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 30, 1995

[  ]  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 1-3439


                      STONE CONTAINER CORPORATION
_______________________________________________________________________
          (Exact name of registrant as specified in its charter)

Delaware                                         36-2041256            
(State or other jurisdiction of incorporation    (I.R.S. employer
or organization)                                  identification no.)

150 North Michigan Avenue, Chicago, Illinois     60601                 
(Address of principal executive offices)         (Zip Code)

Registrant's telephone number:  312-346-6600

Indicate by check mark (X) 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 requirement for the past 90
days.

                 Yes   X              No       

Number of common shares outstanding as of November 7, 1995:  99,133,771

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<TABLE>

                     PART I.  FINANCIAL INFORMATION

                     ITEM 1.  FINANCIAL STATEMENTS

             STONE CONTAINER CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED BALANCE SHEETS

<CAPTION>
                                                   September 30,   December 31,
(in millions)                                              1995*          1994 
<S>                                                <C>             <C>
Assets
Current assets:
Cash and cash equivalents.......................   $      102.2    $     108.6 
Accounts and notes receivable (less allowances 
 of $27.2 and $20.2)............................          997.1          824.5 
Inventories.....................................          827.4          673.1 
Other...........................................          191.1          210.7 
________________________________________________   ____________________________
          Total current assets..................        2,117.8        1,816.9 
________________________________________________   ____________________________
Property, plant and equipment...................        5,867.5        5,465.5 
Accumulated depreciation and amortization.......       (2,376.8)      (2,106.5)
________________________________________________   ____________________________
          Property, plant and equipment--net....        3,490.7        3,359.0 
Timberlands.....................................           77.6           75.1 
Goodwill........................................          888.5          860.2 
Other...........................................          869.4          893.7 
________________________________________________   ____________________________
Total assets....................................   $    7,444.0    $   7,004.9 
                                                   ============================

Liabilities and stockholders' equity
Current liabilities:
Accounts payable................................   $      430.5    $     328.0 
Current maturities of senior and subordinated 
 long-term debt.................................           24.1          276.1 
Notes payable and current maturities of 
 non-recourse debt of consolidated affiliates...           30.5           36.5 
Income taxes....................................           28.5           35.2 
Accrued and other current liabilities...........          359.1          355.7 
________________________________________________   ____________________________
          Total current liabilities.............          872.7        1,031.5 
________________________________________________   ____________________________
Senior long-term debt...........................        2,883.7        2,488.5 
Subordinated debt...............................          827.5        1,159.6 
Non-recourse debt of consolidated affiliates....          667.8          783.8 
Other long-term liabilities.....................          297.1          290.2 
Deferred taxes..................................          575.9          381.4 
Minority interest...............................          256.9          221.8 
Commitments and contingencies...................

Stockholders' equity:
   Series E preferred stock.....................          115.0          115.0 
   Common stock (98.7 and 90.4 shares 
    outstanding)................................        1,025.6          849.1 
   Retained earnings (accumulated deficit)......           54.9          (96.3)
   Foreign currency translation adjustment......         (130.7)        (215.2)
   Unamortized expense of restricted stock plan.           (2.4)          (4.5)
________________________________________________   ____________________________
          Total stockholders' equity............        1,062.4          648.1 
________________________________________________   ____________________________
Total liabilities and stockholders' equity......   $    7,444.0    $   7,004.9 
                                                   ============================
<FN>
*Unaudited; subject to year-end audit

The accompanying notes are an integral part of these statements.

</TABLE>

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<TABLE>
                   STONE CONTAINER CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                   AND RETAINED EARNINGS (ACCUMULATED DEFICIT)

<CAPTION>
                                     Three months ended      Nine months ended 
                                        September 30,           September 30,  
(in millions except per share)         1995       1994         1995       1994 
________________________________   _________  _________    _________  _________
<S>                                <C>        <C>          <C>        <C>
Net sales.......................   $1,924.0   $1,482.2     $5,706.8   $4,127.3 
Cost of products sold...........    1,330.4    1,183.4      4,002.0    3,367.4 
Selling, general and 
 administrative expenses........      151.7      147.7        455.9      418.1 
Depreciation and amortization...       97.1       89.7        285.7      267.5 
Equity (income) loss from 
 affiliates.....................       (2.5)        .4         (6.2)       6.1 
Other operating (income) 
 expense-net....................         --        1.0           --      (32.4)
Other (income) expense-net......      (11.5)     (21.3)       (30.0)     (13.2)
________________________________   _________  _________    _________  _________
Income before interest expense, 
 income taxes, minority 
 interest, extraordinary charges 
 and cumulative effect of an 
 accounting change..............      358.8       81.3        999.4      113.8 
Interest expense................     (114.5)    (113.9)      (354.0)    (338.1)
________________________________   _________  _________    _________  _________
Income (loss) before income  
 taxes, minority interest, 
 extraordinary charges and 
 cumulative effect of an 
 accounting change..............      244.3      (32.6)       645.4     (224.3)
(Provision) credit for income 
 taxes..........................     (102.6)       5.4       (263.1)      65.4 
Minority interest...............      (12.7)      (1.7)       (25.5)        .3 
________________________________   _________  _________    _________  _________
Income (loss) before 
 extraordinary charges and 
 cumulative effect of an 
 accounting change..............      129.0      (28.9)       356.8     (158.6)
Extraordinary charges from early 
 extinguishments of debt (net of 
 income tax benefit)............     (177.9)     (44.8)      (181.0)     (61.6)
Cumulative effect of change in 
 accounting for postemployment 
 benefits (net of income tax 
 benefit).......................         --         --           --      (14.2)
________________________________   _________  _________    _________  _________
Net income (loss)...............      (48.9)     (73.7)       175.8     (234.4)
Preferred stock dividends.......       (2.0)      (2.0)        (6.0)      (6.0)
________________________________   _________  _________    _________  _________
Net income (loss) applicable to 
 common shares..................   $  (50.9)  $  (75.7)    $  169.8   $ (240.4)
________________________________   _________  _________    _________  _________

Retained earnings (accumulated 
 deficit), beginning of period..   $  128.4   $  (72.8)    $  (96.3)  $  101.6 
Net income (loss)...............      (48.9)     (73.7)       175.8     (234.4)
Cash dividends on preferred  
 stock..........................      (24.6)        --        (24.6)      (8.0)
Unrealized gain on marketable 
 equity security (net of income 
 taxes).........................         --       10.3           --        4.6 
________________________________   _________  _________    _________  _________
Retained earnings (accumulated 
 deficit), end of period........   $   54.9   $ (136.2)    $   54.9   $ (136.2)
________________________________   =========  =========    =========  =========

Per share of common stock - 
  Primary:
Income (loss) before 
 extraordinary charges and 
 cumulative effect of an
 accounting change..............   $   1.32   $   (.34)    $   3.79   $  (1.89)
Extraordinary charges from early 
 extinguishments of debt (net of
 income tax benefit)............      (1.85)      (.50)       (1.95)      (.70)
Cumulative effect of change in 
 accounting for postemployment 
 benefits (net of income tax 
 benefit).......................         --         --           --       (.16)
________________________________   _________  _________    _________  _________
Net income (loss)...............   $   (.53)  $   (.84)    $   1.84   $  (2.75)
                                   =========  =========    =========  =========

Per share of common stock - 
   Fully Diluted:
Income (loss) before 
 extraordinary charges and 
 cumulative effect of an
 accounting change..............   $   1.12   $    *       $   3.08   $    *   
Extraordinary charges from early 
 extinguishments of debt (net of
 income tax benefit)............      (1.57)       *          (1.55)       *   
Cumulative effect of change in 
 accounting for postemployment 
 benefits (net of income tax 
 benefit).......................         --        *             --        *   
________________________________   _________  _________    _________  _________
Net income (loss)...............   $   (.45)  $    *       $   1.53   $    *   
                                   =========  =========    =========  =========
Cash dividends..................   $    .15   $     --     $    .15   $     -- 
                                   =========  =========    =========  =========

<PAGE>
Common shares and common share 
 equivalents outstanding 
 (weighted average, in millions):
   Primary......................       95.9       90.4         92.5       87.5 
                                   =========  =========    =========  =========
   Fully Diluted................      113.1        *          116.6        *   
                                   =========  =========    =========  =========

<FN>
Unaudited; subject to year-end audit

The accompanying notes are an integral part of these statements.

* Fully diluted earnings per share are not applicable because the amounts are
  anti-dilutive.

</TABLE>
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<TABLE>

                  STONE CONTAINER CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS


<CAPTION>
                                         Three months ended  Nine months ended
                                               September 30,      September 30,
(in millions except per share)                1995     1994      1995     1994 
_________________________________________   ________________   ________________
<S>                                         <C>      <C>       <C>     <C>
Cash flows from operating activities:
Net income (loss)........................   $(48.9)  $(73.7)   $175.8  $(234.4)
Adjustments to reconcile net income 
 (loss) to net cash provided by (used in) 
 operating activities:
  Depreciation and amortization..........     97.1     89.7     285.7    267.5 
  Deferred taxes.........................     74.4    (10.9)    183.0    (75.1)
  Foreign currency transaction (gains) 
   losses................................     (5.6)   (12.2)     (9.9)     3.7 
  Extraordinary charges from early 
   extinguishments of debt...............    177.9     44.8     181.0     61.6 
  Cumulative effect of an accounting 
   change................................       --       --        --     14.2 
  Other--net.............................     25.4      8.5      56.6    (49.3)
Changes in current assets and 
 liabilities--net of adjustments for an 
 acquisition and dispositions:
  (Increase) decrease in accounts and 
   notes receivable--net.................     16.0    (68.6)   (162.8)  (150.0)
  (Increase) decrease in inventories.....    (73.6)   (26.5)   (145.1)    30.3 
  (Increase) decrease in other current 
   assets................................     31.0      7.2       8.0    (29.6)
  Increase in accounts payable and other 
   current liabilities...................     35.4     35.5      82.5     56.6 
_________________________________________   ________________   ________________
Net cash provided by (used in) operating 
 activities..............................    329.1     (6.2)    654.8   (104.5)
_________________________________________   ________________   ________________

Cash flows from financing activities:
Debt repayments..........................   (329.3)    (4.0)   (703.9)  (921.6)
Payments by consolidated affiliates on 
 non-recourse debt.......................     (5.7)   (16.9)   (144.4)   (47.7)
Borrowings...............................    200.7     74.1     502.8    825.5 
Non-recourse borrowings of consolidated 
 affiliates..............................      2.4       --       4.1       -- 
Proceeds from issuance of common 
 stock-net...............................       .8       --       1.6    276.3 
Payment on letter of credit..............       --       --        --    (20.6)
Cash dividends...........................    (24.6)      --     (24.6)    (8.0)
_________________________________________   ________________   ________________

Net cash (used in) provided by financing 
 activities..............................   (155.7)    53.2    (364.4)   103.9 
_________________________________________   ________________   ________________


Cash flows from investing activities:
Capital expenditures.....................    (97.7)   (67.0)   (279.7)  (133.2)
Proceeds from sales of assets............      6.8       --      15.8     18.9 
Payments made for businesses acquired....    (13.2)    (2.5)    (24.7)    (2.6)
Other--net...............................    (13.0)    10.8     (16.7)     6.4 
_________________________________________   ________________   ________________
Net cash used in investing activities....   (117.1)   (58.7)   (305.3)  (110.5)
_________________________________________   ________________   ________________
Effect of exchange rate changes on cash..       --      1.2       8.5      3.3 
_________________________________________   ________________   ________________
Net increase (decrease) in cash and cash 
 equivalents.............................     56.3    (10.5)     (6.4)  (107.8)
Cash and cash equivalents, beginning of 
 period..................................     45.9    150.1     108.6    247.4 
_________________________________________   ________________   ________________
Cash and cash equivalents, end of period.   $102.2   $139.6    $102.2   $139.6 
                                            ================   ================

<FN>
See Note 12 regarding non-cash investing and financing activities and
supplemental cash flow information.

Unaudited; subject to year-end audit

The accompanying notes are an integral part of these statements.

</TABLE>
<PAGE>
           STONE CONTAINER CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1:  Basis of Presentation

Pursuant to the rules and regulations of the Securities and
Exchange Commission for Form 10-Q, the financial statements,
footnote disclosures and other information normally included in
the financial statements prepared in accordance with generally
accepted accounting principles have been condensed.  These
financial statements, footnote disclosures and other information
should be read in conjunction with the financial statements and
the notes thereto included in Stone Container Corporation's (the
"Company's") latest Annual Report on Form 10-K.  In the opinion
of the Company, the accompanying unaudited consolidated financial
statements contain all adjustments necessary to fairly present
the Company's financial position as of September 30, 1995 and the
results of operations and cash flows for the three and nine month
periods ended September 30, 1995 and 1994.  All adjustments
reflected in the accompanying unaudited consolidated financial
statements are of a normal recurring nature.

NOTE 2:  Reclassifications

Certain prior year amounts have been restated to conform with the
current year presentation in the Consolidated Statements of Cash
Flows.

NOTE 3:  Subsequent Events

On November 1, 1995, Stone-Consolidated Corporation ("Stone-
Consolidated"), a 74.6 percent owned Canadian subsidiary of the
Company, amalgamated its operations (the "Amalgamation") with
Rainy River Forest Products Inc. ("Rainy River"), a Toronto-based
Canadian pulp and paper company.  The amalgamated entity
("Amalco") will continue under the name of Stone-Consolidated
Corporation.  As a result of the Amalgamation, the Company's
equity ownership in Stone-Consolidated Corporation was reduced
from 74.6 percent to 46.7 percent.  From the effective date of
the Amalgamation, the Company will begin reporting Stone-
Consolidated Corporation as a non-consolidated affiliate in
accordance with the equity method of accounting.  

          Pursuant to the Amalgamation, (i) each share of common stock
of Stone-Consolidated was converted into one share of Amalco
common stock, (ii) each share of Rainy River common stock was
converted, at the option of the holder, subject to certain
limitations, into either (a) 1.04 shares of Amalco common stock
or (b) one share of Amalco redeemable preferred stock, (iii) each
convertible debenture of Stone-Consolidated was exchanged for or
converted into 62.11 shares of Amalco common stock, and (iv) each
convertible debenture of Rainy River was exchanged for or
converted into 60.465 shares of Amalco common stock.  In
addition, Amalco paid $160 per $1,000 principal amount for each
of Stone-Consolidated's and Rainy River's convertible debentures
plus accrued interest.

          Immediately after the Amalgamation, approximately 104
million shares of Amalco common stock were issued and outstanding
and approximately 4.7 million shares of Amalco redeemable
preferred stock were issued and outstanding.  

          The Amalgamation will result in the Company recording a
charge to common stock to adjust its investment in Stone-
Consolidated to its share of Amalco's common stockholder's
equity.  Since the Amalgamation occurred on November 1, 1995, the
charge to common stock cannot be estimated at this time.

          On November 2, 1995, the Company announced it has entered
into a joint venture agreement with Four M Corporation (Box USA)
to purchase a paperboard mill located in Port St. Joe, Florida,
from St. Joe Paper Company for $185 million plus applicable
working capital.  Under the joint venture agreement, the Company
would make a 50 percent equity investment in the joint venture. 
It is anticipated that the purchase by the joint venture would
close late in the first quarter of 1996.  The completion of the
transaction is contingent upon a number of conditions, including
the termination of the Hart-Scott-Rodino waiting period and the
placement of non-recourse financing.  Upon completion of the
transaction, the joint venture would be highly leveraged.  The
mill has the capacity to produce approximately 500,000 short tons
per year, split almost evenly between mottled white and kraft
linerboard.

          On November 6, 1995, the Company announced that a wholly-
owned subsidiary plans to privately place $200 million of senior
unsecured notes due in 2003 that will be unconditionally
guaranteed by the Company.  The net proceeds from the issuance of
the notes will be used to retire existing indebtedness of the
Company.  The placement of the notes is expected to close in
November 1995.

NOTE 4:  Debt Repurchases 

During the 1995 third quarter, in separate, independently
negotiated transactions, the Company purchased and retired
approximately $182 million principal amount of its 8-7/8 percent
Convertible Senior Subordinated Notes (the "Convertible Senior
Subordinated Notes").  The Convertible Senior Subordinated Notes
are convertible into 86.58 shares of the Company's common stock
per $1,000 face amount at $11.55 per share.  The Convertible
Senior Subordinated Notes purchased and retired were convertible
into approximately 15.8 million common shares.  The aggregate
value paid by the Company for such Convertible Senior
Subordinated Notes purchased and retired was approximately $357
million comprised of approximately $182 million cash (which was
equal to the face value of the Convertible Senior Subordinated
Notes purchased) and the issuance of approximately 8.2 million
shares of common stock valued at approximately $175 million. 
Although the Company issued approximately 8.2 million shares of
common stock, total common shares on a fully diluted basis was
reduced by approximately 7.6 million common shares. Additionally,
the Company made open market purchases of other debt securities
during the quarter and the year.  These transactions, in total,
resulted in the Company reporting extraordinary charges from the
early extinguishments of debt for the third quarter and first
nine months of 1995 of approximately $178 million and $181
million, respectively (including the write-off of deferred debt
issuance costs, net of income tax benefit).  Furthermore, common
stock increased by approximately $175 million as a result of the
issuance of common shares as part of the transaction regarding
the Convertible Senior Subordinated Notes.  Total stockholders'
equity in the Company's Consolidated Balance Sheet did not
substantially change as a result of the purchases of the
Convertible Senior Subordinated Notes.  The purchases of the
Convertible Senior Subordinated Notes did not substantially
affect the calculation of the available dividend pool under the
covenants of the Company's various debt instruments concerning
dividend restrictions.  Funding for the cash portion of the
purchases of the Convertible Senior Subordinated Notes and the
other open market purchases was financed primarily from bank
borrowings.  See also Note 8 -- "Liquidity Matters".

          The following tables provide actual earnings per share
information for the three and nine month periods ended September
30, 1995 and pro forma earnings per share information for the
three and nine month periods ended September 30, 1995 as if the
purchases of the Convertible Senior Subordinated Notes and the
open market cash purchases of the 6-3/4 percent Convertible
Subordinated Debentures had both occurred as of the beginning of
each period: 


                            Three months ended September 30, 1995
                                    Actual          Pro Forma
                               ________________  ________________
                                         Fully             Fully 
                               Primary  Diluted  Primary  Diluted
                               _______  _______  _______  _______
Per share of common stock:
  Income before 
   extraordinary losses......  $ 1.32   $ 1.12   $ 1.28   $ 1.14
                               =======  =======  =======  =======
  Average common shares 
   (in millions).............    95.9    113.1     99.1    109.9 
                               =======  =======  =======  =======


<PAGE>
                             Nine months ended September 30, 1995
                                    Actual          Pro Forma
                               ________________  ________________
                                         Fully             Fully 
                               Primary  Diluted  Primary  Diluted
                               _______  _______  _______  _______
Per share of common stock:
  Income before 
   extraordinary losses......  $ 3.79   $ 3.08   $ 3.54   $ 3.20
                               =======  =======  =======  =======
  Average common shares 
   (in millions).............    92.5    116.6     99.0    109.8 
                               =======  =======  =======  =======

          Supplemental primary earnings per share before extraordinary
losses for the three and nine months ended September 30, 1995
were $1.29 and $3.58 per share of common stock and supplemental
primary net income (loss) per share for the three and nine months
ended September 30, 1995 were $(.51) and $1.75 per share of
common stock, assuming that the securities pursuant to the
purchases of the Convertible Senior Subordinated Notes existed as
of the beginning of each period.  

NOTE 5:  Refinancings

In August 1995, the Company and its bank group amended and
restated its bank credit agreement (the "Credit Agreement") to
provide for an additional $200 million senior secured term loan
facility.  Permitted uses for the borrowings under this
additional term loan were to partially fund the purchases of the
Convertible Senior Subordinated Notes, to partially fund the
redemption of the Company's $90 million principal amount of its
12-1/8 percent Subordinated Debentures and to partially fund open
market purchases of debt.  The $200 million additional term loan
requires semi-annual amortizations of 1/2 of 1 percent of the
principal amount beginning April 1, 1996 through October 1, 2002
with the remaining balance equally maturing on April 1 and
October 1, 2003.  Interest rate options available under the
additional term loan are either prime rate plus 2-3/8 percent or
LIBOR plus 3-3/8 percent. 

          In March 1995, the Company, through its wholly-owned
subsidiary Stone Receivables Corporation, completed the
refinancing of the obligations relating to its accounts
receivable securitization program with a new $310 million
accounts receivable securitization program consisting of $260
million of floating-rate notes due in 2000 (the "Notes") together
with a five-year $50 million revolving credit facility
(collectively, the "March 1995 Refinancing").  The March 1995
Refinancing permits the Company to sell certain of its accounts
receivable to Stone Receivables Corporation which purchases such
receivables under the program.  The initial accounts receivable
under the program were purchased with the net proceeds received
from the issuance of the Notes.  The purchased accounts
receivable are solely the assets of Stone Receivables
Corporation, which is a wholly-owned subsidiary of the Company,
with its own borrowings.  In the event of a liquidation of Stone
Receivables Corporation, such borrowings would be satisfied from
the assets of Stone Receivables Corporation prior to any
distribution to the Company.  At September 30, 1995, the
Company's Consolidated Balance Sheet included approximately $321
million of accounts receivable under the program and $266 million
of borrowings under the program.

NOTE 6:  Insurance Matters

In the second quarter of 1994, a digester vessel ruptured at the
Company's pulp and paperboard mill in Panama City, Florida
causing extensive damage to certain of the facility's assets. 
The Company is seeking recovery for both the losses to property
and the losses as a result of business interruption arising from
the Panama City occurrence.  A partial recovery of approximately
$31 million has been received by the Company from certain
carriers, claims of approximately $11 million have been committed
to be paid and claims of approximately $41 million covering the
remaining portion of such losses are still pending.  The
insurance carrier providing boiler and machinery coverage for the
Company has denied the Company's claim.  The Company has
challenged the denial and has commenced a declaratory judgement
action against the boiler and machinery insurance carrier for a
determination that such insurance carrier is responsible for
coverage of the loss.  In addition, during the second quarter of
1995, certain of the all-risk insurance carriers, which would
cover the losses not covered under the boiler and machinery
coverage, have also denied coverage.  The Company has entered
into stand-still agreements with such carriers pending the
outcome of the suit against the boiler and machinery carrier. 
Management believes the receivable recorded on its financial
statements is fully recoverable.

NOTE 7:  Acquisition and Retirement of Non-recourse Debt

In March 1995, the Company acquired the remaining 1 percent of
the common stock of Seminole Kraft Corporation ("Seminole")
thereby making it a wholly-owned subsidiary of the Company. 
During the second quarter of 1995, the Company (i) repaid
Seminole's bank debt and (ii) redeemed Seminole's 
13-1/2 percent Subordinated Notes for approximately $123 million. 
Effective April 30, 1995, the Company merged Seminole with and
into the Company.

<PAGE>
NOTE 8:  Liquidity Matters

The Company's liquidity and financial flexibility improved during
the first nine months of 1995 as a result of its earnings, the
recently established $200 million additional bank term loan
facility under its Credit Agreement and through the completion of
the March 1995 Refinancing.  The Company's Credit Agreement also
provides for, among other things, a $450 million revolving credit
facility.  At November 8, 1995, the Company had borrowing
availability of approximately $259 million (net of letters of
credit which reduce the amount available to be borrowed) under
its $450 million revolving credit facility.  In July 1995, the
Company received a waiver of its mandatory prepayments of excess
cash flow (as defined) for four quarters beginning with the 1995
second quarter payment.  To date, such quarterly payments which
would have been scheduled to be paid on or before August 15, 1995
and November 15, 1995 would have totalled approximately $110
million.

     The Company's primary capital requirements consist of debt
service and capital expenditures.  The Company is highly
leveraged, and while highly leveraged, will incur substantial
ongoing interest expense.  No significant debt maturities or
amortization obligations are due until June 1997.  The Company's 
total debt as of September 30, 1995 decreased from that reflected
in its December 31, 1994 Consolidated Balance Sheet by
approximately $311 million.  Further, approximately $396 million
of non-recourse debt will be eliminated from the Company's
Consolidated Balance Sheet as of November 1, 1995 resulting from
the Company beginning to report Stone-Consolidated in accordance
with the equity method of accounting effective with the
Amalgamation described in Note 3 -- "Subsequent Events".

NOTE 9:  Inventories

Inventories are summarized as follows:


                                   September 30,     December 31,
(in millions)                              1995             1994
______________________________     _____________     ____________
Raw materials and supplies....     $      356.7      $     306.9 
Paperstock....................            353.3            263.4 
Work in process...............             21.3             21.4 
Finished products--converting 
  facilities..................            132.0            116.1 
______________________________     _____________     ____________
                                          863.3            707.8 
Excess of current cost over 
  LIFO inventory value........            (35.9)           (34.7)
                                   _____________     ____________
Total inventories.............     $      827.4      $     673.1 
                                   =============     ============

<PAGE>
     At September 30, 1995 and December 31, 1994, the percentage
of total inventories costed by the LIFO, FIFO and average cost
methods were as follows:


                                  September 30,     December 31,
                                          1995             1994 
                                  _____________     ____________
     LIFO...................                38%              42%
     FIFO...................                 7%               7%
     Average Cost...........                55%              51%


NOTE 10:  Current Maturities of Long-Term Debt

Current maturities of long-term debt at September 30, 1995 and
December 31, 1994 consisted of the following components:


                                  September 30,     December 31,
(in millions)                             1995             1994 
_______________________________   _____________     ____________
Senior debt....................   $       24.1      $     276.1 
Non-recourse debt of 
  consolidated affiliates......           20.1             29.2 
_______________________________   _____________     ____________
Total current maturities of 
  long-term debt...............   $       44.2      $     305.3 
                                  =============     ============

     The current maturities at December 31, 1994 included $253.8
million of revolving credit facility borrowings outstanding under
the Company's previous accounts receivable securitization program
which were scheduled to mature in September 1995.  As discussed
in Note 5 -- "Refinancings", the Company refinanced such
obligations through the completion of the March 1995 Refinancing,
which provided for a new, five-year accounts receivable
securitization program.

<PAGE>
NOTE 11:  Segment Information

Financial information by business segment is summarized as
follows:




                                            Three months ended  
                           September 30, 1995           September 30, 1994  
                       __________________________   __________________________
                                   Income before                 Income (loss) 
                                    income taxes,               before income 
                                        minority              taxes, minority 
                                    interest and                 interest and 
                          Total    extraordinary       Total    extraordinary
(in millions)             sales           charge       sales           charge 
____________________   _________        _________   _________        _________ 
Paperboard and paper 
  packaging.........   $1,351.8         $  236.8    $1,099.7         $   82.6 
White paper and 
 other..............      588.3            134.6       391.8              8.0 
Intersegment........      (16.1)              --        (9.3)              -- 
                       _________        _________   _________        _________ 
                        1,924.0            371.4     1,482.2             90.6 
Interest expense....                      (114.5)                      (113.9)
Foreign currency 
 adjustments........                         5.6                         12.2 
General corporate 
 and miscellaneous 
 (net)..............                       (18.2)                       (21.5)
                       _________        _________   _________        _________ 
Total...............   $1,924.0         $  244.3    $1,482.2         $  (32.6)
                       =========        =========   =========        =========

<PAGE>

                                             Nine months ended  
                           September 30, 1995           September 30, 1994  
                       __________________________   __________________________
                                                                 Income (loss) 
                                                                before income 
                                                              taxes, minority 
                                                                     interest, 
                                   Income before                extraordinary 
                                    income taxes,                 charges and 
                                        minority                   cumulative 
                                    interest and                 effect of an 
                          Total    extraordinary       Total       accounting
(in millions)             sales          charges       sales           change 
____________________   _________        _________   _________        _________ 
Paperboard and 
 paper packaging....   $4,104.7         $  726.1    $3,046.2         $  187.7 
White paper and 
 other..............    1,649.9            313.4     1,107.6            (11.8)
Intersegment........      (47.8)              --       (26.5)              -- 
                       _________        _________   _________        _________ 
                        5,706.8          1,039.5     4,127.3            175.9 
Interest expense....                      (354.0)                      (338.1)
Foreign currency 
 adjustments........                         9.9                         (3.7)
General corporate 
 and miscellaneous 
 (net)..............                       (50.0)                       (58.4)
                       _________        _________   _________        _________ 
Total...............   $5,706.8         $  645.4    $4,127.3         $ (224.3)
                       =========        =========   =========        =========


<PAGE>

Financial information by geographic region is summarized as follows:





                                            Three months ended  
                           September 30, 1995           September 30, 1994  
                       __________________________   __________________________
                                   Income before                 Income (loss) 
                                    income taxes,               before income 
                                        minority              taxes, minority 
                                    interest and                 interest and 
                          Total    extraordinary       Total    extraordinary
(in millions)             sales           charge       sales           charge 
____________________   _________        _________   _________        _________ 
United States.......   $1,329.1         $  247.2    $1,082.9         $   74.8 
Canada..............      407.0            113.8       253.7             12.0 
Europe..............      224.2             10.4       163.5              3.8 
                       _________        _________   _________        _________ 
                        1,960.3            371.4     1,500.1             90.6 
Interest expense....                      (114.5)                      (113.9)
Foreign currency  
 adjustments........                         5.6                         12.2 
General corporate 
 and miscellaneous 
 (net)..............                       (18.2)                       (21.5)
Inter-area 
 eliminations.......      (36.3)              --       (17.9)              -- 
                       _________        _________   _________        _________ 
Total...............   $1,924.0         $  244.3    $1,482.2         $  (32.6)
                       =========        =========   =========        =========
<PAGE>

                                             Nine months ended  
                           September 30, 1995           September 30, 1994  
                       __________________________   __________________________
                                                                 Income (loss) 
                                                                before income 
                                                              taxes, minority 
                                                                     interest, 
                                   Income before                extraordinary 
                                    income taxes,                 charges and 
                                        minority                   cumulative 
                                    interest and                 effect of an 
                          Total    extraordinary       Total       accounting
(in millions)             sales          charges       sales           change 
____________________   _________        _________   _________        _________
United States.......   $4,021.6         $  733.9    $3,020.5         $  175.2 
Canada..............    1,108.2            275.0       707.8             (5.3)
Europe..............      657.2             30.6       445.8              6.0 
                       _________        _________   _________        _________
                        5,787.0          1,039.5     4,174.1            175.9 
Interest expense....                      (354.0)                      (338.1)
Foreign currency 
 adjustments........                         9.9                         (3.7)
General corporate 
 and miscellaneous 
 (net)..............                       (50.0)                       (58.4)
Inter-area 
 eliminations.......      (80.2)              --       (46.8)              -- 
                       _________        _________   _________        _________
Total...............   $5,706.8         $  645.4    $4,127.3         $ (224.3)
                       =========        =========   =========        =========

<PAGE>

NOTE 12:  Additional Cash Flow Statement Information

The Company's non-cash investing and financing activities and
cash payments for interest and income taxes were as follows:

                        Three months ended     Nine months ended
                           September 30,         September 30,  
(in millions)             1995     1994       1995       1994 
______________________  _______  _______   _______   ________
Non-cash investing and 
 financing activities:
  Issuance of common 
    stock as partial 
    consideration to 
    extinguish debt...  $174.8   $   --    $174.8    $    --
 Assumption of non-
  recourse debt of an  
  affiliate...........    13.1       --      13.1         -- 
 Unrealized gain on an 
  investment in an
  equity security (net 
  of income taxes)....      --     10.3        --        4.6 
 Conversion of 
  investment in an
  affiliate into a 
  note receivable.....      --      3.2        --        3.2 
 Note receivable 
  received from sale 
  of assets...........      --       --        --        1.3 

Cash paid (refunded) 
 during the periods for:
 Interest (net of 
  capitalization).....  $109.4   $108.4    $342.7     $299.1
 Income taxes (net of 
  refunds)............    26.3    (12.7)     88.3       (9.3)
                        =======  =======   =======    =======

<PAGE>
               STONE CONTAINER CORPORATION AND SUBSIDIARIES

      ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

                   CONDITION AND RESULTS OF OPERATIONS


Results of Operations

                                          Three months ended September 30, 
                                            1995                     1994 
                                    ____________________   ____________________
                                              Percent of             Percent of
(dollars in millions)                 Amount   net sales     Amount   net sales
__________________________________  _________  _________   _________  _________
Net sales.........................  $1,924.0      100.0%   $1,482.2      100.0%
Cost of products sold.............   1,330.4       69.1     1,183.4       79.8
Selling, general and 
 administrative expenses..........     151.7        7.9       147.7       10.0 
Depreciation and amortization.....      97.1        5.1        89.7        6.0
Equity (income) loss from 
 affiliates.......................      (2.5)       (.1)         .4         --
Other operating (income) 
 expense-net......................        --         --         1.0         .1
Other (income) expense-net........     (11.5)       (.6)      (21.3)      (1.4)
                                    _________  _________   _________  _________
Income before interest expense, 
 income taxes, minority interest, 
 extraordinary charges and 
 cumulative effect of an 
 accounting change................     358.8       18.6        81.3        5.5
Interest expense..................    (114.5)      (5.9)     (113.9)      (7.7)
                                    _________  _________   _________  _________
Income (loss) before income taxes, 
 minority interest, extraordinary 
 charges and cumulative effect of 
 an accounting change.............     244.3       12.7       (32.6)      (2.2)
(Provision) credit for income 
 taxes............................    (102.6)      (5.3)        5.4         .4
Minority interest.................     (12.7)       (.7)       (1.7)       (.1)
                                    _________  _________   _________  _________
Income (loss) before extraordinary 
 charges and cumulative effect of 
 an accounting change.............     129.0        6.7       (28.9)      (1.9)
Extraordinary charges from early 
 extinguishments of debt (net of 
 income tax benefit)..............    (177.9)      (9.2)      (44.8)      (3.0)
Cumulative effect of change in 
 accounting for postemployment 
 benefits (net of income tax 
 benefit).........................        --         --          --         --
                                    _________  _________   _________  _________
Net income (loss).................  $  (48.9)      (2.5)   $  (73.7)      (4.9)
                                    =========  =========   =========  =========
<PAGE>
Results of Operations (continued)


                                           Nine months ended September 30, 
                                            1995                     1994 
                                    ____________________   ____________________
                                              Percent of             Percent of
(dollars in millions)                 Amount   net sales     Amount   net sales
__________________________________  _________  _________   _________  _________
Net sales.........................  $5,706.8      100.0%   $4,127.3      100.0%
Cost of products sold.............   4,002.0       70.1     3,367.4       81.6 
Selling, general and 
 administrative expenses..........     455.9        8.0       418.1       10.1 
Depreciation and amortization.....     285.7        5.0       267.5        6.5
Equity (income) loss from 
 affiliates.......................      (6.2)       (.1)        6.1         .1 
Other operating (income) 
 expense-net......................        --         --       (32.4)       (.8)
Other (income) expense-net........     (30.0)       (.5)      (13.2)       (.3)
                                    _________  _________   _________  _________
Income before interest expense, 
 income taxes, minority interest, 
 extraordinary charges and 
 cumulative effect of an 
 accounting change................     999.4       17.5       113.8        2.8
Interest expense..................    (354.0)      (6.2)     (338.1)      (8.2)
                                    _________  _________   _________  _________
Income (loss) before income taxes, 
 minority interest, extraordinary 
 charges and cumulative effect of 
 an accounting change.............     645.4       11.3      (224.3)      (5.4)
(Provision) credit for income 
 taxes............................    (263.1)      (4.6)       65.4        1.6
Minority interest.................     (25.5)       (.4)         .3         -- 
                                    _________  _________   _________  _________
Income (loss) before extraordinary 
 charges and cumulative effect of 
 an accounting change.............     356.8        6.3      (158.6)      (3.8)
Extraordinary charges from early 
 extinguishments of debt (net of 
 income tax benefit)..............    (181.0)      (3.2)      (61.6)      (1.5)
Cumulative effect of change in 
 accounting for postemployment 
 benefits (net of income tax 
 benefit).........................        --         --       (14.2)       (.4)
                                    _________  _________   _________  _________
Net income (loss).................  $  175.8        3.1    $ (234.4)      (5.7)
                                    =========  =========   =========  =========


<PAGE>
     For the three months ended September 30, 1995, income before
the extraordinary charge from the early extinguishment of debt
was $129 million, or $1.32 per share of common stock on a primary
basis and $1.12 per share of common stock on a fully diluted
basis.  In the 1995 third quarter, the Company recorded an
extraordinary charge from the early extinguishment of debt of
$177.9 million, net of income tax benefit, or $1.85 per share on
a primary basis and $1.57 per share on a fully diluted basis,
resulting in a net loss for the 1995 third quarter of $48.9
million, or $.53 per share of common stock on a primary basis and
$.45 per share of common stock on a fully diluted basis.  For the
three months ended September 30, 1994, the loss before the
extraordinary charge from the early extinguishment of debt was
$28.9 million, or $.34 per share of common stock.  After the
extraordinary charge, the net loss for the 1994 third quarter was
$73.7 million, or $.84 per share of common stock.

     For the nine months ended September 30, 1995, income before
the extraordinary charges from the early extinguishments of debt
was $356.8 million, or $3.79 per share of common stock on a
primary basis and $3.08 per share of common stock on a fully
diluted basis.  The Company recorded extraordinary charges from
the early extinguishments of debt totalling $181.0 million, net
of income tax benefit, or $1.95 per share on a primary basis and
$1.55 per share on a fully diluted basis, resulting in net income
for the nine months ended September 30, 1995 of $175.8 million,
or $1.84 per share of common stock on a primary basis and $1.53
per share of common stock on a fully diluted basis.  See
"Financial Condition and Liquidity - Financing Activities" for a
further discussion of the extraordinary charges from the early
extinguishments of debt.  For the nine months ended September 30,
1994, the loss before the extraordinary charges and the
cumulative effect of an accounting change was $158.6 million, or
$1.89 per share of common stock.  After the extraordinary charges
and the cumulative effect of an accounting change, the net loss
for the nine months ended September 30, 1994 was $234.4 million,
or $2.75 per share of common stock.

     The improved results for the three and nine month periods
ended September 30, 1995 over the comparable prior year periods
primarily reflect improved product pricing for the Company's
products which was partially offset by a substantial increase in
recycled fiber costs.

Paperboard and paper packaging:

Net sales for the three and nine months ended September 30, 1995
for the paperboard and paper packaging segment increased 23
percent and 35 percent, respectively, over the comparable prior
year periods reflecting higher sales for corrugated containers,
paperboard and paper bags and sacks.  These sales increases
primarily resulted from significantly higher average selling
prices.  
<PAGE>
    Shipments of corrugated containers, including the Company's
proportionate share of the shipments by its affiliates, were 13.1
billion square feet for the third quarter of 1995, compared with
14.3 billion square feet for the comparable prior year period. 
For the first nine months of 1995, the Company shipped 40.2
billion square feet of corrugated containers, compared with 40.4
billion square feet shipped during the first nine months of 1994. 
The reduction in shipments of corrugated containers is a result
of recent softening in industry demand during the third quarter
of 1995.  Shipments of paper bags and sacks were 140 thousand
tons and 434 thousand tons for the three and nine month periods
ended September 30, 1995, respectively, compared with 164
thousand tons and 486 thousand tons shipped during the comparable
1994 periods.

     Production of containerboard and kraft paper for the three
and nine month periods ended September 30, 1995, was 1.23 million
tons and 3.84 million tons, respectively, compared to 1.29
million tons and 3.88 million tons produced during the comparable
prior year periods.

     Operating income for the paperboard and paper packaging
segment increased significantly for the three and nine month
periods ended September 30, 1995, as compared with the
corresponding 1994 periods.  These increases are attributable to
improved operating margins primarily resulting from significantly
higher average selling prices for the Company's paperboard and
paper packaging products.

White paper and other:

Net sales for the third quarter and first nine months of 1995 for
the white paper and other segment increased 50 percent and 49
percent, respectively, over the comparable prior year periods. 
These increases were due in part to the inclusion of
approximately $44 million for the 1995 third quarter and
approximately $121 million for the first nine months of 1995 of
market pulp sales for Stone Venepal (Celgar) Pulp, Inc. ("SVCPI")
which, effective December 31, 1994, became a consolidated
subsidiary when the Company increased its ownership in SVCPI's
common stock from 50 percent to 90 percent.  SVCPI had previously
been accounted for in accordance with the equity method of
accounting.  Excluding the effect of SVCPI, net sales for the
third quarter and first nine months of 1995 for this segment
increased 39 percent and 38 percent, respectively, over the
comparable prior year periods, reflecting significant sales
increases for market pulp, newsprint and groundwood paper.  These
sales increases were mainly attributable to higher average
selling prices, although improved market pulp sales volume also
contributed to the increases over the comparable prior year
periods.

<PAGE>
     Production of newsprint, market pulp and groundwood paper
for the three and nine month periods ended September 30, 1995,
including 100 percent of the production at Stone-Consolidated
Inc. ("Stone-Consolidated"), the Company's Canadian newsprint and
groundwood paper subsidiary (see Note 3 -- "Subsequent Events"),
and 45 percent of the production at the Company's affiliated
market pulp mill in British Columbia for 1995 and 25 percent for
1994, was 738 thousand tons and 2.19 million tons, respectively,
compared with 650 thousand tons and 1.92 million tons produced
during the comparable prior year periods.  As a result of the
Company increasing its ownership in SVCPI's common stock
effective December 31, 1994, the Company indirectly acquired an
additional 20 percent of the affiliated market pulp mill in
British Columbia.

     Operating income for the white paper and other segment for
the 1995 third quarter was $134.6 million compared to operating
income of $8.0 million for the 1994 third quarter.  Operating
income for the first nine months of 1995 was $313.4 million
compared to an operating loss of $11.8 million for the comparable
period of 1994.  The significant improvement in operating income
was mainly attributable to improved operating margins resulting
primarily from the significantly higher average selling prices
for market pulp, newsprint and groundwood paper.

Financial Condition and Liquidity

The Company's working capital ratio at September 30, 1995 was 2.4
to 1 compared to 1.8 to 1 at December 31, 1994.  The Company's
long-term debt to total capitalization ratio was 69.8 percent at
September 30, 1995 as compared with 78.0 percent at December 31,
1994.  Capitalization, for purposes of this ratio, includes long-
term debt (which includes debt of consolidated affiliates which
is non-recourse to the parent company), deferred income taxes,
minority interest and stockholders' equity.

     The Company's primary capital requirements consist of debt
service and capital expenditures.  The Company is highly
leveraged, and while highly leveraged, will incur substantial
ongoing interest expense.  No significant debt maturities or
amortization obligations are due until June 1997.  The Company's 
total debt as of September 30, 1995 decreased from that reflected
in its December 31, 1994 Consolidated Balance Sheet by
approximately $311 million.  Further, approximately $396 million
of non-recourse debt will be eliminated from the Company's
Consolidated Balance Sheet as of November 1, 1995 resulting from
the Company beginning to report Stone-Consolidated in accordance
with the equity method of accounting effective with the
Amalgamation described in Note 3 -- "Subsequent Events".

     The Company's liquidity and financial flexibility improved
during the first nine months of 1995 as a result of its earnings,
the recent $200 million additional bank term loan facility under
its bank credit agreement (the "Credit Agreement") and through
the completion of the March 1995 Refinancing.  See also
"Financial Condition and Liquidity - Financing Activities".  The
Company's Credit Agreement consists of a $400 million senior
secured term loan facility maturing through April 1, 2000, a $200
million senior secured term loan facility maturing through
October 1, 2003 and a $450 million senior secured revolving
credit facility commitment maturing May 15, 1999, which includes
a $25 million swing-line sub-facility also maturing May 15, 1999. 
At November 8, 1995, the Company had borrowing availability of
approximately $259 million (net of letters of credit which reduce
the amount available to be borrowed) under its $450 million
revolving credit facility.  The term loans and the revolving
credit facility had weighted average interest rates for the nine
months ended September 30, 1995 of 9.22 percent and 9.36 percent,
respectively.  The weighted average rates do not include the
effects of the amortization of deferred debt issuance costs.

     Borrowings under the Credit Agreement are secured with a
significant portion of the assets of the Company.  The Credit
Agreement contains covenants that include, among other things,
the maintenance of certain financial tests and ratios. 
Additionally, the term loan portion of the Credit Agreement
provides for mandatory prepayments from sales of certain assets,
certain debt financings and a percentage of excess cash flow (as
defined).  The Company's bank lenders, at the Company's optional
request, may at their option waive the receipt of certain
mandatory prepayments.  In July 1995, the Company received a
waiver of its mandatory prepayments of excess cash flow (as
defined) for required payments under its initial term loan for
four quarters beginning with the 1995 second quarter payment.  To
date, such quarterly payments which would have been scheduled to
be paid on or before August 15, 1995 and November 15, 1995 would
have totalled approximately $110 million.  The amortizations for
each semi-annual period is 1/2 of 1 percent of the principal
amount of the outstanding term loans and all mandatory and
voluntary prepayments are allocated against the term loan
amortizations in inverse order of maturity.  Mandatory
prepayments from sales of collateral, unless replacement
collateral is provided, will be applied ratably to the term loan
and revolving credit facility, permanently reducing the loan
commitments under the Credit Agreement.  The Credit Agreement
also contains cross-default provisions to the indebtedness of $10
million or more of the Company and certain subsidiaries, as well
as cross-acceleration provisions to the non-recourse debt of $10
million or more of SVCPI.  At September 30, 1995, SVCPI had
approximately $289 million in secured indebtedness owed to bank
lenders.  The Credit Agreement allows, under certain specific
circumstances, for the Company to make further investments in
SVCPI.

Operating activities:

Net cash provided by operating activities was $654.8 million for
the nine months ended September 30, 1995, an improvement of
$759.3 million over the comparable period of 1994.  The
improvement in operating cash flows primarily reflects the
Company's improved earnings and decrease in debt issuance costs
which more than offset the effects of an increase in accounts and
notes receivable and inventories.


Financing activities:

In August 1995, the Company and its bank group amended and
restated its Credit Agreement to provide for an additional $200
million senior secured term loan facility.  Permitted uses for
the borrowings under this additional term loan were to partially
fund the purchases of the 8-7/8 percent Convertible Senior
Subordinated Notes (the "Convertible Senior Subordinated Notes"),
to partially fund the redemption of the Company's $90 million
principal amount of its 12-1/8 percent Subordinated Debentures
and to partially fund open market purchases of debt.  The $200
million additional term loan requires semi-annual amortizations
of 1/2 of 1 percent of the principal amount beginning April 1,
1996 through October 1, 2002 with the remaining balance equally
maturing on April 1 and October 1, 2003.  Interest rate options
available under the additional term loan are either prime rate
plus 2-3/8 percent or LIBOR plus 3-3/8 percent.  

     During the 1995 third quarter, in separate, independently
negotiated transactions, the Company purchased and retired
approximately $182 million principal amount of its Convertible
Senior Subordinated Notes.  The Convertible Senior Subordinated
Notes are convertible into 86.58 shares of the Company's common
stock per $1,000 face amount at $11.55 per share.  The
Convertible Senior Subordinated Notes purchased and retired were
convertible into approximately 15.8 million common shares.  The
aggregate value paid by the Company for such Convertible Senior
Subordinated Notes purchased and retired was approximately $357
million comprised of approximately $182 million cash (which was
equal to the face value of the Convertible Senior Subordinated
Notes purchased) and the issuance of approximately 8.2 million
shares of common stock valued at approximately $175 million. 
Although the Company issued approximately 8.2 million shares of
common stock, total common shares on a fully diluted basis was
reduced by approximately 7.6 million common shares. 
Additionally, the Company made open market purchases of other
debt securities during the quarter and the year.  These
transactions, in total, resulted in the Company reporting
extraordinary charges from the early extinguishments of debt for
the third quarter and first nine months of 1995 of approximately
$178 million and $181 million, respectively (including the write-
off of deferred debt issuance costs, net of income tax benefit). 
Furthermore, common stock increased by approximately $175 million
as a result of the issuance of common shares as part of the
transaction, in total, regarding the Convertible Senior
Subordinated Notes.  Total stockholders' equity in the Company's
Consolidated Balance Sheet did not substantially change as a
result of the purchases of the Convertible Senior Subordinated
Notes.  The purchases of the Convertible Senior Subordinated
Notes did not substantially affect the calculation of the
available dividend pool under the covenants of the Company's
various debt instruments concerning dividend restrictions. 
Funding for the cash portion of the purchases of the Convertible
Senior Subordinated Notes and the other open market purchases was
financed primarily from bank borrowings.  See also "Financial
Condition and Liquidity".


     During the second quarter of 1995, the Company (i) repaid
Seminole Kraft Corporation's ("Seminole") bank debt and (ii)
redeemed Seminole's 13-1/2 percent Subordinated Notes for
approximately $123 million.  The Company had previously acquired
the remaining 1 percent of the common stock of Seminole, thereby
making it a wholly-owned subsidiary of the Company in March 1995. 
Effective April 30, 1995, the Company merged Seminole with and
into the Company.

     In March 1995, the Company, through its wholly-owned
subsidiary Stone Receivables Corporation, completed the
refinancing of the obligations relating to its accounts
receivable securitization program with a new $310 million
accounts receivable securitization program consisting of $260
million of floating-rate notes due in 2000 (the "Notes") together
with a five-year $50 million revolving credit facility
(collectively, the "March 1995 Refinancing").  The March 1995
Refinancing permits the Company to sell certain of its accounts
receivable to Stone Receivables Corporation, which purchases such
receivables under the program.  The initial accounts receivable
under the program were purchased with the net proceeds received
from the issuance of the Notes.  The purchased accounts
receivable are solely the assets of Stone Receivables
Corporation, a wholly-owned subsidiary of the Company, with its
own borrowings.  In the event of a liquidation of Stone
Receivables Corporation, such borrowings would be satisfied from
the assets of Stone Receivables Corporation prior to any
distribution to the Company.  At September 30, 1995, the
Company's Consolidated Balance Sheet included approximately $321
million of accounts receivable under the program and $266 million
of borrowings under the program. 

          On August 15, 1995, the Company paid a cash dividend of
$2.1875 per share on the Series E Cumulative Preferred Stock. 
The cash dividend represented a payment of $1.75 cumulative
arrearage for four quarters plus a regular quarterly dividend of
$0.4375.  The cumulative cash dividend satisfied all dividends in
arrears on the Series E Cumulative Preferred Stock.  On October
2, 1995, the Company's Board of Directors declared a cash
dividend of $0.4375 per share on the Series E Cumulative
Preferred Stock payable November 15, 1995 to stockholders of
record on November 1, 1995.  Also, on October 2, 1995, the
Company's Board of Directors declared a quarterly cash dividend
of $0.15 per share on the Company's common stock payable December
13, 1995 to shareholders of record on November 22, 1995.  The
Company had previously paid a quarterly cash dividend of $0.15
per share on the Company's common stock on September 13, 1995.
<PAGE>
Investing activities:

Capital expenditures for the nine months ended September 30, 1995
totalled approximately $280 million.  

Outlook:

As a result of favorable industry conditions, the Company
implemented price increases for containerboard and corrugated
containers during the first nine months of 1995.  However, due to
an increased imbalance in the supply demand relationship for both
containerboard and corrugated containers during the third quarter
of 1995, industry containerboard inventories have risen.  As a
result of this imbalance, containerboard prices have come under
pressure beginning in the 1995 fourth quarter.

     During the third quarter of 1995, the Company removed
approximately 145 thousand tons of containerboard production from
certain of its mills for inventory balancing purposes.  The
Company plans to take additional market-related downtime of
approximately 160 thousand tons of containerboard and
approximately 20 thousand tons of market pulp during the fourth
quarter of 1995.

     During the first nine months of 1995, the Company
implemented price increases for market pulp and has begun to
implement a further market pulp price increase for softwood pulp
effective October 1, 1995.

     Additionally, Stone-Consolidated implemented newsprint and
groundwood paper price increases during the first nine months of
1995 and has announced a further newsprint price increase
effective February 1, 1996.

     There can be no assurance that announced price increases for
the products of the Company or Stone-Consolidated will be
achieved or that prices can be maintained at current levels.

     Wood fiber and recycled fiber, the principal raw materials
used in the manufacture of the Company's products, are purchased
in highly competitive, price sensitive markets.  These raw
materials have historically exhibited price and demand
cyclicality.  In addition, increased demand for the Company's and
the industry's products has resulted in greater demand for raw
materials, which has translated into higher raw material prices,
including a significant increase in the costs of recycled fiber. 

     The Company purchases or cuts a variety of species of timber
from which the Company utilizes wood fiber.  The supply and price
of wood fiber in particular is dependent upon a variety of
factors over which the Company has no control, including
environmental and conservation regulations and natural disasters,
such as forest fires and hurricanes, and weather.  A decrease in
the supply of wood fiber has caused, and will likely continue to
cause, higher wood fiber costs in some of the regions in which
the Company procures wood.

     The increase in demand for products manufactured, in whole
or in part, from recycled fiber had caused a tightness in supply
of recycled fiber and a resulting significant increase in the
cost of such fiber used in the manufacture of recycled
containerboard and other products.  Costs for recycled fiber
decreased in the 1995 third quarter when compared to the 1995
first and second quarters, but were still higher when compared to
the third quarter of 1994.  Increased benefits of lower recycled
fiber costs are anticipated for the 1995 fourth quarter.

     While the Company has not experienced any significant
difficulty in obtaining wood fiber and recycled fiber for its
mills, there can be no assurances that this will continue to be
the case for any or all of its mills.

     In April 1995, the Company announced modest incremental
containerboard capacity projects at seven of its twelve U.S.
mills.  These projects, which will be phased in between December
1995 and October 1996, will add a total of 704 tons per day to
the Company's production capacity, or less than 3 percent of the
Company's total mill production capacity.  The cost of these
projects is approximately $87,500 per daily ton.

     In July 1995, the Company announced that it has indefinitely
delayed the planned conversion of the No. 1 paper machine from
newsprint to corrugating medium at its mill in Snowflake,
Arizona.  The Company remains on schedule at this mill to
construct an OCC ("old corrugated container") processing plant.  

     In the second quarter of 1994, a digester vessel ruptured at
the Company's pulp and paperboard mill in Panama City, Florida
causing extensive damage to certain of the facility's assets. 
The Company is seeking recovery for both the losses to property
and the losses as a result of business interruption arising from
the Panama City occurrence.  A partial recovery of approximately
$31 million has been received by the Company from certain
carriers, claims of approximately $11 million have been committed
to be paid and claims of approximately $41 million covering the
remaining portion of such losses are still pending.  The
insurance carrier providing boiler and machinery coverage for the
Company has denied the Company's claim.  The Company has
challenged the denial and has commenced a declaratory judgement
action against the boiler and machinery insurance carrier for a
determination that such insurance carrier is responsible for
coverage of the loss.  In addition, during the second quarter of
1995, certain of the all-risk insurance carriers, which would
cover the losses not covered under the boiler and machinery
coverage, have also denied coverage.  The Company has entered
into stand-still agreements with such carriers pending the
outcome of the suit against the boiler and machinery carrier. 
Management believes the receivable recorded on its financial
statements is fully recoverable.
<PAGE>
     The Company is continuing to pursue its financial strategy
of enhancing its liquidity and financial flexibility by
evaluating alternatives related to its non-core assets, including
the U.S. wood products business.  As an initial step in achieving
this objective, the Company ceased operations of three wood
products facilities in the Pacific Northwest and has begun and
will continue to divest the assets of those facilities as
appropriate opportunities arise.  Accordingly, such net assets
held for sale are included in other current assets within the
September 30, 1995 Consolidated Balance Sheet.

     On November 1, 1995, Stone-Consolidated amalgamated its
operations (the "Amalgamation") with Rainy River Forest Products
Inc. ("Rainy River"), a Toronto-based Canadian pulp and paper
company.  The amalgamated entity ("Amalco") will continue under
the name of Stone-Consolidated Corporation.  As a result of the
Amalgamation, the Company's equity ownership in Stone-
Consolidated Corporation was reduced from 74.6 percent to 46.7
percent.  From the effective date of the Amalgamation, the
Company will begin reporting Stone-Consolidated Corporation as a
non-consolidated affiliate in accordance with the equity method
of accounting.

     On November 2, 1995, the Company announced it has entered
into a joint venture agreement with Four M Corporation (Box USA)
to purchase a paperboard mill located in Port St. Joe, Florida,
from St. Joe Paper Company for $185 million plus applicable
working capital.  Under the joint venture agreement, the Company
would make a 50 percent equity investment in the joint venture. 
It is anticipated that the purchase by the joint venture would
close late in the first quarter of 1996.  The completion of the
transaction is contingent upon a number of conditions, including
the termination of the Hart-Scott-Rodino waiting period and the
placement of non-recourse financing.  Upon completion of the
transaction, the joint venture would be highly leveraged.  The
mill has the capacity to produce approximately 500,000 short tons
per year, split almost evenly between mottled white and kraft
linerboard.

     On November 6, 1995, the Company announced that a wholly-
owned subsidiary plans to privately place $200 million of senior
unsecured notes due in 2003 that will be unconditionally
guaranteed by the Company.  The net proceeds from the issuance of
the notes will be used to retire existing indebtedness of the
Company.  The placement of notes is expected to close in November
1995.

          
<PAGE>
                   PART II.  OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

(a)     Exhibits

      3     By-laws of the Company, as amended.

     11     Computation of Primary and Fully Diluted Net Income
            (Loss) Per Common Share.

     27     Financial Data Schedule for the nine months ended
            September 30, 1995.

(b)     Reports on Form 8-K

     1.     A Current Report on Form 8-K dated September 8, 1995
            was filed under Item 5 -- Other Events, stating that
            the Company issued a press release on August 31, 1995
            announcing the removal of 180,000 tons of production
            from seven mills during the third quarter.

     2.     A Current Report on Form 8-K dated November 7, 1995
            was filed under Item 5 -- Other Events, stating that
            the Company issued a press release on October 23,
            1995 announcing its financial results for the third
            quarter of 1995 and for the nine months ended
            September 30, 1995.

     3.     A Current Report on Form 8-K dated November 9, 1995
            was filed reporting under Item 2 - Acquisition or
            Disposition of Assets, stating that Stone-    
            Consolidated Corporation, a 74.6 percent owned
            Canadian subsidiary of the Company, amalgamated its
            operations with Rainy River Forest Products Inc., a
            Toronto-based Canadian pulp and paper company.  The
            amalgamated entity ("Amalco") will continue under the
            name Stone-Consolidated Corporation.  As a result of
            the Amalgamation, the Company's equity ownership in
            Stone-Consolidated Corporation was reduced from 74.6
            percent to approximately 46.7 percent.  Stone-  
            Consolidated Corporation will begin to be reported by
            the Company under the equity method of accounting
            effective November 1, 1995.
<PAGE>

                              SIGNATURES

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

                                     STONE CONTAINER CORPORATION


                                By:  Thomas P. Cutilletta     
                                     ____________________________
                                     Thomas P. Cutilletta
                                     Senior Vice President and 
                                      Corporate Controller
                                     (Principal Accounting 
                                      Officer)

Date:  November 14, 1995