SECURITIES AND EXCHANGE COMMISSION
                  WASHINGTON, D.C.  20549


                         FORM 10-Q
                             
        QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
          OF THE SECURITIES EXCHANGE ACT OF 1934
                             
     FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 29, 1996
                             
              COMMISSION FILE NUMBER 0-11963



                    Iomega Corporation
  (Exact name of registrant as specified in its charter)

          Delaware                                86-0385884
  (State or other jurisdiction            (IRS employer identification number)
   of incorporation or organization)

     1821 West Iomega Way, Roy, UT                   84067
  (Address of principal executive offices)         (ZIP Code)

  Registrant's telephone number, including area code (801)778-1000

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.

                            Yes  X           No

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of September 29, 1996.

Common Stock, par value $.03 1/3                              126,891,588
  (Title of each class)                                   (Number of shares)

<PAGE>
                    IOMEGA CORPORATION
                             
                     TABLE OF CONTENTS



                                                                         Page

PART I -  FINANCIAL INFORMATION

       Condensed consolidated balance sheets at
          September 29, 1996 and December 31, 1995 . . . . . .             2

       Condensed consolidated statements of operations
          for the three months ended September 29, 1996
          and October 1, 1995. . . . . . . . . . . . . . . . .             4

       Condensed consolidated statements of operations
          for the nine months ended September 29, 1996
          and October 1, 1995. . . . . . . . . . . . . . . . .             5

       Condensed consolidated statements of cash flows
          for the nine months ended September 29, 1996
          and October 1, 1995. . . . . . . . . . . . . . . . .             6

       Notes to condensed consolidated financial statements                8

       Management's discussion and analysis of financial
          condition and results of operations. . . . . . . . .            14

PART II - OTHER INFORMATION. . . . . . . . . . . . . . . . . .            21

       SIGNATURES. . . . . . . . . . . . . . . . . . . . . . .            22

       EXHIBIT INDEX . . . . . . . . . . . . . . . . . . . . .            23


                             
This Quarterly Report on Form 10-Q contains forward-looking
statements, including information with respect to the Company's
plans and strategy for its business.  For this purpose, any
statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements.  Without
limiting the foregoing, the words "believes", "anticipates",
"plans", "expects" and similar expressions are intended to identify
forward-looking statements.  There are a number of important factors
that could cause actual events or the Company's actual results to
differ materially from those indicated by such forwarding-looking
statements.  These factors include, without limitation, those set
forth below under the caption "Factors Affecting Future Operating
Results" included under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in Part I of this
Quarterly Report on Form 10-Q and those identified in the Company's
other filings with the Securities and Exchange Commission.

<PAGE>

                    IOMEGA CORPORATION
                             
           CONDENSED CONSOLIDATED BALANCE SHEETS
                             
                          ASSETS
                             
                        (Unaudited)

<TABLE>
                                             September 29,       December 31,
                                                 1996               1995 
                                                       (In thousands)
<S>                                              <C>                <C>
CURRENT ASSETS:
Cash and cash equivalents                        $ 102,452          $   1,023
Trade receivables (net)                            197,706            105,955
Inventories                                        178,035             98,703
Deferred income taxes                               30,440              2,778
Other current assets                                11,219              3,673
                                                 ---------          ---------
Total current assets                               519,852            212,132

PROPERTY AND EQUIPMENT, at cost                    192,175            103,149
Less - accumulated depreciation 
   and amortization                                (64,611)           (49,779)
                                                 ---------          ---------
Net property and equipment                         127,564             53,370

OTHER ASSETS                                         2,803                725
                                                 ---------          ---------
                                                 $ 650,219          $ 266,227
                                                 =========          =========

</TABLE>

   The accompanying notes to condensed consolidated financial statements 
are an integral part of these balance sheets.

<PAGE>
                    IOMEGA CORPORATION
                             
           CONDENSED CONSOLIDATED BALANCE SHEETS
                             
           LIABILITIES AND STOCKHOLDERS' EQUITY

                        (Unaudited)
<TABLE>
                             
                                             September 29,       December 31,
                                                 1996               1995
                                                      (In thousands)
<S>                                              <C>                <C>
CURRENT LIABILITIES:
Current portion of notes payable                 $  30,452          $  47,640
Accounts payable                                   143,061             94,782
Other accrued liabilities                           99,529             51,164
Income taxes payable                                11,319              5,141
Current portion of capitalized 
   lease obligations                                 4,035                782
                                                 ---------          ---------
     Total current liabilities                     288,396            199,509

CAPITALIZED LEASE OBLIGATIONS, 
   net of current portion                            6,776              1,481

NOTES PAYABLE,  net of 
   current portion                                  13,754              2,551

CONVERTIBLE SUBORDINATED NOTES, 
   6.75%, due 2001                                  45,733                  -

STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 
   authorized 4,750,000 shares                           -                  -
Series C junior participating 
   preferred stock, authorized 
   250,000 shares, none issued                           -                  -
Common stock, $.03 1/3 par value; 
   authorized 150,000,000 shares, 
   126,891,588 and 117,638,670
   shares outstanding at September 29, 
   1996 and December 31, 1995, 
   respectively                                     4,236               3,921
Additional paid-in capital                        250,219              49,512
Deferred compensation                                (754)                  -
Retained earnings                                  46,222               9,253
                                                ---------           ---------
                                                  299,923              62,686

Treasury stock                                     (4,363)                  -

Total stockholders' equity                        295,560              62,686
                                                ---------           ---------
                                                $ 650,219           $ 266,227
                                                =========           =========
</TABLE>                             
                             
                             
   The accompanying notes to condensed consolidated financial statements 
are an integral part of these balance sheets.

<PAGE>
                    IOMEGA CORPORATION
                             
      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                             
                        (Unaudited)
<TABLE>
                                                 For the Three Months Ended
                                             September 29,         October 1,
                                                 1996                 1995
                                         (In thousands, except per share data)
<S>                                              <C>                <C>
SALES                                            $ 310,085          $  84,721

COST OF SALES                                      228,424             63,225
                                                 ---------          ---------
Gross Margin                                        81,661             21,496

OPERATING EXPENSES:
Selling, general and administrative                 50,323             13,878
Research and development                            10,475              4,691
                                                 ---------          ---------
Total operating expenses                            60,798             18,569
                                                 ---------          ---------
OPERATING INCOME                                    20,863              2,927

Interest expense                                    (1,790)              (360)
Interest income                                      1,633                 67
Other income, net                                      228                 63
                                                 ---------          ---------
INCOME BEFORE INCOME TAXES                          20,934              2,697

Provision for income taxes                          (8,168)              (672)
                                                 ---------          ---------
NET INCOME                                       $  12,766          $   2,025
                                                 =========          =========
NET INCOME PER COMMON SHARE                      $    0.09          $    0.02
                                                 =========          =========

WEIGHTED AVERAGE COMMON SHARES 
   OUTSTANDING Includes effects of 
   stock splits (see Note 2)                       137,027            127,236
                                                 =========          =========
</TABLE>

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

<PAGE>
                    IOMEGA CORPORATION
                             
      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                             
                        (Unaudited)
<TABLE>
                                                For the Nine Months Ended
                                             September 29,         October 1,
                                                 1996                 1995
                                         (In thousands, except per share data)
<S>                                              <C>                <C>
SALES                                            $ 815,711          $ 177,427

COST OF SALES                                      597,955            132,527
                                                 ---------          ---------
Gross Margin                                       217,756             44,900

OPERATING EXPENSES:
Selling, general and administrative                122,605             33,389
Research and development                            29,008             12,793
                                                 ---------          ---------
Total operating expenses                           151,613             46,182
                                                 ---------          ---------
OPERATING INCOME (LOSS)                             66,143             (1,282)

Interest expense                                    (6,420)              (463)
Interest income                                      2,169                619
Foreign currency loss                                 (250)            (1,232)
Other income (expense)                                (828)               771
                                                 ---------          ---------
INCOME (LOSS) BEFORE INCOME TAXES                   60,814             (1,587)

Benefit (provision) for income taxes               (23,845)               167
                                                 ---------          ---------
NET INCOME (LOSS)                                $  36,969          $  (1,420)
                                                 =========          =========
NET INCOME (LOSS) PER COMMON SHARE               $    0.28          $   (0.01)
                                                 =========          =========
WEIGHTED AVERAGE COMMON SHARES 
   OUTSTANDING Includes effects of 
   stock splits (see Note 2)                       132,089            114,264
                                                 =========          =========
</TABLE>

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

<PAGE>
                    IOMEGA CORPORATION
      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (Unaudited)
<TABLE>
                                                For the Nine Months Ended
                                             September 29,         October 1,
                                                 1996                 1995
                                                       (In thousands)
<S>                                              <C>                <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income (Loss)                              $  36,969          $  (1,420)
  Non-cash Revenue and Expense Adjustments:
    Depreciation and amortization expense           16,532              6,198
    Deferred income tax benefit                    (27,142)            (2,968)
    Other                                              681               (489)
  Changes in Assets and Liabilities:
    Trade receivables (net)                        (91,751)           (34,627)
    Inventories                                    (79,332)           (35,363)
    Income taxes                                     6,178              3,696
    Other current assets                            (7,546)            (1,980)
    Accounts payable                                48,279             40,138
    Accrued liabilities                             48,365              5,058
                                                 ---------          ---------
      Net cash used in operating activities        (48,767)           (21,757)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment               (62,765)           (24,221)
  Purchase of temporary investments                      -             (2,090)
  Sale of temporary investments                          -              5,022
  Net decrease in other assets                         271                  -
                                                 ---------          ---------
      Net cash used in investing activities        (62,494)           (21,289)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from sales of Common Stock                1,825              1,914
  Proceeds from issuance of notes payable          745,864             79,222
  Payments on notes payable and 
    capitalized lease obligations                 (771,668)           (56,045)
  Purchase of treasury stock                        (4,363)                 -
  Tax benefit from early dispositions 
    of employee stock                                6,755                244
  Conversion of Series A Preferred Stock                 -                (30)
  Net proceeds from public offering of 
    Common Stock                                   191,146                  -
  Net proceeds from issuance of 
    convertible notes                               43,131                  -
  Proceeds from notes receivable 
    from shareholders                                    -                880
                                                 ---------          ---------
      Net cash provided from 
        financing activities                       212,690             26,185
                                                 ---------          ---------
NET INCREASE (DECREASE) IN CASH 
  AND CASH EQUIVALENTS                             101,429            (16,861)
CASH AND CASH EQUIVALENTS AT BEGINNING 
  OF PERIOD                                          1,023             16,861
                                                 ---------          ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD       $ 102,452          $       -
                                                 =========          =========


SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES:

  Sale of Common Stock for a note                $       -          $     283
                                                 =========          =========
  Property and equipment financed under 
    capitalized lease obligations and 
    note payable                                 $  28,367          $       -
                                                 =========          =========
  Conversion of Series A Preferred 
    Stock to Common Stock                        $       -          $   1,205
                                                 =========          =========
  Conversion of Subordinated Notes 
    to Common Stock                              $     267          $       -
                                                 =========          =========
</TABLE>

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

<PAGE>
                    IOMEGA CORPORATION
                             
   NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)    SIGNIFICANT ACCOUNTING POLICIES

     In the opinion of management, the accompanying condensed
     consolidated financial statements reflect all adjustments
     (consisting only of normal recurring adjustments) which are
     necessary to present fairly the financial position of Iomega
     Corporation and subsidiaries (the "Company") as of September
     29, 1996 and December 31, 1995, the results of operations for
     the three- and nine-month periods ended September 29, 1996 and
     October 1, 1995, and cash flows for the nine-month periods
     ended September 29, 1996 and October 1, 1995.
     
     The results of operations for the three- and nine-month
     periods are not necessarily indicative of the results for the
     entire year.
     
     These unaudited condensed consolidated financial statements
     should be read in conjunction with the consolidated financial
     statements and notes included in or incorporated into the
     Company's latest Annual Report on Form 10-K.
     
     Pervasiveness of Estimates  --  The preparation of financial
     statements in conformity with generally accepted accounting
     principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and
     liabilities and disclosures of contingent assets and
     liabilities at the date of the financial statements and the
     reported amounts of revenues and expenses during the reporting
     period.  Actual results could differ from these estimates.
     
     Principles of Consolidation  --  The condensed consolidated
     financial statements include the accounts of the Company and
     its wholly owned subsidiaries after elimination of all
     material intercompany accounts and transactions.
     
     Revenue Recognition  --  Revenue is recognized when units are
     shipped to customers.  However, revenue recognition is
     deferred on shipments to customers with right of return
     privileges whose inventory is in excess of estimated normal
     customers' inventory requirements.  The gross margin
     associated with the deferral of sales in excess of normal
     customers' inventory requirements totaled $11,141,000 and
     $3,207,000 at September 29, 1996 and December 31, 1995,
     respectively, and is included in other accrued liabilities in
     the accompanying condensed consolidated balance sheets.
     
     In addition, the Company records reserves at the time of
     shipment for estimated volume and consumer rebates and price
     protection credits to be issued to customers.  These reserves
     totaled $23,271,000 and $1,633,000 at September 29, 1996 and
     December 31, 1995, respectively, and are netted against
     accounts receivable in the accompanying condensed consolidated
     balance sheets.

     Price Protection  --  The Company has agreements with certain
     of its customers which, in the event of a price decrease,
     allow those customers (subject to certain limitations) credit
     equal to the difference between the price originally paid and
     the reduced price on units in the customers' inventories at
     the date of a price decrease.  When a price decrease is
     anticipated, the Company establishes reserves for amounts
     estimated to be reimbursed to the qualifying customers.
     
     Foreign Currency Translation  --  For purposes of
     consolidating foreign operations, the Company has determined
     the functional currency for its foreign operations is the U.S.
     dollar.  Therefore, translation gains and losses are included
     in the determination of income.
     
     Inventories  --  Inventories include direct materials, direct
     labor, manufacturing overhead costs and are recorded at the
     lower of cost (first-in, first-out) or market and consist of
     the following:
     
                                             September 29,       December 31,
                                                 1996               1995
                                                      (In thousands)
     
       Raw materials                             $ 113,561          $  89,030
       Work-in-process                               8,300              5,680
       Finished goods                               56,174              3,993
                                                 ---------          ---------
                                                 $ 178,035          $  98,703
                                                 =========          =========

     Reclassifications  --  Certain reclassifications were made to
     the prior periods' condensed consolidated financial statements
     to conform with the current presentation.
     
     Net Income (Loss) Per Common Share  --  Net income (loss) per
     common share is based on the weighted average number of shares
     of common stock and dilutive common stock equivalent shares
     outstanding during the period.  Common Stock equivalent shares
     consist primarily of stock options that have a dilutive effect
     when applying the treasury stock method.  In periods where
     losses are recorded, common stock equivalents would decrease
     the loss per share and are therefore not added to weighted
     average shares outstanding.  The outstanding shares and
     earnings per share have been restated for all periods
     presented to reflect the impact of the stock splits described
     in Note 2.
     

(2)    STOCK SPLITS

     In December 1995, the Company's Board of Directors declared a
     3-for-1 Common Stock split, which was effected in the form of
     a 200% Common Stock dividend, paid on January 31, 1996 to
     stockholders of record at the close of business on January 15,
     1996.  
     
     On April 23, 1996, the Company's Board of Directors declared
     a 2-for-1 Common Stock split, which was effected in the form
     of a 100% Common Stock dividend, paid on May 20, 1996 to
     stockholders of record at the close of business on May 6,
     1996.  
     
     These stock splits have been retroactively reflected in the
     accompanying condensed consolidated financial statements.
     
     In connection with each stock split, proportional adjustments
     were made to outstanding stock options and other outstanding
     obligations of the Company to issue shares of Common Stock.

     
(3)    INCOME TAXES

     Income tax expense for the nine months ended September 29,
     1996 has been provided at an effective rate of 39% compared to
     an effective rate of 27% for the year ended December 31, 1995. 
     This tax rate is based on the Company's projected domestic and
     foreign pre-tax income for 1996.  The increase in the
     effective tax rate is due to the Company's expected full
     utilization of available tax credits and foreign net operating
     loss carryforwards during 1996, and because pre-tax income of
     certain foreign operations is subject to foreign income taxes
     at a rate in excess of the U.S. statutory rate.  The higher
     tax on foreign operations is expected to offset the benefits
     of the tax credits and net operating loss carryforwards which
     the Company expects to utilize during 1996.
     
     Cash paid for income taxes was $37,546,000 for the first nine
     months of 1996 and $50,000 for the corresponding period in
     1995.

     
(4)    DEBT

     Line of Credit  --  On July 5, 1995, the Company entered into
     a loan agreement with the Commercial Finance Division of Wells
     Fargo Bank, N.A. ("Wells Fargo Bank").
     
     Effective May 13, 1996, the Company renewed and amended its
     loan agreement with Wells Fargo Bank.  The amended agreement
     permits revolving loans, term loans and letters of credit up
     to an aggregate outstanding principal amount equal to the
     lesser of $100 million or 80% of eligible accounts receivable. 
     Amounts outstanding are collateralized by accounts receivable,
     inventory, equipment, general intangibles and certain other
     assets.  The new revolving line bears interest at the bank's
     prime rate plus .5% and the term loans bear interest at the
     bank's prime rate plus .75%.  Total availability under this
     agreement was $98.7 million at September 29, 1996, of which no
     amount had been drawn.  This agreement expires June 30, 1997. 
     Under this agreement, the Company may also secure financing of
     equipment purchases from third parties up to a maximum of $75
     million, less term loans outstanding to Wells Fargo Bank. 
     Among other restrictions, covenants within the agreement
     require the Company to maintain minimum levels of working
     capital and net worth.
     
     Capital Leases  --  From August 1995 to September 1996, the
     Company entered into various agreements to provide capital
     lease financing for the purchase of certain manufacturing
     equipment and office furniture and equipment.  The total
     amount of capital lease commitments at September 29, 1996 is
     $10.8 million.
     
     Other Term Notes  --  During 1995, the Company entered into
     term notes with financial institutions.  The proceeds of the
     notes were used to purchase manufacturing equipment.  The term
     notes have 36-month terms which mature at various dates from
     November 1988 to January 1999.  Interest rates are fixed and
     range from 8.89% to 9.11%.  At September 29, 1996, the Company
     had $2.8 million outstanding on these notes.  The notes are
     secured by the equipment purchased.  The term notes require
     the Company to maintain minimum levels of working capital, net
     worth, and quarterly operating income.
     
     Financing of European Accounts Receivable  --  In November
     1995, a foreign subsidiary of the Company entered into an
     agreement with a German commercial bank for up to DM 50
     million (approximately $35 million) which involves the sale of
     a portion of the foreign subsidiary's accounts receivable to
     the bank.  The agreement expires in November 1996.  The
     Company is currently in the process of negotiating the renewal
     of this agreement, although there can be no assurance that the
     agreement will be renewed.  Such sales of receivables are
     limited to 90% of eligible accounts receivable subject to
     certain credit limits.  The Company has retained the bad debt
     risk on the receivables up to DM 1 million per customer.  At
     September 29, 1996, borrowings against the agreement totaled
     $23.4 million.
     
     In September 1996, the Company entered into an agreement with
     Quantum Corporation to finance a portion of the purchase price
     of land, building and equipment associated with a
     manufacturing facility in Penang, Malaysia.  Even though the
     Company is occupying and utilizing the facility, the
     promissory note reflecting the portion of the purchase price
     being financed will not be signed or finalized until after
     receipt of approval of the sale by the Malaysian government,
     which the Company anticipates will occur the first quarter of
     1997.  However, since the Company is utilizing the facilities,
     the assets and debt have been reflected in the accompanying
     financial statements.  The amount financed under this
     agreement will be $18.0 million, which will bear interest at
     8.5%, and will be payable over a three-year period.  Security
     under this agreement will be comprised of the land, building
     and equipment which was purchased.  The agreement will require
     the Company to maintain minimum levels of working capital and
     net worth.  
     
     Cash paid for interest was $6,769,000 during the first nine
     months of 1996, including interest on capital leases and
     convertible notes.  Interest expense in the first nine months
     of 1995 was minimal.  Included in interest expense for the
     nine months ended September 29, 1996 was $759,000 of
     amortization of deferred charges associated with obtaining the
     debt.
      

(5)    CONVERTIBLE SUBORDINATED NOTES

     In March 1996, the Company issued $46,000,000 in convertible
     subordinated notes.  The net proceeds from the issuance of the
     notes totaled $43.1 million and were used to pay down other
     debts and for operating requirements.  The notes bear interest
     at 6.75% per year and interest payments are payable semi-
     annually on March 15 and September 15 of each year commencing
     on September 15, 1996.  The notes mature on March 15, 2001. 
     The notes are unsecured and subordinated to all existing and
     future senior indebtedness of the Company and are effectively
     subordinated to all existing and future indebtedness and other
     liabilities of the Company's subsidiaries.
     
     The notes are convertible into Common Stock of the Company at
     the option of the holder at any time and at or before
     maturity, unless previously redeemed or repurchased, at a
     conversion price of $9.875 per share (equivalent to a
     conversion rate of approximately 101.27 shares per $1,000
     principal amount of notes), subject to adjustment in certain
     events.  At September 29, 1996, holders have converted
     $267,000 of convertible subordinated notes into 27,034 shares
     of Common Stock.
     
     The notes are redeemable at any time on or after March 15,
     1999, in whole or in part, at the option of the Company, at
     declining redemption prices, 102.7% for 1999 and 101.35% for
     2000, together with accrued interest, if any, to the
     redemption date.
     
     In the event any repurchase event, as defined in the indenture
     agreement, occurs, each holder of notes may require the
     Company to repurchase all or any part of such holder's notes
     at 100% of the principal amount thereof plus accrued interest
     to the repurchase date.
     

(6)   OTHER MATTERS

     Significant Customers  --  During the fiscal quarter and nine
     months ended September 29, 1996, sales to a single customer
     accounted for 20% and 17%, respectively, of consolidated
     sales.  During the fiscal quarter and nine months ended
     October 1, 1995, sales to a single customer accounted for 11%
     and 10%, respectively, of consolidated sales.  No other single
     customer accounted for more than 10% of the Company's sales
     for these periods.
     
     Forward Exchange Contracts  --  The Company has commitments to
     sell and purchase foreign currencies relating to forward
     exchange contracts in order to hedge against future currency
     fluctuations.  In addition, the Company purchases components
     denominated in Yen and has purchased forward contracts to buy
     Yen.
     
     The outstanding forward exchange sales and (purchase)
     contracts at September 29, 1996 are as follows.  The contracts
     mature in December of 1996.
                                                     Contracted
     Currency                       Amount          Forward Rate
     ----------------------     ---------------   ---------------
     German Mark                    (3,600,000)           1.5037
     British Pound                   4,500,000            1.56306
     French Franc                   29,000,000            5.0851
     Spanish Peseta                252,000,000          127.73
     Italian Lira                4,750,000,000        1,525.7
     Japanese Yen               (2,141,200,000)         108.8
     
     Gains and losses on foreign currency contracts intended to be
     used to hedge operating requirements are reported currently in
     income.  Gains and losses on foreign currency contracts
     intended to meet firm commitments are deferred and recognized
     as part  of the cost of the underlying transaction being
     hedged.  At September 29, 1996 and December 31, 1995, all of
     the Company's foreign currency contracts are being used to
     hedge operating requirements.  The Company's theoretical risk
     in these transactions is the cost of replacing, at current
     market rates, these contracts in the event of default by the
     counterparty.
     
     
                    IOMEGA CORPORATION
                             
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF
       FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS

The Company reported sales of $310.1 million and net income of $12.8
million, or $0.09 per share, in the third quarter of 1996.  This
compares to sales of $84.7 million and net income of $2.0 million,
or $0.02 per share, in the third quarter of 1995.  For the nine-month 
period ended September 29, 1996, sales were $815.7 million and
net income was $37.0 million, or $0.28 per share, compared to sales
of $177.4 million and net loss of $1.4 million, or $0.01 per share,
in the same period of 1995.

SALES

Sales for the three- and nine-month periods ended September 29, 1996
increased by $225.4 million, or 266%, and $638.3 million, or 360%,
respectively, when compared to the corresponding periods of 1995. 
The primary reasons for the increases were sales of Zip and Jaz
products, which began shipping in March 1995 and December 1995,
respectively.  Increased sales of Ditto products also contributed
to the increased sales.  

In the third quarter of 1996, sales of Zip and Jaz products
accounted for $269.0 million, or 87%, of total sales, sales of Ditto
products accounted for $32.5 million, or 10%, of total sales, and
sales of Bernoulli products accounted for $8.6 million, or 3%, of
total sales.  Compared to the third quarter of 1995, Zip and Jaz
sales increased by $217.0 million, Ditto sales increased by $13.0
million, and Bernoulli sales declined by $5.4 million.  For the
nine-month period ended September, 1996, Zip and Jaz sales totaled
$700.8 million, or 86%, of total sales, Ditto product sales totaled
$88.5 million, or 11%, of total sales, and Bernoulli sales were
$26.4 million, or 3%, of total sales.  When compared to the first
nine months of 1995, Zip and Jaz sales increased by $628.3 million,
Ditto sales increased by $34.7 million, and Bernoulli sales declined
by $24.7 million.

Sales outside of the United States in the third quarter of 1996 were
$80.3 million, or 26% of total sales, as compared to $15.4 million,
or 18% of total sales in the third quarter of 1995.  For the first
nine months of 1996, sales outside of the United States were $256.0
million, or 31% of total sales, as compared to $44.7 million, or 25%
of total sales for the comparable period of 1995.

GROSS MARGIN
                             
The Company's gross margin percentage for the three- and nine-month
periods ended September 29, 1996 were 26.3% and 26.7%, respectively,
compared to 25.4% reported in the third quarter of 1995 and 25.3%
in the first nine months of 1995.  The gross margin percentage is
slightly higher in the third quarter of 1996, as compared to the
third quarter of 1995, due primarily to a higher margin percentage
achieved on Zip products as a result of a higher ratio of sales of
disks versus drives.  These higher margins were partially offset by
price reductions on Jaz and Ditto products and a rebate program on
Zip products.  For the first nine months of 1996, the gross margin
percentage is slightly higher than the same period of 1995, again
due to higher margin percentage achieved on Zip products due to a
higher ratio of sales of disks versus drives and also due to
manufacturing start up costs associated with Zip products
experienced in 1995.  Gross margins in the first nine months of
1996, as compared to 1995, were negatively impacted by a shift in
product mix away from higher margin Bernoulli products to lower
margin Zip, Jaz and Ditto products.  

Gross margins for the remainder of 1996 will depend in large part
on sales of Zip and Jaz disks, which generate significantly higher
gross margins than the corresponding drives, and on the sales mix
between disks and drives, and between Zip, Ditto and Jaz products. 
Although the Company expects the costs of Zip, Jaz and Ditto
products to decline in the future as production increases and the
start up costs associated with Jaz products decrease, the gross
margin percentages will depend on the Company's ability to achieve
planned cost reductions, as well as on recent and any future pricing
actions.  Also, future gross margin percentages will be impacted by
the mix between OEM sales, which generally provide lower gross
margins than sales to other channels, and retail sales, as well as
other factors.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses represented 16% of
sales for the third quarter of 1996, and 15% for the first nine
months of 1996, compared to 16% and 19% for the third quarter and
first nine months of 1995, respectively.  The decline in these
percentages for the comparable nine-month periods is primarily due
to increased sales volumes in 1996.  The actual selling, general and
administrative expenses increased by $36.4 million in the third
quarter and $89.2 million for the first nine months when compared
to the corresponding periods of 1995.  The increased expenses are
primarily the result of advertising expenses incurred to increase
the market awareness of Zip, Jaz and Ditto, variable selling
expenses, and increased salaries and wages resulting from increased
headcount in all areas of sales, marketing and administration. 
Management expects selling, general and administrative expenses, in
absolute dollars, to increase further during the remainder of 1996,
due to planned additional advertising and promotional expenses,
trade show expenses, and variable selling expenses.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses were 3% of sales in the third
quarter of 1996, and 4% of sales for the first nine months of 1996. 
In 1995, research and development expenses were 6% of sales in the
third quarter and 7% of sales for the first nine months.  The
decline in the percentages from 1995 to 1996 is due to increased
sales volumes.  The actual research and development expenses
increased by $5.7 million for the third quarter and $16.2 million
for the first nine months of 1996 when compared to the same periods
of 1995.  The increased expenses are primarily the result of
expenditures related to continued development of Zip, Jaz and Ditto
products.  Management expects continued increases in research and
development expenses, in absolute dollars, during the remainder of
1996, due to planned increases in resources dedicated to future
product development.

OTHER

Interest expense increased by $1.4 million in the third quarter and
$6.0 million in the first nine months of 1996 compared to the same
periods in 1995.  The increases, on a year-to-date basis, are
primarily due to interest expense associated with the Wells Fargo
Bank line of credit, financing of European accounts receivable,
capital leases, other term notes and the convertible subordinated
notes.  

Interest income increased by $1.6 million in the third quarter and
$1.6 million in the first nine months of 1996 compared to comparable
periods in 1995.  The increases are due to higher levels of
available cash balances.

During the first quarter of 1995, the Company recorded a net foreign
currency loss of $1.0 million as a result of the U.S. dollar
weakening against European currencies.

INCOME TAXES

For the nine-month period ended September 29, 1996, the Company
recorded a tax provision of $23.8 million, representing an effective
income tax rate of 39%.  The tax rate has increased from the rate
of 27% recorded in 1995 due to the Company's expected full
utilization of available tax credits and foreign net operating loss
carryforwards in 1996.  The Company anticipates that the effective
income tax rate will remain at 39% for the remainder of 1996. 
However, differences between the currently anticipated mix of
foreign income versus domestic income, and the actual mix, will have
an impact on the income tax rate that is recorded in future
quarters.

SEASONALITY

The retail market to which the Company's products are targeted is
seasonal with a substantial portion of total sales typically
occurring in the fourth quarter, and sales slow downs commonly
occurring during the summer months, particularly in Europe.

LIQUIDITY AND CAPITAL RESOURCES

At September 29, 1996, the Company had cash and cash equivalents of
$102.4 million, working capital of $231.5 million, and a ratio of
current assets to current liabilities of 1.8 to 1.  During the first
nine months of 1996, the Company's cash and cash equivalents
increased by $101.4 million, comprised of $212.7 million provided
from financing activities offset by $62.5 million used in investing
activities and $48.8 million used in operating activities.

Included in cash and cash equivalents provided from financing
activities is $43.1 million in net proceeds from the issuance of
convertible notes which were issued in March 1996 and $191.2 million
in net proceeds from a secondary offering of common stock which was
completed in June 1996.  These proceeds were offset by $25.8 million
of net payments against notes payable and capital lease obligations,
and $4.4 million used to repurchase 300,000 shares of the Company's
common stock.  The primary component of cash and cash equivalents
used in investing activities is $62.8 million used for the purchase
of property and equipment.  Net cash used in operating activities
includes an increase of $91.8 million in net accounts receivable and
an increase of $79.3 million in inventories.  These uses of cash and
cash equivalents were offset by an increase of $96.6 million in
accounts payable and accrued liabilities.

On July 5, 1995, the Company entered into a loan agreement with
Wells Fargo Bank.  Effective May 13, 1996, the Company renewed and
amended its loan agreement with Wells Fargo Bank.  The amended
agreement permits revolving loans, term loans and letters of credit
up to an aggregate outstanding principal amount equal to the lesser
of $100 million or 80% of eligible accounts receivable.  Amounts
outstanding are collateralized by accounts receivable, inventory,
equipment, general intangibles and certain other assets.  The new
revolving line bears interest at the bank's prime rate plus 0.5% and
the term loans bear interest at the bank's prime rate plus 0.75%. 
This agreement expires June 30, 1997.  Under this agreement, the
Company may also secure financing of equipment purchases from third
parties up to a maximum of $75 million, less term loans outstanding
to Wells Fargo Bank.  Among other restrictions, covenants within the
agreement require the Company to maintain minimum levels of working
capital and net worth.  

In November 1995, a foreign subsidiary of the Company entered into
an agreement with a German commercial bank for up to DM 50 million
(approximately $35 million), which involves the sale of a portion
of the foreign subsidiary's accounts receivable to the bank.  The
agreement expires in November 1996.  The Company is currently in the
process of negotiating the renewal of this agreement, although there
can be no assurance that the agreement will be renewed.  In
addition, the Company has entered into various agreements to provide
capital lease financing and other term loans for the purchase of
certain manufacturing equipment.

The Company's balance sheet at September 29, 1996 reflected short-term 
borrowings of $34.5 million, consisting of borrowings under the
German loan agreement of $23.4 million, term loans of $1.1 million,
the short-term portion of financing to be entered into in connection
with the purchase of a manufacturing facility in Penang, Malaysia
of $6.0 million, and the short-term portion of capitalized lease
obligations of $4.0 million.  At September 29, 1996, the Company's
long-term borrowings were $66.3 million, consisting of $45.7 million
of convertible notes, $6.8 million of capitalized lease obligations,
$12.0 million representing the long-term portion of the financing
related to the facility in Malaysia, and $1.8 million of other term
notes.  The borrowings have been used to finance working capital
needs, including increases in accounts receivable and inventories
and capital expenditures related to production volume increases, in
addition to the purchase of the manufacturing facility in Malaysia
mentioned above.

Net accounts receivable increased by $91.8 million at September 29,
1996 when compared to December 31, 1995, due primarily to increased
sales.  Inventory increased by $79.3 million.  The increase in
inventory was primarily in finished goods (which increased by $52.1
million from December 31, 1995 to September 29, 1996).  The majority
of finished goods inventory at September 29, 1996 relates to the Zip
and Jaz product lines.  Start up of the facility in Malaysia, a
change in the distribution vendor in Europe, and anticipation of
fourth quarter demand were the primary reasons for the increased
inventory balance.  The increases in accounts receivable and
inventory were offset by increases in accounts payable and accrued
liabilities of $48.3 million and $48.4 million, respectively.

Additions to property and equipment for the first nine months of
1996 totaled $91.1 million, offset by $10.4 million in proceeds from
capital leases and $18.0 million in seller financing for the
manufacturing facility in Malaysia.  These additions were primarily
related to increased manufacturing capacity for Zip, Jaz and Ditto
products, including $28.0 million for the manufacturing facility in
Malaysia.  The Company expects property and equipment additions to
be less significant in future quarters.  

The Company expects that its balance of cash and cash equivalents,
together with current sources of available financing will be
sufficient to fund the Company's operations during 1997. 
Thereafter, the Company may require additional funds to finance its
operations.  The precise amount and timing of the Company's future
financing needs cannot be determined at this time, and will depend
on a number of factors, including the market demand for the
Company's products, the success of the Company's strategy to
transfer manfacturing capacity to its new facility in Malaysia, the
availability of critical components, the Company's strategic
alliances for the manufacture of its products, the progress of the
Company's product development efforts, the success of the Company
in improving its inventory management, the Company's management of
its cash and accounts payable, and the Company's ability to
refinance its currently available debt.

FACTORS AFFECTING FUTURE OPERATING RESULTS

Because the Company is relying on its Zip and Jaz products for the
substantial majority of its sales in 1996, the Company's future
operating results will depend in large part on the ability of those
products to attain widespread market acceptance.  Although the
Company believes there is a market demand for new personal computer
data storage solutions, there can be no assurance that the Company
will be successful in establishing Zip and Jaz as accepted solutions
for that market need.  The extent to which Zip and Jaz achieve a
significant market presence will depend upon a number of factors,
including the price, performance and other characteristics of
competing solutions introduced by other vendors, including the LS-120 
and Syquest Technology, Inc.'s EZ Flyer 230 and SyJet 1.3 GB,
the timing of the introduction of such solutions, the success of the
Company in establishing OEM arrangements for Zip and Jaz with
leading personal computer manufacturers, the success of the Company
in educating consumers about the existence and possible uses of Zip
and Jaz products as storage devices.  In addition, component
shortages or other factors affecting the supply of the Company's
products, including any difficulties encountered during the transfer
of manufacturing capacity to the Company's new facility in Malaysia,
could limit the Company's sales and provide an opportunity for
competing products to achieve market acceptance.  Also, the success
of the Company's efforts to restructure its European operations will
have an impact on future operating results.

The Company's business strategy is substantially dependent on
maximizing sales of its proprietary Zip and Jaz disks, which
generate significantly higher margins than its disk drives.  If this
strategy is not successful, either because the Company does not
establish a sufficiently large installed base of Zip and Jaz drives,
because the sales mix between disks and drives is below levels
anticipated by the Company, because another party succeeds in
producing disks that are compatible with Zip and Jaz drives without
infringing the Company's proprietary rights, or for any other
reason, the Company's sales would be adversely affected, and its net
income would be disproportionately adversely affected.

Future market demand for the Company's products cannot be predicted
with certainty.  Sales of Zip products in 1995, and Zip and Jaz
products in the first nine months of 1996, were the primary reasons
for the Company's revenue growth in these periods, however, these
sales may not be indicative of the long-term demand for such
products.  Accordingly, the sales growth experienced by the Company
in 1995 and the first nine months of 1996 should not be assumed to
be an indication of future sales.  Moreover, in light of the
Company's revenue growth in 1995 and the first nine months of 1996,
and the change in the nature of its business over the past year, the
Company believes that period-to-period comparisons of its financial
results are not necessarily meaningful.  In addition, the Company
has experienced and may experience significant fluctuations in its
quarterly operating results.

The Company's European sales are predominantly denominated in
foreign currencies.  In addition, the Company purchases certain
components in foreign currencies.  The Company enters into forward
exchange contracts to sell and purchase foreign currencies as a
means of hedging its foreign operating cash flows.  Fluctuations in
the value of foreign currencies relative to the U.S. dollar could
result in foreign currency gains and losses.

PART II - OTHER INFORMATION

                    IOMEGA CORPORATION


Item 6.          Exhibits and Reports on Form 8-K

               (a)  Exhibits.  The exhibits listed on the
               Exhibit Index filed as a part of this Quarterly
               Report on Form 10-Q are incorporated herein by
               reference.
               
               (b)  Reports on Form 8-K.  No reports on Form
               8-K were filed during the quarter for which this
               report on Form 10-Q is filed. 
                           

<PAGE>
                         SIGNATURE



  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.




                                        IOMEGA CORPORATION          
                                            (Registrant)



                                        /s/ Kim B. Edwards             
Dated:  November 12, 1996                   Kim B. Edwards
                                        President and Chief Executive Officer


                                        /s/ Leonard C. Purkis
Dated:  November 12, 1996                   Leonard C. Purkis
                                        Senior Vice President, Finance
                                        and Chief Financial Officer

<PAGE>
                       EXHIBIT INDEX


The following exhibit is filed as part of this Quarterly Report on
Form 10-Q:

Exhibit No.    Description

10.26 (i)      Seventh Amendment to Loan Agreement dated July 31,
               1996 between the Company and Wells Fargo Bank,
               N.A., Commercial Finance Division.
               
10.34          Agreement for the Sale and Purchase of Assets in
               Malaysia, dated September 13, 1996 between the
               Company and Quantum Corporation.
               
10.34 (a)      Exhibit A to the Agreement for the Sale and
               Purchase of Assets in Malaysia, dated September 13,
               1996 between the Company and Quantum Corporation -
               Preliminary Form of Secured Promissory Note.
               
10.34 (b)      Exhibit B to the Agreement for the Sale and
               Purchase of Assets in Malaysia, dated September 13, 
               1996 between the Company and Quantum Corporation - 
               The Indemnification Agreement.