality-control
  rescreening, adjunct rescreening or primary screening.  Other
  algorithms evaluate the suitability of the slide for machine
  processing (quality of staining, adequacy of cell collection,
  presentation of material on the slide and image quality) and
  determine the probable presence of certain important cellular
  material such as endocervical and squamous cells.
 
  The AutoPap Screener utilizes new diagnostic algorithms that
provide an adjunctive evaluation score, in addition to the
original evaluation score, for superior detection of glandular
abnormalities.  This was accomplished by the development of new
algorithms that classify clusters of cells.  The adjunctive
evaluation score was implemented as a second opinion to the
decision of the original evaluation score.  The combination of
the adjunctive evaluation score and the original evaluation score
produces increased detection sensitivity for all abnormal
categories.
 
Field-of-View (FOV) Computer

  Image-interpretation algorithms are implemented in computer
programs that must be executed by a high-speed computing system.
These algorithms must be run for each Pap smear image, a process
requiring significant computing power.  To address this
requirement, NeoPath developed specialized FOV computers, which
are powerful image processors that contain application-specific
integrated circuits and other processing components.  The
execution speed of NeoPath's image-interpretation software is
accelerated through the use of these special-purpose computers.
The Company estimates that one FOV can perform elemental pixel
operations at a rate exceeding 1.6 billion per second and at
proportionately higher rates when several FOVs are linked to run
in parallel.  The current configuration for the AutoPap System
contains 15 FOVs.  The FOVs are fully programmable and can be
programmed to execute algorithms for other applications.

Patents and Proprietary Rights

  Because of the substantial length of time and expense
associated with bringing new products through development and
regulatory approval to the marketplace, the medical device
industry places considerable importance on obtaining patent
protection and protecting trade secrets for new technologies,
products and processes.  Accordingly, the Company files patent
applications to protect technologies that it believes are
significant to the development of its business.  The Company
holds 54 U.S. patents (issued or allowed) and has 26 additional
U.S. patent applications pending.  The patents and patent
applications relate to various aspects of the Company's high-
speed image-interpretation technology.  The Company holds 7
foreign patents and has applied for patent protection for certain
aspects of its technology in various foreign countries.  The
Company intends to continue to pursue patent protection where it
is available and cost-effective, both in the United States as
well as in other countries.
  
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<PAGE>

  The medical device industry has been characterized by extensive
litigation regarding patents and other intellectual property
rights, and the Company may institute or otherwise be involved in
such litigation to enforce its patents, protect its trade secrets
or know-how, challenge the validity of proprietary rights of
others or defend against its alleged infringement of proprietary
rights of others.  In July 1996, a patent infringement action was
filed against the Company by a competitor; in March 1997, the
Company filed a patent infringement lawsuit against that
competitor.  See "Item 3. Legal Proceedings" and "Factors
Affecting Future Results and Forward-Looking Statements --
Dependence on Patents and Proprietary Rights; Risk of Third-Party
Claims of Infringement."

  NeoPath relies on a combination of patents, trade secrets and
confidentiality agreements to protect its proprietary technology,
rights and know-how.  The Company's policy is to have each
employee or consultant enter into a confidentiality agreement
containing provisions prohibiting disclosure of confidential
information to anyone outside the Company.  These provisions also
require disclosure to the Company of ideas, developments,
discoveries or inventions conceived during employment or
consultation, and assignment to the Company of proprietary rights
to such matters related to the business and technology of the
Company.

  The Company has registered trademarks in the United States,
Australia, Japan, Canada, France, the Benelux countries, Germany,
The United Kingdom, Italy and Spain for "NeoPath" and "AutoPap."
The Company also has registered trademarks for "Pathfinder" and
"PapMap" in the United States.  NeoPath has applied for
registration of its trademarks in several other foreign
countries.

Third-Party Reimbursement

  Some private third-party medical insurance providers and
governmental agencies offer reimbursement for laboratory testing
associated with routine medical examinations, including Pap
smears.  In the United States, the level of reimbursement by
those third-party payers varies considerably, and the patient
often pays for Pap smears.  Third-party healthcare payers in the
United States are increasingly sensitive to containing healthcare
costs and heavily scrutinize new technology as a primary factor
in increased healthcare costs.  Third-party payers may influence
the pricing or perceived attractiveness of the Company's products
and services by regulating the maximum amount of reimbursement
they provide or by not providing any reimbursement.
 
  Restrictions on reimbursement may limit the price NeoPath can
charge for AutoPap System screening or reduce the demand for
AutoPap System screening.  If these payers do not reimburse for
the AutoPap System screening, or provide reimbursement
significantly below the amount laboratories charge patients to
perform AutoPap System screening, the Company's potential market
will be significantly reduced.  The Company intends to focus on
obtaining coverage and reimbursement from major national and
regional third-party payers in the United States.
 
  NeoPath believes that increased third-party reimbursement of
Pap smears in general, and increased reimbursement for screening
utilizing the AutoPap System in particular, would increase market
acceptance of the Company's products.  In early 1998, NeoPath
established a reimbursement team to work with third-party
insurers and managed care organizations to establish and/or
improve third-party reimbursement levels for the AutoPap System.
These reimbursement specialists work closely with NeoPath's field
sales personnel throughout the United States.  On January 1,
1999, revised Physicians' Current Procedural Terminology ("CPT")
codes (established by the American Medical Association) became
effective for the AutoPap Screener.  CPT codes are a standardized
system used by physicians and clinical laboratories to identify
specific procedures when billing insurers for their services.
New CPT codes that address utilization of the AutoPap QC became
available on January 1, 1998.

Governmental Regulation

United States

  The AutoPap QC and the AutoPap Screener are medical devices
subject to extensive regulation in the United States by the FDA
and by other federal, state and local authorities.  The FDA
regulates the research, development, clinical studies,
manufacturing, packaging, labeling, distribution, promotion and
postmarket surveillance of medical devices in the United States.
Preclinical and clinical trials of medical devices must be
conducted in conformity with all applicable FDA regulations.  In
addition, state and local permits may be required under
regulations relating to clinical activities.
  
Page 8
<PAGE>

  Under the Federal Food, Drug, and Cosmetic Act, the AutoPap
System is a Class III medical device, subject to stringent FDA
review to ensure that the device is safe and effective before
commencement of marketing, sales and distribution in the United
States.  Once a PreMarket Approval ("PMA") application receives
FDA approval and the Company commences marketing the applicable
product, it is required to register with the FDA and to submit
device listing information for products in commercial
distribution.  In addition, the FDA may impose certain post-
approval requirements in a PMA approval order at the time of
approval, with which NeoPath would be required to comply.  In
conjunction with FDA approval of the PMA application and
supplements with respect to the AutoPap System, the Company's
manufacturing operations are subject to FDA QSR inspection.  The
Company will continue to be inspected on a routine basis by the
FDA for compliance with QSR regulations with respect to
manufacturing, testing, distribution, storage and control
activities.  The FDA also regulates labeling and promotional
activities.  The Company is required to establish and maintain a
system for tracking AutoPap Systems through the chain of
distribution and to conduct postmarket surveillance, and is
required to provide periodic reports containing safety and
effectiveness information.

  In addition, the Medical Device Reporting ("MDR") regulations
obligate medical device companies such as NeoPath to provide
information to the FDA whenever there is evidence to reasonably
suggest that a device may have caused or contributed to a death
or serious injury.  The MDR regulations also apply if the device
malfunctioned and the device or a similar device marketed by the
company would be likely to cause or contribute to a death or
serious injury if the malfunction were to recur.

  If, as a result of FDA inspections, MDR reports or information
derived from any other source, the FDA believes that the Company
is not in compliance with the law, it can take one or more of the
following actions:
  -  refuse to review or clear applications to market the Company's
     product in the United States or to allow the Company to enter
     into government supply contracts;
  -  withdraw previously approved applications;
  -  require notification to users regarding newly found risks;
  -  request repair, refund or replacement of faulty devices;
  -  request corrective advertisements, recalls or temporary
     marketing suspension; or
  -  initiate legal proceedings to detain or seize products, enjoin
     future violations or assess criminal penalties against the
     Company, its officers or employees.

  The FDA, in lieu of or in addition to instituting other legal
action, may assess civil penalties for Food, Drug, and Cosmetic
Act violations.  Any such FDA actions could result in disruption
of the Company's operations for an indeterminate period of time.
Various states in which the Company's products may be sold in the
future may impose additional regulatory requirements.

International Markets

  Under FDA rules, a Class III medical device that has not been
approved for marketing in the United States may be exported for
sale only after meeting certain criteria.  Such exporting may
only occur after the FDA has determined that the exportation of
the device is not contrary to public health and safety and that
the Company has received approval of the country to which the
device is intended for export.  Approval of a device by a
comparable regulatory authority of a non-U.S. country must
generally be obtained prior to applying to the FDA for clearance
to export and commence marketing in that country.  Sales of
medical devices outside of the United Sates are subject to
foreign regulatory requirements that vary widely from country to
country.

  In addition to regulatory approvals in the United States, the
AutoPap System is approved for primary screening and quality
control rescreening in Japan, Canada, Australia, New Zealand, The
Netherlands, Italy, Hong Kong, Korea, and Taiwan.  NeoPath
intends to pursue additional product registrations in other
foreign countries.
  
Page 9
<PAGE>
  
  The Company's products are subject to a variety of regulations
in Europe, including the European Union ("EU").  In vitro medical
devices, including the AutoPap System, must now comply with the
EU's In-Vitro Diagnostic Medical Devices Directive ("IVDD").  The
IVDD (Directive 98/79/EC) was published in the Official Journal
of European Communities in December, 1998.  The implementation of
the Directive into national law should be completed by the EU
Member States by December, 1999.  A transition period, which
begins from the date of publication of the Directive and ends
December, 2003, is in effect for all devices placed on the market
in the EU.  During this transition period, both European
Directive ("CE") marked and non CE-marked devices may be placed
on the market.  In other words, companies may choose to follow
either the CE mark or the national legislation, if existing (if
no such national legislation exists, the devices can be freely
placed on the market).  By the conclusion of this transition
period, NeoPath Products must comply with the requirements of the
IVDD and member state local language requirements.
  
  Other European countries may enact national laws that would
conform to the Directive.  Member states of the EU and the
European Economic Area may enact requirements in addition to
those imposed by the Directive.  Some European countries have
established national regulations relating to in vitro diagnostic
medical devices.  EU directives and national laws impose
requirements for electrical safety and electromagnetic
compatibility that apply to the AutoPap System.  NeoPath has
performed the requisite testing procedures and related
documentation to apply the European CE mark to the AutoPap
System.  There can be no assurance that the AutoPap System or any
other product that the Company may develop will obtain any
required regulatory clearance or approval on a timely basis, if
at all.
  
Regulation of Cervical Pap Smear Analysis
  
  Pursuant to CLIA, Congress directed the Department of Health
and Human Services to promulgate regulations designed to improve
the quality of biomedical analytic services, particularly the
examination of Pap smears.  CLIA regulations require clinical
laboratories to rescreen at least 10% of the Pap smears
classified on initial manual screen as normal.  This 10% must
include normal cases selected from the laboratory's total
caseload, as well as from patients or groups of patients that are
identified as having a high probability of developing cervical
cancer based on available patient information.  The AutoPap
System is not intended to replace a laboratory's current
practices regarding screening or rescreening Pap smears of "high-
risk" patients.
  
  In addition, laboratories may be subject to state regulations,
inspection, and licensing.  In recent years, a few states,
including New York and California, have adopted regulations that
limit the number of slides that may be manually examined by a
cytotechnologist within a given period of time.  There can be no
assurance that states will not directly regulate the AutoPap
System in the future.  The Company cannot predict the effect, if
any, that such regulation may have on its business or operations.

Competition

  Competition in the medical device industry is intense.  To
effectively compete, NeoPath must keep pace with the rapid
product development and technological change in the industry.
The AutoPap System competes with existing manual methods of
screening Pap smears and with semi-automated systems.  To compete
effectively, the AutoPap System must demonstrate accuracy and
cost effectiveness that equals or exceeds manual review of Pap
smears.  NeoPath is aware of three potential direct competitors:
  -  Neuromedical Systems, Inc. ("Neuromedical"), which has
     obtained regulatory approval for a semi-automated system that
     rescreens conventional Pap smears and may be developing a semi-
     automated primary screener.
  -  AutoCyte, Inc., which is developing a semi-automated system to
     prepare ("PREP") and analyze ("SCREEN") liquid-based Pap smears
     (a potential alternative to conventional Pap smears); and
  -  Morphometrix Technologies Inc., which is developing an
     automated system to analyze monolayer Pap smears.

Page 10
<PAGE>

  Neuromedical is marketing its semi-automated Pap smear
rescreening service as an adjunct to human Pap smear screening.
Neuromedical's system in the United States is currently a
computerized image processing service provided to laboratories
for which selected Pap smear slides are sent for processing to a
Neuromedical processing center.  NeoPath believes that
Neuromedical is changing its system to be available for placement
in the clinical laboratory and that Neuromedical is conducting a
clinical trial for use of its system in semi-automated primary
screening.  The Neuromedical system creates a color video picture
of each of the 128 images of the Pap smear slide deemed by the
Neuromedical system to be most likely to be abnormal.  Under
Neuromedical's current practice in the United States, these
images are recorded on a digital tape cassette that, together
with the patient's Pap smear slide, is returned to the clinical
laboratory.  Trained laboratory personnel then evaluate each of
the 128 video pictures for each Pap smear slide.  If the
cytotechnologist believes that there might be an abnormality
indicated on Neuromedical's images of the Pap smear, then a
cytotechnologist would manually rescreen the Pap smear slide
using a microscope.

  On March 26, 1999, Neuromedical announced that it had filed a 
voluntary chapter 11 petition for bankruptcy.  On the same day,
AutoCyte announced an agreement to purchase certain Neuromedical
technology, including patent rights.

  In July 1998, AutoCyte submitted data to the FDA with regard to
a screening system for the semi-automated analysis of PREP
slides.
  
  The Company also faces indirect competition from companies that
manufacture liquid-based or monolayer slide preparation systems
and devices that automate various aspects of cytology.  In 1997,
AutoCyte announced the completion of clinical studies for PREP,
its liquid-based Pap smear preparation system, and submitted
these results to the FDA under a PMA.  The FDA subsequently
requested that AutoCyte submit additional information to clarify
PREP's ability to differentiate various levels of cervical
disease.  In December 1998, AutoCyte announced that it had
resubmitted data as requested by the FDA.  Cytyc Corporation is
approved to market its ThinPrep System that prepares slides for
cervical cancer screening using a liquid-based sampling and
preparation technique as a replacement for the conventional Pap
smear method.
 
  The Company believes that the AutoPap System must remain
competitive in accuracy and effectiveness, cost (including both
charges by NeoPath to the laboratory and the laboratory's labor
and overhead costs), convenience, perception among influential
cytopathologists and laboratories, and processing speed and
reliability.

Employees

  At December 31, 1998, the Company employed 174 full-time
equivalent personnel, including 70 in research and development
and regulatory; 64 in administration, customer service and
support, and sales and marketing; and 40 in manufacturing and 
operations.  None of the Company's employees are represented by a 
union or other bargaining group.  The Company believes its 
relationship with its employees is good.

Factors Affecting Future Results and Forward-Looking Statements

  The preceding "Business" section and the documents we
incorporate by reference contain forward-looking statements that
involve risks and uncertainties.  The statements in this document
that are not purely historical are forward-looking statements.
Words such as "anticipates," "expects," "intends," "plans,"
"believes," "seeks," estimates," and similar expressions identify
forward-looking statements.  But the absence of these words does
not mean the statement is not forward-looking.  We cannot
guarantee these statements, which are subject to risks,
uncertainties and assumptions that are difficult to predict.  Our
actual results may differ materially from those we forecast in
forward-looking statements due to a variety of factors, including
those set forth in the following risk factors, elsewhere in this
document and in the documents we have incorporated by reference.
We will not update any forward-looking statements due to new
information, future events or otherwise.

History of Losses

  We have incurred substantial losses since we began doing
business.  As of December 31, 1998, our accumulated deficit was
$113.8 million.  We first began recognizing product revenue in
1996.  For 1998, 1997, and 1996 combined, we incurred total
losses of $67.4 million on revenues of $26.0 million.  We expect
continued losses in 1999 as we market the AutoPap Screener
primarily under a fee-per-use strategy in the United States,
continue product development initiatives (including additional
clinical studies), and expand our manufacturing capability.  We
cannot guarantee that the company will ever become profitable.
 
Page 11
<PAGE>

Need for Additional Capital
 
  We expect negative cash flow from operations to continue at
least through 1999.  At December 31, 1998, NeoPath had
approximately $9 million in cash and, although we received an
additional $14.5 million in a February 1999 equity financing, we
may require additional funds to produce AutoPap Systems for our
fee-per-use program and cover continuing losses.  Our future
capital requirements will depend on numerous factors, including:
  -  sales of AutoPap Systems and fee-per-use revenues;
  -  research and development programs for the development of
     enhanced products;
  -  additional clinical trials;
  -  relationships with existing and future corporate
     collaborators, if any;
  -  competing technological and market developments;
  -  the time and costs involved in obtaining regulatory approvals;
  -  the costs involved in filing, prosecuting, defending and
     enforcing patent claims; and
  -  the time and costs of manufacturing scale-up and
     commercialization activities.
 
  We estimate that our existing cash and cash equivalents will
meet our capital requirements through 1999.  We cannot guarantee
that the assumptions underlying our estimates will prove to be
accurate.  We intend to seek additional funding through private
debt financing to provide additional resources to support AutoPap
System production.  Adequate funds, whether obtained through
financial markets or from collaborative or other arrangements
with corporate partners or other sources, may not be available
when needed or may not be available on favorable terms, if at
all.  If we raise additional funds by issuing equity securities,
existing shareholders will suffer dilution of their interest in
NeoPath.  In addition, if we obtain additional funds through
arrangements with collaborative partners, we may have to
relinquish rights to certain of our technologies or potential
products that we would otherwise seek to develop or commercialize
ourselves.

Uncertainty of Market Acceptance
 
  Our products may never be commercially successful.  NeoPath's
growth depends on market acceptance of the AutoPap System by
clinical laboratories, healthcare providers, third-party
healthcare payers and patients.  Our success also depends on
customers' acceptance of our fee-per-use and sale programs.  Even
if our products gain market acceptance, the availability of
reimbursement from third-party healthcare payers such as
government and private insurance plans may limit our revenues.

Market Consolidation; Concentration
 
  Medical community or third-party healthcare payers may delay
acceptance of an automated Pap smear screening or rescreening
system that replaces or supplements current laboratory Pap smear
review practices.  Moreover, due to consolidation in the clinical
laboratory industry, we expect that the number of potential
domestic customers for our products will decrease.  A significant
proportion of our sales is concentrated among a relatively small
number of customers, and this likely will be true for the
foreseeable future.  For the year ended December 31, 1998, 41% of
our revenues were from four customers.  These factors increase
our dependence on sales to the largest clinical laboratories and
the bargaining power of those potential customers.

Uncertainty of Product Regulatory Clearance
 
  The U.S. government extensively regulates the manufacture and
sale of medical diagnostic devices for commercial use.
Government agencies in certain other countries impose similar
requirements.  The AutoPap Screener and AutoPap QC have been
cleared for commercialization in the United States and in Japan,
Canada, Australia, New Zealand, The Netherlands, Italy, Hong
Kong, Korea, and Taiwan.
 
Page 12
<PAGE>
 
  Governmental regulatory agencies in the United States or
elsewhere may not approve future commercial enhancements to the
AutoPap System on a timely basis, if at all.  Even if these
agencies clear the enhanced products for sale, they may not
confer the clinical indications we request, or the approval may
contain significant limitations, such as warnings, precautions or
contraindications, requests for postmarket studies, or additional
regulatory requirements.  Our regulatory applications may be
delayed or rejected based on changes in regulatory policies or
regulations.  Although the FDA has inspected our manufacturing
operations for compliance with FDA quality systems regulations,
we remain subject to ongoing FDA quality systems regulation and
inspection.

Limited Marketing, Sales and Service Experience
 
  We market, sell, service, and support the AutoPap System
through a direct sales force (primarily in North America) and
independent foreign distributors.  We have limited marketing,
sales and service experience, and may find it difficult to
recruit and retain skilled sales, marketing, service or support
personnel or foreign distributors.  Our marketing and sales
efforts may not be successful.

Risks Inherent in International Transactions
 
  We rely primarily on third-party distributors to place AutoPap
Systems internationally.  International transactions pose a
number of risks, including regulatory delays or disapprovals with
respect to our products, expenses and delays due to compliance
with government controls, export license requirements, uncertain
sales and collections due to political instability, reduced
revenues due to price controls, reduced sales due to trade
restrictions, changes in tariffs, and difficulties with foreign
distributors.

Sole or Limited Source of Supply
 
  We purchase all components for the AutoPap System from outside
vendors.  A major component of the AutoPap System, the slide tray
motion system, is supplied by a sole-source vendor.  Certain
other components, such as the video cameras, are currently
supplied by single source vendors, and components provided by
additional or replacement suppliers would require some
modification to be used in the AutoPap System.  We would be
unable to quickly establish additional or replacement sources of
supply for many AutoPap System components.  In addition, we may
need to obtain regulatory approval to substitute certain
components.  We cannot be sure of obtaining the necessary
approvals.  If one of our vendors becomes unable to supply
acceptable components in a timely manner and in the quantity
required we may need to delay or halt our manufacturing process.
Any delay or cessation of manufacturing could adversely affect
our business.

Governmental Regulation of Manufacturing
 
  Manufacturers of medical diagnostic devices face strict federal
regulations regarding the quality of manufacturing.  For example,
the FDA periodically inspects the manufacturing facilities of
diagnostic device manufacturers to determine compliance with
regulations.  Our current and future manufacturing and design
operations must comply with these and all other applicable
regulations, including regulations imposed by other governments.
If we fail to comply with quality systems regulations we could
face civil or criminal penalties or enforcement proceedings.
These proceedings may require us to recall a product or to stop
placing our products in service or selling our products.  Similar
results could occur if we violate foreign regulations.  We may
not be able to attain or maintain compliance with quality systems
requirements.  Any failure to comply with the applicable
manufacturing regulations would have a material adverse effect on
our business.
 
Page 13
<PAGE>

Competition
 
  Competition in the medical device industry is intense.  To
effectively compete, we must keep pace with the rapid product
development and technological change in our industry.  The
AutoPap System competes with existing manual methods of screening
Pap smears and with semi-automated systems.  To compete
effectively, the AutoPap System must demonstrate accuracy and
cost effectiveness that equals or exceeds manual review of Pap
smears.  We are aware of three potential direct competitors:
  -  Neuromedical Systems, Inc., which has obtained regulatory
     approval for a semi-automated system that rescreens conventional
     Pap smears and may be developing a semi-automated primary
     screener.
  -  AutoCyte, Inc., which is developing a semi-automated system to
     prepare and analyze liquid-based Pap smears (a potential
     alternative to conventional Pap smears); and
  -  Morphometrix Technologies Inc., which is developing an
     automated system to analyze monolayer Pap smears.

  We also face indirect competition from companies that
manufacture liquid-based or monolayer slide preparation systems
and devices that automate various aspects of cytology.  AutoCyte
has submitted clinical study data to the FDA with regard to its
liquid-based Pap smear preparation system, PREP, and is awaiting
final approval from the FDA.  Cytyc Corporation is approved to
market its ThinPrep System that prepares slides for cervical
cancer screening using a liquid-based sampling and preparation
technique as a replacement for the conventional Pap smear method.
 
  We believe that the AutoPap System must remain competitive in
accuracy and effectiveness, cost (including both charges by us to
the laboratory and the laboratory's labor and overhead costs),
convenience, perception among influential cytopathologists and
laboratories, and processing speed and reliability.
 
  Our competitors may develop new technologies and products that
prove to be more effective than the AutoPap System in any of
these ways.  Furthermore, other companies may purchase or develop
technologies that compete with the AutoPap System or render it
obsolete.  These competitors may manufacture, market and sell
their products or services more successfully than us, which could
adversely affect our business.

Dependence on Reimbursement
 
  Third-party healthcare payers in the United States are
increasingly sensitive to containing healthcare costs and heavily
scrutinize new technology as a primary factor in increased
healthcare costs.  Third-party payers may influence the pricing
or perceived attractiveness of our products and services by
regulating the maximum amount of reimbursement they provide or by
not providing any reimbursement.
 
  Restrictions on reimbursement may limit the price we can charge
for AutoPap System screening or reduce the demand for AutoPap
System screening.  If these payers do not reimburse for the
AutoPap System screening, or provide reimbursement significantly
below the amount laboratories charge patients to perform AutoPap
System screening, our potential market will be significantly
reduced.  AutoPap System screening may never become widely
reimbursed, and AutoPap reimbursement may not be sufficient to
permit us to generate substantial revenue.  Future healthcare
legislation or other changes in the administration or
interpretation of government healthcare or third-party
reimbursement programs may also adversely affect our business.
Third-party reimbursement also may not be available for the
AutoPap System under foreign reimbursement systems.

Dependence on Single Product Line
 
  To date, we have concentrated on development of the AutoPap
System.  We have performed only limited research on other
applications of our core technology.  Accordingly, our success
will depend primarily on the successful development and marketing
of the AutoPap System to generate revenues.  The AutoPap System
may never be a commercial success.
 
Page 14
<PAGE>

Product Liability
 
  The commercial screening of Pap smears has generated
significant malpractice litigation.  As a result, we face product
liability, errors and omissions or other claims if our products
are alleged to have caused a false-negative diagnosis.  Although
we have product liability insurance, it will become increasingly
difficult for us to obtain and maintain reasonable product
liability coverage.  Substantial increases in insurance premium
costs often make coverage economically impractical.  We may not
be able to obtain adequate product liability insurance at a
reasonable cost.  Thus, product liability claims may adversely
affect our business.

Dependence on Patents and Proprietary Rights; Risk of Third-
Party Claims of Infringement
 
  We rely on a combination of patents, trade secrets and
confidentiality agreements to protect our proprietary technology,
rights and know-how.  We hold 7 foreign patents, 54 U.S. patents
(issued or allowed), and have 26 additional U.S. patents pending.
Pending patent applications may not ultimately issue as patents
or, if patents do issue, may not be sufficiently broad to protect
our proprietary rights.  Competitors may challenge or circumvent
our patents or pending applications.  Our patents may never
provide us with any competitive advantages.  Our confidentiality
agreements with employees and other parties may not protect the
confidentiality of our trade secrets and proprietary information
or provide meaningful protection for our confidential
information.  In addition, our competitors could independently
develop our trade secrets or proprietary information.
 
  On July 15, 1996, Neuromedical filed a lawsuit against NeoPath,
Inc. in the United States District Court for the Southern
District of New York.  The complaint alleged patent infringement,
unfair competition, false advertising, and related claims.  On
September 5, 1996, we filed our answer and counter claims.  In
May 1998, a judge in the United States District Court for the
Southern District of New York denied Neuromedical's motion for a
preliminary injunction against us.  The parties have agreed to
dismiss their claims and counterclaims on all but the patent
issues, and Neuromedical accordingly served an amended complaint
on July 27, 1998 asserting only patent infringement claims.  This
lawsuit is still in the discovery stage, and a trial date has not
been set.  We believe NeoPath has a strong position in this
action, and we will defend against these claims vigorously.
 
  On March 31, 1997, NeoPath filed a patent infringement lawsuit
against Neuromedical in the United States District Court for the
Western District of Washington.  Our complaint alleges patent
infringement and seeks permanent injunctions against
Neuromedical.  In March and April 1998 this lawsuit was amended,
and NeoPath filed an additional related patent lawsuit against
Neuromedical.  Neuromedical filed a motion for summary judgment,
which the court denied in April 1998.  In October 1998,
Neuromedical filed another motion for summary judgment that the
court denied.  We expect trial on the first Washington lawsuit to
begin in 1999.  The second Washington lawsuit is currently in the
discovery stage.

  On March 26, 1999, Neuromedical announced that it had filed a
voluntary chapter 11 petition for bankruptcy.  On the same day,
AutoCyte announced an agreement to purchase certain Neuromedical
technology, including patent rights.
 
  We cannot predict the outcome of this patent litigation.  An
unfavorable resolution of any of these issues could adversely
affect our business.

Dependence on Key Personnel
 
  We depend heavily on the principal members of our management
and scientific staff.  The loss of their services might impede
achievement of our strategic objectives or research and
development.  Our success depends on our ability to retain key
employees and to attract additional qualified employees.
Competition for highly skilled scientific and management
personnel is intense.  The failure to recruit such personnel or
the loss of existing personnel could adversely affect our
business.  We do not carry key person life insurance on our
executives or other key personnel.
 
Page 15
<PAGE>

Highly Volatile Stock Price; Potential Fluctuations in
Future Quarterly Results
 
  The market price of our common stock has been, and may continue
to be, highly volatile.  The future price of the common stock is
likely to be significantly influenced by results of our sales and
marketing programs, the outcome of clinical trials by us or our
competitors, concern about the safety or efficacy of our products
or our competitors' products, announcements of technological
innovations or new products, changes in governmental regulation,
changes in healthcare legislation, developments in our patent or
other proprietary rights or the rights of our competitors,
fluctuations in our operating results, and general market and
economic conditions.
 
  We expect our operating results to fluctuate significantly from
quarter to quarter in the future.  A number of factors may cause
this fluctuation, including the rate and extent of domestic and
international market acceptance of the AutoPap Screener; the
mixture of fee-per-use and sale contracts; the timing and scope
of clinical studies and corresponding regulatory submissions; the
timing of domestic and foreign regulatory approvals; the level of
research and development spending required for product
enhancements and development of new technologies; the timing of
approvals for AutoPap reimbursement; and the introduction and
market acceptance of competing products or technologies.

Year 2000 Issue
 
  We need to modify or replace certain portions of our internal
systems and product software and certain hardware so that those
systems will properly recognize dates beyond December 31, 1999.
However, we have identified no significant Year 2000 issues that
cannot be resolved through software or hardware upgrades that are
currently available or expected to be available soon.  We are
using our existing internal resources to reprogram or replace
noncompliant internal systems and product hardware and software.
We do not expect the total cost of the Year 2000 project to be
material.  We plan to complete the project by mid-1999.
 
  We have asked our significant suppliers and subcontractors
about their Year 2000 compliance status.  To date, we are not
aware of any external agent with Year 2000 problems that would
materially affect our results of operations, liquidity, or
capital resources.  However, we have no means of ensuring that
these agents will be Year 2000 ready.  If our suppliers and
subcontractors do not complete their Year 2000 resolution process
in a timely fashion we could face significant business
interruptions that could harm our business.  We cannot accurately
predict the effect of non-compliance by external agents.
 
  We believe that we have developed an effective program to
resolve the Year 2000 issues within our control in a timely
manner.  With modifications to NeoPath's products, existing
internal software and conversions to new software, the Year 2000
issue should not pose significant operational problems for our
computer systems.  However, if we or others do not make necessary
modifications and conversions, or do not complete them on time,
the Year 2000 issue could disrupt NeoPath's operations and
materially affect its business, financial condition, and results
of operations.
 
Page 16
<PAGE>

Item 2.   PROPERTIES

  The Company leases approximately 72,000 square feet of office
and manufacturing space in Redmond, Washington under operating
leases expiring through January 2000, with various renewal
options.  Management believes that the Redmond facility and other
available office space are adequate for the Company's current
needs.  Management also believes that additional space is
available in the area, should it be needed.  The Company also
leases office space in Brussels, Belgium under an operating lease
expiring in August 2007.
  
Item 3.   LEGAL PROCEEDINGS

  On July 15, 1996, Neuromedical Systems, Inc. filed a lawsuit
against NeoPath, Inc. in the United States District Court for the
Southern District of New York.  The complaint alleged patent
infringement, unfair competition, false advertising, and related
claims.  On September 5, 1996, the Company filed its answer and
counter claims.  In May 1998, a judge in the United States
District Court for the Southern District of New York denied
Neuromedical's motion for a preliminary injunction against
NeoPath.  The parties have agreed to dismiss their claims and
counterclaims on all but the patent issues, and Neuromedical
accordingly served an amended complaint on July 27, 1998
asserting only patent infringement claims.  This lawsuit is still
in the discovery stage, and a trial date has not been set.  The
Company believes it has a strong position in this action and
continues to defend itself vigorously.
 
  On March 31, 1997, NeoPath filed a patent infringement lawsuit
against Neuromedical in the United States District Court for the
Western District of Washington.  The complaint alleges patent
infringement and seeks permanent injunctions against
Neuromedical.  In March and April 1998 this lawsuit was amended,
and NeoPath filed an additional related patent lawsuit against
Neuromedical.  Neuromedical filed a motion for summary judgment,
which the court denied in April 1998.  In October 1998,
Neuromedical filed another motion for summary judgment that the
court denied.  The Company expects trial on the first Washington
lawsuit to begin in 1999.  The second Washington lawsuit is
currently in the discovery stage.

  On March 26, 1999, Neuromedical announced that it had filed a
voluntary chapter 11 petition for bankruptcy.  On the same day,
AutoCyte, Inc. announced an agreement to purchase certain Neuromedical
technology, including patent rights.
 
Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

  No matters were submitted to a vote of security holders during
the fourth quarter of 1998.

Page 17
<PAGE>

                             PART II

Item 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
          SHAREHOLDER MATTERS

    The information required by Item 5 is hereby incorporated by
reference to the Company's 1998 Annual Report to Shareholders,
page 34.

Item 6.   SELECTED FINANCIAL DATA

    The information required by Item 6 is hereby incorporated by
reference to the Company's 1998 Annual Report to Shareholders,
page 10.

Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND  RESULTS OF OPERATIONS

    The information required by Item 7 is hereby incorporated by
reference to the Company's 1998 Annual Report to Shareholders,
pages 11-18.

Item 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    The information required by this item is incorporated by
reference from the section labeled "Market Risks" of the
Company's 1998 Annual Report to Shareholders, page 15.

Item 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
   
    The information required by Item 8 is hereby incorporated by
reference to the Company's 1998 Annual Report to Shareholders,
pages 19-33.
   
Item 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE
   
    None.
   
Page 18
<PAGE>

                            PART III

Item 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

  The information required by Item 10 is hereby incorporated by
reference to the section entitled "Election of Directors and
Management Information" in the Company's definitive Proxy
Statement relating to its 1999 annual meeting of Shareholders
(the "Proxy Statement").  Such Proxy Statement will be filed
within 120 days of the Company's last fiscal year end, December
31, 1998.

Item 11.   EXECUTIVE COMPENSATION

  The information required by Item 11 is hereby incorporated by
reference to the section entitled "Executive Compensation" in the
Proxy Statement.

Item 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGEMENT

  The information required by Item 12 is hereby incorporated by
reference to the section entitled "Security Ownership of Certain
Beneficial Owners and Management" in the Proxy Statement.

Item 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

  Not applicable.

Page 19
<PAGE>

                             PART IV

Item 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
           FORM 8-K

(a)  Index to list of documents filed as part of this report.

  1.   Financial Statements

         The following financial statements of NeoPath, Inc. are
       included in Item 8 by reference to the Company's 1998 Annual
       Report to Shareholders:

                                                        Annual Report
                                                               Page #
                                                               ______

       Balance Sheets at December 31, 1998 and 1997                19

       Statements of Operations for the years ended                20
          December 31, 1998, 1997 and 1996

       Statements of Shareholders' Equity for the years ended      21
          December 31, 1998, 1997 and 1996

       Statements of Cash Flows for the years ended                22
          December 31, 1998, 1997 and 1996

       Notes to Financial Statements                            23-31

  2.   Financial Statement Schedule

       Schedule II -- Valuation and Qualifying Accounts

         All other schedules have been omitted because they were
       not applicable.

  3.   Exhibits

         3.1 (1)     Articles of Incorporation of the registrant

         3.2 (1)     Bylaws of the registrant

         10.1 (5)    NeoPath, Inc. 1989 Stock Option Plan,
                     Amended and Restated on December 10, 1996

         10.2 (5)    NeoPath, Inc. Stock Option Plan for
                     Nonemployee Directors, Amended and Restated on
                     February 27, 1997

         10.3 (1)    Form of Indemnification Agreement for
                     officers and directors of the registrant

         10.4 (1)    Consolidated Amended and Restated
                     Shareholders Agreement dated March 27, 1992, by
                     and among NeoPath, Inc. and the Shareholders
                     listed on Exhibit A thereto and First Amendment
                     to Consolidated Amended and Restated Agreement
                     dated January 14, 1994

         10.8 (1)    Form of Agreement regarding clinical
                     study of the AutoPap 300 QC System:
                     Confidentiality of Records and Indemnification

         10.9 (1)    Agreement by and between NeoPath, Inc.
                     and Kyto Diagnostic, L.P. regarding clinical
                     study of the AutoPap 300 QC System:
                     Confidentiality of Records and Indemnification

Page 20
<PAGE>

         10.10 (1)   Product Development and Supply
                     Agreement between Applied Precision, Inc. and
                     NeoPath, Inc. dated January 1, 1992

         10.14 (2)   Master Equipment Lease by and between
                     NeoPath, Inc. and Haworth Leasing dated January 31, 1995

         10.17 (3)   NeoPath, Inc. Proposal to SmithKline
                     Beecham Clinical Laboratories dated as of
                     October 4, 1995, countersigned by SmithKline
                     Beecham Clinical Laboratories on October 4, 1995

         10.18 (3)   NeoPath, Inc. Proposal to Corning
                     Clinical Laboratories Inc. executed as of
                     October 11, 1995, countersigned by Corning
                     Clinical Laboratories on October 13, 1995

         10.19 (3)   Master Equipment Lease by and between
                     NeoPath, Inc. and Pacific Office Automation
                     dated as of September 30, 1995

         10.20 (4)   NeoPath, Inc. Proposal to SmithKline
                     Beecham Clinical Laboratories, accepted May 9, 1996

         10.21 (4)   NeoPath, Inc. Proposal to Laboratory
                     Corporation of America Holdings, accepted May 15, 1996

         10.22 (4)   NeoPath, Inc. Amended and Restated
                     Proposal to Kaiser IMMC Agreement No. 0249,
                     accepted June 25, 1996

         10.23 (5)   Form of Senior Management Employment Agreement

         10.24 (5)   International Distribution Agreement
                     between NeoPath, Inc. and Nikon Corporation,
                     dated as of December 19, 1996

         10.25 (6)   Purchase and Sale Agreement between
                     CompuCyte Corporation and NeoPath, Inc., Dated
                     as of June 23, 1997

         10.26 (6)   NeoPath, Inc. Registration Rights
                     Agreement, Dated as of June 23, 1997

         10.27 (7)   NeoPath, Inc. 1997 Employee Stock Purchase Plan

         10.28 (8)   Third Amendment to Lease by and
                     between Teachers Insurance & Annuity Association
                     and NeoPath, Inc. dated November 6, 1997

         10.29 (9)   Equipment User Agreement with
                     SmithKline Beecham Clinical Laboratories dated
                     as of September 29, 1998

         10.30 (10)  Common Stock Purchase Agreement,
                     dated as of February 8, 1999

         10.31 (10)  Investor Rights Agreement, dated as
                     of February 8, 1999

         13.1        1998 Annual Report to Shareholders

         23.1        Consent of Ernst & Young LLP, Independent Auditors

         27          Financial Data Schedule
_____________________________

        (1)      Filed as an exhibit to the registrant's Registration
                 Statement on Form S-1 (File No. 33-86822) and 
                 incorporated herein by reference.

Page 21
<PAGE>
        
        (2)      Filed as an exhibit to the registrant's Report on form 10-Q
                 filed on March 29, 1995 and incorporated herein by reference.
        
        (3)      Filed as an exhibit to the registrant's Report on Form 10-Q
                 filed on November 14, 1995 as amended on December 12, 1995 and
                 incorporated herein by reference.
        
        (4)      Filed as an exhibit to the registrant's Report on Form 10-Q
                 filed on August 14, 1996 and incorporated herein by reference.
        
        (5)      Filed as an exhibit to the registrant's Report on Form 10-K
                 filed on March 28, 1997 and incorporated herein by reference.
        
        (6)      Filed as an exhibit to the registrant's Report on Form 10-Q
                 filed on August 12, 1997 and incorporated herein by reference.
        
        (7)      Filed as an exhibit to the registrant's Registration
                 Statement on Form S-8 (File No. 333-40371) and incorporated
                 herein by reference.
 
        (8)      Filed as an exhibit to the registrant's Report on Form 10-K
                 filed on March 30, 1998 and incorporated herein by reference.

        (9)      Filed as an exhibit to the registrant's Report on Form 10-Q
                 filed on November 16, 1998 and incorporated herein by 
                 reference.

        (10)     Filed as an exhibit to the registrant's report on Form 8-K
                 filed on February 26, 1999.

(b)  Reports on Form 8-K:

       None.

Page 22
<PAGE>
                                
                             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 in
the City of Redmond, State of Washington on the 26th day of
March, 1999.
     
                             NEOPATH, INC.

                             By:   /s/  RONALD R. BROMFIELD
                                   ________________________
                                   Ronald R. Bromfield
                                   President and Chief Executive Officer


     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 the capacities
indicated below on this 26th day of March, 1999.

Signature                          Title
_________                          _____


/s/  RONALD R. BROMFIELD           President and Chief Executive Officer
________________________           (Principal Executive Officer)
Ronald R. Bromfield                


/s/  ALAN C. NELSON                Chairman of the Board
___________________
Alan C. Nelson, Ph.D.


/s/  THOMAS A. BONFIGLIO           Director
________________________
Thomas A. Bonfiglio, M.D.


/s/  CRISTINA H. KEPNER            Director
_______________________
Cristina H. Kepner


/s/  WALTER L. ROBB                Director
___________________
Walter L. Robb, Ph.D.


/s/  WILLIAM L. SCOTT              Director
_____________________
William L. Scott


/s/  DAVID A. THOMPSON             Director
______________________
David A. Thompson


/s/  GAIL R. WILENSKY              Director
_____________________
Gail R. Wilensky, Ph.D.


/s/  ROBERT C. BATEMAN             Vice President and Chief Financial Officer
______________________             (Principal Accounting Officer)
Robert C. Bateman                  


Page 23
<PAGE>

                                                 SCHEDULE II

                          NEOPATH, INC.
                VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>

                       Balance at     Charged to     Charged to                  Balance at
                       Beginning      Costs &        Other                       End of
                       of Period      Expenses       Accounts     Deductions     Period
                       _________      ________       ________     __________     ______
<S>                  <C>            <C>            <C>          <C>            <C>     
Description            
                                                         
Allowance for                                            
doubtful accounts:
                                                         
Year ended             $ 500,000     $      --      $      --       $ 33,882    $ 466,118                              
December 31, 1998

Year ended               175,000       325,000             --             --      500,000            
December 31, 1997                                              
                                                         
Year ended December           --       175,000             --             --      175,000
December 31, 1996                                                         

</TABLE>

<PAGE>

NEOPATH, INC.
INDEX TO EXHIBITS


    Exhibit No.        Description
    ___________        ___________

     3.1 (1)           Articles of Incorporation of the registrant

     3.2 (1)           Bylaws of the registrant

     10.1 (5)          NeoPath, Inc. 1989 Stock Option Plan,
                       Amended and Restated on December 10, 1996

     10.2 (5)          NeoPath, Inc. Stock Option Plan for
                       Nonemployee Directors, Amended and Restated on
                       February 27, 1997

     10.3 (1)          Form of Indemnification Agreement for
                       officers and directors of the registrant

     10.4 (1)          Consolidated Amended and Restated
                       Shareholders Agreement dated March 27, 1992, by
                       and among NeoPath, Inc. and the Shareholders
                       listed on Exhibit A thereto and First Amendment
                       to Consolidated Amended and Restated Agreement
                       dated January 14, 1994

     10.8 (1)          Form of Agreement regarding clinical
                       study of the AutoPap 300 QC System:
                       Confidentiality of Records and Indemnification

     10.9 (1)          Agreement by and between NeoPath, Inc.
                       and Kyto Diagnostic, L.P. regarding clinical
                       study of the AutoPap 300 QC System:
                       Confidentiality of Records and Indemnification

     10.10 (1)         Product Development and Supply
                       Agreement between Applied Precision, Inc. and
                       NeoPath, Inc. dated January 1, 1992

     10.14 (2)         Master Equipment Lease by and between
                       NeoPath, Inc. and Haworth Leasing dated January 31, 1995

     10.17 (3)         NeoPath, Inc. Proposal to SmithKline
                       Beecham Clinical Laboratories dated as of
                       October 4, 1995, countersigned by SmithKline
                       Beecham Clinical Laboratories on October 4, 1995

     10.18 (3)         NeoPath, Inc. Proposal to Corning
                       Clinical Laboratories Inc. executed as of
                       October 11, 1995, countersigned by Corning
                       Clinical Laboratories on October 13, 1995

     10.19 (3)         Master Equipment Lease by and between
                       NeoPath, Inc. and Pacific Office Automation
                       dated as of September 30, 1995

     10.20 (4)         NeoPath, Inc. Proposal to SmithKline Beecham Clinical 
                       Laboratories, accepted May 9, 1996

     10.21 (4)         NeoPath, Inc. Proposal to Laboratory Corporation of 
                       America Holdings, accepted May 15, 1996

     10.22 (4)         NeoPath, Inc. Amended and Restated
                       Proposal to Kaiser IMMC Agreement No. 0249,
                       accepted June 25, 1996

     10.23 (5)         Form of Senior Management Employment Agreement

<PAGE>

     10.24 (5)         International Distribution Agreement
                       between NeoPath, Inc. and Nikon Corporation,
                       dated as of December 19, 1996

     10.25 (6)         Purchase and Sale Agreement between
                       CompuCyte Corporation and NeoPath, Inc., Dated
                       as of June 23, 1997

     10.26 (6)         NeoPath, Inc. Registration Rights
                       Agreement, Dated as of June 23, 1997

     10.27 (7)         NeoPath, Inc. 1997 Employee Stock Purchase Plan

     10.28 (8)         Third Amendment to Lease by and
                       between Teachers Insurance & Annuity Association
                       and NeoPath, Inc. dated November 6, 1997

     10.29 (9)         Equipment User Agreement with
                       SmithKline Beecham Clinical Laboratories dated
                       as of September 29, 1998

     10.30 (10)        Common Stock Purchase Agreement,
                       dated as of February 8, 1999

     10.31 (10)        Investor Rights Agreement, dated as
                       of February 8, 1999

     13.1              1998 Annual Report to Shareholders

     23.1              Consent of Ernst & Young LLP, Independent Auditors

     27                Financial Data Schedule
_____________________________

     (1)       Filed as an exhibit to the registrant's Registration
               Statement on Form S-1 (File No. 33-86822) and incorporated herein
               by reference.
        
     (2)       Filed as an exhibit to the registrant's Report on form 10-Q
               filed on March 29, 1995 and incorporated herein by reference.

     (3)       Filed as an exhibit to the registrant's Report on Form 10-Q
               filed on November 14, 1995 as amended on December 12, 1995 and
               incorporated herein by reference.
        
     (4)       Filed as an exhibit to the registrant's Report on Form 10-Q
               filed on August 14, 1996 and incorporated herein by reference.
        
     (5)       Filed as an exhibit to the registrant's Report on Form 10-K
               filed on March 28, 1997 and incorporated herein by reference.
        
     (6)       Filed as an exhibit to the registrant's Report on Form 10-Q
               filed on August 12, 1997 and incorporated herein by reference.
        
     (7)       Filed as an exhibit to the registrant's Registration
               Statement on Form S-8 (File No. 333-40371) and incorporated
               herein by reference.

     (8)       Filed as an exhibit to the registrant's Report on Form 10-K
               filed on March 30, 1998 and incorporated herein by reference.

     (9)       Filed as an exhibit to the registrant's Report on Form 10-Q
               filed on November 16, 1998 and incorporated herein by reference.

     (10)      Filed as an exhibit to the registrant's report on Form 8-K
               filed on February 26, 1999.

<PAGE>