PAGE 1
                                   FORM 10-K
               UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

(X)      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         For the year ended December 31, 1995
                                      OR
( )      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         For the transition period from                    to                
                                        -------------------  -----------------
         Commission file number 1-896
                                -----
                     ALLEGHENY AND WESTERN RAILWAY COMPANY
------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)
       Pennsylvania                                             52-0790328
-------------------------------                           --------------------
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                             Identification No.)

500 Water Street, Jacksonville, FL.                                32202
---------------------------------------                   --------------------
(Address of principal executive offices)                        (Zip Code)

Registrant's telephone number, including area code           (904) 359-3100
                                                          --------------------
Securities registered pursuant to Section 12(b) of the Act:

                                                    Name of each exchange on
      Title of each class                                which registered
-------------------------------                    --------------------------
First Mortgage 4% Bonds due October 1, 1998        The New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None

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 ( )

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.  (X)

State the aggregate market value of the voting stock held by nonaffiliates of
the registrant.  The aggregate market value of the voting stock at March 11,
1996, was $1,030,296, excluding the voting stock held by affiliates of the
registrant.



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         PAGE 2  

Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date.  The registrant has 32,000
shares of common stock, par value $100, outstanding at March 11, 1996.   

The following listed document has been incorporated herein by reference:

Form 10-K filed by CSX Transportation, Inc., on March 8, 1996 - Item 8 of Part
II.

                                    PART I
Item 1.  Business.
            and
Item 2.  Properties.

         Allegheny and Western Railway Company (the "company") is a railroad
incorporated in the Commonwealth of Pennsylvania on January 22, 1898.  It owns
a line of railroad 62 miles long which lies between Punxsutawney and Butler
Junction, Pennsylvania.  Pursuant to leases dated October 1, 1898, and January
15, 1900, between the company and Buffalo, Rochester and Pittsburgh Railway
Company ("BR&P") the company leased its railroad to BR&P for the duration of
the company's corporate existence, at an annual rental equal to 4% on its
bonded debt and 6% on its common stock ($100 par value).  The principal and
interest on the company's bonds are guaranteed by BR&P.

         Under an agreement dated December 15, 1931, as amended, CSX
Transportation, Inc. ("CSXT"), as successor by merger, operated the properties
of BR&P, and incident thereto also operated the properties of the company in
the name and for the account of CSXT without separation or segregation of the
results of such operations.  Under such agreement CSXT agreed to pay all
leased line rentals but did not assume or guarantee payment of the principal
on the bonds.  In addition to the rental paid by CSXT for the payment of the
company's dividends and bond interest, CSXT paid all the expenses of the
company, including all taxes assessed against it.  

         On July 18, 1988, CSXT, BR&P and Buffalo & Pittsburgh Railroad, Inc.
("B&P") entered into certain agreements collectively referred to as the
"Purchase and Sale Agreement" and closed in escrow.  The B&P took possession
and control of operations of the line of railroad of BR&P on July 19, 1988.
The purchase and sale agreement provided that BR&P and CSXT shall assign,
transfer, and convey to B&P all their obligations and duties arising under the
lease agreements.  On October 7, 1991, CSXT, BR&P and B&P executed an
Assignment and Assumption Agreement which concluded the escrow and B&P assumed
all of the terms and conditions of the Purchase and Sale Agreement with the
exception that CSXT would retain its right, title and interest in the 16,159
shares of common stock of the company, being all the stock of the company
owned by CSXT at that time.  As of March 11, 1996, CSXT owned 16,210 shares of
common stock of the company, or 50.65%.

         Since the interest and dividends on the company's bonds and common
stock are paid from moneys obtained from the lessee, reference is made to
CSXT's Form 10-K for the year ended December 29, 1995, a copy of which is
available from Patricia J. Aftoora, Vice President and Corporate Secretary of
CSXT, S/C J-160, 500 Water Street, Jacksonville, FL  32202. 


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         PAGE 3

Item 3.  Legal Proceedings.

            None.

Item 4.  Submission of Matters to a Vote of Security Holders.

            None.

                                    PART II

Item 5.  Market for Registrant's Common Stock and Related Security Holder
         Matters.

         There is no market in which the common stock of the company is
traded.  As of March 11, 1996, there were approximately 167 stockholders of
$100 par value capital stock.  Dividends on the company's capital stock are
guaranteed under the terms of the lease agreement referred to in Items 1 and
2, Business and Properties.





































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         PAGE 4         
Item 6.  Selected Financial Data.

                   and

Item 7.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations.

            Five year selected data:

                        1995        1994        1993        1992        1991
                     ----------  ----------  ----------  ---------- ----------
Rental income        $  328,730  $  328,730  $  326,290  $  326,290 $  326,310
Interest on funded
  debt                   78,600      78,600      75,920      75,920     75,940
Federal income taxes     58,130      58,130      58,130      58,130     58,130
                     ----------  ----------  ----------  ---------- ----------
Earnings for the
  year               $  192,000  $  192,000  $  192,240  $  192,240 $  192,240
                     ==========  ==========  ==========  ========== ==========
Weighted average
  number of common
  shares (a)             32,000      32,000      32,040      32,040     32,040
                     ==========  ==========  ==========  ========== ==========

Earnings per
  common share (a)   $     6.00  $     6.00  $     6.00  $     6.00 $     6.00
                     ==========  ==========  ==========  ========== ==========

Dividends per 
  common share (a)   $     6.00  $     6.00  $     6.00  $     6.00 $     6.00
                     ==========  ==========  ==========  ========== ==========

Total assets         $6,834,324  $6,834,324  $6,834,324  $6,834,324 $6,834,324
                     ==========  ==========  ==========  ========== ==========

Long term debt       $1,965,000  $1,965,000  $1,965,000  $1,965,000 $1,965,000
                     ==========  ==========  ==========  ========== ==========

(a)      Calculations include shares held directly by CSXT.

Item 8.   Financial Statements and Supplementary Data.

         Due to the nature of CSXT's obligations under the lease agreement
referred to in Items 1 and 2, Business and Properties, financial statements
and notes thereto in response to this item are not included herein.  In lieu
thereof, the financial statements and notes included in the Form 10-K filed on
behalf of CSXT on March 8, 1996, are incorporated herein by reference.


Item 9.   Changes in and Disagreements with Accountants on the Accounting and
          Financial Disclosures.

         None.



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         PAGE 5      
                                   PART III

Item 10.  Directors and Executive Officers of the Registrant:

         The following sets forth certain information relating to the
company's directors and executive officers as of March 11, 1996.  Directors
are elected annually and serve until the next annual meeting of stockholders
or until their successors are elected.  Officers are elected annually at the
annual meeting of the Board and hold office until the next annual meeting of
the Board or until their successors are elected.  There are no arrangements or
understandings between any director or executive officer and any other person
pursuant to which the director or officer was selected.  There are no family
relationships among these officers and directors.


Name, Age, Present
Position with the             Business Experience during last 5 Years,
    Company                   Company Directorships in Public Corporations
------------------            --------------------------------------------
GERALD L. NICHOLS, 60         President of the company since March 1, 1995 and
President and Director        Senior Vice President of the company prior
                              thereto.  Mr. Nichols has served in various
                              executive capacities for certain CSXT affiliates 
                              during the past five years and is currently      
                              Executive Vice President and Chief Operating
                              Officer of CSXT.

P. MICHAEL GIFTOS, 49         Senior Vice President of the company since      
Senior Vice President         1990.  During the past five years, Mr. Giftos
and Director                  has served as an executive officer of CSX        
                              Corporation ("CSX") and certain CSX affiliates   
                              and is currently Senior Vice President and       
                              General Counsel of CSXT.

CARL N. TAYLOR, 56            Senior Vice President of the company since
Senior Vice President         since June 5, 1995.  Mr. Taylor has been
and Director                  been an officer of certain CSXT affiliates       
                              during the past five years and is currently      
                              Senior Vice President-Engineering and Mechanical 
                              of CSXT.

MICHAEL J. WARD, 45           Senior Vice President of the company since June
Senior Vice President         5, 1995.  During the past five years, Mr. Ward
and Director                  has served as an officer of certain CSXT
                              affiliates and is currently Senior Vice
                              President-Finance of CSXT.

PATRICIA J. AFTOORA, 56       Vice President of the company since 1990 and
Vice President,               Corporate Secretary of the company prior
Corporate Secretary           thereto.  Mrs. Aftoora has served as an officer
and Director                  of CSX and certain CSX affiliates during the     
                              the past five years and is currently Vice        
                              President and Corporate Secretary of CSXT.



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         PAGE 6 

Name, Age, Present
Position with the                 Business Experience during last 5 Years,
    Company                       Company Directorships in Public Corporations
------------------                -------------------------------------------
C.J.O. WODEHOUSE, JR., 48         Vice President and Controller of the company
Vice President and                since June 5, 1995.  Mr. Wodehouse has
Controller                        served as an officer of CSX and certain of   
                                  its affiliates during the past five years    
                                  and is currently Vice President and
                                  Controller of CSXT.

M. MAURICE LAZENBY, III, 52       Assistant Vice President and Treasurer of
Assistant Vice President          the company since June 5, 1995.  Mr. Lazenby
and Treasurer                     has served as an officer of certain CSXT
                                  affiliates during the past five years and    
                                  is currently Assistant Vice President and    
                                  Treasurer of CSXT.

         There have been no events under any bankruptcy act, no criminal
proceedings, orders, judgments, decrees or injunctions material to the
evaluation of the ability and integrity of any director or executive officer
during the past five years.

Item 11.  Executive Compensation

         All directors and officers of the company are also officers and
employees of CSXT, and serve without compensation from the company.




























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         PAGE 7       

Item 12.  Security Ownership of Certain Beneficial Owners and Management

         As of March 11, 1996, 50.65% of the voting securities of the company
(16,210 shares of $100 par value capital stock) were beneficially held by
CSXT, who, in turn, is beneficially owned by CSX Corporation (CSX), Richmond,
VA, through ownership of 100% of CSXT's outstanding voting securities.  

         As of March 11, 1996, all directors and officers of the company as a
group (7 persons) beneficially owned 875,105 shares of $1 par value common
stock of CSX, (including 414,560 shares exercisable under option within 60
days), representing less than 1% of the outstanding shares.  The number of CSX
shares owned by each director as of March 11, 1996, is set forth below:


                                                       Number of
                               Number of             shares of CSX
                             shares of CSX         exercisable within
                          beneficially owned       60 days under stock
          Name         as of March 11, 1996 (1)(2)    option plans 
          ----         --------------------------- -------------------

    P. J. Aftoora                 63,794                  39,055
    P. M. Giftos                 157,127                  79,196
    G. L. Nichols                235,110                  88,734
    C. N. Taylor                 187,923                 103,843
    M. J. Ward                   106,242                  48,800

      (1)   Includes shares pledged to secure loans under the CSX 1991 Stock
            Purchase and Loan Plan, which shares were acquired under that
            plan.

      (2)   Includes shares held in trust under certain deferred compensation
            plans.

Item 13.  Certain Relationships and Related Transactions.

         None.


















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         PAGE 8     
                                        PART IV

Item 14.  Exhibits, Financial Statement Schedules and
          Reports on Form 8-K.

        (a)   1.  Financial Statements.

                  Refer to response to Item 8 on page 4.

              2.  Financial Statement Schedules

                  Refer to response to Item 8 on page 4.


              3.  Exhibits

                  (3.1) Articles of Incorporation incorporated herein by
                        reference to Registrant's Form 12 Application for
                        Registration, filed on May 13, 1935.

                  (3.2) By-laws of the company incorporated herein by
                        reference to Form 10-K Annual Report for year ended
                        December 31, 1994, filed on March 30, 1995.

                  (23)  Consent of Independent Auditors (See page I-1).

      
        (b)  Reports on Form 8-K   

                 No reports on Form 8-K were filed for the 
                 three-month period ended December 31, 1995.

























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         PAGE 9

         Pursuant to the requirements of Section 13 or 15(d) 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, on the 26th day
of March, 1996.

                              ALLEGHENY AND WESTERN RAILWAY COMPANY

                              /s/ GREGORY R. WEBER
                              --------------------------------------
                              Gregory R. Weber
                              (Principal Accounting Officer)

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

/s/Gerald L. Nichols               President and Director
------------------------           (Principal Executive Officer)
   Gerald L. Nichols*  

/s/P. Michael Giftos               Senior Vice President, General Counsel
------------------------           and Director
   P. Michael Giftos*         

/s/Carl N. Taylor                  Senior Vice President and Director
------------------------
   Carl N. Taylor*

/s/Michael J. Ward                 Senior Vice President and Director
------------------------           (Principal Finance Officer)
   Michael J. Ward*    

/s/Patricia J. Aftoora             Vice President, Corporate Secretary
------------------------           and Director                    
   Patricia J. Aftoora*

/s/C.J.O. Wodehouse, Jr.           Vice President and Controller    
-------------------------
   C.J.O. Wodehouse, Jr.*



/s/ Patricia J. Aftoora
------------------------
Patricia J. Aftoora                                          March 26, 1996
*(Attorney-in-Fact)









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