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

                          FORM 10-Q

(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 
    
For the period ended September 28, 1996     
                 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          0-16088

           CERAMICS PROCESS SYSTEMS CORPORATION
  (Exact Name of Registrant as Specified in its Charter)

        Delaware                       		04-2832509          
(State or Other Jurisdiction         	   (I.R.S. Employer
of Incorporation or Organization)	       Identification No.)  
111 South Worcester Street
P.O. Box 338
Chartley, Massachusetts                		02712  
(Address of Principal Executive Offices) (Zip Code) 
           
Registrant's Telephone Number, including Area Code:
508-222-0614

Former Name, Former Address and Former Fiscal Year if Changed
since Last Report:
Not Applicable.

Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period than the registrant was required
to file such reports), and (2) has been subject to the filing
requirements for the past 90 days.  
     [X]  Yes                                   [] 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 practicable
date.  Number of shares of common stock outstanding as of 
November 1, 1996: 7,917,504.








            CERAMICS PROCESS SYSTEMS CORPORATION

                          Form 10-Q

        For The Fiscal Quarter Ended September 28, 1996

                            Index



PART I:  FINANCIAL INFORMATION                               Page

         Item 1:  Consolidated Financial Statements           3-8
    
                  Consolidated Balance Sheets as of   
                  September 28, 1996 and December 30,     
                  1995                                        3-4

                  Consolidated Statements of Operations 
                  for the fiscal quarters and nine-month
                  periods ended September 28, 1996 and 
                  September 30, 1995                            5
                          
                  Consolidated Statements of Cash Flows 
                  for the nine-month periods ended  
                  September 28, 1996 and September 30,  
                  1995                                          6
                                                                 
           		Notes to Consolidated Financial 
                  Statements                                  7-8
                                                   

         Item 2:  Management's Discussion and Analysis
                  of Financial Condition and Results of
                  Operations                                  8-9
                      


PART II:     OTHER INFORMATION         

             Items 1-6                                         10

Signatures                                       		   12  








                     PART I  FINANCIAL INFORMATION

                     ITEM 1  FINANCIAL STATEMENTS
<TABLE> 
	            CERAMICS PROCESS SYSTEMS CORPORATION
                                       
                      Consolidated Balance Sheets
                                                                  
    

                                   September 28,      December 30,
                                       1996               1995
<S>                                     <C>                <C>      
ASSETS                                               

Current Assets:
Cash                               $   51,833          $   32,127
Accounts receivable, trade            320,152             211,575
Inventories                            29,026              29,026
Prepaid expenses                       11,783              10,824
Other current assets                    5,116                 475
                         
Total current assets                  417,910             284,027

Property and equipment:
Production equipment                  999,032             941,512
Furniture and office equipment         66,967              65,529

                                    1,065,999           1,007,041

Less accumulated depreciation                             
  and amortization                (   796,615)        (   765,635)

Net property and equipment            269,384             241,406

Deposits                                1,328                 953

Total Assets                       $  688,622          $  526,386






See accompanying notes to consolidated financial statements.
</TABLE>








<TABLE>
                     CERAMICS PROCESS SYSTEMS CORPORATION
                    Consolidated Balance Sheets (Continued)
                                                                  
                                      September 28,      December 30, 
                                          1996               1995
<S>                                       <C>                <C>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                    
Current liabilities:
Accounts payable                     $   163,830        $   176,494  
Accrued expenses                         687,788            523,257  
Deferred revenue                         426,802                 --   
Current portion of notes  
  payable:
    Related parties                      920,000            920,000  
    Other                                900,000            900,000    

Total current liabilities              3,098,420          2,519,751  

Notes payable less
  current portion:
    Related parties                           --                 --  
    Other                                500,000            500,000  

Total Liabilities                      3,598,420          3,019,751  

Stockholders' equity (deficit):
  Common stock, $0.01 par value.
    Authorized 15,000,000 shares;
    issued 7,940,387 shares at
    September 28, 1996 and  
    7,780,766 at December 30, 1995        79,404             77,808
                                                                      
  Preferred stock, $.01 par value.
    Authorized 5,000,000 shares;
    no shares issued and outstanding          --                 --

Additional paid-in capital            30,480,856         30,457,384  

Accumulated deficit                  (33,409,223)      ( 32,967,722) 

                                     ( 2,848,963)      (  2,432,530) 
Less treasury stock, at cost, 
  22,883 common shares               (    60,835)      (     60,835) 

Total stockholders' equity (deficit) ( 2,909,798)      (  2,493,365) 

Total Liabilities and Stockholders'
  Equity (Deficit)                    $  688,622        $   526,386



See accompanying notes to consolidated financial statements.
</TABLE>



<TABLE>
                     CERAMICS PROCESS SYSTEMS CORPORATION
                     Consolidated Statements of Operations
                                             
                                                    
                                                   Nine-Month Periods
                           Fiscal Quarters Ended          Ended                                 
                            Sept. 28,  Sept. 30,   Sept. 28,  Sept. 30,  
                              1996       1995        1996       1995
<S>                           <C>        <C>         <C>         <C>
Revenue:

Product sales              $ 581,108  $ 244,799  $ 1,294,31  $  904,039 
License agreements                --         --      85,000       2,000  
 Total revenue               581,108    244,799   1,379,317     906,039

Operating expenses:

Cost of product sales        554,217    346,812   1,333,294   1,136,324
Selling, general, and
   administrative            103,851    116,019     339,266     503,713
Total operating expenses     658,068    462,831   1,672,560   1,640,037

Operating income (loss)   (   76,960)(  218,032)(   293,243)(   733,998)

Other income (expense),net(   54,016)(   56,838)(   148,258)(   150,792)

Net income (loss)         ($ 130,976)($ 274,870)($  441,501)($  884,790)

Net income (loss) per 
  share                     ($0.02)    ($0.04)     ($0.06)     ($0.12)

Weighted average number 
  of common and common 
  equivalent shares
  outstanding              7,917,504  7,690,613   7,853,656  7,659,800


See accompanying notes to consolidated financial statements.
</TABLE>











<TABLE>
                    CERAMICS PROCESS SYSTEMS CORPORATION
                    Consolidated Statements of Cash Flows
                                                                  
                                             Nine-Month Periods Ended
                                          September 28,    September 30,
                                              1996             1995   
<S>                                           <C>              <C>  

Cash flows from operating activities:
  Net income (loss)                        ($ 441,501)     ($ 884,790)
  Adjustments to reconcile net loss 
    to cash provided by (used in)
    operating activities:          
      Depreciation & amortization              79,200          98,917
      Settlement of interest obligation        25,068          72,053
      Gain on sale of property and               
        equipment                          (   27,500)             --
      Changes in assets and liabilities:
        Accounts receivable, trade         (  108,577)         93,866
        Inventories                                --      (    3,989)
        Prepaid expenses                   (      959)          6,035
        Other current assets               (    4,641)         24,269
        Accounts payable                   (   12,664)     (   47,715) 
        Accrued expenses                      426,802      (    6,300)
        Deferred revenue                      164,531          23,683
Net cash provided by (used in)   
  operating activities                         99,759      (  623,971)
           
Cash flows from investing activities:
  Additions to property and equipment      (  107,178)     (   39,279)
  Disposal of property and equipment           27,500              --
  Net change in deposits                   (      375)          1,570
Net cash used in investing  
  activities                               (   80,053)     (   37,709)

Cash flows from financing activities:
  Repayment of capital lease obligations           --      (    7,532)
  Proceeds from issuance of notes
      payable                                      --         450,000
    Net cash provided by financing
      activities                                   --         442,468

Net increase (decrease) in cash                19,706      (  219,212)
Cash at beginning of period                    32,127         252,503
Cash at end of period                       $  51,833       $  33,291


See accompanying notes to consolidated financial statements.
</TABLE>




               CERAMICS PROCESS SYSTEMS CORPORATION
            Notes to Consolidated Financial Statements
                           (Unaudited)

(1)  Nature of Business
      Ceramics Process Systems Corporation ("the Company"), incorporated 
on June 19, 1984, is engaged in the design, development, and manufacture 
of advanced ceramic and composite products for the electronics and 
defense industries.

(2)  Interim Consolidated Financial Statements
      As permitted by the rules of the Securities and Exchange 
Commission applicable to quarterly reports on Form 10-Q, these notes are 
condensed and do not contain all disclosures required by generally 
accepted accounting principles.  

      The accompanying financial statements for the fiscal quarters and 
nine-month periods ended September 28, 1996 and September 30, 1995 are
unaudited.  In the opinion of management, the unaudited consolidated
financial statements of CPS reflect all adjustments necessary to present
fairly the financial position and results of operations for 
such periods.  

      The consolidated financial statements include the accounts of CPS 
and its wholly-owned subsidiary, CPS Superconductor Corporation.  All 
significant intercompany balances and transactions have been eliminated. 

      The results of operations for interim periods are not necessarily 
indicative of the results to be expected for the full year.
     
(3)  Net Loss per Share
      Net loss per share is computed based on the weighted average 
number of common shares outstanding during the period. Common stock 
equivalents pertaining to stock options and convertible notes payable 
were not considered in the calculations of net loss per share since 
their effect would be antidilutive.

<TABLE>
(4)  Inventory
      Inventories consist of the following at September 28, 1996 and 
December 30, 1995:
                                                                 
<S>                                    <C>                
Raw materials                        $  7,399           
Work in process                         8,970              
Finished goods                         12,657              
                                     $ 29,026            
</TABLE>


<TABLE>
(5)  Accrued Expenses
      Accrued expenses consist of the following:

                                   September 28,     December 30,
                                      1996              1995
<S>                                <C>               <C>      
Accrued legal and accounting       $  182,766        $  150,549 
Accrued interest                      363,294           219,839
Accrued payroll                        58,969            67,364
Due to Kilburn Isotronics              22,043            57,713
Accrued material and equipment
     costs                             60,716            27,792                    
                                   $  687,788        $  523,257
</TABLE>

ITEM 2       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
             CONDITION AND RESULTS OF OPERATIONS

Financial Condition

      The Company incurred a net loss in the third fiscal quarter of 
1996 in the amount of $131 thousand, versus a net loss of $275 thousand 
in the third fiscal quarter of 1995.  The Company's cash balance at 
September 28, 1996 and December 30, 1995 was $52 thousand and $32 
thousand, respectively.

      The Company's financial performance improved in the fiscal 
quarter ended September 28, 1996, versus the fiscal quarter ended 
September 30, 1995, due to a $336 thousand increase in product 
shipments, partially offset by a corresponding $207 thousand increase in 
associated cost of sales during this same time period.  Additionally, 
selling, general, and administrative expenses decreased $12 thousand in 
the third fiscal quarter of 1996 versus the third fiscal quarter of 
1995. 

      The Company's entire operations are currently housed in a leased 
facility in Chartley, Massachusetts.  The Company is operating in the 
Chartley facility as a tenant at will.

      Through the first nine months of 1996, the Company has financed 
its working capital requirements through sales of its products and cash 
received in the second and third fiscal quarters of 1996 from a license 
agreement entered into by the Company and a customer.  The Company 
expects that for the remainder of 1996 it will continue to be able to 
fund its recurring working capital requirements through operations.

      During the year certain notes payable have matured.  Although the 
Company seeks to modify the original terms of these notes, it is unable 
to repay the matured balances at this time and there is no assurance 
that the notes will be modified on terms acceptable to the Company. 

Results of Operations
      The Company's total revenue was $581 thousand and $1,379 thousand 
for the fiscal quarter and nine-month period ended September 28, 1996, 
respectively, while total revenue for the fiscal quarter and nine-month 
period ended September 30, 1995 was $245 thousand and $906 thousand, 
respectively.  Revenue recognized in the fiscal quarters ended September 
28, 1996 and September 30, 1995 was derived solely from product sales.  
The increase in product sales in the third fiscal quarter of 1996 versus 
the similar 1995 time period amounted to $336 thousand and resulted from 
increased customer demand in 1996.  The increase in total revenue for 
the first nine months of 1996 versus the first nine months of 1995, in 
the amount of $473 thousand, resulted from a $390 thousand increase in 
product sales, from $904 thousand for the first nine months of 1995, to 
$1,294 thousand for the first nine months of 1996, and an $83 thousand 
increase in license revenue for the first nine months of 1996 versus the 
first nine months of 1995, from $2 thousand for the first nine months of 
1995, to $85 thousand for the first nine months of 1996.  The increase 
in license revenue for the nine-month period ended September 28, 1996 
versus the nine-month period ended September 30, 1995 was due to the 
receipt of $85 thousand in revenue from a license agreement entered into 
by the Company and a customer in the second fiscal quarter of 1996. 

      The Company's gross margin on product sales was a positive gross 
margin of $27 thousand and a negative gross margin of $39 thousand for 
the fiscal quarter and nine-month period ended September 28, 1996, 
respectively, versus negative gross margins of $102 thousand and $232 
thousand for the fiscal quarter and nine-month periods ended September 
30, 1995, respectively.  The improvement in gross margins resulted from 
increased sales volume and sales of higher margin products in 1996.

      Selling, general, and administrative expenses were $104 thousand 
and $339 thousand for the fiscal quarter and nine-month period ended 
September 28, 1996, respectively, versus selling, general, and 
administrative expenses of $116 thousand and $504 thousand for the 
fiscal quarter and nine-month period ended September 30, 1995, 
respectively.  The decrease in selling, general, and administrative 
expenses in 1996 versus similar time periods in 1995 was due to 
personnel reductions made in the third fiscal quarter of 1995 and 
tighter controls over administrative costs in 1996. 

      Other income (expense) principally consisted of interest expense 
accrued on the Company's outstanding notes payable.  Total interest 
expense for the fiscal quarter and nine-month period ended September 28, 
1996 amounted to $59 thousand and $178 thousand, respectively.  Total 
interest expense for the fiscal quarter and nine-month period ended 
September 30, 1995 amounted to $58 thousand and $158 thousand, 
respectively.     
 
      The cumulative effect of these revenues and costs resulted in net 
losses of $131 thousand, or $0.02 per share, and $442 thousand, or $0.06 
per share, for the fiscal quarter and nine-month period ended September 
28, 1996, respectively, and net losses of $275 thousand, or $0.04 per 
share, and $885 thousand, or $0.12 per share, for the fiscal quarter 
and nine-month period ended September 30, 1995, respectively. 



               PART II OTHER INFORMATION




Item 1 through Item 2:        None


Item 3:                  	Defaults upon Senior Securities

Certain notes payable held by the Company
matured in 1996.  The Company defaulted on
payment of principal and interest of these
notes payable at their maturity dates.
Although the Company seeks to modify the
original maturity dates of these notes
payable with the respective noteholders,
there is no assurance that the notes will
be modified on terms acceptable to the
Company.  The default of these notes 
payable at September 28, 1996, is
summarized as follows:
<TABLE>
						              Accrued
                				Principal	 Interest
<S>                 <C>        <C>
Related Parties     $ 920,000	 $ 189,300
Other	              $ 700,000 	$ 131,844

</TABLE>

Item 4 through Item 5:  	None               


Item 6:				Exhibits and Reports on Form 8-K

                        (a)    Exhibits:  None  
                        (b)    Reports on Form 8-K:  None




                            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 thereunto duly authorized.



                            Ceramics Process Systems Corporation
                                          (Registrant)
                                                                  
             





Date:        May 1, 1997            /s/Grant C. Bennett  
                                         Grant C. Bennett
                                         President and Director
                                         (Principal Executive
                                          Officer)