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 SEPTEMBER 30, 1998

                                       OR

  [   ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(D)  OF  THE
         SECURITITES  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        (I.R.S. EMPLOYER
             OF INCORPORATION OR             IDENTIFICATION NO.)
                 ORGANIZATION)
         ----------------------------        -------------------

                       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 NOVEMBER 5, 1998,  THE  REGISTRANT  HAD  48,920,835  SHARES OF COMMON
STOCK  OUTSTANDING  OR TO  BE  DELIVERED  ON  FUTURE  DATES  FOR  NO  ADDITIONAL
CONSIDERATION. OF THIS AMOUNT, 32,694,724 SHARES WERE OUTSTANDING AND 16,226,111
SHARES WERE TO BE DELIVERED ON FUTURE DATES FOR NO ADDITIONAL CONSIDERATION.

<PAGE>
                        AMERICAN ONCOLOGY RESOURCES, INC.
                                    FORM 10-Q
                               SEPTEMBER 30, 1998

                                TABLE OF CONTENTS

                                                                         PAGE NO
                                                                         -------

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       12

         ITEM  3.    QUANTITATIVE AND QUALITATIVE 
                     DISCLOSURES ABOUT  MARKET  RISK                          17

PART  II. OTHER  INFORMATION
          ITEM  2.   CHANGES  IN  SECURITIES                                  18
          ITEM  6.   EXHIBITS  AND  REPORTS  ON  FORM  8-K                    18

          SIGNATURES                                                          19

                                        2
<PAGE>
PART  I.  FINANCIAL  INFORMATION
ITEM  1.  CONDENSED  CONSOLIDATED  FINANCIAL  STATEMENTS

<TABLE>
<CAPTION>
                                AMERICAN ONCOLOGY RESOURCES, INC.
                              CONDENSED CONSOLIDATED BALANCE SHEET
                       (IN THOUSANDS, EXCEPT PAR VALUE AND SHARE AMOUNTS)

                                                                        SEPTEMBER 30,  DECEMBER 31,
                                                                            1998          1997
                                                                        -------------  ------------
                                                                        (UNAUDITED)
                               ASSETS
Current assets:
<S>                                                                        <C>         <C>
  Cash and equivalents                                                     $   1,080   $   5,000
  Accounts receivable                                                        122,099      92,038
Prepaids and other current assets                                             15,595      10,149
  Due from affiliated physician groups                                         4,612       7,904
                                                                           ----------  ---------
    Total current assets                                                     143,386     115,091
Property and equipment, net                                                   48,782      38,564
Management service agreements, net of amortization of $23,529 and $15,589    340,916     326,295
Other assets                                                                   4,408       3,943
                                                                           ----------  ---------
                                                                           $ 537,492   $ 483,893
                                                                           ==========  =========

                LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Short-term notes payable                                                 $       -   $  14,011
  Current maturities of long-term indebtedness                                12,553       8,628
  Accounts payable                                                            30,262      38,870
  Due to affiliated physician groups                                           7,241         289
  Accrued compensation costs                                                   3,924       2,783
  Accrued interest payable                                                     3,709       2,804
  Income taxes payable                                                         3,798           8
  Other accrued liabilities                                                    9,455       3,834
                                                                           ----------  ---------
  Total current liabilities                                                   70,942      71,227
Deferred income taxes                                                         14,448       8,956
Long-term indebtedness                                                       165,567     139,716
                                                                           ----------  ---------
  Total liabilities                                                          250,957     219,899
                                                                           ----------  ---------
Stockholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized, none issued
     and outstanding                                                               -           -
Series A Preferred Stock, $.01 par value, 500,000 shares authorized and
     Reserved, none issued and outstanding                                         -           -
Common stock, $.01 par value, 80,000,000 shares authorized, 32,691,922
     and 29,721,754 shares issued, 31,670,422 and 29,721,754 shares
     outstanding                                                                 327         297
Additional paid-in capital                                                   151,195     138,381
Common stock to be issued, 16,326,127 and 17,937,752 shares                   72,571      74,757
Treasury stock, 1,021,500 shares                                             (10,328)          -
Retained earnings                                                             72,770      50,559
                                                                           ----------  ---------
  Total stockholders' equity                                                 286,535     263,994
                                                                           ----------  ---------
                                                                           $ 537,492   $ 483,893
                                                                           ==========  =========
</TABLE>

          THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
                                        3
<PAGE>
<TABLE>
<CAPTION>
                                  AMERICAN ONCOLOGY RESOURCES, INC.
                           CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                             (UNAUDITED)

                                                        THREE MONTHS               NINE MONTHS
                                                     ENDED SEPTEMBER 30,       ENDED SEPTEMBER 30,
                                                    1998          1997         1998         1997
                                                 -----------  ------------  -----------  -----------
<S>                                              <C>          <C>           <C>          <C>
Revenue                                          $  118,263   $    82,293   $  330,826   $  232,214 
Operating expenses:
  Pharmaceuticals and supplies                       54,051        37,066      149,694      105,206 
  Practice compensation and benefits                 22,158        15,702       62,445       43,761 
  Other practice costs                               13,158         8,604       38,021       24,928 
  General and administrative                          7,100         5,692       19,803       15,639 
       Depreciation and amortization                  6,832         3,716       16,196       10,064 
                                                 -----------  ------------  -----------  -----------
                                                    103,299        70,780      286,159      199,598 
                                                 -----------  ------------  -----------  -----------
Income from operations                               14,964        11,513       44,667       32,616 
Other income (expense):
  Interest income                                        65            74          141          250 
  Interest expense                                   (3,016)       (2,232)      (8,984)      (5,965)
                                                 -----------  ------------  -----------  -----------
Income before income taxes                           12,013         9,355       35,824       26,901 
Income taxes                                          4,565         3,445       13,613       10,200 
                                                 -----------  ------------  -----------  -----------
Net income                                       $    7,448   $     5,910   $   22,211   $   16,701 
                                                 ===========  ============  ===========  ===========
Net income per share - basic                     $     0.15   $      0.13   $     0.46   $     0.37 
                                                 ===========  ============  ===========  ===========
Shares used in per share calculations - basic        48,630        45,651       48,440       45,237 
                                                 ===========  ============  ===========  ===========

Net income per share - diluted                   $     0.15   $      0.12   $     0.44   $     0.35 
                                                 ===========  ============  ===========  ===========
                                                     49,926        48,275       50,052       48,032 
Shares used in per share calculations - diluted  ===========  ============  ===========  ===========
</TABLE>

          THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
                                        4
<PAGE>
<TABLE>
<CAPTION>
                                             AMERICAN ONCOLOGY RESOURCES, INC.
                                 CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                                      (IN THOUSANDS)
                                                        (UNAUDITED)

                                                               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, 1997                29,722  $      297  $ 138,381  $   74,757   $        -   $  50,559  $ 263,994 
Medical practice transactions-value
of 472  shares to be issued                      -           -          -       3,982            -           -      3,982 
Purchase of 1,022 shares of Treasury Stock
                                                 -           -          -           -      (10,328)          -    (10,328)
Delivery of 2,083 shares from issuance
 of Common  Stock                            2,083          21      6,147      (6,168)           -           -          - 
Exercise of options to purchase
Common  Stock                                  887           9      2,366           -            -           -      2,375 
Tax benefit from exercise of non-
qualified stock options                          -           -      4,301           -            -           -      4,301 
Net Income                                       -           -          -           -            -      22,211     22,211 
                                            ------  ----------  ---------  -----------  -----------  ---------  ----------
Balance at September 30, 1998               32,692  $      327  $ 151,195  $   72,571   $  (10,328)  $  72,770  $ 286,535 
                                            ======  ==========  =========  ===========  ===========  =========  ==========
</TABLE>

          THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
                                        5
<PAGE>
<TABLE>
<CAPTION>
                               AMERICAN ONCOLOGY RESOURCES, INC.
                         CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                         (IN THOUSANDS)
                                          (UNAUDITED)
                                                                               NINE MONTHS
                                                                          ---------------------
                                                                            ENDED SEPTEMBER 30,
                                                                          ---------------------
                                                                             1998       1997
                                                                          ----------  ---------
<S>                                                                       <C>         <C>
Cash flows from operating activities:
  Net income                                                              $  22,211   $ 16,701 
  Noncash adjustments:
    Depreciation and amortization                                            16,196     10,064 
    Deferred income taxes                                                     5,492      4,121 
  Cash provided (used), net of effects of medical practice
   transactions, by changes in:
    Accounts receivable                                                     (27,560)   (15,819)
    Prepaids and other current assets                                        (5,409)    (1,018)
    Other assets                                                             (1,088)         9 
    Accounts payable                                                         (9,592)    10,493 
    Due from/to affiliated physician groups                                  10,564      8,361 
    Income taxes receivable/payable                                           8,092        767 
    Other accrued liabilities                                                 6,698       (518)
                                                                          ----------  ---------

          Net cash provided by operating activities                          25,604     33,161 
                                                                          ----------  ---------

Cash flows from investing activities:
  Acquisition of property and equipment                                     (17,278)   (14,171)
  Net payments in medical practice transactions                             (14,310)   (23,632)
  Other                                                                       1,266          - 
                                                                          ----------  ---------

          Net cash used in investing activities                             (30,322)   (37,803)
                                                                          ----------  ---------

Cash flows from financing activities:
  Proceeds from credit facility                                              31,000     51,000 
  Repayments of credit facility                                              (4,000)   (31,000)
  Repayments of other indebtedness                                          (19,015)    (8,642)
  Purchases of Treasury Stock                                                (9,562)    (6,418)
  Proceeds from exercise of stock options                                     2,375          - 
  Net proceeds from issuance of common stock                                      -        562 
                                                                          ----------  ---------

          Net cash provided by financing activities                             798      5,502 
                                                                          ----------  ---------

Increase (decrease) in cash and equivalents                                  (3,920)       860 
Cash and equivalents:
  Beginning of period                                                         5,000      3,429 
                                                                          ----------  ---------
  End of period                                                           $   1,080   $  4,289 
                                                                          ==========  =========

Interest paid                                                             $   8,079   $  5,652 
Taxes paid                                                                      189      5,340 

Noncash transactions:
  Tax benefit from exercise of non-qualified stock options                $   4,301   $  1,300 
  Value of Common Stock to be issued in medical practice transactions         3,982      8,221 
  Delivery of Common Stock to be issued in medical practice transactions      6,168      6,278 
  Debt issued in medical practice transactions                                7,780     14,995 
  Treasury stock purchases subsequently settled                                 766          - 
</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 that are normal and recurring in nature and 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 10-K
filed with the Securities and Exchange Commission on March 23, 1998.

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          NINE MONTHS
                                        ENDED SEPTEMBER 30,   ENDED SEPTEMBER 30,
                                         1998       1997       1998       1997
                                       ---------  ---------  ---------  ---------
<S>                                    <C>        <C>        <C>        <C>
Medical service revenue                $ 156,203  $ 108,570  $ 435,873  $ 306,309
Amounts retained by medical practices     37,940     26,277    105,047     74,095
                                       ---------  ---------  ---------  ---------
Revenue                                $ 118,263  $  82,293  $ 330,826  $ 232,214
                                       =========  =========  =========  =========
</TABLE>

                                        7
<PAGE>
NOTE  3  -  MEDICAL  PRACTICE  TRANSACTIONS

During the first nine months of 1998, the Company affiliated with eight oncology
practices  and  acquired  two radiation oncology centers.  During the first nine
months of 1997, the Company affiliated with eight medical oncology practices and
two  radiation  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        NINE MONTHS
                            ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
                              1998      1997      1998      1997
                            --------  --------  --------  --------
<S>                         <C>       <C>       <C>       <C>
Cash and transaction costs  $  4,739  $    677  $ 14,310  $ 23,632
Liabilities assumed              283       398     1,255     3,202
Issuance of short-term and
      subordinated notes       2,742       602     7,780    14,995
Common Stock to be issued        723       242     3,982     8,221
                            --------  --------  --------  --------
                            $  8,487  $  1,919  $ 27,327  $ 50,050
                            ========  ========  ========  ========
</TABLE>

In conjunction with the medical practice transactions occurring since inception,
the Company is contingently obligated to pay up to an additional $1.3 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  probable.  Any  payment  made  will  be  allocated  as  an
intangible asset and amortized accordingly.

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

When  the Company affiliates with an oncology practice, it records an intangible
asset for the excess of transaction consideration over the value of the tangible
assets  acquired.  Effective  July  1, 1998, the Company changed its policy with
respect  to  amortization  of  its  intangible  assets.  All existing and future
intangible  assets  will be amortized over a period not to exceed 25 years.  Had
this  policy been adopted as of January 1, 1997, amortization expense would have
increased  by  approximately  $2.7  million and $3.2 million for the nine months
ended  September  30,  1998  and  1997,  respectively.  Applying  the  Company's
historical tax rate, diluted earnings per share would have been reduced by $0.03
and  $0.04  for the nine months ended September 30, 1998 and 1997, respectively.
See  discussion  at  Part  I,  Item  2,  Management's Discussion and Analysis of
Financial  Condition  and  Results of Operations, under the caption, "Results of
Operations."

For transactions completed through September 30, 1998, the scheduled issuance of
the  shares  of  Common  Stock that the Company is committed to deliver over the
passage  of  time  is  857,168  in  1998,  5,238,554 in 1999, 5,491,960 in 2000,
1,768,236  in  2001,  2,025,918  in  2002 and 944,291 thereafter.  Although such
shares  are  not  yet  issued  or  outstanding,  such  shares  are considered as
outstanding  for  the  purpose  of  earnings  per  share  calculations.

NOTE  4  -  CAPITALIZATION

As  part  of  affiliating  with  medical  practices  as 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.

During  the  first  nine months of 1998, options to purchase 1,008,500 shares of
Common  Stock  at  $11.63  to  $15.67 per share were granted under the Company's
various  stock  option plans, 483,000 of which was granted to executive officers
and  directors.  During  the  first  nine  months  of  1998, options to purchase
886,720  shares  of Common Stock at $1.34 to $11.81 per share were exercised, of
which  820,800  were  exercised by executive officers and directors.  During the
first  nine  months  of 1998, options to purchase 219,450 shares of Common Stock
were  canceled.  At September 30, 1998, there were options to purchase 5,611,484
shares  of  Common  Stock  outstanding  under the Company's various stock option
plans  at  exercise  prices  of  $1.34  to  $24.18  per  share.

In October 1998, the Company completed its repurchase of 3,000,000 shares of the
Company's  Common  Stock  as  authorized by the Board of Directors on August 13,
1996.  From  August  1998  through  September  1998,  the  Company  repurchased
1,021,500  shares  of Common Stock, at a weighted average price of $10.11, to be
held  as  treasury stock.  1,767,500 shares of Common Stock were repurchased and
issued  in  connection  with medical practice transactions and exercise of stock
options  during  1997.  The  remaining  211,000  shares  of  Common  Stock  were
repurchased  during  October  1998.

Effective May 14, 1998, the stockholders of the Company approved an amendment to
the  Company's Key Employee Stock Option Plan ("Plan") to increase the number of
shares  available  for  grants  under  the  Plan to 10% from 7% of the Company's
outstanding  Common  Stock  (including  shares  to be issued at future specified
dates).  In  addition,  effective  May  14,  1998,  the  Company's  stockholders
approved  amendments  to  the  Company's Non-Employee Director Stock Option Plan
(the  "Director  Plan"): (i) providing for a grant to each non-employee director
who  has  not  previously  been  elected  by  the  stockholders  to the Board of
Directors,  at  the  time of his or her election, of an option to purchase 5,000
shares  of  the Company's Common Stock, at a price determined in accordance with
the  Director  Plan; (ii) increasing the amount of the automatic annual grant to
each  other  non-employee director from an option to purchase 2,000 shares to an
option  to  purchase  3,000 shares, at a price determined in accordance with the
Director  Plan;  and (iii) providing for an additional automatic annual grant to
each  non-employee director of an option to purchase 1,000 shares for each Board
committee  to  which  such  director  is  appointed.

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

NOTE  5  -  INDEBTEDNESS

Short-term  notes  payable

Short-term  notes  payable  bear  interest at 7% and have original maturities of
less  than  one year.  The notes are payable to affiliated physicians and relate
to  medical  practice  transactions.

<TABLE>
<CAPTION>
Long-term  indebtedness
Long-term  indebtedness  consists  of  the  following  (in  thousands):

                                  SEPTEMBER 30,  DECEMBER 31,
                                        1998       1997
                                  -------------  ------------
<S>                                  <C>         <C>
Subordinated notes                   $  83,088   $ 80,710 
Credit facility                         93,000     66,000 
Capital lease obligations and other      2,032      1,634 
                                     ----------  ---------
                                       178,120    148,344 
Less current maturities                (12,553)    (8,628)
                                     ----------  ---------
                                     $ 165,567   $139,716 
                                     ==========  =========
</TABLE>

Subordinated  Notes

The  subordinated  notes  are issued in substantially the same form in different
series  and  are payable to affiliated physicians and relate to medical practice
transactions.  Substantially  all of the notes outstanding at September 30, 1998
and  December  31,  1997  bear interest at 7% per annum, are due in installments
through 2005 and are subordinated to senior bank and certain other debt.  If the
Company fails to make a payment under any of the notes, the respective physician
group  can  terminate  the  related  management  services  agreement  for cause.

Credit  Facility

The  Company  has  a  loan agreement and revolving credit/term facility ("Credit
Facility")  with  First  Union National Bank ("First Union") individually and as
Agent  for twelve additional lenders ("Lenders").  Under the terms of the Credit
Facility,  the  amount  available for borrowings is $150 million through October
31,  2002.  Borrowings  under the Credit Facility may be used to finance medical
group  transactions,  provide  working  capital  or  for other general corporate
purposes.  At  September 30, 1998, the Company had an outstanding balance of $93
million  under the Credit Facility.  The Company has classified this facility as
long-term  due  to  its ability and intent to maintain the borrowings beyond the
next  twelve  months.

Borrowings  under the Credit Facility are secured by all securities owned by the
Company,  including  all  capital  stock  of the Company's subsidiaries, and all
management  service  agreements.  At the Company's option, funds may be borrowed
at  the  Base  interest  rate or the London Interbank Offer Rate (LIBOR) plus an
amount  determined  under a defined formula.  The Base rate is selected by First
Union  and  is  defined  as  their  prime  rate or Federal Funds Rate plus 1/2%.
Interest  on  amounts  outstanding under Base rate loans is due quarterly, while
interest  on  LIBOR  related loans is due at the end of each applicable interest
period  or  quarterly,  if  earlier.

The  Company is  subject to  restrictive  covenants  under the Credit  Facility,
including the  maintenance  of certain  financial  ratios.  The Credit  Facility
limits  certain  activities  such as additional  indebtedness,  sales of assets,
investments, capital expenditures, mergers and consolidations and the payment of
dividends. Under certain circumstances, additional medical practice transactions
may require First Union's and the Lenders'  consent.  At September 30, 1998, the
Company was in compliance with all applicable debt covenants. Derivatives

Derivatives

As  of August 31, 1998, the Company entered into an interest rate swap agreement
with  a  financial institution to reduce the impact of changes in interest rates
on its floating rate debt.  The agreement effectively fixed the interest rate on
floating rate debt at a rate of 5.93% per annum for notional principal amount of
$80.0  million  through  August  30,  1999.  The  notional  amount  of  the swap
agreement  is  used  to  measure  interest  to  be paid or received and does not
represent the amount of exposure to credit loss.  The use of this swap agreement
had  an insignificant impact on interest expense for the quarter and nine months
ended  September  30,  1998.  As  of  September 30, 1998, the effective weighted
average  interest  rate  on  all outstanding draws under the Credit Facility was
6.0%.

Master  Lease

In  December 1997, the Company entered into a $75 million master lease agreement
related  to  integrated cancer centers that the lessor thereunder may construct.
Under  the  agreement,  the  lessor  purchases  the  properties,  pays  for  the
construction  costs  and  thereafter  leases the facilities to the Company.  The
initial  term  of  the  lease  is  for five years and can be renewed in one-year
increments  if  approved  by  the  lessor.  The  lease  provides for substantial
residual value guarantees and includes purchase options at original cost on each
option.

NOTE  6  -  EARNINGS  PER  SHARE

During  1997,  the  Company  adopted  the  provisions  of  Financial  Accounting
Standards Board (FASB) Statement No. 128, "Earnings Per Share," (FAS 128), which
requires the Company to disclose "basic" and "diluted" earnings per share and to
restate  all  prior periods presented for comparative purposes.  The Company has
restated  all  prior periods presented to comply with the provisions of FAS 128.

The  computation  of  basic  earnings  per  share is based on a weighted average
number  of  Common Stock and Common Stock to be issued shares outstanding during
the  periods.  The  computation  of the diluted earnings per share is based on a
weighted  average  number  of  Common Stock and Common Stock to be issued shares
outstanding  during  the  periods as well as all dilutive potential Common Stock
calculated  under  the  treasury  stock  method.

                                        10
<PAGE>
                       AMERICAN ONCOLOGY RESOURCES, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
                                   (unaudited)

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

<TABLE>
<CAPTION>
                                                THREE MONTHS ENDED  NINE MONTHS ENDED
                                                    SEPTEMBER 30,     SEPTEMBER 30,
<S>                                               <C>      <C>      <C>      <C>
Basic                                               1998     1997     1998     1997 
                                                  -------  -------  -------  -------
     Outstanding at end of period:
Common Stock                                      32,692   29,014   32,692   29,014 
Common Stock to be issued                         16,326   16,815   16,326   16,815 
       Treasury Stock                             (1,022)       -   (1,022)       - 
                                                  -------  -------  -------  -------
                                                  47,996   45,829   47,996   45,829 
     Effect of weighting                             634     (178)     444     (592)
                                                  -------  -------  -------  -------
       Shares used in per share calculations      48,630   45,651   48,440   45,237 
                                                  =======  =======  =======  =======
Diluted
     Outstanding at end of period:
Common Stock                                      32,692   29,014   32,692   29,014 
Common Stock to be issued                         16,326   16,815   16,326   16,815 
       Treasury Stock                             (1,022)       -   (1,022)       - 
                                                  -------  -------  -------  -------
                                                  47,996   45,829   47,996   45,829 
     Effect of weighting and assumed conversions
       of dilutive stock options                   1,930    2,446    2,056    2,203 
                                                  -------  -------  -------  -------
       Shares used in per share calculations      49,926   48,275   50,052   48,032 
                                                  =======  =======  =======  =======
</TABLE>

NOTE  7  -  RECENT  PRONOUNCEMENTS

Effective   April  1,  1998,  the  Company   adopted  FASB  Statement  No.  130,
"Comprehensive Income," which establishes standards for reporting and display of
comprehensive  income  and  its  components  in a full  set  of  general-purpose
financial  statements.  In  addition  to net  income,  comprehensive  income  is
comprised  of "other  comprehensive  income,"  which  includes  all  charges and
credits to equity  that are not the result of  transactions  with  owners of the
Company's  Common Stock. Net income and  comprehensive  income were the same for
the quarter and the nine months ended September 30, 1998.

In  June  1998,  the  FASB  issued Statement No. 133, "Accounting for Derivative
Instruments  and  Hedging  Activities,"  which  is  effective  for the Company's
financial  statements  as  of  and  for the year ending December 31, 2000.  This
statement  requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at  fair  value.  Management  expects  to  implement this Statement for the year
ended  December  31,  2000  and  does  not  expect such implementation to have a
material  effect  on  the  Company's  operations.

In June 1997, the FASB issued Statement No. 131,  "Disclosures About Segments of
an  Enterprise  and Related  Information,"  which is effective for the Company's
financial  statements  as of and for the year ending  December  31,  1998.  This
Statement requires  reporting of summarized  financial results for the operating
segments as well as establishes standards for related disclosures about products
and  services,   geographic  areas  and  major  customers.   Primary  disclosure
requirements  include total segment  revenues,  total segment profit or loss and
total segment assets.  The Company is evaluating the impact of this Statement on
its current  reporting  and expects to adopt the new standard for its year ended
December 31, 1998.

                                       11
<PAGE>
                        AMERICAN ONCOLOGY RESOURCES, INC.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

INTRODUCTION

American  Oncology  Resources,   Inc.  (the  "Company")  provides  comprehensive
management services to its affiliated oncology practices,  including operational
and clinical  research  services and data management,  and furnishes  personnel,
facilities,  supplies and equipment.  These affiliated practices provide a broad
range of medical  services to cancer  patients,  integrating  the specialties of
medical oncology, hematology,  radiation oncology, diagnostic radiology and stem
cell  transplantation.  Substantially  all of the Company's  revenue consists of
management fees and includes all medical practice  operating costs for which the
Company is contractually responsible.

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 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 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 cancer 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, (v) negotiating and expanding managed
care  relationships  and  (vi) expanding the clinical research operations of the
affiliated  physician  groups.  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 cancer 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. Forward-looking statements often include
words  like  "believe", "plan", "expect", "intend" or "estimate".  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 (including results of
operations impacted by changes in cancer therapies or the manner in which cancer
care  is  delivered),  the ability to construct integrated cancer centers and to
operate  them  profitably,  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  Annual Report on Form 10-K for the year ended
December  31,  1997  and  subsequent  filings  with  the Securities and Exchange
Commission for a more detailed discussion of such risks and uncertainties.  Many
of  these risks and uncertainties are beyond the Company's ability to control or
predict.  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, the Company has grown rapidly
from  managing  six  affiliated  physicians  in  one  state  to  350  affiliated
physicians  in  18  states  as of September 30, 1998.  For the nine months ended
September  30,  1998,  as  well  as the first nine months of 1997, no affiliated
physician  group  contributed  more  than 10% of the Company's revenue.  For the
first  nine  months  of  1998, the payor mix of the affiliated physician groups'
medical  practice  revenue,  expressed as a percentage, was 33% for Medicare and
Medicaid,  48%  for managed care and 19% for private insurance and other payors.
For  the  first  nine  months of 1997, the payor mix of the affiliated physician
groups'  medical  practice  revenue,  expressed  as  a  percentage,  was 33% for
Medicare  and  Medicaid, 47% for managed care, and 20% for private insurance and
other  payors.

                                       12
<PAGE>
                        AMERICAN ONCOLOGY RESOURCES, INC.
     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
                            OF OPERATIONS - CONTINUED

When affiliating with an oncology group, the Company records an intangible asset
for  the  excess  of  transaction consideration over the value of the nonmedical
tangible  assets  acquired.  In  response  to recent action taken and viewpoints
expressed  by  certain  financial  and  regulatory  organizations  regarding the
amortization  periods  used  by  the physician practice management industry as a
whole,  the Company has changed the amortization period of its intangible assets
from  40 to 25 years on a prospective basis beginning July 1, 1998.  This change
resulted  in an increase of amortization expense charged against earnings in the
quarter ended September 30, 1998.  Had this policy been adopted January 1, 1997,
amortization expense would have increased by approximately $2.7 million and $3.2
million  for  the  nine  months ended September 30, 1998 and 1997, respectively.
Applying  the  Company's  historical  tax rate, diluted earnings per share would
have  been  reduced  by  $0.03 and $0.04 for the nine months ended September 30,
1998  and  1997,  respectively.  This  adjustment  does not reflect in any way a
change  in  management's  estimate  of  the  value  and expected duration of its
relationships  with its physician groups.  This change in estimate has no impact
on  cash flow or earnings before interest, taxes, depreciation and amortization.

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        NINE MONTHS
                                 ENDED SEPTEMBER 30,  ENDED SEPTEMBER 30,
                                       1998    1997    1998    1997
                                      ------  ------  ------  ------
<S>                                   <C>     <C>     <C>     <C>
Revenue                               100.0%  100.0%  100.0%  100.0%
                                      ------  ------  ------  ------
Operating expenses:
  Pharmaceuticals and supplies         45.7    45.0    45.2    45.3 
  Practice compensation and benefits   18.7    19.1    18.9    18.8 
  Other practice costs                 11.1    10.5    11.5    10.7 
  General and administrative            6.0     6.9     6.0     6.8 
  Depreciation and amortization         5.8     4.5     4.9     4.3 
  Net interest expense                  2.5     2.6     2.7     2.5 
                                      ------  ------  ------  ------
       Income before income taxes      10.2    11.4    10.8    11.6 
Income taxes                            3.9     4.2     4.1     4.4 
                                      ------  ------  ------  ------
       Net income                       6.3%    7.2%    6.7%    7.2%
                                      ======  ======  ======  ======
</TABLE>

1998  COMPARED  TO  1997

The  Company  affiliated  with  eight  and ten oncology groups in the first nine
months  of  1998  and  1997,  respectively.  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 nine
months  of  1997  to  the  first  nine  months  of 1998 were caused, in part, by
affiliations  with these oncology practices.  Same market growth, as used in the
following  discussion  of  revenue,  consists of revenue growth for all oncology
practices within a metropolitan service area in which the Company has operations
in  both  periods.

     Revenue.  Revenue in the third quarter of 1998 increased $36.0 million,  or
43.7%,  to $118.3  million  from  $82.3  million in the same  period  last year.
Revenue for the first nine months of 1998 increased by $98.6 million,  or 42.5%,
over the  comparable  prior year period.  Same market  growth in 1998  increased
$23.8 million,  or 29%, for the third quarter and $65.4 million, or 28%, for the
first nine months  over the same  periods  from the prior year.  This growth was
primarily the result of expansion of services,  increases in patient  volume and
recruitment of or affiliation  with additional  physicians.  The remaining $12.2
million for the third  quarter  and $33.2  million for the first nine months was
primarily attributable to affiliations with oncology practices in new markets.

                                       13
<PAGE>
                        AMERICAN ONCOLOGY RESOURCES, INC.
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                             OPERATIONS - CONTINUED

     Pharmaceuticals and Supplies.  Pharmaceuticals and supplies,  which include
drugs,  medications and other supplies used by the affiliated  physician groups,
increased  $17.0  million,  or 45.8%,  to $54.1 million for the third quarter of
1998 from  $37.1  million  for the third  quarter of 1997.  Pharmaceuticals  and
supplies  increased $44.5 million,  or 42.3%,  for the first nine months of 1998
over the comparable  period of the prior year.  These increases were principally
attributable  to  the  same  factors  that  caused  revenue  to  increase.  As a
percentage of revenue,  pharmaceuticals  and supplies increased to 45.7% for the
third  quarter of 1998 from 45.0% in 1997 and  decreased  to 45.2% for the first
nine  months of 1998 from  45.3% in the first  nine  months of 1997.  Management
expects that  third-party  payors will continue to negotiate  the  reimbursement
rate for 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  adversely  impact the  Company's  margins  with respect to such
items.  The Company has adopted a number of  strategies  to address this matter,
including   maintaining   and  improving   existing   preferred   pharmaceutical
relationships  and  initiating  new  ones;  however,  the  Company  can  give no
assurance  that these  strategies  will  continue to be successful in mitigating
future increases in drug costs.

     Practice  Compensation  and  Benefits.  Practice compensation and benefits,
which  include  the  salaries,  wages  and  benefits of the affiliated physician
groups'  employees (excluding affiliated physicians) and the Company's employees
who are located at the affiliated physician practice sites and business offices,
increased  $6.5 million, or 41.1%, to $22.2 million in the third quarter of 1998
from  $15.7  million  in  the  third quarter of 1997.  Practice compensation and
benefits  increased  $18.7  million, or 42.7%, for the first nine months of 1998
over  the  comparable  period for the prior year.  This increase was principally
attributable  to  the  same  factors  that  caused  revenue  to  increase.  As a
percentage  of revenue, practice compensation and benefits decreased to 18.7% in
the  third  quarter and increased to 18.9% for the first nine months of 1998, as
compared  to  19.1%  and  18.8% in the comparable periods of 1997.  The decrease
from  third  quarter  1997  is  primarily  the  result  of  economies  of scale.

     Other  Practice  Costs.  Other  practice  costs,  which  consist  of  rent,
utilities,  repairs  and maintenance, insurance and other direct practice costs,
increased  $4.6 million, or 52.9%, to $13.2 million in the third quarter of 1998
from  $8.6  million  in  the  third  quarter of 1997.  For the nine months ended
September  30,  1998, practice costs increased $13.1 million, or 52.5%, over the
comparable  prior year period. Such increase was principally attributable to the
same factors that caused revenue to increase.  As a percentage of revenue, other
practice  costs increased to 11.1% from 10.5% for the third quarter and to 11.5%
from  10.7%  for  the  first  nine months of 1998 and 1997, respectively.  These
increases  are  attributable to increased stem cell and radiation revenue, which
have associated direct costs for third-party services and equipment maintenance,
respectively,  that  are  included  in  other  practice  costs.

     General  and  Administrative.  General  corporate  expenses  increased $1.4
million,  or  24.7%,  to  $7.1  million  in  the third quarter of 1998 from $5.7
million  in  the  third  quarter  of  1997.  General and administrative expenses
increased  $4.2  million,  or  26.6%, for the first nine months of 1998 over the
comparable  period  of  1997.  This  increase  was primarily attributable to the
addition  of  personnel  and greater support costs associated with the Company's
rapid  growth  since  September  1997.  As  a percentage of revenue, general and
administrative  expenses  were 6.0% for the third quarter and 6.0% for the first
nine months of 1998, down from 6.9% and 6.8% in the third quarter and first nine
months  of  1997,  respectively.  Such  decreases  were  primarily the result of
economies  of  scale.

     Depreciation  and  Amortization.   Depreciation  and  amortization  expense
increased $3.1 million,  or 83.9%,  to $6.8 million in the third quarter of 1998
from $3.7 million in the third quarter of 1997. For the nine-month  period ended
September 30, 1998,  depreciation  and amortization  increased $6.1 million,  or
60.9%, over the comparable prior year period. This increase was primarily due to
the change in  amortization  periods  mentioned  above, as well as the result of
amortization of intangible assets associated with the Company's affiliating with
physician  groups,   investments  in  equipment,   leasehold   improvements  and
management information systems. Management expects depreciation and amortization
to increase in future periods due to planned  affiliations with physician groups
and investments in management information systems.

                                       14
<PAGE>
                        AMERICAN ONCOLOGY RESOURCES, INC.
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                             OPERATIONS - CONTINUED

     Interest.  Net  interest  expense  increased  $800,000,  or  36.7%, to $3.0
million  in the third quarter of 1998 from $2.2 million in the second quarter of
1997.  Interest  expense  increased  $3.0  million, or 50.6%, for the first nine
months  of  1998  over  the comparable period in 1997.  These increases were the
result  of  higher  levels of debt, principally incurred to finance transactions
with  thirteen  oncology  groups  since  September 30, 1997.  As a percentage of
revenue,  net  interest  expense was 2.5% for the third quarter and 2.7% for the
first  nine  months  of 1998 compared to 2.6% and 2.5% for the third quarter and
first  nine  months of 1997, respectively.  Indebtedness to physicians was $83.1
million  and  $73.6  million  at  September  30,  1998  and  1997, respectively.

     Income  Taxes. Income tax expense increased from the prior year as a result
of  the  Company's  increased profitability.  For the first nine months of 1998,
the  Company  recognized  a  tax  provision  of  $13.6  million  resulting in an
effective  tax  rate  of 38.0% as compared to 37.9% for the first nine months of
1997.

LIQUIDITY  AND  CAPITAL  RESOURCES

The Company requires capital primarily to enter into management agreements with,
and  to  purchase  the  nonmedical  assets  of,  medical  and radiation oncology
practices.  During  the  first  nine  months  of  1998,  the  Company paid total
consideration  of  $27.3  million, including cash and transaction costs of $14.3
million,  in connection with affiliations with seven medical oncology groups and
one  radiation  oncology  group  and  the  acquisition of two radiation oncology
centers.  During the comparable period of the prior year, the Company paid total
consideration  of  $50.1  million, including cash and transaction costs of $23.6
million,  for  affiliations  with  ten  physician  groups.

To  fund  its  recent  growth  and  development,  the  Company has satisfied its
transaction  and  working  capital needs through borrowings under a $150 million
syndicated  revolving  credit  facility  ("Credit  Facility")  with  First Union
National  Bank, ("First Union"), as agent for the various lenders.  In addition,
as  part of the Credit Facility, the Company has recently obtained a $75 million
end-loaded  leasing facility, related to integrated cancer centers.  The Company
has  relied  primarily on management fees received from its affiliated physician
groups  to  fund  its  operations.

During the first nine months of 1998, the Company borrowed $27.0 million, net of
$4.0 million in reductions,  under the Credit Facility to fund medical  practice
transactions and the development of integrated cancer centers.  Borrowings under
the Credit  Facility bear interest at a rate equal to a rate based on prime rate
or LIBOR, 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   services   agreements  and  the  capital  stock  of  the  Company's
subsidiaries are pledged as security under the Credit  Facility.  The Company is
currently in compliance with the Credit Facility covenants.

Cash  provided by operations was $25.6 million in the first nine months of 1998,
a  decrease  of $7.6 million from the same period of 1997.  The decrease was due
to  an  increase  in  accounts  receivable  from revenue growth, the deferral of
certain  annual fourth quarter payments into the first quarter of 1998 and, to a
lesser  extent,  working  capital for new product lines.  Cash used in investing
activities  was  $30.3  million  in  the  nine  months  ended September 30, 1998
compared  to  $37.8  million  for  the  same period of the previous year.   This
decrease  is  attributable to a higher level of medical practice transactions in
1997, as mentioned above.  Such decrease was  partially offset by an increase in
capital expenditures over the prior year.  Cash provided by financing activities
was  $800,000  for the first nine months of 1998 compared to $5.5 million in the
previous  year.  Such  decrease  is  primarily due to one-time payments in 1998,
totaling  $14.0 million for short-term notes payable issued in connection with a
certain  medical  practice  transaction.

At September  30,  1998,  the Company had net working  capital of $72.4  million
compared to $43.9  million at December 31, 1997.  Such increase is due primarily
to an increase in revenue  combined with a decrease in short-term notes payable.
The  Company  also  had  $70.9   million  of  current   liabilities,   including
approximately $12.6 million of long-term  indebtedness maturing before September
30, 1999. The Company's debt to total  capitalization was 38.3% at September 30,
1998 compared to 38.1% at December 31, 1997.

                                       15
<PAGE>
                        AMERICAN ONCOLOGY RESOURCES, INC.
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                             OPERATIONS - CONTINUED

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  Company  expects  that  the existing cash and investment balances,
cash  generated from operations and borrowing capacity under the Credit Facility
will  be adequate to satisfy the Company's cash requirements for the next twelve
months.  The  Company  is  currently studying various alternatives to expand its
current  credit  capacity  and finance its growth beyond the next twelve months.
Although  the  Company  currently  believes  it  will  be  able  to  secure such
financing,  it  can  give  no  assurance  that  it  will  be able to obtain such
financing  on terms as favorable as the current terms under the Credit Facility.

YEAR  2000  ISSUE

General
-------

The  "Year  2000  problem"  describes computer programs that use two rather than
four  digits  to define the applicable year, and thus cannot distinguish between
the  year  1900  and the year 2000.  These programs are present in the Company's
computer  systems and are incorporated into equipment.  Certain of the Company's
computer  hardware and software, building infrastructure components (e.g., alarm
systems  and  HVAC  systems)  and  medical equipment (e.g., linear accelerators,
which are used to provide radiation therapy) that are date sensitive may contain
programs  with  the Year 2000 problem.  If uncorrected, the problem could result
in  computer  system  and  program  failure or equipment malfunctions that could
disrupt  business  operations  or  affect  patient  treatment.

Project
-------

The  Company's   Year  2000  Project  is  divided  into  four  major   sections:
applications  software, equipment,  customers and suppliers.  The Company's Year
2000 Project  includes  education,  inventory and assessment of  applications at
risk,  analysis and planning,  testing and correction of each of these sections.
The Company's strategy also includes development of contingency plans to address
potential disruption of operations arising from the Year 2000 problem.

Applications  Software
----------------------

The   Company   recognizes   that   investment   in   information   systems  and
state-of-the-art  medical equipment is integral to its operations.  The majority
of the  Company's  technology  expenditures  for 1998 and  1999  relates  to the
development  and  implementation  of  a  clinical  information  system  that  is
currently being tested in one of the Company's affiliated practices. This system
provides an interactive  electronic  format for capturing the entire spectrum of
care that a patient  receives and creates an  electronic  medical  record.  This
system  does not replace  any  existing  systems and is believed to be Year 2000
compliant.  The majority of the costs related to the implementation are expected
to be capitalized and amortized over the life of the asset.

In 1994, the Company began a project to replace the existing practice management
systems  (billing  and  collection  systems)  with a common  system  to  improve
efficiency and consistency  among its affiliated  practices.  The Company made a
strategic  decision  in  1997 to  utilize  a  common  vendor  for  the  clinical
information and practice management systems.  This practice management system is
being tested in one of the affiliated practices and will begin to be implemented
in the first quarter of 1999. The system is believed to be Year 2000  compliant,
and the majority of the costs related to the  implementation  are expected to be
capitalized  and amortized  over the life of the asset.  Any remaining  practice
management  systems not replaced by the new system during the first half of 1999
are expected to be Year 2000  compliant by March 1999. The Company will complete
the testing of these systems in its Year 2000 test facility by June 1999.  Costs
to upgrade the practice  management systems that are not converted to the common
vendor but are upgraded  under the existing  vendor would be expensed;  however,
such costs are not expected to be material.

In  1996,  the  Company's   management   incorporated  a  business  strategy  to
accommodate the rapid growth of its  operations.  One component of this strategy
was the investment in developing an integrated  financial system  throughout its
network of affiliated  physicians.  This financial system is Year 2000 compliant
and has been  implemented in two locations.  The Company intends to complete the
implementation  of this  financial  system  throughout its network of affiliated
physicians by mid-1999.  The costs incurred to date in developing such financial
system have been capitalized through the initial implementation date.

                                       16
<PAGE>
                        AMERICAN ONCOLOGY RESOURCES, INC.
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                             OPERATIONS - CONTINUED

The  Company  relies almost entirely on purchased applications systems.  Through
software  maintenance  agreements  with  the  respective  vendors, these systems
continue to be updated and supported after their purchase.  Due to this strategy
and  a  reliance  on industry standard query/reporting packages, the Company has
not  engaged  in  any  significant  in-house  system  development  projects.

Equipment
---------

The Company has reviewed the Year 2000 readiness of the linear  accelerators and
associated  equipment  and systems  used in the  affiliated  radiation  oncology
practices with its vendors who have certified that,  with minor upgrades,  these
systems will be Year 2000  compliant.  These systems will be upgraded during the
first quarter of 1999. The Company is in the process of evaluating the Year 2000
compliance of other clinical equipment at this time and expects to complete this
process by January 1999. Any such costs to upgrade equipment will be expensed.

Customers
---------

The Company bills and collects for medical  services  from numerous  third party
payors  in  operating  its  business.   These  third  parties   include   fiscal
intermediaries  that process  claims and make payments on behalf of the Medicare
program as well as insurance companies,  HMO's and other private payors. As part
of the Company's Year 2000 strategy, a comprehensive survey has been sent to all
significant  payors to assess their  timeline for Year 2000  compliance  and the
impact to the Company of any  potential  interruptions  in services or payments.
The Company is working to accumulate the results by December 31, 1998.

Vendors
-------

The  Company is currently evaluating third party vendors of medical supplies and
pharmaceuticals  in  order to determine whether their services and products will
be  interrupted  or  malfunction  due  to  the Year 2000 problem.  The Company's
pharmaceuticals  purchase ordering system is a proprietary system developed by a
third  party vendor and is utilized under the Company's purchasing contract with
such  vendor.  This relationship has been identified and prioritized as the most
critical  in the vendor evaluation process.  The third party vendor is currently
upgrading  its  pharmaceuticals  purchase  ordering  system  at  no  cost to the
Company.  The  upgraded  software  is  expected  to  be  certified  as Year 2000
compliant  by  the  vendor  and  is  scheduled  for implementation by the second
quarter  of  1999.

Risks
-----

The  failure  to  correct  a  material  Year  2000  problem  could  result in an
interruption   in,  or  failure  of,  certain  normal  business   activities  or
operations.  Such failures could  materially and adversely  affect the Company's
results of  operations,  liquidity and financial  condition.  Due to the general
uncertainty  inherent  in the Year  2000  problem,  resulting  in part  from the
uncertainty of the Year 2000  readiness of third-party  suppliers and customers,
the Company is unable to determine at this time whether the consequences of Year
2000  failures  will  have  a  material  impact  on  the  Company's  results  of
operations,  liquidity or financial condition. The Year 2000 Project is expected
to significantly  reduce the Company's level of uncertainty  about the Year 2000
problem and, in particular,  about the Year 2000 compliance and readiness of its
material  customers.  The Company believes that, with the  implementation of new
business systems and completion of the Project as scheduled,  the possibility of
significant interruptions of normal operations should be reduced.

Costs
-----

The  Company  believes  that  the Year 2000 - related remediation costs incurred
through  1998  have not been material to its results of operations.  The Company
is  not  yet  able  to  reasonably  estimate  the total costs to be incurred for
completion of its Year 2000 strategy.  Some replacements and upgrades would take
place  in  the  normal  course  of  business.

The  foregoing  assessment  is  based  on information currently available to the
Company.  The  Company  can provide no assurance that applications and equipment
that  the  Company  believes  to  be  Year  2000  compliant  will not experience
problems.  Failure by the Company or third parties on which it relies to resolve
Year 2000 problems could have a material adverse effect on the Company's results
of  operations.

ITEM  3.   QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

Inapplicable. 

                                       17
<PAGE>
                        AMERICAN ONCOLOGY RESOURCES, INC.

PART  II.   OTHER  INFORMATION
ITEM  2.   CHANGES  IN  SECURITIES

In  connection  with  each  affiliation  transaction  between  the Company and a
physician group, the Company purchases the nonmedical assets of, and enters into
a  long-term  management agreement with, that physician group.  In consideration
for  that  arrangement,  the  Company  typically  pays cash, issues subordinated
promissory notes (in general, payable in equal installments on the third through
seventh  anniversaries  of  the closing date at an annual interest rate of seven
percent)  and unconditionally agrees to deliver shares of Common Stock at future
specified dates (in general, on each of the third through fifth anniversaries of
the  closing  date).

The  following  table  describes  all  unregistered  sales by the Company of the
Company's  securities  during  the  first  nine months of 1998.  Each sale was a
private  placement made in connection with a physician transaction, as described
in  general  in  the  preceding  paragraph.  The  overwhelming  majority  of the
affiliated  physicians are accredited investors.  No underwriter was involved in
any  such  sale, and no commission or similar fee was paid with respect thereto.
Each  sale  was  not  registered under the Securities Act of 1933 in reliance on
Section  4(2)  of  such  Act  and  Rule  506  enacted  thereunder.

<TABLE>
<CAPTION>
                                           Number of Shares of   Aggregate Principal
Date of Transaction  Number of Physicians    Common Stock (1)      Amount of Notes
-------------------  --------------------  --------------------  --------------------
<S>                  <C>                   <C>                   <C>
3/98                                    3                61,276  $          1,140,000
3/98                                    6               115,758             1,504,000
5/98                                    6               111,923               778,000
6/98                                    1                16,824               300,000
6/98                                    2                39,077               549,000
6/98                                    1                 6,320                     -
7/98                                    1                20,058               251,000
8/98                                    3                41,136               901,000
9/98                                    1                88,250             1,689,000
<FN>
1)     In  connection  with each affiliation transaction, the Company unconditionally
agrees  to  deliver  shares  of  Common  Stock  at  specified  future  dates.
</TABLE>

ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)     Exhibits

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

        3.1     Certificate  of  Incorporation,  as  amended  (incorporated  by
                reference from  Form  10-Q for the period  ended June 30, 1997)

        3.2     By-Laws, as amended (incorporated  by  reference from Form 10-Q
                for the  period  ended   June  30,  1997)

        4.1     Rights  Agreement  between  the  Company  and  American  Stock
                Transfer  & Trust  Company  (incorporated  by  reference  from
                Form 8-A filed June 2, 1997)

        11      Statement  Re  -  Computation  of  Per  Share  Earnings

        27      Financial  Data  Schedule


(b)     Reports  on  Form  8-K

      During  the  third  quarter  of 1998, the Company did not file any Current
Reports  on  Form  8-K.

                                       18
<PAGE>
                        AMERICAN ONCOLOGY RESOURCES, INC.





                                   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:  November  13,  1998             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

                                       19
<PAGE>
                        AMERICAN ONCOLOGY RESOURCES, INC.
                                EXHIBIT  INDEX


Exhibit Number  Description  of  Exhibits
--------------  -------------------------
   3.1          Certificate of Incorporation, as amended (incorporated by
                reference from Form 10-Q for the period ended June 30, 1997)

   3.2          By-Laws,  as  amended  (incorporated by reference from Form
                10-Q for the period  ended  June  30,  1997)

   4.1          Rights Agreement between the Company and American Stock
                Transfer & Trust Company  (incorporated  by  reference  from
                Form  8-A  filed  June  2,  1997)

   11           Statement  Re  -  Computation  of  Per  Share  Earnings
   27           Financial  Data  Schedule

                                       20
<PAGE>