UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                       
                                   FORM 10-K

                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
                   OF THE SECURITIES EXCHANGE ACT OF 1934

                           For the fiscal year ended

             [X]     TRANSITION REPORT PURSUANT TO SECTION 13
                 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

       For the transition period from July 1, 1995 to December 31, 1995

                          Commission file number 1-12

                            THE QUAKER OATS COMPANY

            (Exact name of registrant as specified in its charter.)

                   NEW JERSEY                                  36-1655315
          (State of other jurisdiction of                  (I.R.S. Employer
          incorporation or organization)                  Identification No.)

               QUAKER TOWER
          P.O. Box 049001 Chicago, Illinois                  60604-9001
          (Address of principal executive offices)           (Zip Code)

          Registrant's telephone number, including area code (312) 222-7111

             Securities registered pursuant to Section 12(b) of the Act:
                                       
                Title of each class              Name of each exchange
                                                  on which registered


           Common Stock ($5.00 Par Value)        New York Stock Exchange
                                                 Chicago Stock Exchange
                                                 Pacific Stock Exchange
                                                 The Stock Exchange, London

           Preferred Stock Purchase Rights       New York Stock Exchange
                                                 Chicago Stock Exchange
                                                 Pacific Stock Exchange

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  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

Indicate by check mark if disclosure of delinquent filers pursuant to Item  405
of  Regulation S-K is not contained herein, and will not be contained, to  best
of  registrant's  knowledge,  in  definitive proxy  or  information  statements
incorporated  by  reference in Part III of this Form 10-K or any  amendment  to
this Form 10-K. [X]

The  aggregate  market  value of Common Stock held  by  non-affiliates  of  the
Registrant   as   of  the  close  of  business  on  February   29,   1996   was
$4,647,911,193.75.   The  liquidation  value  of  Series  B  ESOP   Convertible
Preferred  Stock, all of which is held in The Quaker Employee  Stock  Ownership
Plan,  at the close of business on February 29, 1996 totaled $90,230,790,  plus
related  dividends.   The number of shares of Common Stock,  $5.00  par  value,
outstanding as of the close of business on February 29, 1996 was 135,211,962.
                                       
                                       
                                       
                                       
                                       
                                       
                                       
DOCUMENTS INCORPORATED BY REFERENCE.

1.    Portions  of The Quaker Oats Company Notice of Annual Meeting  and  Proxy
Statement (Proxy Statement) dated April 1, 1996 (Part III of Form 10-K)

CROSS-REFERENCE TABLE OF CONTENTS

The Proxy Statement includes all information required in Part III of Form 10-K,
except  as  otherwise  indicated in the following Cross-Reference  Table.   The
Cross-Reference Table identifies the source of information for each of the Form
10-K  items  included in Parts I, II and III.  Only those sections of  the  the
Proxy Statement cited in the Cross-Reference Table of Contents are incorporated
in the Form 10-K and filed with the Securities and Exchange Commission.

               10-K Item No.                        Source of Information

PART I.
  Item 1. Business.
   (a)    General Development of Business           Transition Report, 
                                                       pages 31,50-51
   (b)    Financial Information About               Transition Report,
          Industry Segments                            pages 44-45
   (c)    Narrative Description of Business         Transition Report, 
                                                       pages 30-39, 46-
                                                       47, 63, 66, 70-71
   (d)    Financial Information About Foreign       Transition Report, 
          and Domestic Operations and Export Sales      pages 44-45
   
   (e)    Executive Officers of Registrant          Transition Report, 
                                                       pages 72-73

  Item 2. Properties.                               Transition Report, 
                                                       page 70
  Item 3. Legal Proceedings.                        Transition Report,
                                                       page 65
  Item 4. Submission of Matters to a Vote of
          Security Holders.                         (Not Applicable)


PART II.
  Item 5. Market for the Registrant's Common        Transition Report,
          Equity and Related Stockholder Matters.      pages 47, 66, 74-76
      
  Item 6. Selected Financial Data.                  Transition Report, 
                                                       pages 46-47
  Item 7. Management's Discussion and Analysis      Transition Report, 
          of Financial Condition and Results           pages 30-39
          of Operations.
  
  Item 8. Financial Statements and Supplementary    Transition Report, 
          Data.                                        pages 40-68
  
  Item 9. Changes in and Disagreements with         (Not Applicable)
          Accountants on Accounting and                      
          Financial Disclosure.


PART III.
  Item 10. Directors and Executive Officers of       Notice of Annual Meeting
           the registrant.                              and Proxy Statement,
                                                        pages 9-11; Transition 
                                                        Report, pages 72-73
  
  Item 11. Executive Compensation.                   Notice of Annual Meeting 
                                                        and Proxy Statement,
                                                        pages 15-24
    
  Item 12. Security Ownership of Certain             Notice of Annual Meeting
           Beneficial Owners and Management.            and Proxy Statement,
                                                        pages 13-15
  
  Item 13. Certain Relationships and Related         (Not Applicable)
           Transactions.                                

PART IV.
  Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
  (a)(1)   Financial Statements.
           Consolidated financial statements of The Quaker Oats Company and its
           subsidiaries are incorporated under Item 8 of this Form 10-K.
  (a)(2)   Financial Statement Schedules.
   & (d)   All required financial statement schedules are included in the 
           consolidated financial statements or notes thereto as incorporated 
           under  Item  8  of this Form 10-K.
  (a)(3)   Exhibits  - See Exhibit  index  attached hereto, which is 
   & (c)   incorporated herein by reference.
   



                                  SIGNATURES

   Pursuant  to  the  requirements of Sections 13 or 15(d)  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.


THE QUAKER OATS COMPANY

By /s/WILLIAM D. SMITHBURG
    William D. Smithburg, Chairman, President and
    Chief Executive Officer

Date:  March 13, 1996

   Pursuant  to the requirements of the Securities Exchange Act of  1934,  this
report  has  been signed below on the 13th day of March 1996, by the  following
persons on behalf of the Registrant and in the capacities indicated.


               Signature                              Title

        /s/  WILLIAM  D.  SMITHBURG           Chairman, President and 
          William D. Smithburg                Chief  Executive Officer
         

       /s/ ROBERT S. THOMASON                Senior Vice President Finance 
         Robert S. Thomason                   and Chief Financial Officer

       /s/ THOMAS L. GETTINGS                Vice President and Corporate 
         Thomas L. Gettings                       Controller

       /s/ FRANK C. CARLUCCI                 Director
         Frank C. Carlucci

       /s/ SILAS S. CATHCART                 Director
         Silas S. Cathcart

       /s/ KENNETH I. CHENAULT               Director
         Kenneth I. Chenault

       /s/JUDY C. LEWENT                     Director
         Judy C. Lewent

       /s/ VERNON R. LOUCKS, JR.             Director
         Vernon R. Loucks, Jr.

       /s/ THOMAS C. MacAVOY                 Director
         Thomas C. MacAvoy

       /s/ LUTHER C. McKINNEY                Director
         Luther C. McKinney

       /s/ WALTER J. SALMON                  Director
         Walter J. Salmon

       /s/ WILLIAM L. WEISS                  Director
         William L. Weiss
                                       
                                       
                                       
                                       
EXHIBIT INDEX

                                                                  PAPER (P),
                                                                ELECTRONIC (E)
                                                               OR INCORPORATED
EXHIBIT NO.                DESCRIPTION                       BY REFERENCE (IBRF)

3(a)       Restated Certificate of Incorporation   
           (as of November 9, 1994)                                         IBRF

3(b)       Bylaws of The Quaker Oats Company 
           (as amended January 11, 1995)                                    IBRF

4          Registrant undertakes to furnish to the Commission, 
           upon request, a copy of any instrument defining the rights 
           of holders of long-term debt of the registrant and all of 
           its subsidiaries for which consolidated or unconsolidated 
           financial statements are required to be filed                    IBRF

10(a)(1)   1984 Long-Term Incentive Plan (incorporated by reference 
           to Exhibit B of the Company's 1983 Proxy Statement, file 
           number 1-12)                                                     IBRF

10(a)(2)   First Amendment to  1984 Long-Term Incentive Plan 
           (incorporated by reference to the Company's Form 10-K for 
           the fiscal year ended June 30, 1992, file number 1-12)           IBRF

10(b)(1)   Deferred  Compensation Plan for Directors of The Quaker 
           Oats Company  as restated effective January 1, 1989 
           (incorporated by reference to the Company's Form 10-K for 
           the fiscal year ended June 30, 1989, file number 1-12)           IBRF

10(b)(2)   First Amendment  to  the Deferred Compensation Plan for 
           Directors of The Quaker Oats Company (incorporated by 
           reference to the Company's Form  10-K  for the fiscal year 
           ended June 30, 1992, file number  1-12)                          IBRF

10(c)      Deferred Compensation Plan for Executives of The Quaker 
           Oats Company as restated effective March 1, 1996                    E

10(d)      Management Incentive Bonus Plan of The Quaker Oats Company 
           as amended September 8, 1993 (incorporated by reference to 
           the Company's Form  10-K  for the fiscal year ended 
           June 30, 1994, file number  1-12)                                IBRF

10(e)(1)   Directors' Stock Retirement Plan (incorporated by reference 
           to the Company's Form 10-K for the fiscal year ended 
           June 30, 1985, file number 1-12)                                 IBRF

10(e)(2)   First Amendment to Directors' Stock Retirement Plan 
           (incorporated by reference to the Company's Form 10-K for 
           the fiscal year ended June 30, 1992, file number 1-12)           IBRF

10(e)(3)   Second Amendment to Directors' Stock Retirement Plan 
           (incorporated by reference to the Company's Form 10-K for 
           the fiscal year ended June 30, 1995).                            IBRF

10(e)(4)   Third Amendment to Directors' Stock Retirement Plan                 E

10(f)(1)   Termination Benefits Agreement with William D. Smithburg, 
           first effective in the fiscal year ended June 30, 1995 
           (incorporated by reference to the Company's Form 10-K for 
           the fiscal year ended June 30, 1995).                            IBRF

10(f)(2)   Termination   Benefits Agreement with Philip A. Marineau, 
           first effective in the  fiscal year ended June 30, 1995 
           (incorporated by reference to  the Company's Form 10-K 
           for the fiscal year ended June 30, 1995).                        IBRF

10(f)(3)   Termination   Benefits Agreements with certain Executive 
           Officers, first effective in the fiscal year ended 
           June 30, 1995 or effective by filing date (incorporated  
           by reference to the Company's Form 10-K for  the  fiscal
           year ended June 30, 1995).                                       IBRF

10(f)(4)   Termination   Benefits Agreements with certain Executive 
           Officers, first effective for the transition period ended 
           December 31, 1995                                                   E

10(f)(5)   Agreement upon Separation of employment with 
           Philip A. Marineau first effective for the transition 
           period ended December 31, 1995.                                     E

10(g)(1)  The Quaker Supplemental Executive Retirement Program 
          (incorporated by reference to the Company's Form 10-K for 
          the fiscal year ended June 30, 1989, file number 1-12)            IBRF

10(g)(2)  First Amendment  to  The Quaker Supplemental Executive 
          Retirement Program (incorporated by reference to the 
          Company's Form 10-K for the fiscal year ended June 30, 1992, 
          file number 1-12)                                                 IBRF
                                       
                                       
                                       

EXHIBIT INDEX

                                                                  PAPER (P),
                                                                ELECTRONIC (E)
                                                               OR INCORPORATED
EXHIBIT NO.                DESCRIPTION                       BY REFERENCE (IBRF)

10(g)(3)  Second Amendment to  The Quaker Supplemental 
          Executive Retirement Program (incorporated by reference 
          to the Company's Form 10-K for the fiscal year ended 
          June 30, 1992, file number 1-12)                                  IBRF

10(g)(4)  Third Amendment  to  The Quaker Supplemental Executive 
          Retirement Program (incorporated by reference to the 
          Company's Form 10-K for the fiscal year ended June 30, 1992, 
          file number 1-12)                                                 IBRF

10(g)(5)  Fourth Amendment to  The Quaker Supplemental Executive 
          Retirement Program (incorporated by reference to the 
          Company's Form 10-K for the fiscal year ended June 30, 1992, 
          file number 1-12)                                                 IBRF

10(g)(6)  Fifth Amendment  to  The Quaker Supplemental Executive 
          Retirement Program (incorporated by reference to the 
          Company's Form 10-K for the fiscal year ended June 30, 1993, 
          file number 1-12)                                                 IBRF

10(g)(7)  Sixth Amendment  to  The Quaker Supplemental Executive 
          Retirement Program (incorporated by reference to the 
          Company's Form 10-K for the fiscal year ended June 30, 1993, 
          file number 1-12)                                                 IBRF

10(g)(8)  Seventh Amendment to The Quaker Supplemental Executive
          Retirement Program (incorporated by reference to the 
          Company's Form 10-K for the fiscal year ended June 30, 1995, 
          file number  1-12)                                                IBRF

10(g)(9)  Eighth Amendment to  The Quaker Supplemental Executive
          Retirement Program (incorporated by reference to the 
          Company's Form 10-K for the fiscal year ended June 30, 1995, 
          file number  1-12)                                                IBRF

10(g)(10) Ninth Amendment  to  The Quaker Supplemental Executive
          Retirement Program (incorporated by reference to the Company's
          Form  10-K  for the fiscal year ended June 30, 1995, file 
          number  1-12)                                                     IBRF

10(h)(1)  The Quaker Oats  Company Benefits Protection Trust
          (incorporated by reference to the Company's Form 10-K for
          the fiscal year ended June 30, 1989, file number 1-12)            IBRF

10(h)(2)  First Amendment to The Quaker Oats Company Benefits Protection
          Trust (incorporated by reference to the Company's Form 10-K 
          for the fiscal year ended June 30, 1992, file number 1-12)        IBRF

10(h)(3)  Second Amendment to The Quaker Oats Company Benefits Protection
          Trust (incorporated by reference to the Company's Form 10-K for 
          the fiscal year ended June 30, 1992, file number 1-12)            IBRF

10(i)     The Quaker Eligible Earnings Adjustment Plan (incorporated by 
          reference to the Company's Form 10-K for the fiscal year ended 
          June 30, 1992, file number 1-12)                                  IBRF

10(j)     The Quaker Officers Severance Program, effective March 8, 1995
          (incorporated by reference to the Company's Form 10-K for the 
          fiscal year ended June 30, 1995, file number 1-12)                IBRF

10(k)(1)  The  Quaker  Long  Term Incentive Plan of 1990 (incorporated 
          by reference to the Company's Form 10-K for the fiscal year 
          ended June 30, 1990, file number 1-12)                            IBRF

10(k)(2)  First Amendment  to  The Quaker Long Term Incentive Plan of 
          1990 (incorporated by reference to the Company's From 10-K for 
          the fiscal year ended June 30, 1992, file number 1-12)            IBRF

10(k)(3)  Second Amendment to  The Quaker Long Term Incentive Plan of 
          1990 (incorporated by reference to the Company's Form 10-K for 
          the fiscal year ended June 30, 1993, file number 1-12)            IBRF

10(k)(4)  Third Amendment  to  The Quaker Long Term Incentive Plan of 
          1990 (incorporated by reference to the Company's Form 10-K for 
          the fiscal year ended June 30, 1994, file number 1-12)            IBRF

10(k)(5)  Fourth Amendment to  The Quaker Long Term Incentive Plan of 1990
          
          
          
EXHIBIT INDEX
                                                                  PAPER (P),
                                                                ELECTRONIC (E)
                                                               OR INCORPORATED
EXHIBIT NO.                DESCRIPTION                       BY REFERENCE (IBRF)


          (incorporated by reference to the Company's Form 10-K for the
          fiscal year ended June 30, 1995, file number 1-12)                IBRF

10(k)(6)  Fifth Amendment  to  The Quaker Long Term Incentive Plan of 
          1990 (incorporated by reference to the Company's Form 10-K for 
          the fiscal year ended June 30, 1995, file number 1-12)            IBRF

10(l)     The Quaker 415 Excess Benefit Plan (incorporated by reference to 
          the Company's Form 10-K for the fiscal year ended June 30, 1990, 
          file number 1-12)                                                 IBRF

10(m)     Quaker Salaried Employees Compensation and Benefits Protection 
          Plan (incorporated by reference to the Company's Form 10-K for 
          the fiscal year ended June 30, 1990, file number 1-12)            IBRF

11        Statement re Computation of Per Share Earnings                       E

12        Statement re Computation of Ratios                                   E

13        Transition Report of The Quaker Oats Company for the transition 
          period from July 1, 1995 to December 31, 1995                        E

21        List of Subsidiaries of the Registrant                               E

23        Consent of Auditors                                                  E

(b)       Reports on Form 8-K

(b)(1)    8-K filed November 3, 1995                                        IBRF