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, 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 July 29, 1997:

       Common Stock, par value $1 per share - 10,994,904 shares
 



 

 
<PAGE>



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, 1997 and 
   1996 (Unaudited)......................................3

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

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

Consolidated Statements of Cash Flows - For the 
   Six Months Ended June 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...........13

PART II. OTHER INFORMATION..............................18

SIGNATURES..............................................20



                              2


<PAGE>


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,
                              1997        1996          1997          1996     
 <S>                        <C>         <C>           <C>           <C>

Revenues:                                                           
 Net sales                  $104,618    $102,307      $165,454      $155,294
 Joint venture income          2,335       1,947         3,077         2,477
 Other income, net               391         660         1,065         2,223
                            --------    --------      --------      --------
                             107,344     104,914       169,596       159,994
                            --------    --------      --------      --------  
Deductions from revenues:                                           
 Cost of sales                62,535      64,637       108,718       109,578
 Selling, general and                                                
  administrative expenses      7,473       7,049        15,177        14,260
 Depreciation and depletion    5,952       5,790        12,205        11,734
 Interest expense                804       1,672         2,518         3,546
                            --------    --------      --------      --------
                              76,764      79,148       138,618       139,118
                            --------    --------      --------      --------  
Income before income                                                
 taxes                        30,580      25,766        30,978        20,876
 Provision for income taxes  (10,399)     (8,503)      (10,533)       (6,889)
                            --------    --------      --------      --------  
Net income applicable                                        
 to common stock            $ 20,181    $ 17,263      $ 20,445      $ 13,987 
                            ========    ========      ========      ========  

Weighted average common
 shares outstanding           10,994      11,427        10,924        11,451
                            ========    ========      ========      ========
Primary income per common                                        
 share                         $1.53       $1.26         $1.55         $1.05
                            ========    ========      ========      ======== 
Fully diluted income                                           
  per common share             $1.50       $1.26         $1.52         $1.03   
                            ========    ========      ========      ========  

</TABLE>

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

                              3

<PAGE>


<TABLE>
<CAPTION>


LONE STAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (Unaudited)
(In Thousands)
	
                                     
                              For the Three Months       For the Six Months 
                                 Ended June 30,             Ended June 30,
                               1997          1996         1997          1996 
<S>                            <C>          <C>          <C>           <C>
                                                                     
Retained earnings, beginning                                         
 of period                  $ 114,945    $  59,465    $ 115,228     $  63,315
                                                                     
Net income                     20,181       17,263       20,445        13,987
Dividends                        (550)        (571)      (1,097)       (1,145)
			
                             ---------    ---------    ---------     --------- 

Retained earnings, end of 
 period                     $ 134,576     $ 76,157   $  134,576     $  76,157
                             =========    =========    =========     ========= 
</TABLE>

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


                              4


<PAGE>

<TABLE>
<CAPTION>

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


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

Assets:                                                           
  Current assets:                                                   
    Cash including cash equivalents of $48,952
     and $69,768                                     $ 50,864        $ 71,215
    Accounts and notes receivable, net                 49,982          33,336
    Inventories:                                                     
       Finished goods                                  22,437          24,913
       Work in process and raw materials                7,718           5,347
       Supplies and fuel                               23,178          23,609
                                                     --------        --------  
                                                       53,333          53,869

    Deferred tax asset                                  3,611           3,611
    Other current assets                                6,352           3,183
                                                     --------        -------- 
       Total current assets                           164,142         165,214
                                                                              
  Joint ventures                                       20,582          19,505

  Property, plant and equipment                       392,176         383,974
  Less accumulated depreciation and depletion          69,491          60,992
                                                     --------        -------- 
                                                      322,685         322,982

Deferred tax asset                                     39,174          47,365  
Other assets and deferred charges                       8,865           7,085
                                                     --------        --------
 
       Total assets                                  $555,448        $562,151
                                                     ========        ========
Liabilities and Shareholders' Equity:                              
  Current liabilities:                                               
    Accounts payable                                 $ 11,647        $ 12,562
    Accrued liabilities                                41,461          44,238
    Senior notes payable                                  -            28,000
    Other current liabilities                           3,149           3,436
                                                      --------        --------
  
       Total current liabilities                       56,257          88,236
                                                                 
Senior notes payable                                   50,000          50,000
Postretirement benefits other than pensions           131,883         132,219
Other liabilities                                      26,863          27,414
Contingencies (Notes 9 and 10)
                                                     --------        --------
       
 
       Total liabilities                              265,003         297,869
                                                     --------        -------- 
Shareholders' Equity:                                                         
  Common stock                                         12,089          12,087
  Warrants to purchase common stock                    15,566          15,574
  Additional paid-in capital                          161,856         163,664
  Retained earnings                                   134,576         115,228 
  Treasury stock, at cost                             (33,642)        (42,271)
                                                     --------        --------
       Total shareholders' equity                     290,445         264,282
       
       Total liabilities and shareholders'           --------        -------- 
        equity                                       $555,448        $562,151
                                                     ========        ======== 
</TABLE>

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

  


                              5


<PAGE>

<TABLE>
<CAPTION>

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

                                               For the Six Months
                                                 Ended June 30,
                                               1997          1996   
    <S>                                       <C>           <C>
                                                                    
Cash Flows from Operating Activities:                                
                                                                    
Net income                                 $  20,445     $  13,987
Adjustments to arrive at net cash
 used by operating activities:                                          
    Depreciation and depletion                12,205        11,734
    Deferred income taxes                     10,533         6,889      
    Changes in operating assets and                                 
      liabilities:                                                  
        Accounts and notes receivable        (16,009)      (13,237)
        Inventories and other current                               
          assets                              (4,986)       (3,714)
        Accounts payable and                                    
          accrued liabilities                 (5,940)       (3,060)
    Equity income, net of dividends
      received                                (1,077)         (977)
    Pension funding less than (in
      excess of) expense                         831        (3,111)
    Other, net                                  (153)         (475)
                                             --------      --------
Net cash provided by operating                               
  activities                                  15,849         8,036
                                                                     

Cash Flows from Investing Activities:                               
                                                                    
Capital expenditures                         (21,050)      (20,411)
Proceeds from sale of assets                   9,490            66
Other, net                                       -              82   
                                             --------      --------
Net cash used by investing                                
  activities                                 (11,560)      (20,263)
                                                                     
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                38            66  
Purchase of treasury stock                       -          (1,572)
Dividends paid                                (1,097)       (1,145)
Proceeds from exercise of options              4,419           -
                                            --------       --------
Net cash used by financing activities        (24,640)       (2,651)
                                            --------       --------     
Net decrease in cash and cash                             
  equivalents                                (20,351)      (14,878)
                                                                    
Cash and cash equivalents, beginning of                             
  period                                      71,215        50,049
                                            --------      --------     
Cash and cash equivalents, end of period   $  50,864     $  35,171
                                            ========      ======== 

</TABLE>
                                                                               
The accompanying Notes to Unaudited Consolidated Financial Statements are an 
integral part of the Financial Statements.


                              6

<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 June 30, 1997, and the results 
of operations for the three and six months ended June 30, 1997 and 1996, 
and the cash flows for the six months ended June 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 and May 1997, the Board of Directors declared $0.05 dividends per 
common share, which were paid on March 14, 1997 and June 16, 1997 to 
shareholders of record as of March 1, 1997 and June 1, 1997.  During the six 
months ended June 30, 1997, 280,000 employee stock options were exercised for 
a total of $4,419,000.  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.  


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, 
1997 and 1996 was $5,396,000 and $3,966,000, respectively.  Income taxes paid 
during the six months ended June 30, 1997 and 1996, were $290,000 and 
$35,000, respectively.


Note 4 - Interest

Interest expense of $1,205,000, $3,131,000, $1,984,000 and $3,966,000 has 
been accrued for the three and six months ended June 30, 1997 and 1996, 
respectively. Interest capitalized during the three and six months ended June 
30, 1997 and 1996, was $401,000, $613,000, $312,000 and $420,000, 
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 

                              7
<PAGE>
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 June 30, 1997 and 1996 were calculated based on adjusted weighted 
average shares outstanding of 13,219,979 and 13,773,019, and net income of 
$20,181,000 and $17,399,000, respectively.  Primary earnings per share for 
the six months ended June 30, 1997 and 1996 were calculated based on adjusted 
weighted average shares outstanding of 13,158,646 and 13,798,153 and net 
income of $20,445,000 and $14,511,000, respectively.

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 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, second quarter and six-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 quarterly segment information 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 6 - 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. 


Note 7 - 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.  

                              8
<PAGE>
Note 8 - 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 9 - 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.  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.  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.

The Clean Air Act was amended in 1990 to provide for a uniform federal 
regulatory scheme governing 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").  These standards are in 
some respects more, and in some less, restrictive than the MACT standards 
proposed in 1996.  They are subject to public comment and are not 
anticipated by the Company to be effective prior to early 1998 and 
thereafter will be implemented over a three-year period.  They are 
extremely lengthy and complex and, depending on their final terms when 
effective, 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 the third 
quarter of 1997.

                             9
<PAGE>
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 

                              10
<PAGE>
BIF Rules, in the past Lone Star has been involved in certain 
environmental enforcement proceedings seeking civil penalties and 
injunctive relief for past non-compliance, and 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 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 has received a letter from EPA Region 4 reasserting a claim for 
approximately $830,000 of oversight costs and accrued interest associated 
with the Company's cleanup of the site of a former woodtreating operation 
in Dania, Florida.  The Company is contesting this claim.  The Company is 
also reviewing certain of its inactive properties to determine if any 
remedial action may be required at these sites.

                               11
<PAGE>
Note 10 - 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, an inactive 
Lone Star subsidiary ("San-Vel"), 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.

                              12

<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 $50.9 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 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.

	Cash inflows from operating activities of $15.8 million for the 
six months ended June 30, 1997 primarily reflect income from 
operations, partly offset by increases in working capital. 

	During the six months ended June 30, 1997, the Company used 
$11.6 million for investing activities, representing capital 
expenditures of $21.1 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. 

	Net cash outflows from financing activities of $24.6 million for 
the six months ended June 30, 1997 primarily reflect the redemption of 
$78.0 million of the 10% senior notes and dividends paid, partially 
offset by the proceeds from the long-term private placement of $50 
million 7.31% senior notes and $4.4 million from the exercise of 
employee stock options.

	Working capital on June 30, 1997 was $107.9 million as compared 
to $77.0 million on December 31, 1996.  Current assets of $164.1 
million approximated the year-end balance primarily due to a lower 
marketable securities balance, offset by an increase in accounts 
receivable and prepaid expenses.  Current liabilities decreased $32.0 
million primarily reflecting the redemption of $28.0 million of the 
10% senior notes during the first quarter of 1997.
  
	The $8.2 million decrease in the Company's deferred tax asset is 
primarily due to utilization of the tax assets related to the income 

                              13
<PAGE>
tax provision for the six months of 1997, partly offset by the tax 
benefit recognized related to the exercise of employee stock options. 
The investment in joint ventures at June 30, 1997 was $1.1 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 remained consistent with the year-
end balance, reflecting depreciation and the sale of the Company's two 
ready-mixed and other concrete operations in Illinois, offset by 
capital expenditures.
	
	In February and May 1997, the Company's Board of Directors 
declared a $0.05 per share dividend which was paid on March 14 and 
June 16, 1997 to shareholders on record as of March 1 and June 1, 
1997.  Total dividends paid during the three and six months ended June 
30, 1997 were approximately $0.6 million and $1.1 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 9).

	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 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", 

                             14
<PAGE>
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 $104.6 million for the second quarter 
of 1997 and $165.5 million for the first six months were $2.3 million 
and $10.2 million, respectively, higher than the results of the 
comparable prior-year periods.  The increase in net sales primarily 
reflects cement price increases during 1997 combined with higher 
cement shipments due to continued strong demand in the Company's major 
markets.  The Company implemented price increases of $1 to $2 per ton 
in most markets effective April 1, 1997.

	Cement sales of $86.0 million for the second quarter of 1997 and 
$135.3 million for the first six months were $10.6 million and $17.0 
million, respectively, greater than the comparable prior-year period 
results.  The increase is due to an increase of approximately 7% in 
cement shipments for both periods over prior-year levels reflecting 
continued strong demand in most markets.  In addition, average net 
realized selling prices for the three and six-month periods ended June 
30, 1997 increased 4% and 5%, respectively, over comparable periods in 
1996.

	The strong sales experienced in the last twelve months have 
reduced cement inventory to a level that is approximately 160,000 tons 
below the inventory level at the end of the second quarter of 1996. 
This lower level of inventory may result in lower shipments during the 
second half of 1997 as compared to the second half of 1996.   
	
	Sales of construction aggregates of $13.5 million for the 
second quarter of 1997 were consistent with the comparable prior-year 
period.  Sales of $19.2 million for the first six months were $2.6 
million higher than the prior-year period results.  This is primarily 

                               15
<PAGE>
attributable to an increase in overall construction aggregate 
shipments, partly offset by lower average net realized selling prices.

	Ready-mixed concrete and other operations sales of $5.2 million 
for the second quarter of 1997 and $10.9 million for the first six 
months were $8.2 million and $9.4 million, respectively, below the 
comparable prior-year period results, primarily due to the sale of the 
Company's central Illinois ready-mixed and other concrete operations 
in March 1997 and lower shipments from the Memphis, Tennessee 
operations due to adverse weather.

	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 operations was $32.7 million and 
$43.7 million for the three and six months ended June 30, 1997 as 
compared to gross profit of $24.8 million and $30.7 million 
respectively, for the comparable prior-year periods.  Gross profit was 
higher than the previous year at every plant during the first six 
months of 1997 reflecting higher average net realized cement selling 
prices and higher overall shipments.  

	Construction aggregates had a gross profit of $2.5 million for 
the quarter ended June 30, 1997 and a loss at the gross profit level 
of $0.2 million for the first six months of 1997 which was $1.6 
million and $0.4 million, respectively, lower than the comparable 
prior-year periods. These results primarily reflect lower average 
selling prices due to customer and product mix and higher distribution 
costs.  Higher unit production costs also contributed to the reduction 
in gross profit for the second quarter of 1997 as compared to the 
prior-year quarter.  The higher unit costs for the quarter reflect 
timing differences related to plant spending and annual production 
startup at one plant.  Unit production costs for the six-month periods 
are comparable for both years. 

	Gross profit from ready-mixed concrete and other operations was 
$1.0 million and $1.3 million for the three and six months ended June 
30, 1997, a $2.0 million and $2.1 million, respectively, decrease from 
the comparable prior-year periods.  These results primarily reflect 
the sale of the Company's central Illinois ready-mixed and other 
concrete operations during the first quarter of 1997 and lower 
shipments from the Memphis, Tennessee operations due to adverse 
weather conditions.              

	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 $2.3 million and $3.1 
million, respectively, during the three and six months ended June 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 six months ended June 30, 1997 were $0.4 million and $0.6 million, 
respectively, higher than the comparable prior-year periods primarily 
reflecting higher average net realized selling prices. 

                              16
<PAGE>
	Other income of $0.4 million and $1.1 million, during the three 
and six months ended June 30, 1997 decreased $0.3 million and $1.2 
million, respectively, from the comparable prior-year periods.  The 
decrease is due primarily to state and local tax refunds including 
interest, related to prior years, included in other income in 1996. 
This was partly offset by higher interest income earned on higher 
marketable securities balances during the first and second quarters of 
1997.

	Selling, general and administrative expenses of $7.5 million and 
$15.2 million during the three and six months ended June 30, 1997 
represent an increase of $0.4 million and $0.9 million over the 
comparable prior-year period 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 $0.8 million and $2.5 million, during the 
three and six months ended June 30, 1997 represents a decrease of $0.9 
million and $1.0 million, respectively, over the comparable prior-year 
periods. Capitalized interest was $0.4 million and $0.6 million for 
three and six-month periods of 1997 and $0.3 million and $0.4 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 $10.4 million and $10.5 million during 
the three and six months ended June 30, 1997, an increase of $1.9 
million and $3.6 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 $20.2 million, or $1.53 per share, during the 
second quarter of 1997 was $2.9 million, or $0.27 per share, higher 
than the comparable prior-year period results.  Net income of $20.4 
million, or $1.55 per share, during the first six months of 1997 was 
$6.5 million, or $0.50 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 
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.

                              17

<PAGE>

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 15, 1997.

	(b)	The names of each director elected at the Annual Meeting 
are: Arthur B. Newman, Allen E. Puckett and David W. 
Wallace.  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: James 
E. Bacon, Theodore F. Brophy, Robert G. Schwartz, 
William M. Troutman 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:

		Arthur B. Newman		For:				10,258,076
							Withheld:			    76,947

		Allen E. Puckett		For:				10,290,565
							Withheld:			    44,458

		David W. Wallace		For:				10,293,929
							Withheld:			    41,094


	2.	Upon the ratification of the appointment of 
		Coopers & Lybrand L.L.P. as auditors of the
		Company for the year 1997.

							For:				10,329,412
							Against:			     3,430
							Abstain and
							Broker Non-Votes:	     2,181


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

	(a)	Index of Exhibits:

                              18
<PAGE>
	    4.4  Credit Agreement by and among Lone Star Industries, 
Inc., NBD Bank, N.A. (as Agent) and the Lenders that 
are signatories thereto, dated as of June 30, 1997.

	   *10.19	Lone Star Industries, Inc. Amended and Restated 
Executive Incentive Plan.

	    11.	Statement Re Computation of Per Share Earnings.

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

	    27.	Financial Data Schedule.



* Indicates management contract or compensatory plan or arrangement.

                              19
<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: July 31, 1997			By:  WILLIAM E. ROBERTS	
							     William E. Roberts
							    Vice President, Chief
							      Financial Officer,
							   Controller and Treasurer



Date: July 31, 1997			By:    JAMES W. LANGHAM	 
							       James W. Langham
							        Vice President



                              20

<PAGE>