SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549


                                     FORM 10-K


                   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934


    For the fiscal year ended June 30, 1997         Commission File No. 0-12948

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


                    DELAWARE                                03-0221503
          (State or other jurisdiction of                   (IRS Employer
            incorporation or organization)                  Identification No.)

            701 DANIEL WEBSTER HIGHWAY
                   P.O. BOX 1137
            MERRIMACK, NEW HAMPSHIRE                            03054
       (Address of principal executive offices)               (Zip Code)

                              AREA CODE (603) 424-9000
                           (Registrant's telephone number)


            SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                        None


            SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                            Common Stock, $.10 par value


     Indicate by checkmark 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]

     The aggregate market value of Registrant's voting stock held by non-
affiliates of the Registrant at August 11, 1997 was approximately $158 million.
7,998,537 shares of the Registrant's common stock, $.10 par value, were
outstanding on August 11, 1997.

                        DOCUMENTS INCORPORATED BY REFERENCE

     Proxy Statement for the 1997 Annual Meeting of Shareholders of the
Registrant to be held on October 30, 1997.  Certain information therein is
incorporated by reference into Part III hereof.

                                    PART I

ITEM 1   BUSINESS

      CHEMFAB CORPORATION, together with its consolidated subsidiaries
(hereinafter, the Company), is an international manufacturer and marketer of
engineered products based on its expertise and technology in polymeric composite
materials.  Relative to alternative materials, the Company's polymer-based
composite materials exhibit an outstanding range and combination of performance
properties, including superior thermal, chemical, electrical and surface release
properties, retention of flexibility-in-use, mechanical strength, and other
performance properties tailored to the requirements of particular applications.
The majority of the Company's composite materials are made by embedding woven
glass fiber into a fluoropolymer resin matrix.  The Company also produces and
sells specialty fluoropolymer films and silicone-based products.  Worldwide end-
use applications for the Company's products are in electrical, environmental,
food processing, architectural, aerospace, communications, laboratory test,
protective systems, and other industrial markets.  The Company operates in one
business segment.

      The Company's principal executive offices are located at 701 Daniel
Webster Highway, P.O. Box 1137, Merrimack, New Hampshire 03054; its telephone
number is (603) 424-9000.  Unless the context indicates otherwise, the term
"Company" in this Form 10-K refers to Chemfab Corporation, a Delaware
corporation, as well as its predecessor company incorporated in 1968, and its
consolidated subsidiaries.

      The Company is organized into three geographically focused business units:
(1) the Americas Business Group (North America and South America), (2) the
European Business Group (Europe, India, the Middle East and Africa), and (3) the
Asia Pacific Business Group (the Far East).  Each is principally responsible for
all business operations conducted in its geographic territory, except that the
Americas Business Group is responsible for architectural product sales
worldwide.

PRODUCTS

      The Company has two principal product groups: Engineered Products and
Architectural Products.  Sales of Engineered Products are reported separately
for Americas Sourced sales and Europe Sourced sales (see "Comparative Sales by
Product Group" on page 5) because they represent the activities of different
marketing and manufacturing organizations within the Company; however, the
products manufactured at each location are generally similar, and rely
principally on the performance properties of the Company's fluoropolymer-
containing composite materials, as described above and below, to create value-
in-use.  No Asia Pacific Sourced sales are reported because the manufactured
materials which comprise products sold into the Far East are sourced, at
present, from the Company's U.S. and European manufacturing plants and, as such,
are reflected in those other categories.

      Engineered Products - Americas Sourced sales include all non-architectural
product sales from the Company's U.S. manufacturing plants.  These sales are
made primarily to customers in the Americas and the Far East.  Engineered
Products - Europe Sourced sales include all sales from the Company's European
manufacturing plants and are made primarily to customers in Western Europe,
Africa, the Middle East and the Far East.  All architectural membrane products
are manufactured in the United States and are reported as a separate component
of revenue.

      ENGINEERED PRODUCTS.  Engineered Products, whether manufactured in the
United States or Europe, consist of a broad range of polymer-based composite
materials which are generally characterized by their exceptional ability to
withstand high temperatures, corrosive chemicals and other harsh conditions, and
by their excellent surface release properties.  These products are generally
used in industrial applications involving severe service environments, but some
communications and protective systems products are sold to the U.S. Government
and have their own unique performance properties.  The majority of the
Engineered Products sold by the Company are comprised of woven fiberglass or
other high-strength fibrous reinforcements coated or laminated with formulations
of polytetrafluoroethylene (PTFE) or other fluoropolymer resins.  By designing
variations in the reinforcements and the coatings, the Company has engineered
many products with specific performance characteristics.  The combination of
fluoropolymer resins and reinforcing fibers provide the resultant composite
materials with performance properties far surpassing those of the separate
component materials contained therein.

      The Company's engineered products are sold into a number of specific
markets and the polymer-based composite materials of which they are comprised
are tailored accordingly to satisfy specific requirements of the product in-use.
Selected examples of typical engineered products and their markets are described
below:

    Energy/Environmental Market - The Company's DARLYN(R) Chemical
    Resistant Membrane is used for expansion joints at power generating
    stations and in chemical processing plants to provide extended life to
    flexible joints which are exposed to highly corrosive flue duct
    condensates and gases at varying temperatures.  In addition, the
    Company manufactures a similar corrosion resistant composite which is
    fabricated into floating roof seals to retard evaporation from above-
    ground petroleum bulk storage tanks.

    Food Processing Market -  The Company manufactures and sells a broad
    range of high temperature conveyor belts and grilling release sheets
    used in commercial cooking applications and quick service restaurants.
    These products rely on the excellent release properties of PTFE
    required by the food processing industry for use in high-temperature
    cooking.

    Communications Market - The Company manufactures planar
    electromagnetic windows, utilizing its RAYDEL(R) Microwave
    Transmissive Composite, for commercial microwave communications.  It
    also designs and manufactures spherical radomes for radar and high
    frequency satellite communications which are sold primarily under
    government prime and subcontracts.  These products rely on low signal
    loss over a wide range of frequencies, and outstanding hydrophobicity,
    which results in minimal signal loss even in adverse weather
    conditions.

     Lab Test/Biomedical Market - The Company manufactures a comprehensive
     product line of high performance elastomeric closures for use in gas
     and liquid chromatography, environmental testing and the packaging and
     storage of sterile biomedical culture media.  The products, sold under
     the MICROSEP(R) and MICROLINK(R) trademarks, are based upon a
     combination of fluoropolymer and silicone elastomer processing
     technology.  The performance of these products relies on the purity,
     inertness and physical integrity of fluoropolymer films, in
     combination with the elastomer properties of silicone, to create
     closures capable of containing the most sensitive chemicals and
     samples without risk of sample contamination or seal degradation.

      In addition to these specific examples of products which rely on the
highly tailored performance properties of the Company's polymer-based composite
materials, the Company sells fiber-reinforced composite materials primarily in
the form of belting products, to customers in the packaging, textile, floor
covering and other industries which use the products as consumable processing
aids in their manufacturing processes.  The Company also sells fiber-reinforced
composite materials and fluoropolymer films in roll stock form to end users and
distributors for use in a variety of industries where severe service
environments exist.

      ARCHITECTURAL PRODUCTS.  The Company has developed and markets a line of
Architectural Products under the names SHEERFILL(R) Architectural Membrane,
ULTRALUX (TM) Architectural Membrane and FABRASORB(R) Acoustical Membrane.
These products are made of PTFE coated fiberglass composite materials that are
strong, translucent, fire resistant, self cleaning and long-lived.  SHEERFILL(R)
and ULTRALUX (TM) are typically used as primary structural components in roof
systems and large skylights for athletic facilities, walkways, entrance
canopies, convention centers and specialty events structures.  The most visible
and cost effective applications for these products are as roofing and
skylighting systems covering large domed stadiums and transportation terminals.
An example of such a roofing application is the main terminal building at the
Denver International Airport. FABRASORB(R) is used inside such structures as a
sound dampener and/or decorative liner.

      Since the inception of the permanent membrane structures business in 1973,
establishing and maintaining a reliable delivery system to install permanent
membrane structures has been a key element of the Company's strategy to develop
the market.  Principally for this purpose, over the past twenty years, the
Company has held equity positions in several companies that design, fabricate,
and install permanent membrane structures.  Throughout this period, however, the
Company's primary focus has been on establishing itself as the world leader in
the development, manufacture and sale of architectural membrane products.

      As part of the market development strategy described above, the Company
has participated in two corporate joint ventures.  In 1985, the Company formed a
corporate joint venture, now named Birdair, Inc. (Birdair), to provide
design/engineering, fabrication and installation support services related to
permanent membrane structures.  Effective March 27, 1992, the Company sold its
47.5% equity interest (and 50% voting interest) in this venture to Taiyo Kogyo
Corporation (Taiyo), which owned the other 50% voting interest at that time.  As
part of the transaction, the Company and Taiyo entered into a 10-year supply
agreement pursuant to which the Company continues to be Birdair's exclusive
supplier of architectural membrane products for permanent fabric structure
projects undertaken by Birdair throughout the world.

      Also in 1985, the Company, together with Nitto Denko Corporation (Nitto
Denko) and Taiyo, formed a joint venture company in Japan, Nitto Chemfab Co.,
Ltd. (Nitto Chemfab), for the purpose of manufacturing and selling architectural
and industrial products into the Japanese market. As a result of changes in
economic conditions since the joint venture was established, and amendments to
its governing agreements, Nitto Chemfab's business activities are now generally
limited to promoting architectural membrane products in the Japanese market and
providing related customer service and support.  Nitto Chemfab is 39% owned by
the Company, with the remainder owned 51% and 10% by Nitto Denko and Taiyo,
respectively (see Note 13 of Notes to Consolidated Financial Statements).

SALES AND MARKETING

      The Company sells its Engineered Products primarily through direct sales
efforts in the United States, supplemented by commissioned representatives and
distributors as necessary in the United States and in the Far East.  In Europe,
the Company sells such products primarily through distributors in its major
markets, except in the UK and Spain where it maintains its own direct sales
force. Architectural Products are sold pursuant to supply agreements with
Birdair, Taiyo, and a customer in Australia.  The Company's sales and marketing
personnel strive to understand their customers' businesses and respond to their
specific applications' needs by drawing from the Company's materials, weaving,
coating, film manufacturing, laminating, design engineering, fabricating and
installation capabilities and technologies.

<TABLE>
<S><C>

                      COMPARATIVE SALES BY PRODUCT GROUP

                                          1997     1996     1995     1994     1993
                                          ----     ----     ----     ----     ----
                                                     (in thousands)

Engineered Products - Americas Sourced   $48,978  $41,436  $38,962  $34,008  $31,868

Engineered Products - Europe Sourced      32,061   29,710   20,833   13,882   12,527

Architectural Products                     9,744   12,736    8,185    4,261    6,541
                                         -------  -------  -------  -------  -------
                                         $90,783  $83,882  $67,980  $52,151  $50,936
                                         =======  =======  =======  =======  =======

</TABLE>

MAJOR PRODUCT SALES

      Sales of grilling release sheets and belting products used in the food
processing industry accounted for 12%, 11% and 13% of the Company's fiscal 1997,
1996 and 1995 sales, respectively.  Also see Note 12 of Notes to Consolidated
Financial Statements.

MANUFACTURING

      The Company's manufacturing processes include the weaving of fibrous
reinforcing materials, the application of formulated coatings to reinforcements,
the production of multi-layer films, and the combination of such materials as
multi-layer composites by lamination.  The Company's manufacturing processes
also include extrusion and precision calendering of silicone elastomers.

      Woven reinforcements are manufactured in widths up to fifteen feet, as
well as in narrower formats of specialty design.  The mechanical performance of
coated or laminated composites is substantially a function of the uniformity and
quality of such reinforcements.  The Company's Merrimack, New Hampshire facility
is believed to be uniquely adapted to the manufacture of such fibrous
reinforcements at the high level of quality required for their use in structural
composite materials.

      Coatings are produced from aqueous formulations of fluoropolymer resins in
the Company's North Bennington, Vermont, Merrimack, New Hampshire, Kilrush,
Ireland and Littleborough, England facilities, employing equipment and control
systems substantially designed and installed by the Company.

      Specialty fluoropolymer films are produced at the Company's Merrimack, New
Hampshire facility utilizing the Company's proprietary casting process and other
related processes.  Lamination of fluoropolymer-containing materials is
performed in the Merrimack facility and in the Company's Kilrush, Ireland
facility.

      High performance elastomeric closures (septa and cap liners) are produced
in the Company's Poestenkill, New York facility.  Precision calendered
extrusions of silicone elastomers, often laminated to specialty fluoropolymer
films, are fabricated into a wide variety of closure parts.  Thermal welding of
liners into plastic caps is performed utilizing the Company's proprietary
MICROLINK(R) technology.

      Design/engineering and fabrication of end-use articles are primarily
carried out at the Company's Merrimack, New Hampshire facility.  Light
fabrication of conveyor belts, food processing release sheets and other products
is also performed at the Company's North Bennington, Vermont, Schaumburg,
Illinois, Kilrush, Ireland, Littleborough, England, Valencia, Spain, Suzhou,
China and Sao Paulo, Brazil facilities.  The Company designs and builds
substantially all of the jigs, fixtures, heat sealing machinery and other
equipment required for fabrication.

RAW MATERIALS

      The primary raw materials used by the Company in its weaving, coating and
film manufacturing operations are fiberglass yarns, commercially available woven
fiberglass reinforcements, and fluoropolymers (principally PTFE).  The
fiberglass yarns are supplied principally by Owens Corning (OC) and PPG
Industries, Inc.  Alternative sources of supply are available for all the
Company's key raw materials, except for Beta(R) fiberglass yarn (Beta) used in
the manufacture of certain structural membrane products, which is supplied to
the Company solely by OC.  Beta(R) is a registered trademark of OC.  For such
Beta yarn, OC has agreed to give the Company at least two years advance notice
prior to any discontinuance of production and supply (see below).

      In March 1997, OC informed the Company of its intent to cease supplying
Beta to all of its customers and, more specifically, to the Company effective
March 31, 1999 pursuant to the above-described two year notice requirement.
Concurrently, the Company entered into an agreement with OC aimed at the
development by OC, over the remaining Beta supply period, of a new continuous
filament fiberglass yarn to replace Beta in those products wherein Beta has been
utilized.  A related objective of this collaborative effort is for such new
glass fiber to also provide, relative to Beta, improved cost/performance for the
benefit of the Company and enhanced production efficiencies for the benefit of
OC.  Based on development work conducted to date, management is optimistic that
this development program will be successful.  Nevertheless, over the remaining
Beta supply period, the Company may inquire about, and attempt to contract for,
alternative sources of supply of Beta-type fiberglass yarn.

      Subject to the foregoing, the Company believes that it maintains adequate
inventories and close working relationships with its suppliers to provide for a
continuous and adequate supply of raw materials for production.  The Company has
not experienced any serious interruptions in production due to a shortage of raw
materials.

BACKLOG

      The Company's backlogs, comprised of firm orders or unfilled portions
thereof, at the dates indicated were as follows:

                                                 At June 30,
                                --------------------------------------------
                                                (in thousands)

                                               1997          1996        1995
                                               ----          ----        ----

Engineered Products - Americas Sourced      $10,149      $  8,172    $  6,157

Engineered Products - Europe Sourced          2,993         3,117       2,880

Architectural Products                        1,670         2,192       3,794
                                            -------       -------     -------
                                            $14,812       $13,481     $12,831
                                            =======       =======     =======


      Included in the June 30, 1997 backlog is approximately $4,553,000
attributable to United States Government prime contracts and subcontracts.  All
United States Government contracts, whether funded or unfunded, can be
terminated or curtailed at the convenience of the Government.

      The Company expects to recognize as revenue in fiscal 1998 virtually all
of its June 30, 1997 backlog.

OTHER

      In addition to normal business risks, operations outside the United States
are subject to other risks including:  the political, economic and social
environment; governmental laws and regulations; and currency revaluations and
fluctuations.

RESEARCH AND DEVELOPMENT

      Fiscal 1997 expenditures for Company-sponsored research and development
were $2,498,000, representing approximately 2.8% of consolidated net sales, an
amount which management believes was sufficient to support continuing new
product and process development.  Comparable expenditures in 1996 and 1995 were
$2,270,000 and $2,047,000, respectively, which represented approximately 3% of
consolidated net sales in both years.

      During fiscal 1997, the Company's research efforts were devoted to the
development of:  next-generation composite wire insulation products to serve the
airframe wiring market; new PTFE/elastomer laminates for the laboratory-test and
bio-medical care markets; and high light-transmission architectural membrane
products for the construction industry.  A significant effort was also initiated
in fiscal 1997 directed at developing fluoroelastomer products targeted at
fluid-handling and sealing applications in the electronic and automotive
markets.  Resources were also committed to improvements in pressure sensitive
adhesive tapes for the packaging industry and in laminates and belting products
for food processing applications.

COMPETITION

      The Company believes that the integration of its materials and processing
technologies represents a significant factor in its competitive position.  The
Company also competes on the basis of technological suitability, quality and
price of its products, its ability to meet individual customer specifications,
and the quality of technical assistance and service furnished to customers.

      The majority of the Company's engineered products are comprised of the
Company's fluoropolymer-containing composite materials and specialty
fluoropolymer films.  These materials are manufactured through the application
of a number of different production processes, including custom fiber
reinforcement weaving, fluoropolymer coating, fluoropolymer film casting, and
fluoropolymer film lamination.  In the area of fluoropolymer coated composites,
the Company has three major and several smaller competitors worldwide in a
relatively mature marketplace.  The Company believes that it is the market
leader in both the United States and Europe in the majority of product lines
based on this production methodology.  The Company's multi-layer fluoropolymer
films and products made from fluoropolymer film laminates are based on
proprietary technologies and, accordingly, there is no significant competition
worldwide which utilizes the same process technologies.  These products do,
however, compete with other valued products comprised of similar and dissimilar
materials.

      In the area of high performance elastomeric closures, the Company has four
major and several smaller competitors worldwide.

      None of the Company's competitors have the same breadth of offering in
these specialty niches, and the Company believes it is the global leader in the
principal markets where it competes.  The Company's fluoropolymer-containing
composite materials are also fabricated into end-use products.  The Company
believes that these fabricated articles, which include chemical protective
suits, spherical radomes, and military shelters, compete favorably against
products manufactured from other materials.

      The Company believes that its architectural membrane products, which are
sold through supply agreements with Birdair, Taiyo, and a customer in Australia,
have a worldwide leadership position in the market for permanent membrane
structures.  The Company believes its leadership position in this field is the
result of its expertise in wide-width weaving and coating, coupled with the
expertise of its customers in the design/engineering and installation of
permanent membrane structures. SHEERFILL(R) Architectural Membrane and ULTRALUX
(TM) Architectural Membrane products compete with alternative construction
materials, and with permanent architectural membrane materials manufactured by
other companies.

PATENTS AND TRADEMARKS

      The Company holds numerous patents covering manufacturing processes and
product compositions.  In addition, the Company has several patent applications
on file, including applications related to specific end-uses for its products.

      Additionally, a notice of allowance was received for two patents in fiscal
1997.  The first, from the United States Patent Office, related to the use of a
fluoropolymer-based composite for use in air-distribution systems. The second,
from the European Patent Office, related to the use of a fluoropolymer-based
laminate in structural applications. During fiscal year 1997, the Company also
filed a patent application in the U.S. and Japan for a high light-transmission
architectural membrane product and is in the process of filing in Europe.  In
addition, a trademark application for ULTRALUX (TM) Architectural Membrane has
been filed for use with this product.  These high light-transmission
architectural membranes are expected to serve markets in sports arena and
stadium applications.

      U.S. patents and trademarks, and their foreign counterparts, are key
elements in the Company's strategy to maintain and extend its competitive
position in its markets.  The Company also relies on trade secrets and
proprietary know-how in the design and manufacture of its products, and may
license some of those trade secrets and proprietary know-how to others for
certain new products and applications.

ENVIRONMENTAL CONTROLS

      Federal, state, local, and foreign governmental requirements relating to
the discharge of materials into the environment, the disposal of hazardous
wastes and other factors affecting the environment have had, and will continue
to have, an impact on the manufacturing operations of the Company (see Item 3
Legal Proceedings).  Thus far, the Company believes compliance with such
provisions has been accomplished without material effect on the Company's
capital expenditures, earnings and competitive position, and it is expected that
this will continue to be the case.

EMPLOYEES

      At June 30, 1997, the Company had 584 full-time employees.

ITEM 2   PROPERTIES

      The sales, marketing, administrative, research and development,
manufacturing and distribution facilities used by the Company and its
subsidiaries are located in four different states within the U.S., and in
Ireland, England, Spain, Japan, Brazil and China.  The Company owns an aggregate
of approximately 302,000 square feet of facilities, and leases approximately
149,000 square feet of additional space.

      In December 1993, the Company purchased, for approximately $5.3 million in
cash, its Merrimack, New Hampshire headquarters site.  The property, which
previously had been occupied under lease, consists of a 170,000 square foot
building and 21 acres of land.  At the time of the purchase, the Company also
acquired a 10-year right to purchase an additional 32 acres of adjacent
undeveloped land.

      In the opinion of the Company, its properties have been well maintained,
are in sound operating condition, and contain all equipment and facilities
necessary to conduct its business at present levels.  A summary of the square
footage of floor space currently being utilized at the Company's facilities at
June 30, 1997 is as follows:
                                          NO.  OF
            PRIMARY USE                   LOCATIONS     OWNED         LEASED(1)

Manufacturing and engineering                9          245,000       122,000

Research and development,                   11(2)        57,000        27,000
sales and administrative
office facilities

            (1)  The lease in the Republic of Ireland is a tenant-at-
              will lease; leases in Japan expire in 1997, Spain in
              1997, Vermont in 1997, Brazil in 1998, Illinois in 1998,
              China in 1999, New York in 1999, and England in 2000.
              Leased space in these locations is primarily used for
              storage and/or sales and administrative functions.
              Principal manufacturing facilities in New Hampshire,
              Vermont and Ireland are owned by the Company.

            (2)  Of the Company's eleven research and development,
              sales and administrative office facilities, nine are
              located together with manufacturing and engineering
              facilities.

ITEM 3 LEGAL PROCEEDINGS

      In March 1991, the United States Environmental Protection Agency ("EPA")
informed the Company it was one of a number of Potentially Responsible Parties
("PRPs") under the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") and related laws concerning the disposal of hazardous
waste at the Bennington Landfill Superfund Site in Bennington, Vermont (the
"Site").  Under these statutes, PRPs may be jointly and severally liable for the
cost of study and remediation actions at the Site and for other damages.  While
denying liability, the Company has worked with the approximately twelve (12)
other Site PRPs to respond to the EPA's claim.

      In April 1997, the EPA and the United States Department of Justice ("DOJ")
issued a Consent Decree to resolve Site-related claims against the Company and
the other PRPs.  Under terms of the Consent Decree, the Company is a "de
minimis" party, eligible for settlement under section 122 (g) of CERCLA, and
entitled to statutory contribution protection.  The Company's contribution to
the settlement is set at $180,000, of which the Company's insurance carriers
have agreed to pay $120,000. The Company executed the Consent Decree on April
10, 1997.  Signatures from the necessary government officials have been obtained
by the EPA and the DOJ and the Consent Decree was filed with the United States
District Court for the District of Vermont on July 2, 1997.  Assuming no
objections to the Consent Decree are filed, it is anticipated the United States
District Court will give final approval to the Consent Decree by the end of
calendar year 1997.

      Upon approval of the Consent Decree by the Court, the Company will have 30
days to make its settlement payment.  The Consent Decree provides for the
Company, upon payment of the settlement amount, to receive final convenants from
Federal and State Governments prohibiting those entities from taking further
civil or administrative action against the Company related to the Site, subject
to standard statutory reopeners.  The Company is not aware of any other pending
or threatened claims or administrative actions involving the Site, and believes
that any such claims or actions would be unlikely.

      The Company is involved in a number of other lawsuits as either a
defendant or a plaintiff.  Although the outcome of such matters cannot be
predicted with certainty, and some lawsuits or claims may be disposed of
unfavorably to the Company, management believes that the disposition of its
current legal proceedings, to the extent not covered by insurance, will not have
a material adverse effect on the Company's consolidated financial statements.

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 fiscal 1997.

ITEM 4A   OFFICERS OF THE COMPANY

      The name, age, positions, and offices held with the Company, and principal
occupations and employment during the past five years of each of the Officers of
the Company, are as follows:

      NAME                      AGE                 POSITION OR OFFICE HELD

Duane C. Montopoli              48          President, Chief Executive Officer
                                               and Director

John W. Verbicky                45          Executive Vice President and Chief
                                               Operating Officer

Michael P. Cushman              44          Vice President - Americas Business
                                               Group

Moosa E. Moosa                  40          Vice President - Finance, Treasurer,
                                              and Chief Financial Officer

Thomas C. Platt III             42          Vice President - General Counsel and
                                               Administration and Secretary

Charles Tilgner III             62          Vice President and Director of U.S.
                                              Operations and Engineering

Hilary A. Arwine                37          Corporate Controller

      Duane C. Montopoli was elected President and Chief Executive Officer in
January 1987; he had been serving as interim President since June 1986.  He
joined the Company as Chief Financial Officer in February 1986.  Until January
1990, he was also a partner in Oak Grove Ventures, Menlo Park, California, which
he joined in December 1983.  Prior to that time, Mr. Montopoli was employed by
Arthur Young & Company (now Ernst & Young LLP) where he was a general partner
from October 1982 through December 1983.  On August 7, 1997, the Company
announced that Mr. Montopoli had informed its Board of Directors of his
intention to terminate his employment with the Company effective on or about
December 31, 1997, while thereafter remaining a director of the Company.  John
W. Verbicky has been named to succeed Mr. Montopoli as the Company's President
and Chief Executive Officer (see below).

      John W. Verbicky Ph.D. joined the Company in January 1993 as Vice
President - Research & Development. In April 1994, Dr. Verbicky assumed the
position of Vice President - U.S. Business Group, and in March 1996 he was
promoted to the position of Executive Vice President and Chief Operating
Officer.  From November 1990 until the commencement of his employment with the
Company, Dr. Verbicky was employed by General Electric (GE) as manager of the
Environmental Technology Laboratory at GE's Research and Development Center.  He
previously served as manager of the Chemical Synthesis Laboratory after joining
GE in 1979.  In this role, he led a series of research and development teams
focused on product and process development efforts in the area of engineering
thermoplastics and composites supporting the GE Plastics and Silicones
businesses.  Concurrent with the announcement of Mr. Montopoli's intention to
terminate his employment with the Company effective on or about December 31,
1997 (see above), the Board of Directors named Dr. Verbicky to succeed Mr.
Montopoli as the Company's President and Chief Executive Officer at that time.

      Michael P. Cushman joined the Company in February 1978 as Customer Service
Coordinator. He served in various product and sales management functions and
became Director of the European Business Group in June 1984.  In July 1991, he
was named Director of the Asia Pacific Business Group.  He assumed leadership of
the Americas Business Group as General Manager in March 1996, and was named Vice
President - Americas Business Group effective  July 1997.

      Moosa E. Moosa joined the Company as Vice President - Finance, Treasurer
and Chief Financial Officer in July 1996.  Prior to joining the Company, Mr.
Moosa was employed by Freudenberg Nonwovens LP as Vice President of Finance &
Chief Financial Officer since 1992.  Prior to that time, he worked for KPMG Peat
Marwick, an international public accounting firm, since 1980.

      Thomas C. Platt III joined the Company in July 1997 as Vice President -
General Counsel and Administration and Secretary.  Prior to joining the Company,
Mr. Platt was a senior level Director and Shareholder at the law firm of Orr &
Reno, P.A. in Concord, New Hampshire.  He had worked for Orr & Reno since his
graduation from law school in 1980.  Mr. Platt and his firm have served as
outside legal counsel to the Company on many business matters over the past 10
years, particularly in the areas of the architectural products business and real
estate and employment matters.

      Charles Tilgner III joined the Company in January 1978 as the Company's
Manager of Engineering.  In January 1984 he was named Site Manager, Buffalo
Operations.  In May 1985, Mr. Tilgner became Director of Technical Operations.
He was named Vice President - Manufacturing in October 1986, and became Vice
President - Engineering in September 1990.  In September 1994, while retaining
his office of Vice President, he was named Director of U.S. Operations and
Engineering.

      Hilary A. Arwine joined the Company in June 1996 as Controller of the
Merrimack manufacturing facility.  In June 1997, she was promoted to the
position of Corporate Controller.  Prior to joining the Company, Ms. Arwine was
Vice President, Finance and Administration at Saphikon Inc. where she had held
positions of increasing responsibility since 1989.  Prior to 1989, she held
various finance positions at Hollis Engineering and New Hampshire Ball Bearing,
Inc.

      All Officers are elected annually to serve at the discretion of the Board
of Directors.

                                   PART II

ITEM 5 MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

      Until March 10, 1997, the common stock of the Company was traded on the
Nasdaq National Market under the symbol "CMFB".  Effective March 11, 1997, the
Company moved its listing to the New York Stock Exchange.

      The common stock of the Company is now traded on the New York Stock
Exchange under the symbol "CFA".  The following table sets forth, for the
periods indicated, the high and low sale prices per share of the Company's
common stock as reported by the New York Stock Exchange or the Nasdaq National
Market, as applicable.  These figures have been adjusted to reflect the
Company's three for two stock split in February 1996.

                                   Fiscal year ended     Fiscal year ended
                                   -----------------     -----------------
                                    June 30, 1997         June 30, 1996
                                    -------------         -------------
                                    High     Low           High     Low
                                    ----     ---           ----     ---
            First quarter           14 1/2   12 1/4        13 1/3   10 2/3
            Second quarter          15 1/4   12 3/4        14 1/3   12
            Third quarter           18 1/2   13            14 1/3   12
            Fourth quarter          21 3/8   16 3/8        14 3/4   11 1/2

      As of August 11, 1997, the number of record holders of the Company's stock
was 470.  At the present time, the Company intends to follow a policy of not
paying any dividends and retaining all earnings to finance the development and
growth of the business.


ITEM 6 SELECTED FINANCIAL DATA
       (in thousands except per share data)

                                        For the year ended June 30,
                          ----------------------------------------------------
                             1997       1996   1995 (1)       1994        1993
                             ----       ----   --------       ----        ----
Net sales                 $90,783    $83,882    $67,980    $52,151     $50,936

Gross profit               30,944     28,109     21,856     16,717      16,890

Other (income) expense       (213)        51       (111)      (251)       (282)

Income before income
  taxes                    13,300     11,154      7,480      5,218       4,632

Net income                $ 9,106    $ 7,714    $ 5,310    $ 3,895     $ 3,502

Number of shares and share
  equivalents used to compute
  earnings per share        8,278      8,199      7,991      7,926       7,875

Net income per share        $1.10      $0.94      $0.66      $0.49       $0.45

The Company has never paid a cash dividend.

(1) See also Note 2 of Notes to Consolidated Financial Statements.



ITEM 6   SELECTED FINANCIAL DATA (CONTINUED)
       (in thousands)

                                                    at June 30,
                          -----------------------------------------------------
                             1997       1996    1995 (1)      1994        1993
                             ----       ----    --------      ----        ----

Working capital           $33,226    $28,292    $25,501    $22,930     $25,970

Net property, plant and
  equipment                21,472     20,540     19,833     17,889      12,851

Total assets               80,565     73,662     70,619     53,794      48,669

Long-term debt
  including current portion   ---      2,377      8,132        ---         ---

Shareholders' equity       66,385     58,505     50,321     44,372      39,846

(1) See also Note 2 of Notes to Consolidated Financial Statements.


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

      The following table indicates the percentage relationships of selected
financial items included in the Consolidated Statements of Income for the three
fiscal years ended June 30, 1997, 1996, and 1995, and the pertinent percentage
changes in those items for the year.

                                 Percent of net sales             Increase from
                              for the years ended June 30,          prior year
                              ----------------------------        -------------
                                                                1997       1996
                                                                 vs.        vs.
                              1997         1996       1995      1996       1995
                              ----         ----       ----      ----       ----

Net sales                   100.0%       100.0%     100.0%      8.2%      23.4%

Gross profit                 34.1%        33.5%      32.2%     10.1%      28.6%

Income before
  income taxes               14.7%        13.3%      11.0%     19.2%      49.1%

Net income                   10.0%         9.2%       7.8%     18.0%      45.3%


                             1997 COMPARED TO 1996
SALES

     The Company's fiscal 1997 consolidated sales increased 8% to $90,783,000
from $83,882,000 in 1996.  This revenue growth was the result of a 14% increase
over the prior year in worldwide sales of industrial and fabricated products,
net of a decline in shipments of architectural products relative to the
preceding year.  The growth in sales for the fiscal year was primarily volume-
related.

     Engineered Products - Americas Sourced sales (which include all non-
architectural product sales from the Company's U.S. manufacturing plants;
principal geographic markets are the Americas and the Far East) increased 18% to
$48,978,000 from $41,436,000 in the prior year.  This sales increase was broad-
based, with sales of fabricated products and shipments to industrial
distributors being particularly strong relative to the prior year.

     Engineered Products - Europe Sourced sales (which include all product sales
from the Company's European manufacturing plants; principal geographic markets
are Europe, Africa and the Middle East) increased 8% to $32,061,000 from
$29,710,000 in the prior year. This increase in revenues resulted principally
from greater sales into general distributor and pharmaceutical markets within
Europe.  During the fiscal year, the British Pound, which is the currency in
which the Company's European sales are recorded, strengthened relative to
mainland Europe currencies and relative to the U.S. Dollar.  Although this
adversely affected European sales made in those other currencies upon conversion
into British Pounds, and beneficially affected European sales upon translation
into U.S. Dollars, the net effect on reported sales for the year was immaterial.

     Architectural Product sales decreased 23% to $9,744,000 from $12,736,000 in
fiscal 1996.  This decrease in revenues was expected and was a consequence of a
higher concentration of large construction contract awards to the Company's
architectural product customers in fiscal 1996 as compared to fiscal 1997.

     For fiscal 1998, worldwide demand for industrial and fabricated products is
expected to remain generally strong and architectural product sales are expected
to be up over the levels achieved in fiscal 1997.

GROSS PROFIT MARGINS

     Gross profit margins as a percentage of net sales for fiscal 1997 increased
to 34.1% from 33.5% in fiscal 1996. The improvement resulted principally from
increased production efficiencies and targeted cost reduction programs.

SELLING, ADMINISTRATIVE, RESEARCH AND DEVELOPMENT EXPENSES

     Selling, general and administrative expenses increased to $15,539,000 in
fiscal 1997 from $14,157,000 in fiscal 1996.  Increased selling, general and
administration expenditures resulted from the combined effects of the higher
cost structure in place to support the Company's newly established subsidiary
operations in China, Brazil and Japan, as well as normal increases in salaries
and other costs. The percentage of selling, general and administrative expenses
to sales was 17%,  unchanged from fiscal 1996.

     Research and development (R&D) expenses increased to $2,498,000 in fiscal
1997 from $2,270,000 in fiscal 1996.  R&D expenses, as a percentage of revenues,
were approximately 2.8% of sales in both years.  At the present time, management
believes that R&D spending in the range of 3% of sales will be generally
adequate to support the Company's present new product and process development
programs.

INTEREST (INCOME) EXPENSE AND OTHER INCOME

     In fiscal 1997, net interest income was $180,000 compared to net interest
expense of $477,000 in fiscal 1996.  This change resulted from the repayment of
debt incurred to finance the Tygaflor business acquisition in England.

     Other income, net of other expense, was $213,000 in fiscal 1997 compared to
$51,000 of other expense in fiscal 1996.  Included in the current period is
$115,000 of income related to a fire insurance claim and realized foreign
exchange gains of $83,000.  Other expense in fiscal 1996 included realized
foreign exchange losses of $90,000.

INCOME TAXES

     In fiscal 1997, the Company recorded $4,194,000 of income tax expense as
compared to $3,440,000 in 1996.  The Company's effective tax rate for 1997 was
31.5% as compared to 30.8% in the prior year.  The increase in the effective tax
rate is due primarily to the increased proportion of income from U.S. and U.K.
operations, as compared to income from operations in lower tax jurisdictions.

PROFITABILITY

     The Company earned net income before taxes of $13,300,000 for the year
ended June 30, 1997 as compared to $11,154,000 in the prior year.  This
represents an increase in pre-tax income of 19% over the prior year on an 8.2%
increase in revenues.  Net income increased 18% to $9,106,000 or $1.10 per share
for fiscal 1997 from $7,714,000 or $0.94 per share in 1996.


                            1996 COMPARED TO 1995

SALES

      The Company's fiscal 1996 consolidated net sales increased 23% to
$83,882,000 from $67,980,000 in 1995.  Revenues in fiscal 1996 included the
sales of the Tygaflor business in England, which was acquired in February 1995.
This growth was attributable to a strong market for the Company's architectural
products, continued strength in the industrial products business in Europe and
the U.S., and the full-year inclusion of Tygaflor sales compared to 4.5 months
in fiscal 1995.  Measured in constant foreign currency translation rates, fiscal
1996 net sales would have increased 25% over fiscal 1995.  The growth in
revenues was primarily volume-related.

      Engineered Products - Americas Sourced sales (which included all non-
architectural product sales from the Company's U.S. manufacturing plants with
principal geographic markets in the Americas and the Far East) increased 6% to
$41,436,000 from $38,962,000 in the prior year.  This growth was principally
attributable to strength in the Company's government related and fabricated
products business.

      Engineered Products - Europe Sourced sales (which include all product
sales from the Company's European manufacturing plants with principal geographic
markets in Europe, Africa and the Middle East) increased 43% to $29,710,000 from
$20,833,000 in the prior year.  Without the impact of the Tygaflor business
(acquired February 1995), it is estimated that this increase would have been
approximately 14%.  This increase in revenues was broad based and extended
across most of the Company's products manufactured in Europe.

      Architectural Product sales increased 56% to $12,736,000 from $8,185,000
in fiscal 1995, due primarily to strong demand for the Company's products in the
Far East.

GROSS PROFIT MARGINS

      Gross profit margins as a percentage of net sales for fiscal 1996
increased to 33.5% from 32.2% in fiscal 1995.  Consolidated gross margins
benefited from significantly increased production volumes without a
corresponding percentage increase in fixed manufacturing overhead costs.

SELLING, ADMINISTRATIVE, RESEARCH AND DEVELOPMENT EXPENSES

      Selling, general and administrative expenses increased to $14,157,000 in
fiscal 1996 from $12,124,000 in fiscal 1995.  This increase in spending was
principally the result of added expenses relating to the full-year impact of
owning the Tygaflor business versus the prior year, normal salary and wage
increases, and increased performance-based compensation versus the prior year.
The percentage of selling, general and administrative expenses to sales
decreased to approximately 17% in fiscal 1996 from 18% in fiscal 1995.

      Research and development expenses increased to $2,270,000 in 1996 from
$2,047,000 in 1995.  R&D expenses, as a percentage of revenues, were
approximately 2.7% versus 3% in fiscal 1996 and 1995.

INTEREST EXPENSE, EQUITY OPERATIONS AND OTHER INCOME

      In fiscal 1996, net interest expense was $477,000 compared to $95,000 in
fiscal 1995.  This change was caused by the full-year impact of the long-term
debt incurred to acquire the Tygaflor business in England (See Notes 2 and 5 of
Notes to Consolidated Financial Statements).

      Results of equity operations for fiscal 1995 were a loss of $221,000.  For
fiscal 1996, no amount was recorded since the Company's investment in this
venture had been written down to zero as of the end of fiscal 1995.
      
      Other expense, net of other income, was $51,000 in fiscal 1996 compared to
$111,000 of other income in fiscal 1995.  Other expense in 1996 included
realized foreign exchange losses of $90,000.  Other income in fiscal 1995
included realized foreign exchange gains of $68,000.

INCOME TAXES

      In fiscal 1996, the Company recorded $3,440,000 of income tax expense as
compared to $2,170,000 in 1995.  The Company's effective tax rate for 1995 was
31% as compared to 29% in the prior year.  The increase in the effective tax
rate was due primarily to the increased proportion of income from U.S. and UK
operations as compared to income from operations in lower tax jurisdictions.

PROFITABILITY

      The Company earned net income before taxes of $11,154,000 for the year
ended June 30, 1996 as compared to $7,480,000 in the prior year.  This
represented an increase in pre-tax income of 49% over the prior year on a 23%
increase in revenues.  Net income increased 45% to $7,714,000 or $0.94 per share
for fiscal 1996 from $5,310,000 or $0.66 per share in 1995.

                             EFFECTS OF INFLATION

      Inflation rates over the past three years have remained relatively low and
as a result have not had a material impact on the financial results of the
Company.

                       LIQUIDITY AND CAPITAL RESOURCES

      During fiscal 1997, the Company generated $11,954,000 of cash from
operations and an additional $4,478,000 from the exercise of stock options.
During this same period, the Company spent $3,860,000 for capital additions,
repaid $2,447,000 of long-term debt and expended $7,064,000 for the acquisition
of treasury shares (see Note 8 of Notes to Consolidated Financial Statements).

      Working capital increased to $33,226,000 at June 30, 1997 from $28,292,000
at June 30, 1996.  Current assets increased from $39,548,000 in 1996 to
$45,616,000 at June 30, 1997.  Current liabilities increased to $12,390,000 at
June 30, 1997 from $11,256,000 at June 30, 1996.  The higher working capital
levels were the result of higher levels of sales and profitability in fiscal
1997 as compared to fiscal 1996 and the establishment of new operations in
China, Brazil and Japan.

      As of June 30, 1997, the Company had approximately $21,000,000 of
additional credit available under its domestic and international borrowing
facilities.  Management believes that cash on hand, together with cash expected
to be generated from operations and the credit facilities mentioned above, will
be adequate to finance operations during fiscal 1998 and the foreseeable future
and to deal with any liabilities or contingencies described in Note 14 of Notes
to Consolidated Financial Statements.


                           FORWARD-LOOKING STATEMENTS

      Statements in this report that are not historical facts may be forward-
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995.  Without limiting the foregoing, the words "believes,"
"anticipates," "plans," "expects," "assumes" and similar expressions are
intended to identify forward-looking statements.  Forward-looking statements are
inherently uncertain and there are a number of important factors that could
cause actual results to differ materially from those expressed or suggested in
any forward-looking statement made by the Company.  These factors include, but
are not limited to:

     - The impact of changes in foreign currency exchange rates on sales, gross
       profit margins, expenses, and net income.

     - The level and timing of architectural product sales over the course of
       the fiscal year, considering the cyclical nature of demand for such
       products.

     - The level and timing of U.S. Government contract awards (either as prime
       contractor or as a sub-contractor) in particular for radome systems, and
       the completion (i.e., non- cancellation or curtailment) of such
       contracts after award.

     - The financial operating performance of the Company's recently
       established China, Japan and Brazil subsidiaries during their respective
       start-up phases.

     - The uninterrupted availability, at reasonable prices, of key raw
       materials used in the production of the Company's products including,
       without limitation, fluoropolymer resins and fiberglass yarns in various
       fiber diameters, especially Beta-type fiberglass yarn and/or its
       intended replacement fiber currently under development by OC (see 
       Part I, Item 1, Raw Materials).  There can be no assurance that the OC
       development program will be successful or that the Company will be able,
       if and as necessary after the remaining Beta supply period, to obtain
       from other sources adequate quantities of Beta-type yarn at reasonable
       prices.

     - The strength of industrial economies around the world, in particular the
       economies of the United States, Germany, England and Japan.


ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The financial statements and supplementary data listed in Item 14 in 
Part IV on Page 21, are filed as part of this report.


ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
       FINANCIAL DISCLOSURE

      None.


                                   PART III

ITEM 10  DIRECTORS AND OFFICERS OF THE REGISTRANT

      See the information under the captions "Nominees for Election As
Directors" and "Information As To Directors and Nominees For Director" on pages
3 and 4, of the Proxy Statement for the 1997 Annual Meeting of Shareholders of
the Company to be held on October 30, 1997, which information is incorporated
herein by reference.  See also the information with respect to officers of the
Company under Item 4a of Part I hereof.

ITEM 11  EXECUTIVE COMPENSATION

      See the information under the caption "Executive Compensation" beginning
on page 7 of the Proxy Statement for the 1997 Annual Meeting of Shareholders of
the Company, which information is incorporated herein by reference.

ITEM 12  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      See the information under the captions "Principal Shareholders" and
"Ownership  of  Equity Securities by Management" on pages 2 and 6 of the Proxy
Statement for the 1997 Annual Meeting of Shareholders of the Company, which
information is incorporated herein by reference.

ITEM 13  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      See the information under the caption "Certain Transactions" on page 14 of
the Proxy Statement for the 1997 Annual Meeting of Shareholders of the Company,
which information is incorporated herein by reference.


                                   PART IV

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


  (a) LISTED BELOW ARE ALL OF THE DOCUMENTS FILED AS PART OF THE REPORT:  PAGE
                                                                          ----

       (1) FINANCIAL STATEMENTS OF CHEMFAB CORPORATION                      25
           Report of Ernst & Young LLP Independent Auditors

           Consolidated Balance Sheets at June 30, 1997 and 1996         26-27

           For the three years ended June 30, 1997, 1996 and 1995:
               Consolidated Statements of Income                            28
               Consolidated Statements of Shareholders' Equity              29
               Consolidated Statements of Cash Flows                        30

           Notes to Consolidated Financial Statements
               June 30, 1997, 1996 and 1995                              31-45

           Quarterly Financial Data (unaudited)                             46

       (2) FINANCIAL STATEMENT SCHEDULES OF CHEMFAB CORPORATION
           II   - Valuation and Qualifying Accounts                        S-1

All other schedules have been omitted since the required information is not
present or not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the Consolidated
Financial Statements or the notes thereto.

     (3)  EXHIBITS

    3(a)  Certificate of Incorporation of the Company filed as Exhibit 3(a) to
          the Company's Annual Report on Form 10-K for the year ended June 30,
          1996 is incorporated herein by reference.

 3(a)(1)  Certificate of Amendment to Certificate of Incorporation of the 
          Company (effective November 6, 1991) filed as Exhibit 3(a)(1) to the 
          Company's Annual Report on Form 10-K for the year ended June 30, 1996 
          is incorporated herein by reference.

    3(b)  By-Laws of the Company filed as Exhibit 3(b) to the Company's
          Registration Statement on Form S-1 (File No. 2-85949) filed November
          10, 1983 is incorporated herein by reference.

    4(a)  Specimen Common Stock Certificate.

    4(b)  See Exhibit 3(a) above.

    4(c)  See Exhibit 3(b) above.

10(a)(1)  The Company's 1986 Stock Option Plan filed as Exhibit 10(a)(1) to the
          Company's Annual Report on form 10-K for the year ended June 30, 1996
          is incorporated herein by reference.

10(a)(2)  Forms of Stock Option Agreements under the Company's 1986 Stock 
          Option Plan and for Non-Plan Options filed as Exhibit 10(a)(2) to the
          Company's Annual Report on form 10-K for the year ended June 30, 1996
          are incorporated herein by reference.

10(a)(3)  Employment Agreement with Mr. Duane C. Montopoli, dated May 29, 1992
          and effective July 1, 1992, filed as Exhibit 10(a)(9) to the 
          Company's Annual Report on Form 10-K for the year ended June 30, 1992 
          is incorporated herein by reference.

10(a)(4)  Letter Agreement with Mr. James C. Manocchi dated June 4, 1991 filed 
          as Exhibit 10(a)(4) to the Company's Annual Report on form 10-K for 
          the year ended June 30, 1996 is incorporated herein by reference.

10(a)(5)  Letter Agreement with Dr. John W. Verbicky dated October 15, 1992 and
          effective January 11, 1993 filed as Exhibit 10(a)(6) to the Company's
          Annual Report on Form 10-K for the year ended June 30, 1993 is
          incorporated herein by reference.

10(a)(6)  Second Amended and Restated Chemfab Corporation 1991 Stock Option Plan
          filed as Exhibit 10(a)(6) to the Company's Annual Report on form 10-K
          for the year ended June 30, 1996 is incorporated herein by reference.

10(a)(7)  Forms of Stock Option Agreements under the Company's 1991 Stock Option
          Plan filed as Exhibit 10(a)(8) to the Company's Annual Report on form
          10-K for the year ended June 30, 1995 is incorporated herein by
          reference.

10(a)(8)  Form of Amendment to 1986 and/or 1991 Stock Option Plan Agreements,
          filed as exhibit 10(a)(10) to the Company's Annual Report on Form 10-K
          for the year ended June 30, 1994 is incorporated herein by reference.

10(a)(9)  Stock Option Agreement between the Company and Mr. Manocchi dated
          October 21, 1994 filed as Exhibit 10(a)(10) to the Company's Annual
          Report on Form 10-K for the year ended June 30, 1995 is incorporated
          herein by reference.

10(a)(10) Amendment to 1991 Stock Option Plan agreements between the Company and
          Mr. Manocchi dated October 21, 1994 filed as Exhibit 10(a)(11) to the
          Company's Annual Report on Form 10-K for the year ended June 30, 1995
          is incorporated herein by reference.

10(a)(11) Letter Agreement with Mr. Moosa E. Moosa dated June 25, 1996.

10(a)(12) Amendment No. 1 to Second Amended and Restated 1991 Stock Option
          Plan.

10(b)(1)  Share Purchase Agreement, dated January 18, 1991, relating to
          Fluorocarbon Fabrication Limited.

10(b)(2)  Supply Agreement, dated January 18, 1991, by and between Chemical
          Fabrics Europe and Aerovac Systems (Keighley) Limited filed as Exhibit
          10(b)(2) to the Company's Annual Report on form 10-K for the year 
          ended June 30, 1996 is incorporated herein by reference.

10(b)(3)  Purchase and Sale Agreement, relating to Birdair, Inc. dated as of
          March 27, 1992 between Taiyo Kogyo Corporation and the Company, filed
          as Exhibit 10(b)(13) to the Company's Annual Report on Form 10-K for
          the year ended June 30, 1992 is incorporated herein by reference.

10(b)(4)  Asset Purchase Agreement between Chemfab Corporation, Chemfab U.K.
          Ltd., Courtaulds plc and Courtaulds Aerospace Limited dated February
          13, 1995 filed as exhibit 10(b)(8) to the Company's Quarterly Report 
          on Form 10-Q for the quarter ended April 2, 1995 is incorporated 
          herein by reference.

10(b)(5)  Facilities Agreement between Chemfab Europe, Chemfab Holdings U.K.
          Ltd., Chemfab U.K. Ltd. and Bank of Ireland dated February 17, 1995
          filed as exhibit 10(b)(9) to the Company's Quarterly Report on Form 
          10-Q for the quarter ended April 2, 1995 is incorporated herein by
          reference.

10(b)(6)  Consulting Agreement dated August 2, 1996 between Chemfab Corporation
          and Chemfab Director, Dr. Nicholas Pappas filed as Exhibit 10(b)(11) 
          to the Company's Quarterly Report on form 10-Q for the quarter ending
          September 29, 1996 is incorporated herein by reference.

10(b)(7)  $20,000,000 Credit Agreement by and between Chemfab Corporation as
          borrower and The First National Bank of Boston and The Bank of Ireland
          as lenders filed as Exhibit 6(a) to the Company's Quarterly Report on
          form 10-Q for the quarter ending December 29, 1996 is incorporated
          herein by reference.

10(b)(8)  $1,000,000 Credit Agreement by and between Chemfab Corporation as
          borrower and The First National Bank of Boston.

      21  List of Subsidiaries of Chemfab Corporation.

      23  Consent of Ernst & Young LLP, Independent Auditors, set forth at page
          S-2 of this Annual Report on Form 10-K.

      24  Power of Attorney authorizing certain persons to sign this Annual
          Report on Form 10-K on behalf of certain directors and officers of 
          this Company.

     (b)  REPORTS ON FORM 8-K      None.

                                  SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Annual Report to be
signed on behalf of the Registrant and in the capacities indicated.

                             CHEMFAB CORPORATION
                                 (Registrant)

                        By /s/ Duane C. Montopoli
                        ----------------------------------------------------
                        Duane C. Montopoli
                        President and Chief Executive Officer
                        -------------------------------------

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on the 18th day of September 1997 by the following
persons on behalf of the Registrant and in the capacities indicated.

      By /s/ Duane C. Montopoli
      -----------------------------------------------------------------------
      Duane C. Montopoli, President, Chief Executive Officer
      (principal executive officer) and Director

      By             *
      -------------------------------------------------------------------------
      Moosa E. Moosa, Vice President Finance, Treasurer and
      Chief Financial Officer (principal financial officer)

      By             *
      ------------------------------------------------------------------------
      Hilary A. Arwine, Corporate Controller (principal
      accounting officer)

      By             *
      ------------------------------------------------------------------------
      Paul M. Cook, Director

      By             *
      ------------------------------------------------------------------------
      Warren C. Cook, Director

      By             *
      ------------------------------------------------------------------------
      Robert E. McGill, III, Director

      By             *
      ------------------------------------------------------------------------
      James E. McGrath, Director

      By            *
      ------------------------------------------------------------------------
      Nicholas Pappas, Director

                        * By   /S/ Duane C. Montopoli
                         ----------------------------------------------------
                         Duane C. Montopoli, Attorney-In-Fact*

*By authority of powers of attorney filed herewith.


                             CHEMFAB CORPORATION


Index to Consolidated Financial Statements                                Page

Report of Ernst & Young LLP Independent Auditors                            25

Consolidated Balance Sheets                                              26-27

Consolidated Statements of Income                                           28

Consolidated Statements of Shareholders' Equity                             29

Consolidated Statements of Cash Flows                                       30

Notes to Consolidated Financial Statements                               31-45

Quarterly Financial Data (unaudited)                                        46



               REPORT OF ERNST & YOUNG LLP INDEPENDENT AUDITORS

The Board of Directors and Shareholders
Chemfab Corporation

We have audited the accompanying consolidated balance sheets of Chemfab
Corporation as of June 30, 1997 and 1996, and the related consolidated
statements of income, shareholders' equity, and cash flows for each of the three
years in the period ended June 30, 1997.  Our audits also included the financial
statement schedule listed in the Index at Item 14(a)(2).  These financial
statements and schedule are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Chemfab
Corporation at June 30, 1997 and 1996, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
June 30, 1997, in conformity with generally accepted accounting principles.
Also, in our opinion, the related financial statement schedule, when considered
in relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.

Boston, Massachusetts
July 29, 1997


Ernst & Young LLP


<TABLE>
<S><C>


CONSOLIDATED BALANCE SHEETS                                     CHEMFAB CORPORATION
June 30, 1997 and 1996
(in thousands)                                                      1997         1996
ASSETS                                                              ----         ----

CURRENT ASSETS      Cash and cash equivalents                   $  8,055     $  5,017

                    Receivables:
                        Trade, net of allowance for doubtful      17,078       17,797
                        accounts of $367 ($382 in 1996)

                        Other                                        425          185

                    Costs and estimated earnings in excess         1,741          886
                        of billings on uncompleted contracts

                    Inventories                                   16,373       13,622

                    Prepaid expenses and other current assets      1,174        1,246
                    Deferred tax assets                              770          795
                                                                  ------       ------
                       Total current assets                       45,616       39,548
                                                                  ------       ------

PROPERTY, PLANT  &  Land                                             634          571
EQUIPMENT, AT COST  Buildings                                     10,377        9,426
                    Machinery and equipment                       31,926       29,104
                    Leasehold improvements                         1,000          912
                                                                  ------       ------
                                                                  43,937       40,013
                    Less accumulated depreciation and
                         amortization                             22,465       19,473
                                                                  ------       ------
                         Net property, plant and equipment        21,472       20,540
                                                                  ------       ------

GOODWILL, NET OF ACCUMULATED AMORTIZATION
OF $2,866 ($1,819 IN 1996)                                       10,740        11,084
                                           
OTHER ASSETS                                                      2,737         2,490
                                                                -------       -------
TOTAL ASSETS                                                    $80,565       $73,662
                                                                =======       =======


See accompanying notes to Consolidated Financial Statements





CONSOLIDATED BALANCE SHEETS                                     CHEMFAB CORPORATION
June 30, 1997 and 1996
(in thousands, except shares and per share amounts)

LIABILITIES AND SHAREHOLDERS' EQUITY                               1997          1996
                                                                   ----          ----

CURRENT             Accounts payable                           $  6,042      $  5,172
LIABILITIES
                    Accrued liabilities                           4,127         4,330
                    
                    Accrued income taxes                          2,119         1,441
                    
                    Billings in excess of costs and estimated
                    earnings on uncompleted contracts               102           313
                                                                -------        ------
                       Total current liabilities                 12,390        11,256
                                                                -------        ------

LONG-TERM DEBT                                                       ---        2,377

DEFERRED TAX LIABILITIES                                           1,790        1,524

SHAREHOLDERS'       Preferred stock, par value $.50:
EQUITY              authorized -                                     ---          ---
                        1,000,000, none issued
                    
                    Common stock, par value $.10: authorized -
                        15,000,000; issued - 8,521,110 in 1997       852          809
                        and 8,085,607 in 1996
                    
                    Additional paid-in capital                    22,749       18,314
                    
                    Retained earnings                             50,104       40,998
                    
                    Treasury stock, at cost, (547,719 shares
                        in 1997 and 95,938 in 1996)               (8,007)        (943)
                    
                    Foreign currency translation adjustment          687         (673)
                                                                 -------      -------
                       Total shareholders' equity                 66,385       58,505
                                                                 -------      -------

TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY                                             $80,565      $73,662
                                                                 =======      =======



See accompanying notes to Consolidated Financial Statements

</TABLE>



<TABLE>
<S><C>



CONSOLIDATED STATEMENTS OF INCOME                                  CHEMFAB CORPORATION

For the years ended June 30, 1997, 1996 and 1995
(in thousands, except per share data)



                                                        1997         1996          1995
                                                        ----         ----          ----

             NET SALES                               $90,783      $83,882       $67,980
             
             Cost of sales                            59,839       55,773        46,124
                                                     -------      -------       -------
                 Gross profit                         30,944       28,109        21,856

             Selling, general and
               administrative expenses                15,539       14,157        12,124
             
             Research and development expenses         2,498        2,270         2,047
             
             Interest expense                             80          611           395
             
             Interest income                           (260)        (134)         (300)
             
             Results of equity operations                ---          ---           221
             
             Other (income) expense                    (213)           51         (111)
                                                     -------      -------       -------
                 Income before income taxes           13,300       11,154         7,480
             
             Provision for income taxes                4,194        3,440         2,170
                                                     -------      -------       -------
                 Net income                         $  9,106     $  7,714      $  5,310
                                                     =======      =======       =======
             Weighted average common and
                  common equivalent shares             8,278        8,199         7,991
             
             NET INCOME PER SHARE                  $    1.10    $     .94    $      .66


</TABLE>

See accompanying notes to Consolidated Financial Statements


<TABLE>
<S><C>




CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
CHEMFAB CORPORATION
For the years ended June 30, 1997, 1996 and 1995
(in thousands)

                             COMMON STOCK                                       
                            --------------                                              FOREIGN
                                               ADDITIONAL                              CURRENCY
                           NUMBER               PAID-IN      RETAINED   TREASURY    TRANSLATION
                           OF                   CAPITAL      EARNINGS    STOCK       ADJUSTMENT    TOTAL
                           SHARES    AMOUNT
                           --------  ------     --------     --------    ------         ------- --------
                                                                       
Balance at June 30, 1994    5,220.8    $522      $16,396      $28,241    $(26)           $(761)  $44,372
                                                           
Net income                      ---     ---          ---        5,310      ---             ---     5,310
                                                                        
Options exercised              32.1       3          238          ---      ---             ---       241

Foreign currency
translation adjustment          ---     ---          ---          ---      ---             398       398

                           --------   -----     --------     --------    ------         ------- --------

Balance at June 30, 1995    5,252.9     525       16,634       33,551      (26)           (363)   50,321

Net income                      ---     ---          ---        7,714      ---             ---     7,714

Options exercised             172.0      17        1,680          ---      ---             ---     1,697

Purchase of shares
  for treasury                  ---     ---          ---          ---     (917)            ---      (917)

Three-for-two stock split   2,660.7     267          ---         (267)     ---             ---       ---

Foreign currency
translation adjustment          ---     ---          ---          ---      ---            (310)     (310)
  
                           --------   -----     --------     --------    ------         -------  --------

Balance at June 30, 1996    8,085.6     809       18,314       40,998     (943)           (673)    58,505

Net income                      ---     ---          ---        9,106      ---             ---      9,106

Options exercised             435.5      43        4,435          ---      ---             ---      4,478

Purchase of shares
  for treasury                  ---     ---          ---          ---   (7,064)            ---     (7,064)
Foreign currency
translation  adjustment         ---     ---          ---          ---      ---           1,360      1,360

                           --------   -----     --------     -------- ---------         ------    --------
Balance at June 30, 1997    8,521.1    $852      $22,749      $50,104  $(8,007)          $ 687     $66,385
                           ========   =====     ========     ======== =========         ======    ========
                                                                                        

See accompanying notes to Consolidated Financial Statements


</TABLE>



<TABLE>
<S><C>



CONSOLIDATED STATEMENTS OF CASH FLOWS                                  CHEMFAB CORPORATION
Years ended June 30, 1997, 1996 and 1995
(in thousands)
                                                                        1997      1996      1995
                                                                        ----      ----      ----
CASH FLOWS FROM
OPERATING ACTIVITIES     Net income                                 $  9,106  $  7,714  $  5,310

ADJUSTMENTS TO
RECONCILE NET INCOME     Depreciation                                  3,194     2,733     2,481
TO NET CASH PROVIDED     
BY OPERATING             Amortization                                  1,317     1,219       786
ACTIVITIES        
                         Results of equity operations                    ---       ---       221
                         
                         Change in assets and liabilities:
                           Receivables                                   950    (1,658)   (2,342)
                       
                         Costs and estimated earnings in
                         excess of billings on uncompleted
                         contracts, net                               (1,066)       (2)     (320)

                         Inventories                                  (2,405)     (630)   (1,668)
                                                               
                         Prepaid expenses and other current assets        96      (350)      (95)
                     
                         Other assets                                   (489)     (431)     (430)
                       
                         Accounts payable and accrued liabilities        406       844     1,139
                     
                         Accrued income taxes                            554      (280)      431

                         Deferred tax assets and liabilities             291       330      (112)
                                                                      -------   -------   -------   
                                                                    
                           Total adjustments                           2,848     1,775        91
                                                                      -------   -------   -------          
                                                                    
                         Net cash provided by operating
                             activities                               11,954     9,489     5,401
                                                                      -------   -------   -------

CASH FLOWS FROM
INVESTING ACTIVITIES     Capital expenditures                         (3,860)   (3,553)   (1,826)

                         Purchase of Tygaflor                            ---       ---   (16,252)
                                                                      -------  --------  --------
                           Net cash used in investing activities      (3,860)   (3,553)  (18,078)
                                                                     --------   -------- --------

CASH FLOWS FROM
FINANCING ACTIVITIES     Repayment of long-term debt                  (2,447)   (5,515)   (2,928)

                         Proceeds from the issuance of                   ---       ---    11,060
                            long-term debt

                         Proceeds from exercise of stock options       4,478     1,697       241

                         Purchase of treasury shares                 (7,064)      (917)      ---
                                                                   --------   --------   --------
                     Net cash (used in) provided by
                       financing activities                          (5,033)    (4,735)    8,373
                                                                   --------   --------   -------- 
                                                                    
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                 (23)        36       161
                                                                   --------   --------   --------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                  3,038      1,237    (4,143)
                                         
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                        5,017      3,780     7,923
                                                                   --------   --------  --------

CASH AND CASH EQUIVALENTS AT END OF YEAR                            $ 8,055    $ 5,017   $ 3,780
                                                                   ========   ========  ========

INTEREST PAID                                                       $   106    $   604   $   310

INCOME TAXES PAID                                                   $ 2,270    $ 2,924   $ 1,763

See accompanying notes to Consolidated Financial Statements


</TABLE>




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                 CHEMFAB CORPORATION


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS:  The Company is an international manufacturer and
marketer of polymer-based engineered products and material systems for use in
harsh conditions such as high temperature and/or corrosive chemical
environments.  The majority of the Company's products, which are also
characterized by their retention of flexibility-in-use and by their excellent
surface release properties, are made by embedding interlaced glass fiber
reinforcement into a fluoropolymer resin matrix.  The Company also makes and
sells specialty fluoropolymer films and high performance elastomeric closure
products.  Worldwide end-use applications are in communications, food
processing, architectural, aerospace, electronics, environmental, protective
clothing, and other industrial markets.

PRINCIPLES OF CONSOLIDATION:  The consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries.  The Company's
investments in corporate joint ventures are accounted for under the equity
method.  All significant intercompany transactions and amounts have been
eliminated in consolidation.

USE OF ESTIMATES:  The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes.  Such estimates include, but are not limited
to, allowances for doubtful accounts and returns, provisions for slow-moving or
obsolete inventory, provisions for environmental matters, and various other
accruals.  Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS:  Cash and cash equivalents consist of cash on hand,
cash deposited in highly liquid money market accounts, and investments in high
grade commercial paper or treasury notes having maturities of three months or
less when purchased.  There were no commercial paper or treasury notes
outstanding at June 30, 1997 and 1996.

LONG-TERM CONTRACTS:  The Company recognizes revenues on most long-term
contracts under the percentage-of-completion method.  Under the percentage-of-
completion method, profit on contracts is recognized based on the ratio of costs
incurred to date to estimated final costs.  Revisions in costs and estimated
final profits are reflected in the accounting period in which the facts that
require the revisions become known.  At the time a loss on a contract becomes
known, the entire amount of the estimated loss is accrued.  Revenues on certain
long-term contracts are recognized on a units of delivery basis.  Each contract
has a unique set of terms and conditions for the billing of unbilled amounts.

INVENTORIES:  Inventories are valued at the lower of cost or market. Cost is
determined on a first-in, first-out basis.

GOODWILL:  Costs in excess of net assets acquired, which relate to the
acquisition of the Tygaflor business in fiscal 1995 and the Canton Bio-Medical
business in fiscal 1994, are being amortized over fifteen years.  Costs in
excess of net assets acquired related to the purchase of two distributor
businesses in the U.K. in fiscal 1991 are being amortized over ten years.
Goodwill is reviewed periodically for impairment by comparing the carrying
amount to the estimated future undiscounted cash flows of the business acquired.

PROPERTY, PLANT AND EQUIPMENT:  Depreciation is computed using the straight-line
method over the estimated useful lives of the assets.

LONG-LIVED ASSETS:  In March 1995, Statement of Financial Accounting Standards
(SFAS) No. 121, "Accounting for the Impairment of Long-lived Assets and for
Long-lived Assets to be Disposed Of", was issued.  SFAS No. 121 requires that
long-lived assets and certain identifiable intangibles to be held and used or
disposed of by an entity be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable.  During fiscal 1997, the Company adopted SFAS No. 121 which did not
have any impact on the Company's consolidated financial position or results of
operations.

INCOME TAXES:  The Company uses the liability method of accounting for income
taxes.   Under this method, deferred tax assets and liabilities are determined
based on differences between financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.

TRANSACTIONS IN FOREIGN CURRENCY:  The Company enters into forward exchange
contracts to reduce the impact of foreign currency fluctuations on certain sales
and material purchase transactions. The gains or losses on these hedge contracts
are included in income when the underlying purchase or sale transaction is
recorded.  The carrying value of these contracts at June 30, 1997 and 1996,
which approximated fair value based on exchange rates at June 30, 1997 and 1996,
was not significant.  In addition, the Company recognizes in current income
gains or losses from the remeasurement of transactions denominated in currencies
other than the Company's functional currencies.  Translation adjustments arising
from the consolidation of foreign subsidiaries have been included in
shareholders' equity.

EARNINGS PER SHARE:  Per share amounts are based upon the weighted average
number of common shares outstanding during each year, plus common stock
equivalents.  On February 1, 1996, the Company's Board of Directors authorized a
three-for-two stock split in the form of a dividend to shareholders of record as
of February 12, 1996.  The split resulted in the issuance of 2,660,713 new
shares of common stock.  All references in the financial statements to average
numbers of shares outstanding and related prices, per share amounts, and Stock
Option Plan data have been restated to reflect the split.

STOCK-BASED COMPENSATION:  The Company accounts for stock options as prescribed
by APB Opinion No. 25 and has included additional pro forma information as
required by Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation" (SFAS 123).

RECENT ACCOUNTING PRONOUNCEMENTS:  In February 1997, the Financial Accounting
Standards Board (FASB) issued Statement No. 128, "Earnings per Share" and
Statement No. 129, "Disclosure of Information about Capital Structure".
Statement 128, which must be adopted by the Company in fiscal year 1998,
establishes standards for computing and presenting earnings per share by
simplifying previous standards and making them comparable to international
standards.  Statement 129, which must also be adopted by the Company in fiscal
year 1998, establishes standards for disclosing information about the Company's
capital structure.

     In July 1997, the FASB issued Statement No. 130, "Reporting Comprehensive
Income" and Statement No. 131, "Disclosure about Segments of an Enterprise and
Related Information". Statement 130, which must be adopted by the Company in
fiscal year 1999, establishes standards for the reporting and display of
comprehensive income and its components in a complete set of financial
statements.  Statement No. 131, which must also be adopted by the Company in
fiscal year 1999, changes the way segment information is reported and
establishes standards for related disclosures about products and services,
geographic areas, and major customers.

     The Company believes that the adoption of these new standards is not likely
to have a material impact on the Company's financial position or results of
operations.

NOTE 2 - PURCHASE - TYGAFLOR BUSINESS

     On February 17, 1995, the Company purchased the Tygaflor fluoropolymer
products business of the Advanced Materials Division of Courtaulds Aerospace
Ltd. ("Tygaflor")  in England, for approximately $16.3 million in cash,
including associated transaction costs and anticipated severance costs.  The
acquisition was accounted for using the purchase method of accounting.  Net
assets acquired included working capital, machinery and equipment, goodwill and
other intangibles.  Tygaflor, based in Littleborough, Lancashire, England,
manufactures and markets fluoropolymer-based composite materials and fabricated
products for a broad range of industrial applications.  The acquisition of the
Tygaflor business resulted in the recognition of approximately $9.5 million of
goodwill.  In connection with the acquisition, the Company borrowed $11,060,000
( Pounds 7,000,000) from a commercial bank in Ireland (see Note 5).

     The following unaudited pro forma information for fiscal 1995 is presented
as if the acquisition had occurred at the beginning of fiscal year 1995: sales
$74,241,000; net income $5,713,000; and earnings per share $0.71.  The pro forma
information is provided for informational purposes only and does not reflect the
actual results that would have occurred nor is it indicative of the future
results of operations of the combined enterprises.

NOTE 3 - INVENTORIES

     Inventories at June 30, 1997 and 1996 consisted of the following:

                                                    1997         1996
                                                    ----         ----
                                                     (in thousands)

      Finished goods                            $  6,153     $  5,112
      Work in process                              5,597        4,602
      Raw materials                                4,623        3,908
                                                 -------      -------
                                                 $16,373      $13,622
                                                 =======      =======

NOTE 4 - ACCRUED LIABILITIES

      Accrued liabilities at June 30, 1997 and 1996 consisted of the following:

                                                             1997         1996
                                                             ----         ----
                                                              (in thousands)

      Accrued payroll and related expenses                 $2,433       $2,199
      Other accrued expenses                                1,694        2,131
                                                           ------       ------
                                                           $4,127       $4,330
                                                           ======       ======

NOTE 5 - DEBT

      In October 1996, the Company entered into a new three year revolving
credit agreement jointly with two commercial banks, one based in the U.S. and
the other in Ireland.  Under the terms of the agreement, the Company has
available a $20,000,000 unsecured credit facility until October 4, 1999.
Thereafter, any balance outstanding will convert into a four-year term loan with
a five-year amortization schedule and a lump sum payment due October 4, 2003.
Borrowing under this facility is at the higher of the bank's base rate (8.5% at
June 30, 1997), or 0.5% over the federal funds rate (6.87% at June 30, 1997), as
defined in the agreement.  The Company has also secured Eurocurrency pricing
options for certain debt as defined in the agreement.  The Company is obligated
to pay a commitment fee of 0.125% of the unused portion of the line.  At June
30, 1997, there were no borrowings under this revolving credit agreement.

      The revolving credit agreement contains financial covenants with which the
Company must comply including maintenance of minimum levels of debt service
coverage and tangible net worth.  These covenants also limit the net losses that
the Company may incur over any six-month period.

      In March 1997, the Company entered into an additional line of credit
agreement with a bank.  Under the terms of the agreement, the Company has
available a $1,000,000 line of credit in the form of revolving loans and letters
of credit.  The revolving loans are payable on demand and the letters of credit
expire no later than 365 days from the date of issuance.  Revolving loan
borrowings are subject to interest at the Company's option of either the rate
quoted by the bank, or the higher of the bank's base rate (8.5% at June 30,
1997) or 0.5% over the federal funds rate (6.87% at June 30, 1997), as defined
in the agreement.  The Company is obligated to pay a 1% commitment fee of the
face amount of each letter of credit.  At June 30, 1997, there were no
borrowings under this credit agreement.

      In connection with its acquisition of the Tygaflor business (see Note 2),
the Company borrowed $11,060,000 ( Pounds 7,000,000) from a commercial bank in
Ireland.  The loan had a 5-year term and required no principal repayments for
the first year.  After the first year, quarterly principal payments of
approximately $437,500 were required.  The weighted average interest rate on the
loan was 10.15%, 10.05% and 10.12% in fiscal 1997, 1996 and 1995, respectively.
This loan was fully repaid as of September 1996.

NOTE 6 - FINANCIAL INSTRUMENTS

      At June 30, 1997 and 1996, the carrying value of financial instruments
such as cash and cash equivalents and foreign currency contracts approximated
their fair values based on the short-term maturities of these instruments and
contracts.  Additionally, the carrying value of long-term debt at June 30, 1996
approximated its fair value.  Fair value is estimated using discounted cash flow
analysis, based on the Company's current incremental borrowing rate.

      It was not practicable to estimate the fair value of the Company's
investment in preferred stock of Birdair, Inc. (a customer for its architectural
products) because of the lack of a quoted market price and the inability to
estimate fair value without incurring excessive costs.  The $533,000 carrying
amount at June 30, 1997 represents the original cost of the investment, which
management believes is not impaired.  Dividends received for the years ended
June 30, 1997, 1996 and 1995 were $45,000 annually.

NOTE 7 - INCOME TAXES

      The components of the income tax provision for the years ended June 30,
1997, 1996 and 1995 consisted of the following:

                                            1997        1996       1995
                                            ----        ----       ----
                                                   (in thousands)
       Current:
       --------
         Federal                         $ 1,972      $1,830     $1,474
         State                               472         447        379
         Foreign                           1,459         833        429
                                          ------      ------     -------
                                           3,903       3,110      2,282
       Deferred:
       ---------
         Federal                             112         (85)      (192)
         State                                29         (22)       (39)
         Foreign                             150         437        119
                                         -------      ------    -------
                                             291         330       (112)
                                         -------      ------    -------
       Total income taxes                $ 4,194      $3,440     $2,170
                                         =======      ======     ======

The components of income before income taxes were as follows:

                                            1997        1996       1995
                                            ----        ----       ----
                                                  (in thousands)

       United States                    $  7,046    $  5,984     $3,989
       Foreign                             6,254       5,170      3,491
                                         -------     -------     ------
       Total                             $13,300     $11,154     $7,480
                                         =======     =======    =======

The U.S. statutory federal income tax rate is reconciled to the Company's
consolidated effective tax rate as follows:

                                            1997        1996        1995
                                            ----        ----        ----
Statutory tax rate                           35.0%       35.0%       35.0%
Earnings of foreign subsidiaries
  taxed at rates less than the U.S.
  statutory rate                             (6.3)       (7.3)      (10.0)
Non-deductible goodwill amortization
  relating to foreign acquisitions            1.7         1.9         1.4
FSC benefit                                  (0.5)       (0.5)       (0.7)
Tax rate exemption                           (1.0)       (1.0)       (1.0)
State income taxes, net of federal
  income tax benefit                          2.8         2.8         2.8
Equity in joint ventures, net of tax         ---         ---          1.0
Other, net                                    (.2)        (.1)         .5
                                            ------      --------    ------
Effective tax rate                           31.5%       30.8%       29.0%
                                             =====       =====       =====


Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.  Significant components
of the Company's deferred tax liabilities and assets as of June 30, 1997 and
1996 were as follows:

                                        Domestic     Foreign
June 30, 1997                         Operations  Operations      Total
-------------                         ----------  ----------    -------
                                                (in thousands)
Deferred Tax Liabilities:
-------------------------
Plant and equipment                       $  979      $  304     $1,283
Intangibles                                  ---         477        477
Other                                       (36)          66         30
                                          ------      ------      ------
Total deferred tax liabilities               943         847      1,790
                                          ------      ------      ------
Deferred Tax Assets:
--------------------
Inventories                                 (468)        ---       (468)
Valuation reserves                          (122)        ---       (122)
Other                                       (182)          2       (180)
                                          ------      ------      ------
Total deferred tax assets                   (772)          2       (770)
                                           ------     ------     ------
Net deferred tax liabilities               $ 171      $  849     $1,020
                                           ======     ======      =====


                                        Domestic     Foreign
June 30, 1996                         Operations  Operations      Total
-------------                         ----------  ----------      -----
                                                (in thousands)
Deferred Tax Liabilities:
-------------------------
Plant and equipment                        $ 851        $248     $1,099
Intangibles                                  ---         335        335
Other                                        (1)          91         90
                                            -----       -----    -------
Total deferred tax liabilities               850         674      1,524
                                            ----        -----    -------
Deferred Tax Assets:
--------------------

Inventories                                (314)         ---      (314)
Valuation reserves                         (229)         ---      (229)
Other                                      (277)          25      (252)
                                           -----        ----      -----
Total deferred tax assets                  (820)          25      (795)
                                           -----        ----      -----
Net deferred tax liabilities              $   30        $699     $  729
                                          ======        ====     ======


      The Company does not provide for federal income taxes on the undistributed
earnings of its foreign subsidiaries.  These earnings, which are deemed to be
permanently reinvested, aggregated approximately $22,496,000 at June 30, 1997.
Chemfab Europe, the Company's Irish subsidiary, was exempt from Irish taxes on
its income from manufacturing operations until April 1990.  Manufacturing
profits earned each year from April 1990 through April 2010 are subject to a 10%
tax rate.

NOTE 8 - COMMON STOCK AND STOCK OPTIONS

      During fiscal 1992, the Board of Directors adopted and the shareholders
ratified the "1991 Stock Option Plan" which reserved 750,000 shares (adjusted
for the Company's three-for-two stock split) of common stock for issuance upon
exercise of option grants to key employees, directors, and consultants.  The
shareholders ratified the adoption of the increase in the maximum number of
shares available for option under the 1991 plan to 1,050,000 in fiscal 1993 and
up to 1,500,000 in fiscal 1996. Under this plan, options generally vest at the
rate of 25% per year on the anniversary of the date of grant.

      During fiscal 1992, the Company also adopted the "1991 Employee Stock
Option Plan" which reserved 75,000 (adjusted for the Company's three-for-two
stock split) shares of common stock for issuance upon exercise of grants to
specific eligible employees with a minimum of two years of service on the date
of the grant.  At June 30, 1997, there were 41,250 options outstanding under
this plan, held by 275 employees.

      During fiscal 1987, the Company's Board of Directors adopted and the
shareholders subsequently ratified a non-qualified stock option plan (the 1986
Plan).  The 1986 Plan at the time of adoption reserved 1,125,000 shares
(adjusted for the Company's three-for-two stock split) of common stock for
issuance upon exercise of option grants under this plan to employees, directors
and consultants.  During fiscal 1990, the shareholders ratified the adoption of
an increase in the maximum number of shares available for option under the 1986
Plan to 1,500,000.  The options under the 1986 Plan generally vest at the rate
of 25% per year on the anniversary of the grant.

      A summary of stock option activity, adjusted for the Company's three-for-
two stock split, related to all of the Company's plans for fiscal 1995, 1996 and
1997 is as follows:

                                                       Weighted Average
                                          Options       Exercise Price
                                         ---------     ----------------
      June 30, 1994 Outstanding          1,378,215         $  9.08
                    Granted                170,550            7.27
                    Cancelled             (110,343)          11.37
                    Exercised              (48,245)           4.99
      ------------------------------------------------------------
      June 30, 1995 Outstanding          1,390,177            8.83
                    Granted                305,388           12.14
                    Cancelled              (39,282)          10.43
                    Exercised             (206,232)           5.30
      ------------------------------------------------------------
      June 30, 1996 Outstanding          1,450,051            9.98
                    Granted                245,500           14.47
                    Cancelled              (89,351)          11.70
                    Exercised             (435,503)           7.92
      ------------------------------------------------------------
      June 30, 1997 Outstanding          1,170,697           11.55
                                         =========           =====

    The following table summarizes information about stock options outstanding
at June 30, 1997.

<TABLE>
<S><C>


                                Options Outstanding              Options Exercisable
                          ------------------------------------   -------------------
                                          Weighted
                                           Average    Weighted              Weighted
                                         Remaining     Average               Average
Range of                               Contractual    Exercise              Exercise
Exercise Prices              Shares  Life(inYears)       Price   Shares        Price
---------------           ---------  -------------    --------   ------   ----------

$2.83 - $7.50               133,487         5.08       $  6.42   83,056      $  6.07
$7.51 - $11.33              384,535         5.68          9.48  253,104         9.47
$11.34 - $18.25             652,675         7.09         13.95  356,275        11.43
                           --------         ----         -----  -------        -----

$2.83 - $18.25            1,170,697         6.24        $11.55  692,435       $10.90
                          =========         ====        ======  =======       ======


</TABLE>


    As of June 30, 1996, and 1995 options to purchase 994,390 and 992,249
shares were exercisable at a weighted average exercise price of $9.91 and $8.85
per share, respectively.  The Company does not intend to grant any further
options or stock appreciation rights under the 1986 Plan. At June 30, 1997,
there were 284,811 shares available for grant under the 1991 Stock Option Plan
and 30,450 shares available under the 1991 Employee Stock Option Plan.

    In October 1995, the Financial Accounting Standards Board issued SFAS No.
123, "Accounting for Stock-Based Compensation".  Under SFAS No. 123, the
Company had the choice of adopting a fair value based method of accounting for
employee stock-based compensation plans, as established by SFAS No. 123, or
retaining the intrinsic value-based method prescribed under Accounting
Principles Board Opinion ("APB") No. 25, provided certain pro forma disclosures
are made.  Effective July 1, 1996, the Company chose to retain the intrinsic
value-based method of accounting for employee stock-based compensation plans as
prescribed by APB No. 25 and adopted the pro forma disclosure provisions of SFAS
No. 123.  Accordingly, no compensation expense has been recognized for its stock
option awards as they are granted at prices not less than fair market value of
the stock on date of grant.

    The following pro forma disclosures required by SFAS No. 123 have been
prepared as if the Company accounted for its employee stock options using the
fair value-based method of accounting:

                                                           Year ended June 30
                                                   ---------------------------
                                                        1997            1996
                                                        ----            ----

Net Income (in thousands)
     As Reported                                        $9,106        $7,714
     Pro Forma                                          $8,750        $7,517

Net Income per share
     As Reported                                        $ 1.10        $ 0.94
     Pro Forma                                          $ 1.06        $ 0.92


      The fair value of each option grant is estimated on the date of grant
using the following weighted-average assumptions for fiscal 1997 and 1996:

                                                        1997            1996
                                                        ----            ----

Risk-free Interest Rate                                  6.5%            5.9%

Expected Stock Price Volatility                         21.8%           21.8%

Expected Life of Options (in years)                      3.2             3.2

      The weighted-average fair value of options granted during the years ended
June 30, 1997 and 1996 were $3.59 and $2.85 respectively.  The Company amortizes
the estimated fair value of options over the options' vesting period.  In
estimating the fair value of each option, the Company uses the Black-Scholes
option valuation method.  The Black-Scholes model was developed for use in
estimating the fair value of traded options that have no vesting restrictions
and are fully transferable.  In addition, option valuation models, such as the
Black-Scholes model, require the input of highly subjective assumptions
including the expected stock price volatility which are subject to change from
time to time.  For this reason, and because the SFAS No. 123 fair value-based
method of accounting has not been applied to options granted prior to July 1,
1995, the resulting pro forma compensation costs are not necessarily indicative
of costs to be expected in future years.

      In May 1996, Chemfab Corporation's Board of Directors authorized the
repurchase, at management's discretion, of up to 400,000 shares of the Company's
common stock during any one fiscal year.  In May 1997, Chemfab Corporation's
Board of Directors increased the authorization to 500,000 shares for fiscal
1997.  Subsequently, Chemfab Corporation's Board of Directors increased the
authorization to repurchase up to 600,000 shares of the Company's common stock
during any one fiscal year.

NOTE 9 - RETIREMENT PLANS

DEFINED BENEFIT PLANS

      The Company has three defined benefit pension plans covering substantially
all of its employees.  The Retirement Plan for Employees of Chemfab Corporation
("U.S. Plan") provides pension benefits for the Company's domestic employees.
The "Irish Pension Plan" provides benefits to employees of the Company's
subsidiary in Ireland and the "Tygaflor Pension Plan" provides pension benefits
to employees of the Company's U.K. subsidiary.  The plans provide pension
benefits that are based on the employee's compensation and service.   The
Company's funding policy is to fund amounts required by applicable government
regulations.  The U.S. plan is non-contributory while the Irish and Tygaflor
plans require employee contributions of 5% and 6%, respectively, of pensionable
salary.

      Net pension expense for the domestic plans for fiscal 1997, 1996 and 1995
consisted of the following:

                                             1997          1996          1995
                                             ----          ----          ----
                                                       (in thousands)
      Service Cost:  benefits earned
        during the period                   $ 376         $ 318         $ 327
      Interest cost on projected
        benefit obligation                    340           312           292
      Return on assets                       (777)         (406)         (422)
      Deferral of gains                       378           122           183
      Amortization of prior service cost       96            96            96
      Amortization of gain                    (10)           (8)           (1)
                                            -----         ------       ------
      Net pension expense                   $ 403         $ 434         $ 475
                                            =====         =====         =====


       The following table sets forth the funded status of the Company's
domestic defined benefit pension plans at June 30, 1997 and 1996:
                                                           
                                                           1997          1996
                                                           ----          ----
                                                              (in thousands)
      Actuarial present value of:
      Vested benefit obligation                          $3,832        $3,216
      Non-vested benefit obligation                         139           110
                                                          ------       ------
      Accumulated benefit obligation                      3,971         3,326
      Additional amount related to
         projected wage increases                         1,488         1,419
                                                          -----        ------
      Projected benefit obligation                        5,459         4,745
      Unrecognized prior service costs                     (453)         (549)
                                                          -----         -----
                                                         $5,006        $4,196
                                                         ======        ======
      Plan assets at fair value (primarily U.S.
       publicly traded stocks and bonds
       and Government Securities)                        $5,263        $4,593




                                                           1997          1996
                                                           ----          ----
                                                              (in thousands)
      Accrued pension liability recognized
        on consolidated balance sheets                       648          245

      Unrecognized net gain                                 (905)        (642)
                                                          ------       ------
                                                          $5,006       $4,196
                                                          ======       ======


      Assumptions used in determining
         actuarial present value of
         plan benefit obligations:
                                              1997         1996          1995
                                              ----         ----          ----
       Discount rate                          7.25%        7.50%         7.50%
       Average rate of increase in
          compensation levels                 4.50%        5.50%         5.50%
       Expected long-term rate of
          return on plan assets               9.00%        7.50%         7.50%


      Net pension expense for the Irish Plan in fiscal 1997, 1996 and 1995 was
$156,000, $106,000, and $67,000 respectively.  Certain Tygaflor employees were
covered by the seller's pension plan until September 1995.  In September 1995, a
new plan was established, the cost of which was $208,000 and $141,000 in fiscal
1997 and fiscal 1996, respectively.  Information concerning the components of
net pension expense and the funded status of the Company's Irish Plan and
Tygaflor Plan have not been provided since the amounts are not significant.


DEFINED CONTRIBUTION PLAN

      The Company sponsors a Savings and Security Plan and Trust ("the Savings
Plan") for its eligible U.S. employees.  Subject to certain limitations,
eligible employees may elect to contribute a percentage of their salaries
ranging from 1% to 12%.  The Savings Plan also contains an employer contribution
formula equal to 25% of the first 6% of compensation that each participant
defers under the Savings Plan.  In addition, the Savings Plan provides that the
Company may make an annual supplemental discretionary contribution to the
Savings Plan based on its profitability.  The discretionary contributions are
allocated to eligible U.S. employees employed by the Company at the end of the
relevant plan year based upon years of service and employee contributions made
during the plan year.  Total employer contributions made to this plan for the
fiscal years ended June 30, 1997, 1996 and 1995 were as follows:

                                 (in thousands)
                        1997 . . . . . . . . . .        $237
                        1996 . . . . . . . . . .        $226
                        1995 . . . . . . . . . .        $186


NOTE 10 - LEASE COMMITMENTS

      The Company incurred rent expense for office and manufacturing facilities,
vehicles and office equipment of $883,000, $811,000, and $762,000 in fiscal
1997, 1996 and 1995, respectively, under various operating leases expiring
through 2001.  Future minimum rental commitments at June 30, 1997 under
existing, non-cancellable operating leases with initial  terms of one year or
more are as follows:
                                 (in thousands)
                        1998 . . . . . . . . . .                    $822
                        1999 . . . . . . . . . .                    $579
                        2000 . . . . . . . . . .                    $129
                        2001 . . . . . . . . . .                    $ 18


NOTE 11 - CONTINGENCIES

      In connection with obtaining incentive grants from the Industrial
Development Authority of Ireland to subsidize investments in plant and equipment
in Ireland, the Company's Irish subsidiary, Chemfab Europe, has agreed to
restrict repatriation of 410,000 Irish Pounds (U.S. $621,000) of its retained
earnings to fund repayment of the grants in the event of default under the
agreement.  Chemfab Corporation has also provided a parent company guarantee in
the event that the subsidiary's equity, so restricted, is not sufficient to
repay any amounts due.


NOTE 12 - BUSINESS SEGMENT AND FOREIGN OPERATIONS

      The Company operates in one business segment which focuses on the
development, manufacture and marketing of high-performance flexible composite
materials.


SALES TO MAJOR CUSTOMERS

      Sales to the United States Government under prime contracts and
subcontracts for the fiscal years ended June 30, 1997, 1996 and 1995 were as
follows:
                                 (in thousands)
                        1997 . . . . . . . . . .                  $7,607
                        1996 . . . . . . . . . .                  $6,216
                        1995 . . . . . . . . . .                  $2,146


BUSINESS SEGMENT AND FOREIGN OPERATIONS

                           SALES BY GEOGRAPHIC AREA
                                (in thousands)

                                    United                  Elimi-    Consol-
1997                                States     Europe(1)    nations   idated
----                               ---------   ---------   ---------   -------

Sales to unaffiliated
  customers                        $  57,458   $  33,325   $   ---    $  90,783

Transfers between geographic
  areas                                3,337         836      (4,173)       ---
                                   ---------   ---------   ---------- ---------
Net sales                          $  60,795   $  34,161   $  (4,173)  $ 90,783
                                   =========   =========   ========== =========

Income from operations             $   6,863   $   6,257   $     ---   $ 13,120

                                   =========   ==========  ==========  ========

Identifiable assets                $  48,213   $  32,352   $     ---   $ 80,565

                                   =========   ==========  ==========  ========


1996
----

Sales to unaffiliated
  customers                        $  54,172   $  29,710   $   ---     $ 83,882

Transfers between geographic
  areas                                2,546         362     (2,908)        ---
                                   ---------   ---------   ---------   --------
Net sales                          $  56,718   $  30,072   $ (2,908)   $ 83,882
                                   =========   =========   =========   ========

Income from operations             $   5,727   $   5,904   $    ---    $ 11,631
                                   =========   =========   ========    ========

Identifiable assets                $  47,056   $  26,606   $    ---    $ 73,662
                                   =========   =========   ========    ========


       1995
       ----

Sales to unaffiliated
  customers                        $  47,147    $ 20,833    $   ---    $ 67,980

Transfers between geographic
  areas                                2,793         623     (3,416)        ---
                                   ---------    --------    --------   --------
Net sales                          $  49,940    $ 21,456    $(3,416)   $ 67,980
                                   =========    ========    ========   ========

Income from operations             $   4,137    $  3,659    $    ---   $  7,796
                                   =========    ========    ========   ========

Identifiable assets                $  42,966    $ 27,653    $    ---   $ 70,619
                                   =========    ========    =========  ========


(1) Fiscal 1997 includes amounts for subsidiaries in Japan, Brazil and China.

      Transfers between geographic areas are accounted for at cost plus a
reasonable profit.  Income from operations excludes interest expense and
interest income.


EXPORT SALES

      The Company's export sales from the United States for the fiscal years
ended June 30, 1997, 1996 and 1995 were as follows:

                                                1997         1996         1995
                                             -------      -------      -------
                                                          (in thousands)

       Far East                              $ 6,830      $10,746      $ 7,694
       Canada                                    850          695          899
       Mexico                                    959          741          616
       Australia                               1,210        1,156          883
       Europe and other                          258          770          556
       Central and South America                 180          176          365
                                             -------      -------      -------
                                             $10,287      $14,284      $11,013
                                             =======      =======      =======

NOTE 13 - RELATED PARTIES

      The Company's balances and transactions with Nitto Chemfab Co., Ltd. as of
and for the years ended June 30, 1997, 1996 and 1995, were as follows:

                                                1997         1996         1995
                                                ----         ----         ----
                                                      (in thousands)

Purchases from Company                         $ 402       $9,748       $6,677
Amount due to Company                             83        3,282        1,708
Company's 39% Equity Investment in subsidiary    ---          ---          ---

Amounts due to the Company are principally trade receivables carrying standard
trade terms.

      In February 1995, two employees (one of whom is now a consultant to the
Company and was an officer of the Company until the termination of his
employment in June, 1997), acquired an ownership interest in Fothergill
Engineered Fabrics ("FEF"), a commercial weaver of specialty fibers in England.
FEF is also a raw material supplier to the Company's U.K. and Irish
subsidiaries, and owns the site on which the U.K. subsidiary operates.  The
Company's transactions and balances with FEF for the years ended June 30, 1997
and June 30, 1996, and five months ended and as of June 30, 1995, were as
follows:

                                                1997         1996         1995
                                                ----         ----         ----
                                                        (in thousands)

Sales to Company                              $1,801       $1,552         $704
Payments for shared services and rent            516          450           75
Amount due from Company                          318          365          424


NOTE 14 - LEGAL PROCEEDINGS

      In March 1991, the United States Environmental Protection Agency ("EPA")
informed the Company it was one of a number of Potentially Responsible Parties
("PRPs") under the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") and related laws concerning the disposal of hazardous
waste at the Bennington Landfill Superfund Site in Bennington, Vermont (the
"Site").  Under these statutes, PRPs may be jointly and severally liable for the
cost of study and remediation actions at the Site and for other damages.  While
denying liability, the Company has worked with the approximately twelve (12)
other Site PRPs to respond to the EPA's claim.

      In April 1997, the EPA and the United States Department of Justice ("DOJ")
issued a Consent Decree to resolve Site-related claims against the Company and
the other PRPs.  Under terms of the Consent Decree, the Company is a "de
minimis" party, eligible for settlement under section 122 (g) of CERCLA, and
entitled to statutory contribution protection.  The Company's contribution to
the settlement is set at $180,000, of which the Company's insurance carriers
have agreed to pay $120,000. The Company executed the Consent Decree on April
10, 1997.  Signatures from the necessary government officials have been obtained
by the EPA and the DOJ and the Consent Decree was filed with the United States
District Court for the District of Vermont on July 2, 1997.  Assuming no
objections to the Consent Decree are filed, it is anticipated the United States
District Court will give final approval to the Consent Decree by the end of
calendar year 1997.

      Upon approval of the Consent Decree by the Court, the Company will have 30
days to make its settlement payment.  The Consent Decree provides for the
Company, upon payment of the settlement amount, to receive final convenants from
Federal and State Governments prohibiting those entities from taking further
civil or administrative action against the Company related to the Site, subject
to standard statutory reopeners.  The Company is not aware of any other pending
or threatened claims or administrative actions involving the Site, and believes
that any such claims or actions would be unlikely.

      The Company is involved in a number of other lawsuits as either a
defendant or a plaintiff.  Although the outcome of such matters cannot be
predicted with certainty, and some lawsuits or claims may be disposed of
unfavorably to the Company, management believes that the disposition of its
current legal proceedings, to the extent not covered by insurance, will not have
a material adverse effect on the Company's Consolidated Financial Statements.



CHEMFAB CORPORATION QUARTERLY FINANCIAL DATA (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                     Per Share
     1997                                             Data (1)
     ----                                            ----------

                         Net     Gross      Net            Net
     Quarter           Sales    Profit   Income         Income
                       ------   ------   ------         ------

     First           $19,938   $ 6,747   $1,700         $ 0.21
     Second           22,127     7,458    2,125           0.26
     Third            23,446     7,876    2,319           0.28
     Fourth           25,272     8,863    2,962           0.36
                     -------   -------   ------

     Year            $90,783   $30,944   $9,106         $ 1.10
                     =======   =======   ======


                                                     Per Share
     1996                                             Data (1)
     ----                                            ---------

                         Net     Gross      Net            Net
     Quarter           Sales    Profit   Income         Income
                     -------   -------   ------         ------

     First           $18,466   $ 5,899   $1,359         $ 0.17
     Second           20,885     6,942    1,821           0.22
     Third            21,814     7,337    2,013           0.24
     Fourth           22,717     7,931    2,521           0.31
                     -------   -------   ------

     Year            $83,882   $28,109   $7,714         $ 0.94
                     =======   =======   ======


 (1)  Computations of earnings per share for each quarter are independent and do
not necessarily equal the amount computed for the year.  Amounts have been
adjusted to reflect the Company's three-for-two stock split in February 1996.


                                  CHEMFAB CORPORATION
                           VALUATION AND QUALIFYING ACCOUNTS
                                      SCHEDULE II
                        YEARS ENDED JUNE 30, 1997, 1996 AND 1995
                                     (in thousands)


                     Balance at        Charges                     Balance at
                      beginning             to        Deductions          end
                        of year        Expense     and Other (1)      of year
                     ----------        -------     -------------   ----------
1997
----

Allowance for
doubtful accounts          $382           $112          $  (127)         $367
                           ====           ====          =======          ====

1996
----

Allowance for
doubtful accounts          $276           $201          $   (95)         $382
                           ====           ====          =======          ====

1995
----

Allowance for
doubtful accounts          $154           $119          $   3(2)         $276
                           ====           ====          ========         ====


(1)  Uncollectible accounts written off, net of recoveries.

(2)  Adjusted for valuation accounts acquired as part of the Tygaflor
acquisition.