SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 8-K

                                 CURRENT REPORT


                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


         Date of Report (date of earliest event reported): July 31, 1997

                     MEADOWBROOK REHABILITATION GROUP, INC.


             (Exact name of registrant as specified in its charter)

    Delaware                         0-19726                   94-3022377
(State or other                  (Commission File           (I.R.S.  Employer
jurisdiction of                      Number)              Identification Number)
incorporation)

            2200 Powell Street, Suite 800, Emeryville, CA      94608  
              (Address of principal executive offices)      (zip code)


               Registrant's telephone number, including area code:
                                 (510) 420-0900








<PAGE>


Item 2.  Acquisition or Disposition of Assets

                  On July 31, 1997,  Meadowbrook  Rehabilitation  Group, Inc., a
Delaware  corporation (the "Company"),  sold the business and assets (other than
accounts  receivable as of the closing) of  Meadowbrook  Neurocare-Kansas  City,
Inc. (the  "Subsidiary"),  a wholly owned subsidiary of the Company,  to NewCare
Hospital  Corporation (the  "Purchaser"),  a wholly-owned  subsidiary of NewCare
Health Corporation.  The Subsidiary  provided acute and subacute  rehabilitation
services at a leased hospital in Gardner,  Kansas.  The hospital was leased from
Harvey Wm. Glasser,  M.D., the Company's  Chief  Executive  Officer and majority
shareholder.  Concurrently  with the sale of the assets of the  Subsidiary,  Dr.
Glasser sold the hospital leased by the Subsidiary to the Purchaser.

                  In  consideration  of the transfer of such business and assets
of the  Subsidiary,  the Company  received  $1,500,000 less the value of certain
liabilities  of the Subsidiary  assumed by the Purchaser.  The selling price for
the business and assets of the Subsidiary  was  determined  based on arms-length
negotiations between the parties. There was no material relationship between the
Purchaser  and the Company or any of the Company's  affiliates,  any director or
officer of the Company or any associate of any such director or officer.


<PAGE>



Item 7.  Financial Statements and Exhibits.


         (b) Pro Forma financial  information required pursuant to Article 11 of
             Regulation S-X.

             Thefollowing Pro Forma financial  statements are included following
             the signature page to this Form 8-K:

             Introduction  to the Pro  Forma  Condensed  Consolidated  financial
             information.

             Pro  Forma  Condensed  Consolidated  Balance  Sheet as of March 31,
             1997, (unaudited).

             Pro Forma  Condensed  Consolidated  Statements  of  Income  for the
             twelve  months  ended June 30, 1996 and for the nine  months  ended
             March 31, 1997, (unaudited).

             Notes to Pro Forma  Condensed  Consolidated  financial  information
             (unaudited).

         (c) Exhibits:

         Exhibit 2.1  Agreement  of  Purchase  and Sale,  dated  June 18,  1997,
             between NewCare Health Corporation and Meadowbrook Neurocare-Kansas
             City, Inc. The Registrant  agrees to furnish  supplementally to the
             Commission a copy of the omitted schedules.


<PAGE>

         SIGNATURES


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.

         Dated:   August 13, 1997.

                                           MEADOWBROOK REHABILITATION
                                           GROUP, INC.

                                           By: /s/ Harvey Wm. Glasser, M.D.
                                           Harvey Wm. Glasser, M.D.
                                           President and Chief Executive Officer


<PAGE>






Item 7(b)   Meadowbrook Rehabilitation Group, Inc. reflecting the sale of 
            Meadowbrook Neurocare-Kansas City, Inc.
            Introduction to unaudited Pro Forma Condensed Consolidated Financial
            information.

            The following  tables set forth the  unaudited  Pro Forma  Condensed
            Consolidated  Balance Sheet of the Company as of March 31, 1997, and
            the unaudited Pro Forma Condensed Consolidated  Statements of Income
            of the  Company  for the twelve  months  ended June 30, 1996 and the
            nine  months  ended  March  31,  1997.   The  Pro  Forma   Condensed
            Consolidated Statements of Income include adjustments related to the
            sale of  Meadowbrook  Rehabilitation  Group  of  Georgia,  Inc.  The
            transaction closing date for the sale of Meadowbrook  Rehabilitation
            Group  of  Georgia,  Inc.  was  March  31,  1997 and  therefore  the
            Condensed  Consolidated Balance Sheet reflects the disposition.  The
            Pro Forma Condensed Consolidated Balance Sheet was prepared assuming
            that the Company's disposition of Meadowbrook Neurocare-Kansas City,
            Inc.  took  place  on  March  31,  1997.  The  Pro  Forma  Condensed
            Consolidated  Statements of Income were  prepared  assuming that the
            disposition  of  Meadowbrook  Neurocare-Kansas  City,  Inc.  and the
            disposition of  Meadowbrook  Rehabilitation  Group of Georgia,  Inc.
            took place as of the  beginning of the twelve  months ended June 30,
            1996 and at the  beginning  of the nine months ended March 31, 1997,
            respectively.

            The unaudited  financial  information  furnished herein reflects all
            adjustments  for the twelve  months ended June 30, 1996 and the nine
            months ended March 31, 1997, respectively, consisting only of normal
            recurring  adjustments  which,  in the  opinion of  management,  are
            necessary to fairly state the Company's  financial  position and the
            results of its operations for the periods presented.

            The unaudited pro forma  financial  information  does not purport to
            present the consolidated financial position and consolidated results
            of  operations  of the Company  had the  Company's  dispositions  of
            Meadowbrook    Neurocare-Kansas    City,    Inc.   and   Meadowbrook
            Rehabilitation Group of Georgia, Inc. actually occurred on the dates
            indicated; nor does it purport to be indicative of results that will
            be attained in the future.

            The pro forma  financial  information  should be read in conjunction
            with the Company's historical  Consolidated Financial Statements and
            Notes thereto  contained in the  Company's  From 10-K for the fiscal
            year ended June 30, 1996 and the Company's  Form 8-K dated March 31,
            1997.




<PAGE>
<TABLE>
<CAPTION>

                                           PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET


                                                                                    As of March 31, 1997
                                             -----------------------------------------------------------------------
                                                                    Pro Forma Adjustments
                                                           -----------------------------------
                                                 Actual            Debit            Credit     Ref       Pro Forma
                                               ---------------------------------------------------------------------
 <S>                                            <C>              <C>               <C>         <C>            <C>
 CURRENT ASSETS
       Cash and cash equivalents                 $3,639,993       $1,500,000                   (A)       $5,139,993
       Net patient accounts receivable            5,122,109                                               5,122,109
       Due from intermediaries                        9,630                                                   9,630
       Prepaid expenses and other assets          1,198,336                            $2,410  (A)        1,195,926
                                                                                                        -----------
       Total current assets                       9,970,068                                              11,467,658
                                                                                                        -----------
 PROPERTY AND EQUIPMENT, (net)                    1,188,669                           208,148  (A)          980,521
 GOODWILL AND INTANGIBLE ASSETS                   1,820,472                                               1,820,472
                                                -----------                                             -----------
       TOTAL ASSETS                             $12,979,209                                             $14,268,651
                                                ===========                                             ===========
 CURRENT LIABILITIES                              3,550,872                           146,000  (A)        3,696,872
 LONG-TERM LIABILITIES                              380,956                                                 380,956
                                                -----------                                             -----------
       Total Liabilities                          3,931,828                                               4,077,828
                                                -----------                                             -----------
 MINORITY INTEREST                                        0                                                       0
 STOCKHOLDERS' EQUITY
       Common stock                                  19,302                                                  19,302
       Paid-in capital                           17,908,122                                              17,908,122
       Retained deficit                         (8,880,043)                         1,143,442  (A)      (7,736,601)
                                                -----------                                             -----------
           Total stockholders' equity             9,047,381                                              10,190,823
                                                -----------       ----------       ----------           -----------
 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
                                                $12,979,209       $1,500,000       $1,500,000           $14,268,651
                                                ===========       ==========       ==========           ===========
<FN>
 Footnotes on page 9.
</FN>
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                                                  PRO FORMA CONDENSED CONSOLIDATED
                                                        STATEMENTS OF INCOME

                                                                Year Ended June 30, 1996
                           ---------------------------------------------------------------------------------------------------
                                              Georgia Pro Forma            Kansas Pro Forma Adjustments
                                                 Adjustments
                                         -----------------------------     -----------------------------
                                  Actual         Debit          Credit   Ref      Debit         Credit    Ref      Pro Forma
                                ---------------------------------------------------------------------------------------------
<S>                             <C>            <C>           <C>        <C>    <C>            <C>                 <C>              
OPERATING REVENUES:
   Net patient revenues         $23,622,560    $6,068,071      $184,000 (E,F)  $6,331,254                 (B)     $11,407,235
                                -----------                                                                       -----------
     Net operating revenues      23,622,560                                                                        11,407,235
                                -----------                                                                       -----------
OPERATING EXPENSES:
   Salaries and employee         15,189,173                   4,204,456 (C,E)                 $3,387,295  (B,C)     7,597,422
benefits
   Other operating expenses       9,108,509                   1,847,827 (C,E)                  2,255,209  (B,C)     5,005,473
                                -----------                                                                       -----------
     Total operating expenses    24,297,682                                                                        12,602,895
                                -----------                                                                       -----------
     Loss from operations         (675,122)                                                                       (1,195,660)
                                -----------                                                                       -----------
OTHER (INCOME) EXPENSE:
   Gain on sale of assets                 0                                                                                 0
   Interest income                (113,834)                      65,000 (D)                       75,000  (D)       (253,834)
                                -----------                                                                       -----------
     Net other income             (113,834)                                                                         (253,834)
                                -----------                                                                       -----------
     Loss before income taxes     (561,288)                                                                         (941,826)
INCOME TAX PROVISION 
(BENEFIT)                                 0                                                                                 0
                                -----------                                                                       -----------
    NET LOSS BEFORE                                                                                                 (941,826)
MINORITY INTEREST                 (561,288)
                                -----------                                                                       -----------
MINORITY INTEREST                    29,016                                                                            29,016
                                -----------    ----------    ----------        ----------
NET LOSS                        $ (590,304)    $6,068,071    $6,301,283        $6,331,254     $5,717,504           $(970,842)
                                ===========    ==========    ==========        ==========
NET LOSS PER SHARE
(primary and fully diluted)         ($0.31)                                                                           ($0.50)
                                ===========                                                                       ===========
WEIGHTED AVERAGE COMMON
AND COMMON EQUIVALENT
SHARES OUTSTANDING                1,930,244                                                                         1,930,244
                                ===========                                                                       ===========
<FN>
 Footnotes on page 9.
</FN>
</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                                                  PRO FORMA CONDENSED CONSOLIDATED
                                                        STATEMENTS OF INCOME

                                                                    Nine Months Ended March 31, 1997
                                      ----------------------------------------------------------------------------------------------
                                                          Georgia Pro Forma                Kansas Pro Forma
                                                             Adjustments                     Adjustments
                                          Actual         Debit          Credit    Ref       Debit       Credit    Ref     Pro Forma
                                      ----------------------------------------------------------------------------------------------
<S>                                      <C>            <C>           <C>       <C>      <C>          <C>         <C>     <C>      
OPERATING REVENUES:
      Net patient revenues                $17,013,035   $4,856,216      $138,000(E,F)    $3,738,745               (B)     $8,556,074
                                      ---------------                                                                     ----------
           Net operating revenues          17,013,035                                                                      8,556,074
                                      ---------------                                                                     ----------
 OPERATING EXPENSES:
      Salaries and employee benefits       11,926,130                  3,371,655(C,E)                 $2,552,610  (B,C)    6,001,865
      Other operating expenses              6,668,417                  1,291,786(C,E)                  1,577,938  (B,C)    2,736,809
                                      ---------------                                                                     ----------
           Total operating expenses        18,594,547                                                                      8,738,674
                                      ---------------                                                                     ----------
           Loss from operations           (1,581,512)                                                                      (182,600)
                                      ---------------                                                                     ----------
 OTHER (INCOME) EXPENSE:
      Gain on sale of assets                (530,942)                                                                        530,942
      Interest income                        (38,184)                     48,750(D)                       56,250  (D)      (143,184)
                                      ---------------                                                                     ----------
           Net other income                 (569,126)                                                                        387,758
                                      ---------------                                                                     ----------
           Loss before income taxes       (1,012,386)                                                                      (570,358)
                                                                                                                          ----------
 INCOME TAX PROVISION (BENEFIT)
                                                    0                                                                              0
                                      ---------------                                                                     ----------
      NET LOSS BEFORE MINORITY
 INTEREST                                 (1,012,386)                                                                      (570,358)
                                      ---------------                                                                     ----------
 MINORITY INTEREST                             26,660                                                                         26,660
                                      ---------------   ----------    ----------         ----------   ----------          ----------
 NET LOSS                                $(1,039,046)   $4,856,216    $4,850,191         $3,738,745   $4,186,798          $(597,018)
                                      ===============   ==========    ==========         ==========   ==========          ==========
 NET LOSS PER SHARE (primary and
 fully diluted)                               ($0.54)                                                                       ($0.31)
                                      ===============                                                                ==============
 WEIGHTED AVERAGE COMMON AND COMMON
 EQUIVALENT SHARES OUTSTANDING              1,930,349                                                                     1,930,349
                                      ===============                                                                ==============
<FN>
Footnotes on page 9.
</FN>
</TABLE>



<PAGE>


                     Meadowbrook Rehabilitation Group, Inc.
         Reflecting the Sale of Meadowbrook Neurocare-Kansas City, Inc.

         Notes to Pro Forma Condensed Consolidated Financial Information

1.       The amounts  reflected in these notes are based on estimates which are
         subject to change. The following pro forma adjustments were made to the
         March 31, 1997 Condensed Consolidated Balance Sheet to reflect the sale
         of Meadowbrook Neurocare-Kansas City, Inc. for cash.

    (A)  To record the sale of certain assets of Meadowbrook Neurocare-Kansas 
         City, Inc.

2.       The following pro forma adjustments were made to the Condensed
         Consolidated Statements of Income for the twelve months ended
         June 30, 1996 and the nine months ended March 31, 1997.

    (B)  Elimination of all operating  revenue and expenses for Meadowbrook
         Neurocare-Kansas City, Inc.

    (C)  Estimated reduction of Corporate office salaries and wages and 
         operating expenses.

    (D)  Estimated increase in Meadowbrook Rehabilitation Group, Inc.'s interest
         income due to higher cash balances.

    (E)  Elimination of all operating revenue and expenses for Meadowbrook
         Rehabilitation Group of Georgia, Inc.

    (F)  Estimated increase in revenue due to increased Medicare reimbursement 
         based on higher overall Medicare utilization.