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               December 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 filing requirements for the past 90 days.


                             YES  X  NO

Common Shares outstanding as of     December 26, 1998    :

     Class A Common Shares      5,254,971

     Class B Common Shares      1,622,230





                                Page 1 of 9
<PAGE>
                         THE L. S. STARRETT COMPANY

                                  CONTENTS

                                                                    Page No.

Part I.  Financial Information:

      Item 1.  Financial Statements

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

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

                  Consolidated Statements of Stockholders'
                  Equity - twenty-six weeks ended
                  December 26, 1998 and December 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 6.  Exhibits and reports on Form 8-K                         9



























                                 Page 2 of 9
<PAGE>
                         THE L. S. STARRETT COMPANY
             Consolidated Statements of Earnings and Cash Flows
         (in thousands of dollars except per share data)(unaudited)
                                        13 Weeks Ended     26 Weeks Ended  
EARNINGS                              12/26/98 12/27/97  12/26/98 12/27/97

Net sales                               60,889   68,638   119,253  133,851
Cost of goods sold                     (42,194) (45,372)  (83,415) (89,851)
Selling and general                    (12,617) (14,216)  (24,508) (26,010)
Other income and expense                   477      382       986      842 

Earnings before income taxes             6,555    9,432    12,316   17,832 
Provision for federal, foreign and
      state income taxes                 2,042    3,041     3,887    6,028 

Net earnings                             4,513    6,391     8,429   11,804
Basic earnings per share                   .65      .93      1.22     1.71 
      Average shares used                6,884    6,865     6,890    6,894
Diluted earnings per share                 .65      .93      1.22     1.71
      Average shares used                6,888    6,879     6,898    6,909
Dividends per share                        .20      .19       .40      .38 


CASH FLOWS

Cash flows from operating activities:
   Net earnings                          4,513    6,391     8,429   11,804 
   Noncash expenses:
      Depreciation and amortization      3,012    2,650     5,966    5,395 
      Deferred taxes                      (273)    (254)      (66)    (208)
      Unrealized translation losses                  71                154 
   Working capital changes:
      Receivables                        1,834    1,378     3,044   (6,027)
      Inventories                         (970)   1,234        61    3,389
      Other assets and liabilities       2,108     (583)      623    3,051
   Prepaid pension cost and other         (357)  (1,113)   (1,120)  (1,532)

         Net cash from operations        9,867    9,774    16,937   16,026 

Cash flows from investing activities:
   Additions to plant and equipment     (4,445)  (3,986)   (9,780)  (7,806)
   Increase in short-term investments     (142)  (3,211)   (3,359)  (4,521)

         Net cash used in investing     (4,587)  (7,197)  (13,139) (12,327)

Cash flows from financing activities:
   Short-term borrowings, net                       101      (401)     101
   Long-term debt repayments              (300)    (300)     (300)    (300)
   Common stock issued                   1,253      934     2,093    1,820
   Treasury shares purchased            (2,156)    (334)   (3,017)  (4,019)
   Dividends                            (1,373)  (1,302)   (2,751)  (2,619)

         Net cash used in financing     (2,576)    (901)   (4,376)  (5,017)

Translation rate change effect on cash     (52)      25       (14)      26

Net increase (decrease) in cash          2,652    1,701      (592)  (1,292)
Cash, beginning of period                  461       60     3,705    3,053 
Cash, end of period                      3,113    1,761     3,113    1,761 

               See notes to consolidated financial statements
                                 Page 3 of 9
<PAGE>
                         THE L. S. STARRETT COMPANY
                         Consolidated Balance Sheets
                          (in thousands of dollars)
                                                       Dec. 26     June 27 
                                                         1998        1998   
ASSETS                                               (unaudited)           
Current assets:
   Cash                                                  3,113       3,705 
   Investments                                          30,615      27,115 
   Accounts receivable (less allowance for doubtful
         accounts of $2,472,000 and $2,450,000)         37,644      40,764 
   Inventories:
      Finished goods                                    32,550      30,199 
      Goods in process and finished parts               25,722      25,825 
      Raw materials and supplies                        15,018      17,753 
                                                        73,290      73,777 
   Prepaid expenses and other current assets             2,394       5,335 

                  Total current assets                 147,056     150,696 

Property, plant and equipment, at cost (less
      accumulated depreciation of $71,168,000
      and $66,233,000)                                  72,389      68,818 
Cost in excess of net assets acquired (less
      accumulated amortization of $4,099,000
      and $3,896,000)                                    7,294       7,484 
Prepaid pension cost                                    23,366      22,035 
Other assets                                             1,189       1,230 
                                                       251,294     250,263 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Notes payable and current maturities                    600       1,001 
   Accounts payable and accrued expenses                13,301      14,371 
   Accrued salaries and wages                            5,732       8,059 
   Taxes payable                                         2,166       1,475
   Employee deposits for stock purchase plan               549         528 
                  Total current liabilities             22,348      25,434 

Deferred income taxes                                    9,608       9,367 
Long-term debt                                           3,600       3,900 
Accumulated postretirement medical benefit obligation   16,539      16,268 
Stockholders' equity:
      Class A Common $1 par (20,000,000 shrs. auth.;
        5,254,971 outstanding in Dec.1998, excluding
        1,072,074 in treasury; 5,193,904 outstanding
        in June 1998, excluding 1,045,731 in treasury)   5,255       5,194
      Class B Common $1 par (10,000,000 shrs. auth.;
        1,622,230 outstanding in Dec.1998, excluding
        282,602 in treasury; 1,703,434 outstanding
        in June 1998, excluding 274,283 in treasury)     1,622       1,703 
      Additional paid-in capital                        42,647      41,263 
      Retained earnings reinvested and employed in
            the business                               154,707     151,317 
      Foreign currency translation adjustment           (5,467)     (4,479)
      Other equity adjustments                             435         296 
                  Total stockholders' equity           199,199     195,294 
                                                       251,294     250,263 



               See Notes to Consolidated Financial Statements
                                 Page 4 of 9
<PAGE>
                         THE L. S. STARRETT COMPANY
               Consolidated Statements of Stockholders' equity
   For the Twenty-six Weeks Ended December 26, 1998 and December 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                                    11,804              11,804 
Dividends ($.38)                                (2,619)             (2,619)
Treasury shares:
  Purchased                  (119)     (745)    (3,155)             (4,019)
  Issued                       46     1,579                          1,625 
Options exercised              10       185                            195 
Translation gain, net                                        820       820
Investment valuation                                          77        77 

Balance Dec. 27, 1997        6,881    39,749   143,818    (2,100)  188,348 






Balance June 27, 1998        6,897    41,263   151,317    (4,183)  195,294 
Net earnings                                     8,429               8,429 
Dividends ($.40)                                (2,751)             (2,751)
Treasury shares:
  Purchased                    (88)     (641)   (2,288)             (3,017)
  Issued                        54     1,703                         1,757 
Options exercised               14       322                           336 
Translation loss, net                                       (988)     (988)
Investment valuation                                         139       139 

Balance Dec. 26, 1998        6,877    42,647   154,707    (5,032)  199,199 



















               See Notes to Consolidated Financial Statements
                                 Page 5 of 9
<PAGE>
                         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 December 26,
1998 and June 27, 1998; the results of operations and cash flows for the
thirteen weeks and twenty-six weeks ended December 26, 1998 and December 27,
1997; and changes in stockholders' equity for the twenty-six weeks ended
December 26, 1998 and December 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    Twenty-six Weeks   
                                      Ended December     Ended December    
                                       1998     1997      1998     1997    

      Interest income                  465      746       964    1,388     
      Interest expense and com-
        mitment fees                  (115)    (252)     (192)    (457)    
      Realized and unrealized ex-
        change losses                    4     (135)      (27)    (232)   
      Other                            123       23       241      143
                                       477      382       986      842     


Approximately 70% of all inventories are valued on the LIFO method.  At
December 26, 1998, and June 27, 1998, total inventories are $24,702,000 and
$23,998,000 less, respectively, than if determined on a FIFO basis.

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

                                              December      June          
                                                1998        1998  

            Industrial revenue bond             1,200       1,500         
            Revolving credit agreement          3,000       3,000         
                                                4,200       4,500         
            Less current portion                  600         600         
                                                3,600       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    Twenty-six Weeks   
                                        Ended December     Ended December    
                                         1998     1997      1998     1997
                                                      
  Net earnings                          4,513    6,391     8,429   11,804    
  Unrealized gains on investments          36       77       139           
  Accumulated translation adjustments  (1,241)   1,238      (988)     820      
  Comprehensive income                  3,308    7,706     7,580   12,624

                              Page 6 of 9	      
<PAGE>
                         THE L. S. STARRETT COMPANY
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                            RESULTS OF OPERATIONS
Sales
Sales are down 11% compared to a year ago, both for the December quarter and 
year to date comparisons. The year to date decrease is spread fairly evenly 
between foreign and domestic operations, although foreign sales were down more 
than domestic in the first quarter and domestic sales were down more in the 
second quarter. These decreases in revenue directly reflect the manufacturing 
economies, both in the U.S. and abroad. Over the past six months, manufacturing 
operations on the industrial side in the U.S. have slowed. In Scotland we are 
still being hurt by the strong British pound and, in Brazil, the economy is 
slowing. It is too early to predict what the effect of the recent currency 
devaluation will be in Brazil. It will certainly disrupt economic activity for 
a few months but, beyond that, remains to be seen.

Earnings Before Taxes
Pretax earnings are down 31% for both the quarter and year to date comparisons. 
This is consistent with the decrease in sales volume mentioned above and the 
lower margins resulting from 1) international pricing pressures due to the 
strong pound and 2) lower overhead absorption due to lower production activity.

Income Taxes
The effective income tax rate is 31% for the quarter and 32% year to date. The 
rates were slightly higher (32% and 34%) in the corresponding periods in the 
prior year. The main cause of the decrease is a shift in income mix favoring 
Brazil, where the effective tax rate is lower than our average.


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. If it begins to appear that the 
Company's planned upgrades and modifications might 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,

                                Page 7 of 9
<PAGE>
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 
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     26 Weeks Ended   
                                          12/26/98 12/27/97  12/26/98 12/27/97
   Cash provided by operations              9,867    9,774    16,937   16,026
   Cash used in investing activities       (4,587)  (7,197)  (13,139) (12,327)
   Cash used in financing activities       (2,576)    (901)   (4,376)  (5,017)
   Cash effect of translation rate changes    (52)      25       (14)      26 
      Net increase (decrease) in cash       2,652    1,701      (592)  (1,292)

Despite a decrease in net earnings, the quarter and year to date cash flow 
provided by operations increased slightly compared to the prior year because of 
working capital changes and increased depreciation. An increase in treasury 
share purchases (a financing activity) in the current year's quarter resulted 
in less funds being available for short-term investing. 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 6.6 to 1 
as of December 26, 1998 and 5.9 to 1 as of June 27, 1997


                             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."


                               Page 8 of 9
<PAGE>
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. 

Risks Related to Adoption of the Euro: The new European currency (the Euro) 
began 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. See Management's Discussion 
regarding the recent devaluation of the Brazilian currency.

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 6. Exhibits and Reports on Form 8-K. none


                               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   February 8, 1999                 S/R.U.WELLINGTON, JR.       
                                     R. U. Wellington, Jr. (Treasurer      
                                       and Chief Financial Officer)        

Date   February 8, 1999                     S/S.G.THOMSON                
                                 S. G. Thomson (Chief Accounting Officer)

                                 Page 9 of 9