======================================================================= 
   
                          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 June 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:  48,365,475 shares
                 outstanding as of June 30, 1998



======================================================================       
                                


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


                                                                   Page No.
                                                                   --------

PART I.   FINANCIAL INFORMATION

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

            Consolidated Statements of Operations for the 
            quarters and six months ended June 30, 1998 
            and 1997                                                   3

            Consolidated Statements of Cash Flows for the 
            six months ended June 30, 1998 and 1997                    4

            Notes to Consolidated Financial Statements               5 - 8

   Item 2.  Management's Discussion and Analysis of Financial 
            Condition and Results of Operations                      9 - 18


PART II.  OTHER INFORMATION

   Item 1.  Legal Proceedings                                         19

   Item 4.  Submission of Matters to a Vote of Security Holders       20

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


SIGNATURES                                                            21




*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 for the quarter
ended March 31, 1998, and this Form 10-Q.


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

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

Assets
  Cash and cash equivalents                       $ 85,456        $ 46,645
  Accounts receivable, net                         291,635         324,654
  Inventories                                      107,338         105,032
  Other current assets                              31,440          25,693
---------------------------------------------------------------------------
      Total current assets                         515,869         502,024

  Investments in affiliates                         13,960          14,776
  Other assets                                      62,702          53,566
  Property, plant, and equipment, net              135,402         150,623
---------------------------------------------------------------------------
      Total Assets                                $727,933        $720,989
===========================================================================

Liabilities and Shareholders' Equity
  Trade accounts payable                          $ 50,110        $ 60,945
  Accrued compensation                              46,659          48,330
  Other accrued expenses                            75,258          71,126
  Billings in excess of sales                       71,509          66,680
  Short-term debt and current maturities 
    of long-term debt                               33,884          50,409
---------------------------------------------------------------------------
      Total current liabilities                    277,420         297,490

  Deferred income taxes                                376             460
  Long-term debt                                    51,561          54,256
---------------------------------------------------------------------------
      Total liabilities                            329,357         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                      225,242         226,362
   Retained earnings                               297,896         269,442
   Accumulated other comprehensive income - 
     cumulative translation adjustment                 808           1,090
----------------------------------------------------------------------------
                                                   529,682         502,630
   Less - cost of 8,995,887 treasury shares at
     June 30, 1998 and 9,183,845 treasury 
     shares at December 31, 1997                  (131,106)       (133,847)
----------------------------------------------------------------------------
      Total shareholders' equity                   398,576         368,783
----------------------------------------------------------------------------
      Total Liabilities and Shareholders' Equity  $727,933        $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 June 30,  Six Months Ended June 30,
                                     1998      1997       1998       1997
--------------------------------------------------------------------------------
(In thousands except per share amounts)

Revenues
  Systems                          $168,314  $199,883   $336,697   $368,926
  Maintenance and services           78,299    88,726    155,734    172,441
--------------------------------------------------------------------------------
    Total revenues                  246,613   288,609    492,431    541,367
--------------------------------------------------------------------------------

Cost of revenues
  Systems                           121,358   127,500    242,346    237,738
  Maintenance and services           48,785    51,994     95,692    106,904
--------------------------------------------------------------------------------
    Total cost of revenues          170,143   179,494    338,038    344,642
--------------------------------------------------------------------------------

    Gross profit                     76,470   109,115    154,393    196,725

Product development                  22,249    25,171     45,949     51,130
Sales and marketing                  59,306    65,518    119,244    125,221
General and administrative           24,436    25,753     50,970     50,810
Nonrecurring charges (credit)       (   859)    ---       13,902      1,095
--------------------------------------------------------------------------------

   Loss from operations             (28,662)  ( 7,327)   (75,672)   (31,531)

Gains on sales of assets              8,275       ---    111,042        ---
Arbitration award                       ---   ( 6,126)       ---    ( 6,126)
Interest expense                    ( 1,861)  ( 1,612)   ( 4,050)   ( 2,847)
Other income (expense) - net          1,260   (   962)       634    ( 1,812)
--------------------------------------------------------------------------------
   
   Income (loss) before 
     income taxes                   (20,988)  (16,027)    31,954    (42,316)

Income tax expense                      ---       ---      3,500        ---
--------------------------------------------------------------------------------

   Net income (loss)               $(20,988) $(16,027)  $ 28,454   $(42,316)
================================================================================

   Net income (loss) per share -
      basic and diluted            $(   .43) $(   .33)  $    .59   $(   .88)
================================================================================

Weighted average shares outstanding -
      basic and diluted (1)          48,311    47,888     48,265     47,823
================================================================================

(1) Diluted shares were 48,358 for the six months ended June 30, 1998.

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



                   INTERGRAPH CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (Unaudited)

---------------------------------------------------------------------------
Six Months Ended June 30,                             1998          1997
---------------------------------------------------------------------------
(In thousands)

Cash Provided By (Used For):
Operating Activities:
  Net income (loss)                                $ 28,454      $(42,316)
  Adjustments to reconcile net income (loss) 
  to net cash used for operating activities:
    Depreciation and amortization                    26,921        31,511
    Arbitration award                                   ---         6,126
    Noncash portion of nonrecurring charges          11,947           ---
    Gains on sales of assets                       (111,042)          ---
    Net changes in current assets and liabilities    21,181       (12,117)
---------------------------------------------------------------------------
    Net cash used for operating activities         ( 22,539)      (16,796)
---------------------------------------------------------------------------

Investing Activities:
  Purchases of property, plant, and equipment      (  8,008)      (11,679)
  Capitalized software development costs           (  5,037)      ( 4,371)
  Proceeds from sales of assets                     118,002           ---
  Purchase of software rights                      ( 26,292)          ---
  Other                                                  14       ( 1,146)
---------------------------------------------------------------------------    
    Net cash provided by (used for) investing 
    activities                                       78,679       (17,196)
---------------------------------------------------------------------------

Financing Activities:
  Gross borrowings                                      168        36,565
  Debt repayment                                   ( 18,196)      (17,424)
  Proceeds of employee stock purchases and 
   exercise of stock options                          1,449         1,620
---------------------------------------------------------------------------   
    Net cash provided by (used for) financing 
    activities                                     ( 16,579)       20,761
---------------------------------------------------------------------------
Effect of exchange rate changes on cash            (    750)        3,041
---------------------------------------------------------------------------
Net increase (decrease) in cash and 
 cash equivalents                                    38,811       (10,190)
Cash and cash equivalents at beginning of period     46,645        50,674
---------------------------------------------------------------------------
Cash and cash equivalents at end of period         $ 85,456      $ 40,484
===========================================================================

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  six  months  and quarter ended 
        June  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  for  the quarter ended March 31, 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 second  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 $24,400,000 at June 30, 1998,  is  included
        in  "Other  assets"  in  the June 30,  1998  consolidated
        balance sheet.

NOTE 4: Inventories  are stated at the lower of average  cost  or
        market and are summarized as follows:
            
        ------------------------------------------------------     
                                 June 30,         December 31,
                                   1998              1997
        ------------------------------------------------------
        (In thousands)
        
        Raw materials           $ 32,944          $ 35,799
        Work-in-process           30,973            37,357
        Finished goods            25,687            11,760
        Service spares            17,734            20,116
        ------------------------------------------------------
        Totals                  $107,338          $105,032
        ======================================================

NOTE 5: Property,  plant, and equipment - net includes allowances
        for  depreciation  of  $271,009,000 and  $289,775,000  at
        June 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  six  months
        ended June 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  statements of operations  for  the  quarter
        and  six months ended June 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  first  quarter  1998,  the  Company  reorganized  its
        European  operations to reflect the organization  of  the
        Company  into  four  distinct  operating  units  and   to
        further  align operating expense 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  second
        quarter 1998, $859,000 of the costs accrued in the  first
        quarter  were  reversed as the result  of  incurrence  of
        lower  severance costs than originally anticipated.   The
        second  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 six months ended June  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 $2,000,000 in  the  first  six
        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   June   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 8: 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"   in   the
        consolidated statement of operations for the  six  months
        ended  June 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 9: 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
        and   is   included  in  "Arbitration   award"   in   the
        consolidated  statements of operations  for  the  quarter
        and  six  months ended June 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 10: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 Provded By (Used For) Operations
        Six Months Ended June 30,             1998          1997
        -------------------------------------------------------------
        (In thousands)

        (Increase) decrease in:
          Accounts receivable, net          $31,249      $(   512)
          Inventories                       ( 2,732)      (20,986)
          Other current assets              ( 1,888)      (   552)
        Increase (decrease) in:
          Trade accounts payable            (10,737)        7,231
          Accrued compensation and other  
           accrued  expenses                    216         2,091
          Billings in excess of sales         5,073           611
        -------------------------------------------------------------
        Net changes in current assets 
        and liabilities                     $21,181      $(12,117)
        =============================================================

        Investing  and financing transactions in the  first  half
        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,  and a $4,649,000 unfavorable  mark-to-market
        adjustment  of  an  investment in an affiliated  company.
        There   were   no   significant  noncash  investing   and
        financing transactions in the first half of 1998.

NOTE 11:Basic income (loss) per share is computed by dividing
        net  income  (loss)  by the weighted  average  number  of
        common  shares  outstanding.  Diluted 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 12: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  six  months ended June 30,  1998  and  1997,
        total  comprehensive  income (loss) was  $28,172,000  and
        ($50,064,000),   respectively.    Comprehensive    income
        (loss)  differs  from net income (loss)  due  to  foreign
        currency  translation adjustments and, for 1997 only,  an
        unrealized holding loss on securities of an affiliate.

NOTE 13: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  six  months  ended June 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 14:In February 1998, the Financial Accounting Standards Board
        issued Statement of Financial Accounting Standards No. 132,
        "Employers' Disclosures about Pensions and Other Postretirement
        Benefits".  This statement, which is effective fiscal year 1998
        for the Company, revises the disclosures required for pension and
        other postretirement benefit plans, but does not change the 
        recognition and measurement for these plans.  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 any of these
        newly issued accounting pronouncements to have a material impact
        on its consolidated operating results or financial position.




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

SUMMARY
-------

Earnings.   In second quarter 1998, the Company incurred  a  net
loss  of $.43 per share on revenues of $246.6 million, including
an $8.3 million ($.17 per share) gain on the sale of its printed
circuit  board manufacturing facility.  The second quarter  1997
loss was $.33 per share on revenues of $288.6 million, including
a  $6.1  million ($.13 per share) charge for an adverse contract
arbitration  award  to  Bentley Systems,  Inc.  (Bentley).   The
second  quarter  1998 loss from operations was  $.59  per  share
versus a loss of $.15 per share for the second quarter of  1997.
This  increased  loss results primarily from a  15%  decline  in
revenues  and  a  6.8 point decline in gross  margin,  partially
offset  by  a 9% decline in operating expenses.  For  the  first
half of 1998, the Company earned net income of $.59 per share on
revenues  of  $492.4 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 $13.9 million ($.29 per  share)
charge  for nonrecurring operating expenses (primarily  employee
termination  costs and write-off of certain intangible  assets),
and  the  $.17 per share gain on the sale of the printed circuit
board  facility.   For  the  first half  of  1997,  the  Company
incurred  a  net  loss of $.88 per share on revenues  of  $541.4
million,   including  the  $.13  per  share   adverse   contract
arbitration  award.  Excluding nonrecurring charges,  the  first
half 1998 loss from operations was $1.28 per share versus a loss
of  $.64  per share for the first half of 1997.  This  increased
loss  results  from a 9% decline in revenues  and  a  7.6  point
decline in systems margin.  The Company's declining revenues and
margins  are  primarily the result of its ongoing  dispute  with
Intel  Corporation and of operating expenses that are  too  high
for  the  level of revenue being generated by the Company.   The
Company's dispute with Intel is fully described in its Form 10-K
annual  report for the year ended December 31, 1997, and updated
in subsequent Form 10-Q filings, including this report.

Nonrecurring  Charges.   In  first  quarter  1998,  the  Company
reorganized  its European operations to reflect the organization
of the Company into four distinct operating units and to further
align  operating  expenses 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  second quarter 1998, $.9 million of the costs accrued in the
first quarter were reversed as the result of incurrence of lower
severance costs than originally anticipated.  The second quarter
credit  and year to date charge of $4.5 million are included  in
"Nonrecurring  charges (credit)" in the consolidated  statements
of  operations  for the quarter and six months  ended  June  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 million in the first six 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
June 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"  in  the
consolidated  statement of operations for the six  months  ended
June  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 for the quarter ended  March
31,  1998, the Company has ongoing litigation, and its  business
is  subject  to  certain  risks and uncertainties.   Significant
developments during second quarter 1998 are discussed below.

Intel.   As further described in the Company's Form 10-Q  filing
for  the quarter ended March 31, 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.

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 currently plans to file a brief on this matter with
the Alabama Court September 15, 1998.

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 at least through the third quarter  of
1998.

Year 2000 Issue.  As further described in the Company's Form 10-
K  annual  report  for  the year ended December  31,  1997,  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 and 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 under
way.   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 1998.  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.   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 cause actual results to differ materially
from  the Company's estimates and, if successful, could have  an
adverse impact on future results.

The  Company's preliminary efforts to identify and resolve  Year
2000  issues  affecting its internal business systems  began  in
1996.   The  Company has required all organizations  to  develop
program  plans  and  implementation schedules  addressing  their
specific  Year  2000  needs by the end of  third  quarter  1998.
These plans are required to be implemented by mid-year 1999  and
must include contingency plans for continuing operations in  the
event  that  remediation  plans are unsuccessful.   The  Company
expects  to  successfully  implement all  internal  systems  and
programming changes necessary to resolve Year 2000 issues.   New
systems, if necessary, will be selected before the end of  1998,
with  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 departmental  program
plans   are   completed.   Costs  incurred  to  date   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.  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.  However, there can be no guarantee
that  the systems of other companies on which the Company relies
will  be  timely converted, and the Company could  be  adversely
impacted  if suppliers, customers, and other businesses  do  not
address this issue successfully.

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   were  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
similar uncertainties.

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.
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.   In addition, the Company  faces  significant
operational and financial uncertainty of unknown duration due to
its  dispute with Intel.  There can be no assurance that actions
taken by the Company will restore profitability.


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

Orders.   Second  quarter  and first half  1998  systems  orders
totaled  $222.5  million  and $378.5 million,  respectively,  an
increase  of  approximately 2% and 1% from the same  prior  year
periods.  U.S. systems orders increased 7% and 3%, respectively,
from the second quarter and first half 1997 levels due primarily
to  increased  orders  from  the federal  government,  partially
offset  by  weakness  in  the Company's U.S.  commercial  market
sector.   International systems orders declined by 3% from  both
the second quarter and first half 1997 levels.  Strengthening of
the  U.S. dollar against international currencies, primarily  in
Europe  and Asia, has reduced consolidated system orders  growth
by  approximately 3 points.  Additionally, order levels  in  all
regions have been adversely affected by the previously described
dispute with Intel.

New  Products.   In  July 1998, the Company introduced  its  new
Wildcat   3D   graphics  technology,  which  will  substantially
increase the performance of Windows NT-based workstations beyond
current 3D graphics technology.  This technology will streamline
workflows, enabling creative and technical professionals to work
interactively in real time with more realistic full-sized, fully
textured  3D  models.  The technology will be delivered  on  the
Company's   new  Intense  3D  Wildcat  series  of  3D   graphics
accelerators  and  will be available in the Company's  TDZ  2000
ViZual  workstations  as  well as in the Intel/Windows  NT-based
workstations of other computer vendors.  The first  entry  level
products  based  on  this  technology  are  scheduled  to  begin
shipping in December of this year.  The Company does not  expect
that  introduction of this new technology will adversely  affect
the carrying value of its existing inventories.

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 second quarter and first half 1998
were  $246.6 million and $492.4 million, respectively, down  15%
and  9%,  respectively, from the comparable prior year  periods.
Sales outside the U.S. represented 51% of total revenues in  the
first half of 1998, down from 52% for the first half of 1997 and
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 31% of total revenues  for  the
first half of 1998, compared to 32% for both the first half  and
full year 1997.

Systems.  Systems revenue for the second quarter and first  half
of  1998  was  $168.3 million and $336.7 million,  respectively,
down 16% and 9%, respectively, from the same prior year periods.
The Company's hardware revenues remain low due to effects of the
ongoing  litigation  with  Intel, with  delays  in  new  product
releases  resulting  in lost sales for the Company  as  well  as
increased  discounting on available products, severely impacting
the Company's systems revenues and margins.  While the April  10
ruling of the Alabama Court requires Intel to provide Intergraph
with  advance  product  samples and technical  information,  the
current  level  of compliance with the ruling indicates  that  a
revenue  recovery  will  most  likely  not  occur  until  fourth
quarter.   Of  the  Company's June 30 backlog of  $211  million,
approximately  $25  million  was undeliverable  due  to  product
delays arising from effects of the dispute with Intel.  Most  of
these   undeliverable  products  were  high-end,  higher  margin
hardware.

U.S. revenues were down 18% from second quarter 1997 and 6% from
first  half  1997  levels, 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 second quarter 1997  and  12%  from  the
first  half  of  1997.  Asia Pacific and European revenues  have
declined  by 24% and 15%, respectively, from the first  half  of
1997.   Excluding the impact of a stronger dollar,  the  revenue
declines in these regions were 14% and 10%, 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 half of 1998 declined  8%  from
the  prior year period.  Unit sales of workstations and  servers
were  up  7% from first half 1997, while workstation and  server
revenues declined by 12% due to a 17% decline in the average per
unit  selling price.  Price competition continues to  erode  per
unit  selling  prices, and volumes have been suppressed  by  the
aforementioned factors associated with the Intel lawsuit.  Sales
of  peripheral hardware products declined by 2% from  the  prior
year  period due primarily to a 50% decline in sales of graphics
cards,  partially offset by increased memory and storage  device
revenues   and  upgrades  to  Intel-based  hardware.    Software
revenues  declined  18% from the prior  year  level.   With  the
exception  of  the  Company's plant  design  product  offerings,
software  revenues were down across the board, with the  largest
declines   occurring   in  sales  of  MicroStation,   mechanical
(includes the Solid Edge and Engineering Modeling System product
lines),  and infrastructure products.  (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.)   Sales  of  the
Company's plant design products increased by 28% from the  prior
year  level.   Plant  design is currently the Company's  highest
volume  software  offering, representing 28% of  total  software
sales  for  the  first  half of 1998.   Sales  of  Windows-based
software   represented  approximately  85%  of  total   software
revenues in the first half of 1998, up from approximately 80% in
the first half of 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 $78.3  million  for
the  second  quarter and $155.7 million for the  first  half  of
1998,  down 12% and 10%, respectively, from the comparable prior
year  periods.  Maintenance revenues for the first half of  1998
totaled  $106.4  million,  down 16% 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 total first half 1998  revenues  and  has
increased  7%  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 second quarter of 1998
was  31%,  down 6.8 points from the second quarter  1997  level.
For  the first half of 1998, total gross margin was 31.4%,  down
4.9  points from the first half of 1997 and 4.2 points from  the
full year 1997 level.

Systems margin for the second quarter was 27.9%, down 8.3 points
from  second quarter 1997.  First half 1998 margin was 28%, down
7.6  points from the first half of 1997 and 6.6 points from  the
full   year  1997  level.   The  previously  discussed   factors
contributing to the Company's systems revenue decline have  also
had  a  significant  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 unfavorable
manufacturing variances resulting from a sales volume  that  was
below Company expectations.

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  margins
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 second quarter  of  1998
was  37.7%, down 3.7 points from the second quarter of 1997  due
primarily  to  costs  incurred on long  term  service  contracts
without  corresponding revenue recognition.  Revenue on services
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  38.6%,  relatively
unchanged from the same prior year period and from the full year
1997   level.    The   Company  continues  to  closely   monitor
maintenance  and  services cost and has taken certain  measures,
including  reductions  in headcount,  to  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 second quarter and first half of 1998
declined  by 9% and 5%, respectively, from the comparable  prior
year  periods.  Total employee headcount has declined by 8% from
that same period.

Product  development expense for the second  quarter  and  first
half  of  1998 declined by 12% and 10%, 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 10% from the prior year level.  Sales  and
marketing expense for the second quarter and first half of  1998
declined  by  10%  and 5%, 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").    Second   quarter    general    and
administrative  expense declined 5% from  the  same  prior  year
period;  however, year to date expense is flat  with  the  prior
year  level.   The positive impact resulting from a strong  U.S.
dollar  was offset by increases in legal expenses and  worldwide
provisions for bad debts.


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

Interest  expense was $1.9 million for second quarter  and  $4.1
million for the first half of 1998 versus $1.6 million and  $2.8
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 six months ended June 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 statements of operations for the  quarter  and
six  months ended June 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  statements
of  operations  for the quarter and six months  ended  June  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.

"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 half of 1998, approximately  51%
(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 half of 1998,  the  U.S.  dollar
strengthened  on average from its first half 1997  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  half  of   1998   by
approximately $.10 per share in comparison to the first half  of
1997.   (Operating results for first half 1997 were  reduced  by
$.09 per share from first half 1996 as a result of strengthening
of the U.S. dollar.)

The  Company conducts business in all major markets  outside  of
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 June 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 of  $32 million in  the  first
half  of 1998 versus a pretax loss of $42.3 million in the first
half  of  1997.  Income tax expense for the first half  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  June 30, 1998, cash totaled $85.5 million compared to  $46.6
million  at  December 31, 1997.  Cash consumed by operations  in
the  first  half of 1998 totaled $22.5 million,  compared  to  a
consumption  of $16.8 million in the first half  of  1997,  both
generally reflecting the negative cash flow effects of increased
operating losses.

Net  cash  generated  from  investing activities  totaled  $78.7
million  in  the first half of 1998, compared to a  net  use  of
$17.2  million in first half of 1997.  First half 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.
Also  included in investing activities were capital expenditures
of  $8 million  ($11.7 million in the first  half  of  1997),
primarily for Intergraph products used in hardware and  software
development  and  sales and marketing activities.   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 $16.6  million
versus net cash generation of $20.8 million in the first half of
1997.   First  half  1998 financing activities  included  a  net
repayment of debt of $18 million compared with a net  addition
to  short and long term debt of $19.1 million in the first  half
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  (8.5%  at  June 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  June  30, 1998, the Company  had  outstanding
borrowings of $47.6 million ($49.2 million at August 10,  1998),
$25  million  of which was classified as long term debt  in  the
consolidated  balance  sheet, and an  additional  $35.1  million
($32.5 million at August 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 these same
dates,  the  borrowing base, representing the maximum  available
credit under the line, was $102 million.

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.

At  June 30, 1998, the Company had approximately $75 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 third
quarter  1998.  The Company further believes that cash  expected
to  be  generated from operations in the fourth quarter of 1998,
together with cash received from the sale of its Solid Edge  and
Engineering  Modeling System product lines, cash  received  from
sale  of  its printed circuit board facility, and cash available
under  its  term  loan and revolving credit  agreement  will  be
adequate  to meet cash requirements for the remainder  of  1998.
However, the Company in the near term 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

            As  further  described in the Company's Form 10-Q  filing
            for  the  quarter ended March 31, 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.

            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 currently plans  to
            file  a  brief  on  this matter with  the  Alabama  Court
            September 15, 1998.

            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 at least through the  third
            quarter of 1998.

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

            Intergraph   Corporation's   Annual   Meeting    of
            Shareholders  was held on May 28, 1998.  The  results  of
            the meeting follow.

            (1)  Seven  directors  were elected  to  the  Board  of
                 Directors  to  serve for the ensuing year  and  until
                 their  successors  are  duly elected  and  qualified.
                 All   nominees  were  serving  as  Directors  of  the
                 Company at the time of their nomination.

                                                      Votes
                                          -------------------------------    
                                             For         Against/Withheld
                                          ----------     ----------------
                 Larry J. Laster          41,486,895         1,079,646
                 Thomas J. Lee            41,599,825           966,716
                 Sydney L. McDonald       41,596,696           969,845
                 James W. Meadlock        41,473,706         1,092,835
                 Keith H. Schonrock Jr.   41,473,703         1,092,838
                 James F. Taylor Jr.      41,509,662         1,056,879
                 Robert E. Thurber        41,507,898         1,058,643

            (2)  Ratification of the appointment by  the  Board  of
                 Directors  of  Ernst  & Young LLP  as  the  Company's
                 independent  auditors  for  the  current   year   was
                 approved   by  a  vote  of  42,444,157  for,   74,576
                 against, and 47,808 abstentions.

            (3)  The  Intergraph  Corporation Nonemployee  Director
                 Stock   Option  Plan  was  approved  by  a  vote   of
                 41,389,735   for,   993,713  against,   and   183,093
                 abstentions.


  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 June 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 and
    Chief Executive Officer            Controller
                                       (Principal Accounting Officer)

Date:    August 13, 1998               Date: August 13, 1998