UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


            [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                      For the Period Ended March 31, 1997

                                       or

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
       For the Transition Period From ______________ to _________________


                         Commission file number 0-28652

                        AMERICAN DISPOSAL SERVICES, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                   Delaware                           13-3858494
        -------------------------------          --------------------
        (State or other jurisdiction of            (I.R.S. Employer
         incorporation or organization)           Identification No.)

                            745 McClintock - Ste 305
                           Burr Ridge, Illinois 60521
             -----------------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (630) 655-1105
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not applicable
              ----------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

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  periods 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
    ---      ---
                
                      APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practical date.

Common Stock, $.01 Par Value - 13,472,501 shares as of May 15, 1997



<PAGE>


                        AMERICAN DISPOSAL SERVICES, INC.

                                      INDEX

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

   Condensed Consolidated Balance Sheets - March 31, 1997 and December 31, 1996

   Condensed Consolidated Statements of Operations - Three months ended 
   March 31, 1997 and 1996

   Condensed Consolidated Statements of Cash Flows - Three months ended 
   March 31, 1997 and 1996

   Notes to the Condensed Consolidated Financial Statements

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


PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

Signatures



                                        2

<PAGE>


PART I. FINANCIAL INFORMATION
                       
                        AMERICAN DISPOSAL SERVICES, INC.
                      
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                   March 31,
                                                                     1997                 December 31,
                                                                  (Unaudited)                1996
                                                                ---------------         ---------------
<S>                                                           <C>                     <C>    
                                ASSETS

Current assets:
  Cash and cash equivalents                                      $      1,949            $      2,301
  Cash held in escrow                                                      17                       -
  Trade receivables, net                                               12,898                   9,741
  Prepaid expenses and other                                            2,733                   1,248
  Inventory                                                               461                     354
                                                                ---------------         ---------------             
Total current assets                                                   18,058                  13,644
Property, plant, and equipment, net                                   117,471                  93,692
Other assets:
  Cost over fair value of net assets of acquired businesses,
    net of accumulated amortization of $1,597 and $1,374               44,281                  31,237
  Other intangible assets, net of accumulated amortization
    of $487 and $439                                                    2,025                   1,610
  Debt issuance costs, net of accumulated amortization
    of $301 and $204                                                    2,548                   2,392
  Other assets                                                          2,134                   2,411
                                                                ---------------         ---------------       
                                                                $     186,517            $    144,986
                                                                ===============         ===============

                  LIABILITIES AND STOCKHOLDERS' EQUITY 

Current liabilities:
  Accounts payable                                               $      3,218            $      3,359
  Accrued liabilities                                                   4,990                   4,249
  Deferred revenues                                                     2,769                   2,245
  Current portion of long-term debt and capital lease 
    obligations                                                         6,309                   2,572
                                                                ---------------         ---------------
Total current liabilities                                              17,286                  12,425

Long-term debt and capital lease obligations, net of 
  current portion                                                     100,511                  65,445
Accrued environmental and landfill costs                                8,761                   7,603
Deferred income taxes                                                   1,416                   1,416

Total stockholders' equity (8,872,501 and 8,872,381
  shares of common stock issued and outstanding)                       58,543                  58,097
                                                                ---------------         ---------------
                                                                 $    186,517            $    144,986
                                                                ================        ===============
</TABLE>

See accompanying notes.
                                       3

<PAGE>


                        AMERICAN DISPOSAL SERVICES, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Dollars in Thousands, Except per Share Data)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                              Three months ended
                                                                   March 31,
                                                            ---------------------
                                                               1997        1996
                                                            ---------   ---------
<S>                                                         <C>         <C>      
Revenues                                                    $  18,511   $  11,724
Cost of operations                                              9,892       6,108
Selling, general and administrative expenses                    2,685       1,935
Depreciation and amortization                                   3,784       2,718
                                                            ---------   ---------
  Operating income                                              2,150         963

Interest expense, net                                           1,552       1,539
Other income                                                       21           -
                                                            ---------   ---------
  Income (loss) before income taxes                               619        (576)

Income tax benefit (expense)                                     (173)        160
                                                            ---------   ---------                        
 Net income (loss)                                                446        (416)
Preferred stock dividend                                            -         (63)
                                                            ---------   ---------                        
 Net income (loss) applicable to common
  stockholders                                              $     446   $    (479)
                                                            =========   =========


NET INCOME (LOSS) PER SHARE:

  Net income (loss)                                         $    0.05   $   (0.07)
  Preferred stock dividend                                          -       (0.01)
                                                            ---------   ---------
 Net income (loss) applicable to common
  stockholders                                              $    0.05   $   (0.08)
                                                            =========   =========
 Weighted average common stock and
    common stock equivalent shares
    outstanding                                             9,514,097   5,864,078
                                                            =========   =========
</TABLE>
See accompanying notes.

                                        4

<PAGE>


                        AMERICAN DISPOSAL SERVICES, INC.
                 
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in Thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                     Three months ended
                                                                                          March 31,
                                                                                 --------------------------
                                                                                    1997            1996
                                                                                 ----------      ----------

<S>                                                                              <C>             <C>    
Operating activities:
Net income (loss)                                                                $      446      $     (416)
Adjustments to reconcile net income (loss) to net cash provided by
 (used in) operating activities:
  Depreciation and amortization                                                       3,784           2,718
  Provision for environmental and landfill costs                                        113             118
  Deferred income taxes                                                                   -            (160)
  Gain on sale of fixed assets                                                          (13)              -
  Changes in operating assets and liabilities, net of effects from acquisitions:
    Trade receivables                                                                (1,998)           (232)
    Prepaid expenses, cash held in escrow and other assets                           (1,523)           (144)
    Inventory                                                                            (7)             (7)
    Accounts payable, accrued liabilities and accrued environmental
      and landfill costs                                                                227             105
    Deferred revenue                                                                    297             (22)
                                                                                 ----------      ----------
Net cash provided by operating activities                                             1,326           1,960
                                                                                 ----------      ----------

Investing activities:
  Capital expenditures                                                               (3,599)         (2,674)
  Cost of acquisitions                                                              (36,598)              -
                                                                                 ----------      ----------
Net cash used in investing activities                                               (40,197)         (2,674)
                                                                                 ----------      ----------

Financing activities:
  Preferred stock dividend                                                                -             (63)
  Proceeds from issuance of long-term debt                                           39,053           1,200
  Repayments of indebtedness                                                           (281)           (256)
  Debt issuance costs                                                                  (253)              -
                                                                                 ----------      ----------
Net cash provided by financing activities                                            38,519             881
                                                                                 ----------      ----------
Net increase (decrease) in cash and cash equivalents                                   (352)            167
Cash and cash equivalents, at beginning of period                                     2,301           6,383
                                                                                 ----------      ----------
Cash and cash equivalents, at end of period                                      $    1,949      $    6,550
                                                                                 ==========      ==========
</TABLE>

See accompanying notes.


                                        5

<PAGE>


                        AMERICAN DISPOSAL SERVICES, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                             March 31, 1997 and 1996
                                   (Unaudited)


1.   FORMATION AND BASIS OF PRESENTATION

     ADS, Inc. (ADS) was organized on January 15, 1991, to acquire, develop, and
operate non-hazardous municipal solid waste disposal,  collection,  and transfer
operations and provide non-hazardous solid waste disposal management services to
commercial,  industrial, and residential customers. During 1993, an affiliate of
Charterhouse  Equity  Partners,  L.P. (CEP) purchased a controlling  interest in
ADS.

     County  Disposal,  Inc.  (County) was  incorporated by Charterhouse  Equity
Partners  II,  L.P.  (CEPII) on April 27,  1995,  for the  purpose of  acquiring
certain  net  assets of  Envirite  Corporation  (Envirite).  On April 28,  1995,
Envirite and County  entered into an Asset  Purchase  Agreement  whereby  County
agreed  to  purchase  from  Envirite  certain  landfill   facilities  and  waste
transportation and collection equipment located in Livingston County,  Illinois,
and Wyandot  County,  Ohio; all of the issued and  outstanding  capital stock of
County  Environmental  Services,  Inc., a  wholly-owned  subsidiary of Envirite,
which  owned and  operated  a landfill  facility  and waste  transportation  and
collection  equipment  located  in Clarion  County,  Pennsylvania;  and  certain
related assets and assumption of certain liabilities.

     Effective  January 1, 1996, the  stockholders  of ADS and County  exchanged
their  shares  for  shares of a newly  created  holding  company  by the name of
American  Disposal  Services,  Inc.  (the  Company).  This share  exchange  (the
Exchange)  qualified  as  a  transfer  of  companies  under  common  control  as
affiliates of Charterhouse  Group  International,  Inc. are the general partners
and in control of CEP and CEPII and, accordingly,  the transaction was accounted
for at historical cost in a manner similar to pooling of interests accounting.

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation  S-X.  Accordingly,  they do not include all of the information
and footnotes required by generally accepted accounting  principles for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been  included.  Operating  results for the three month  period  ended March 31,
1997, are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 1997. These financial  statements should be read
in conjunction with the consolidated  financial statements,  including the notes
thereto,  for the fiscal year ended  December 31, 1996 included in the Company's
Annual Report on Form 10-K.

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the amounts  reported in the financial  statements  and
accompanying notes. Actual results could differ from those estimates.

2.   RELATED PARTY INTEREST EXPENSE
<TABLE>
<CAPTION>
                                                     Three months ended
                                                          March  31,
                                                     ------------------  
                                                       1997      1996
                                                     --------  -------- 
                                                   (Dollars in Thousands)
<S>                                                  <C>       <C>    
Charterhouse Equity Partners II, L.P.................$      -  $    359
                                                     ========  ========
</TABLE>
                                       6

<PAGE>


3.   ENVIRONMENTAL MATTERS

     See  the  Company's  Annual  Report  on  Form  10-K  for a  description  of
environmental matters.

4.   ACQUISITIONS

     On  March  31,  1997 the  Company  acquired  certain  net  assets  of Waste
Management,  Inc.'s  Evansville,  Indiana  Operations  for  approximately  $29.0
million.  The  acquisition  has been accounted for using the purchase  method of
accounting and,  accordingly,  the results of operations will be included in the
Company's  results of operations from the  acquisition  date. The purchase price
has been allocated to the assets acquired and liabilities assumed based on their
fair values at the  acquisition  date with the  residual  allocated to cost over
fair value of net assets acquired.  The following unaudited pro forma results of
operations  for the three  months  ended  March 31,  1997 and 1996  assumes  the
acquisition occurred on January 1, 1996 (dollars in thousands,  except per share
data):
<TABLE>
<CAPTION>
                                                  Three months ended
                                                       March 31,
                                                  ------------------
                                                    1997      1996
                                                  --------  --------
<S>                                               <C>       <C>     
Revenue                                           $ 21,532  $ 14,699
Operating income                                     3,164     1,882
Net income applicable to common
  stockholders                                       1,176       183
Pro forma net income per share of
  common stock                                        0.10      0.02
Weighted average common stock and
  common stock equivalent shares
  outstanding (1)                                   11,373     7,723
</TABLE>

(1) Adjusted to give effect to the issuance of 1.8 million shares of common 
    stock as if the foregoing occurred on January 1, 1996 (see footnote 5).

5.   PUBLIC OFFERING

     Effective May 13, 1997 the Company completed a public offering of 4,600,000
shares (including the underwriters'  over-allotment option) at $16.50 per share.
This  resulted in net  proceeds to the Company of  approximately  $70.8  million
which  were  used  to pay  down a  portion  of the  Company's  Credit  Facility.
Immediately following the offering,  the Company had 13,472,501 shares of common
stock outstanding.

6.   RECENTLY ISSUED ACCOUNTING STANDARD

     In February 1997, the Financial Accounting Standards Board issued Statement
No.  128,  Earnings Per Share,  which is  required  to be adopted in the fourth
quarter of 1997; earlier adoption is not allowed. At that time, the Company will
be required to change the method  currently  used to compute  earnings per share
and to restate all prior periods.  Under the new  requirements  for  calculating
basic earnings per share, the dilutive effect of stock options will be excluded.
The impact of Statement 128 on the calculation of primary earnings per share for
the quarters ended March 31, 1997 and 1996 is not expected to be material.







                                        7

<PAGE>


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following  discussion  should be read in conjunction with the Company's
unaudited  Condensed  Consolidated  Financial  Statements  and the related notes
thereto included elsewhere herein.

INTRODUCTION

     The Company has adopted an  acquisition-based  growth strategy that focuses
on: (i) the  identification  and acquisition of solid waste landfills located in
secondary  markets  that are  within  approximately  125  miles  of  significant
metropolitan  centers;  and  (ii)  securing  dedicated  waste  streams  for such
landfills  by the  acquisition  or  development  of  transfer  stations  and the
acquisition of collection  companies.  The Company has completed 37 acquisitions
from January 1993 through  March 1997,  including  four hauling  companies,  one
landfill,  and one transfer station acquired in the three months ended March 31,
1997 (the "1997  Acquisitions").  All of these  acquisitions  were accounted for
under the purchase method of accounting for business combinations.  Accordingly,
the  amortization  of goodwill  and landfill  airspace  reflects the fair market
value of the Company's assets at the time of their acquisition rather than their
historical  cost  basis,  and  the  results  of  operations  for  such  acquired
businesses  are included in the  Company's  financial  statements  only from the
applicable date of acquisition. As a result, the Company believes its historical
results of operations for the periods presented are not directly comparable.

FORWARD LOOKING STATEMENTS

     Certain  information  contained  in this  Quarterly  Report  on Form  10-Q,
including,  without  limitation  information  appearing  under  Part I,  Item 2,
"Managements'  Discussion  and  Analysis of Financial  Condition  and Results of
Operations," are  forward-looking  statements (within the meaning of Section 27A
of the Securities Act of 1934 and Section 21E of the Securities  Exchange Act of
1934).  Factors  set forth  under the caption  "Risk  Factors" in the  Company's
Registration Statement on Form S-1 could affect the Company's actual results and
could  cause the  Company's  actual  results  to differ  materially  from  those
expressed  in any  forward-looking  statements  made by,  or on behalf  of,  the
Company in this Quarterly Report on Form 10-Q.

GENERAL

     The  Company's  revenues  are  attributable  primarily  to fees  charged to
customers for waste collection,  transfer and disposal  services.  The Company's
collection  services are generally  provided  under direct  agreements  with its
customers or pursuant to contracts with municipalities. Commercial and municipal
contract terms, where used,  generally range from one to five years and commonly
have automatic  renewal  options.  A relatively small portion of such agreements
also provide for the prepayment of certain fees, which are reflected as deferred
revenues. The table below shows for the periods indicated, the percentage of the
Company's total revenues attributable to services provided:
<TABLE>
<CAPTION>
                                               Three Months Ended
                                                    March 31,
                                               ------------------                                                          
                                                 1997      1996
                                               --------  --------
<S>                                            <C>       <C>    
           Collection (1)                         48.9%     39.4%
           Transfer                                3.8       1.9
           Landfill (1)                           46.4      58.5
           Other                                   0.9       0.2
                                               --------  --------
             Total Revenues                      100.0%    100.0%
                                               ========  ========
</TABLE>

(1)  The portion of collection  revenues  attributable  to disposal  charges for
     waste  collected by the Company and disposed of at the Company's  landfills
     has been  excluded  from  collection  revenues  and  included  in  landfill
     revenues.

                                        8

<PAGE>


     A   component   of  the   Company's   business   strategy  is  to  maximize
internalization of waste it collects and thereby realize higher margins from its
operations.  By  disposing  of waste at  Company-owned  landfills,  the  Company
retains the margin generated through disposal operations that would otherwise be
earned by  third-party  landfills.  For the three  months  ended March 31, 1997,
approximately  89% of the total tonnage collected by the Company was disposed of
at  Company-owned  landfills.  This  represents  approximately  31% of the total
tonnage  disposed of at Company- owned landfills in the three months ended March
31, 1997.  During such period,  the Company's captive waste (consisting of waste
collected  by the  Company  and  delivered  to any of its  landfills  and  waste
delivered  to  any of the  Company's  landfills  by  third-party  haulers  under
long-term collection  contracts)  constituted an average of approximately 63% of
the solid waste disposed of at its landfills.

     The Company has  estimated  that,  as of December 31, 1996,  closure  costs
expected to occur during the operating  lives of these  facilities  and expensed
over these facilities' useful lives will approximate $35.2 million. In addition,
the  Company  has  estimated  that,  as of December  31,  1996,  total costs for
post-closure  activities,  including cap  maintenance,  groundwater  monitoring,
methane gas control and recovery and  leachate  treatment/disposal  for up to 30
years after closure in certain cases, will be approximately  $10.9 million.  The
December  31,  1996 and  March 31,  1997,  accruals  for  landfill  closure  and
post-closure   costs  (including  costs  assumed  through   acquisitions)   were
approximately $7.6 million and $8.8 million,  respectively. The accruals reflect
relatively  young  landfills with estimated  remaining  lives,  based on current
waste flows, that range from  approximately  three to 50 years, and an estimated
average remaining life of greater than 20 years.

RESULTS OF OPERATIONS

     The  following  table  sets  forth  items  in  the  Company's  consolidated
statement of operations as a percentage of revenues for the periods indicated:
<TABLE>
<CAPTION>
                                                           Three  Months Ended
                                                                March  31,
                                                           -------------------      
                                                             1997       1996
                                                           --------   --------
<S>                                                         <C>         <C>    
  Revenues................................................. 100.0 %     100.0 %
  Cost of operations.......................................  53.4        52.1
  Selling, general and administrative expenses.............  14.5        16.5
  Depreciation and amortization expenses...................  20.5        23.2
                                                           --------   --------
  Operating income.........................................  11.6         8.2
  Interest expense, net....................................   8.4        13.1
  Other income.............................................   0.1           -
  Income tax (provision) benefit...........................  (0.9)        1.4
                                                           --------   --------
    Net income (loss)......................................   2.4 %      (3.5)%
                                                           ========   =========

  EBITDA margin (1)                                          32.1 %      31.4 %
                                                          ========   =========
</TABLE>
(1) EBITDA margin represents operating income plus depreciation and amortization
    divided by revenues.


THREE MONTHS ENDED MARCH 31, 1997 AND 1996

     REVENUES.  Revenues  for the three  months  ended March 31, 1997 were $18.5
million  compared to $11.7 million for the three months ended March 31, 1996. Of
the  increase  in  revenues,  $4.6  million is due  primarily  to the effects of
nineteen  companies  acquired  during 1996 and the first quarter of 1997,  while
approximately   $2.2  million  is  attributable  to  increases  in  revenues  in
operations acquired prior to 1996.

                                        9

<PAGE>


     COST OF OPERATIONS. Cost of operations for the three months ended March 31,
1997 was $9.9 million  compared to $6.1 million for the three months ended March
31, 1996. This increase in costs was attributable  primarily to increases in the
Company's  revenues  described  above.  As a  percentage  of  revenues,  cost of
operations  was 53.4% in the 1997 period  compared to 52.1% in the 1996  period.
The increased costs as a percentage of the Company's  overall revenue are due to
the impact of more substantial collection versus landfill operations in the 1997
period compared to the same period in 1996.

     SELLING,  GENERAL AND  ADMINISTRATIVE  EXPENSES.  SG&A  expenses  were $2.7
million for the three months  ended March 31, 1997  compared to $1.9 million for
the three months ended March 31, 1996.  This increase in costs was  attributable
primarily  to  increases  in  the  Company's  revenues  described  above.  As  a
percentage of revenues, SG&A expenses decreased to 14.5% in the 1997 period from
16.5% in the 1996  period.  The  decrease in SG&A  expenses as a  percentage  of
revenues is due primarily to a significant increase in revenue producing assets,
while corporate and other related administrative expenses increased moderately.

     DEPRECIATION  AND  AMORTIZATION  EXPENSE.   Depreciation  and  amortization
expense for the three months  ended March 31, 1997 was $3.8 million  compared to
$2.7  million  for the three  months  ended  March 31,  1996.  The  increase  in
depreciation  and  amortization  expense is due  primarily  to  increases in the
Company's  revenues  described above. As a percentage of revenues,  depreciation
and  amortization  expense was 20.5% and 23.2% for the three  months ended March
31,  1997 and 1996,  respectively.  The  decline as a percent of revenues in the
March 1997  period  compared to the March 1996  period is due  primarily  to the
diminished  concentration  of  landfill  assets,  which  typically  have  higher
depreciation and amortization expense than collection operations.

     NET INTEREST  EXPENSE.  Net interest expense was $1.6 million for the three
months ended March 31, 1997  compared to $1.5 million for the three months ended
March 31,  1996,  which  reflects the debt  structure of the Company  during the
respective periods offset by an overall  improvement in the Company's  effective
borrowing rate.

     INCOME TAXES.  The Company recorded an income tax provision of $173,000 for
the three months ended March 31, 1997 compared to a $160,000  income tax benefit
for the three months ended March 31, 1996.

LIQUIDITY AND CAPITAL RESOURCES

     Due to the  capital  intensive  nature of the  solid  waste  industry,  the
Company  has  used,  and  expects  to  continue  using,  substantially  all cash
generated  from  operations  to  fund  acquisitions,  capital  expenditures  and
landfill  development.  Certain operating equipment has also been acquired using
leases which have short and medium-term maturities. As a result, the Company has
incurred  working  capital  deficits in the past,  and there can be no assurance
that its  available  working  capital  will be  sufficient  in the  future as it
pursues its  acquisition-based  growth strategy.  Historically,  the Company has
satisfied  its  acquisition,  capital  expenditure  and  working  capital  needs
primarily  through  equity and bank  financings.  There can be no assurance that
such financing will continue to be available.

     Operating  activities  in the  quarter  provided  net cash of $1.3  million
compared to $2.0 million in the three  months  ended March 31, 1996,  reflecting
the additional  operating  contribution of the Company,  partially  offset by an
increase in receivables as a result of increased revenues.

     Investing activities used net cash of $40.2 million and $2.7 million in the
three months ended March 31, 1997 and 1996, respectively.  The Company's capital
expenditure  and working  capital  requirements  have  increased  significantly,
reflecting the Company's  rapid growth by acquisition and development of revenue
producing  assets,  and will increase further as the Company continues to pursue
its acquisition-based  growth strategy.  During the three months ended March 31,
1997,  the Company  spent $3.6  million in capital  expenditures,  of which $1.7
million was for cell  development.  In fiscal year 1997, the Company  expects to
spend approximately $14.5 million for capital expenditures of which $9.0 million
is  anticipated  to be used for cell  development.  In connection  with the 1997
Acquisitions, the Company invested $36.6 million.



                                       10

<PAGE>


     In the three months ended March 31, 1997, financing activities provided net
cash of $38.5 million,  drawn  principally from the Company's Credit Facility to
fund the 1997  Acquisitions,  compared to $881,000  for the three  months  ended
March 31, 1996.

     In March 1997,  the Company  increased the amount of its revolving and term
loan credit  facility with ING (U.S.)  Capital  Corporation,  as  administrative
agent for the  lenders,  and  Morgan  Guaranty  Trust  Company  of New York,  as
documentation  agent for the  lenders,  from $110 million to $125  million.  The
Credit  Facility  provides  the Company  with a term loan of $25  million,  a $5
million  revolving  credit  facility  for working  capital  purposes,  and a $95
million expansion  facility that may only be used for acquisitions.  The various
loans and lines of credit under the Credit  Facility  bear interest at rates per
annum equal to, at the Company's  discretion,  either: (i) the higher of (a) the
federal funds rate plus 0.5% and (b) the prime rate,  plus an applicable  margin
ranging from 0% to 1.5%; or (ii) the London  Interbank  Offered Rate  ("LIBOR"),
plus an  applicable  margin  ranging  from  1.5% to 3.25%,  and have  maturities
ranging from 2001 to 2003. As of March 31, 1997, the Company had borrowed $102.7
million  under the Credit  Facility.  At such date,  the  interest  rates on the
various loans and lines of credit under the Credit  Facility ranged from 7.9% to
9.5% and the total  unused  availability  under the  Credit  Facility  was $22.0
million,  of which $1.7  million may be used for working  capital  purposes  and
$20.3 million may be used for  acquisitions.  The  Company's  ability to use the
expansion  facility  is  based  upon  a  number  of  covenants,   including  the
maintenance of specified  debt to equity and fixed charge  coverage  ratios.  At
March 31, 1997 the Company was in compliance with the terms of these covenants.

     Effective  May 13,  1997,  the  Company  completed  a  public  offering  of
4,600,000 shares (including the underwriters'  over-allotment  option) at $16.50
per share.  This resulted in net proceeds to the Company of approximately  $70.8
million which were used to pay down a portion of the Company's  Credit Facility.
Immediately following the offering,  the Company had 13,472,501 shares of common
stock outstanding.

     The Company  intends to satisfy its interest  obligations as well as future
capital  expenditures  and working  capital  requirements,  with cash flows from
operations and borrowings  under the Credit Facility.  However,  the Company may
need to raise  additional  capital to fund the  acquisition  and  integration of
additional solid waste businesses. The Company may raise such funds through bank
financings  or public or private  offerings of its  securities.  There can be no
assurance that the Company will be able to secure such funding, if necessary, on
favorable  terms,  if at all. If the Company is not  successful in securing such
funding,  the Company's  ability to pursue its business strategy may be impaired
and results of operations for future periods may be adversely affected.

     The Company expects that Subtitle D and other regulations that apply to the
non-hazardous  waste  disposal  industry  will require the  Company,  as well as
others in the industry,  to alter  operations and to modify or replace  existing
facilities.  Such  expenditures  have been and will continue to be  substantial.
Regulatory  changes could  accelerate  expenditures for closure and post-closure
monitoring and obligate the Company to spend sums in addition to those presently
reserved  for such  purposes.  The  factors,  together  with the  other  factors
discussed above, could substantially increase the Company's operating costs.

INFLATION AND PREVAILING ECONOMIC CONDITIONS

     To  date,  inflation  has not had a  significant  impact  on the  Company's
operations.  Consistent with industry practice,  most of the Company's contracts
provide for a pass  through of certain  costs,  including  increases in landfill
tipping fees and, in some cases, fuel costs. The Company  therefore  believes it
should be able to  implement  price  increases  sufficient  to offset  most cost
increases resulting from inflation. However, competitive factors may require the
Company  to absorb  at least a portion  of these  cost  increases,  particularly
during periods of high inflation.  The Company is unable to determine the future
impact of a sustained economic slowdown.

SEASONALITY

     The Company's revenues tend to be somewhat lower in the winter months. This
is primarily  attributable to the fact that: (i) the volume of waste relating to
construction  and  demolition  activities  tends to  increase  in the spring and
summer months;  and (ii) the volume of industrial and  residential  waste in the
regions where the Company operates

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<PAGE>


tends to decrease  during the winter  months.  In addition,  particularly  harsh
weather  conditions may delay the development of landfill capacity and otherwise
result in the temporary  suspension of certain of the Company's  operations  and
could materially  adversely  affect the Company's  overall  business,  financial
condition and results of operations.










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<PAGE>


PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

     a.  Financial Data Schedule (filed electronically  only).

     b.  Reports on Form 8-K: none.




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<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.

                        AMERICAN DISPOSAL SERVICES, INC.

Date: May 15, 1997      /s/ Stephen P. Lavey
                        ---------------------
                        Stephen P. Lavey
                        Vice President and Chief Financial Officer





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