<PAGE>
 
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C.  20549

                                   FORM 10-Q
(MARK ONE)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934
 
     FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
     SECURITIES EXCHANGE ACT OF 1934
 
                        COMMISSION FILE NUMBER: 0-26190
 
                       AMERICAN ONCOLOGY RESOURCES, INC.
            (Exact name of registrant as specified in its charter)
 
          DELAWARE                                              84-1213501
(STATE OR OTHER JURISDICTION OF                              (I.R.S. EMPLOYER
 INCORPORATION OR ORGANIZATION)                             IDENTIFICATION NO.)
 

 
                      16825 NORTHCHASE DRIVE, SUITE 1300
                                HOUSTON, TEXAS
                                     77060
                   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
                                  (ZIP CODE)
 
                                (281) 873-2674
             (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

   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    
                                                -----      -----

   AS OF MAY 9, 1997, 28,645,826 SHARES OF THE REGISTRANT'S COMMON STOCK WERE
OUTSTANDING.
<PAGE>
 
                       AMERICAN ONCOLOGY RESOURCES, INC.

                                   FORM 10-Q

                                 MARCH 31, 1997


                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
 
                                                                        PAGE NO.
                                                                        -------
<S>                                                                         <C>
 
PART I.  FINANCIAL INFORMATION
         ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  CONDENSED CONSOLIDATED BALANCE SHEET                       3
                  CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS             4
                  CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY   5
                  CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS             6
                  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS       7
         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS             11
 
PART II.          OTHER INFORMATION

         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                          15
  
         SIGNATURES                                                         16
 
</TABLE>

                                      -2-
<PAGE>
 
PART I.  FINANCIAL INFORMATION

Item 1.   Condensed Consolidated Financial Statements

                       AMERICAN ONCOLOGY RESOURCES, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEET
                     (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE> 
<CAPTION> 
                                                March 31,             December 31,
                                                  1997                    1996  
                                                ----------            ------------
ASSETS                                       (unaudited)  
<S>                                       <C>                 <C>
Current assets:
   Cash and equivalents.................           $ 8,551        $        3,429
   Accounts receivable..................            72,206                61,183  
  Prepaids and other current assets.....             5,500                 5,775  
   Due from affiliated physician groups.             1,311                 5,356  
                                                  --------              --------
       Total current assets.............            87,568                75,743  
 
Property and equipment, net.............            21,063                18,943  
Management service agreements, net......           265,150               240,034   
Other assets............................             5,229                 4,680
                                                  --------              --------  
                                                  $379,010              $339,400
                                                  ========              ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Current maturities of indebtedness...           $ 5,180              $  9,783  
   Accounts payable.....................            23,663                15,148  
   Due to affiliated physician groups...             1,796                   616  
   Accrued compensation costs...........             1,589                 1,806                     
   Accrued interest payable.............             1,744                 2,325  
   Income taxes payable.................             2,635                   641                             
   Other accrued liabilities............             2,916                 2,452  
                                                  --------              --------  
   Total current liabilities............            39,523                32,771  
 
Deferred income taxes...................             3,883                 3,068  
Long-term indebtedness..................           110,582                81,707              
                                                  --------              --------
   Total liabilities....................           153,988               117,546  
                                                  --------              --------  
 
Stockholders' equity:
   Preferred stock, $.01 par value,
    1,000,000 shares authorized,
       none issued and outstanding......
   Common stock, $.01 par value,
    60,000,000 shares authorized,
     28,411,082 and 28,369,482 shares
      issued and
     27,531,056 and 27,371,422 shares                 
      outstanding.......................               284                   284
   Additional paid-in capital...........           136,106               139,804  
   Common stock to be issued,                                                       
    17,388,480 and 17,462,782 shares....            63,382                61,225
   Treasury stock, 880,026 and 998,060                                            
    shares..............................            (8,591)               (8,530) 
   Retained earnings....................            33,841                29,071  
                                                  --------              --------  
   Total stockholders' equity...........           225,022               221,854  
                                                  --------              --------
                                               
                                                  $379,010              $339,400
                                                  ========              ========  
</TABLE>

        The accompanying notes are an integral part of this statement.

                                      -3-
<PAGE>
 
                       AMERICAN ONCOLOGY RESOURCES, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                      (IN THOUSANDS EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
 
 
                                               THREE MONTHS
                                              ENDED MARCH 31,
                                           1997           1996
                                         ---------      --------
<S>                                      <C>            <C> 
Revenue................................   $70,396       $40,750
                                                       
Operating expenses:                                    
  Pharmaceuticals and supplies.........    32,138        14,958
  Practice compensation and benefits...    13,471         8,364
  Other practice costs.................     7,690         5,028
  General and administrative...........     4,171         2,869
  Depreciation and amortization........     3,037         1,902
                                          -------       -------
                                           60,507        33,121
                                          -------       -------
Income from operations.................     9,889         7,629
Other income (expense):                                
  Interest income......................       102           549
  Interest expense.....................    (1,745)       (1,006)
                                          -------       -------
Income before income taxes.............     8,246         7,172
Income taxes...........................     3,174         2,725
                                          -------       -------
Net income.............................   $ 5,072         4,447
                                          =======       =======
Net income per share...................   $   .11       $  $.09
                                          =======       =======
                                           47,392        47,338
Shares used in per share calculations..   =======       =======
 
</TABLE>


        The accompanying notes are an integral part of this statement.

                                      -4-
<PAGE>
 
                       AMERICAN ONCOLOGY RESOURCES, INC.
            CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
 
                                                             ADDITIONAL     COMMON      TREASURY
                                            COMMON STOCK       PAID-IN     STOCK TO      STOCK      RETAINED
                                          SHARES  PAR VALUE    CAPITAL    BE ISSUED       COST      EARNINGS     TOTAL
                                          ------  ---------  -----------  ----------  ------------  ---------  ----------
<S>                                       <C>     <C>        <C>          <C>         <C>           <C>        <C>
Balance at December 31, 1996............  28,369   $  284      $139,804     $61,225    $   (8,530)   $29,071    $221,854
                                                          
Medical practice transactions-value of                    
 700,732 shares to be issued............                                      4,393                                4,393
Purchase of 657,000 shares of Treasury                    
 stock..................................                                                   (6,418)                (6,418)
Delivery of 775,034 shares of Common                      
 Stock issued from treasury.............                         (3,819)     (2,236)        6,357       (302)
 Exercise of options to purchase                          
  Common Stock..........................      42                    121                                              121  
                                                          
Net Income..............................                                                               5,072       5,072
                                          -----    ------     ---------    --------    ----------    -------    --------
Balance at March 31, 1997...............  28,411   $  284      $136,106     $63,382    $   (8,591)   $33,841    $225,022
                                          ======   ======      ========     =======    ==========    =======    ========
 
 
</TABLE>


        The accompanying notes are an integral part of this statement.

                                      -5-
<PAGE>
 
                       AMERICAN ONCOLOGY RESOURCES, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                              THREE MONTHS
                                             ENDED MARCH 31,
                                            1997       1996
                                          ---------  ---------
<S>                                       <C>        <C>
Cash flows from operating activities:
   Net income...........................  $  5,072   $  4,447
   Noncash adjustments:
       Depreciation and amortization....     3,037      1,902
       Deferred income taxes............       815        379
       Imputed interest on medical                        
        practice transactions...........                  113
   Cash provided (used), net of effects
    of medical practice
       transactions, by changes in:
       Accounts receivable..............    (8,942)    (4,487)
       Prepaids and other current assets       273     (1,559)
       Other assets.....................      (502)       (39)
       Accounts payable.................     8,452     (1,344)
       Due from/to affiliated physician     
        groups..........................     5,548        954
       Income taxes payable.............     1,353     (1,865)
       Other accrued liabilities........    (2,668)       (17)
                                          --------   --------
   Net cash provided (used) by                                 
    operating activities................    12,438     (1,516) 
                                          --------   --------  

Cash flows from investing activities:
   Net sales of short-term investments..               23,887
   Acquisition of property and equipment    (2,825)    (2,166)
   Net payments in medical practice                             
    transactions........................   (13,471)   (19,351)  
                                          --------   --------   
   Net cash provided (used) by                                  
    investing activities................   (16,296)     2,370 
                                          --------   -------- 

Cash flows from financing activities: 
   Proceeds from credit facility........    32,000
   Repayment of credit facility.........   (10,000)
   Proceeds from other indebtedness.....       519
   Repayment of other indebtedness......    (7,242)   (15,411)
   Purchase of Treasury Stock...........    (6,418)
   Net proceeds from issuance of Common                       
    Stock...............................       121        218 
                                          --------   -------- 
   Net cash provided  (used) by                                
    financing activities................     8,980    (15,193) 
                                          --------   --------  

Increase (decrease) in cash and                                
 equivalents............................     5,122    (14,339) 
Cash and equivalents:
   Beginning of period..................     3,429     14,816
                                          --------   --------
   End of period........................  $  8,551   $    477
                                          ========   ========
Interest paid...........................  $  2,313   $  1,305
Taxes paid..............................       420      4,211
Noncash transactions:
   Tax benefit from exercise of                       
    non-qualified stock options.........                1,958
   Value of Common Stock to be issued                         
    in medical practice transactions....     4,393      4,149 
   Delivery of Common Stock to be            
    issued in medical practice
    transactions........................     2,236
   Debt issued in medical practice                            
    transactions........................     8,955      6,815 
</TABLE>


        The accompanying notes are an integral part of this statement.

                                      -6-
<PAGE>
 
                       AMERICAN ONCOLOGY RESOURCES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial reporting and in accordance with Form 10-Q and Rule 10.01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, the unaudited condensed
consolidated financial statements contained in this report reflect all
adjustments, which are normal and recurring in nature, considered necessary for
a fair presentation of the financial position and the results of operations for
the interim periods presented. The preparation of the Company's financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets, liabilities, revenues and expenses, as well as disclosures on contingent
assets and liabilities.  Because of inherent uncertainties in this process,
actual future results could differ from those expected at the reporting date.
These unaudited condensed consolidated financial statements, footnote
disclosures and other information should be read in conjunction with the
financial statements and the notes thereto included in the Company's Form 10K
filed with the Securities and Exchange Commission on March 25, 1997.

NOTE 2 - MEDICAL SERVICE REVENUE

Medical service revenue for services to patients by the medical groups
affiliated with the Company is recorded when services are rendered based on
established or negotiated charges reduced by contractual adjustments and
allowances for doubtful accounts.  Differences between estimated contractual
adjustments and final settlements are reported in the period when final
settlements are determined.  Medical service revenue of the affiliated medical
groups is reduced by the contractual amounts retained by the medical groups to
arrive at the Company's revenue.

The following presents the amounts included in the determination of the
Company's revenue (in thousands):

<TABLE>
<CAPTION>
                                             Three Months
                                           Ended March 31,
                                            1997      1996
                                          --------  --------
<S>                                       <C>       <C>
Medical service revenue.................   $92,137   $53,511
Amounts retained by medical practices...    21,741    12,761
                                           -------   -------
Revenue.................................   $70,396   $40,750
                                           =======   =======
 
Management service agreements at end of        
 period.................................        35        25
</TABLE>

                                      -7-
<PAGE>
 
                       AMERICAN ONCOLOGY RESOURCES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

NOTE 3 - MEDICAL PRACTICE TRANSACTIONS

During the first quarter of 1997, the Company, through wholly-owned
subsidiaries, acquired certain non-medical assets of, and amended long-term
management agreements to affiliate with, four medical oncology practices.
During the first quarter of 1996, the Company acquired certain non-medical
assets of, and entered into long-term management service agreements with, three
medical oncology practices.  The transactions have been accounted for as asset
purchases.  The following presents the aggregate consideration required to
complete those transactions (in thousands):

<TABLE>
<CAPTION>
                                              THREE MONTHS
                                            ENDED MARCH 31,
                                            1997       1996
                                          ---------  ---------
<S>                                       <C>        <C>
Cash and transaction costs..............    $13,870    $19,351
Liabilities assumed.....................      2,212        967
Issuance of short-term and subordinated       8.955      6,815
 notes..................................
Common Stock to be issued...............      4,393      4,149
                                            -------    -------
                                            $29,430    $31,282
                                            =======    =======
</TABLE>

In conjunction with the medical practice transactions occurring in the first
quarter of 1996, the Company is contingently obligated to pay up to an
additional $2.6 million in future years, depending on the achievement of certain
financial objectives.  Such liability, if any, will be recorded in the period in
which the outcome of the contingency becomes known.  Any payment made will be
allocated to the long-term management services agreements and will not
immediately be charged to expense.

For transactions completed through March 31, 1997, the scheduled issuance of the
shares of Common Stock that the Company is committed to deliver over the passage
of the time are:  1,816,858 in 1997, 2,940,617 in 1998, 5,244,319 in 1999,
5,092,384 in 2000, 1,298,859 in 2001 and 995,443 thereafter.  Although such
shares are not yet issued or outstanding, such shares are considered as
outstanding for per share calculations.

The accompanying unaudited condensed consolidated financial statements include
the results of operations derived from the management service agreements from
their respective effective dates.  The following unaudited pro forma information
presents the results of operations assuming all 1997 and 1996 transactions were
consummated on January 1, 1996.  Such pro forma information is based on the
historical financial information of the medical practices and does not include
operational or other changes which might have been effected pursuant to the
Company's management of the nonmedical aspects of such practices.

The pro forma information presented below is for illustrative information only
and is not necessarily indicative of results which would have been achieved or
results which may be achieved in the future (in thousands except share amounts):

<TABLE>
<CAPTION>
                        THREE MONTHS ENDED MARCH 31,
                            1997           1996
                        -------------  -------------
<S>                     <C>            <C>
Revenue...............        $71,961        $51,756
Net income............          5,097          4,679
Net income per share..           0.11           0.10
</TABLE>

NOTE 4- CAPITALIZATION


As part of entering into long-term management agreements with medical practices
described in Note 3, the Company has nonforfeitable commitments to issue shares
of Common Stock at specified future dates for no further consideration.  Common
Stock to be issued is shown as a separate component in stockholders' equity and
the amounts, upon issuance of the shares, will be reclassified to par value and
additional paid-in capital.

                                      -8-
<PAGE>
 
                       AMERICAN ONCOLOGY RESOURCES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

Effective May 8, 1997, the Company's stockholders approved an increase in the
number of shares of Common Stock authorized to be issued to 80,000,000 shares.
In addition, the Company's Key Employee Stock Option Plan ("Plan") was amended
to increase the number of shares available for grants under the Plan to 7% from
5% of the Company's outstanding Common Stock (includig shares to be issued at 
future specified dates).

During the first quarter of 1997, options to purchase 436,050 shares of Common
Stock at $10.56 per share were granted under the Company's various stock option
plans, of which 242,500 were granted to executive officers and directors.
During the first quarter of 1997, options to purchase 41,600 shares of Common
Stock at $2.67 to $4.125 per share were exercised, of which 30,000 were
exercised by executive officers and directors.  During the first quarter of
1997, options to purchase 42,624 shares of Common Stock were canceled.  At March
31, 1997, there were options to purchase 5,170,394 shares of Common Stock
outstanding under the Company's various stock option plans at exercise prices of
$1.34  to $24.18 per share.

On August 13, 1996, the Board of Directors of the Company authorized the
repurchase of up to 3,000,000 shares of the Company's Common Stock in public or
private transactions. From November 1996 through January 1997, the Company
repurchased 1,767,500 shares of Common Stock at an average price of $8.96 to be
held as treasury stock.  On March 3, 1997 and March 17, 1997, the Company issued
555,616 and 219,418 shares, respectively, from treasury stock to affiliated
physicians in connection with two 1995 medical practice transactions.

On May 16, 1996, the Board of Directors of the Company declared a two-for-one
stock split of the Company's Common Stock which was paid on June 10, 1996 to
stockholders of record on May 31, 1996.  All references herein to the number of
shares and per share amounts have been adjusted to reflect the effect of the
split.


NOTE 5- INDEBTEDNESS

Indebtedness consists of the following (in thousands):
<TABLE>
<CAPTION>
                                       MARCH 31, 1997   DECEMBER 31, 1996
                                       ---------------  ------------------
<S>                                    <C>              <C>
Short-term notes payable.............                             $ 4,219
Subordinate notes....................        $ 68,151              62,113
Credit facility......................          45,000              23,000
Capital lease obligations and other..           2,611               2,158
                                             --------             -------
                                              115,762              91,490
Less current maturities..............          (5,180)             (9,783)
                                             --------             -------
                                             $110,582             $81,707
                                             ========             =======
</TABLE>

The Company has a loan agreement and revolving credit facility ("Credit
Facility") with First Union National Bank of North Carolina ("First Union")
individually and as Agent for seven additional lenders ("Lenders"), which was
amended as of October 30, 1996 to increase the amount available for borrowing
thereunder to $150 million through October 31, 2001.  Proceeds of loans may be
used to finance medical group transactions, provide working capital or for other
general corporate uses.  At March 31, 1997, the Company had an outstanding
balance of $45 million under the Credit Facility which consisted of multiple
draws with maturities up to 32 days.  The Company has classified this facility
as long term due to its ability and intent to renew the obligations through
1998.

Borrowings under the Credit Facility are secured by capital stock of the
Company's subsidiaries and all material contracts, including management service
agreements.  At the Company's option, funds may be borrowed at the Base interest
rate or the London Interbank Offer Rate plus a range from .5% to 1.5%
(determined under a specific formula).  Interest on amounts outstanding under
Base rate loans is due quarterly while interest on London Interbank Offer Rate
related loans is due upon maturity.  The weighted average interest rate
outstanding on draws under the Credit Facility at  March 31, 1997 was 6.58%.

The Company is subject to restrictive covenants under the facility, including
the maintenance of certain financial ratios.  The agreement limits certain
activities such as additional indebtedness, sales of assets, investments,

                                      -9-
<PAGE>
 
                       AMERICAN ONCOLOGY RESOURCES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

capital expenditures, mergers and consolidations and the payment of dividends.
Under certain circumstances, additional medical practice transactions may
require First Union and the Lenders' consent.

The Company has a $5,000,000 Master Lease Agreement to provide equipment
financing for use in operations.  At March 31, 1997, the Company had no
outstanding balance under the Master Lease Agreement.

NOTE 6- EARNINGS PER SHARE

The computation of earnings per share is based on the weighted average number of
Common Stock and Common Stock equivalent shares outstanding during the periods
in accordance with the requirements of the Securities and Exchange Commission
(SEC).  All options to purchase Common Stock, shares issued and commitments to
issue Common Stock at specified future dates are assumed to have been
outstanding Common Stock equivalents under the treasury stock method for each of
the periods presented.  Fully diluted earnings per share has not been presented
because it does not differ materially from the primary per share computations.

The table summarizes the determination of shares used in per share calculations
(in thousands):

<TABLE>
<CAPTION>
                                           THREE MONTHS
                                          ENDED MARCH 31,
                                           1997     1996
                                          -------  ------
<S>                                       <C>      <C>
Outstanding at end of period:
  Common Stock..........................   27,531  27,746
  Common Stock to be issued.............   17,388  15,612
                                           ------  ------
                                           44,919  43,358
Effect of weighting and assumed share
 equivalents for grants and issuances     
 at less than the weighted average price    2,473   3,980
                                           ------  ------
 
Shares used in per share calculations...   47,392  47,338
                                           ======  ======
</TABLE> 


NOTE 7 - SUBSEQUENT EVENTS

In April 1997, the Company amended long-term management agreements to affiliate
with oncology physician groups located in Austin, Texas; Indianapolis, Indiana;
Portland, Oregon and Alexandria, Virginia. Total consideration consisted of cash
and transaction costs of approximately $9,599,000, promissory notes
approximating $5,018,000, contingent promissory notes of $600,000, and 635,154
shares of Common Stock to be delivered at specific future dates as follows:
127,032 in 2000, 127,032 in 2001, and 381,090 in 2002.

NOTE 8 - RECENT PRONOUNCEMENTS

In 1997, Financial Accounting Standards No. 128 ("FAS 128") Earnings Per Share
was issued.  FAS 128 is effective for earnings per share calculations for
periods ending after December 15, 1997.  At that time, the Company will be
required to change the method currently used to compute earnings per share and
to restate all prior periods.

                                      -10-
<PAGE>
 
Item 2.                AMERICAN ONCOLOGY RESOURCES, INC.
                    Management's Discussion and Analysis of
                 Financial Condition and Results of Operations


INTRODUCTION

American Oncology Resources, Inc. (the "Company") enters into management
agreements with, and purchases the nonmedical assets of, oncology medical
practices. Under the terms of the management agreements, the Company provides
comprehensive management services to its affiliated oncology practices,
including operational and administrative services, and furnishes personnel,
facilities, supplies and equipment. These practices provide a broad range of
medical services to cancer patients, integrating the specialties of medical
oncology, hematology and radiation oncology.  The Company's revenue consists of
management fees and includes all medical practice operating costs for which the
Company is contractually responsible.

In recent years, there has been a trend among oncologists to form larger group
practices that provide a broad range of services to cancer patients in
outpatient settings, rather than in hospitals or other inpatient settings.  The
Company believes that the coordinated delivery of comprehensive cancer care in
an outpatient setting offers high quality care that is more cost-effective than
traditional approaches and is increasingly preferred by patients, payors and
physicians.  The Company believes that many of these larger oncology practices
recognize the need for outside managerial, financial and business expertise to
more efficiently manage the increasingly complex, burdensome and time-consuming
nonmedical aspects of their practices and that such practices will increasingly
elect to enter into management relationships with entities such as the Company.

The Company's objective is to be the leading national physician practice
management company providing comprehensive services to an integrated network of
affiliated oncology practices.  The Company intends to achieve this objective by
(i) focusing exclusively on oncology, (ii) affiliating with leading oncology
practices throughout the United States, (iii) expanding each affiliated oncology
group's presence in its market, (iv) assisting affiliated oncology practices in
offering coordinated, comprehensive cancer care and (v) negotiating and
expanding managed care relationships.  Based on the Company's success in
expanding its business to date, the Company believes that it has effective
strategies for achieving its objective of becoming the leading national oncology
practice management company.

FORWARD LOOKING STATEMENTS

The statements contained in this report, in addition to historical information,
are forward looking statements based on the Company's current expectations, and
actual results may vary materially. The Company's business and financial results
are subject to various risks and uncertainties, including the Company's
continued ability to enter into affiliations with new physician practices and to
successfully integrate such practices, the results of operations of groups
currently affiliated with the Company, competition, reductions in third party
reimbursement for services rendered by physician groups affiliated with the
Company, health care regulation and other risks generally affecting the health
care industry. Please refer to the Company's 1996 Annual Report on Form 10-K for
a more detailed discussion of such risks and uncertainties. These forward
looking statements are provided as a framework for the Company's results of
operations. The Company does not intend to provide updated information other
than as otherwise required by applicable law.

RESULTS OF OPERATIONS

Since the Company's incorporation in October 1992, it has grown rapidly from
managing six affiliated physicians in one state to 250 affiliated physicians and
35 oncology practices in fifteen states as of March 31, 1997.  For the first
quarter of 1997 and 1996, only one of the Company's affiliated physician groups
contributed more than 10% of the Company's revenue which was 10% and 11%,
respectively, of total revenue.   For the first quarter of 1997, the payor mix
of the affiliated physician groups' medical practice revenue, expressed as a
percentage, was 33% for Medicare and Medicaid, 46% for managed care and 21% for
private insurance and other payors.  For the first quarter of 1996, the payor
mix of the affiliated physician groups' medical practice revenue, expressed as a
percentage, was 34% for Medicare and Medicaid, 45% for managed care, and 21% for
private insurance and other payors.   Because of the number of physician groups
with which the Company has recently affiliated and the different payor mix of
each affiliated physician group, meaningful year-to-year payor trends cannot yet
be identified.

                                      -11-
<PAGE>
 
Item 2.                AMERICAN ONCOLOGY RESOURCES, INC.
                    Management's Discussion and Analysis of
                 Financial Condition and Results of Operations

The following table sets forth the percentages of revenue represented by certain
items reflected in the Company's Statement of Operations.  The information that
follows should be read in conjunction with the Company's unaudited condensed
consolidated financial statements and notes thereto included elsewhere herein.
<TABLE>
<CAPTION>
 
                                              THREE MONTHS  
                                           ENDED MARCH 31,      
                                           1997          1996
                                       ------------  ------------
<S>                                    <C>           <C>
Revenue..............................        100.0%        100.0%
                                             -----         -----
Operating expenses:..................
 Pharmaceuticals and supplies........         45.7          36.7
 Practice compensation and benefits..         19.1          20.5
 Other practice costs................         10.9          12.3
 General and administrative..........          5.9           7.1
 Depreciation and amortization.......          4.3           4.7
Net interest expense.................          2.4           1.1
                                             -----         -----
Income before income taxes...........         11.7          17.6
Income taxes.........................          4.5           6.7
                                             -----         -----
Net income (loss)....................          7.2%         10.9%
                                             =====         =====

</TABLE> 
 
1997 COMPARED TO 1996

  The Company amended management agreements to affiliate with four oncology
practices in the first quarter of 1997 and entered into new management
agreements with three oncology practices in the first quarter of 1996.  The
results of the new affiliated oncology practices are included in the Company's
operating results from the dates of affiliation.  Changes in results of
operations from the first quarter of 1996 to the first quarter of 1997 were
caused, in part, by affiliations with these oncology practices.

  Revenue.  Revenue for the first quarter of 1997 increased $29.6 million or 73%
over the comparable period of the prior year.  Of the increase in first quarter
revenue, $11.7 million was attributable to the addition of ten new oncology
practices with whom the Company entered into new management agreements after
March 31, 1996.  The remaining increase in revenue of $17.9 million for the
first quarter of 1997 was attributable to the increase in medical practice
revenue for affiliated physician practices with whom the Company entered into
management agreements prior to March 31, 1996.  Revenue for markets under
management in the first quarter of 1996 and 1997 increased 45% over the same
period from the prior year.  The methodology for calculating same market growth
is a change from the same practice growth disclosed in prior periods.  The
Company changed the methodology to more accurately reflect the revenue growth
for a market from period to period as well as the changing structure of new
physician transactions in 1997.  Under the new method, revenue growth for all
practices within a metropolitan service area in which the Company has operations
in both periods is treated as same market growth.  Under the old methodology,
the same practice growth for the first quarter of 1997 over the comparable
period in 1996 would have been a 34% increase in revenue.  The growth in
practice revenue resulted from the recruitment of new physicians, expansion of
services, affiliation with new physician groups, increases in patient volume
and, to a lesser extent, price adjustments for certain physician services.

  Pharmaceuticals and Supplies.  Pharmaceuticals and supplies, which include
drugs, medications and other supplies used by the affiliated physician
practices, for the first quarter ended March 31, 1997 increased $17.2 million or
115% over the comparable prior year peiod.  Of this increase, $6.1 million was
attributable to the addition of ten new oncology practices with whom the Company
entered into new management agreements after March 31, 1996.  The remaining
increase is principally the result of the expansion of services and increase in
patient volume of practices with whom the Company entered into management
agreements prior to March 31, 1996. As a percentage of revenue, pharmaceuticals
and supplies increased to 45.7% in the first quarter of 1997

                                      -12-
<PAGE>
 
Item 2.                AMERICAN ONCOLOGY RESOURCES, INC.
                    Management's Discussion and Analysis of
                 Financial Condition and Results of Operations

from 36.7% in the first quarter of 1996. This increase was primarily due to a
shift in the revenue mix to a higher percentage of drug revenue, the
introduction of a number of new chemotherapy agents and, to a lesser extent,
lower reimbursement from payors. Management expects that third-party payors will
continue to negotiate medical services, pharmaceuticals (including chemotherapy
drugs) and other supplies, with the goal of lowering reimbursement and
utilization rates, and that such lower reimbursement and utilization rates as
well as shifts in revenue mix may continue to reduce the Company's margins with
respect to such items. The Company has adopted a number of strategies to address
this matter, including initiating preferred pharmaceutical relationships.

  Practice Compensation and Benefits. Practice compensation and benefits, which
include the salaries, wages and benefits of the employees of the affiliated
physician practices (excluding affiliated oncologists) and the employees of the
Company who are located at the affiliated physician practice sites, for the
first quarter of 1997 increased $5.1 million or 61% over the comparable prior
year period.  Of the increase for the first quarter of 1997, $2.1 million was
attributable to the addition of ten affiliated oncology practices with whom the
Company entered into new management agreements after March 31, 1996.  As a
percentage of revenue, practice compensation and benefits decreased to 19.1% in
the first quarter of 1997 from 20.5% in the first quarter of 1996.  Decreases in
practice compensation and benefit costs as a percentage of revenue resulted from
economies of scale.

  Other Practice Costs. Other practice costs, which consist of rent, utilities,
repairs and maintenance, insurance and other direct practice costs, for the
first quarter of 1997 increased $2.7 million or 53% over the comparable prior
year period.  Of the increase for the three months ended March 31, 1997, $0.9
million was attributable to the addition of ten affiliated oncology practices
with whom the Company entered into new management agreements after March 31,
1996.  As a percentage of revenue, other practice costs decreased to 10.9% in
the first quarter of 1997 as compared to 12.3% in the same period in 1996.
Decreases in other practice costs as a percentage of revenue resulted from
economies of scale.

  General and Administrative. General corporate expenses for the first quarter
ended March 31, 1997 increased $1.3 million or 45% over the comparable prior
year period.  This increase was primarily attributable to the addition of
personnel and greater support costs associated with the Company's rapid growth
since March 31, 1996.  As a percentage of revenue, general and administrative
expenses decreased to 5.9% in the first quarter of 1997 from 7.1% in the first
quarter of 1996, primarily as a result of economies of scale.

  Depreciation and Amortization. Depreciation and amortization expenses for the
quarter ended March 31, 1997 increased $1.1 million or 60% over the comparable
prior year period.  This increase was primarily the result of amortization of
intangible assets associated with the Company's entering into new and amending
existing management agreements with physician groups.

  Interest.  Net interest expense increased to $1.6 million for the first
quarter of 1997 from $0.5 million in the same period of 1996.  The increase was
primarily attributable to interest expense on borrowings used to fund  cash
consideration and physician debt issued for seventeen medical practice
transactions, including both new and amendments to existing management
agreements, since March 31, 1996.  In the future, management expects that net
interest expense as a percentage of revenue will increase slightly due to
anticipated debt related to medical practice transactions and the development of
integrated cancer centers.

  Income Taxes. For the first quarter of 1997 and 1996, the Company recognized a
tax provision of $3.2 million and $2.7 million, respectively, at estimated
annual effective rates of 38.5% and 38.0%, respectively.   The effective annual
tax rates represent management's best estimate of the tax provision based on the
existing state revenue mix.

                                      -13-
<PAGE>
 
Item 2.                AMERICAN ONCOLOGY RESOURCES, INC.
                    Management's Discussion and Analysis of
                 Financial Condition and Results of Operations

LIQUIDITY AND CAPITAL RESOURCES


  The Company requires capital primarily to enter into new or amended management
agreements with, and to purchase the nonmedical assets of, oncology medical
practices.  During the quarter ended March 31, 1997, the Company paid total
consideration of $29.4 million for the affiliation of four oncology practices
through amending existing management agreements, including cash and transaction
costs of $13.9 million.  During the comparable period of the prior year, the
Company paid $31.3 million for management agreements with physician groups
including cash and transaction costs of $19.4 million.

  To fund this rapid growth and development, the Company has satisfied its
transaction and working capital needs through a recapitalization, private debt
and equity financings, and borrowings under a $150 million syndicated revolving
Credit Facility with First Union.  The Company has relied primarily on
management fees received from its affiliated physician practices to fund
operations.  Cash derived from operations was $12.4 million for the first
quarter of 1997, while cash used in operations in the comparable period of 1996
was $1.5 million.  The increase is due primarily to the operations of the
oncology practices with whom the Company has affiliated since March 31, 1996,
and the effect of the reversal of the accelerated payments made in December 1996
to the affiliated physician groups.

  During the first quarter of 1997, the Company borrowed $32 million under the
Credit Facility to fund medical practice transactions and the purchase of
treasury stock.  Of the 1997 borrowings, $10 million was repaid during the
quarter.   Borrowings under the Credit Facility bear interest at a rate equal to
a rate based on prime rate or the London Interbank Offer Rate, based on a
defined formula.  The Credit Facility contains affirmative and negative
covenants, including the maintenance of certain financial ratios, restrictions
on sales, leases or other dispositions of property, restrictions on other
indebtedness and prohibitions on the payment of dividends.  The Company's
management service agreements, its equity ownership in its subsidiaries and all
other securities owned by the Company (other than treasury shares of the
Company) are pledged as security under the Credit Facility.  The Company is
currently in compliance with the Credit Facility covenants.


  At March 31, 1997, the Company had working capital of $48.0 million and cash
and cash equivalents of $8.6 million.  The Company also had $39.5 million of
current liabilities, including approximately $5.2 million of short term notes
payable and long-term indebtedness maturing before March 31, 1998.  The Company
currently expects that its principal use of funds in the near future will be in
connection with anticipated transactions with affiliated physician groups, the
purchase of medical equipment and the acquisition of real estate for the
development of integrated cancer centers.  The Company expects that the existing
cash and investment balances, cash generated from operations and amounts
available under the Credit Facility will be adequate to satisfy the Company's
cash requirements for the next 12 months.

                                      -14-
<PAGE>
 
PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K

                       AMERICAN ONCOLOGY RESOURCES, INC.

(a)  Exhibits

     Exhibit
     Number    Description
     ------    -----------

      3.1      Articles of Incorporation, as amended

      3.2      By-Laws, as amended

     11        Statement Re - Computation of Per Share Earnings

     27        Financial Data Schedule


(b)    Reports on Form 8-K

  The Company did not file any Reports on Form 8-K during the quarter ended
March 31, 1997.
 

                                      -15-
<PAGE>
 
                                   SIGNATURES

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



Date:  May 12, 1997             AMERICAN ONCOLOGY RESOURCES, INC.

 

                           By:     /s/   R. DALE ROSS
                                ---------------------
                                R. Dale Ross, Chairman of the Board
                                and Chief Executive Officer



 
                           By:     /s/   L. FRED POUNDS
                                -----------------------
                                L. Fred Pounds, Vice President of Finance
                                and Chief Financial Officer

                                      -16-
<PAGE>
 
                       AMERICAN ONCOLOGY RESOURCES, INC.
                                 EXHIBIT INDEX

 


Exhibit Number         Description of Exhibits
--------------         -----------------------

     3.1               Articles of Incorporation, as amended 

     3.2               By-Laws, as amended 

    11                 Statement Re - Computation of Per Share Earnings

    27                 Financial Data Schedule

                                      -17-