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 June 30, 1998
                                 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 July 23, 1998:

       Common Stock, par value $1 per share - 10,681,030 shares
 

 
 




TABLE OF CONTENTS


	
												PAGE


PART I.	FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
Consolidated Statements of Operations - For the
   Three and Six Months Ended June 30, 1998 and 
   1997 (Unaudited)......................................3

Consolidated Statements of Retained Earnings -            
   For the Three and Six Months Ended June 30, 1998 
   and 1997 (Unaudited)..................................4 

Consolidated Balance Sheets - June 30, 1998
   (Unaudited) and December 31, 1997.....................5

Consolidated Statements of Cash Flows - For the 
   Six Months Ended June 30, 1998 and 1997
   (Unaudited)...........................................6

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

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
FINANCIAL CONDITION AND RESULTS OF OPERATIONS...........13

PART II.	OTHER INFORMATION.......................................17

SIGNATURES.........................................................19






PART I.   FINANCIAL INFORMATION
ITEM 1.   FINANCIAL STATEMENTS

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


                             For the Three Months      For the Six Months
                                Ended June 30,            Ended June 30,
                               1998        1997          1998          1997     
 <S>                           <C>         <C>           <C>           <C>

Revenues:                                                           
                                                                    
 Net sales                  $ 97,702    $104,618      $155,496      $165,454
 Joint venture income          2,231       2,335         3,054         3,077
 Other income, net             1,936         391         5,705         1,065
                            --------    --------      --------      --------
                             101,869     107,344       164,255       169,596
                            --------    --------      --------      -------- 
Deductions from revenues:                                           
 Cost of sales                56,095      62,535        94,998       108,718
 Selling, general and                                                
  administrative expenses      6,328       7,473        13,060        15,177
 Depreciation and depletion    5,211       5,952        10,557        12,205
 Interest expense                405         804         1,152         2,518
                            --------    --------      --------      --------
                              68,039      76,764       119,767       138,618
                            --------    --------      --------      -------- 
Income before income                                                
 taxes                        33,830      30,580        44,488        30,978
 Provision for income taxes  (11,418)    (10,399)      (15,015)      (10,533)
                            --------    --------      --------      --------  
Net income applicable                                        
 to common stock            $ 22,412    $ 20,181      $ 29,473      $ 20,445 
                            ========    ========      ========      ======== 
Weighted average common 
 shares outstanding:
    Basic                     10,710      10,994        10,713        10,924
                            ========    ========      ========      ========
    Diluted                   13,786      13,220        13,680        13,159
                            ========    ========      ========      ======== 
Earnings per common share:                          
    Basic                   $   2.09   $   1.84      $   2.75      $   1.87    
                            ========    ========      ========      ========
    Diluted                 $   1.63   $   1.53      $   2.15      $   1.55
                            ========    ========      ========      ========
</TABLE>

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















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



<TABLE>
<CAPTION>
                                     
                              For the Three Months       For the Six Months 
                                 Ended June 30,             Ended June 30,
                               1998          1997         1998          1997 
<S>                            <C>          <C>          <C>           <C>
                                                                     
Retained earnings, beginning                                         
 of period                  $ 184,978    $ 114,945    $ 178,444     $ 115,228
                                                                     
Net income                     22,412       20,181       29,473        20,445
Dividends                        (536)        (550)      (1,063)       (1,097)
			
                             ---------    ---------    ---------     --------- 

Retained earnings, end of 
 period                     $ 206,854     $ 134,576   $  206,854     $ 134,576
                             =========    =========    =========     ========= 
</TABLE>

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
































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

<TABLE>
<CAPTION>


                                                     June 30,     December 31,
                                                       1998           1997
                                                   (Unaudited)           
    <S>                                                 <C>             <C>

Assets:                                                           
  Current assets:                                                   
    Cash including cash equivalents of $142,029
     and $152,775                                   $ 146,331       $ 154,080
    Accounts and notes receivable, net                 40,877          28,217
    Inventories:                                                     
       Finished goods                                  19,350          14,850
       Work in process and raw materials                6,992           6,417
       Supplies and fuel                               22,004          21,836
                                                     --------        --------  
                                                       48,346          43,103

    Deferred tax asset                                  3,825           3,825
    Other current assets                                4,482           3,751
                                                     --------        -------- 
       Total current assets                           243,861         232,976
                                                                             
  Joint ventures                                       22,380          20,326

  Property, plant and equipment                       398,636         368,248
  Less accumulated depreciation and depletion          79,325          68,993
                                                     --------        -------- 
                                                      319,311         299,255

Deferred tax asset                                   29,319          37,661 
Other assets and deferred charges                     8,704           8,759
                                                     --------        --------
 
       Total assets                                  $623,575        $598,977
                                                     ========        ========
Liabilities and Shareholders' Equity:                              
  Current liabilities:                                               
    Accounts payable                                 $ 10,457       $  13,400
    Accrued liabilities                                44,512          46,417
    Other current liabilities                           7,893           3,565
                                                      --------        --------
  
       Total current liabilities                       62,862          63,382
                                                                 
Senior notes payable                                   50,000          50,000
Postretirement benefits other than pensions           122,829         123,728
Other liabilities                                      28,371          28,233
Contingencies (See notes 7 and 8)
                                                     --------        --------
       
 
       Total liabilities                              264,062         265,343
                                                     --------        --------
Shareholders' Equity:                                                         
  Common stock                                         12,096          12,092
  Warrants to purchase common stock                    15,418          15,554
  Additional paid-in capital                          175,052         174,915
  Retained earnings                                   206,854         178,444 
  Treasury stock, at cost                             (49,907)        (47,371)
                                                     --------        --------
       Total shareholders' equity                     359,513         333,634
       
       Total liabilities and shareholders'           --------        -------- 
        equity                                       $623,575        $598,977
                                                     ========        ======== 
</TABLE>
                           
The accompanying Notes to Unaudited Consolidated Financial Statements are an 
integral part of the Financial Statements.

  






























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

<TABLE>
<CAPTION>
                                              For the Six Months
                                                 Ended June 30,
                                               1998          1997   
    <S>                                        <C>          <C>
                                                                    
Cash Flows from Operating Activities:                                
                                                                    
Net income                                 $  29,473     $  20,445
Adjustments to arrive at net cash
 provided by operating activities:                                          
    Depreciation and depletion                10,557        12,205
    Deferred income taxes                      8,342        10,533
    Changes in operating assets and                                 
      liabilities:                                                  
        Accounts and notes receivable        (12,596)      (16,009)
        Inventories and other current                               
          assets                              (6,072)       (4,986)
        Accounts payable and                                    
          accrued liabilities                 (1,765)       (5,940)
    Equity income, net of dividends
      received                                (2,054)       (1,077)
    Gain of sale of a surplus property        (1,500)           -
    Other, net                                   522           678
                                            -------- 		-------
Net cash provided by operating                               
  activities                                  24,907        15,849
                                                                     

Cash Flows from Investing Activities:                               
                                                                    
Capital expenditures                         (31,571)      (21,050)
Proceeds from sales of assets                  2,539         9,490
                                             --------      --------
Net cash used by investing                                
  activities                                 (29,032)      (11,560)
                                                                     
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                70            38  
Purchase of treasury stock                    (2,765)            -
Dividends paid                                (1,063)       (1,097)
Proceeds from exercise of options                134         4,419
                                            --------       --------
Net cash used by financing activities         (3,624)      (24,640)
                                            --------       --------
Net decrease in cash and cash                             
  equivalents                                 (7,749)      (20,351)
                                                                    
Cash and cash equivalents, beginning of                             
  period                                     154,080        71,215
                                            --------      --------     
Cash and cash equivalents, end of period   $ 146,331     $  50,864
                                            ========      ======== 
</TABLE>
                                                                               
The accompanying Notes to Unaudited Consolidated Financial Statements are an 
integral part of the Financial Statements.






	NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Note 1

In the opinion of management, the accompanying unaudited consolidated 
financial statements contain all adjustments, which are of a normal 
recurring nature, necessary to present fairly the financial position of 
the Company as of June 30, 1998, the results of operations for the three 
and six months ended June 30, 1998 and 1997 and the cash flows for the six 
months ended June 30, 1998 and 1997. 

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, 1997. 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 and May 1998, the Board of Directors declared $0.05 dividends per 
common share, which were paid on March 16, 1998 and June 15, 1998 to 
shareholders of record as of March 1, 1998 and June 1, 1998.  In January 
1998, pursuant to an order signed by the U.S. Bankruptcy Court, 14,572 shares 
of common stock and 31,033 warrants were returned to the Company.  The common 
stock shares have been recorded as treasury shares and the returned warrants 
have been cancelled.  There was no effect on total equity of the Company as a 
result. During the second quarter of 1998, the Company purchased 40,800 
shares for $2,765,000.   


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 six months ended June 30, 
1998 and 1997 was $1,838,000 and $5,396,000, respectively.  Income taxes paid 
during the six months ended June 30, 1998 and 1997, were $2,345,000 and 
$290,000, respectively.


Note 4 - Interest

Interest expense of $945,000, $1,890,000, $1,205,000 and $3,131,000 has been 
accrued for the three and six months ended June 30, 1998 and 1997, 
respectively. Interest capitalized during the three and six months ended June 
30, 1998 and 1997, was $540,000, $738,000, $401,000 and $613,000, 
respectively.





Note 5 - Earnings Per Share

In 1997, the Company adopted Statement of Financial Accounting Standards No. 
128, "Earnings Per Share" ("SFAS No. 128").  Previously reported earnings per 
share amounts have been restated.  Basic earnings per common share for the 
three and six months ended June 30, 1998 and 1997 are calculated by dividing 
net income by weighted average common shares outstanding during the period. 
Diluted earnings per common share for the three and six months ended June 30, 
1998 and 1997 are calculated by dividing net income by weighted average 
common shares outstanding during the period plus dilutive potential common 
shares which are determined as follows:


                       For the Three Months  		For the Six Months
                         Ended June 30,		        Ended June 30,
		
                          1998	      1997	      1998	        1997  
				
Weighted average common
  shares                10,710,390 10,994,323   10,713,227 10,923,583
Effect of dilutive
  securities:				
     Warrants            2,961,815  2,133,264    2,855,542  2,102,171
     Options to purchase 
       common stock        113,772     92,392      110,902    132,892
Adjusted weighted
  average common shares 13,785,977 13,219,979   13,679,671 13,158,646

				
Dilutive potential common shares are calculated in accordance with the 
treasury stock method which assumes that the proceeds from the exercise of 
all warrants and options are used to repurchase common stock at market value. 
The number of shares remaining after the proceeds are exhausted represents 
the potentially dilutive effect of the securities.  


Note 6 - Sale of Assets

In February 1998, the Company recorded a gain of $1,500,000 from the sale of 
a piece of surplus real estate in Massachusetts.  The gain is included in 
other income on the accompanying consolidated statement of operations.


Note 7 - 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 operations or could otherwise 
substantially increase the capital, operating and other costs associated 
with compliance.  For example, recent initiatives for limitations on 
carbon dioxide emissions as a result of the fear of global warming could 
result in statutes or regulations which, if promulgated, could adversely 
affect certain aspects of United States manufacturing, including the 
cement industry.

The federal Water Pollution Control Act, commonly known as the Clean Water 
Act, provides a comprehensive federal regulatory scheme governing the 
discharge of pollutants to waters of the United States. This regulatory 
scheme requires that permits be secured for discharges of wastewater, 
including stormwater runoff associated with industrial activity, to waters 
of the United States. The Company has secured or has applied for all 
required permits in connection with its wastewater and stormwater 
discharges.

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 has identified maximum available control technology 
("MACT") for the reduction of emissions of air toxics from cement 
manufacturing facilities. In 1997, the EPA announced 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 for companies that plan to comply.  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. MACT standards 
for facilities burning fossil fuels were proposed in early 1998, and these 
standards are currently being studied by the Company.  In 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.  Also in 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, in 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 shortly, and that, thereafter, these rules 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 and will complete 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.

The Company's operations are also subject to federal and state laws and 
regulations designed to protect worker health and safety. Worker 
protection at the Company's cement manufacturing facilities is governed by 
the federal Mine Safety and Health Act ("MSHA") and at other Company 
operations is governed by the federal Occupational Safety and Health Act 
("OSHA").


Note 8 -  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 also has 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. In late 1995, 
an office building in Boston, Massachusetts, constructed in 1983 using 
concrete pilings produced by San-Vel Concrete Corporation, an inactive 
Lone Star subsidiary ("San-Vel"), was demolished by order of the City of 
Boston based upon an engineering report that the pilings were unreliable. 
 The owner of this 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 reportedly 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 is 
contesting this lawsuit vigorously, and believes that it has good defenses 
to the lawsuit. The foregoing matters are being defended by the Company's 
insurers. No assurances as to their ultimate outcome can be given.

























 





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 $146.3 million and funds generated by operations will be adequate 
to cover current working capital and capital expenditure needs. 
	
	The Company's financing agreement and the revolving credit 
facility contain certain restrictive covenants which, among other 
things, could have the effect of limiting the payment of dividends and 
the repurchase of common stock and warrants.  Approximately $113.5 
million is currently available for such payments under the most 
restrictive of such covenants.  

	Cash flows from operating activities of $24.9 million for the 
six months ended June 30, 1998 primarily reflect income from 
operations and changes in working capital.  The utilization of net 
operating loss carryforwards and other deferred tax assets during the 
first six months reduced cash taxes otherwise payable by $8.3 million.
 
	During the six months ended June 30, 1998, investing activities 
used $29.0 million, representing $31.6 million for capital 
expenditures, offset by $1.5 million received for the sale of a 
surplus parcel of real estate and $1.0 million related to sales of 
miscellaneous property, plant and equipment.   

	Net cash outflows from financing activities of $3.6 million for 
the six months ended June 30, 1998 primarily reflect the repurchase of 
40,800 shares of common stock for $2.8 million and dividends of $1.1 
million paid during the first six months of 1998. 

     Working capital on June 30, 1998 was $181.0 million as compared 
to $169.6 million on December 31, 1997.  Current assets increased 
$10.9 million primarily due to higher accounts and notes receivable 
and inventory balances offset by lower short-term investments. Current 
liabilities decreased $0.5 million primarily due to a decrease in 
accounts payable and accrued expenses, partly offset by a increase in 
accrued income taxes.

	The $8.3 million decrease in the Company's long-term deferred 
tax asset is due to the utilization of a portion of the tax assets 
during the first six months of 1998.  Investments in joint ventures 
increased $2.1 million as the Company's share of equity earnings 
exceeded cash distributions paid from Kosmos Cement Company.  Net 
property, plant and equipment increased $20.1 million reflecting 
capital expenditures, partly offset by depreciation expense. 

	In February and May 1998, the Company's Board of Directors 
declared $0.05 per share dividends which were paid on March 16, 1998 
and June 15, 1998 to shareholders of record as of March 1, 1998 and 
June 1, 1998.  Total dividends paid during the six months ended June 
30, 1998 were approximately $1.1 million.

	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 injuctive 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 operations or 
could otherwise substantially increase the capital, operating and 
other costs associated with compliance(See Note 7).

	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 six months of 1998 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, the 
successful negotiation of labor contracts 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 $97.7 million during the second 
quarter of 1998 and $155.5 million for the first six months of 1998 
were $6.9 million and $10.0 million, respectively, lower than the 
comparable prior-year results.  The decrease in net sales primarily 
reflects the sales of the Company's New York construction aggregates 
and central Illinois ready-mixed concrete operations during 1997.  

	Sales of $97.7 million and $155.5 million from the Company's on-
going cement and ready-mixed concrete operations for the three and six 
months ended June 30, 1998 were $6.6 million and $11.1 million, 
respectively, higher than the comparable prior-year periods.  Cement 
shipments for the current quarter and six-month period were 
approximately 3% and 4%, respectively, above the prior-year levels, 
reflecting continued strong demand in most markets.  Average net 
realized selling prices for the second quarter and first six months of 
1998 were 4% higher than comparable prior-year periods.  

	Gross profit from the Company's on-going cement and ready-mixed 
concrete operations of $36.5 million and $50.1 million for the three 
and six months ended June 30, 1998 was $2.8 million and $4.8 million, 
respectively, higher than the comparable 1997 periods.  This increase 
in gross profit reflects higher average net realized cement selling 
prices, greater cement production and higher overall cement and ready-
mixed concrete shipments for the quarter and six months ended June 30, 
1998.
    
	The construction aggregates and ready-mixed concrete operations 
sold in 1997 contributed sales of $13.5 million and gross profit of 
$2.5 million to the second quarter of 1997. The six-month results 
include net sales of $21.1 million and a loss at the gross profit 
level of $0.6 million from these operations. The third and fourth 
quarters of 1997 included sales of $17.0 million and $2.2 million, and 
gross profit of $3.7 million and $0.6 million, respectively.  For the 
full year 1997, these operations contributed net sales of $40.3 
million and gross profit of $3.7 million.

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

	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 office equipment, furniture and 
fixtures which are not related to the cost of sales).

	Pre-tax income from joint ventures of $2.2 million and $3.1 
million, respectively, during the three and six months ended June 30, 
1998 reflects the results of the Kosmos Cement Company, a partnership 
in which the Company has a 25% interest.  The results for the second 
quarter were $0.1 million lower than the comparable prior-year period. 
The results for the six months ended June 30, 1998 approximated the 
prior year. Both periods reflect higher net realized selling prices 
offset by higher per unit production costs.

	Other income of $1.9 million and $5.7 million during the three 
and six months ended June 30, 1998 increased $1.5 million and $4.6 
million, respectively, over the comparable 1997 periods. The increase 
in other income for both periods primarily reflects higher interest 
income due to higher short-term investment balances.  In addition, 
results for the six-month period ended June 30, 1998 include a gain of 
$1.5 million on the sale of a surplus parcel of real estate during the 
first quarter of 1998. 

	Selling, general and administrative expenses of $6.3 million and 
$13.1 million during the three and six months ended June 30, 1998 were 
$1.1 million and $2.1 million, respectively, lower than the comparable 
period in 1997. This primarily reflects the decrease in expense 
related to the Company's New York construction aggregates and central 
Illinois ready-mixed concrete operations which were sold in 1997, in 
addition to lower pension and other postretirement benefit expenses.  

	Interest expense of $0.4 million and $1.2 million during the 
three and six months ended June 30, 1998 represents a decrease of $0.4 
million and $1.4 million, respectively, over the comparable prior-year 
period expense. Capitalized interest was $0.5 million and $0.7 million 
for the three and six months ended June 30, 1998 and $0.4 million and 
$0.6 million for the comparable prior-year periods.  The reduction in 
interest expense reflects lower debt and a lower interest rate.  The 
Company redeemed $78.0 million of its 10% senior notes in March and 
April 1997 and issued $50.0 million of 7.31% senior notes through a 
private placement agreement in April 1997.  

	The income tax expense of $11.4 million and $15.0 million during 
the three and six months ended June 30,1998, reflects an increase of 
$1.0 million and $4.5 million, respectively, from the prior-year 
expense, reflecting higher pre-tax earnings in the first and second 
quarters of 1998.  

	Net income of $22.4 million during the second quarter of 1998 
was $2.2 million higher than the prior-year results. On a per share 
basis, basic and diluted earnings for the three-month period were 
$2.09 and $1.63, respectively, compared to $1.84 and $1.53, 
respectively, for 1997. Net income of $29.5 million during the first 
six months of 1998 was $9.0 million higher than the prior-year 
results. On a per share basis, basic and diluted earnings for the 
first half of 1998 were $2.75 and $2.15, respectively, compared to 
$1.87 and $1.55, respectively, for 1997. The improvement in net income 
for the three and six months ended June 30, 1998 is primarily due to 
higher cement and ready-mixed concrete shipments, higher interest 
income earned on higher short-term investment balances, lower interest 
expense on lower outstanding debt, and a gain on the sale of surplus 
real estate. In addition, the Company sold its construction aggregates 
and ready-mixed concrete operations in 1997. The losses sustained by 
these operations during the first six months of 1997 had a favorable 
impact on the results for the comparable period of 1998. These 
favorable results were partly offset by increased income tax expense 
due to higher pre-tax earnings.
 

 
 






PART II.  OTHER INFORMATION




ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

	(a)	The Annual Meeting of Stockholders of the Company was 
held on May 14, 1998.

	(b)	The names of each director elected at the Annual Meeting 
are: James E. Bacon and William M. Troutman.  Each was 
elected for a three year term.  The names of each other 
director whose term of office as a director continued 
after the Annual Meeting are:  Theodore F. Brophy, 
Arthur B. Newman, Allen E. Puckett, Robert G. Schwartz, 
David W. Wallace and Jack R. Wentworth.

	(c)	The following were the matters voted upon at the Annual 
Meeting and the number of votes cast for, against or 
abstentions and broker non-votes, as to each such 
matter, including a separate tabulation with respect to 
each nominee for office.

1.For the election of the persons named
below as directors of the Company:

James E. Bacon			For:      9,766,008
                 Withheld:   125,612

William M. Troutman		For:      9,767,494
                     Withheld:   124,126


2.Upon the ratification of the appointment of 
Coopers & Lybrand L.L.P. as auditors of the
Company for the year 1998.

For:           9,886,493
Against:           3,072
Abstain and
 Broker Non-Votes: 2,055



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

	(a)	Index of Exhibits:

	*10.5.	Second Amended and Restated Employment Agreement,
			dated as of May 1, 1998, between David W. Wallace 
and Lone Star Industries, Inc.

	*10.6.	Second Amended and Restated Employment Agreement,
			dated as of May 1, 1998, between William M. Troutman 
and Lone Star Industries, Inc.

	*10.7.	Second Amended and Restated Agreement, dated May 1,
1998, between William M. Troutman and Lone Star 
Industries, Inc.

    *10.10  Form of amended "Change in Control" agreement for
certain named executive officers of Lone Star Industries, Inc.

	 27.		Financial Data Schedule.


                            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: July 31, 1998			By:  WILLIAM E. ROBERTS	
                           William E. Roberts
                           Vice President, Chief
                           Financial Officer,
                           Controller and Treasurer



Date: July 31, 1998			By:    JAMES W. LANGHAM	 
                             James W. Langham
                             Vice President, General
                             Counsel and Secretary






*  Indicates management contract or compensatory plan or arrangement.