EXHIBIT 10.1

            THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT


     THIS THIRD  AMENDMENT  TO  AMENDED  AND  RESTATED  CREDIT  AGREEMENT  (this
"Amendment")  dated as of April 22,  1999 is made among APRIA  HEALTHCARE  GROUP
INC.,  a  corporation  organized  and  existing  under  the laws of the State of
Delaware  ("Apria") and the  Subsidiaries  of Apria  identified on the signature
pages of this  Amendment and any  Subsidiary  of Apria that,  subject to Section
9.13 of the Credit Agreement, shall have executed a Joinder Agreement (Apria and
such   Subsidiaries   are  referred  to   individually   as  a  "Borrower"  and,
collectively, as the "Borrowers"),  each of the financial institutions listed on
Schedule I to the Credit  Agreement  or that,  pursuant  to Section  13.4 of the
Credit Agreement, shall become a "Bank" thereunder (individually,  a "Bank" and,
collectively,  the "Banks"),  NATIONSBANK  OF TEXAS,  N.A.,  as the  Syndication
Agent,  and BANK OF  AMERICA  NATIONAL  TRUST AND  SAVINGS  ASSOCIATION,  as the
Administrative and Collateral Agent.

                                    RECITALS

     I. The Borrowers,  the Banks, the Syndication Agent and the  Administrative
and Collateral  Agent are parties to the Amended and Restated  Credit  Agreement
dated as of November 13, 1998, as amended by the First  Amendment to Amended and
Restated  Credit  Agreement,  dated as of January  15,  1999,  as amended by the
Second Amendment to Amended and Restated Credit Agreement,  dated as of February
23, 1999 (the "Credit Agreement"),  pursuant to which the Banks extended certain
credit  to the  Borrowers.

     II. Pursuant to certain sections of the Credit Agreement, Apria is required
to issue certain Senior  Subordinated  Debentures on or prior to April 23, 1999.


     III. The Borrowers have requested that they be relieved of their obligation
to issue such  Senior  Subordinated  Debentures.

     IV. The Banks are willing to  accommodate  the request of the  Borrowers on
the terms and conditions specified in this Amendment.

                                    AGREEMENT

     In consideration of the foregoing  premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties to this Amendment  agree as follows:

     1.  Amendment  to Section 1.1 of the Credit  Agreement.  Section 1.1 of the
Credit Agreement is hereby amended as follows:

     a. the definition of "Additional  Permitted  Subordinated  Indebtedness" is
amended and restated in its entirety as follows:

          "Additional Permitted Subordinated  Indebtedness"  shall  mean  up  to
          $150,000,000 of other Indebtedness  having a maturity of not less than
          five years and no scheduled  amortization  and containing other terms,
          including subordination  provisions,  acceptable to the Administration
          and Collateral Agent.

     b. the  definition of "Change of Control" is amended by deleting the phrase
"or as  defined  in the Senior  Subordinated  Debentures"  in clause (z) of such
definition.

     c. the  definition of "Initial  Acquisition  Cap" is hereby  deleted in its
entirety.

     d. the  definition of "Senior  Subordinated  Debentures"  is deleted in its
entirety.

     e.  the  definition  of  "Trigger  Date" is  deleted  in its  entirety.

     2.  Amendment  to  Section  5.2(a)(B).  Section  5.2(a)(B)  of  the  Credit
Agreement  is hereby  amended  by  deleting  the phrase  "other  than the Senior
Subordinated Debentures" at the end of such provision.

     3.  Amendment  to  Section  5.2(a)(C).  Section  5.2(a)(C)  of  the  Credit
Agreement is hereby amended by deleting "or Senior  Subordinated  Debentures" in
each place that it appears.

     4.  Amendment  to  Section  5.2(a)(E).  Section  5.2(a)(E)  of  the  Credit
Agreement is hereby deleted in its entirety.

     5.  Amendment  to Section  6.12.  Section  6.12 of the Credit  Agreement is
hereby amended by deleting the last sentence thereof.

     6. Amendment to Section 9.1(i).  Section 9.1(i) of the Credit  Agreement is
hereby amended in its entirety to read as follows:

          "(i) Monthly Financial  Statements.  Within 20 days after the close of
     each  fiscal  month in each  fiscal  year of  Apria,  (i) the  consolidated
     balance sheet of Apria and its  Subsidiaries  as at the end of such monthly
     period and the related consolidated statements of income, retained earnings
     and cash flow, (ii) pro forma  statements of cash flow,  including  sources
     and uses of cash, for Apria and its  Subsidiaries  for the next  succeeding
     three month period,  in form and substance  reasonably  satisfactory to the
     Administrative   and  Collateral  Agent  and  the  Required  Banks,   (iii)
     statements showing Apria and its Subsidiaries' Excess Cash Flow and (iv) an
     accounts  receivable  aging report with aging detail and bad debt  exposure
     analysis.  Within  thirty  (30)  days  after  the  close  of  each  monthly
     accounting  period  in each  fiscal  year of  Apria,  a  business  overview
     narrative, including without limitation, the number of oxygen starts placed
     during the period.  Notwithstanding  anything to the contrary  contained in
     the foregoing, commencing with financial statements for the fiscal month of
     July of 1999 and  continuing  thereafter,  for any month  during  which the
     Borrowers'  EBITDA  for  the  immediately   preceding  fiscal  quarter,  as
     calculated  pursuant to Section 10.10, was in excess of $40,000,000 (A) the
     Borrowers will not be required to produce the information required pursuant
     to this  paragraph (i) clauses (i) through  (iii),  and (B) the  Borrowers'
     obligation  pursuant  to this  paragraph  (i) to produce  (x) the  accounts
     receivable  aging  report  required  by  clause  (iv) and (y) the  business
     overview narrative, shall be a quarterly reporting obligation under Section
     9.1(a)."

     7. Amendment to Section 9.13(a). Section 9.13(a) of the Credit Agreement is
hereby amended as follows:

     a.  by  amending  and  restating  paragraph  (i) in its  entirety  to  read
"Reserved"; and

     b. restating paragraph (ii) to read as follows:

         "withrespect to all Permitted  Transactions  (other  than   Subsidiary
          Reorganizations)  after April 22, 1999, the sum (without  duplication)
          of  (I)  cash  paid  by  Apria  in  connection   with  such  Permitted
          Transactions,  (II) the Fair Market Value of Apria Common Stock issued
          in connection  with such Permitted  Transactions  and (III) the amount
          (determined by using the face amount of the debt or the amount payable
          at maturity,  whichever is greater) of all  Permitted  Debt  incurred,
          assumed or  acquired  in all such  Permitted  Transactions,  shall not
          exceed  the sum of  $56,900,000  in the  aggregate  (the  "Acquisition
          Cap");  provided,  that (x) for the fiscal year 1999, the  Acquisition
          Cap shall be reduced on a dollar for dollar basis by the amount of any
          Unusual Cash  Expenses  incurred by the  Borrowers  and paid in fiscal
          year 1999;".

     8.  Amendment  to Section  9.15.  Section  9.15 of the Credit  Agreement is
hereby amended and restated in its entirety to read "Reserved.".

     9.  Amendment  to Section  9.16.  Section  9.16 of the Credit  Agreement is
hereby amended by deleting the phrase "the minimum balance of which prior to the
Trigger Date shall not be less than $35,000,000," in clause (i) of such section.

     10. Amendment to Section  10.5(i).  Section 10.5(i) of the Credit Agreement
is hereby amended by deleting the reference to "Senior Subordinated Debentures".

     11. Amendment to Section 10.11(i). Section 10.11(i) of the Credit Agreement
is hereby amended by deleting the proviso "; provided,  however, that so long as
no Default or Event of Default  shall have  occurred and be  continuing or would
result  therefrom,  Apria may  refinance the Senior  Subordinated  Debentures in
their  entirety  pursuant to Section  10.5(i)"

     12.  Amendment to Section 11.11.  Section 11.11 of the Credit  Agreement is
hereby  deleted in its  entirety.

     13.  Representations.  Each of the Borrowers represents and warrants to the
Banks that (a) it has the corporate or partnership power to execute, deliver and
perform the terms and  provisions of this  Amendment and has taken all necessary
corporate  or  partnership  action to  authorize  the  execution,  delivery  and
performance  by it of this  Amendment  and (b)  upon the  effectiveness  of this
Amendment,  no Default or Event of Default shall have occurred and be continuing
under the Credit Agreement. Each of Apria and its Material Subsidiaries has duly
executed and delivered this Amendment and this Amendment  constitutes its legal,
valid and binding obligation enforceable in accordance with its terms, except as
enforceability  may be  limited by  bankruptcy,  reorganization,  moratorium  or
similar laws relating to or limiting creditors' rights generally or by equitable
principles   relating  to   enforceability.

     14. Conditions Precedent. The effectiveness of this Amendment is subject to
the following:

     (i) the receipt by the  Administrative  and Collateral Agent of the consent
of the Required Banks;

     (ii) the  receipt  by the  Banks of a cash  prepayment  of the Loans by the
Borrower,  in the amount of $50,000,000  to be applied to permanently  repay the
Term Loans, in the inverse order of maturity.

     (iii) the receipt by the  Administrative and Collateral Agent of an opinion
of Borrower's counsel in a form and substance satisfactory to the Administrative
and Collateral Agent;

     (iv)  the  receipt  by the  Administrative  and  Collateral  Agent  of this
Amendment,  duly  executed  and  delivered  by  each  of the  Borrowers  and the
Administrative and Collateral Agent;

     (v) the  Borrowers  shall have paid to the  Administrative  and  Collateral
Agent for  distribution to each Bank that approves this Amendment on or prior to
12:00 noon  (Pacific  Time) on April 21, 1999 an amendment fee equal to .125% of
such Bank's  Commitment  Amount as in effect  subsequent to the  prepayment  set
forth in clause (ii) of this Section 9;

     (vi) the Borrowers shall have paid all fees owed to the  Administrative and
Collateral Agent in connection with this Amendment  (including,  but not limited
to,  reasonable  fees  and  expenses  of  counsel)  to  the  Administrative  and
Collateral Agent; and

     (vii) an  officer's  certificate  of Apria to the effect that no Default or
Event of Default has occurred or is  continuing  under the Credit  Agreement and
that each of the  representations  and warranties  contained in Section 8 of the
Credit Agreement are true and correct in all material respects as of the date of
this  Amendment  with  references  to  the  Agreement  being  references  to the
Agreement as amended by this Amendment.

     15.Reference to and Effect on the Credit Agreement,  Notes and Guaranty.

     a. Except as specifically  amended by this Amendment,  the Credit Agreement
shall remain in full force and effect and is hereby ratified and confirmed.

     b. This Amendment  shall be construed as one with the Credit  Agreement and
the Credit Agreement shall,  where the context  requires,  be read and construed
throughout so as to incorporate this Amendment.

     c.  All  documents  executed  in  connection  with  the  Credit  Agreement,
including,  but not limited to, the Notes and the Guaranty  shall remain in full
force and effect and are  hereby  ratified  and  confirmed  with  respect to the
Credit Agreement, as amended hereby.

     16. Entire  Agreement.  This Amendment,  together with the Credit Agreement
and the other  documents  referred to in, or executed in  connection  with,  the
Credit Agreement supersedes all prior agreements and understandings,  written or
oral, among the parties with respect to the subject matter of this Amendment.

     17.  Expenses.  The Borrowers  shall reimburse the Agents on demand for all
reasonable  costs,   expenses  and  charges   (including,   without  limitation,
reasonable  fees and  charges of legal  counsel  and other  consultants  for the
Agents) incurred by the Agents in connection with the  preparation,  performance
or enforcement of this Amendment.

     18. Successors and Assigns.  This Amendment shall be binding upon and inure
to the benefit of its  parties and their  respective  successors  and  permitted
assigns.

     19.  Severability.  Any provision of this  Amendment  that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining   provisions   of  this   Amendment  and  any  such   prohibition   or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.

     20. Captions. The captions and section headings appearing in this Amendment
are included  solely for convenience of reference and are not intended to affect
the interpretation of any provision of this Amendment.

     21.  Counterparts.  This  Amendment  may  be  executed  in  any  number  of
counterparts  all of which when taken together shall constitute one and the same
instrument  and any of the parties to this  Amendment may execute this Amendment
by signing any such  counterpart;  signature pages may be detached from multiple
separate  counterparts  and  attached  to  a  single  counterpart  so  that  all
signatures are physically attached to the same document.

     22. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND INTERPRETED AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA.
<PAGE>

     IN WITNESS  WHEREOF,  the parties to this  Amendment have caused their duly
authorized  officers to execute and deliver this  Amendment as of the date first
above written.


                           APRIA HEALTHCARE GROUP INC.
                           APRIA HEALTHCARE, INC.
                           APRIACARE MANAGEMENT SYSTEMS, INC.
                           APRIA NUMBER TWO, INC.
                           APRIA HEALTHCARE OF NEW YORK STATE, INC.



                           By:                                       
                              ----------------------------------------       
                              Name:  Robert S. Holcombe, Esq.
                              Title: Vice President, Secretary and General
                                     Counsel



                            BANK OF AMERICA NATIONAL TRUST AND
                            SAVINGS ASSOCIATION,
                            as Administrative and Collateral Agent



                            By:                                  
                               ---------------------------------------
                               Name:  Christine Cordi
                               Title: Vice President