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

FORM 10-Q

[X]        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended            September 26, 1998

                                     OR

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

For the transition period from



Commission file number                         1-367



                         THE L. S. STARRETT COMPANY
           (Exact name of registrant as specified in its charter)

         MASSACHUSETTS                                        04-1866480
 (State or other jurisdiction of                           (I.R.S. Employer
 incorporation or organization)                          Identification No.)
 

     121 CRESCENT STREET, ATHOL, MASSACHUSETTS               01331-1915
     (Address of principal executive offices)                 (Zip Code)


Registrant's telephone number, including area code       978-249-3551



      Former name, address and fiscal year, if changed since last report.


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 filings requirements for the past 90 days.

                             YES  X  NO


Common Shares outstanding as of  September 26, 1998    :

     Class A Common Shares      5,220,090

     Class B Common Shares      1,678,805




                                 Page 1 of 10
                         THE L. S. STARRETT COMPANY

                                  CONTENTS

                                                                    Page No.

Part I.  Financial Information:

      Item 1.  Financial Statements

                  Consolidated Statements of Earnings and
                  Cash Flows - thirteen weeks ended
                  September 26, 1998 and September 27, 1997
                  (unaudited)                                           3

                  Consolidated Balance Sheets - September 26,
                  1998 (unaudited) and June 27, 1998                    4

                  Consolidated Statements of Stockholders'
                  Equity - thirteen weeks ended September 26,
                  1998 and  September 27, 1997 (unaudited)              5

                  Notes to Consolidated Financial Statements            6


      Item 2.  Management's Discussion and Analysis of Financial
               Condition and Results of Operations                    7-9



Part II.  Other information:

      Item 4.  Submission of Matters to a Vote of Security Holders      9

      Item 5.  Other information                                     9-10

      Item 6.  Exhibits and reports on Form 8-K                        10
























                                 Page 2 of 10
                         THE L. S. STARRETT COMPANY
             Consolidated Statements of Earnings and Cash Flows
         (in thousands of dollars except per share data)(unaudited)
                                                           13 Weeks Ended  
EARNINGS                                                  9/26/98  9/27/97

Net sales                                                  58,364   65,213
Cost of goods sold                                        (41,221) (44,479)
Selling and general                                       (11,891) (12,794)
Other income and expense                                      509      460  

Earnings before income taxes                                5,761    8,400 
Provision for federal, foreign and
      state income taxes                                    1,845    2,987 

Net earnings                                                3,916    5,413 
Basic earnings per share                                      .57      .78 
      Average outstanding shares used                       6,896    6,924
Diluted earnings per share                                    .57      .78
      Average outstanding shares used                       6,908    6,940
Dividends per share                                           .20      .19 


CASH FLOWS

Cash flows from operating activities:
   Net earnings                                             3,916    5,413 
   Noncash expenses:
      Depreciation and amortization                         2,954    2,745 
      Deferred taxes                                          207       46 
      Unrealized translation losses(gains)                              83 
   Working capital changes:
      Receivables                                           1,210   (7,405)
      Inventories                                           1,031    2,155 
      Other assets and liabilities                         (1,485)   3,634 
   Prepaid pension cost and other                            (763)    (419)

         Net cash from operations                           7,070    6,252 

Cash flows from investing activities:
   Additions to plant and equipment                        (5,335)  (3,820)
   Increase in short-term investments                      (3,217)  (1,310)

         Net cash used in investing                        (8,552)  (5,130)

Cash flows from financing activities:
   Short-term borrowings, net                                (401)      
   Common stock issued                                        840      886 
   Treasury shares purchased                                 (861)  (3,685)
   Dividends                                               (1,378)  (1,317)

         Net cash used in financing                        (1,800)  (4,116)

Effect of translation rate changes
      on cash                                                  38        1 
 
Net decrease in cash                                       (3,244)  (2,993)
Cash, beginning of period                                   3,705    3,053 
Cash, end of period                                           461       60 

               See notes to consolidated financial statements
                                 Page 3 of 10
                         THE L. S. STARRETT COMPANY
                         Consolidated Balance Sheets
                          (in thousands of dollars)
                                                       Sep. 26     June 27 
                                                         1998        1998   
ASSETS                                               (unaudited) 
Current assets:
   Cash                                                    461       3,705 
   Investments                                          30,554      27,115 
   Accounts receivable (less allowance for doubtful
         accounts of $2,503,000 and $2,450,000)         39,741      40,764 
   Inventories:
      Finished goods                                    32,103      30,199 
      Goods in process and finished parts               25,252      25,825 
      Raw materials and supplies                        15,477      17,753 
                                                        72,832      73,777 
   Prepaid expenses and other current assets             2,460       5,335 
                  Total current assets                 146,048     150,696 

Property, plant and equipment, at cost (less
      accumulated depreciation of $68,825,000
      and $66,233,000)                                  71,285      68,818 
Cost in excess of net assets acquired (less
      accumulated amortization of $4,016,000
      and $3,896,000)                                    7,396       7,484 
Prepaid pension cost                                    22,968      22,035 
Other assets                                             1,084       1,230 
                                                       248,781     250,263 

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Notes payable and current maturities                    600       1,001 
   Accounts payable and accrued expenses                11,652      14,371 
   Accrued salaries and wages                            5,248       8,059 
   Taxes payable                                         2,670       1,475 
   Employee deposits for stock purchase plan               645         528 
                  Total current liabilities             20,815      25,434 

Deferred income taxes                                    9,496       9,367 
Long-term debt                                           3,900       3,900 
Accumulated postretirement medical benefit obligation   16,403      16,268 
Stockholders' equity:
      Class A Common $1 par (20,000,000 shrs. auth.;
        5,220,090 outstanding in 9/98, excluding
        1,039,852 held in treasury; 5,193,904 outstanding
        in 6/98, excluding 1,045,731 held in treasury)   5,220       5,194
      Class B Common $1 par (10,000,000 shrs. auth.;
        1,678,805 outstanding in 9/98, excluding
        278,605 held in treasury; 1,703,434 outstanding
        in 6/98, excluding 274,283 held in treasury)     1,679       1,703 
      Additional paid-in capital                        41,933      41,263 
      Retained earnings reinvested and employed in
            the business                               153,162     151,317 
      Foreign currency translation adjustment           (4,226)     (4,479)
      Other equity adjustments                             399         296 
                  Total stockholders' equity           198,167     195,294 
                                                       248,781     250,263 



               See Notes to Consolidated Financial Statements
                                 Page 4 of 10
                         THE L. S. STARRETT COMPANY
               Consolidated Statements of Stockholders' equity
   For the Thirteen Weeks Ended September 26, 1998 and September 27, 1997
                          (in thousands of dollars)
                                 (unaudited)


                           Common      Addi-                                
                          Stock Out-  tional               Equity           
                          standing   Paid-in   Retained    Adjust-          
                          ($1 Par)   Capital   Earnings    ments     Total  


Balance June 28, 1997        6,944    38,730   137,788    (2,997)  180,465 
Net earnings                                     5,413               5,413 
Dividends ($.19)                                (1,317)             (1,317)
Treasury shares:
  Purchased                   (110)     (693)   (2,882)             (3,685)
  Issued                        26       860                           886 
Translation loss, net                                       (418)     (418)
Investment valuation                                           0         0 

                          
Balance September 27, 1997   6,860    38,897   139,002    (3,415)  181,344 



                           
                    
                       
Balance June 27, 1998        6,897    41,263   151,317    (4,183)  195,294
Net earnings                                     3,916               3,916 
Dividends ($.20)                                (1,378)             (1,378)
Treasury shares:
  Purchased                    (23)     (145)     (693)               (861)
  Issued                        25       815                           840 
Translation gain, net                                        253       253 
Investment valuation                                         103       103 

                        
Balance September 26, 1998   6,899    41,933   153,162    (3,827)  198,167 



















               See Notes to Consolidated Financial Statements
                                 Page 5 of 10
                         THE L. S. STARRETT COMPANY
                 Notes to Consolidated Financial Statements

In the opinion of management, the accompanying financial statements contain
all adjustments, consisting only of normal recurring adjustments, necessary
to present fairly the financial position of the Company as of September 26,
1998 and June 27, 1998; the results of operations and cash flows for the
thirteen weeks ended September 26, 1998 and September 27, 1997; and changes in 
stockholders' equity for the thirteen weeks ended September 26, 1998 and 
September 27, 1997.

The Company follows the same accounting policies in the preparation of interim
statements as described in the Company's annual report filed on form 10-K for
the year ended June 27, 1998, and these financial statements should be read
in conjunction with said annual report. 


Other income (expense) is comprised of the following (in thousands):

                                                     Thirteen Weeks   
                                                    Ended September       
                                                     1998     1997	       

        Interest income                               499      642    
        Interest expense and commitment fees          (77)    (205)    
        Realized and unrealized exchange losses       (31)     (97)    
        Other                                         118      120	
                                                      509      460	


Approximately 70% of all inventories are valued on the LIFO method.  At
September 26, 1998 and June 27, 1998, total inventories are $24,426,000 and
$23,998,000 less, respectively, than if determined on a FIFO basis.


Long-term debt is comprised of the following (in thousands):

                                                   September   June          
                                                     1998      1997	  

        Industrial revenue bond                      1,500     1,500         
        Revolving credit agreement                   3,000     3,000         
                                                     4,500     4,500         
        Less current portion                           600       600         
                                                     3,900     3,900         


Effective with the quarter ended September 26, 1998, the Company adopted 
Statement of Financial Accounting Standards No.130, "Reporting Comprehensive 
Income." Following is the reconciliation of net earnings to comprehensive 
income:
                                                     Thirteen Weeks   
                                                     Ended September       
                                                      1998     1997	    

        Net earnings                                 3,916    5,413    
        Unrealized gains on investments                103              
        Accumulated translation adjustments            253     (418)      
        Comprehensive income                         4,272    4,995		      


                                 Page 6 of 10
                         THE L. S. STARRETT COMPANY
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                            RESULTS OF OPERATIONS
Sales
Sales for the September quarter are 11% below the corresponding quarter of a 
year ago. The decrease comes from most all locations, particularly foreign, 
reflecting the negative effects of the strong pound in the U.K. and general 
economic conditions in Brazil. In addition, the current quarter is being 
compared to a record 1998 first quarter that experienced a 12% sales increase,  
significantly higher than the 6% sales increase for the full year.

Earnings Before Taxes
Pretax earnings are down 31% from the September 1997 quarter. This is consis-
tent with the decrease in sales volume mentioned above, the international 
pricing pressures resulting from the strong pound, and lower overhead 
absorption resulting from lower production activity.

Income Taxes
The effective income tax rate was 32.0% in the September quarter of 1998 and 
35.6% in the prior year. The decrease results from favorable tax law changes in 
Brazil as well as sales mix changes favoring Puerto Rico, where the effective 
tax rate is low.

Year 2000
The Company does not currently anticipate any material disruption of its 
operations as a result of any failure by the Company to be year 2000 compliant. 
If, however, the Company, its customers or its suppliers are unable to achieve 
year 2000 compliance, the potential exists for the Company's business and 
results of operations to be adversely affected.

Worldwide, the Company has four major computer systems that are used in the 
areas of manufacturing, sales and accounting. Two use third party packages that 
the Company believes are or, through vendor upgrades, will be year 2000 
compliant. The other two systems are in the process of being converted to third 
party packages that the Company believes are already compliant. The Company 
expects to complete the reasonably necessary remediation of its significant 
systems by the end of fiscal 1999 and has not incurred, and does not expect to 
incur, significant additional separately identifiable costs in order to make 
its computer systems year 2000 compliant. In the event the Company's planned 
upgrades and modifications fail to bring any of these major systems into Year 
2000 compliance or fail to do so in a timely manner, the Company will have to 
adopt contingency plans to deal with any resulting disruptions in its business.

The Company employs certain manufacturing processes that utilize computer 
controlled manufacturing equipment. The Company believes such equipment is year 
2000 compliant to the extent reasonably necessary but has not completed its 
testing of such equipment. In the event the Company determines that such 
equipment cannot readily be made year 2OOO compliant, it believes it can revert 
to the manual processes previously employed or outsource such work. The Company 
is also in the process of investigating the status of other systems with 
respect to year 2000 compliance such as phone, fax, heating/air conditioning, 
and electricity and believes they will be year 2000 compliant to the extent 
reasonably necessary before the end of 1999. The Company is utilizing internal 
resources for this purpose and does not expect to incur significant separately 
identifiable costs.

In addition to reviewing its own systems, the Company has polled or is in the 
process of polling its significant customers and vendors to get assurance that

                                Page 7 of 10
they are year 2000 compliant and to attempt to identify potential issues. To
the extent such assurance is not received, appropriate contingency plans will 
be developed and implemented. At this time, the Company is not aware of 
significant problems. If the Company's customers and vendors do not achieve 
year 2000 compliance before the end of 1999, the Company could experience a 
variety of problems that might have a material adverse effect on the Company's 
business and results of operations. For example, customers might lose EDI 
capability or vendors might fail to deliver, but most foreseeable problems can 
be overcome by reverting to phone, fax, mail and other manual procedures. It 
should be noted that the Company outsources very little other than raw steel 
and is not dependent on single source suppliers. In addition it has no customer 
accounting for more than ten percent of sales.


                       LIQUIDITY AND CAPITAL RESOURCES
                                                          13 Weeks Ended   
                                                          9/26/98  9/27/97
   Cash provided by operations                             7,070    6,252 
   Cash used in investing activities                      (8,552)  (5,130) 
   Cash used in financing activities                      (1,800)  (4,116)
   Cash effect of translation rate changes                    38        1	 
      Net decrease in cash                                (3,244)  (2,993)

Despite a decrease in net earnings, cash flow provided by operations increased 
slightly compared to the prior year because the prior year's quarter 
experienced a large but temporary increase in accounts receivable. A reduction 
in treasury share purchases in the current year's quarter allowed for an 
increase in investments.

The Company maintains sufficient liquidity and has adequate resources, 
including lines of credit, to fund its operations under current business 
conditions. The Company continues to maintain a strong financial position with 
a working capital ratio of 7.0 to 1 as of September 26, 1998 and 5.9 to 1 as of 
June 27, 1998.

                            SAFE HARBOR STATEMENT
           UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This quarterly report, as well as the 1998 Annual Report, including the 
Chairman's letter to stockholders, include forward-looking statements about the 
Company's business, sales, expenditures, Year 2000 compliance, environmental 
regulatory compliance, foreign operations, debt service, liquidity and capital 
resources, and other operating and capital requirements.  In addition, forward-
looking statements may be included in future Company documents and in oral
statements by Company representatives to security analysts and investors.  The
Company is subject to risks that could cause actual events to vary materially 
from such forward-looking statements, including the following risk factors:

Risks Related to Year 2000 Issues: The Company continues to explore whether and 
to what extent its computer and other systems will be disrupted at the turn of 
the century as a result of the widely-publicized dating system flaw inherent in 
many computer systems. See "Management's Discussion and Analysis of Financial 
Condition and Results of Operations-Year 2000."

Risks Related to Technology: Although the Company's strategy includes 
significant investment in research and development of new and innovative 
products to meet technology advances, there can be no assurance that the 
Company will be successful in competing against new technologies developed by 
competitors. 

                               Page 8 of 10
Risks Related to Adoption of the Euro: The new European currency (the Euro) 
will begin being used by the eleven participating European countries January 1, 
1999. Although the United Kingdom is not currently a Euro country, the 
Company's Scottish subsidiary does a significant amount of business with Euro 
countries. Management believes it has the necessary systems and business 
processes to deal with what is, in effect, one more foreign currency, but there 
can be no assurance that there will not be unforeseen economic effects of this 
change that might affect the Company's sales or margins on business done with 
Euro countries.  

Risks Related to Foreign Operations: Foreign operations are subject to special 
risks that can materially affect the sales, profits, cash flows, and financial 
position of the Company, including taxes and other restrictions on 
distributions and payments, currency exchange rate fluctuations, political and 
economic instability in emerging markets, inflation, minimum capital 
requirements, and exchange controls.  In particular, the Company's Brazilian 
operations, which constitute over half of the Company's revenues from foreign 
operations, can be very volatile, changing from year to year due to the 
political situation and economy.  As a result, the future performance of the 
Brazilian operations is inherently unpredictable.

Risks Related to Cyclical Nature of the Industry: The market for the Company's 
products is subject to general economic conditions, including the level of 
capital spending by industrial companies.  As such, recessionary forces 
decrease demand for the Company's products and adversely affect performance.

Risks Related to Competition:  The Company's business is subject to direct and 
indirect competition from both domestic and foreign firms.  In particular, low-
wage foreign sources have created severe competitive pricing pressures. Under 
certain circumstances, including significant changes in U.S. and foreign 
currency relationships, such pricing pressures might reduce unit sales and/or 
adversely affect the Company's margins.

                      PART II.  OTHER INFORMATION

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

      (a) A regular meeting of shareholders was held on September 16, 1998.
      (c) The following directors were elected:
                                                                 Abstentions
                                               Votes      Votes   and Broker
                                                For     Withheld  Non-votes
            A shares voting as separate class:
                 Richard B. Kennedy          4,520,306   63,697      N/A
            A and B shares voting together:
                 George B. Webber           19,504,980   94,593      N/A

ITEM 5.  Other Information.

     Stockholder Proposals - On September 16, 1998, the Company's Board of 
Directors voted to amend the Company's bylaws requiring, in general, that 
stockholders provide the Company with notice at least 120 days prior to a 
stockholders' meeting of any nominations for the Board of Directors or any 
proposal to be voted upon at a meeting of the stockholders. Under the Company's 
recently amended bylaws, stockholders who wish to make a proposal at the 1999 
annual meeting scheduled for September 15, 1999, other than one that will be 
included in the Company's proxy materials, must notify the Company no earlier 
than April 19, 1999 and no later than May 19, 1999. Under recent changes to the 
federal proxy rules, if a stockholder who wishes to present such a proposal 
fails to notify the Company by May 19, 1999, then the proxies that management

                                 Page 9 of 10
solicits for the 1999 annual meeting will include discretionary authority to 
vote on the stockholder's proposal in the event it is properly brought before 
the meeting notwithstanding the Company's bylaws. Stockholder proposals for 
inclusion in the Company's proxy statement for its 1999 annual meeting must be 
received by the Company no later than April 14, 1999.



 ITEM 6.  Exhibits and Reports on Form 8-K.

6(a) Exhibit 3. Bylaws as amended 9/16/98 filed herewith electronically





                                 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.


                                        THE L. S. STARRETT COMPANY         
                                               (Registrant)                


Date   November 6, 1998                 S/R.U.WELLINGTON, JR.       
                                     R. U. Wellington, Jr. (Treasurer      
                                       and Chief Financial Officer)        


Date   November 6, 1998                     S/S.G.THOMSON                
                                 S. G. Thomson (Chief Accounting Officer)



























                                Page 10 of 10