FORM 10-Q

                               United States
                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549



(Mark One)

     |X|          Quarterly Report Pursuant to Section 13 or 15(d) of the
                      Securities Exchange Act of 1934

                    For the period ended March 31, 1997

                                     or

     |_|          Transition Report Pursuant to Section 13 or 15(d) of the
                      Securities Exchange Act of 1934

                For the transition period from       to

                       Commission File Number 1-2346

                    SOUTHWESTERN BELL TELEPHONE COMPANY

            Incorporated under the laws of the State of Missouri
              I.R.S. Employer Identification Number 43-0529710

              One Bell Center, St. Louis, Missouri 63101-3099
                      Telephone Number: (314) 235-9800


THE REGISTRANT,  A WHOLLY-OWNED SUBSIDIARY OF SBC COMMUNICATIONS INC., MEETS THE
CONDITIONS SET FORTH IN GENERAL  INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND IS
THEREFORE  FILING THIS FORM WITH REDUCED  DISCLOSURE  FORMAT PURSUANT TO GENERAL
INSTRUCTION H(2).

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



<PAGE>



PART I - FINANCIAL INFORMATION
Item 1.  Financial Statements

SOUTHWESTERN BELL TELEPHONE COMPANY
--------------------------------------------------------------------------------
STATEMENTS OF INCOME
Dollars in millions
(Unaudited)
--------------------------------------------------------------------------------
                                                          Three months ended

                                                                March 31,

                                                     ---------------------------
                                                             1997          1996
--------------------------------------------------------------------------------
Operating Revenues
Local service                                             $ 1,254       $ 1,121
Network access                                                835           804
Long-distance service                                         211           217
Other                                                         235           203
--------------------------------------------------------------------------------
Total operating revenues                                    2,535         2,345
--------------------------------------------------------------------------------

Operating Expenses
Cost of services and products                                 938           854
Selling, general and administrative                           425           410
Depreciation and amortization                                 462           440
--------------------------------------------------------------------------------
Total operating expenses                                    1,825         1,704
--------------------------------------------------------------------------------
Operating Income                                              710           641
--------------------------------------------------------------------------------

Other Income (Expense)
Interest expense                                             (84)          (83)
Other income - net                                              -             1
--------------------------------------------------------------------------------
Total other income (expense)                                 (84)          (82)
--------------------------------------------------------------------------------

Income Before Income Taxes                                    626           559
--------------------------------------------------------------------------------

Income Taxes                                                  231           208
--------------------------------------------------------------------------------

Net Income                                                $   395       $   351
--------------------------------------------------------------------------------

See Notes to the Financial Statements.


<PAGE>


SOUTHWESTERN BELL TELEPHONE COMPANY
--------------------------------------------------------------------------------
BALANCE SHEETS
Dollars in millions
--------------------------------------------------------------------------------
                                                   -----------     -------------
                                                    March 31,      December 31,
                                                   -----------     -------------
                                                         1997              1996
--------------------------------------------------------------------------------
Assets                                            (Unaudited)
Current Assets
Cash and cash equivalents                            $     73          $     69
Accounts receivable - net of allowances for
uncollectibles of                                       1,645             1,674
  $23 and $23
Prepaid expenses                                          291               168
Deferred charges                                           44                35
Deferred income taxes                                      38                96
Other current assets                                      141               137
--------------------------------------------------------------------------------
Total current assets                                    2,232             2,179
--------------------------------------------------------------------------------
Property, Plant and Equipment - at cost                29,690            29,347
 Accumulated depreciation and amortization             17,826            17,588
--------------------------------------------------------------------------------
Property, Plant and Equipment - Net                    11,864            11,759
--------------------------------------------------------------------------------
Other Assets                                               40                30
--------------------------------------------------------------------------------
Total Assets                                         $ 14,136          $ 13,968
--------------------------------------------------------------------------------

Liabilities and Shareowner's Equity
Current Liabilities
Debt maturing within one year                        $  1,319          $    921
Accounts payable and accrued liabilities                2,271             2,517
--------------------------------------------------------------------------------
Total current liabilities                               3,590             3,438
--------------------------------------------------------------------------------
Long-Term Debt                                          4,168             4,265
--------------------------------------------------------------------------------

Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes                                     276               209
Postemployment benefit obligation                       2,545             2,646
Unamortized investment tax credits                        247               255
Other noncurrent liabilities                              286               269
--------------------------------------------------------------------------------
Total deferred credits and other noncurrent             3,354             3,379
liabilities
--------------------------------------------------------------------------------

Shareowner's Equity
Common stock - one share, no par value                      1                 1
Paid-in surplus                                         3,430             3,687
Retained earnings (deficit)                             (407)             (802)
--------------------------------------------------------------------------------
Total shareowner's equity                               3,024             2,886
--------------------------------------------------------------------------------
Total Liabilities and Shareowner's Equity            $ 14,136          $ 13,968
--------------------------------------------------------------------------------

See Notes to the Financial Statements.


<PAGE>


<TABLE>
---------------------------------------------------
SOUTHWESTERN BELL TELEPHONE COMPANY
-----------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS
Dollars in millions, increase (decrease) in cash
and cash equivalents
(Unaudited)
<CAPTION>
-----------------------------------------------------------------------------------
                                                               Three months ended
                                                                    March 31,
                                                               --------------------
                                                                   1997       1996
-----------------------------------------------------------------------------------
<S>                                                          <C>        <C>    
Operating Activities
Net income                                                   $      395 $      351
                                                                         
Adjustments  to  reconcile   net  income  to  net
 cash  provided  by  operating  activities:
   Depreciation and amortization                                    462        440
   Provision for uncollectible accounts                              23         18
   Amortization of investment tax credits                           (8)        (8)
   Pensions and other postemployment expenses                        58         19
   Deferred income taxes                                            125         50
   Other - net                                                    (541)      (224)
-----------------------------------------------------------------------------------
Total adjustments                                                   119        295
-----------------------------------------------------------------------------------
Net Cash Provided by Operating Activities                           514        646
-----------------------------------------------------------------------------------

Investing Activities
Construction and capital expenditures                             (553)      (519)
-----------------------------------------------------------------------------------
Net Cash Used in Investing Activities                             (553)      (519)
-----------------------------------------------------------------------------------

Financing Activities
Net change in short-term borrowings with original
 maturities of three months or less                                 256        139
Issuance of other short-term borrowings                             120         89
Repayment of other short-term borrowings                           (75)          -
Repayment of long-term debt                                         (1)          -
Dividends paid                                                    (412)      (339)
Equity received from parent                                         155          -
-----------------------------------------------------------------------------------
Net Cash Provided by (Used in) Financing                             43      (111)
Activities
-----------------------------------------------------------------------------------
Net increase in cash and cash equivalents                             4         16
-----------------------------------------------------------------------------------
Cash and cash equivalents beginning of year                          69         43
-----------------------------------------------------------------------------------
Cash and Cash Equivalents End of Period                      $       73 $       59  
-----------------------------------------------------------------------------------

Cash paid during the three months ended March 31 for:
     Interest                                                $       76 $       73
     Income taxes                                            $       91 $       65
<FN>
See Notes to the Financial Statements.
</FN>
</TABLE>


<PAGE>


-------------------------------------------------------------
SOUTHWESTERN BELL TELEPHONE COMPANY

--------------------------------------------------------------------------
STATEMENTS OF SHAREOWNER'S EQUITY

Dollars in millions
(Unaudited)
----------------------------------------------------------------------------
                                                                  Retained
                                          Common      Paid-in     Earnings
                                          Stock       Surplus     (Deficit)
----------------------------------------------------------------------------
Balance, December 31, 1995            $         1  $     4,838 $    (2,171)
                                                                
Net income                                      -            -          351
Dividend to shareowner                          -        (339)            -
----------------------------------------------------------------------------
Balance, March 31, 1996               $         1  $     4,499 $    (1,820)    
----------------------------------------------------------------------------

Balance, December 31, 1996            $         1        3,687 $      (802)
                                                              
Net income                                      -            -          395
Dividend to shareowner                          -        (412)            -
Equity received from parent                     -          155            -
----------------------------------------------------------------------------
Balance, March 31, 1997               $         1  $     3,430 $      (407)     
----------------------------------------------------------------------------

See Notes to Financial Statements.

                              * * * *


SELECTED FINANCIAL AND OPERATING DATA

At March 31, or for the three months then                1997          1996
ended:
                                                       -------       -------

  Return on weighted average total capital. . . . .     22.85%       21.70%
 . . . . . . . . . . . . . . . . . . . . . . . .

  Debt ratio  . . . . . . . . . . . . . . . . . . .     64.47%       65.97%
 . . . . . . . . . . . . . . . . . . . . . .  . . . .
 . . .

  Network access lines in service (000)   . . . . .     15,198       14,465
 . . . . . . . . . . . . . . . . . . . . . . . . . .

  Access minutes of use (000,000)  . . . . . . . . .    14,225       13,246
 . . . . . . . . . . . . . . . . . . . . . . . . . .

  Number of employees . . . . . . . . . . . . . . .     49,640       48,170
 . . . . . . . . . . . . . . . . .





<PAGE>


SOUTHWESTERN BELL TELEPHONE COMPANY

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Dollars in millions

1. BASIS OF  PRESENTATION - Southwestern  Bell Telephone  Company  (SWBell) is a
   wholly-owned  subsidiary  of SBC  Communications  Inc.  (SBC).  The financial
   statements have been prepared by SWBell pursuant to the rules and regulations
   of the  Securities  and  Exchange  Commission  (SEC) and,  in the  opinion of
   management,  include all  adjustments  (consisting  only of normal  recurring
   accruals)  necessary  to present  fairly the results for the interim  periods
   shown.  Certain  information and footnote  disclosures,  normally included in
   financial   statements   prepared  in  accordance  with  generally   accepted
   accounting  principles,  have been condensed or omitted  pursuant to such SEC
   rules and regulations.  Certain  reclassifications have been made to the 1996
   financial  statements to conform with the 1997 presentation.  The results for
   the interim  periods are not  necessarily  indicative of results for the full
   year. The financial statements contained herein should be read in conjunction
   with the financial  statements  and notes  thereto  included in SWBell's 1996
   Annual Report on Form 10-K.

    2. MERGER - On April 1, 1997, SBC and Pacific  Telesis Group (PAC) completed
   the merger of an SBC  subsidiary  with PAC,  in a  transaction  in which each
   share of PAC common stock was  exchanged for 0.73145 of a share of SBC common
   stock (equivalent to approximately 313 million shares).  With the merger, PAC
   became a wholly-owned subsidiary of SBC. The transaction  wasaccounted for as
   a pooling of interests and a tax-free reorganization.

   SWBell's results will include the effect of changes applied  retroactively to
   conform accounting  methodologies between PAC and SBC for, among other items,
   sales commissions,  resulting from the merger. These changes will be recorded
   by SWBell in the second quarter of 1997, retroactive to January 1, 1997, as a
   cumulative  effect of  accounting  change of $16,  net of tax. Had the merger
   occurred  January 1, 1997,  income  before  cumulative  effect of  accounting
   change would have decreased by $7.



<PAGE>


SOUTHWESTERN BELL TELEPHONE COMPANY

Item 2.  Management's Discussion and Analysis of Results of Operations
Dollars in millions

RESULTS OF OPERATIONS



Southwestern Bell Telephone Company (SWBell) reported net income of $395 for the
first quarter of 1997. Financial results for the first quarters of 1997 and 1996
are summarized as follows:

--------------------------------------------------------------------------
                                                   First Quarter
                                           -------------------------------
                                                                  Percent
                                               1997      1996     Change
--------------------------------------------------------------------------
Operating revenues                          $  2,535  $  2,345       8.1%
Operating expenses                          $  1,825  $  1,704       7.1%
Net income                                  $    395  $    351      12.5%
==========================================================================

The primary factor  contributing  to the increase in net income during the first
quarter of 1997 was growth in demand for services and products.

SWBell's  operating  revenues in the first  quarter of 1997  increased  $190, or
8.1%, over the first quarter of 1996.  Components of operating  revenues for the
first quarters of 1997 and 1996 are as follows:

--------------------------------------------------------------------------
                                                   First Quarter
                                           -------------------------------
                                                                  Percent
                                               1997      1996     Change
--------------------------------------------------------------------------
Local service                               $  1,254  $  1,121      11.9%
Network access
   Interstate                                    565       534       5.8
   Intrastate                                    270       270       0.0
Long-distance service                            211       217      (2.8)
Other                                            235       203      15.8
----------------------------------------------------------------
       Total Operating Revenues             $  2,535  $  2,345       8.1%
==========================================================================

      Local  Service  revenues  increased  in the  first  quarter  of  1997  due
      primarily to increases in demand,  including increases in access lines and
      vertical services  revenues.  The number of access lines increased by 5.1%
      since  March  31,  1996,  of  which  66%  was  due  to  growth  in  Texas.
      Approximately  29% of access  line  growth was due to sales of  additional
      access  lines  to  existing  residential   customers.   Vertical  services
      revenues,  which  include  custom  calling  options,  Caller  ID and other
      enhanced services, increased by approximately 22%.

      Network Access Interstate  network access revenues  increased in the first
      quarter of 1997 due largely to increases in demand for access  services by
      interexchange  carriers.   Growth  in  revenues  from  end  user  charges,
      attributable to an increasing  access line base,  also  contributed to the
      increase.

      Intrastate  network access revenues were unchanged in the first quarter of
      1997 as  modest  increases  in  demand,  including  usage  by  alternative
      intraLATA toll carriers, were offset by net price decreases.

<PAGE>


SOUTHWESTERN BELL TELEPHONE COMPANY

Item 2.  Management's Discussion and Analysis of Results of Operations
Dollars in millions

RESULTS OF OPERATIONS - Continued

      Long-Distance  Service revenues decreased in the first quarter of 1997 due
      to the  impact  of  price  competition  from  alternative  intraLATA  toll
      carriers. The decrease in long-distance service revenues also reflects the
      introduction and deployment of extended area local service plans.

      Other  operating  revenues  increased  in the  first  quarter  of 1997 due
      primarily   to  sales  of  business   systems   communications   equipment
      attributable   to  the   December   1996  merger  of   Southwestern   Bell
      Telecommunications  Inc. (Telecom), a wholly-owned subsidiary of SBC which
      marketed business and residential  communications  equipment, into SWBell.
      This  increase  was  somewhat  offset  by  decreased  sales of  Caller  ID
      equipment.

SWBell's  operating  expenses in the first  quarter of 1997  increased  $121, or
7.1%, over the first quarter of 1996.  Components of operating  expenses for the
first quarters of 1997 and 1996 are as follows:

--------------------------------------------------------------------------
                                                   First Quarter
                                           -------------------------------
                                                                  Percent
                                               1997      1996     Change
--------------------------------------------------------------------------
Cost of services and products               $    938  $    854       9.8%
Selling, general and administrative              425       410       3.7
Depreciation and amortization                    462       440       5.0
----------------------------------------------------------------
       Total Operating Expenses             $  1,825  $  1,704       7.1%
==========================================================================

      Total  Operating  Expenses  Costs of services and  products,  and selling,
      general and administrative  expenses increased on a combined basis $99, or
      7.8%,  in the  first  quarter  of  1997  due  to  increases  for  employee
      compensation,  network expansion and maintenance, sales agents commissions
      and  operating  taxes.  Results for the first quarter of 1997 also reflect
      increased expenses for business systems  communications  equipment,  which
      subsequent  to the merger with Telecom as described  above are now sold by
      SWBell.  These increases were somewhat offset by decreases in expenses for
      Caller ID equipment.  Depreciation and amortization increased in the first
      quarter of 1997 due primarily to growth in plant levels.

Income taxes increased $23, or 11.1%, in the first quarter of 1997 primarily due
to higher income before income taxes.

<PAGE>


SOUTHWESTERN BELL TELEPHONE COMPANY

Item 2.  Management's Discussion and Analysis of Results of Operations
Dollars in millions

OPERATING ENVIRONMENT AND TRENDS OF BUSINESS - Continued


OPERATING ENVIRONMENT AND TRENDS OF THE BUSINESS

COMPETITIVE ENVIRONMENT

Access  reform - On May 7, 1997,  the Federal  Communications  Commission  (FCC)
adopted  orders on access  charge reform and local  exchange  carrier price caps
which will reduce access charges by, in part,  adjusting the productivity factor
to be used in interstate price cap calculations.  In presenting the orders,  the
FCC  estimated  there  would  be  a  $1.7  billion  reduction  in  industry-wide
interstate  access  charges  which  are  estimated  to  aggregate  $23  billion.
Management is evaluating the effect of and its response to the orders.

Interconnection  Agreements - Companies  seeking to connect to SWBell's  network
and  provide  local  service  must enter into  interconnection  agreements  with
SWBell,  which are then subject to approval by the appropriate state commission.
SWBell  has  entered  into  agreements  in each of its five  states,  and Texas,
Missouri and Oklahoma  commissions  have approved  various  agreements.  Several
companies  which  failed to agree on all terms of an  interconnection  agreement
with SWBell have filed for binding  arbitration  before the state commissions in
the five-state area.

In October 1996, in a consolidated  arbitration  hearing between SWBell and AT&T
Corp., MCI Communications  Corporation (MCI), MFS Communications  Company,  Inc.
(MFS),  Teleport  Communications  Group, and American  Communications  Services,
Inc., the Texas Public Utility Commission (TPUC) approved  interconnection rates
to be  charged  by  SWBell as well as  certain  other  terms of  interconnection
between  the   parties.   SWBell  also  filed   revised  cost  support  for  the
establishment  of rates with the TPUC which may be subject to further  hearings.
SWBell, AT&T and MCI filed suit in state and federal court maintaining that, for
various reasons,  the arbitration  award is unlawful.  SWBell has  TPUC-approved
interconnection  agreements  with 26 local  service  providers,  with 17 pending
approvals as of April 15.

As a result of these agreements,  SWBell expects that in 1997 it will experience
local  exchange  competition  from one or more of these  providers  in  selected
markets.  When these agreements are finalized,  SBC intends to use these and all
other approved  agreements as a part of its  applications  to the FCC to provide
interLATA long-distance service in each of its states.

InterLATA  Long-distance  Filing - On April 11, 1997,  SBC filed an  application
with the FCC for the provision of interLATA  long-distance  services in Oklahoma
under the provisions of the Telecom Act. If approved by the FCC, SBC could begin
offering interLATA landline long-distance services to customers in Oklahoma. The
FCC has 90  days  to rule on the  filing,  according  to the  Telecom  Act.  The
Oklahoma Corporation Commission approved SBC's application in April 1997.

OTHER BUSINESS MATTERS

Over the next few years,  SWBell is expecting to incur  significant  capital and
software  expenditures for interconnection and customer number portability.  The
extent and timing of these  expenditures  will vary  depending on the timing and
nature  of  regulatory   action  and   corresponding  or  compensating   network
improvements, but are likely to be material.



<PAGE>


SOUTHWESTERN BELL TELEPHONE COMPANY

PART II - OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K

(a)   Exhibits

      Exhibit 12  Computation of Ratios of Earnings to Fixed Charges.

      Exhibit 27  Financial Data Schedule.

(b)   Reports on Form 8-K

      There  were no reports on Form 8-K filed  during the first  quarter  ended
      March 31, 1997.




<PAGE>




                                  SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                       Southwestern Bell Telephone Company




May  9 , 1997                          /s/ Richard G. Linder
                                       ---------------------
                                       Richard G. Lindner
                                       Vice President and Chief Financial
                                       Officer (Principal Accounting/
                                       Financial Officer)