FORM 10-Q

                  SECURITIES AND EXCHANGE COMMISSION
                       Washington, D. C.  20549

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

For the quarterly period ended September 30, 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 1-06124

                      LONE STAR INDUSTRIES, INC.
        (Exact name of registrant as specified in its charter)
                                 	
			   DELAWARE    			  No. 13-0982660
         (State or other jurisdiction of	 (I.R.S. Employer
	    incorporation or organization) 	Identification No.)

300 First Stamford Place, P. O. Box 120014, Stamford, CT  06912-
0014
        (Address of principal executive offices)    (Zip Code)

Registrant's telephone number, including area code   203-969-8600

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 whether the registrant has filed all 
documents and reports required to be filed by Sections 12, 13 or 
15(d) of the Securities Exchange Act of 1934 subsequent to the 
distribution of securities under a plan confirmed by a court.

                   Yes   X             No       

The number of shares outstanding of each of the registrant's 
classes of common stock as of October 29, 1997:

       Common Stock, par value $1 per share - 11,007,388 shares


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TABLE OF CONTENTS


	
                                                      PAGE


PART I.	FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
Consolidated Statements of Operations - For the
   Three and Nine Months Ended September 30, 1997 and 
   1996 (Unaudited)......................................3

Consolidated Statements of Retained Earnings -            
   For the Three and Nine Months Ended September 30, 1997 
   and 1996 (Unaudited)..................................4 

Consolidated Balance Sheets - September 30, 1997
   (Unaudited) and December 31, 1996.....................5

Consolidated Statements of Cash Flows - For the 
   Nine Months Ended September 30, 1997 and 1996
   (Unaudited)...........................................6

Notes to Unaudited Consolidated Financial Statements.....7

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
FINANCIAL CONDITION AND RESULTS OF OPERATIONS...........14

PART II.	OTHER INFORMATION..............................20

SIGNATURES..............................................21




<PAGE>




PART I.   FINANCIAL INFORMATION
ITEM 1.   FINANCIAL STATEMENTS

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<CAPTION>

LONE STAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In Thousands Except Per Share Amounts)


                             For the Three Months       For the Nine Months
                              Ended September 30,       Ended September 30,
                              1997        1996          1997         1996     
 <S>                           <C>         <C>           <C>           <C>

Revenues:                                                          
                                                                    
 Net sales                  $111,775    $118,349      $277,229      $273,643
 Joint venture income          3,059       2,967         6,136         5,444
 Other income, net             4,553         701         5,618         2,924
                            --------    --------      --------      --------
                             119,387     122,017       288,983       282,011
                            --------    --------      --------      -------- 
Deductions from revenues:                                           
 Cost of sales                63,895      69,388       172,613       178,966
 Selling, general and                                                
  administrative expenses      6,752       6,606        21,929        20,866
 Depreciation and depletion    6,121       6,088        18,326        17,822
 Interest expense                617       1,664         3,135         5,210
                            --------    --------      --------      --------
                              77,385      83,746       216,003       222,864
                            --------    --------      --------      -------- 
Income before income                                                
 taxes                        42,002      38,271        72,980        59,147
 Provision for income taxes  (14,280)    (12,925)      (24,813)      (19,814)
                            --------    --------      --------      -------- 
Net income applicable                                        
 to common stock            $ 27,722    $ 25,346      $ 48,167      $ 39,333 
                            ========    ========      ========      ======== 

Weighted average common
 shares outstanding           10,997      11,369        10,948        11,424
                            ========    ========      ========      ========
Primary income per common                                        
 share                         $2.04       $1.86         $3.61         $2.91
                            ========    ========      ========      ======== 
Fully diluted income                                           
  per common share             $2.02       $1.86         $3.52         $2.90   
                            ========    ========      ========      ======== 

The accompanying Notes to Unaudited Consolidated Financial Statements are an 
integral part of the Financial Statements.

</TABLE>


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<CAPTION>


LONE STAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (Unaudited)
(In Thousands)

							
                                     
                              For the Three Months       For the Nine Months 
                               Ended September 30,       Ended September 30,
                               1997          1996         1997          1996 
<S>                            <C>          <C>          <C>           <C>
                                                                     
Retained earnings, beginning                                         
 of period                  $ 134,576    $  76,157    $ 115,228     $  63,315
                                                                     
Net income                     27,722       25,346       48,167        39,333
Dividends                        (550)        (568)      (1,647)       (1,713)
			
                             ---------    ---------    ---------     --------- 

Retained earnings, end of 
 period                     $ 161,748    $ 100,935   $  161,748     $ 100,935
                             =========    =========    =========     =========

The accompanying Notes to Unaudited Consolidated Financial Statements are an 
integral part of the Financial Statements.

</TABLE>



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<TABLE>
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LONE STAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)


                                                   September 30,  December 31,
                                                       1997           1996
                                                    (Unaudited)           
    <S>                                                 <C>             <C>

Assets:                                                           
  Current assets:                                                   
    Cash including cash equivalents of $92,372
     and $69,768                                     $ 94,600        $ 71,215
    Accounts and notes receivable, net                 49,948          33,336
    Inventories:                                                     
       Finished goods                                  17,472          24,913
       Work in process and raw materials                6,494           5,347
       Supplies and fuel                               24,191          23,609
                                                     --------        --------  
                                                       48,157          53,869

    Deferred tax asset                                  3,611           3,611
    Other current assets                                5,500           3,183
                                                     --------        -------- 
       Total current assets                           201,816         165,214
                                                                             
  Joint ventures                                       20,891          19,505

  Property, plant and equipment                       399,718         383,974
  Less accumulated depreciation and depletion          74,476          60,992
                                                     --------        -------- 
                                                      325,242         322,982

Deferred tax asset                                     29,090          47,365  
Other assets and deferred charges                       9,661           7,085
                                                     --------        --------
 
       Total assets                                  $586,700        $562,151
                                                     ========        ========
Liabilities and Shareholders' Equity:                              
  Current liabilities:                                               
    Accounts payable                                 $ 13,374        $ 12,562
    Accrued liabilities                                39,858          44,238
    Senior notes payable                                  -            28,000
    Other current liabilities                           6,572           3,436
                                                      --------        --------
  
       Total current liabilities                       59,804          88,236
                                                                 
Senior notes payable                                   50,000          50,000
Postretirement benefits other than pensions           131,393         132,219
Other liabilities                                      28,136          27,414
Contingencies (Notes 10 and 11)
                                                     --------        --------
       
 
       Total liabilities                              269,333         297,869
                                                     --------        --------
Shareholders' Equity:                                                         
  Common stock                                         12,090          12,087
  Warrants to purchase common stock                    15,562          15,574
  Additional paid-in capital                          161,729         163,664
  Retained earnings                                   161,748         115,228 
  Treasury stock, at cost                             (33,762)        (42,271)
                                                     --------        --------
       Total shareholders' equity                     317,367         264,282
       
       Total liabilities and shareholders'           --------        -------- 
        equity                                       $586,700        $562,151
                                                     ========        ========
                           
The accompanying Notes to Unaudited Consolidated Financial Statements are an 
integral part of the Financial Statements.

</TABLE>



<PAGE>
  

<TABLE>
<CAPTION>


LONE STAR INDUSTRIES, INC. 
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In Thousands)

                                               For the Nine Months
                                               Ended September 30,
                                               1997          1996   

<S>                                        <C>           <C>
                                                                    
Cash Flows from Operating Activities:                                
                                                                    
Net income                                 $  48,167     $  39,333
Adjustments to arrive at net cash
 provided by operating activities:                                          
    Depreciation and depletion                18,326        17,822
    Deferred income taxes                     20,617        19,814  
    Changes in operating assets and                                 
      liabilities:                                                  
        Accounts and notes receivable        (16,017)      (16,986)
        Inventories and other current                               
          assets                               1,042         5,984
        Accounts payable and                                    
          accrued liabilities                 (2,218)       (6,761)
    Equity income, net of dividends
      received                                (1,386)          556
    Pension funding less than (in
      excess of) expense                         823       (13,345)
    Gain on sale of a surplus property        (3,110)          -
    Other, net                                  (236)          169
                                             --------      --------
Net cash provided by operating                               
  activities                                  66,008        46,586
                                                                     

Cash Flows from Investing Activities:                               
                                                                    
Capital expenditures                         (30,026)      (29,765)
Proceeds from sale of assets                  12,854            81
Other, net                                       -              32   
                                             --------      --------
Net cash used by investing                                
  activities                                 (17,172)      (29,652)
                                                                     
Cash Flows from Financing Activities:                               

Proceeds from issuance of long-term
  senior notes                                50,000           -
Redemption of long-term senior notes         (78,000)          -    
Proceeds from exercise of warrants                58            86  
Purchase of treasury stock                      (436)       (8,191)
Dividends paid                                (1,647)       (1,713)
Proceeds from exercise of options              4,574         1,143
                                            --------       --------
Net cash used by financing activities        (25,451)       (8,675)
                                            --------       --------  
Net increase in cash and cash                             
  equivalents                                 23,385         8,259
                                                                    

Cash and cash equivalents, beginning of                             
  period                                      71,215        50,049
                                            --------      --------     
Cash and cash equivalents, end of period   $  94,600     $  58,308
                                            ========      ======== 
                                                                               
The accompanying Notes to Unaudited Consolidated Financial Statements are an 
integral part of the Financial Statements.

</TABLE>


<PAGE>



	NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Note 1

In the opinion of management, the accompanying unaudited consolidated 
financial statements contain all adjustments necessary to present fairly 
the financial position of the Company as of September 30, 1997, and the 
results of operations for the three and nine months ended September 30, 
1997 and 1996, and the cash flows for the nine months ended September 30, 
1997 and 1996. 

The year-end consolidated balance sheet was derived from the Company's 
audited financial statements, but does not include all disclosures 
required by generally accepted accounting principles.  The financial 
statements contained herein should be read in conjunction with the 
financial statements and related notes in the Company's annual report on 
Form 10-K for the year ended December 31, 1996. The Company's operations 
are seasonal and, consequently, interim results are not indicative of the 
results to be expected for a full year.


Note 2 - Common Stock 

In February, May and August 1997, the Board of Directors declared a $0.05 
dividend per common share, which was paid on March 14, 1997, June 16, 1997 
and September 15, 1997 to shareholders of record as of March 1, 1997, June 1, 
1997 and September 1, 1997.  During the nine months ended September 30, 1997, 
290,000 employee stock options were exercised for a total of $4,574,000.  In 
May 1997, the Board of Directors authorized the Company to purchase up to 
$25,000,000 of the Company's common stock and warrants.  During the third 
quarter of 1997, the Company purchased 8,800 shares for $436,000.  


Note 3 - Supplemental Disclosures of Cash Flow Information

Cash equivalents include the Company's marketable securities which are 
comprised of short-term, highly liquid investments with original maturities 
of three months or less.  Interest paid during the nine months ended 
September 30, 1997 and 1996 was $7,261,000 and $7,899,000, respectively. 
Income taxes paid during the nine months ended September 30, 1997 and 1996, 
were $1,063,000 and $293,000, respectively.


Note 4 - Interest

Interest expense of $951,000, $4,082,000, $1,982,000 and $5,948,000 has been 
accrued for the three and nine months ended September 30, 1997 and 1996, 
respectively.  Interest capitalized during the three and nine months ended 
September 30, 1997 and 1996, was $334,000, $947,000, $318,000 and $738,000, 
respectively.


Note 5 - Earnings Per Share

Due to the Company having outstanding common stock equivalents in excess of 
20% of the number of shares of outstanding common stock, primary and fully 
diluted earnings per share of the Company are calculated using the modified 
treasury stock method in accordance with Accounting Principles Board Opinion 
No. 15, "Earnings per Share", except when primary and fully diluted earnings 
per share are anti-dilutive.  Primary earnings per share for the three months 
ended September 30, 1997 and 1996 were calculated based on adjusted weighted 
average shares outstanding of 13,621,286 and 13,708,843, and net income of 
$27,722,000 and $25,566,000, respectively.  Primary earnings per share for 
the nine months ended September 30, 1997 and 1996 were calculated based on 
adjusted weighted average shares outstanding of 13,342,383 and 13,787,591 and 
net income of $48,167,000 and $40,102,000, respectively.


Note 6 - Recent Pronouncements

In March 1997, the Financial Accounting Standards Board ("FASB") issued 
Statement of Financial Accounting Standards No. 128, "Earnings per Share" 
("SFAS No. 128"). This statement establishes new standards for computing and 
presenting earnings per share ("EPS").  SFAS No. 128 is effective for 
financial statements issued for periods ending after December 15, 1997, 
including interim periods, and earlier application is not permitted.  When 
adopted, the Company will be required to restate its EPS data for all prior 
periods presented.  The Company expects the impact of the adoption of this 
statement to increase previously reported annual, third quarter and nine-
month period EPS amounts.

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income", 
which requires that changes in comprehensive income be shown in a financial 
statement that is displayed with the same prominence as other financial 
statements.  This statement is effective for periods beginning after December 
15, 1997.  The Company does not expect adoption of the statement to have a 
material effect on the presentation of its financial statements.

In June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments of an 
Enterprise and Related Information", ("SFAS No. 131") which changes the way 
public companies report information about segments.  SFAS No. 131, which is 
based on the management approach to segment reporting, includes requirements 
to report selected segment information quarterly, and entity-wide disclosures 
about products and services, major customers, and the material countries in 
which the entity holds assets and reports revenues.  This statement is 
effective for financial statements for periods beginning after December 15, 
1997.  Management has not yet evaluated the effects of this change on the 
Company's financial statements.


Note 7 - Sale of Assets

In March 1997, the Company sold its central Illinois ready-mixed and other 
concrete operations, including inventories, for about $10,500,000 which 
approximated book value.  The total proceeds included a note receivable for 
$1,650,000.  

In October 1997, the Company sold its New York construction aggregates 
operations, including working capital, for proceeds of about $43,000,000, 
which approximated book value.  The construction aggregates operations sold 
contributed $17,061,000 and $36,287,000 to consolidated sales, and $3,656,000 
and $3,434,000 to consolidated gross profit of the Company for the three and 
nine months ended September 30, 1997, respectively.  These sold operations 
contributed $16,630,000 and $33,255,000 to consolidated sales, and $3,703,000 
and $3,851,000 to consolidated gross profit of the Company for the three and 
nine months ended September 30, 1996, respectively. 

In September 1997, the Company received $3,110,000 from the sale of a parcel 
of surplus real estate in Massachusetts.  The gain on the sale is included in 
other income on the consolidated statement of operations.


Note 8 - Senior Notes Payable

In March 1997, the Company redeemed $28,000,000 of its 10% senior notes and 
called for the early redemption of the remaining $50,000,000 in the second 
quarter of 1997.  In March 1997, the Company issued $50,000,000 of 7.31% 
senior notes due 2007.  On April 21, 1997, the remaining $50,000,000 of the 
10% senior notes were redeemed at par plus accrued interest of $1,125,000.  


Note 9 - Credit Agreement

In June 1997, the Company entered into a new $100,000,000 unsecured revolving 
credit facility, replacing the $35,000,000 secured revolving credit facility 
the Company canceled in March 1997.


Note 10 - Environmental Matters

The Company is subject to extensive, stringent and complex federal, state 
and local laws, regulations and ordinances pertaining to the quality and 
the protection of the environment and human health and safety, requiring 
the Company to devote substantial time and resources in an effort to 
maintain continued compliance.  Many of the laws and regulations apply to 
the Company's former activities, properties and facilities as well as its 
current operations. There can be no assurances that judicial or 
administrative proceedings, seeking penalties or injunctive relief, will 
not be brought against the Company for alleged non-compliance with 
applicable environmental laws and regulations relating to matters as to 
which the Company is currently unaware.  For instance, if releases of 
hazardous substances are discovered to have occurred at facilities 
currently or previously owned or operated by the Company, or at facilities 
to which the Company has sent waste materials, the Company may be subject 
to liability for the investigation and remediation of such sites.  In 
addition, changes to such regulations or the enactment of new regulations 
in the future could require the Company to undertake capital improvement 
projects or to cease or curtail certain current operations or could 
otherwise substantially increase the capital, operating and other costs 
associated with compliance.  For example, certain world leaders are 
currently discussing limitations on carbon dioxide emissions as a result 
of the fear among certain scientists of "global warming".  These 
limitations will be the focus of an international meeting in December 1997 
in Japan.  Depending on their form when promulgated, such limitations, if 
any are ultimately imposed, could adversely affect certain aspects of 
United States manufacturing, including the cement industry.  

The Clean Air Act was amended in 1990 to provide for a uniform federal 
regulatory scheme governing the control of air pollutant emissions and 
permit requirements.  In addition, certain states in which the Company 
operates have enacted laws and regulations governing the emission of air 
pollutants and requiring permits for sources of air pollutants.  As a 
result of the 1990 amendments to the Clean Air Act, the Company is 
required to apply for federal operating permits for each of its cement 
manufacturing facilities at various dates through 1999.  As part of the 
permitting process, the Company may be required to install equipment to 
monitor emissions of air pollutants from its facilities. In addition, the 
Clean Air Act amendments require the United States Environmental 
Protection Agency ("EPA") to develop regulations directed at reducing 
emissions of toxic air pollutants from a variety of industrial sources, 
including the portland cement manufacturing industry.  As part of this 
process, the EPA will identify maximum available control technology 
("MACT") for the reduction of emissions of air toxics from cement 
manufacturing facilities.  On April 27, 1997, the EPA announced new 
proposed MACT standards for those cement manufacturing facilities (like 
Lone Star's Greencastle and Cape Girardeau plants) that burn hazardous 
waste fuels ("HWF").   The proposed standards are extremely lengthy and 
complex and have been commented on by concerned parties.  They are 
anticipated by the Company to be effective in late 1998 and thereafter 
will be implemented over a three-year period. Depending on their final 
terms when effective, they could have the effect of limiting or 
eliminating the use of HWF at one or both facilities.  The Company 
anticipates that standards for facilities burning fossil fuels will be 
initially proposed in late 1997.  In August 1997, the EPA promulgated 
under the Clean Air Act new standards for small particulate matter and 
ozone emissions, and related testing  will be carried out over the next 
several years.  Depending on the result of this testing, additional 
regulatory burdens could be imposed on the cement industry by states not 
in compliance with the regulations.  On October 10, 1997, the EPA proposed 
new regulations to reduce nitrogen oxide emissions substantially over the 
next eight years.  This proposal would affect 22 states including three in 
which the Company has cement plants: Indiana, Illinois and Missouri.  
Depending on state implementation, this emissions reduction could 
adversely affect the cement industry in these states. 

The Resource Conservation and Recovery Act ("RCRA") establishes a 
cradle-to-grave regulatory scheme governing the generation, treatment, 
storage, handling, transportation and disposal of solid wastes.  Solid 
wastes which are classified as hazardous wastes pursuant to RCRA, as well 
as facilities that treat, store or dispose of such hazardous wastes, are 
subject to stringent regulatory requirements.  Generally, wastes produced 
by the Company's operations are not classified as hazardous wastes and are 
subject to less stringent federal and state regulatory requirements.  
Cement kiln dust ("CKD"), a by-product of cement manufacturing, is 
currently exempted from regulation as a hazardous waste pursuant to the 
Bevill Amendment to RCRA.  However, on January 31, 1995, the EPA issued a 
regulatory determination regarding the need for regulatory controls on the 
management, handling and disposal of CKD.  Generally, the EPA regulatory 
determination provides that the EPA intends to draft and promulgate 
regulations imposing controls on the management, handling and disposal of 
CKD that will be based largely on selected components of the existing RCRA 
hazardous waste regulatory program, tailored to address the specific 
regulatory concerns posed by CKD.  The EPA regulatory determination 
further provides that new CKD regulations will be designed both to be 
protective of the environment and to minimize the burden on cement 
manufacturers.  While it is not possible to predict at this time precisely 
what new regulatory controls on the management, handling and disposal of 
CKD or what increased costs (or range of costs) would be incurred by the 
Company to comply with these requirements, the EPA announced in 1996 that 
regulations will be promulgated through a rulemaking scheduled to be 
completed in late 1997, and that, thereafter, these rules would become 
effective in 1998 and thereafter will be implemented over a three-year 
period.  The types of controls being considered by the EPA include 
fugitive dust emission controls, restrictions for landfills located in 
sensitive areas, groundwater monitoring, standards for liners and caps, 
metals limits and corrective action for currently active units.

In 1995, the State of Indiana made a determination that the CKD stored at 
the Company's Greencastle plant is a Type I waste and requested that the 
Company apply for a formal permit for an on-site landfill for the CKD.  
The Company understands that similar notices were sent to other cement 
manufacturers in the State of Indiana.  The Company is protesting this 
determination through legal channels and has received a stay to allow it 
to demonstrate that current management practices pose no threat to the 
environment.  The Company believes that the State's determination 
ultimately will be reversed or the Company will receive the needed permit 
or other adequate relief, such as an agreed order requiring certain 
additional waste management procedures that are less stringent than those 
generally required for Type I wastes.  If the Company is not successful in 
this regard, however, like other Indiana cement producers, the Greencastle 
plant could incur substantially increased operating and capital costs.

The Cape Girardeau, Missouri and Greencastle, Indiana plants, which are 
the Company's two cement manufacturing facilities using HWF as a cost 
saving energy source, are subject to strict federal, state and local 
requirements governing hazardous waste treatment, storage and disposal 
facilities, including those contained in the federal Boiler and Industrial 
Furnace Regulations promulgated under RCRA (the "BIF Rules").  These 
facilities qualified for and operate under interim status pursuant to RCRA 
and the BIF Rules.  While Lone Star believes that it is currently in 
compliance with the extensive and complex technical requirements of the 
BIF Rules, there can be no assurances that the Company will be able to 
maintain compliance with the BIF Rules or that changes to such rules or 
their interpretation by the relevant agencies or courts might not make it 
more difficult or cost-prohibitive to continue to burn HWF.

The Company is currently engaged in the process of securing the permit 
required under RCRA and the BIF Rules for the Cape Girardeau plant.  The 
Company anticipates that the Greencastle plant also will go through this 
permitting process or a three-year recertification of its existing interim 
status in 1998.  These permits are a requirement to enable Lone Star to 
continue the use of HWF at those facilities.  The permitting process is 
lengthy and complex, involving the submission of extensive technical data. 
There can be no assurances that the Company will be successful in securing 
a final RCRA permit for either or both of its HWF facilities.  In 
addition, if received, the permits could contain terms and conditions with 
which the Company cannot comply or could require the Company to install 
and operate costly control technology equipment.

The federal Comprehensive Environmental Response, Compensation and 
Liability Act ("CERCLA" or "Superfund"), as well as many comparable state 
statutes, creates a joint and several liability scheme for the 
investigation and remediation of facilities where releases of hazardous 
substances are found to have occurred.  Liability may be imposed upon 
current owners and operators of the facility, upon owners and operators of 
the facility at the time of the release and upon generators and 
transporters of hazardous substances released at the facility.  While, as 
noted above, wastes produced by the Company generally are not classified 
as hazardous wastes, many of the raw materials, by-products and wastes 
currently and previously produced, used or disposed of by the Company or 
its predecessors contain chemical elements or components that have been 
designated as hazardous substances or which otherwise may cause 
environmental contamination.  Hazardous substances are or have been used 
or produced by the Company in connection with its cement manufacturing 
operations (e.g. grinding compounds, refractory bricks), quarrying 
operations (e.g. blasting materials), equipment operation and maintenance 
(e.g. lubricants, solvents, grinding aids, cleaning aids, used oils), and 
hazardous waste fuel burning operations.  Past operations of the Company 
have resulted in releases of hazardous substances at sites currently or 
formerly owned by the Company and certain of its subsidiaries or where 
waste materials generated by the Company have been disposed.  CKD and 
other materials were placed in depleted quarries and other locations for 
many years.  The Company has been named by the EPA as a potentially 
responsible party for the investigation and remediation of several 
Superfund sites.  Available factual information indicates that the 
Company's disposal of waste at these Superfund sites (other than sites 
that have been remediated or as to which the Company has entered into 
settlement agreements with the EPA) was small or non-existent, and the 
Company may have certain defenses arising out of its reorganization.  The 
Company is also reviewing certain of its inactive properties to determine 
if any remedial action may be required at these sites.


Note 11 - Litigation

From time to time the Company is named as a defendant in lawsuits 
asserting product liability for which the Company maintains insurance 
coverage.  In this regard, the Company is one of many defendants, 
including several cement manufacturers, named in two product liability 
lawsuits in southern Texas that allege that cement is an unreasonably 
dangerous product that has injured a large number of plaintiffs.  The 
Company believes this type of litigation is totally without merit and is 
contesting the lawsuits vigorously.  The Company has also been named in a 
lawsuit asserting that it has successor liability for certain defunct 
subsidiaries which allegedly manufactured faulty prestressed "double tees" 
resulting in property damage to a retail store (and consequent loss of 
business) in south Florida during Hurricane Andrew in 1992.  The Company 
is contesting this lawsuit vigorously.  In another matter, in late 1995, 
an office building in Boston, Massachusetts, constructed in 1983 using 
concrete pilings produced by San-Vel Concrete Corporation ("San-Vel"), an 
inactive Lone Star subsidiary was demolished by order of the City of 
Boston based upon an engineering report by the owner's consultants that 
the pilings were unreliable.  In March 1997, the owner of the demolished 
building brought suit against San-Vel and the Company alleging, among 
other things, that San-Vel was negligent in producing, and that it 
breached representations relating to, the pilings.  At the request of the 
City of Boston, San-Vel has provided a list of the approximate twenty-five 
other buildings built in that City between 1980 and 1990 using San-Vel 
pilings. The City has inspected these buildings visually, without noting 
any apparent piling failure.  Certain engineering studies also have been 
conducted, and those limited results that have been made available to the 
Company do not indicate any additional failures.  The Company believes 
that San-Vel used cement produced by Lone Star at one of its formerly 
owned cement plants to mix the concrete from which pilings in certain of 
these buildings (including the demolished building), were produced.  There 
has been no indication that Lone Star's production of this cement was 
defective.  The Company plans to contest this lawsuit vigorously, and 
believes that it has good defenses to the lawsuit.  All of the foregoing 
matters are in preliminary stages, and no assurances as to their ultimate 
outcome can be given.  These matters are being defended by the Company's 
insurers.



<PAGE>
 



 

 

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


Financial Condition

	The Company believes that cash and marketable securities on hand 
of $94.6 million and funds generated by operations will be adequate to 
cover current working capital and capital expenditure needs. 

	In March 1997, the Company sold its two ready-mixed and other 
concrete operations in Illinois for about $10.5 million, which 
approximated book value.
	
	On March 12, 1997, the Company redeemed $28.0 million of its 
$78.0 million of 10% senior notes.  The notes were paid from cash on 
hand. In addition, the Company entered into a long-term private 
placement agreement for $50.0 million of 7.31% senior notes due 2007. 
On April 21, 1997, the Company redeemed the balance of the 10% senior 
notes at par plus accrued interest of approximately $1.1 million. 

	In March 1997, the Company canceled its $35.0 million secured 
revolving credit agreement and during the second quarter, entered into 
a new $100.0 million unsecured revolving credit facility which will 
allow the Company to borrow funds at lower interest rates and increase 
the Company's ability to repurchase common stock and warrants.  

	The Board of Directors has authorized the Company to purchase up 
to $25.0 million of the Company's common stock and warrants in open 
market or privately negotiated transactions.  During the third quarter 
of 1997, the Company repurchased $0.4 million of common stock.  

	In October 1997, the Company sold its New York construction 
aggregates operations for approximately $43 million, which 
approximated book value. The proceeds from the sale will be invested 
in the Company's cement operations.  The Company has announced capital 
projects totaling approximately $60 million.  The Company intends to 
spend $12.5 million to increase production capacity at its Cape 
Girardeau, Missouri cement plant by 100,000 tons to 1.3 million tons. 
The Company will spend $16.5 million to double the size of its New 
Orleans distribution system by adding 50,000 tons of new capacity and 
installing a state-of-the-art ship and barge unloading system to 
handle foreign and domestic portland cement.  The Company also plans 
to increase the production capacity at its New Orleans slag cement 
facility from 225,000 tons to 600,000 tons, to enlarge its Memphis, 
Tennessee distribution terminal for slag cement and to build new slag 
cement terminals in Atlanta, Georgia and Northern Florida at a cost of 
$18 million.  In addition, the Company's 25% owned joint venture, 
Kosmos Cement, recently announced the planned expansion of its 
Louisville, Kentucky cement plant at a cost of $50 million.  The 
project will add 500,000 tons of production capacity to the plant's 
current capacity of 875,000 tons.

	Cash generated by operating activities of $66.0 million for the 
nine months ended September 30, 1997 primarily reflect income from 
operations, partly offset by increases in working capital. 

	During the nine months ended September 30, 1997, the Company 
used $17.2 million for investing activities, primarily consisting of 
capital expenditures of $30.0 million, partially offset by $8.9 
million cash proceeds received for the sale of the Company's two 
ready-mixed and other concrete operations in Illinois and $3.1 million 
received for the sale of a parcel of surplus real estate in 
Massachusetts. 

	Net cash outflows from financing activities of $25.5 million for 
the nine months ended September 30, 1997 primarily reflect the 
redemption of $78.0 million of 10% senior notes and dividends paid, 
partially offset by the proceeds from the private placement of $50 
million of 7.31% long-term senior notes and $4.6 million from the 
exercise of employee stock options.

	Working capital on September 30, 1997 was $142.0 million as 
compared to $77.0 million on December 31, 1996.  Current assets of 
$201.8 million represents a $36.6 million increase primarily due to 
higher marketable securities and accounts receivables balances, offset 
by a decrease in inventories. Current liabilities decreased $28.4 
million primarily reflecting the redemption of $28.0 million of the 
10% senior notes during the first quarter of 1997.
  
	The $18.3 million decrease in the Company's deferred tax asset 
is due to utilization of the tax assets related to the income tax 
provision for the nine months of 1997, partly offset by the tax 
benefit recognized related to the exercise of employee stock options. 
The investment in joint ventures at September 30, 1997 was $1.4 
million higher than the year-end balance as the Company's share of 
equity earnings exceeded cash distributions paid by Kosmos Cement 
Company. Net property, plant and equipment was $2.3 million higher 
than the year-end balance, reflecting capital expenditures offset  by 
depreciation and the sale of the Company's two ready-mixed and other 
concrete operations in Illinois.
	
	In February, May and August 1997, the Company's Board of 
Directors declared a $0.05 per share dividend which was paid on March 
14, June 16 and September 15, 1997 to shareholders on record as of 
March 1, June 1 and September 1, 1997.  Total dividends paid during 
the three and nine months ended September 30, 1997 were approximately 
$0.6 million and $1.6 million, respectively.    

	The Company is subject to extensive, stringent and complex 
federal, state and local laws, regulations and ordinances 
pertaining to the quality and the protection of the environment and 
human health and safety, requiring the Company to devote 
substantial time and resources in an effort to maintain continued 
compliance.  Many of the laws and regulations apply to the 
Company's former activities, properties and facilities as well as 
its current operations. Changes to such regulations or the 
enactment of new regulations in the future could require the 
Company to undertake capital improvement projects or to cease or 
curtail certain current operations or could otherwise substantially 
increase the capital, operating and other costs associated with 
compliance.  Moreover, there can be no assurances that judicial or 
administrative proceedings, seeking penalties or injunctive relief, 
will not be brought against the Company for alleged non-compliance 
with applicable environmental laws and regulations relating to 
matters as to which the Company is currently unaware. In addition, 
if releases of hazardous substances are discovered to have occurred 
at facilities currently or previously owned or operated by the 
Company, or at facilities to which the Company has sent waste 
materials, the Company may be subject to liability for the 
investigation and remediation of such sites (See Note 10).

	The Company believes that it has adequately provided for costs 
related to its ongoing obligations with respect to known environmental 
liabilities. Expenditures for environmental liabilities during the 
first nine months of 1997 did not have a material effect on the 
financial condition or cash flows of the Company.


Forward-Looking Statements

	This Management's Discussion and Analysis of Financial Condition 
and Results of Operations and other sections of this Form 10-Q contain 
forward-looking statements within the meaning of Section 27A of the 
Securities Exchange Act of 1933 and Section 21E of the Securities 
Exchange Act of 1934.  These forward-looking statements are based on 
current expectations, estimates and projections concerning the general 
state of the economy and the industry and market conditions in certain 
geographic locations in which the Company operates.  Words such as 
"expects", "anticipates", "intends", "plans", "believes", "estimates", 
and variations of such words and similar expressions are intended to 
identify such forward-looking statements.  These statements are not 
guarantees of future performance and involve certain risks, 
uncertainties and assumptions which are difficult to predict. 
Therefore, actual results and outcomes may differ materially from what 
is expressed or forecasted in such forward-looking statements. The 
Company undertakes no obligation to update publicly any forward-
looking statements as a result of new information, future events or 
other factors.

	The Company'S business is cyclical and seasonal, the effects of 
which cannot be accurately predicted.  Risks and uncertainties include 
changes in general economic conditions (such as changes in interest 
rates), changes in economic conditions specific to any one or more of 
the Company's markets (such as the strength of local real estate 
markets and the availability of public funds for construction), 
adverse weather, unexpected operational difficulties, changes in 
governmental and public policy including increased environmental 
regulation, the outcome of pending and future litigation,  and the 
continued availability of financing in the amounts, at the times, and 
on the terms required to support the Company's future business.  Other 
risks and uncertainties could also affect the outcome of the forward-
looking statements.
 

Results of Operations

	Consolidated net sales of $111.8 million for the third quarter 
of 1997 and $277.2 million for the first nine months of 1997 were $6.6 
million lower and $3.6 million higher, respectively, than the 
comparable prior-year periods.  

	Cement and ready-mixed concrete operations sales of $94.7 
million for the third quarter of 1997 and $239.1 million for the first 
nine months were $0.7 million and $14.2 million, respectively, greater 
than the comparable prior-year period results.  This increase is due 
to 5% higher average net realized cement selling prices in both 
periods of 1997, partially offset by a 4% decrease in cement shipments 
during the third quarter.  This decrease in shipments is attributable 
to lower cement product availability, reflecting the high level of 
cement shipments experienced during the first half of 1997, and to 
lower shipments from the Memphis, Tennessee operations. These results 
exclude sales of $1.9 million for the three months ended March 31, 
1997 and $7.7 million and $15.5 million for the three and nine months 
ended September 30, 1996, respectively from the Company's central 
Illinois ready-mixed and other concrete operations which were sold in 
March 1997.

	The strong sales experienced in the first nine months of 1997 
has reduced cement inventory to a level that is approximately 120,000 
tons below the inventory level at the end of the third quarter of 
1996. This lower level of inventory may result in lower shipments 
during the fourth quarter of 1997 as compared to 1996.   
	
	Sales of construction aggregates of $17.1 million for the third 
quarter of 1997 were $0.4 million higher than the 1996 period.  Sales 
of $36.3 million for the first nine months were $3.0 million higher 
than the prior-year period results.  This is primarily attributable to 
an increase in overall construction aggregate shipments for the 1997 
nine-month period.  The construction aggregates operations were sold 
in October, 1997.

	The Company's operations are seasonal and, consequently, the 
interim results are not indicative of the results to be expected for 
the full year.	  		

	Gross profit from the cement and ready-mixed concrete operations 
was $38.2 million and $83.5 million for the three and nine months 
ended September 30, 1997 as compared to gross profit of $37.5 million 
and $71.0 million respectively, for the comparable prior-year periods. 
The increase in gross profit reflects higher average net realized 
cement selling prices and higher overall cement shipments and lower 
shipments from the Memphis, Tennessee operations for the nine months 
ended September 30, 1997.  These results exclude a loss of the gross 
profit level of $0.3 million for the three months ended March 31, 1997 
and gross profit of $1.8 million and $2.3 million for the three and 
nine months ended September 30, 1996, respectively from the Company's 
central Illinois ready-mixed and other concrete operations which were 
sold during the first quarter of 1997. 

	Construction aggregates operations had a gross profit of $3.7 
million for the quarter ended September 30, 1997 which was comparable 
to the prior-year period.  Gross profit for the first nine months of 
1997 was $3.4 million which was $0.4 million lower than 1996.  These 
results primarily reflect lower average selling prices due to customer 
and product mix and higher distribution costs.   

	Included in the calculation of gross profit are sales less cost 
of sales including depreciation related to cost of sales (which 
excludes depreciation related to depreciation on office equipment, 
furniture and fixtures which are not related to the cost of sales).

	Pre-tax income from joint ventures of $3.1 million and $6.1 
million, respectively, during the three and nine months ended 
September 30, 1997 reflects the results of the Kosmos Cement Company, 
a partnership in which the Company has a 25% interest.  The results 
for the three and nine months ended September 30, 1997 were $0.1 
million and $0.7 million, respectively, higher than the comparable 
prior-year periods primarily reflecting higher average net realized 
selling prices and shipments. 

	Other income of $4.6 million and $5.6 million, during the three 
and nine months ended September 30, 1997 increased $3.9 million and 
$2.7 million, respectively, over the comparable prior-year periods. 
The increase is due primarily to a gain on the sale of a parcel of 
surplus real estate in Massachusetts of $3.1 million as well as higher 
interest income earned on higher marketable securities balances in 
each of the first three quarters of 1997.  The increase for the nine- 
month period was partly offset by state and local tax refunds 
including interest, related to prior years, included in other income 
in 1996.
  
	Selling, general and administrative expenses of $6.8 million and 
$21.9 million during the three and nine months ended September 30, 
1997 represent an increase of $0.1 million and $1.1 million over the 
comparable prior-year periods expense.  This increase primarily 
reflects higher selling and administrative expenses related to the 
Company's cement operations, partly offset by lower pension expense 
and lower other postretirement benefit expenses for retirees.     

	Interest expense of $0.6 million and $3.1 million, during the 
three and nine months ended September 30, 1997 represents a decrease 
of $1.0 million and $2.1 million, respectively, over the comparable 
prior-year periods. Capitalized interest was $0.3 million and $0.9 
million for three and nine-month periods of 1997 and $0.3 million and 
$0.7 million in the comparable prior-year periods. The decrease in 
interest expense is primarily attributable to lower debt, lower 
interest rates and higher capitalized interest in 1997.

	The income tax expense of $14.3 million and $24.8 million during 
the three and nine months ended September 30, 1997, an increase of 
$1.4 million and $5.0 million, respectively, from the comparable 
prior-year periods, primarily reflects higher pre-tax earnings in 1997 
as compared to the prior-year periods.  

	Net income of $27.7 million, or $2.04 per share, during the 
third quarter of 1997 was $2.4 million, or $0.18 per share, higher 
than the comparable prior-year period results.  Net income of $48.2 
million, or $3.61 per share, during the first nine months of 1997 was 
$8.8 million, or $0.70 per share, higher than the comparable prior-
year period results.  The improvement for both periods is primarily 
due to improved results in the cement product line due to continued 
strong demand for cement.  Also contributing to the favorable increase 
in net income for both periods of 1997 over the prior-year results was 
a gain on the sale of a parcel of surplus property in the third 
quarter of 1997, higher joint venture income and lower interest 
expense partly offset by increased selling, general and administrative 
expenses and increased income tax expense due to higher pre-tax 
earnings.

	
 
<PAGE>




PART II.  OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

	(a)	Index of Exhibits:


	    11.	Statement Re Computation of Per Share Earnings.

	    12.	Statement Re Computation of Ratio of Earnings to 
			Fixed Charges.

	    27.	Financial Data Schedule.


<PAGE>


                            SIGNATURES



	Pursuant to the requirements of the Securities Exchange Act of 
1934, Lone Star Industries, Inc. has duly caused this report to be 
signed on its behalf by the undersigned thereunto duly authorized.

							LONE STAR INDUSTRIES, INC.



Date: November 11, 1997			By:  WILLIAM E. ROBERTS	
                              William E. Roberts
                             Vice President, Chief
                              Financial Officer,
                           Controller and Treasurer



Date: November 11, 1997			By:    JAMES W. LANGHAM	 
                                James W. Langham
                                 Vice President