==========================================================================
                                
                          UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                                
                            FORM 10-Q


      [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934

        For the quarterly period ended September 30, 1997
                                
                               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 0-9722
                                
                                
                        INTERGRAPH CORPORATION
     ------------------------------------------------------
     (Exact name of registrant as specified in its charter)
                                
          Delaware                                  63-0573222
-------------------------------      ------------------------------------
(State or other jurisdiction of      (I.R.S. Employer Identification No.)
incorporation or organization)

       Intergraph Corporation
        Huntsville, Alabama                             35894-0001
---------------------------------------                ------------
(Address of principal executive offices)                (Zip Code)

                            (205) 730-2000
                         --------------------
                          (Telephone Number)


Indicate by check mark whether the registrant (1) has filed  all
reports  required  to be filed by Section 13  or  15(d)  of  the
Securities Exchange Act of 1934 during the preceding  12  months
(or for such shorter period that the registrant was required  to
file  such  reports), and (2) has been subject  to  such  filing
requirements for the past 90 days.   YES  X   NO


   Common stock, par value  $.10 per share:  48,062,854 shares
              outstanding as of September 30, 1997


==========================================================================
                                
                                
                                
                     INTERGRAPH CORPORATION
                            FORM 10-Q
                       September 30, 1997
                                
                              INDEX



                                                                  Page No.
                                                                  -------- 

PART I.  FINANCIAL INFORMATION
          ---------------------

   Item 1.  Financial Statements
            --------------------       
                    
            Consolidated Balance Sheets at September 30, 1997 
                and December 31, 1996                                 2

            Consolidated Statements of Operations for the 
            quarters ended September 30, 1997 and 1996                3

            Consolidated Statements of Operations for the nine
            months ended September 30, 1997 and 1996                  4

            Consolidated Statements of Cash Flows for the nine
            months ended September 30, 1997 and 1996                  5

            Notes to Consolidated Financial Statements              6 - 9

   Item 2.  Management's Discussion and Analysis of Financial 
            Condition and Results of Operations                    10 - 18


PART II.  OTHER INFORMATION
          -----------------

   Item 1.  Legal Proceedings                                      19 - 20

   Item 6.  Exhibits and Reports on Form 8-K                          20


SIGNATURES                                                            21


PART I.   FINANCIAL INFORMATION
          ---------------------
                                
                  INTERGRAPH CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
                                (Unaudited)

---------------------------------------------------------------------------
                                               September 30,   December 31,
                                                   1997           1996
---------------------------------------------------------------------------
(In thousands except share and per share amounts)

Assets
  Cash and cash equivalents                      $ 38,829       $ 50,674
  Accounts receivable, net                        304,321        326,117
  Inventories                                     102,868         89,411
  Other current assets                             36,948         37,718
---------------------------------------------------------------------------
      Total current assets                        482,966        503,920

  Investments in affiliates                        13,997         19,102
  Other assets                                     56,011         59,106
  Property, plant, and equipment, net             153,005        174,219
---------------------------------------------------------------------------
      Total Assets                               $705,979       $756,347
===========================================================================

Liabilities and Shareholders' Equity
  Trade accounts payable                         $ 57,878       $ 51,205
  Accrued compensation                             51,672         50,364
  Other accrued expenses                           68,395         72,798
  Billings in excess of sales                      56,038         62,869
  Short-term debt and current maturities 
    of long-term debt                              26,311         35,880
---------------------------------------------------------------------------
      Total current liabilities                   260,294        273,116

  Deferred income taxes                             5,944          6,204
  Long-term debt                                   51,696         29,764
---------------------------------------------------------------------------
      Total liabilities                           317,934        309,084
---------------------------------------------------------------------------

  Shareholders' equity:
   Common stock, par value $.10 per share -
     100,000,000 shares authorized;
     57,361,362 shares issued                       5,736          5,736
   Additional paid-in capital                     227,005        229,675
   Retained earnings                              290,177        339,679
   Unrealized holding gain on securities 
     of affiliate                                     ---          6,858
   Cumulative translation adjustment                  681          6,049
---------------------------------------------------------------------------
                                                  523,599        587,997
   Less - cost of 9,298,508 treasury shares at
     September 30, 1997 and 9,656,295 treasury 
     shares at December 31, 1996                 (135,554)      (140,734)
---------------------------------------------------------------------------
      Total shareholders' equity                  388,045        447,263
---------------------------------------------------------------------------
      Total Liabilities and Shareholders' Equity $705,979       $756,347
===========================================================================
The accompanying notes are an integral part of these consolidated 
financial statements.
                                

                  INTERGRAPH CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Unaudited)
                                

---------------------------------------------------------------------------
Quarter Ended September 30,                        1997           1996
---------------------------------------------------------------------------
(In thousands except per share amounts)

Revenues 
  Systems                                        $199,720       $185,310
  Maintenance and services                         82,347         91,003
---------------------------------------------------------------------------
    Total revenues                                282,067        276,313
---------------------------------------------------------------------------

Cost of revenues
  Systems                                         131,258        117,210
  Maintenance and services                         49,632         56,102
---------------------------------------------------------------------------
    Total cost of revenues                        180,890        173,312
---------------------------------------------------------------------------

    Gross profit                                  101,177        103,001

Product development                                23,991         26,563
Sales and marketing                                61,637         60,482
General and administrative                         25,106         25,325
---------------------------------------------------------------------------

    Loss from operations                         (  9,557)      (  9,369)

Interest expense                                 (  1,805)      (  1,318)
Gains on sales of investments in affiliates         4,858            316
Other income (expense) - net                     (    682)      (  3,559)
---------------------------------------------------------------------------

    Loss before income taxes                     (  7,186)      ( 13,930)

Income taxes                                          ---            ---
---------------------------------------------------------------------------

    Net loss                                    $(  7,186)     $( 13,930)
===========================================================================

    Net loss per share                          $(    .15)     $(    .29)
===========================================================================

Weighted average shares outstanding                48,006         47,243
===========================================================================

The accompanying notes are an integral part of these consolidated 
financial statements.
                                
                                
                  INTERGRAPH CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Unaudited)
                                
---------------------------------------------------------------------------
Nine Months Ended September 30,                     1997           1996    
---------------------------------------------------------------------------
(In thousands except per share amounts)

Revenues
  Systems                                         $568,646      $523,409
  Maintenance and services                         254,788       277,776
---------------------------------------------------------------------------
    Total revenues                                 823,434       801,185
---------------------------------------------------------------------------

Cost of revenues
  Systems                                          368,996       335,691
  Maintenance and services                         156,536       165,722
---------------------------------------------------------------------------
    Total cost of revenues                         525,532       501,413
---------------------------------------------------------------------------

    Gross profit                                   297,902       299,772

Product development                                 75,121        77,812
Sales and marketing                                186,858       189,936
General and administrative                          75,916        72,879
Nonrecurring operating charge                        1,095           ---
---------------------------------------------------------------------------

    Loss from operations                          ( 41,088)     ( 40,855)

Interest expense                                  (  4,652)     (  3,723)
Arbitration award                                 (  6,126)         ---
Gains on sales of investments in affiliates          4,858         9,689
Other income (expense) - net                      (  2,494)     (    611)
---------------------------------------------------------------------------

    Loss before income taxes                      ( 49,502)     ( 35,500)

Income taxes                                           ---           ---
---------------------------------------------------------------------------

    Net  loss                                    $( 49,502)    $( 35,500)
===========================================================================

    Net loss per share                           $(   1.03)    $(    .75)
===========================================================================

Weighted average shares outstanding                 47,885        47,046
===========================================================================

The accompanying notes are an integral part of these consolidated 
financial statements.
                                
                                
                  INTERGRAPH CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (Unaudited)

---------------------------------------------------------------------------
Nine Months Ended September 30,                     1997           1996
---------------------------------------------------------------------------
(In thousands)

Cash Provided By (Used For):
Operating Activities:
  Net loss                                       $(49,502)      $(35,500)
  Adjustments to reconcile net loss to net
  cash provided by (used for) operating activities:
    Depreciation and amortization                  46,192         57,569
    Arbitration award                               5,835            ---
    Gains on sales of investments in affiliates   ( 4,858)       ( 9,689)
    Net changes in current assets and liabilities (12,008)       (   778)
---------------------------------------------------------------------------
    Net cash provided by (used for) operating 
      activities                                  (14,341)        11,602
---------------------------------------------------------------------------

Investing Activities:
  Purchase of property, plant, and equipment      (17,872)       (23,974)
  Capitalized software development costs          ( 7,149)       (12,093)
  Proceeds from sales of division and 
    investments in affiliates                       5,749         10,077
  Other                                           ( 1,165)       (   605)
---------------------------------------------------------------------------
    Net cash used for investing activities        (20,437)       (26,595)
---------------------------------------------------------------------------

Financing Activities:
  Gross borrowings                                 39,078         11,439
  Debt repayment                                  (22,381)       (17,715)
  Proceeds of employee stock purchases and 
    exercise of stock options                       2,419          2,970
---------------------------------------------------------------------------
    Net cash provided by (used for) 
      financing activities                         19,116        ( 3,306)
---------------------------------------------------------------------------
Effect of exchange rate changes on cash             3,817            487
---------------------------------------------------------------------------
Net decrease in cash and cash equivalents         (11,845)       (17,812)
Cash and cash equivalents at beginning of period   50,674         56,407
---------------------------------------------------------------------------
Cash and cash equivalents at end of period        $38,829        $38,595
===========================================================================

The accompanying notes are an integral part of these consolidated 
financial statements.
                                

                  INTERGRAPH CORPORATION AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: In  the  opinion  of  management,  the  accompanying
        unaudited  consolidated financial statements  contain  all
        adjustments   (consisting  of  normal   recurring   items)
        necessary  for  a  fair presentation of  results  for  the
        interim periods presented.

        Certain   reclassifications  have   been   made   to   the
        previously  reported consolidated statements of operations
        and  cash  flows  for the quarter and  nine  months  ended
        September  30,  1996  to  provide comparability  with  the
        current period presentation.


NOTE 2: Bentley  Systems,  Inc.  Arbitration.   As   further
        described in the Company's Form 10-K filing for  its  year
        ended  December 31, 1996, the Company has  been  party  to
        certain  arbitration  proceedings with  its  approximately
        50%-owned  affiliate,  Bentley Systems,  Inc.  (BSI),  the
        developer  and  owner of MicroStation, a software  product
        utilized  in  many of the Company's software  applications
        and  for  which  the  Company  serves  as  a  nonexclusive
        distributor.  In May 1997, the Company received notice  of
        the  adverse  determination of an  arbitration  proceeding
        with  BSI  in which the Company had alleged that  BSI  had
        inappropriately   and   without   cause    terminated    a
        contractual  arrangement with the Company,  and  in  which
        BSI  had  filed a counterclaim against the Company seeking
        significant  damages  as  the  result  of  the   Company's
        alleged  failure  to  use best efforts  to  sell  software
        support  services  pursuant to terms  of  the  contractual
        arrangement  terminated  by BSI.  The  arbitrator's  award
        against the Company was in the amount of $6,126,000  ($.13
        per  share).   This  charge  is included  in  "Arbitration
        award"  in  the  consolidated statement of operations  for
        the   nine   months  ended  September   30,   1997.    The
        arbitration award did not materially impact the  Company's
        cash   position,  as  approximately  $5,800,000  in   fees
        otherwise owed the Company by BSI were offset against  the
        amount   awarded   BSI.   In  addition,  the   contractual
        arrangement  that was the subject of this arbitration  has
        been  terminated  effective  with  the  award  and,  as  a
        result,  the  Company  will no  longer  sell  the  related
        software  support  services  under  this  agreement.   The
        Company  and  BSI have entered into a new agreement  which
        establishes  single  support  services  between  the   two
        companies.    The  Company  believes  that   neither   the
        arbitration   related  change  in  BSI  software   support
        services  or its new agreement with BSI relative  to  such
        services  will  have a material impact  on  the  Company's
        financial  position, results of operations, or cash  flows
        in future periods.

        The  Company  has  one  other  arbitration  proceeding  in
        process  related  to its business relationship  with  BSI.
        The  Company is vigorously defending its positions in that
        proceeding,  but  at  present is  unable  to  predict  its
        outcome.  See  "Management's Discussion and Analysis"  and
        "Part  II., Item 1., Legal Proceedings" included  in  this
        Form  10-Q and the Company's Form 10-K for the year  ended
        December  31,  1996 for further details of  the  Company's
        business    relationship   with   BSI,   its   sales    of
        MicroStation, and the financial effects on the Company  of
        changes in this business relationship.
  
        Zydex,  Inc. Litigation.  The Company filed a legal action
        in  August  1995,  seeking to dissolve  and  wind  up  its
        business   arrangement  with  Zydex,  Inc.  ("Zydex"),   a
        company  with which it jointly developed its plant  design
        application  software  product  ("PDS"),  and  seeking  an
        order  allowing  the Company to continue the  business  of
        that   arrangement   without  further  responsibility   or
        obligation   to  Zydex.   In  response,  Zydex   filed   a
        counterclaim   against  the  Company  in  November   1995,
        alleging    wrongful   dissolution   of    the    business
        relationship and seeking both sole ownership  of  PDS  and
        significant compensatory and punitive damages.

        In  April  1997, the parties agreed to settle the dispute,
        but  failed  to agree on certain terms of the  settlement.
        In  September  1997, the court issued an  order  resolving
        the  disputed  issues and requiring the parties  to  close
        the  settlement agreement, and dismissed  the  case.   The
        settlement  includes the purchase of 100% of Zydex  common
        stock  by Intergraph for $24,750,000, with $8,250,000  due
        at  closing  of  the  agreement and the  remaining  amount
        payable  over  a  24 month period.  The  deferred  payment
        portion  of  the  total purchase price  is  secured  by  a
        subordinate interest in the PDS intellectual property  and
        by  an  irrevocable  letter of  credit  in  favor  of  the
        current  owner  of Zydex.  Interest on the  unpaid  amount
        will accrue at a rate of 1% less than the rate charged  by
        Intergraph's primary lender.  The current owner  of  Zydex
        will  retain  certain limited rights to use  PDS  products
        for a period of 15 years following the date of closing.

        In  November  1997, a hearing was held  during  which  the
        judge  ordered both parties to sign the closing documents.
        Such  documents  have been executed by both  parties,  but
        Zydex has indicated they may appeal the judge's order.   A
        formal  closing  of  the  transaction  has  to  date   not
        occurred,  but  the Company believes the transaction  will
        close  on  substantially the terms described  above.   The
        Company  will  not record the settlement in its  books  of
        account  until  the date of closing.  When  recorded,  the
        purchase price of Zydex stock will be recorded as a  long-
        term  asset  and amortized over the remaining useful  life
        of  the PDS product, currently estimated at 10 years.  Had
        the   closing  occurred  November  1,  1997,  the  Company
        estimates  its total cash outlay to Zydex would have  been
        approximately  $14,000,000,  all  of  which  was   to   be
        obtained   from   the  Company's  primary   lender.    See
        "Liquidity    and   Capital   Resources"    included    in
        Management's  Discussion and Analysis in  this  Form  10-Q
        for discussion of the Company's liquidity.
  
        The  Company's sales of PDS products during the first nine
        months   of   1997  and  for  the  full  year  1996   were
        approximately $34 million and $36 million, respectively.


NOTE 3: Inventories are stated at the lower of  average  cost
        or market and are summarized as follows:
       
       ------------------------------------------------------
                             September 30,       December 31,
                                  1997             1996
       ------------------------------------------------------
       (In thousands)
       
       Raw materials           $ 28,644            $26,601
       Work-in-process           39,568             24,008
       Finished goods            12,692             12,945
       Service spares            21,964             25,857
       ------------------------------------------------------
       Totals                  $102,868            $89,411
       ======================================================

NOTE 4: Property,  plant,  and  equipment  -  net   includes
        allowances   for   depreciation   of   $288,466,000    and
        $307,536,000 at September 30, 1997 and December 31,  1996,
        respectively.


NOTE 5: In   first  quarter  1997,  the  Company   sold   an
        unprofitable  business unit to a third party.   The  total
        loss  on  the  sale  was $8,100,000, of  which  $7,000,000
        ($.15   per   share)  had  been  recorded  as   an   asset
        revaluation  in  fourth quarter 1996.  The remaining  loss
        of  $1,100,000  ($.02 per share) was recorded  upon  final
        determination  of  the loss and closure  of  the  sale  in
        first  quarter  1997,  and  is included  in  "Nonrecurring
        operating   charge"  in  the  consolidated  statement   of
        operations for the nine months ended September  30,  1997.
        In addition, the Company discontinued the operations of  a
        second  unprofitable business unit.   This  business  unit
        was  sold  to a third party during the second  quarter  of
        1997.   This  business closure and sale did not materially
        affect  the Company's results of operations for  the  nine
        months ended September 30, 1997.

        Revenues  and  losses of these two business units  totaled
        $24,000,000  and $16,000,000, respectively, for  the  full
        year   1996.    Assets  of  the  business  units   totaled
        $14,000,000 at December 31, 1996.


NOTE 6: In  third  quarter 1997, the Company sold  its  stock
        investment  in a publicly traded affiliate at  a  gain  of
        $4,858,000  ($.10  per share).  The gain  is  included  in
        "Gains  on  sales  of  investments in affiliates"  in  the
        consolidated statements of operations for the quarter  and
        nine  months  ended September 30, 1997.  At  December  31,
        1996,  the  unrealized  gain on this investment  resulting
        from  periodic  mark-to-market  adjustments  totaled  $6.9
        million  and  was included in "Investments in  affiliates"
        and  "Unrealized holding gain on securities of  affiliate"
        in the consolidated balance sheet at that date.

        In   first  quarter  1996,  the  Company  sold  its  stock
        investment  in  an  affiliated  company  at  a   gain   of
        $9,373,000  ($.20  per share).  The gain  is  included  in
        "Gains  on  sales  of  investments in affiliates"  in  the
        consolidated statement of operations for the  nine  months
        ended September 30, 1996.
  
NOTE 7: Supplementary cash flow information is summarized  as follows:

        Changes  in  current assets and liabilities,  net  of  the
        effects of business divestitures, in reconciling net  loss
        to net cash provided by operations are as follows:

        -----------------------------------------------------------   
                             Cash Provided By (Used For) Operations
        Nine Months Ended September 30,       1997           1996
        -----------------------------------------------------------      
        (In thousands)
      
        (Increase) decrease in:
          Accounts receivable, net         $(   800)       $10,570
          Inventories                       (19,508)        18,889
          Other current assets                  246          8,105
         Increase (decrease) in:
           Trade accounts payable             8,002        (15,197)
           Accrued compensation and other 
            accrued expenses                  3,193        ( 9,863)
           Billings in excess of sales      ( 3,141)       (13,282)
        ------------------------------------------------------------
        Net changes in current assets 
         and liabilities                   $(12,008)      $(   778)
        ============================================================

        Cash  payments  for  income taxes totaled  $4,050,000  and
        $3,719,000 for the nine months ended September   30,  1997
        and   1996,  respectively.   Cash  payments  for  interest
        during  those  periods totaled $4,655,000 and  $3,494,000,
        respectively.

        Investing  and  financing transactions in the  first  nine
        months  of  1997  that did not require cash  included  the
        sale  of two noncore business units of the Company in part
        for   notes  receivable  and  future  royalties   totaling
        $3,950,000.  Investing and financing transactions  in  the
        first  nine  months  of  1996 that did  not  require  cash
        included  the issuance of 438,357 shares of the  Company's
        common  stock  in connection with a professional  services
        agreement  related to the Company's efforts to  build  its
        public safety business in the Asia Pacific region.
  
NOTE 8: Net  loss per share is computed by dividing net  loss
        by  the  weighted average number of common and  equivalent
        common  shares  outstanding.  Employee stock  options  are
        the  only common stock equivalent and are included in  the
        weighted   average  number  of  common  shares   only   if
        dilutive.   Weighted average common and equivalent  common
        shares  outstanding for both the primary and fully diluted
        loss   per  share  calculations  for  the  quarters  ended
        September   30,   1997  and  1996  were   48,006,000   and
        47,243,000,  respectively.   For  the  nine  months  ended
        September  30, 1997 and 1996, weighted average common  and
        equivalent  common shares outstanding were 47,885,000  and
        47,046,000, respectively.

        In  February  1997,  the  Financial  Accounting  Standards
        Board  issued Statement of Financial Accounting  Standards
        No.  128,  Earnings Per Share, which establishes standards
        for  computing and presenting earnings per share data  for
        publicly  held  entities.  The Statement is effective  for
        fiscal  years  ending  after  December  15,  1997.    Upon
        adoption,  the  Statement requires  restatement  of  prior
        periods' earnings per share data.  The Company will  adopt
        this  Statement  for its fiscal year ending  December  31,
        1997  but  does not expect the new standard to  materially
        affect  previously reported or future earnings  per  share
        data.

                                
                  INTERGRAPH CORPORATION AND SUBSIDIARIES
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
               FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SUMMARY
-------

Earnings.  In the third quarter of 1997, the Company incurred  a
net  loss  of  $.15  per share on revenues  of  $282.1  million,
including a $4.9 million ($.10 per share) gain on the sale of an
investment in an affiliated company.  The third quarter 1996 net
loss  was  $.29  per share on revenues of $276.3  million.   The
Company's  loss  from operations was unchanged  from  the  third
quarter 1996 level at $.20 per share.

For  the  first nine months of 1997, the Company lost $1.03  per
share  on  revenues of $823.4 million, including  the  $.10  per
share  gain referenced above and a $6.1 million ($.13 per share)
charge  for  an  adverse contract arbitration award  to  Bentley
Systems, Inc. (BSI) (see "Litigation" and "MicroStation" below).
The loss for the first nine months of 1996 was $.75 per share on
revenues  of $801.2 million, including a $9.4 million ($.20  per
share)  gain  on  the  sale of an investment  in  an  affiliated
company.   Losses excluding these non-recurring  items  and  all
other items of nonoperating income and expense totaled $.84  per
share in the first nine months of 1997 versus $.87 per share for
the  first nine months of 1996.  The slight decline in operating
losses results primarily from a 9% increase in systems revenues.
The  Company's  continuing operating losses are  the  result  of
declining margins and operating expenses that are too  high  for
the level of revenue being generated by the Company.

Disposition of Noncore Business Units.  In the first quarter  of
1997,  the Company sold an unprofitable business unit to a third
party.   The total loss on the sale was $8.1 million,  of  which
$7.0  million ($.15 per  share) had been recorded  as  an  asset
revaluation in fourth quarter 1996.  The remaining loss of  $1.1
million  ($.02  per share) was recorded upon final determination
of the loss and closure of the sale in first quarter 1997 and is
included  in "Nonrecurring operating charge" in the consolidated
statement of operations for the nine months ended September  30,
1997.   In  addition,  during  the  first  quarter  the  Company
discontinued  the  operations of a second unprofitable  business
unit  and  sold  the  unit to a third party  during  the  second
quarter  of  1997.   This  business closure  and  sale  did  not
materially  affect the results of operations of the  Company  in
the first nine months of 1997.  Revenues and losses of these two
business   units  totaled  $24.0  million  and  $16.0   million,
respectively,  for the full year 1996.  Assets of  the  business
units totaled $14.0 million at December 31, 1996.

Organizational Changes.  In October, the Company  announced  the
formation  of  a  new  company for  operation  of  its  computer
hardware business.  The new company, Intergraph Computer Systems
(ICS),  is  a wholly owned subsidiary of Intergraph Corporation.
ICS   supplies   high  performance  Windows  NT-based   graphics
workstations and PCs, 3D graphics subsystems, and servers.   ICS
is  being  spun  off  to  allow greater focus  on  the  hardware
business  and  to  provide clear accountability  as  a  business
enterprise.

Also  in  October, the Company announced jointly with Electronic
Data Systems, Inc. (EDS) the intention to form a new company  to
pursue   market  leadership  in  the  mechanical   CAD   market,
addressing the growing demand for high-end computer-aided design
and  manufacturing solutions and the dynamic market for Windows-
based  design  products.   The  new  company  will  combine  the
Unigraphics Division of EDS with the Company's Solid  Edge  line
of  products.   EDS  will have majority  ownership  of  the  new
company.  This proposed transaction is in an early stage, but is
projected for completion by the end of 1997.

Litigation.  Bentley Systems, Inc.  As further described in  the
Company's Form 10-K filing for its year ended December 31, 1996,
the  Company  has been party to certain arbitration  proceedings
with BSI, an approximately 50%-owned affiliate and the developer
and  owner of MicroStation, a software product utilized in  many
of the Company's software applications and for which the Company
serves  as a nonexclusive distributor.  In May 1997, the Company
received  notice of the adverse determination of an  arbitration
proceeding  with BSI in which the Company had alleged  that  BSI
had  inappropriately and without cause terminated a  contractual
arrangement  with  the Company, and in which  BSI  had  filed  a
counterclaim against the Company seeking significant damages  as
the  result of the Company's alleged failure to use best efforts
to  sell  software support services pursuant  to  terms  of  the
contractual  arrangement terminated by  BSI.   The  arbitrator's
award  against  the Company was in the amount  of  $6.1  million
($.13  per  share).   This  charge is included  in  "Arbitration
award" in the consolidated statements of operations for the nine
months ended September 30, 1997.  The arbitration award did  not
materially  impact the Company's cash position, as approximately
$5.8  million  in fees otherwise owed the Company  by  BSI  were
offset  against  the  amount  awarded  BSI.   In  addition,  the
contractual arrangement that was the subject of this arbitration
has  been terminated effective with the award and, as a  result,
the  Company  will  no longer sell the related software  support
services under this agreement.  The Company and BSI have entered
into  a  new agreement which establishes single support services
between  the  two companies.  The Company believes that  neither
the  arbitration related change in BSI software support services
or  its  new  agreement with BSI relative to such services  will
have  a  material  impact on the Company's  financial  position,
results of operations, or cash flows in future periods.

The  Company  has  one other arbitration proceeding  in  process
related  to its business relationship with BSI.  The Company  is
vigorously  defending its position in that  proceeding,  but  at
present  is  unable to predict its outcome.  See  "MicroStation"
below for further details of the Company's business relationship
with  BSI, its sales of MicroStation, and the financial  effects
on the Company of changes in this business relationship.

Zydex,  Inc.  The Company filed a legal action in  August  1995,
seeking  to  dissolve and wind up its business arrangement  with
Zydex, Inc. ("Zydex"), a company with which it jointly developed
its  plant  design  application software  product  ("PDS"),  and
seeking  an order allowing the Company to continue the  business
of that arrangement without further responsibility or obligation
to  Zydex.  In response, Zydex filed a counterclaim against  the
Company in November 1995, alleging wrongful dissolution  of  the
business relationship and seeking both sole ownership of PDS and
significant compensatory and punitive damages.

In  April  1997, the parties agreed to settle the  dispute,  but
failed  to  agree  on  certain  terms  of  the  settlement.   In
September 1997, the court issued an order resolving the disputed
issues  and  requiring  the  parties  to  close  the  settlement
agreement, and dismissed the case.  The settlement includes  the
purchase  of  100%  of  Zydex common  stock  by  Intergraph  for
$24,750,000, with $8,250,000 due at closing of the agreement and
the  remaining  amount  payable over a  24  month  period.   The
deferred payment portion of the total purchase price is  secured
by  a subordinate interest in the PDS intellectual property  and
by an irrevocable letter of credit in favor of the current owner
of  Zydex.  Interest on the unpaid amount will accrue at a  rate
of 1% less than the rate charged by Intergraph's primary lender.
The current owner of Zydex will retain certain limited rights to
use PDS products for a period of 15 years following the date  of
closing.

In  November  1997, a hearing was held during  which  the  judge
ordered  both  parties  to  sign the  closing  documents.   Such
documents  have  been executed by both parties,  but  Zydex  has
indicated  they may appeal the judge's order.  A formal  closing
of  the  transaction has to date not occurred, but  the  Company
believes  the transaction will close on substantially the  terms
described above.  The Company will not record the settlement  in
its  books of account until the date of closing.  When recorded,
the  purchase price of Zydex stock will be recorded as  a  long-
term  asset and amortized over the remaining useful life of  the
PDS  product, currently estimated at 10 years.  Had the  closing
occurred November 1, 1997, the Company estimates its total  cash
outlay  to Zydex would have been approximately $14,000,000,  all
of  which was to be obtained from the Company's primary  lender.
See  "Liquidity and Capital Resources" included in  Management's
Discussion and Analysis in this Form 10-Q for discussion of  the
Company's liquidity.

The Company's sales of PDS products during the first nine months
of  1997  and  for  the  full year 1996 were  approximately  $34
million and $36 million, respectively.

See "Part II., Item 1., Legal Proceedings" included in this Form
10-Q and the Company's Form 10-K for the year ended December 31,
1996 for further details of the Bentley and Zydex litigation.

Remainder  of  the  Year.  Industry conditions  and  changes  in
operating  system and hardware architecture strategies  resulted
in a transition period for the Company characterized by revenues
that  declined from 1992 through 1994, by restructuring  charges
in  1993  and  1995, and by annual net losses from 1993  through
1995.    Although  the  Company  substantially   completed   its
operating system and hardware architecture transition  in  1995,
revenue  to date associated with resulting new product offerings
has  not met expectations, and gross margin on product sales has
continued to decline due primarily to price competition  in  the
industry.   The Company expects that the industry will  continue
to  be  characterized  by higher performance  and  lower  priced
products,  intense  competition, rapidly  changing  technologies
that  result  in  shorter product cycles,  and  development  and
support  of  generic  software standards  that  result  in  less
specific hardware and software dependencies by customers.

The  Company continues to believe that its operating system  and
hardware  architecture strategies are the correct choices,  that
the  industry is accepting Windows NT, and that Windows NT  will
become  the dominant operating system in markets served  by  the
Company.   However, acceptance of this system and the  Company's
new  products  built  around this system has  been  slower  than
anticipated, and the timing of such acceptance is unpredictable.
Competing  operating systems and products are available  in  the
market,  and  several competitors of the Company  offer  or  are
adopting  Windows NT as the operating system for their products.
There  can be no assurance that the Windows NT operating  system
will  become dominant in markets served by the Company  or  that
the  Company's product strategies will result in restoration  of
profitability.   Improvement in the Company's operating  results
will  depend  on  its ability to accurately anticipate  customer
requirements  and  technological  trends  and  to  rapidly   and
continuously  develop  and  deliver new  hardware  and  software
products   that   are  competitively  priced,   offer   enhanced
performance,    and    meet    customers'    requirements    for
standardization and interoperability.  To achieve  and  maintain
profitability,  the  Company  must continue  to  increase  sales
volume  and further align its operating expenses with the  level
of revenue being generated.


ORDERS/REVENUES
---------------

Orders.   Systems orders for the third quarter  and  first  nine
months  of  1997  totaled  $199.7 million  and  $576.1  million,
respectively,  an  increase  of  approximately  10%   and   13%,
respectively,  from the same prior year periods.   U.S.  systems
orders  increased  30%  and 37%, respectively,  from  the  third
quarter and first nine months of 1996.  Orders for the Company's
hardware products were also strong.  Strengthening of the dollar
against  international currencies, primarily in Europe,  reduced
systems  orders growth by approximately 2 points.  International
systems  orders  declined approximately 8% from both  the  third
quarter  and  first nine months of 1996 due primarily  to  order
declines  in  the  Asia Pacific and Middle  East  regions  (both
regions included unusually large individual orders in the  first
nine  months  of  1996) and to strengthening of  the  dollar  as
described above.  European orders were up 5% from the first nine
months  of  1996.   Excluding the impact of a  stronger  dollar,
European orders were up 11%.

New  Products.   During the first quarter of 1997,  the  Company
added a line of Intel/Windows-based personal workstations priced
to compete in the PC market.  The workstations have features and
performance  required  by  professional  users  and  provide  3D
graphics that the Company believes will be required by users  in
the future. In second quarter, the Company introduced twelve new
workstations  in  its  TD  and TDZ lines,  including  the  first
Windows  NT-based workstations using dual Pentium II processors.
Also   introduced   were   two  new  InterServe   servers,   the
ImageStation Z digital photogrammatic workstation, and the first
28-inch, high resolution, wide-format monitor.  These products 
will commence shipping at various dates throughout 1997.  In original
equipment manufacturer (OEM) business in the third quarter,  the
Company  announced it would develop and manufacture Sony-branded
computers  for  Sony  Corporation's  professional  and  business
systems  and  would  become  the  exclusive  provider  of  high-
performance   3D   graphics  hardware  for   Digital   Equipment
Corporation's  Windows  NT-based  personal  workstations.    The
Company  is unable to predict the financial impact of these  new
products  and  business agreements.  It  does  not  expect  that
introduction of these new products and fulfillment  of  its  new
business agreements will adversely affect the carrying value  of
its existing inventories.

The  Company  introduced two new software  products  that  began
shipping   in   the  second  quarter,  Solid   Edge   3.0   (see
"Organizational Changes" above) and GeoMedia 1.0, both based  on
the  Company's Jupiter technology.  Solid Edge 3.0  is  a  solid
modeling  system for designing mechanical parts and  assemblies.
The   Company  believes  it  removes  the  obstacles  that  once
prevented companies from using 3D solid modeling as a mainstream
design  tool.   GeoMedia allows users to access data  warehouses
virtually  anywhere  in  the  world and  simultaneously  perform
analyses with varying data types and formats.

Revenues.   Total revenues for the third quarter and first  nine
months   of  1997  were  $282.1  million  and  $823.4   million,
respectively,  up 2% and 3%, respectively, from  the  comparable
prior  year periods.  Sales outside the U.S. represented 51%  of
total  revenues  in the first nine months of 1997,  compared  to
approximately  55%  for the full year 1996.   European  revenues
were  31%  of total revenues for the first nine months of  1997,
down 2 points from the full year 1996 level.

Systems.   Systems revenue for the third quarter and first  nine
months   of   1997  was  $199.7  million  and  $568.6   million,
respectively,  up 8% and 9%, respectively, from the  same  prior
year  periods.  U.S. revenues were up 28% from the third quarter
1996 and 19% from the first nine months of 1996 (up 26% for  the
first  nine  months  excluding the effect  of  disposal  of  two
unprofitable  business units).  International  systems  revenues
were  down 10% from the third quarter 1996 and down 1% from  the
first nine months of 1996.  European systems revenues were up 1%
from  the first nine months of 1996 (excluding the impact  of  a
stronger  dollar, European systems revenues were  up  7%).   The
factors  that  affected  systems  order  growth  have  similarly
affected systems revenue growth.

Hardware  revenues  for  the first  nine  months  of  1997  have
increased  27%  from  the  prior year  period.   Unit  sales  of
workstations  and  servers were up 75% (workstation  and  server
average  per  unit selling price declined 40%), while  sales  of
peripheral  hardware products increased by 92%  from  the  first
nine  months of 1996 due primarily to sales of 3D graphics cards
introduced during the third quarter of 1996.  Third quarter revenues
were significantly impacted by a delay in shipment of the Company's
new TDZ 2000 line of workstations.  The delay is the result of 
defects in Intel's PIIX4 I/O bridge and Intel's lack of remedy
of those defects with respect to the Company's products.  The 
Company has now resolved these problems and will commence shipment
of this product line in fourth quarter.  Software  revenues
were  relatively flat with the prior year level, despite  a  29%
decline  in  MicroStation revenues (see further details  below).
Excluding MicroStation, software revenues increased 5% from  the
first  nine months of 1996 due primarily to an increase in plant
design  and shipbuilding software applications sales,  partially
offset  by  declines  in  sales of infrastructure  and  database
software.    Sales   of   Windows-based   software   represented
approximately 81% of total software revenues in the  first  nine
months  of  1997, up from approximately 77% in  the  first  nine
months of 1996.

The  Company  is unable to predict the level of success  of  its
products  in the marketplace.  However, it expects a  sequential
systems  revenue increase in the fourth quarter of 1997  through
growth  in  core  product sales and sales of  new  hardware  and
software product offerings.

MicroStation.   Through  the end of 1994,  the  Company  had  an
exclusive  license agreement with BSI, a 50%-owned affiliate  of
the Company, under which the Company distributed MicroStation, a
software product developed and maintained by BSI and utilized in
many  of  the  Company's software applications. As a  result  of
settlement  of a dispute between the companies relative  to  the
exclusivity  of  the  Company's distribution license,  effective
January 1, 1995, the Company had a nonexclusive license to  sell
MicroStation via its direct sales force and to sell MicroStation
via  its  indirect sales channels if MicroStation is  sold  with
other  Intergraph products.  The Company's sales of MicroStation
have  declined  each  year  since  the  change  in  the  license
agreement.  During the first nine months of 1997, the  Company's
sales  of  MicroStation declined by approximately 29%  from  the
same prior year period.  The Company estimates that this decline
increased  net  losses  for the first nine  months  of  1997  by
approximately $4.6 million ($.10 per share).  MicroStation sales
did  not  have  a material impact on the third quarter  of  1997
versus  the  third quarter of 1996.  The Company  is  unable  to
predict the level of MicroStation sales that will occur  in  the
future,  but  it  is  likely that such  sales  will  be  further
reduced.

Maintenance  and  Services.  Maintenance  and  services  revenue
consists  of  revenues from maintenance of Company  systems  and
from   Company   provided  services,  primarily   training   and
consulting.   These forms of revenue totaled $82.3  million  for
the  third quarter and $254.8 million for the first nine  months
of  1997,  down  10% and 8%, respectively, from  the  comparable
prior  year  periods.  Maintenance revenues for the  first  nine
months  of 1997 totaled $185.8 million, down 14% from  the  same
prior  year  period.   The trend in the  industry  toward  lower
priced  products  and longer warranty periods  has  resulted  in
reduced  levels of maintenance revenue, and the Company believes
this  trend  will  continue  in the  future.   Services  revenue
represents  approximately 8% of year to date 1997  revenues  and
has  increased  9% from the same prior year period.   Growth  in
services  revenue has acted to partially offset the  decline  in
maintenance  revenue.   The Company is endeavoring  to  increase
revenues  from  its services business.  Such revenues,  however,
produce lower gross margins than maintenance revenues.


GROSS MARGIN
------------

The  Company's  total  gross margin for the  third  quarter  was
35.9%, down 1.4 points from the third quarter of 1996.  For  the
first  nine  months of 1997, total gross margin was 36.2%,  down
1.2 points from the first nine months of 1996 and .6 points from
the full year 1996 level.

Systems margin for the third quarter was 34.3%, a decline of 2.4
points  from the third quarter 1996 level.  For the  first  nine
months  of 1997 systems margin was 35.1%, down approximately  .8
points  from the same prior year period and from the  full  year
1996  level.  Systems margin has been unfavorably impacted by  a
strengthening  U.S.  dollar  against  international  currencies,
primarily  in  Europe, and by a higher hardware content  in  the
product   mix,   partially  offset  by  production  efficiencies
recognized  by  a  significant increase in hardware  unit  sales
volume.  Since the end of 1994, the Company's systems margin has
declined  by  4.6 points, due primarily to price competition  in
the industry.

In general, the Company's systems margin may be lowered by price
competition,  a  higher hardware content in the product  mix,  a
stronger  U.S. dollar in international markets, the  effects  of
technological changes on the value of existing inventories,  and
a  higher  mix  of  federal government  sales,  which  generally
produce lower margins than commercial sales. Systems margin  may
be  improved by higher software content in the product, a weaker
dollar  in  international markets, a higher mix of international
systems  sales to total systems sales, and reductions in  prices
of component parts, which generally tend to decline over time in
the industry.  The Company is unable to predict the effects that
many  of these factors may have, but expects continuing pressure
on   its   systems  margin  due  primarily  to  industry   price
competition.

Maintenance and services margin for the third quarter and  first
nine  months  of 1997 were 39.7% and 38.6% (38.8% for  the  full
year  1996),  respectively, up 1.3 points and down  1.7  points,
respectively,  from  the  comparable prior  year  periods.   The
Company's maintenance revenue has declined at a faster rate than
cost   associated  with  that  form  of  revenue.   The  Company
continues to closely monitor maintenance and services  cost  and
has  taken  certain measures, including reductions in headcount,
to  more closely align cost with the current revenue level.  The
Company  believes  that the trend in the industry  toward  lower
priced  products  and longer warranty periods will  continue  to
reduce  its maintenance revenue, which will pressure maintenance
margin in the absence of corresponding cost reductions.


OPERATING EXPENSES
------------------

Operating  expenses for the third quarter and first nine  months
of 1997 declined by 2% and 1%, respectively, from the comparable
prior  year  periods.  Total employee headcount has declined  7%
during  that same period.  The sale of two unprofitable business
units reduced total operating expenses by approximately 3%, with
most  of  the  expense  savings being achieved  in  the  product
development and sales and marketing areas.

Product development expense for the third quarter and first nine
months  of 1997 declined by 10% and 4%, respectively,  from  the
same  prior year periods due primarily to significant reductions
in  headcount, including those resulting from sale  of  the  two
business  units.  The expense savings achieved through headcount
reductions  have  been partially offset  by  a  decline  in  new
software    product   development   expenses   qualifying    for
capitalization.  Third quarter sales and marketing expenses were
up  slightly  from the prior year level; however, year  to  date
expenses  declined by 2%.  The decline from 1996 levels  is  due
primarily  to  sale  of  the  two  unprofitable  business  units
described  above  and to strengthening of  the  U.S.  dollar  in
international markets, primarily in Europe, partially offset  by
increased  trade  show  and advertising  expenses  in  the  U.S.
General  and  administrative expense was  flat  with  the  third
quarter  1996  level, but increased by 4% from  the  first  nine
months of 1996 due to increased legal expenses (see "Litigation"
above).


NONOPERATING INCOME AND EXPENSE
-------------------------------

Interest expense was $1.8 million for the third quarter and $4.7
million  for  the first nine months of 1997 versus $1.3  million
and  $3.7  million, respectively, for the comparable prior  year
periods.   The Company's average outstanding debt has  increased
in  comparison  to  the  same prior year periods;  however,  the
Company's   rate   of   interest  on  the  debt   has   declined
approximately  2  points due primarily to a  change  in  lenders
under the Company's primary credit facility.  See "Liquidity and
Capital  Resources"  below  for a discussion  of  the  Company's
current financing arrangements.

In  the  third  quarter  of  1997,  the  Company  sold  a  stock
investment in a publicly traded affiliate, resulting in  a  gain
of  $4.9  million  ($.10 per share).  The gain  is  included  in
"Gains   on   sales  of  investments  in  affiliates"   in   the
consolidated statements of operations for the quarter  and  nine
months  ended  September 30, 1997.  At December  31,  1996,  the
unrealized gain on this investment resulting from periodic mark-
to-market  adjustments totaled $6.9 million and is  included  in
"Investments  in  affiliates" and "Unrealized  holding  gain  on
securities  of affiliate" in the consolidated balance  sheet  at
that  date.   In the first quarter of 1996, the Company  sold  a
stock  investment in an affiliated company, resulting in a  gain
of  $9.4  million ($.20 per share).  This gain  is  included  in
"Gains   on   sales  of  investments  in  affiliates"   in   the
consolidated  statement of operations for the nine months  ended
September 30, 1996.

"Other income (expense) - net" in the consolidated statements of
operations  consists  primarily of foreign  exchange  gains  and
losses,  equity  in  earnings and losses of investee  companies,
other  miscellaneous items of nonoperating income  and  expense,
and nonrecurring charges/credits.


IMPACT OF CURRENCY FLUCTUATIONS AND CURRENCY RISK MANAGEMENT
------------------------------------------------------------

Fluctuations  in  the value of the U.S. dollar in  international
markets  can have a significant impact on the Company's  results
of operations.  For the first nine months of 1997, approximately
51%  (55% for the full year 1996) of the Company's revenues were
derived  from  customers  outside the United  States,  primarily
through  subsidiary  operations.   Most  subsidiaries  sell   to
customers  and  incur  and  pay  operating  expenses  in   local
currency.   These  local  currency  revenues  and  expenses  are
translated  to dollars for U.S. reporting purposes.  A  stronger
U.S.  dollar  will  decrease the level of reported  U.S.  dollar
orders  and  revenues,  decrease the dollar  gross  margin,  and
decrease reported dollar operating expenses of the international
subsidiaries.   For  the first nine months  of  1997,  the  U.S.
dollar strengthened on average from its prior year level,  which
decreased  reported dollar revenues, orders, and  gross  margin,
but  also  decreased  reported  dollar  operating  expenses   in
comparison  to  the  prior year period.  The Company   estimates
that  currency effects increased the Company's year to date 1997
loss by approximately $.15 per share.  Such currency effects did
not  materially  impact the Company's results of operations  for
the comparable prior year period.

The  Company conducts business in all major markets outside  the
U.S.,  but the most significant of these operations with respect
to  currency  risk are located in Europe (specifically  Germany,
U.K.,   The   Netherlands,  France  and  Italy)  and  Australia.
Primarily,  but not exclusively in these locations, the  Company
has  certain  currency  related asset  and  liability  exposures
against which certain measures, primarily hedging, are taken  to
reduce  currency  risk.  With respect to  these  exposures,  the
objective  of  the  Company  is  to  protect  against  financial
statement volatility arising from changes in exchange rates with
respect to amounts denominated for balance sheet purposes  in  a
currency other than the functional currency of the local entity.
The  Company  therefore enters into forward  exchange  contracts
primarily  related  to these balance sheet  items  (intercompany
receivables  and payables).  Periodic changes in  the  value  of
these  contracts  offset exchange rate related  changes  in  the
financial statement value of these balance sheet items.  Forward
exchange contracts are purchased with maturities reflecting  the
expected   settlement  dates  of  these  balance   sheet   items
(generally three months or less), and only in amounts sufficient
to  offset possible significant currency rate related changes in
the   recorded  values  of  these  balance  sheet  items,  which
represent  a calculable exposure for the Company from period  to
period.   Since this risk is calculable and these contracts  are
purchased  only  in  offsetting amounts, neither  the  contracts
themselves nor the exposed foreign currency denominated  balance
sheet  items  are  likely to have a significant  effect  on  the
Company's  financial  position or results  of  operations.   The
Company's  positions  in   these  derivatives  are  continuously
monitored  to ensure protection against the known balance  sheet
exposures described above.  By policy, the Company is prohibited
from  market speculation via such instruments and therefore does
not  take  currency  positions  exceeding  its  known  financial
statement exposures, and does not otherwise trade in currencies.


INCOME TAXES
------------

The Company incurred a loss before income taxes of $49.5 million
in  the  first nine months of 1997 versus $35.5 million for  the
same  prior  year  period.  These losses generated  minimal  net
financial  statement tax benefit, as the majority  of  available
tax   benefits  were  offset  by  tax  expenses  in   individual
profitable international subsidiaries.


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

At September 30, 1997, cash totaled $38.8 million as compared to
$50.7  million  at December 31, 1996. Operations consumed  $14.3
million  in  the first nine months of 1997, as compared  to  net
cash  generation of $11.6 million in the first  nine  months  of
1996.   An  inventory build-up in response to increased hardware
unit sales volume and to customer demand for faster delivery  of
products  has  consumed  approximately  $15  million  since  the
beginning of the year.

Net cash used for investing activities totaled $20.4 million  in
the  first nine months of 1997 versus $26.6 million in the first
nine  months  of  1996.  Included in investing  activities  were
capital  expenditures  of $17.9 million ($24.0  million  in  the
first  nine  months of 1996), primarily for Intergraph  products
used  in  hardware  and  software  development  and  sales   and
marketing   activities.   The  Company  expects   that   capital
expenditures will require $25 to $30 million for the  full  year
1997,  primarily  for these same purposes.  The  Company's  term
loan   and   revolving   credit   agreement   contains   certain
restrictions on the level of the Company's capital expenditures.
Other significant investing activities included $7.1 million for
capitalizable software  development costs ($12.1 million in  the
first  nine  months of 1996) and $5.7 million in  proceeds  from
sales of a division and investments in affiliated companies ($10
million in the first nine months of 1996.)

Net  cash  provided by financing activities in  the  first  nine
months of 1997 totaled $19.1 million versus a net use of cash of
$3.3  million  in the first nine months of 1996.  Year  to  date
1997  financing activities included a $16.7 million net addition
to  short- and long-term debt, compared with a net repayment  of
$6.3 million in the first nine months of 1996.

In  January  1997, the Company entered into a three  year  fixed
term  loan and revolving credit agreement.  Available borrowings
are  determined by the amounts of eligible assets of the Company
(the  "borrowing base"), as defined in the agreement,  including
accounts   receivable,  inventory,  and  property,  plant,   and
equipment,  with maximum borrowings of $100 million.   The  term
loan portion of  the agreement is in the principal amount of $20
million,  with  principal due at expiration  of  the  agreement.
Borrowings are secured by a pledge of substantially all  of  the
Company's  assets  in  the U.S.  The rate  of  interest  on  all
borrowings  under  the agreement is the greater  of  7%  or  the
Norwest  Bank  Minnesota  National  Association  base  rate   of
interest (8.5% at September 30, 1997) plus .625%.  The agreement
requires the Company to pay a facility fee at an annual rate  of
 .15%  of the maximum amount available under the credit line,  an
unused  credit line fee at an annual rate of .25% of the average
unused  portion  of  the revolving credit line,  and  a  monthly
agency  fee.  At September 30, 1997, the Company had outstanding
borrowings of $27.8 million ($43 million at November 10,  1997),
$20  million  of which was classified as long-term debt  in  the
consolidated balance sheet, and an additional $37 million of the
available credit line was allocated to support letters of credit
issued  by  the  Company  and  the  Company's  forward  exchange
contracts.  As of this same date, the borrowing base  under  the
credit line was $100 million.

The  Company  is  currently  negotiating  with  this  lender  to
increase the credit line from $100 million to $125 million.  The
Company  expects  negotiations to be  completed  in  the  fourth
quarter  and  that  the increase will be granted.   The  Company
estimates  that  at present it can support a borrowing  base  of
approximately $110 million, and expects that the full amount  of
the  extended  line,  if granted, will become  supportable  with
future growth in the Company's business.

The  term  loan and revolving credit agreement contains  certain
financial covenants of the Company, including minimum net worth,
minimum   current   ratio,  and  maximum   levels   of   capital
expenditures.   In addition, the agreement includes  restrictive
covenants  that  limit or prevent various business  transactions
(including   repurchases  of  the  Company's   stock,   dividend
payments,  mergers,  acquisitions of  or  investments  in  other
businesses,   and   disposal  of  assets  including   individual
businesses,  subsidiaries, and divisions) and limit  or  prevent
certain other business changes.

In  March of 1997, the Company entered into an agreement for the
sale and leaseback of one of its facilities.  Based on the terms
of  the agreement, the transaction has been accounted for  as  a
borrowing.   The  amount borrowed totals  $8.4  million  and  is
included  in  "Long-term debt" in the 1997 consolidated  balance
sheet.   The borrowing will be repaid over a period of 20  years
at an implicit rate of interest of 10.7%.

At September 30, 1997, the Company had approximately $58 million
in debt on which interest is charged under various floating rate
arrangements,  primarily  under its three  year  term  loan  and
revolving credit agreement, an Australian term loan, and various
mortgages.   The  Company is exposed to market  risk  of  future
increases  in interest rates on these loans, with the  exception
of  the  Australian term loan, on which the Company has  entered
into an interest rate swap agreement.

The  Company is not currently generating adequate cash  to  fund
its  operations and build cash reserves.  However,  the  Company
believes  that  existing  cash  balances,  together  with   cash
expected  to  be  generated  by improving  operations  and  cash
available under its term loan and revolving credit agreement, when
amended, will be adequate to meet anticipated cash requirements 
in the near term.  The Company, in the near term, must increase 
sales volume and align its operating expenses with the level of 
revenue being generated if it is to adequately fund its operations,
build adequate cash reserves, and avoid additional third party 
financing.


                                
                  INTERGRAPH CORPORATION AND SUBSIDIARIES

PART II.  OTHER INFORMATION
          -----------------

  Item 1: Legal Proceedings

          Bentley  Systems, Inc.  As described in the Company's
          Form  10-K  filing for its year ended December 31,  1996,
          the   Company  has  been  party  to  certain  arbitration
          proceedings   with  Bentley  Systems,  Inc.   (BSI),   an
          approximately  50%-owned affiliate and the developer  and
          owner  of  MicroStation, a software product  utilized  in
          many  of  the  Company's software  applications  and  for
          which  the  Company serves as a nonexclusive distributor.
          In  December  1995, the Company commenced an  arbitration
          proceeding  against  BSI  with the  American  Arbitration
          Association,  Philadelphia, Pennsylvania,  alleging  that
          BSI  inappropriately  and  without  cause  terminated   a
          contractual arrangement between BSI and the Company.   In
          response,  in  January  1996  BSI  filed  a  counterclaim
          against  the Company seeking significant damages  as  the
          result  of  the  Company's alleged failure  to  use  best
          efforts  to  sell software support services pursuant   to
          terms  of the contractual arrangement terminated by  BSI.
          In  May  1997, the Company received notice of the adverse
          determination   of  this  arbitration  proceeding.    The
          arbitrator's award against the Company was in the  amount
          of  $6,126,000 ($.13 per share).  This charge is included
          in  "Arbitration award" in the consolidated statement  of
          operations for the nine months ended September 30,  1997.
          The  arbitration  award  did not  materially  impact  the
          Company's  cash position, as approximately $5,800,000  in
          fees  otherwise  owed  the Company  by  BSI  were  offset
          against  the  amount  awarded  BSI.   In  addition,   the
          contractual  arrangement that was  the  subject  of  this
          arbitration has been terminated effective with the  award
          and,  as  a result, the Company will no longer  sell  the
          related  software support services under this  agreement.
          The  Company  and BSI have entered into a  new  agreement
          which  establishes  single support services  between  the
          two  companies.   The Company believes that  neither  the
          arbitration  related  change  in  BSI  software   support
          services or its new agreement with BSI relative  to  such
          services  will  have a material impact on  the  Company's
          financial position, results of operations, or cash  flows
          in future periods.

          Zydex,  Inc.  The Company filed a legal action  in  August
          1995,  seeking  to  dissolve  and  wind  up  its  business
          arrangement  with Zydex, Inc. ("Zydex"),  a  company  with
          which  it  jointly developed its plant design  application
          software  product ("PDS"), and seeking an  order  allowing
          the  Company  to continue the business of that arrangement
          without  further  responsibility or obligation  to  Zydex.
          In  response,  Zydex  filed  a  counterclaim  against  the
          Company  in  November 1995, alleging wrongful  dissolution
          of   the  business  relationship  and  seeking  both  sole
          ownership   of   PDS  and  significant  compensatory   and
          punitive damages.
 
          In  April  1997, the parties agreed to settle the dispute,
          but  failed  to agree on certain terms of the  settlement.
          In  September  1997, the court issued an  order  resolving
          the  disputed  issues and requiring the parties  to  close
          the  settlement agreement, and dismissed  the  case.   The
          settlement  includes the purchase of 100% of Zydex  common
          stock  by Intergraph for $24,750,000, with $8,250,000  due
          at  closing  of  the  agreement and the  remaining  amount
          payable  over  a  24 month period.  The  deferred  payment
          portion  of  the  total purchase price  is  secured  by  a
          subordinate interest in the PDS intellectual property  and
          by  an  irrevocable  letter of  credit  in  favor  of  the
          current  owner  of Zydex.  Interest on the  unpaid  amount
          will accrue at a rate of 1% less than the rate charged  by
          Intergraph's primary lender.  The current owner  of  Zydex
          will  retain  certain limited rights to use  PDS  products
          for a period of 15 years following the date of closing.

          In  November  1997, a hearing was held  during  which  the
          judge  ordered both parties to sign the closing documents.
          Such  documents  have been executed by both  parties,  but
          Zydex has indicated they may appeal the judge's order.   A
          formal  closing  of  the  transaction  has  to  date   not
          occurred,  but  the Company believes the transaction  will
          close  on  substantially the terms described  above.   The
          Company  will  not record the settlement in its  books  of
          account  until  the date of closing.  When  recorded,  the
          purchase price of Zydex stock will be recorded as a  long-
          term  asset  and amortized over the remaining useful  life
          of  the PDS product, currently estimated at 10 years.  Had
          the   closing  occurred  November  1,  1997,  the  Company
          estimates  its total cash outlay to Zydex would have  been
          approximately  $14,000,000,  all  of  which  was   to   be
          obtained   from   the  Company's  primary   lender.    See
          "Liquidity    and   Capital   Resources"    included    in
          Management's  Discussion and Analysis in  this  Form  10-Q
          for discussion of the Company's liquidity.

          The  Company's sales of PDS products during the first nine
          months   of   1997  and  for  the  full  year  1996   were
          approximately $34 million and $36 million, respectively.


  Item 6: Exhibits and Reports on Form 8-K

    (a)   Exhibit    10(a),    agreement   between    Intergraph
          Corporation and Green Mountain, Inc., dated April  1, 1997. *(1)

          Exhibit  10(b),  Indemnification  Agreement  between
          Intergraph  Corporation and each member of the  Board  of
          Directors of the Company dated June 3, 1997.  (2)

          Exhibit  10(c), Employment Contract of Wade Patterson
          dated May 30, 1997.  *(2)

          Exhibit 27, Financial Data Schedule.



      *      Denotes  management contract or compensatory  plan,
             contract, or arrangement.
      
             (1)  Incorporated  by  reference  to  exhibit   filed
             with  the  Company's Quarterly Report on Form  10-Q
             for  the  quarter ended March 31, 1997,  under  the
             Securities Exchange Act of 1934, File No. 0-9722.
      
             (2)  Incorporated  by  reference  to  exhibit   filed
             with  the  Company's Quarterly Report on Form  10-Q
             for  the  quarter  ended June 30, 1997,  under  the
             Securities Exchange Act of 1934, File No. 0-9722.

    (b)   There  were  no reports on Form 8-K filed  during  the
          quarter ended September 30, 1997.


                  INTERGRAPH CORPORATION AND SUBSIDIARIES
                                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.



                          INTERGRAPH CORPORATION
                          ----------------------
                               (Registrant)




By:                                By:
       ----------------------             ----------------------
       Larry J. Laster                    John W. Wilhoite
       Executive Vice President,          Vice President and Controller
       Chief Financial Officer and        (Principal Accounting Officer)
       Director

Date:  November 13, 1997           Date:  November 13, 1997