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                                                                     EXHIBIT 11




                  MECHANICAL DYNAMICS, INC. AND SUBSIDIARIES
                STATEMENT RE COMPUTATION OF PER SHARE EARNINGS


<TABLE>
<CAPTION>
                                                                         THREE MONTHS ENDED           NINE MONTHS ENDED           
                                                                             SEPTEMBER 30,               SEPTEMBER 30,            
                                                                  ------------------------------  ---------------------------     
   in thousands, except share and per share data                          1997          1996           1997          1996         
 ============================================================================================================================     
   <S>                                                                  <C>            <C>            <C>         <C>             
   PRIMARY EARNINGS PER SHARE:                                                                                                    
    Net income                                                               $649           $713         $1,715       $1,645      
                                                                                                                                  
    Weighted average common shares outstanding                          5,781,991      5,743,222      5,771,036    4,731,997      
    Effect of stock options and warrants                                   60,837        118,880         99,658       76,584      
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     Adjusted shares outstanding                                        5,842,828      5,862,102      5,870,694    4,808,581      
 ----------------------------------------------------------------------------------------------------------------------------     
    Net income per common share                                             $0.11          $0.12          $0.29        $0.34      
 ============================================================================================================================     
                                                                                                                                  
   FULLY DILUTED EARNINGS PER SHARE:                                                                                              
    Net income                                                               $649           $713         $1,715       $1,645      
                                                                                                                                  
    Weighted average common shares outstanding                          5,781,991      5,743,222      5,771,036    4,731,997      
    Effect of stock options and warrants                                   99,658        129,700         99,658      129,700      
 ----------------------------------------------------------------------------------------------------------------------------     
     Adjusted shares outstanding                                        5,881,649      5,872,922      5,870,694    4,861,697      
 ----------------------------------------------------------------------------------------------------------------------------     
    Net income per common share                                             $0.11          $0.12          $0.29        $0.34      
 ============================================================================================================================     
</TABLE>




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