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, 1998
                                
                               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)

                        (256) 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: 48,491,098 shares
              outstanding as of September 30, 1998



                                
                                
                     INTERGRAPH CORPORATION
                           FORM 10-Q*
                       September 30, 1998
                                
                              INDEX



                                                                     Page No.
                                                                     --------
PART I. FINANCIAL INFORMATION
        ---------------------          

   Item 1. Financial Statements
           --------------------         
                    
           Consolidated Balance Sheets at 
               September 30, 1998 and December 31, 1997                 2

           Consolidated Statements of Operations for 
               the quarters and nine months ended 
               September 30, 1998 and 1997                              3

           Consolidated Statements of Cash Flows for the 
               nine months ended September 30, 1998 and 1997            4

           Notes to Consolidated Financial Statements                 5 - 9

   Item 2. Management's Discussion and Analysis of Financial
           -------------------------------------------------           
           Condition and Results of Operations                       10 - 21
           -----------------------------------

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

   Item 1. Legal Proceedings                                         22 - 23

   Item 6. Exhibits and Reports on Form 8-K                            23


SIGNATURES                                                             24






*Information contained in this Form 10-Q includes statements
that are forward looking as defined in Section 21-E of the
Securities Exchange Act of 1934.  Actual results may differ
materially from those projected in the forward looking
statements.  Information concerning factors that could cause
actual results to differ materially from those in the forward
looking statements is described in the Company's filings with
the Securities and Exchange Commission, including its most
recent annual report on Form 10-K, its Form 10-Q filings for the
quarters ended March 31, 1998 and June 30, 1998, and this Form
10-Q.

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

--------------------------------------------------------------------------
                                              September 30,   December 31,
                                                   1998           1997
--------------------------------------------------------------------------
(In thousands except share and per share amounts)

Assets
  Cash and cash equivalents                      $ 56,763       $ 46,645
  Accounts receivable, net                        294,620        324,654
  Inventories                                     116,533        105,032
  Other current assets                             28,244         25,693
--------------------------------------------------------------------------
      Total current assets                        496,160        502,024

  Investments in affiliates                        13,841         14,776
  Other assets                                     60,520         53,566
  Property, plant, and equipment, net             134,348        150,623
--------------------------------------------------------------------------
      Total Assets                               $704,869       $720,989
==========================================================================

Liabilities and Shareholders' Equity
  Trade accounts payable                         $ 53,292       $ 60,945
  Accrued compensation                             46,748         48,330
  Other accrued expenses                           75,530         71,126
  Billings in excess of sales                      64,925         66,680
  Short-term debt and current maturities 
    of long-term debt                              37,541         50,409
--------------------------------------------------------------------------
      Total current liabilities                   278,036        297,490

  Deferred income taxes                               433            460
  Long-term debt                                   50,876         54,256
--------------------------------------------------------------------------
      Total liabilities                           329,345        352,206
--------------------------------------------------------------------------

  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                     224,135        226,362
   Retained earnings                              270,723        269,442
   Accumulated other comprehensive income- 
     cumulative translation adjustment              4,205          1,090
--------------------------------------------------------------------------
                                                  504,799        502,630
   Less- cost of 8,870,264 treasury shares 
     at September 30, 1998 and 9,183,845 
     treasury shares at December 31, 1997        (129,275)      (133,847)
--------------------------------------------------------------------------
      Total shareholders' equity                  375,524        368,783
--------------------------------------------------------------------------
      Total Liabilities and Shareholders' Equity $704,869       $720,989
==========================================================================

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


                 INTERGRAPH CORPORATION AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                               (Unaudited)
                                
------------------------------------------------------------------------------
                                     Quarter Ended          Nine Months Ended
                                     September 30,            September 30,
                                   1998         1997        1998         1997
------------------------------------------------------------------------------
(In thousands except per share amounts)

Revenues
 Systems                       $176,697     $199,720    $513,394     $568,646
 Maintenance and services        76,927       82,347     232,661      254,788
------------------------------------------------------------------------------
  Total revenues                253,624      282,067     746,055      823,434
------------------------------------------------------------------------------

Cost of revenues
 Systems                        125,572      131,258     367,918      368,996
 Maintenance and services        49,952       49,632     145,644      156,536
------------------------------------------------------------------------------
  Total cost of revenues        175,524      180,890     513,562      525,532
------------------------------------------------------------------------------

  Gross profit                   78,100      101,177     232,493      297,902

Product development              20,692       23,991      66,641       75,121
Sales and marketing              57,426       61,637     176,670      186,858
General and administrative       25,634       25,106      76,604       75,916
Nonrecurring charges (credit)   (   120)         ---      13,782        1,095
------------------------------------------------------------------------------

  Loss from operations          (25,532)     ( 9,557)   (101,204)     (41,088)

Gains on sales of assets            ---        4,858     111,042        4,858
Arbitration award                   ---          ---         ---      ( 6,126)
Interest expense                ( 1,804)     ( 1,805)   (  5,854)     ( 4,652)
Other income (expense)- net       1,163      (   682)      1,797      ( 2,494)
------------------------------------------------------------------------------
  Income (loss) before 
    income taxes                (26,173)     ( 7,186)      5,781      (49,502)

Income tax expense                1,000          ---       4,500          ---
------------------------------------------------------------------------------

  Net income (loss)            $(27,173)    $( 7,186)   $  1,281     $(49,502)
==============================================================================

  Net income (loss) per share
      - basic and diluted      $(   .56)    $(   .15)   $    .03     $(  1.03)
==============================================================================

Weighted average shares outstanding
      - basic and diluted (1)    48,416       48,006      48,316       47,885
==============================================================================

(1)  Diluted shares were 48,355 for the nine months ended September 30, 1998.

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,                          1998          1997
-----------------------------------------------------------------------------
(In thousands)

Cash Provided By (Used For):
Operating Activities:
  Net income (loss)                                   $ 1,281      $(49,502)
  Adjustments to reconcile net income (loss) to 
  net cash used for operating activities:
    Depreciation and amortization                      39,604        46,192
    Arbitration award                                     ---         5,835
    Noncash portion of nonrecurring charges            11,353           ---
    Gains on sales of assets                         (111,042)      ( 4,858)
    Net changes in current assets and liabilities      12,023       (12,008)
-----------------------------------------------------------------------------
    Net cash used for operating activities           ( 46,781)      (14,341)
-----------------------------------------------------------------------------

Investing Activities:
  Purchases of property, plant, and equipment        ( 12,392)      (17,872)
  Capitalized software development costs             (  8,647)      ( 7,149)
  Proceeds from sales of assets                       118,002         5,749
  Purchase of software rights                        ( 26,292)          ---
  Other                                              (    328)      ( 1,165)
-----------------------------------------------------------------------------
    Net cash provided by (used for) 
      investing activities                             70,343       (20,437)
-----------------------------------------------------------------------------

Financing Activities:
  Gross borrowings                                        182        39,078
  Debt repayment                                     ( 16,303)      (22,381)
  Proceeds of employee stock purchases and 
    exercise of stock options                           2,173         2,419
-----------------------------------------------------------------------------
    Net cash provided by (used for) 
      financing activities                           ( 13,948)       19,116
-----------------------------------------------------------------------------
Effect of exchange rate changes on cash                   504         3,817
-----------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents   10,118       (11,845)
Cash and cash equivalents at beginning of period       46,645        50,674
-----------------------------------------------------------------------------
Cash and cash equivalents at end of period           $ 56,763      $ 38,829
=============================================================================

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, 1997 to provide comparability
          with the current period presentation.

NOTE 2:   Litigation.   As further described in the Company's  Form
          10-K  for its year ended December 31, 1997, and its  Form
          10-Q  filings for the quarters ended March 31,  1998  and
          June  30, 1998, the Company has risks related to  certain
          litigation,  in  particular that with  Intel  Corporation
          and  Bentley  Systems, Inc.  See Management's  Discussion
          and  Analysis  of  Financial  Condition  and  Results  of
          Operations  in  this  Form  10-Q  for  a  discussion   of
          developments in the third quarter of 1998.

NOTE 3:   Zydex.   On  January  15, 1998, the Company's  litigation
          with  Zydex, Inc. was settled, resulting in the Company's
          purchase  of  100%  of  the common  stock  of  Zydex  for
          $26,300,000,  with  $16,000,000 paid at  closing  of  the
          agreement  and  the remaining amount to  be  paid  in  15
          equal  monthly  installments,  including  interest.    In
          March,  the Company prepaid in full the remaining  amount 
          payable  to  Zydex.  The former owner  of  Zydex  retains
          certain rights to use, but not sell or sublicense,  plant
          design  system application software ("PDS") for a  period
          of  15  years following the date of closing.  In addition
          to  the  purchase price of common stock, the Company  was
          required  to  pay additional royalties to  Zydex  in  the
          amount of $1,000,000 at closing of the agreement.   These
          royalties were included in the Company's 1997 results  of
          operations  and  therefore did not affect  1998  results.
          The  first quarter cash payments to Zydex were funded  by
          the  Company's  primary lender and by proceeds  from  the
          sale   of   the  Company's  Solid  Edge  and  Engineering
          Modeling   System   product  lines.    See   Management's
          Discussion  and  Analysis  of  Financial  Condition   and
          Results  of Operations in this Form 10-Q for a discussion
          of the Company's liquidity.

          The  Company capitalized the $26,300,000 cost of the  PDS
          software  rights and is amortizing it over its  estimated
          useful  life  of  seven years.  The unamortized  balance,
          approximately  $23,500,000  at  September  30,  1998,  is
          included  in  "Other  assets" in the September  30,  1998
          consolidated balance sheet.

NOTE 4:   Inventories  are stated at the lower of average  cost  or
          market and are summarized as follows:
       
          ---------------------------------------------------------
                                September 30,       December 31,
                                     1998             1997
          --------------------------------------------------------- 
          (In thousands)
       
          Raw materials          $  36,614        $  35,799
          Work-in-process           29,527           37,357
          Finished goods            33,169           11,760
          Service spares            17,223           20,116
          ---------------------------------------------------------
          Totals                  $116,533         $105,032
          =========================================================

NOTE 5:   Property,  plant, and equipment - net includes allowances
          for  depreciation  of  $277,863,000 and  $289,775,000  at
          September 30, 1998 and December 31, 1997, respectively.

NOTE 6:   In  first  quarter 1998, the Company sold the  assets  of
          its  Solid  Edge and Engineering Modeling System  product
          lines  to  Electronic  Data Systems Corporation  and  its
          Unigraphics  Solutions, Inc. subsidiary for  $105,000,000
          in   cash.    The  Company  recorded  a  gain   on   this
          transaction  of  $102,767,000 ($2.13  per  share).   This
          gain  is  included in "Gains on sales of assets"  in  the
          consolidated statement of operations for the nine  months
          ended September 30, 1998.

          In  second  quarter 1998, the Company sold the assets  of
          its  printed  circuit  board manufacturing  facility  for
          $16,002,000  in  cash.  The Company recorded  a  gain  on
          this  transaction of $8,275,000 ($.17 per  share).   This
          gain  is  included in "Gains on sales of assets"  in  the
          consolidated statement of operations for the nine  months
          ended   September   30,  1998.   The   Company   is   now
          outsourcing its printed circuit board needs and does  not
          expect  this operational change to materially impact  its
          results of operations in the remainder of 1998.

NOTE 7:   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  assets"  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  $6,858,000
          and  was  included  in "Investments  in  affiliates"  and
          "Unrealized  holding gain on securities of affiliate"  in
          the consolidated balance sheet at that date.

NOTE 8:   In  first  quarter  1998,  the  Company  reorganized  its
          European  operations to reflect the organization  of  the
          Company  into four distinct operating units and to  align
          operating  expenses more closely with revenue  levels  in
          that  region.   The  cost  of  this  reorganization   was
          originally   estimated  at  $5,400,000,   primarily   for
          employee  severance pay and related costs. In the  second
          and  third  quarters  of  1998,  $859,000  and  $120,000,
          respectively,  of the costs accrued in the first  quarter
          were  reversed  as  the  result of  incurrence  of  lower
          severance  costs than originally anticipated.  The  third
          quarter  credit and year to date charge of  approximately
          $4,500,000   are   included  in   "Nonrecurring   charges
          (credit)"  in  the consolidated statements of  operations
          for  the  quarter  and  nine months ended  September  30,
          1998.  Approximately 70 positions were eliminated in  the
          sales and marketing, general and administrative, and pre-
          and  post-sales support areas.  Cash outlays  related  to
          this  charge  approximated $2,400,000 in the  first  nine
          months of 1998.  The remaining costs are expected  to  be
          paid  over the remainder of the year and are included  in
          "Other  accrued  expenses"  in  the  September  30,  1998
          consolidated  balance sheet.  The Company  estimates  the
          European reorganization will result in annual savings  of
          approximately $5,200,000.

          The  remainder of the 1998 nonrecurring charges  consists
          of  write-offs of a) certain intangible assets, primarily
          capitalized   business  system  software,   b)   goodwill
          recorded   on   a   prior  acquisition  of   a   domestic
          subsidiary, and c) a noncompete agreement with  a  former
          third   party   consultant.   Prior  to  the   write-off,
          amortization   of   these   intangibles   accounted   for
          approximately   $3,400,000  of   the   Company's   annual
          operating expenses.

NOTE 9:   In  first  quarter 1997, the Company sold an unprofitable
          business  unit  to  a  third party and  discontinued  the
          operations of a second unprofitable business unit.   This
          second  business  unit was sold to a third  party  during
          second  quarter 1997.  The total loss on these sales  was
          $8,300,000,  of  which $7,200,000 ($.15  per  share)  had
          been  recorded as an asset revaluation in fourth  quarter
          1996.   The remaining loss of $1,100,000 ($.02 per share)
          is  included  in "Nonrecurring charges (credit)"  in  the
          consolidated statement 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.
          The two business units did not have a material effect  on
          the  Company's  results of operations for the  period  in
          1997 prior to their disposal.

NOTE 10:  In  second quarter 1997, the Company received notice
          of   the   adverse   determination  of   an   arbitration
          proceeding  with  Bentley  Systems,  Inc.  (Bentley),  an
          approximately  50%-owned affiliate  of  the  Company  and
          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.   The arbitrator's award was in  the  amount
          of  $6,126,000  ($.13  per  share)  and  is  included  in
          "Arbitration  award"  in  the consolidated  statement  of
          operations for the nine months ended September 30,  1997.
          The  cash  position of the Company was not  significantly
          adversely  affected by this award, as the Company  offset
          approximately  $5,835,000  in  fees  otherwise  owed  the
          Company  by  Bentley against the amount awarded  Bentley.
          For   further   details   of   the   Company's   business
          relationship   with   Bentley  and   a   description   of
          continuing  arbitration  proceedings  between   the   two
          companies,  see  the Company's Form 10-K filing  for  the
          year ended December 31, 1997.

NOTE 11:  Supplementary cash flow information is summarized as follows:

          Changes  in  current assets and liabilities, net  of  the
          effects  of  business divestitures,  in  reconciling  net
          income  (loss) to net cash used for operating  activities
          are as follows:

          ------------------------------------------------------------
                              Cash Provided By (Used For) Operations
          Nine Months Ended September 30,       1998           1997
          ------------------------------------------------------------
          (In thousands)
       
          (Increase) decrease in:
            Accounts receivable, net         $32,305       $(   800)
            Inventories                      (11,940)       (19,508)
            Other current assets               2,820            246
          Increase (decrease) in:
            Trade accounts payable           ( 8,427)         8,002
            Accrued compensation and other
              accrued expenses               (   454)         3,193
            Billings in excess of sales      ( 2,281)       ( 3,141)
          ------------------------------------------------------------
          Net changes in current assets 
            and liabilities                  $12,023       $(12,008)
          ============================================================

          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.  There were no significant noncash  investing
          and  financing transactions in the first nine  months  of
          1998.

NOTE 12:  Basic income (loss) per share is computed by dividing
          net  income  (loss)  by the weighted  average  number  of
          common  shares outstanding.  Dilutive income  (loss)  per
          share  is computed by dividing net income (loss)  by  the
          weighted  average number of common and equivalent  common
          shares  outstanding.   Employee  stock  options  are  the
          Company's  only common stock equivalent and are  included
          in the calculation only if dilutive.

NOTE 13:  Effective  January  1,  1998,  the  Company  adopted
          Statement  of  Financial Accounting  Standards  No.  130,
          Reporting    Comprehensive   Income.    This    Statement
          establishes standards for reporting comprehensive  income
          and  its  components.  Under this Statement, all nonowner
          changes  in equity during a period are to be reported  as
          a  component  of comprehensive income.  With  respect  to
          the  Company, such nonowner equity items include  foreign
          currency  translation  adjustments and  unrealized  gains
          and  losses  on  certain investments in debt  and  equity
          securities.   The Statement requires that the accumulated
          balance   of  other  comprehensive  income  be  displayed
          separately from retained earnings and additional paid  in
          capital  in the equity section of the Company's statement
          of financial position.

          During  the  nine  months ended September  30,  1998  and
          1997,  total  comprehensive income (loss) was  $4,396,000
          and  ($61,728,000),  respectively.  Comprehensive  income
          (loss)  differs  from net income (loss)  due  to  foreign
          currency translation adjustments and, for 1997 only,  the
          reversal  of an unrealized holding gain on securities  of
          an  affiliate that were sold during the third quarter  of
          1997.  See Note 7.
 
NOTE 14:  Effective  January  1,  1998,  the  Company  adopted
          American   Institute  of  Certified  Public   Accountants
          Statement    of    Position   97-2,   Software    Revenue
          Recognition.   The Statement requires each element  of  a
          software  sale  arrangement to be  separately  identified
          and  accounted  for based on the relative fair  value  of
          each  element.   Revenue  cannot  be  recognized  on  any
          element  of the sale arrangement if undelivered  elements
          are   essential   to  functionality  of   the   delivered
          elements.  The Statement replaces the previous method  of
          software  revenue recognition, under which a  distinction
          was  made  between  significant and  insignificant  post-
          shipment  obligations  for revenue recognition  purposes.
          Adoption  of  this  new  accounting  standard   did   not
          significantly affect the Company's results of  operations
          for  the nine months ended September 30, 1998, nor is  it
          expected to have a significant impact on results for  the
          remainder  of  the  year  since  the  Company's   revenue
          recognition   policies   have   historically   been    in
          substantial  compliance with the  practices  required  by
          the new pronouncement.

NOTE 15:  In  March 1998, the American Institute of  Certified
          Public  Accountants issued Statement  of  Position  98-1,
          Accounting  for the Costs of Computer Software  Developed
          or  Obtained  for Internal Use, defining  which  computer
          software costs are to be capitalized and expensed.   This
          statement  is effective fiscal year 1999 for the  Company
          and  will  be implemented effective January 1, 1999.   In
          June  1998,  the  Financial  Accounting  Standards  Board
          issued  Statement of Financial Accounting  Standards  No.
          133,  Accounting for Derivative Instruments  and  Hedging
          Activities,   requiring  companies   to   recognize   all
          derivatives  as  either  assets  or  liabilities  on  the
          balance  sheet  and  to measure the instruments  at  fair
          value.  This statement is effective fiscal year 2000  for
          the   Company.    The   Company   does   not   anticipate
          implementation   of   either  of   these   newly   issued
          accounting  pronouncements to have a material  impact  on
          its   consolidated   operating   results   or   financial
          position.

NOTE 16:  Subsequent   Events.    Reflecting   an   industry
          outsourcing  trend, on October 14, 1998, the Company  and
          SCI  Systems  Inc.  (SCI) announced an agreement  whereby
          SCI  will  purchase substantially all  of  the  Company's
          U.S.  manufacturing inventory and assets and will  assume
          manufacturing  of the Company's hardware  products.   SCI
          will  lease the Company's manufacturing facilities for  a
          period   of  approximately  five  months  before   moving
          operations  to  SCI facilities and will offer  employment
          to  approximately  310  of  the  Company's  manufacturing
          employees.   The  Company expects to benefit  from  lower
          employee  headcount, lower per unit costs  for  materials
          and  overhead expenses, and improved cash flow  resulting
          from improved inventory management.  This outsourcing  of
          the  Company's  manufacturing will also allow  Intergraph
          Computer  Systems,  the Company's wholly  owned  hardware
          subsidiary,   to  focus  on  its  core  competencies   of
          graphics,  workstations,  and systems  integration.   The
          companies closed the transaction November 13, 1998.


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

SUMMARY
-------

Earnings.   In  third quarter 1998, the Company incurred  a  net
loss of $.56 per share on revenues of $253.6 million.  The third
quarter  1997 net loss was $.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  1998 loss from operations was $.53 per share  versus  a
loss  of  $.20  per share for the third quarter of  1997.   This
increased loss results primarily from a 10% decline in  revenues
and  a 5.1 point decline in gross margin, partially offset by  a
6% decline in operating expenses.

For the first nine months of 1998, the Company earned net income
of  $.03  per  share on revenues of $746.1 million, including  a
$102.8  million ($2.13 per share) gain on the sale of its  Solid
Edge  and  Engineering Modeling System product  lines,  a  $13.8
million  ($.29  per  share)  charge for  nonrecurring  operating
expenses (primarily employee termination costs and write-off  of
certain intangible assets), and an $8.3 million ($.17 per share)
gain  on  the  sale  of its printed circuit board  manufacturing
facility.   For the same period in 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. (Bentley).  Excluding nonrecurring  charges,  the
loss from operations for the first nine months of 1998 was $1.81
per  share  versus a loss of $.84 per share for the  first  nine
months  of 1997.  This increased loss results from a 9%  decline
in  revenues  and a 6.8 point decline in systems  gross  margin,
partially  offset  by a 5% decline in operating  expenses.   The
year  to  date decline in revenues and margins is primarily  the
result  of the Company's ongoing dispute with Intel Corporation.
This  dispute  is  fully described in the  Company's  Form  10-K
annual  report for the year ended December 31, 1997, and updated
in subsequent Form 10-Q filings, including this report.

SCI.   Reflecting an industry outsourcing trend, on October  14,
1998,  the  Company  and  SCI Systems Inc.  (SCI)  announced  an
agreement  whereby SCI will purchase substantially  all  of  the
Company's  U.S.  manufacturing inventory  and  assets  and  will
assume  manufacturing of the Company's hardware  products.   SCI
will  lease the Company's manufacturing facilities for a  period
of  approximately  five months before moving operations  to  SCI
facilities and will offer employment to approximately 310 of the
Company's  manufacturing  employees.   The  Company  expects  to
benefit from lower employee headcount, lower per unit costs  for
materials   and  overhead  expenses,  and  improved  cash   flow
resulting  from improved inventory management.  This outsourcing
of  the  Company's  manufacturing  will  also  allow  Intergraph
Computer   Systems,   the   Company's  wholly   owned   hardware
subsidiary,  to  focus  on  its core competencies  of  graphics,
workstations, and systems integration.  The companies closed the
transaction  November 13, 1998.  The transaction is expected  to
generate cash flow for the Company of approximately $60 million.

Nonrecurring  Charges  (Credit).  In  first  quarter  1998,  the
Company  reorganized  its  European operations  to  reflect  the
organization  of the Company into four distinct operating  units
and to align operating expenses more closely with revenue levels
in  that region.  The cost of this reorganization was originally
estimated at $5.4 million, primarily for employee severance  pay
and  related costs.  In the second and third quarters  of  1998,
$.9  million and $.1 million, respectively, of the costs accrued
in  the  first quarter were reversed as the result of incurrence
of lower severance costs than originally anticipated.  The third
quarter  credit  and  year to date charge of approximately  $4.5
million are included in "Nonrecurring charges (credit)"  in  the
consolidated statements of operations for the quarter  and  nine
months  ended  September 30, 1998.  Approximately  70  positions
were  eliminated  in  the  sales  and  marketing,  general   and
administrative,  and  pre- and post-sales support  areas.   Cash
outlays related to this charge approximated $2.4 million in  the
first nine months of 1998.  The remaining costs are expected  to
be  paid out over the remainder of the year and are included  in
"Other  accrued expenses" in the September 30, 1998 consolidated
balance    sheet.    The   Company   estimates   the    European
reorganization  will result in annual savings  of  approximately
$5.2 million.

The  remainder  of  the first quarter 1998 nonrecurring  charges
consists   of  write-offs  of  a)  certain  intangible   assets,
primarily  capitalized  business system  software,  b)  goodwill
recorded on a prior acquisition of a domestic subsidiary, and c)
a  noncompete  agreement with a former third  party  consultant.
Prior  to  the  write-off,  amortization  of  these  intangibles
accounted for approximately $3.4 million of the Company's annual
operating expenses.

In first quarter 1997, the Company sold an unprofitable business
unit  to  a  third  party and discontinued the operations  of  a
second  unprofitable business unit.  This second  business  unit
was sold to a third party during second quarter 1997.  The total
loss  on  these  sales was $8.3 million, of which  $7.2  million
($.15  per  share) had been recorded as an asset revaluation  in
fourth  quarter 1996.  The remaining loss of $1.1 million  ($.02
per share) is included in "Nonrecurring charges (credit)" in the
consolidated  statement of operations for the nine months  ended
September  30, 1997.  Revenues and losses of these two  business
units totaled $24 million and $16 million, respectively, for the
full  year  1996.   Assets  of the business  units  totaled  $14
million  at December 31, 1996.  The two business units  did  not
have  a  material effect on the Company's results of  operations
for the period in 1997 prior to their disposal.

Litigation  and  Other  Risks  and  Uncertainties.   As  further
described  in the Company's Form 10-K filing for its year  ended
December  31,  1997 and its Form 10-Q filings for  the  quarters
ended  March 31, 1998 and June 30, 1998, the Company has ongoing
litigation,  in  particular with Intel Corporation  and  Bentley
Systems, Inc., and its business is subject to certain risks  and
uncertainties.   Significant developments during  third  quarter
1998 are discussed below.

Intel.   As further described in the Company's Form 10-Q filings
for  the  quarters ended March 31, 1998 and June 30,  1998,  the
U.S.  District Court, Northern District of Alabama, Northeastern
Division, (the "Alabama Court") ruled in favor of Intergraph  on
April  10, 1998 and ordered that Intel, the supplier of all  the
Company's  microprocessor needs, be preliminarily enjoined  from
terminating  Intergraph's  rights as  a  strategic  customer  in
current and future Intel programs, and from otherwise taking any
action  adversely  affecting Intel's business relationship  with
Intergraph or Intergraph's ability to design, develop,  produce,
manufacture,  market  or sell products incorporating,  or  based
upon, Intel products or information.  In response to the Alabama
Court's  decision,  on  April 16, 1998, Intel  appealed  to  the
United  States  Court  of Appeals for the Federal  Circuit  (the
"Appeals Court").  Intel and the Company have each filed  briefs
with  the  Appeals Court.  No decision has been  entered.   Oral
argument  before  the  Appeals  Court  has  been  scheduled  for
December 9, 1998.

On  May  18, 1998, the Alabama Court denied Intel's January  15,
1998  motion  for a change of venue from Alabama to  California,
and  Intel  subsequently dropped two retaliatory lawsuits  which
Intel  had brought against the Company in California.   On  June
17,  1998,  Intel  filed its answer in the Alabama  case,  which
included counterclaims against Intergraph, including claims that
Intergraph  has infringed seven patents of Intel.   On  July  8,
1998,  the  Company filed its answer to the Intel counterclaims,
among  other  things  denying  any liability  under  the  patent
infringement asserted by Intel.  On June 17, 1998, Intel filed a
motion  before  the  Alabama Court seeking  a  summary  judgment
holding  that  Intel  is licensed to use the  patents  that  the
Company   asserted  against  Intel  in  the  Company's  original
complaint.    This  "license  defense"  is  based   on   Intel's
interpretation of the facts surrounding the acquisition  by  the
Company   of  the  Advanced  Processor  Division  of   Fairchild
Semiconductor  Corporation in 1987.  The Company  is  vigorously
contesting  Intel's motion for summary judgment on  the  license
defense,  and  filed  a  cross motion  with  the  Alabama  Court
September 15, 1998 requesting summary adjudication in  favor  of
the Company.  No decision has been entered.

In  a  scheduling order entered June 25, 1998, the Alabama Court
has set a trial date of February 14, 2000.

Reference  should  be  made to the Company's  Form  10-K  annual
report  for  the  year ended December 31, 1997  for  a  complete
description  of  the background of and basis for these  actions,
and  for  a  description of the effects of this dispute  on  the
operations   of  the  Company,  which  include  lost   revenues,
uncertain  supply, and increased microprocessor costs and  legal
expenses.   The Company is vigorously prosecuting its  positions
and believes it will prevail in these matters, but at present is
unable  to  predict the outcome of its dispute with Intel.   The
Company  does  expect,  however, that  adverse  effects  on  its
operations  will  continue in the near term,  primarily  due  to
increased legal and administrative expenses associated with  the
trial.

Bentley.  As further described in the Company's Form 10-K annual
report  for the year ended December 31, 1997, Bentley  commenced
an  arbitration  proceeding against the Company in  March  1996,
alleging that the Company failed to properly account for and pay
to  Bentley  certain royalties on its sales of Bentley  software
products,  and  seeking significant damages.  Hearings  on  this
matter  are in process and are expected to continue through  the
first  quarter of 1999.  The Company denies that it has breached
any  of its contractual obligations to Bentley and is vigorously
defending  its  position in this proceeding, but at  present  is
unable to predict an outcome.

Year 2000 Issue.  As further described in the Company's Form 10-
K  annual  report for the year ended December 31, 1997  and  its
Form  10-Q for the quarter ended June 30, 1998, the Company  has
initiated  a  program to mitigate/ and or prevent  the  possible
adverse effects on its operations of Year 2000 problems  in  its
software  and hardware  products  sold  to  customers and in its 
internally used software and hardware.

The  Company's efforts to identify and resolve Year 2000  issues
related  to  its  hardware and software  product  offerings  are
nearing  completion.   All  products currently  offered  in  the
Company's standard price list are Year 2000 compliant or will be
so  certified  as new versions and utilities are  released.   In
addition, the Company has made significant due diligence efforts
to  contact  its customers and business partners to ensure  that
customers  are  aware  of  how  to acquire  detailed  Year  2000
information  regarding any Intergraph-produced product.   As  of
November 10, 1998, all customers and business partners have been
contacted with this information, which is also included  on  the
Company's Internet website.  Accordingly, the Company  does  not
believe  that  Year  2000  presents a material  exposure  as  it
relates  to  the  Company's  product offerings.   The  Company's
product compliance costs have not had and are not anticipated to
have a material impact on its results of operations or financial
condition.   However,  any unanticipated customer  claims  could
increase the Company's legal expenses and, if successful,  could
have an adverse impact on future results.

Year  2000 readiness of the Company's business critical internal
systems have been made a top priority by the Company's Year 2000
Program Team.  These efforts have been primarily concentrated in
the  third and fourth quarters of 1998, and significant  efforts
will  continue through the first quarter of 1999.  All  business
critical  internal systems upgrades and programming changes  are
scheduled  to be tested and implemented by March of  1999.   New
financial and administrative systems form a portion of the Company's
Year 2000 internal solution, and will be selected before the end 
of 1998, with implementation and most of the related costs to be incurred 
in 1999.  While the Company does not anticipate that these costs will have a
material  effect  on  its  results of  operations  or  financial
condition  for  either  1998  or 1999,  it  will  be  unable  to
accurately calculate the impact until all systems selections are
completed  at  the  end  of  1998.  If such system changes and 
replacements are not completed timely, the Year 2000 issue could have a  
material impact  on the operations of the Company.  The Company believes
that it will successfully implement all internal systems changes
and replacements necessary to ensure the Year 2000 compliance of
all  business critical internal systems.  Costs incurred to date
are not significant.

In  second  quarter 1998, the Company's Year 2000  Program  Team
required  all  organizations to develop plans and implementation
schedules  addressing  their  specific  Year  2000  needs.   The
majority  of  the  Company's subsidiaries and  departments  have
completed  and  prioritized an initial inventory of  their  Year
2000 risks and have begun to plan corrective actions.  Contingency  
plans, if necessary, will be developed and implemented commencing 
at end of first quarter of 1999.  Costs incurred to date, consisting  
primarily of hardware and software  upgrades, are not significant.

To  ensure the Company's critical suppliers are able to continue
uninterrupted  supply, the Company is conducting  a  program  of
investigation  with  these  suppliers  and  includes  Year  2000
provisions  in  its  new  supplier  agreements.   This   program
consists  primarily  of a major survey campaign  and  aggressive
follow-up  with significant third parties to monitor compliance.
The  Company is also initiating discussions with other  entities
with which it interacts electronically, including customers  and
financial institutions, to ensure those parties have appropriate
plans  to  remediate  Year 2000 issues.  To date,  responses  to
third  party  Year  2000 surveys do not provide  assurance  that
these  third parties will achieve Year 2000 compliance  as  most
companies are reluctant to make such representations.   However,
most  of these parties have Year 2000 programs in place and,  to
date,  no significant risks have been identified.  There can  be
no  guarantee that the systems of other companies on  which  the
Company  relies will be converted timely, and the Company  could
be   adversely  impacted  by  suppliers,  customers,  and  other
businesses not successfully addressing this issue.  It  is  also
possible  that  the  Company's sales volume for  1999  could  be
negatively impacted as the result of customer focus on the  Year
2000  compliance  of their current systems rather  than  on  the
purchase  of  new  ones.  The Company will  develop  contingency
plans  by  the  end  of the second quarter of  1999  to  address
potential third party noncompliance issues.

The  costs  of  the  Year 2000 project and the  dates  on  which
significant  phases will be completed are based on  management's
best  estimates,  which  have  been derived  utilizing  numerous
assumptions   of   future   events,  including   the   continued
availability  of  certain  resources, third  party  modification
plans, and other factors.  There can be no guarantee that  these
estimates  will  be  achieved, and actual results  could  differ
materially from those anticipated.  Specific factors that  might
cause such material differences include, but are not limited to,
the availability and cost of personnel trained in this area, the
ability  to locate and correct all relevant computer  codes  and
implement   new  systems  in  a  timely  manner,   and   similar
uncertainties.

The  Company  believes it has an effective program in  place  to
resolve the Year 2000 issue in a timely manner; however, it  has
not  yet completed all necessary phases of this program.  In the
event  that the Company does not complete any additional phases,
the  Company could experience significant delays in sales  order
processing, shipping, invoicing, and collections among other areas.   
In  addition, the Company's  operations  could  be  materially  
adversely affected if Year 2000  compliance  is  not achieved  
by significant vendors or  if the Company becomes the subject of 
significant product liability claims.   The  amount of potential 
liability  and  lost  revenue cannot be reasonably estimated  at 
this time.

Euro Conversion.  On January 1, 1999, eleven member countries of
the  European  Monetary Union (EMU) are  scheduled  to  fix  the
conversion  rates among those national currencies and  a  common
currency, the "Euro".  The former national currencies  of  these
participating  countries will continue to exist as denominations
of  the Euro through July 1, 2002.  Euro currency will begin  to
circulate  on  January 1, 2002.  With respect  to  the  Company,
European business systems are being upgraded to accommodate  the
Euro.  European accounts receivable and  accounts  payable systems 
are planned to be made Euro compliant by December 31, 1998.  The 
remaining  systems conversions are scheduled for the second quarter
of 1999.  Euro conversion capabilities are also being considered
in the evaluation of potential new U.S. accounting systems.  The
Company   is  in  the  process  of  evaluating  other   business
implications  resulting  from  Euro  conversion,  including  the
impact  of  cross-border price transparency on the  revenues  of
countries  within  the  EMU and exposure  to  market  risk  with
respect to financial instruments.  While the Company has not yet
completed its assessment of these business implications  on  its
results  of  operations  or financial  condition,  it  does  not
anticipate this impact will be material.  However, any resulting
devaluation of the Euro or other European currencies could  have
an  adverse  impact  on  the  Company's  reported  revenues  and
operating results.

Remainder  of  the Year.  The Company expects that the  industry
will  continue  to  be characterized by higher  performance  and
lower  priced  products, intense competition,  rapidly  changing
technologies,  shorter  product  cycles,  and  development   and
support  of  software  standards that result  in  less  specific
hardware  and software dependencies by customers.   The  Company
believes  that  its  operating system and hardware  architecture
strategies  are  the  correct choices,  that  the  industry  has
accepted  Windows  NT,  and  that Windows  NT  is  becoming  the
dominant  operating system in the majority of markets served  by
the  Company.  However, competing operating systems and products
are  available  in the market, and competitors  of  the  Company
offer  or  are adopting Windows NT and Intel as the systems  for
their  products.  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, and will further depend on
its  ability to successfully implement its strategic  direction.
In  addition,  the  Company  faces significant  operational  and
financial  uncertainty of unknown duration due  to  its  dispute
with  Intel.  To achieve and maintain profitability, the Company
must  substantially increase sales volume and/or  further  align
its  operating  expenses with the level  of  revenue  and  gross
margin being generated.


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

Orders.   Systems orders for the third quarter  and  first  nine
months  of  1998  totaled  $173.0 million  and  $551.5  million,
respectively,   a  decrease  of  approximately   13%   and   4%,
respectively,  from the same prior year periods.   U.S.  systems
orders  decreased  17%  and  4%, respectively,  from  the  third
quarter  and  first  nine  months of 1997  due  primarily  to  a
significant  third quarter decline in orders  from  the  federal
government  and  to  weakness in the Company's  U.S.  commercial
market sector.  Both federal and commercial orders were impacted
by weakened demand for the Company's hardware product offerings,
due   partially  to  increasing  price  competition  within  the
industry.  International systems orders declined 9% and 5%  from
the  third  quarter and first nine months of 1997, respectively.
Strengthening   of   the   U.S.  dollar  against   international
currencies,   primarily  in  Europe  and   Asia,   has   reduced
consolidated  systems orders growth by approximately  2  points.
In  addition, order levels in all regions have been  reduced  by
the  sale  of the Company's Solid Edge and Engineering  Modeling
System  product  lines and by the previously  described  dispute
with  Intel.  The Company expects that the impact of  the  Intel
dispute  on  its  fourth quarter orders will  be  diminished  in
comparison to previous quarters since, as of October  1998,  all
of  the  Company's hardware product offerings contain the latest
Intel  technology  and are technologically  back  in  line  with
industry competition.

New  Products.   In  July 1998, the Company introduced  its  new
Wildcat  3D graphics technology, which increases the performance
of  Windows  NT-based  workstations beyond current  3D  graphics
technology.   This  technology streamlines  workflows,  enabling
creative  and  technical professionals to work interactively  in
real  time  with  more realistic full-sized, fully  textured  3D
models.  The technology, which was originally scheduled to  ship
in  December, began delivering in late October in the  Company's
TDZ  workstations.  It will also be available on  the  Company's
new Intense 3D Wildcat series of 3D graphics accelerators and in
the   Intel/Windows  NT-based  workstations  of  other  computer
vendors.

The  success  of  new product introductions is  dependent  on  a
number  of  factors, including market acceptance, the  Company's
management  of  risk  associated with  product  transition,  the
effective   management  of  inventory  levels   in   line   with
anticipated  demand,  and the risk that new  products  may  have
defects  in  the introductory stage.  Accordingly,  the  Company
cannot determine the ultimate effect that new products will have
on its sales or operating results.

Revenues.   Total revenues for the third quarter and first  nine
months   of  1998  were  $253.6  million  and  $746.1   million,
respectively,  down approximately 10% from the comparable  prior
year  periods.  Sales outside the U.S. represented 50% of  total
revenues  in  the  first  nine  months  of  1998,  compared   to
approximately 53% for the full year 1997.  Strengthening of  the
U.S. dollar in the Company's international markets, particularly
Europe  and  Asia,  reduced the reported level  of  U.S.  dollar
revenues  for the period.  European revenues were 30%  of  total
revenues for the first nine months of 1998, compared to 32%  for
the full year 1997.

Systems.   Systems revenue for the third quarter and first  nine
months   of   1998  was  $176.7  million  and  $513.4   million,
respectively,  down  12% and 10%, respectively,  from  the  same
prior year periods.  The factors affecting systems orders growth
described above have similarly affected systems revenue  growth.
During the third quarter, the Company continued to feel residual
effects from its dispute with Intel Corporation, including  lost
sales  momentum and shipment problems resulting from a non-Intel
chipset used in certain of the Company's workstations.  In  late
1997,  when  the  dispute looked as if it might  jeopardize  the
Company's  supply  of  Intel components,  an  alternate  chipset
supplier  was  selected for some of its designs.  In  the  third
quarter,  that vendor had difficulty delivering enough parts  to
the  Company, resulting in a significant backlog that could  not
be  shipped  during the quarter.  As of the end of October,  the
Company  believes this problem has been resolved  and  that  the
remaining backlog should ship during the fourth quarter.

U.S. systems revenues were down 10% from third quarter 1997  and
7%  from  the  first  nine  months of 1997  due  to  significant
declines   in  both  federal  government  and  U.S.   commercial
revenues,  partially offset by continued growth in the Company's
public  safety  business.  International systems  revenues  were
down approximately 14% from third quarter 1997 and 12% from  the
first  nine months of 1997.  Asia Pacific and European  revenues
have  declined by 28% and 12%, respectively, from the prior year
to  date level.  Excluding the impact of a stronger dollar,  the
revenue declines in these regions were 18% and 9%, respectively.
These declines are primarily due to factors associated with  the
Intel  lawsuit  and  the sale of the Company's  Solid  Edge  and
Engineering Modeling System product lines and, in Asia,  due  to
currency and economic problems affecting that region.

Hardware revenues for the first nine months of 1998 declined  9%
from  the  prior  year period.  Unit sales of  workstations  and
servers  were  up  6%,  while workstation  and  server  revenues
declined  by  11% due to a 16% decline in the average  per  unit
selling  price.  Third quarter revenues were negatively impacted
by  the chipset problem described above and by increasing  price
competition  within the industry.  Sales of peripheral  hardware
products declined by 7% from the prior year period due primarily
to a 45% decline in sales of graphics cards, partially offset by
an  increase  in upgrades to Intel-based hardware.  The  Company
expects  the  demand for graphics cards to increase  during  the
fourth  quarter of 1998 with the availability of its new Wildcat
3D graphics technology.

Software  revenues declined 17% from the prior  year  level  due
primarily  to  a 76% decline in sales of mechanical applications
(includes the Solid Edge and Engineering Modeling System product
lines)  and  a  49%  decline  in sales  of  MicroStation.   (The
Company's Form 10-K filing for the year ended December 31,  1997
contains further discussion of the Company's MicroStation  sales
and   relationship  and  ongoing  arbitration  proceedings  with
Bentley Systems, Inc., the developer and owner of MicroStation.)
These  declines were partially offset by a 22% increase in sales
of  the  Company's  plant  design  products.   Plant  design  is
currently   the  Company's  highest  volume  software  offering,
representing approximately 29% of total software sales  for  the
first  nine  months  of  1998.  Sales of Windows-based  software
represented approximately 86% of total software revenues in  the
first nine months of 1998, up from approximately 81% in the same
period in 1997.

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 $76.9  million  for
the  third quarter and $232.7 million for the first nine  months
of 1998, down 7% and 9%, respectively, from the comparable prior
year periods.  Maintenance revenues for the first nine months of
1998  totaled $160.1 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  10%  of  year  to  date  1998  revenues  and  has
increased  5%  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  grow  its
services business and has begun to redirect the efforts  of  its
hardware  maintenance  organization  to  focus  increasingly  on
systems  integration  and  training.   Such  revenues,  however,
produce lower gross margins than maintenance revenues.


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

The  Company's  total  gross margin for the  third  quarter  was
30.8%,  down 5.1 points from the third quarter 1997 level.   For
the  first  nine months of 1998, total gross margin  was  31.2%,
down  5.0 points from the same prior year period and 4.4  points
from the full year 1997 level.

Systems margin for the third quarter was 28.9%, down 5.4  points
from the third quarter 1997 level.  For the first nine months of
1998,  systems margin was 28.3%, down approximately  6.8  points
from  the  same prior year period and 6.3 points from  the  full
year  1997 level.  The previously discussed factors contributing
to  the  Company's systems revenue decline have  had  a  similar
adverse  effect on systems margin.  In addition, systems margins
continue to be negatively impacted by a higher hardware  content
in the product mix and by significant over capacity variances in
manufacturing.  These manufacturing variances will be eliminated
by  the Company's outsourcing agreement with SCI, and additional
cost   savings  are  expected  to  be  realized  from  resulting
reductions in headcount and materials costs.

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 on its systems margins.   While
the  Company expects to achieve significant cost savings through
its  outsourcing  agreement  with  SCI,  it  expects  continuing
pressure  on  its  systems  margin due primarily  to  increasing
industry price competition.

Maintenance  and services margin for the third quarter  of  1998
was 35.1%, down 4.6 points from the third quarter of 1997 due to
a  decline in maintenance revenue and to costs incurred on long-
term  service  contracts  without corresponding  recognition  of
revenue.   Revenue  on  service  contracts  is  often  based  on
completion  of  milestones or other factors appropriate  to  the
individual  contract  of  sale.  Year to  date  maintenance  and
services  margin is 37.4%, down 1.2 points from the  same  prior
year  period and .6 points from the full year 1997 level.  Long-
term  service contracts account for the majority of the year  to
date  margin  decline.  While the Company's maintenance  revenue
level  has  declined significantly from the  prior  year  level,
margins on this form or revenue have remained relatively stable.
The Company closely monitors its maintenance costs and has taken
certain  measures,  including reductions in headcount,  to  more
closely  align  costs  with  the current  revenue  levels.   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 1998 declined by 6% and 5%, respectively, from the comparable
prior year periods.  Total employee headcount has declined by 8%
during that same period.

Product development expense for the third quarter and first nine
months  of 1998 declined by 14% and 11%, respectively, from  the
same  prior year periods due primarily to a decline in labor and
related overhead expenses.  Headcount in the product development
area  has  declined by 9% from the prior year level.  Sales  and
marketing expense for the third quarter and first nine months of
1998 declined by 7% and 6%, respectively, from the corresponding
prior  year periods due to strengthening of the U.S.  dollar  in
the  Company's  international markets and to  across  the  board
expense   reductions   in   Europe  resulting   primarily   from
restructuring   actions  taken  in  the   first   quarter   (see
"Nonrecurring Charges").  General and administrative expense for
the  third  quarter and first nine months of 1998 is  relatively
flat  with  the  comparable prior year  periods.   The  positive
impact  resulting  from  a  strong U.S.  dollar  was  offset  by
increases in legal expenses (see "Litigation and Other Risks and
Uncertainties") and worldwide provisions for bad debts.


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

Interest expense was $1.8 million for the third quarter and $5.9
million  for  the first nine months of 1998 versus $1.8  million
and $4.7 million, respectively, for the corresponding prior year
periods.   The  Company's average outstanding debt increased  in
comparison  to  the  same prior year periods  due  primarily  to
borrowings  under  the Company's revolving credit  facility  and
term  loan.  See "Liquidity and Capital Resources" below  for  a
discussion of the Company's current financing arrangements.

In  first quarter 1998, the Company sold the assets of its Solid
Edge and Engineering Modeling System product lines to Electronic
Data  Systems  Corporation and its Unigraphics  Solutions,  Inc.
subsidiary  for  $105 million in cash.  The Company  recorded  a
gain  on  this  transaction of $102.8  million.   This  gain  is
included  in  "Gains  on sales of assets"  in  the  consolidated
statement of operations for the nine months ended September  30,
1998.   Full  year 1997 revenues and operating  loss  for  these
product lines were $35.2 million and $4.1 million, respectively.
The  Company estimates the sale of this business will result  in
an improvement in its 1998 operating results of approximately $5
million, excluding the impact of the gain on the sale.

In  second  quarter  1998, the Company sold the  assets  of  its
printed circuit board manufacturing facility for $16 million  in
cash.   The Company recorded a gain on this transaction of  $8.3
million.  This gain is included in "Gains on sales of assets" in
the  consolidated statement of operations for  the  nine  months
ended  September  30, 1998.  The Company is now outsourcing  its
printed circuit board needs and does not expect this operational
change  to  materially impact its results of operations  in  the
remainder of 1998.

In  second  quarter  1997, the Company received  notice  of  the
adverse  determination of an arbitration proceeding with Bentley
Systems, Inc. (Bentley), an approximately 50%-owned affiliate of
the  Company and 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.
The arbitrator's award was in the amount of $6.1 million and  is
included in "Arbitration award" in the consolidated statement of
operations  for the nine months ended September 30,  1997.   The
cash  position  of  the Company was not significantly  adversely
affected by this award, as the Company offset approximately $5.8
million  in  fees otherwise owed the Company by Bentley  against
the   amount  awarded  Bentley.   For  further  details  of  the
Company's  business relationship with Bentley and a  description
of continuing arbitration proceedings between the two companies,
see  the  Company's Form 10-K filing for the year ended December
31, 1997.

In  third quarter 1997, the Company sold its stock investment in
a publicly traded affiliate at a gain of $4.9 million.  The gain
is  included  in "Gains on sales of assets" 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.

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


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 1998, approximately
50%  (53% for the full year 1997) 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  1998,  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
this  strengthening  of  the U.S. dollar  in  its  international
markets,  primarily  Europe  and Asia,  adversely  affected  its
results  of  operations for the first nine  months  of  1998  by
approximately  $.13 per share in comparison to  the  same  prior
year   period.   (Strengthening  of  the  U.S.  dollar   reduced
operating  results  for  the  first  nine  months  of  1997   by
approximately  $.16 per share in comparison to  the  first  nine
months of 1996.)

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 and Asia.  With  respect
to the currency exposures in these regions, 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  will
therefore  enter  into  forward exchange  contracts  related  to
certain balance sheet items, primarily intercompany receivables,
payables,  and formalized intercompany debt, when a  significant
risk  has  been identified.  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 the balance  sheet  items  being
hedged, which are generally less than three months, 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  forward  exchange
contracts   and  therefore  does  not  take  currency  positions
exceeding its known financial statement exposures, and does  not
otherwise trade in currencies.

At  September  30,  1998, the Company's only  outstanding  hedge
contracts  related to formalized intercompany loans between  the
Company's  European subsidiaries.  The Company is not  currently
hedging  any  of its foreign currency risks in the Asia  Pacific
region.

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

The   Company  earned  pretax  income  for  financial  statement
purposes of $5.8 million in the first nine months of 1998 versus
a  pretax loss of $49.5 million for the same prior year  period.
Income  tax  expense for the first nine months of  1998  results
primarily  from  U.S.  alternative  minimum  tax  and  taxes  on
individually profitable international subsidiaries.  The sale of
the Solid Edge and Engineering Modeling System product lines did
not  create a significant tax liability for the Company  due  to
the  availability of net operating loss carryforwards to  offset
current  year  earnings.  After consideration of the  sale,  the
Company  has  net operating loss carryforwards for U.S.  federal
purposes   of   approximately  $130  million  and  international
carryforwards of approximately $100 million.


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

At September 30, 1998, cash totaled $56.8 million as compared to
$46.6 million at December 31, 1997.  Cash consumed by operations
in the first nine months of 1998 totaled $46.8 million, compared
to  a  consumption of $14.3 million in the first nine months  of
1997,  reflecting  the negative cash flow effects  of  increased
operating  losses.   In addition, inventory  build-ups  consumed
$11.9 million and $19.5 million, respectively, in the first nine
months  of 1998 and 1997.  The 1997 build up was in response  to
an  anticipated increase in hardware unit sales  volume  and  to
customer demand for faster delivery of products.  The 1998 build
up  resulted  from  an  anticipated order level  which  did  not
materialize.

Net  cash  generated  from  investing activities  totaled  $70.3
million in the first nine months of 1998, compared to a net  use
of $20.4 million in the first nine months of 1997.  Year to date
1998 investing activities included $102 million in proceeds from
the  sale  of the Company's Solid Edge and Engineering  Modeling
System  product lines, $16 million in proceeds from the sale  of
the  Company's printed circuit board manufacturing facility, and
expenditure of $26.3 million for the purchase of Zydex  software
rights.  Investing activities for the first nine months of  1997
included  $5.7 million in proceeds from sales of a division  and
investments   in   affiliated  companies.    Other   significant
investing  activities  included capital  expenditures  of  $12.4
million  ($17.9  million  in the first  nine  months  of  1997),
primarily for Intergraph products used in hardware and  software
development and sales and marketing activities, and $8.6 million
for  capitalizable software development costs ($7.1  million  in
the  first  nine  months  of 1997.)  The  Company  expects  that
capital  expenditures will require $16 to $20  million  for  the
full  year  1998,  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.

Net cash used for financing activities totaled $13.9 million  in
the  first  nine months of 1998 versus a net cash generation  of
$19.1 million in the same prior year period.  Year to date  1998
financing activities included a net repayment of debt  of  $16.1
million compared with a net addition to short and long term debt
of  $16.7 million in the first nine months of 1997.  Activity in
both  years relates primarily to borrowings under the  Company's
revolving credit facility and term loan.

Under  the Company's January 1997 four 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 $125 million.  The $25 million term  loan
portion  of the agreement is 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  (8.25%  at  September  30,  1998)  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, 1998, the Company  had
outstanding borrowings of $45 million ($43.3 million at November
10, 1998), $25 million of which was classified as long term debt
in  the  consolidated  balance sheet, and  an  additional  $32.9
million  ($30.5 million at November 10, 1998) 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
November 10, 1998, the borrowing base, representing the  maximum
available  credit under the line, was $107.1 million, leaving  a
remaining  availability  at  that  date  of  approximately   $33
million.

The  term  loan  and revolving credit agreement contain  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.

On  October  30, 1998, the term loan and security agreement  was
amended  to  incorporate the sale of the Company's manufacturing
assets  to  SCI  and  to modify the borrowing  base  accordingly
effective  on  the  closing date of the  SCI  transaction.   The
Company does not anticipate that the SCI transaction will affect
the   Company's  remaining  credit  line  availability  as   the
borrowing  base reduction for assets sold to SCI will be  offset
by  the cash received from the sale, which will be used to repay
current amounts outstanding under the credit line.

At September 30, 1998, the Company had approximately $78 million
in debt on which interest is charged under various floating rate
arrangements,  primarily  under its  four  year  term  loan  and
revolving  credit agreement, mortgages, and an  Australian  term
loan.  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  cash   from   its
operations,  and  believes  this condition  may  extend  through
fourth  quarter  1998.   However,  the  Company  believes   that
existing cash balances, cash from the SCI transaction, and  cash
available  under  its term loan and revolving  credit  agreement
will be adequate to meet cash requirements through the first half
of 1999.   The  Company  also anticipates  that  it  will  generate
between  $10  and $15 million during the fourth quarter  through
various other sale and financing transactions.  In  the
near  term,  the Company must increase sales volume and  further
align  its  operating expenses with the level of  revenue  being
generated  in order to adequately fund its operations and  build
its  cash reserves without reliance on funds generated from  the
sale of long term assets and third party financing.

INTERGRAPH CORPORATION AND SUBSIDIARIES

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

  Item 1: Legal Proceedings
          -----------------

       Intel.   As further described in the Company's Form  10-Q
       filings  for the quarters ended March 31, 1998  and  June
       30,  1998, the U.S. District Court, Northern District  of
       Alabama,  Northeastern  Division, (the  "Alabama  Court")
       ruled  in  favor  of  Intergraph on April  10,  1998  and
       ordered  that  Intel, the supplier of all  the  Company's
       microprocessor  needs,  be  preliminarily  enjoined  from
       terminating  Intergraph's rights as a strategic  customer
       in  current and future Intel programs, and from otherwise
       taking  any  action adversely affecting Intel's  business
       relationship with Intergraph or Intergraph's  ability  to
       design,  develop, produce, manufacture,  market  or  sell
       products incorporating, or based upon, Intel products  or
       information.    In   response  to  the  Alabama   Court's
       decision,  on  April  16, 1998,  Intel  appealed  to  the
       United  States  Court of Appeals for the Federal  Circuit
       (the  "Appeals Court").  Intel and the Company have  each
       filed  briefs  with the Appeals Court.  No  decision  has
       been  entered.   Oral argument before the  Appeals  Court
       has been scheduled for December 9, 1998.

       On  May  18,  1998,  the  Alabama  Court  denied  Intel's
       January  15,  1998  motion for a  change  of  venue  from
       Alabama  to  California, and Intel  subsequently  dropped
       two  retaliatory lawsuits which Intel had brought against
       the  Company  in  California.  On June  17,  1998,  Intel
       filed  its  answer  in the Alabama case,  which  included
       counterclaims against Intergraph, including  claims  that
       Intergraph  has  infringed seven patents  of  Intel.   On
       July  8, 1998, the Company filed its answer to the  Intel
       counterclaims, among other things denying  any  liability
       under  the  patent infringement asserted  by  Intel.   On
       June  17,  1998, Intel filed a motion before the  Alabama
       Court  seeking a summary judgment holding that  Intel  is
       licensed  to  use  the patents that the Company  asserted
       against Intel in the Company's original complaint.   This
       "license  defense" is based on Intel's interpretation  of
       the  facts surrounding the acquisition by the Company  of
       the    Advanced    Processor   Division   of    Fairchild
       Semiconductor  Corporation  in  1987.   The  Company   is
       vigorously   contesting  Intel's   motion   for   summary
       judgment  on  the  license defense,  and  filed  a  cross
       motion   with  the  Alabama  Court  September  15,   1998
       requesting summary adjudication in favor of the  Company.
       No decision has been entered.

       In  a scheduling order entered June 25, 1998, the Alabama
       Court has set a trial date of February 14, 2000.

       Reference  should  be  made to the  Company's  Form  10-K
       annual report for the year ended December 31, 1997 for  a
       complete  description of the background of and basis  for
       these  actions, and for a description of the  effects  of
       this  dispute  on  the operations of the  Company,  which
       include  lost  revenues, uncertain supply, and  increased
       microprocessor costs and legal expenses.  The Company  is
       vigorously  prosecuting  its positions  and  believes  it
       will  prevail in these matters, but at present is  unable
       to  predict  the outcome of its dispute with Intel.   The
       Company  does  expect, however, that adverse  effects  on
       its  operations will continue in the near term, primarily
       due   to  increased  legal  and  administrative  expenses
       associated with the trial.

       Bentley.  As further described in the Company's Form  10-
       K  annual  report for the year ended December  31,  1997,
       Bentley  commenced an arbitration proceeding against  the
       Company  in March 1996, alleging that the Company  failed
       to  properly  account  for and  pay  to  Bentley  certain
       royalties on its sales of Bentley software products,  and
       seeking  significant damages.  Hearings  on  this  matter
       are  in process and are expected to continue through  the
       first  quarter of 1999.  The Company denies that  it  has
       breached  any of its contractual obligations  to  Bentley
       and   is  vigorously  defending  its  position  in   this
       proceeding,  but  at  present is  unable  to  predict  an
       outcome.


  Item 6: Exhibits and Reports on Form 8-K
          --------------------------------

    (a)   Exhibit    10(a),    agreement   between    Intergraph
          Corporation  and  Green Mountain, Inc.,  dated  April  1,
          1998.  *(1)


          Exhibit 27, Financial Data Schedule.



         *Denotes   management  contract  or   compensatory   plan,
         contract,  or  arrangement required  to  be  filed  as  an
         exhibit to this Form 10-Q.
      
         (1)    Incorporated  by  reference to exhibit  filed  with
                the  Company's  Quarterly Report on Form  10-Q  for
                the   quarter  ended  March  31,  1998,  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, 1998.


             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: /s/ James W. Meadlock          By: /s/ John W. Wilhoite
    ---------------------              --------------------
    James W. Meadlock                  John W. Wilhoite
    Chairman of the Board and          Executive Vice President, Finance
    Chief Executive Officer            (Principal Accounting Officer)


Date:  November 16, 1998               Date:November 16, 1998