U.S. SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549


                            FORM 10-QSB



[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     For the quarterly period ended    September 30, 1997

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     For the transition period ended          to


                Commission File Number: 33-30123-A
                                 


                        TRANSIT GROUP, INC.
       (Exact name of small business issuer in its charter)



      State of Florida                            59-2576629
    (State or other jurisdiction of           (I.R.S. Employer
    incorporation  or organization)          Identification No.)

                                 
                                 
       2859 Paces Ferry, Suite 1740,  Atlanta, Georgia 30039
             (Address of principal executive offices)


                          (770) 444-0240
                    (Issuer's telephone number)


Check whether issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities and 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

There were 19,018,811 shares of the Company's common stock
outstanding as of November 13, 1997.

<PAGE>
               TRANSIT GROUP, INC. AND SUBSIDIARIES
                                 
                            FORM 10-QSB
                                 
                               INDEX
                                 
PART I.   FINANCIAL INFORMATION                        Page Number

          Item 1 - Financial Statements

          Consolidated Balance Sheets
             as of September 30, 1997 and
             December 31, 1996 . . . . . . . . . . . . . . .2

          Consolidated Statements of Operations
             for the three and nine months ended
             September 30, 1997 and 1996 . . . . . . . . . .3

          Consolidated Statements of Cash Flows
             for the nine months ended September 30,
             1997 and 1996 . . . . . . . . . . . . . . . . .4

          Notes to Consolidated Financial Statements . . . .5

          Item 2
          Management's Discussion and Analysis of
             Financial Condition and Results of
             Operations  . . . . . . . . . . . . . . . . . .8

PART II.  OTHER INFORMATION. . . . . . . . . . . . . . . . 11

          Item 6
          Exhibits and Reports on Form 8-K




<PAGE>
<TABLE>
<CAPTION>
               TRANSIT GROUP, INC. AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS
                                 
                                         September 30,  December 31,
                                              1997          1996
                                          (Unaudited)        
                 ASSETS                                      
<S>                                      <C>            <C>           
Current assets:                                             
  Cash                                   $    834,361   $       6,455
  Accounts receivable, net of 
    allowance of $195,339                   9,883,937        --
  Current portion of deferred taxes           367,930        --
  Other current assets                      2,468,811          27,231
                                         ------------    ------------
      Total current assets                 13,555,039          33,686
                                                            
Long-term assets:                                           
  Equipment, at net book value             24,416,747           4,828
  Goodwill                                 35,319,884         --
  Other assets                              1,282,979         --
  Net long-term assets from discontinued                           
    operations                              4,845,653       5,781,602
                                         ------------    ------------     
      Total long-term assets               65,865,263       5,786,430
                                         ------------    ------------
        Total assets                     $ 79,420,302    $  5,820,116
                                         ============    ============
                                                             
      LIABILITIES AND STOCKHOLDERS' EQUITY
                                                             
Current liabilities:                                        
  Short term borrowings                  $  9,073,587    $     --
  Current maturities of debt                1,846,790          --
  Current portion of capitalized leases     6,106,930          --
  Accounts payable                          3,789,423          --
  Accrued expense                           4,988,178          --
  Net current liabilities from 
    discontinued operations                11,723,341       3,807,445
  Other current liabilities                    35,983          --
                                         ------------    ------------
      Total current liabilities            37,564,232       3,807,445
                                                            
Long-term liabilities                                       
  Long-term debt                            5,488,318          --
  Long-term obligations under capital
     leases                                11,302,376          --
  Long-term deferred taxes payable            922,523          --
                                         ------------    ------------
      Total long-term liabilities          17,713,217          --
                                         ------------    ------------
         Total liabilities                 55,277,449       3,807,445
                                         ------------    ------------
Common stock issued subject to
  put arrangements                          8,100,000          --
                                         ------------    ------------

Commitments and contingencies                               
                                                            
Stockholders' equity:                             
  Preferred stock, $.01 par value,                          
    800,000 shares authorized, none
    issued and outstanding at
    September 30, 1997, 420,000 issued
    and outstanding at December 31, 1996,      --               4,200
  Common stock, $.01 par value, 
    30,000,000 shares authorized,
    11,494,780 shares issued and
    outstanding at September 30, 1997,
    and 3,758,671 at December 31, 1996.       190,184          37,586
  Additional paid-in capital               49,479,521      21,386,455
  Deficit                                 (33,626,852)    (19,415,570)
                                         ------------    ------------
      Total stockholders' equity           16,042,853       2,012,671
                                         ------------    ------------
        Total liabilities and                                       
          stockholders' equity           $ 79,420,302   $  5,820,116
                                         =============   =============
</TABLE>
                      Read accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
               TRANSIT GROUP, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF OPERATIONS
                            (Unaudited)
                                 
                                       Three months ended September 30,    Nine months ended September 30,
                                            1997             1996                1997          1996

<S>                                     <C>              <C>               <C>              <C>            
Revenues                                                                                      
Freight and transportation revenue      $  10,859,233    $     --          $  10,859,233    $     --
Other income                                  --               --                --               --
                                        -------------    ------------      -------------     ------------
   Total revenues                          10,859,233          --             10,859,233          --
                                        -------------    ------------      -------------     ------------
                                                                                              
Expenses                                                                                      
Purchased transportation                    4,142,025          --              4,142,025          --
Salaries, wages and benefits                2,547,342          --              2,547,342          --
Fuel                                        1,062,043          --              1,062,043          --
Operating supplies and expenses             1,137,956          --              1,137,956          --
Insurance                                     261,500          --                261,500          --
Depreciation and amortization expense         816,188          --                816,188          --
General and administrative expense            422,922           47,077           690,988          280,940
                                        -------------    -------------     -------------     ------------
     Total operating expense               10,389,976           47,077        10,658,042          280,940
                                        -------------    -------------     -------------     ------------
Operating income                              469,257          (47,077)          201,191         (280,940)
                                                                                              
Interest expense                              414,269          --                414,269          --
                                        -------------    -------------     -------------     ------------
Earnings from continuing operations                                                           
   before income taxes                         54,988          (47,077)        (213,078)        (280,940)
                                                                                              
Income taxes attributable to                                                                  
   continuing operations                       42,830          --                 42,830          --
                                        -------------    -------------     -------------     ------------
   Income from continuing operations           12,158          (47,077)         (255,908)        (280,940)
                                                                                              
Discontinued operations:                                                                      
  Loss from discontinued operations           --            (1,463,979)       (6,114,408)      (2,546,693)
                                                                                              
  Estimated loss on disposal including                                                        
  provision for operating losses                                                              
  through disposal date                       --               --             (7,455,966)          --
                                        -------------    -------------     -------------     ------------
  Net income (loss)                            12,158       (1,511,056)      (13,826,282)      (2,827,633)
                                                                                              
Preferred stock dividend requirement          --              (122,500)         (385,000)        (281,529)
                                        -------------    -------------     -------------     ------------
Income (loss) to common shareholders    $      12,158    $  (1,633,556)    $ (14,211,282)    $ (3,109,162)
                                        =============    =============     =============     ============
                                                                                              
Income (loss) per common share -- basic                                                       
    and diluted                                                                         
  Continuing operations                 $        0.00    $       (0.05)    $       (0.08)    $      (0.15)
  Discontinued operations:                                                                    
    Loss from discontinued operations            0.00            (0.39)            (0.73)           (0.68)
    Estimated loss on disposal                   0.00             0.00             (0.89)            0.00
                                        -------------    -------------     -------------     ------------
      Total                             $        0.00    $       (0.44)    $       (1.70)    $      (0.83)
                                        =============    =============     =============     ============
Weighted average number of common                                                             
  shares outstanding - basic               15,239,087        3,758,671         8,359,543        3,758,671
                                           ==========       ==========        ==========       ==========
Weighted average number of common                                                             
  shares outstanding - diluted             16,938,571        3,758,671         8,359.543        3,758,671
                                           ==========       ==========        ==========       ==========
</TABLE>
                                 
                     Read accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
               TRANSIT GROUP, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS
                    Increase (Decrease) in Cash
                            (Unaudited)

                                           Nine months ended September 30,
                                                1997            1996

<S>                                        <C>             <C>
Cash flows (used in) provided by operating                   
    activities:                                              
  Net loss from continuing operations      $    (255,908)    $    (280,940)
    Adjustments to reconcile net loss to                     
     cash (used in) provided by operating                                  
     activities:                           
       Depreciation and amortization             816,188             1,665
    Changes in assets and liabilities:                       
      Decrease in accounts receivable            633,883           --
      Decrease in other current assets          (309,336)          --
      Increase in other assets                    (6,733)          --
      Decrease in accounts payable              (602,275)          --
      Increase in deferred taxes                 142,184           --
      Increase in accrued expenses               338,946           --
                                           -------------     -------------
        Total adjustments                      1,012,857             1,665
                                           -------------     -------------
        Net cash (used in) provided by                                  
          continuing operations                  756,949          (279,275)
        Net cash (used in) discontinued
          operations                          (3,020,194)         (287,080)
                                           -------------     -------------
          Net cash (used in) operating   
            activities                        (2,263,245)         (566,355)
                                           -------------     -------------

Cash flows for investing activities:                         
  Business acquisition                        (3,897,691)          --
  Proceeds from disposal of equipment            220,043             4,500
  Purchase of equipment                         (232,337)         (506,759)
                                           -------------     -------------
         Net cash used in investing
           activities                         (3,909,982)         (502,259)
                                           -------------     -------------
                                                                        
Cash flows from financing activities:                        
  Proceeds from issuance of preferred
    stock                                         --             6,000,000
  Proceeds from issuance of common stock       6,075,014            --
  Dividends paid on preferred stock             (666,750)         (243,300)
  Repayment of long-term debt                   (842,108)       (3,449,226)
  Principal payments under capital lease                          
    obligations                               (1,672,362)         (558,597)
  Repayment of short-term debt                  (212,631)       (3,000,000)
  Increase in short-term borrowings            4,999,356         3,080,689
  Decrease in bank overdraft                    (679,383)         (759,458)
                                           -------------     -------------
        Net cash provided by financing
          activities                           7,001,136         1,070,108
                                           -------------     -------------
                                                                        
Increase in cash                                 806,540             1,494
Cash, beginning of period                          6,455             6,739
                                           -------------     -------------
Cash, end of period                        $     834,361     $       8,233
                                           =============     =============
                                                                  
Supplemental cash flow data                                  
  Cash paid during the period for interest                               
    in discontinued operations             $     446,914     $     487,434
                                           =============     =============
                                                                         
  Cash paid during the period for                                        
    interest in continued operations       $     414,269     $       --      
                                           =============     =============
                                                                         
  Supplemental schedule of noncash                                       
    investing and financing activities
    in discontinued operations
      Capital lease and notes payable                          
        obligations incurred for
        new vehicles and equipment         $     212,896     $       68,033
                                           =============     ==============
                                                            
                                                            
</TABLE>

                     Read accompanying notes.
<PAGE>
               TRANSIT GROUP, INC. AND SUBSIDIARIES
            Notes to Consolidated Financial Statements
                                 
                                 
The information presented herein as of September 30, 1997, and for
the three and nine months ended September 30, 1997 and 1996 is
unaudited.  The December 31, 1996, balance sheet data was derived
from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.

1.  Basis of Presentation
-------------------------

The Company's consolidated balance sheet as of September 30, 1997,
it's consolidated statements of operations for the three and nine
month periods ended September 30, 1997 and it's consolidated
statement of cash flows for the nine month period ended September
30, 1997 present the consolidated financial position, results of
operations and cash flows of the Company reflecting the disposal of
the parcel delivery and courier operations (see Note 4) and the
acquisition of four truckload carriers (see Note 5).

These September 30, 1997 financial statements include the consolidated
balance sheets of Transit Group, Inc. ("Transit Group" or the "Company") 
and its four acquired subsidiaries, Carolina Pacific Distributors, Inc. 
("Carolina Pacific"), Capitol Warehouse, Inc. ("Capitol Warehouse"), 
Service Express, Inc. ("Service Express") and Carroll Fulmer Group, Inc.
("Carroll Fulmer") at September 30, 1997 and the results of operations 
and cash flows for the following periods:

     Company                       Periods Included
     -------                       ----------------
Carolina Pacific           July 12, through September 30, 1997
Capitol Warehouse          August 16, through September 30, 1997
Service Express            August 16, through September 30, 1997
Carroll Fulmer             August 30, through September 30, 1997

The Company's consolidated balance sheet as of December 31, 1996, it's 
consolidated statements of operations for the three and nine month periods 
ended September 30, 1996 and it's consolidated statement of cash flows for 
the nine month period ended September 30, 1996 have been restated to 
reflect the disposal of such businesses.


2.  Summary of Significant Accounting Policies
----------------------------------------------

Management's Representation
---------------------------
The accompanying interim consolidated financial statements have
been prepared by the Company in accordance and consistent with the
accounting policies stated in the Company's 1996 Annual Report on
Form 10-KSB and should be read in conjunction with the consolidated
financial statements appearing therein.  In the opinion of
management, all adjustments necessary for a fair presentation of
such consolidated financial statements are reflected in the interim
periods presented.  Such adjustments consisted of normal recurring
items except for adjustments recorded pursuant to APB 30 (See Note
4).  Interim results are not necessarily indicative of results for
a full year.

The consolidated financial statements and notes are presented as
permitted by Form 10-QSB and do not contain certain information
included in the annual consolidated financial statements and notes
of Transit Group.

Corporate Name Change
---------------------
The Company formerly known as General Parcel Service, Inc. changed
it's name to Transit Group, Inc. effective June 30, 1997.  This name
change reflects the new strategic direction of the Company as it
concentrates it's operations in the truckload motor carrier
industry.


3.  Common Stock Sales
----------------------

On May 2, 1997, the Company's Chairman, the Company's President and
Chief Executive Officer, certain affiliates of the Company's
Chairman and another individual subscribed to purchase 3,387,187
shares of restricted common stock for cash, cancellation of debt
and assumption of debt in the amount of approximately $5.9 million.
In July 1997, warrants were exercised to purchase 25,000 shares of
common stock for $62,500.

3.  Preferred Stock
-------------------

The holders of the Company's outstanding preferred stock elected to
convert their preferred stock and accrued dividends to common stock
on June 30, 1997.  The Company issued 4,323,922 shares of common
stock upon the conversion.

4.  Discontinued Operations
---------------------------

During the second quarter of 1997, the Company approved a plan to dispose 
of it's parcel delivery and courier operations and has executed a contract 
for the sale of the parcel delivery business to a company controlled by 
Transit Group's Chairman.  The sale contract is effective as of September 
30, 1997 and administration and legal work is progressing to transfer all 
the parcel delivery assets to the purchaser.  Under the contract, the
buyer will assume the net liabilities related to the parcel delivery 
operations as part of the transaction and will receive shares of the 
Company's common stock.

Revenues attributable to the discontinued businesses were $14.7 million 
and $17.2 million for the nine months ended September 30, 1997 and 1996, 
respectively.  The Company has recorded a provision for losses during 
the phase-out period of approximately $800,000.  A tax benefit has not 
been provided on the losses from discontinued operations because it is 
more likely than not that a portion or all of the losses may not produce 
a tax benefit.

The loss from discontinued operations has been reflected as an APB No. 30 
disposal of a segment.  The December 31, 1996 consolidated balance sheet, 
the consolidated statements of operations for the three and nine month 
periods ended September 30, 1996 and the consolidated statement of cash 
flows for the nine month period ended September 30, 1996 have been restated 
to separately reflect the financial position, results of operations and cash 
flows of the discontinued parcel delivery and courier businesses.

5.  Business Combinations
-------------------------

In May 1997, the Company executed letters of intent to acquire four
privately-held trucking companies in separate transactions.  The four 
companies have combined annual revenues of approximately $100 million 
and were purchased by the Company during the third quarter of 1997 for 
cash and stock.

On July 11, 1997, the Company consummated the first of its announced 
acquisitions by acquiring Carolina Pacific, a privately-held North 
Carolina corporation, and the business and related assets operated by 
the owners of Carolina Pacific.  Pursuant to the Stock Purchase
Agreement executed at closing, Transit Group purchased all of the
outstanding capital stock of Carolina Pacific and the business and
related assets operated and owned by the shareholders of Carolina
Pacific for a purchase price of approximately $10.8 million consisting
of $3.7 million in cash at closing, issuance of 1,733,000 shares of
common stock of the Company to the shareholders of Carolina Pacific
and assumption of approximately $0.6 million of debt.

Carolina Pacific, which has been in business for more than 20 years, 
is a truckload carrier based in Highpoint, North Carolina.

On August 15, 1997, Transit Group consummated the acquisition of 
Service Express, an Alabama corporation.  Pursuant to the Agreement 
and Plan of Reorganization executed at closing, a wholly-owned Alabama 
subsidiary of Transit Group was merged with and into Service Express 
in a reverse triangular merger, with Service Express remaining as the 
surviving corporation of the merger.  Upon consummation of the merger, 
all of the outstanding common stock of Service Express was converted
into 903,226 shares of Transit Group common stock.

In addition, on August 15, 1997, Transit Group consummated the
acquisition of Capitol Warehouse, a Kentucky corporation.   Pursuant
to the Agreement and Plan of Reorganization executed at closing, a 
wholly-owned Kentucky subsidiary of Transit Group was merged with and 
into Capitol Warehouse in a reverse triangular merger, with Capitol 
Warehouse remaining as the surviving corporation of the merger.  Upon 
consummation of the merger, all of the outstanding common stock of 
Capitol Warehouse was converted into 641,283 shares of Transit Group 
common stock.

Service Express and Capitol Warehouse are truckload carriers based
in Tuscaloosa, Alabama and Louisville, Kentucky, respectively.

On August 29, 1997, Transit Group consummated the acquisition of Carroll 
Fulmer, a Florida corporation.  Pursuant to the Agreement and Plan of 
Reorganization executed at closing, Carroll Fulmer  merged  with and 
into Transit Group Sub., Inc., a wholly-owned Florida subsidiary  of 
Transit Group (the  "Subsidiary"), in a forward triangular merger,  with 
the Subsidiary remaining as the surviving corporation of the merger.  
Upon consummation of the merger, all of the outstanding common stock of 
Carroll Fulmer was converted into 4,166,666 shares of Transit Group 
common stock, and the Subsidiary's name was changed to Carroll Fulmer 
Group, Inc.

Carroll Fulmer is a truckload carrier based in Groveland, Florida.

<PAGE>
The following unaudited pro forma combined results of operations of the 
Company for the three and nine months ended September 30, 1997 and 1996 
account for all four acquisitions as if they had occurred on January 1, 
1997 and 1996, respectively.  The pro forma results give effect to the 
amortization of goodwill, the effects of additional interest expense 
and certain other adjustments.

<TABLE>
<CAPTION>
        Unaudited Pro Forma Combined Results of Operations
  For the Three and Nine Months Ended September 30, 1997 and 1996
                                 
                                     Three months ended            Nine months ended
                                        September 30,                 September 30,
                                                                   
                                       1997         1996            1997           1996

<S>                              <C>            <C>            <C>              <C>       
                                       
Revenues                         $ 25,164,817   $ 19,006,572   $  80,230,494    $ 64,428,492
                                                                                   
Income (loss) from                                                            
  continuing operations               (61,159)      (218,795)       (255,908)       (794,640)
                                                                          
Discontinued operations:                                                
  Loss from discontinued                                                      
    operations                          --        (1,463,979)     (6,114,408)     (2,546,693)
                                                                              
  Estimated loss on disposal
    including provision for                                               
    operating losses through
    disposal date                       --             --         (7,455,966)        --
                                 ------------   ------------    ------------    ------------
                                                                              
Net loss                              (61,159)    (1,682,774)    (13,826,282)     (3,341,333)
                                                                          
Preferred stock dividend
  requirement                           --          (122,500)       (385,000)       (281,529)
                                 ------------    ------------    -----------    ------------
                                                                                   
Loss to common shareholders      $    (61,159)  $ (1,805,274)   $(14,211,282)   $ (3,622,862)
                                                                                   
Loss per common share -- basic
     and diluted:                                                     
  Continuing operations          $      (0.00)  $      (0.03)   $      (0.04)   $      (0.09)
  Discontinued operations:
    Loss from discontinued
      operations                        (0.00)         (0.16)          (0.42)          (0.23)
    Estimated loss on disposal          (0.00)         (0.00)          (0.51)           --
                                 ------------    ------------   ------------    ------------
       Total                     $      (0.00)   $     (0.16)   $      (0.97)   $      (0.32)
                                 ============    ============   ============    ============
                                 
Weighted average number of
  shares -- basic                  19,018,145      11,202,180      14,651,275     11,202,180
                                   ==========      ==========      ==========     ==========
Weighted average number of
  shares -- diluted                20,717,629      11,202,180      14,651,275     11,202,180
                                   ==========      ==========      ==========     ==========
</TABLE>
The above pro forma statements do not purport to be indicative of the results
of operations which would have occurred had the acquisitions been made on 
January 1, 1997 or 1996.

<PAGE>
                TRANSIT GROUP, INC.  AND SUBSIDIARY
         Item 2.  Management's Discussion and Analysis of
           Financial Condition and Results of Operations
                                 
The following discussion should be read in conjunction with the
Consolidated Financial Statements including the footnotes and is
qualified in its entirety by the foregoing and other more detailed
financial information appearing elsewhere herein.  Historical
results of operations and the percentage relationships among any
amounts included in the Consolidated Statements of Operations, and
any trends which may appear to be inferable therefrom, should not
be taken as being necessarily indicative of trends in operations or
results of operations for any future periods.

Comments in this Management's Discussion and Analysis of Financial
Condition and Results of Operations regarding the Company's
business which are not historical facts are forward looking
statements that involve risks and uncertainties.  Among these risks
are the Company is in a highly competitive business, has a history
of operating losses, and is pursuing a growth strategy that relies
in part on the completion of acquisitions of companies in the
trucking industry.  There can be no assurance that in its highly
competitive business environment, the Company will successfully
improve its operating profitability or consummate such
acquisitions.

The following discussion and analysis reflect the Company's
financial position, results of operations and cash flows as
restated to reflect the disposal of the parcel delivery and courier
operations in accordance with APB No. 30.

Liquidity and Capital Resources
-------------------------------
The Company has incurred substantial operating losses and cash flow
deficits since inception. From September 1985 through September 30,
1997, the Company had accumulated a deficit from operating losses
of $32,288,048.  As of September 30, 1997, the Company had raised
$57,769,705 from (i) private placements of preferred stock, (ii)
its initial public offering of November 2, 1989, (iii) the sale of
restricted and unrestricted common shares and has paid dividends on
its preferred stock of approximately $1,338,804 and (iv) stock
issued in connection with the acquisition of the four truckload
carriers.  As a result of equity placements, dividends on preferred
stock and cumulative losses, the stockholders' equity as of
September 30, 1997, was $16,042,853, and common stock issued subject
to put arrangements was $8,100,000.

Management believes, but can offer no assurances, that it can
improve operating performance and cash flows through the following
measures:

Eliminating Parcel Delivery and Courier Operations.
   Management has entered into a contract to sell it's unprofitable
   parcel delivery operations to a company controlled by its Chairman and
   expects this sale to close in December 1997 with an effective date
   of September 30, 1997.  Management is currently negotiating for the
   sale of it's courier operations and expects to complete this sale by
   December 31, 1997.

Acquiring Profitable Trucking Operations.
   The Company has reorganized into a "holding company" format based in
   Atlanta, Georgia.  This new corporate structure is intended to increase
   the Company's flexibility to pursue the acquisition and operation of
   profitable truckload motor carriers.  The Company's intent is to
   continue to identify and acquire additional mid-size trucking
   companies, primarily with annual revenues between $10 million and
   $100 million, that possess strong market positions, sound
   management and a commitment to a high level of service and quality.
   The Company has completed the acquisition of four companies at
   September 30, 1997 and is pursuing additional accounts.


Relying on Equity Sales to or Loans from Major Shareholders. 
   In July 1997, an affiliate of the Company's Chairman loaned the
   Company $4 million to consummate the acquisition of Carolina
   Pacific Distributors, Inc.  During August, September and October of
   1997, the affiliate loaned the Company an additional $2,600,000 to
   fund the continuing operations of the parcel delivery and courier
   operations and fund certain expenses associated with the
   acquisition of the truckload companies.  The $2,600,000 is 
   expected to be assumed by the purchaser of the parcel delivery
   operations.

Obtaining Bank Financing.
   Management is negotiating new lines of bank financing to provide
   working capital financing and financing for acquisition of additional
   truckload motor carriers.   Management has received a $20 million
   commitment from a bank to make available to Capital Warehouse,
   Carroll Fulmer, Service Express and Carolina Pacific an asset based
   line of credit secured by accounts receivable and other intangible
   assets.  The Company expects this line of credit to be closed by
   the end of 1997.

In connection with the acquisition of three of the truckload carriers
completed during the third quarter of 1997, the Company granted selling
shareholders the option to put a portion of the shares which they 
received in exchange for selling their business to the Company.  The
amount of the puts issued by the Company aggregates approximately $8.1
million.  Of this $8.1 million, options in the amounts of $4.6 million
are exercisable before August 29, 1998 when an additional $3.5 million
become exercisable.  The put options expire in the amounts of $2.1
million at August 15, 1998 and $6.0 million at August 29, 2003.

Holders of options to put $6.0 million of stock at $3.60 per share may
require either the Company to redeem the stock or a major shareholder of
the Company to acquire the stock.  Holders of options to put $1.8
million of stock at $3.875 per share and $0.3 million at $6.75 per
share have the right to put the stock to the Company with a guarantee
from a major shareholder.

Through November 10, 1997, the Company has received notification that
puts in the amount of approximately $2,200,000 will be exercised within
the next 60 days for stock at amounts ranging from $3.60 to $6.75 per
share.  The Company is seeking investors to purchase the stock from
the shareholders.  To the extent that the Company is not successful 
in obtaining investors to purchase the stock, the Company will be 
required to fund the cash required to meet its obligations under the
put through borrowing such funds, drawing down on bank lines which
may be available to its subsidiaries or to call upon a major
shareholder to purchase the stock under such shareholder's
obligations and guarantees associated with the acquisition contracts.
The Company has arranged for the purchase by third parties of
approximately $450,000 of the $2,200,000.

Financial Condition
-------------------
As of June 30, 1997, the Company treated it's parcel delivery
operations and courier operations as discontinued operations.  The
Company's outstanding vehicle and equipment indebtedness, operating
leases, and most remaining liablities (other than $4.0 million in
debt to a related shareholder) will be assumed by the companies 
purchasing the operations.


Results of Operations - Three months ended
September 30, 1997 versus three months ended September 30, 1996
---------------------------------------------------------------
At June 30, 1997, the Company had no revenues from continuing
operations.  Such revenues commenced on July 11, 1997 with the
purchase of Carolina Pacific Distributors, Inc. and continued to
increase with the acquisitions of the three additional companies
with which it had executed letters of intent.

The following table sets forth items in the Consolidated Statement
of Operations for the three months ended September 30, 1997 as a
percentage of operating revenue.  Because the truckload operations
were acquired during the third quarter of 1997, the table is not
comparable to an earlier period.

                                         Percentage of
                                       Operating Revenues
                                       ------------------
Operating revenues                           100.0%
Operating expenses                           
   Purchased transportation                   38.1%
   Salaries, wages and benefits               23.5%
   Fuel                                        9.8%
   Operating Supplies and expenses            10.5%
   Insurance                                   2.4%
   Depreciation and amortization expense       7.5%
   General and administrative expense          3.8%
                                             ------
      Total operating expense                 95.7%
                                             ------
      Operating income                         4.3%
Interest expense                               3.8%
                                             ------
      Earnings from continuing operations    
         before income taxes                   0.5%
                                             
Income taxes attributable to continuing      
     Operations                                0.4%
                                             ------
Income from continuing operations              0.1%
                                             ======

The Company incurred corporate administration expenses for the
three months ended September 30, 1997 of approximately $0.4 million
as compared to approximately $47 thousand for the three months
ended September 30, 1996.  These increases are attributable the
reorganization to a holding company format, the opening of new corporate
office in Atlanta, Georgia and the acquisition of the four truckload
companies.

Revenues attributable to the discontinued businesses were $5.0
million and $5.8 million for the three months ended September 30,
1997 and 1996, respectively.  The reduction in revenue resulted
primarily from closing terminals in North and South Carolina.  The
Company has recorded a provision for losses during the phase-out
period of approximately $0.8 million.  A tax benefit has not been
provided on the losses from discontinued operations because it is
more likely than not that a portion or all of the losses may not
produce a tax benefit.

Results of Operations - Nine months ended
September 30, 1997 versus nine months ended September 30, 1996
--------------------------------------------------------------
The following table sets forth items in the Consolidated Statement
of Operations for the nine months ended September 30, 1997 as a
percentage of operating revenue.  Because the truckload operations
were acquired during the third quarter of 1997, the table is not
comparable to an earlier period.

                                         Percentage of
                                       Operating Revenues
                                       ------------------
Operating revenues                           100.0%
Operating expenses                           
   Purchased transportation                   38.1%
   Salaries, wages and benefits               23.5%
   Fuel                                        9.8%
   Operating Supplies and expenses            10.5%
   Insurance                                   2.4%
   Depreciation and amortization expense       7.5%
   General and administrative expense          6.4%
                                             ------
      Total operating expense                 98.2%
                                             ------
      Operating income                         1.8%
Interest expense                               3.8%
                                             ------
      Earnings from continuing operations    
         before income taxes                  (2.0%)
                                             
Income taxes attributable to continuing      
     Operations                                0.4%
                                             ------
Income from continuing operations             (2.4%)
                                             ======

The Company incurred general and administrative expenses for the nine
months ended September 30, 1997 of approximately $0.7 as compared to
approximately $0.3 million for the nine months ended September 30, 1996.
These increases are attributable the reorganization to a holding company
format, the opening of new corporate office in Atlanta, Georgia and
the acquisition of the four truckload companies.

During the second quarter of 1997, the Company approved a plan to
dispose of its parcel delivery and courier operations and has
executed a letter of intent for the sale of the parcel delivery
portion of such businesses.  It is expected that substantially all
property and equipment and substantially all capital and 
operating lease obligations will be assumed by the buyer.  The
Company anticipates that the disposal will be completed in December
1997.

Revenues attributable to the discontinued businesses were
approximately $14.7 million and $17.2 million for the nine months
ended September 30, 1997 and 1996, respectively.  The Company has
recorded a provision for losses during the phase-out period of
approximately $0.8 million.  A tax benefit has not been provided on
the losses from discontinued operations because it is more likely
than not that a portion or all of the losses may not produce a tax
benefit.

                                 
                                 
                TRANSIT GROUP, INC. AND SUBSIDIARY
                    Part II - Other Information


Item 1 - Legal Proceedings

           Not applicable

Item 2 - Changes in Securities

           Not applicable

Item 3 - Defaults on Senior Securities

           Not applicable

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

           Not applicable

Item 5 - Other Information

           Not applicable


 (a)  Exhibits:

        Exhibit 4 - Instruments defining the Rights of Security holders

        4.1    Specimen Stock Certificate (incorporated by reference from
               Exhibit 4.1 to the Registrant's Form S-18, Registration No.
               33-30123A).

        4.2    Warrant granting stock purchase warrants to J. Ray Gatlin
               (incorporated by reference from Exhibit 4.2 to the 
               Registrant's Form S-18, Registration No. 33-30123A).

        4.3    Warrant granting stock purchase rights to T. Wayne Davis
               (incorporated by reference from Exhibit 4.3 to Registrant's
               Form S-18, Registration No. 33-30123A).

        4.4    Warrant granting stock purchase rights to T. Wayne Davis
               (incorporated by reference from Exhibit 4.4 to Registrant's
               Form S-18, Registration No. 33-30123A).

        4.5    Warrant granting stock purchase rights to Drue B. Linton
               (incorporated by reference from Exhibit 4.5 to Registrant's
               Form S-18, Registration No. 33-30123A).

        4.6    Warrant granting stock purchase rights to Steven C. Koegler
               (incorporated by reference from Exhibit 4.7 to Registrant's
               Form S-18, Registration No. 33-30123A).

        4.7    Warrant granting stock purchase rights to J. Ray Gatlin
               (incorporated by reference from Exhibit 4.8 to Registrant's
               Form S-18, Registration No. 33-30123A).

        4.8    Form of Warrant issued (incorporated by reference from
               Exhibit 4.9 to Registrant's Form S-18, Registration No.
               33-30123A).

        4.9    Form of Warrant Agreement between the Company and American
               Transtech, Inc., as Warrant Agent (incorporated by
               reference from Exhibit 4.10 to Registrant's Form S-18,
               Registration No. 33-30123A).

        4.10   Preferred Stock Purchase Agreement and specimen stock
               certificate between the Company and T. Wayne Davis
               (incorporated by reference from Exhibit Z to Registrant's
               1993 Form 8-K, Registration No. 33-30123A).

        Exhibit 10 - Material Contracts

        10.1   Incentive Stock Option Plan (incorporated by reference from
               Exhibit 10.2 to Registrant's Form S-18, Registration No.
               33-30123A).

        10.2   Lease Agreement governing the Company's lease of its
               terminal in Jacksonville, Florida dated November 12, 1986,
               between the Company and Lakepoint Joint Venture,
               (incorporated by reference from Exhibit 10.9 to
               Registrant's Form S-18, Registration No. 33-30123A).

        10.3   First Amendment to Lease Agreement governing the Company's
               lease of its terminal in Jacksonville, Florida dated 
               December 8, 1988, between the Company and Lakepoint Joint
               Venture, (incorporated by reference from Exhibit 10.10 to
               Form S-18, Registration No. 33-30123A).

        10.4   Lease Agreement governing the Company's terminal in
               Gainesville, Florida, dated June 25, 1990, between the
               Company and W. Marvin Gresham incorporated by reference
               from Exhibit B to Registrant's 1990 Form 10-K, Registration
               No. 33-30123A).

        10.5   Lease Agreement governing the Company's terminal in Riviera
               Beach, Florida, dated July 9, 1990, between the Company and
               McClosky-Bills, Partnership (incorporated by reference from
               Exhibit D to Registrant's 1990 Form 10-K, Registration No.
               33-30123A).

        10.6   Lease Agreement governing the Company's terminal in
               Tallahassee, Florida, dated December 19, 1991, between the
               Company and Barnett Tallahassee, (incorporated by reference 
               from  Exhibit A to Registrant's 1991 Form 10-K,
               Registration No. 33-30123A).

        10.7   Lease Agreement governing the Company's terminal in
               Rockledge, Florida, dated October 21, 1991, between the
               Company and Robert Carl Cook and Sara E. Cook,
               (incorporated by reference from Exhibit B to Registrant's
               1991 Form 10-K, Registration No. 33-30123A).

        10.8   Lease Agreement governing the Company's terminal in 
               Orlando, Florida, dated December 20, 1992, between the
               Company and Michel Kurban (incorporated by reference from
               33-30123A).

        10.9   Lease Agreement governing the Company's terminal in Fort
               Myers, Florida, dated February 25, 1993, between the
               reference from Exhibit D to Registrant's 1992 10-KSB,
               Registration No. 33-30123A).

        10.10  Lease Agreement governing the Company's terminal in Medley,
               Florida, dated March 16, 1993, between the Company and Gran
               Central Corporation (incorporated by reference from Exhibit
               E to Registrant's 1992 10-KSB, Registration No. 33-30123A).

        10.11  Employment Agreement between the Company and Gayle Smith,
               dated April 5, 1993, (incorporated by reference from
               Exhibit A to Registrant's 1993 10-KSB, Registration No
               33-30123A).

        10.12  Lease Agreement governing the Company's terminal in College
               Park, Georgia, dated August 23, 1993, between the Company
               and General of Georgia, Inc. (incorporated by reference 
               from Exhibit E to the Registrant's 1993 Form 10-KSB,
               Registration No. 33-30123A).

        10.13  Lease Agreement governing the Company's terminal in
               Tifton, Georgia, dated October 7, 1993, between the
               Company and National Foods, Inc. (incorporated by
               reference from Exhibit G to Registrant's 1993 10-
               KSB, Registration No. 33-30123A).
               
        10.14  Lease agreement governing the Company's terminal in
               Milton, Florida, dated June 30, 1994, between the
               and Scott Steel, Inc. (incorporated by reference
               from Exhibit B to Registrant's 1994 10-KSB,
               Registration No. 33-30123A)
               
        10.15  Lease Agreement governing the Company's terminal in
               Columbia, South Carolina dated May 31, 1996 between
               the Company and Angoria Columbia Enterprises.
               (incorporated by reference from Exhibit 10.1 to
               Registrant's June 30, 1996 10-QSB, Registration No.
               33-30123A).
               
        10.16  Assignment of Lease Agreement governing the
               Company's terminal in Greensboro, North Carolina
               dated June 13, 1996 between the Company, ABF Freight
               System, Inc., Bob G. Gibson and Defco Company
               (incorporated by reference from Exhibit 10.2 to
               Registrant's June 30, 1996 10-QSB, Registration No.
               33-30123A).
               
        10.17  Lease Agreement governing the Company's terminal in
               Charlotte, North Carolina dated July 30, 1996
               between the Company and Lincoln National Life
               Insurance Company (incorporated by reference from
               Exhibit 10.7 to Registrant's June 30, 1996 10-QSB,
               Registration No. 33-30123A).
               
        10.18  Lease Agreement governing the Company's terminal in
               Charleston, South Carolina dated July 9, 1996
               between the Company and J. P. Gaillard, ET AL.
               (incorporated by reference from Exhibit 10.8 to
               Registrant's June 30, 1996 10-QSB, Registration No.
               33-30123A).
               
        10.19  Lease Agreement governing the Company's terminal in
               Tampa, Florida dated November 30, 1994 and amended
               on January 26, 1996 and February 19, 1996 between
               the Company and Scott Steel, Inc. (incorporated by
               reference from Exhibit 10.1 to Registrant's
               September 30, 1996 10-QSB, Registration No.
               33-30123A).
               
        10.20  Purchase Agreement governing purchase by GPS
               Acquisition Corp. from Transit Express of Charlotte,
               Inc. of certain assets, dated February 6, 1995
               (incorporated by reference from Exhibit 10.5 to
               Registrant's 1995 10-KSB, Registration No. 
               33-30123A).
               
        10.24  Resignation agreement dated December 20, 1996
               between the Company, E. Hoke Smith, Jr., and T.
               Wayne Davis as guarantor (incorporated by reference
               from Exhibit 10.31 to Registrant's 1996 10-KSB,
               Registration No. 33-30123A).
                                         
        10.25  Purchase Agreement governing purchase by Transit of
               the stock of Carolina Pacific (incorporated by
               reference from Exhibit 2.1 to Registrant's Form 8-K
               dated July 11, 1997.
               
        10.26  Purchase Agreement governing purchase by Transit of
               the stock of Service Express (incorporated by
               reference from Exhibit 2.1 to Registrant's Form 8-K
               dated August 15, 1997.
               
        10.27  Purchase Agreement governing purchase by Transit of
               the stock of Capitol Warehouse (incorporated by
               reference from Exhibit 2.2 to Registrant's Form 8-K
               dated August 15, 1997.
               
        10.28  Agreement and Plan of Reorganization under which
               Carroll Fulmer was merged with and into Transit
               Group Sub., Inc., a wholly-owned Florida subsidiary
               of Transit Group incorporated by reference from
               Exhibit 2.1 to Registrant's Form 8-K dated August
               29, 1997.
               
 (b)  Reports on Form 8-K

The Company amended it's Form 8-K dated July 11, 1997 on September
24, 1997 to include audited financial statements and pro forma
financial information related to the acquisition of Carolina
Pacific.

The Company filed a Form 8-K dated August 15, 1997 to report
Transit Group had consumated the acquisitions of Capital Warehouse
and Service Express.  Pursuant to the Agreement and Plan of
Reorganization excuted at closing, a wholly-owned Alabama
subsidiary of Transit Group was merged with and into Service
Express in a reverse triangular merger, with Service Express
remaining as the surviving corporation of the merger.  Upon
consummation of the merger, all of the outstanding common stock
of Service Express was converted into 903,226 shares of Transit
Group common stock.  In addition, on August 15, 1997, pursuant
to the Agreement and Plan of Reorganization executed at closing,
a wholly-owned Kentucky subsidiary of Transit Group was merged
with and into Capital Warehouse in a reverse triangular merger,
with Capital Warehouse remaining as the surviving corporation
of the merger.  Upon consummation of the merger, all of the
outstanding common stock of Capital Warehouse was converted
into 641,283 shares of Transit Group common stock.  The company
amended this filing on November 4, 1997, to include audited
financial statements on both Service Express and Capital
Warehouse and pro forma financial information.

The Company filed a Form 8-K dated August 29, 1997 to report
Transit Group had consummated the acquisition of Carroll Fulmer,
a Florida corporation.  Pursuant to the Agreement and Plan of
Reorganization executed at closing, Carroll Fulmer was merged
with and into Transit Group Sub., Inc., a wholly-owned Florida
subsidiary of Transit Group (the "Subsidiary") in a forward
triangular merger, with the Subsidiary remaining as the 
surviving corporation of the merger.  Upon consumation of the
merger, all of the outstanding common stock of Carroll Fulmer
was converted into 4,166,666 shares of Transit Group common
stock, and the Subsidiary's name was changed to Carroll Fulmer
Group, Inc.  The Company amended this filing on November 12,
1997 to include audited financial statements and pro forma 
financial information.



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.

Transit Group, Inc.

Date: November 14, 1997

By:   /s/Wayne N. Nellums
          Wayne N. Nellums
          Vice President,
          Chief Financial Officer
          and Secretary