13

                   SECURITIES AND EXCHANGE COMMISSION
                             Washington D.C.
                                    
                                FORM 10-Q
                                    
                                    
               Quarterly Report Under Section 13 or 15(d)
                 Of the Securities Exchange Act of 1934
                                    
                                    
                     For Quarter Ended June 30, 1998
                     Commission File Number  0-7955


                           Mentor Corporation
         (Exact name of registrant as specified in its charter)


     Minnesota                        41-0950791
(State of Incorporation) (I.R.S. Employer Identification Number)


5425 Hollister Avenue, Santa Barbara, California       93111
    (Address of Principal Executive Offices)        (Zip Code)


Registrant's Telephone Number:     (805) 681-6000



Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 of 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                 No

The number of shares outstanding for each of the Issuer's classes of
common stock as of August 12, 1998 was:

          Common stock, $.10 par value 24,788,789 shares

                           Mentor Corporation
                                    
                                  INDEX

Part I.  Financial Information

     Item 1.  Financial Statements (unaudited)

          Condensed Consolidated Statements of Financial
               Position -- June 30, 1998 and March 31, 1998
          Consolidated Statements of Income -- Three Months
               Ended June 30, 1998 and 1997
          Condensed Consolidated Statements of Cash Flows --
               Three Months Ended June 30, 1998 and 1997
          Notes to Condensed Consolidated Financial Statements--
               June 30, 1998

     Item 2.  Management's Discussion and Analysis of Results of
               Operations and Financial Condition

Part II. Other Information

     Item 1.  Legal Proceedings
     Item 2.  Changes in Securities
     Item 3.  Defaults upon Senior Securities
     Item 4.  Submission of Matters to a Vote of Security Holders
     Item 5.  Other Information
     Item 6.  Exhibits and Reports on Form 8-K

List of Exhibits

     11.  Statement Regarding Computation of Per Share Earnings
                           Mentor Corporation
         Condensed Consolidated Statements of Financial Position
                    June 30, 1998 and March 31, 1998
                               (Unaudited)



                                       June 30,         March 31,
(dollars in thousands)                   1998             1998
                                                    
ASSETS                                                            
Current assets:                                                   
  Cash and marketable securities     $   34,732        $   27,937
  Accounts receivable, net               40,853            40,209
  Inventories                            46,589            44,632
  Deferred income taxes                   6,619             6,619
  Other                                   4,094             8,144
                                                       
          Total current assets          132,887           127,541
                                                                  
Property, plant and equipment,                                    
  net of accumulated depreciation        41,992            39,423
Other assets:                                                     
  Patents, licenses and trademarks                     
    net of accumulated amortization       5,667            5,530
  Goodwill, net of accumulated                         
    amortization                         13,501           13,619
  Long term marketable securities                      
    and investment                       13,575           14,806
  Other assets                                                454
                                         32,743            34,409
Total assets                         $  207,622        $  201,373


See Notes to Condensed Consolidated Financial Statements

                           Mentor Corporation
         Condensed Consolidated Statements of Financial Position
                    June 30, 1998 and March 31, 1998
                               (Unaudited)



                                        June 30,        March 31,
(dollars in thousands)                    1998             1998
                                                                  
LIABILITIES AND SHAREHOLDERS' EQUITY                              
Current liabilities:                                              
  Accounts payable                    $    7,018        $    6,903
  Accrued compensation                     6,097             8,742
  Income taxes payable                     4,610             1,325
  Dividends payable                          634               634
  Sales returns                            5,941             5,961
  Self-insured retention                   3,619             3,580
  Accrued royalties                        1,414             1,598
  Other accrued liabilities                3,787             3,841
  Short-term borrowings and current                     
    portion of long-term debt                                  50
                                                        
          Total current liabilities       33,120            32,634
                                                        
Long-term deferred taxes                   3,341             4,054
                                                        
Shareholders' equity:                                  
  Common shares, $.10 par value:                        
    Authorized-- 50,000,000 shares                      
    Issued and outstanding:                             
      25,046,790 shares at                              
        June 30,1998
      25,020,690 shares at                              
        March 31, 1998                     2,504            2,502
  Capital in excess of par                35,473            35,189
  Cummulative transalation                             
    adjustment                            (1,333)          (1,404)
  Unrealized gains on investments          3,900            5,000
  Retained earnings                      130,617           123,398
                                         171,161           164,685
                                                                  
Total liabilities and shareholders'                     
equity                                $  207,622       $  201,373


See Notes to Condensed Consolidated Financial Statements
                           Mentor Corporation
                    Consolidated Statements of Income
                Three Months Ended June 30, 1998 and 1997
                               (Unaudited)
                                    
                                    
(in thousands, except per share                              
data)                                    1998              1997
                                                                   
Net sales                            $   57,018        $   55,291
Costs and expenses:                                    
  Cost of sales                          19,165            18,275
  Selling, general and                                 
     administrative                      22,787           20,309
  Research and development                3,679             5,109
                                         45,631            43,693
                                                       
Operating income                         11,387            11,598
  Interest expense                          (10)              (11)
  Interest income                           383               324
  Other income (expense)                    (59)              (70)
Income before income taxes               11,701            11,841
  Income taxes                            3,862             4,038
                                                       
Net income                           $    7,839        $    7,803
                                                                   
Basic earnings per share             $      .31       $      .31
Diluted earnings per share           $      .30       $      .30
                                    
             See notes to consolidated financial statements
                           Mentor Corporation
             Condensed Consolidated Statements of Cash Flows
                Three Months Ended June 30, 1998 and 1997
                               (Unaudited)
                                    

(in thousands)                           1998              1997
                                                                   
Cash flows from operating activities $   12,240       $   13,935
                                                      
Cash flows from investing                             
activities:
                                                      
  Purchase of property, equipment,                    
    and intangibles                      (5,112)          (3,071)
  Investment in Marketing Partner                         (2,006)
                                         (5,112)          (5,077)
                                                      
Cash flows from financing                             
activities:
  Exercise of stock options                 287              890
  Dividends paid                           (620)            (624)
  Reduction of long-term debt                                 (9)
  Repurchase of common stock                              (1,519)
                                           (333)          (1,262)
Increase (decrease) in cash, cash                     
  equivalents, and marketable                         
  securities                              6,795            7,596
                                                                   
Cash at beginning of period              27,937           27,808
                                                      
Cash at end of period                $   34,732       $   35,404

See notes to consolidated financial statements

                           Mentor Corporation
          Notes to Condensed Consolidated Financial Statements
                              June 30, 1998


Note A

Inventories at June 30, 1998 and March 31, 1998 consisted of:

                            June 30        March 31
                                 (In thousands)

Raw materials            $    13,071    $    12,900
Work in process                7,639          6,682
Finished goods                25,879         25,050
                         $    46,589    $    44,632


Note B

Other assets at June 30, 1998 include the Company's equity investments in
its marketing partners, Intracel Corporation and North American
Scientific, Inc. (NASI).  The Intracel Corporation investment is valued
at cost of $6 million.  In accordance with Financial Accounting Standards
Board (FASB) statement 115 "Accounting of Certain Equity Investments in
Debt and Equity Securities" the North American Scientific investment is
carried at its fair market value of approximately $7.1 million.
Unrealized gains, net of the related tax effect, are accounted for as a
separate component of shareholders' equity.

Note C

In 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share".  Statement
128 replaced the previously reported primary and fully diluted earnings
per share with basic and diluted earnings per share.  Unlike primary
earnings per share, basic earnings per share excludes any dilutive
effects of options, warrants, and convertible securities.  Diluted
earnings per share is very similar to the previously reported fully
diluted earnings per share.  All earnings per share amounts for all
periods have been restated to conform to Statement 128 requirements.

Note D

The amounts set forth in the accompanying statements are unaudited but,
in the opinion of management, reflect all adjustments (consisting only of
normal accruals) necessary for a fair statement of the results of
operations for the periods presented.  Operating results for the three
months period ended June 30, 1998 are not necessarily indicative of the
results that may be expected for the year ended March 31, 1999.  It is
suggested that the condensed consolidated financial statements included
herein be read in conjunction with the Company's annual report on form 10-
K for the year ended March 31, 1998.

Note E

The Company's three quarterly interim reporting periods are each
approximately thirteen week periods ending on the Friday nearest the end
of the third calendar month.  The fiscal year end remains March 31.  To
facilitate ease of presentation, each interim period is shown as if it
ended on the last day of the appropriate calendar month.  The actual
dates on which each quarter ended are shown below:

                       Fiscal 1999         Fiscal 1998
                                           
First Quarter          June 26, 1998       June 30, 1997
Second Quarter         September 25, 1998  September 26, 1997
Third Quarter          December 25, 1998   January 2, 1998

                           Mentor Corporation
           Management's Discussion and Analysis of Results of
                   Operations and Financial Condition


Except for the historical information contained herein, the matters
discussed in this Management's Discussion are forward-looking statements,
the accuracy of which is necessarily subject to risks and uncertainties.
Actual results may differ significantly from the discussion of such
matters in the forward looking statements.  Potential risks and
uncertainties include, without limitation, those mentioned in this report
and, in particular, the factors described under "Factors That May Affect
Future Results of Operations" in the Company's Annual Report on Form 10-K
for the fiscal year ended March 31, 1998.

RESULTS OF OPERATIONS

Sales

Sales for the three months ended June 30, 1998 increased 3% to $57
million, compared to $55.3 million the prior year.  Growth was
particularly strong in sales of urology products, increasing 13% compared
to a year ago. Disposable products for the management of urinary
incontinence were up 14%.  Adding to urology product sales were two new
products that were introduced in the last year, brachytherapy seeds for
the treatment of prostate cancer, and the Suspend sling for treating
female urinary incontinence.  Sales of penile implants declined 22% from
the previous year, due to competition from a new impotence drug, Viagra.
The combination of ease of use, plus a major advertising campaign from
Pfizer, has generated an unprecedented amount of interest in this new
product.  The Company continues to believe that this interest in treating
impotence bodes well for the long term prospects of penile implant sales,
as Viagra will not work on all patients. However, we may continue to see
weakness in sales in the next few quarters. Plastic surgery products were
flat compared to a year ago, while Ophthalmic products increased 2%.
Increased sales of the MemoryLens, a foldable intraocular lens, helped
offset continued declines in fixed intraocular lenses.

       Sales by Principal Product Line
                               
                  For the Three Months Ended
                           June 30,
                                     Percent
                   1998      1997     Change
                                    
Plastic surgery  $30,404   $31,799     (4%)
General surgery    1,053               N/A
Urology           16,627    14,762     13%
Ophthalmology      8,934     8,730      2%
                 $57,018   $55,291      3%

Cost of Sales

Cost of sales was 33.6% for three months ended June 30, 1998 compared to
33.1% for the same period last year. Included in Cost of Sales this
period was approximately $2 million in proceeds from the Company's
insurance claim related to a fire at its Texas facility in 1997. These
funds were used to offset continuing extra expenses resulting from the
fire and for additional costs related to the ongoing re-validation
efforts at the Texas plant.

In 1996, the Food and Drug Administration ("FDA") issued the Texas
facility a warning letter, citing several inadequacies in the Company's
adherence to FDA Good Manufacturing Practices.  The FDA was specifically
concerned with the method by which the Company had performed its initial
validation of the manufacturing processes in the Texas facility.  The
Company agreed to re-validate the facility, as well as correct the other
items in the warning letter, and in July, 1996, submitted to the FDA a
schedule for completion of these items.  In August 1997, the FDA returned
to the Texas facility to perform a comprehensive GMP compliance audit,
which included reviewing the Company's progress in completing the
remaining items contained in the 1996 warning letter.  While the Company
had completed a substantial amount of items, the re-validation effort had
not been completed within the time frame outlined in the July 1996
schedule.

In May 1998, the Company entered into a voluntary consent decree with the
FDA in relation to the Texas facility.  The agreement requires the
completion of the re-validations of certain of the Company's
manufacturing processes, strengthening of its continuous quality
improvement program, and for the independent audit on overall GMP
compliance under a schedule agreed to by the Company and the FDA.  Mentor
has completed to date those activities called for in the agreement.
Specifically, the Company has selected a GMP expert consultant to conduct
the reviews and audits prescribed by the agreement, and has submitted to
the FDA the results of those reviews and audits, along with Company
responses where appropriate, that were to be conducted in the first 60-
day period.

Should the Company fail to complete the milestones in a timely manner,
the consent decree allows the FDA to order the Company to stop
manufacturing or distributing breast implants, order a recall or take
other corrective actions.  The Company may also be subject to penalties
of $10,000 per day until the task is completed.  While the Company
believes it can continue to meet the milestones set out in the agreement,
which extends through the end of the fiscal year, there can be no
guarantee that such timeframes can actually be met.

Selling, General and Administrative Expenses

Selling, General and Administrative expenses were 40.0% of sales in the
quarter compared to 36.7% in the previous year.  The increase relates
primarily to the Company's efforts in launching several new products,
including the Contour Genesis surgical aspiration system, the MemoryLens,
brachytherapy seeds and the Suspend sling.  The Company is increasing its
marketing and sales staff to accommodate these new products.

Research and Development

Research and development expenses were 6.5% of sales for the quarter,
compared to 9.2% for the prior year.  In the prior year, the Company had
spent funds on the completion of the development of the Contour Genesis,
which was introduced in September 1997.  The Company continues to spend
substantial funds on its premarket approval applications ("PMAAs") for
its saline breast implants, silicone gel filled breast implants, and
penile implants.  The Company is committed to a variety of clinical and
laboratory studies in connection with these products.  The Company
expects to complete the work on its saline filled breast implant PMAAs
and submit the data to the FDA by the end of fiscal 1999.  Other major
studies underway include an alternate filler breast implant and extending
the use of the Contour Genesis to include liposuction.

Interest and Other Income and Expense

Net interest income increased from $313 thousand last year to $373
thousand this year, resulting from higher cash balances.

Income Taxes

The effective rate of corporate income taxes was 33.0% for the quarter,
compared to 34.1% in the same period a year ago.  The decrease results
from higher expected income from our tax-advantaged facility in Puerto
Rico, which makes the MemoryLens.

Net Income

Diluted earnings per share remained the same at $.30 for the three months
ended June 30, 1998 and 1997, as slightly higher sales were offset by
increased expenses.


LIQUIDITY AND CAPITAL RESOURCES

At June 30, 1998, the Company's working capital was $99.8 million
compared to $94.9 million at March 31, 1998.  The Company's working
capital needs were provided from operations.

The Company generated $12.2 million of cash from operations during the
three months ended June 30, 1998, compared to $13.9 million the previous
year.  Higher net income in the current period was offset by reduced
accrued liabilities when compared to the prior year.

The Company anticipates investing approximately $12 million in facilities
and capital equipment in fiscal 1999.  The majority of the expenditures
will be for facility upgrades at the Company's manufacturing facilities
in Texas and Minneapolis, as well as for enhancing the Company's
information technology capabilities.

At the end of fiscal 1998, the Company filed an insurance claim related
to the fire it experienced at its Texas facility.  The claim requested
reimbursement for property damage repair, loss of inventory destroyed by
the fire and business interruption.  In the first quarter of fiscal 1999,
the Company settled its claim with the insurance carrier for a total of
$6 million, of which $1 million had been prepaid to the Company in fiscal
1998.  The Company received the remaining $5 million in the first
quarter.

For the last several years, the Company has paid a quarterly cash
dividend of $.025 per share.  At the indicated rate of $.10 per year, the
aggregate annual dividend would equal approximately $2.5 million.

The Company's Board of Directors has authorized an ongoing stock
repurchase program.  The objectives of the program, among other items,
are to offset the issuance of stock options, provide liquidity to the
market and to reduce the overall number of shares outstanding.
Repurchases are subject to market conditions and cash availability.  In
July 1998, the Board increased the repurchase authorization by 1 million
shares, to a total of 1.8 million, and instructed the Company to increase
its share repurchases.  As a result, during the second quarter of fiscal
1999 the Company has repurchased approximately 450 thousand shares for
consideration of $9.1 million.

The Company's principal source of liquidity at June 30, 1998 consisted of
$34.7 million in cash and marketable securities plus $15 million
available under its line of credit.


PART II

Item 1.   Legal Proceedings

     In regards to the litigation reported in Item 3 of the annual report
on Form 10-K for the fiscal year ended March 31, 1998, there have been no
material changes.

Item 2.   Changes in Securities

     No changes have been made in any registered securities.

Item 3.   Defaults Upon Senior Securities

     No event constituting a material default has occurred respecting any
senior security of the Registrant.

Item 4.   Submission of Matters to a Vote of Security Holders

     None

Item 5.   Other Information

     None

Item 6.   Exhibits and Reports on Form 8-K

     10(a)     Consent Decree of Permanent Injunction, between United
               States of America and Mentor Corporation, dated May 6,
               1998

     10(b)     Distribution Agreement, dated June 13, 1997, between
               Mentor Corporation and Intracel Corporation
     
     10(c)     Stock Purchase Agreement, dated June 16, 1997, between
               Mentor Corporation and Intracel Corporation
     
     10(d)     Research , Collaboration and Distribution Agreement, dated
               December 22, 1997, between Mentor Corporation and Intracel
               Corporation
     
     10(e)     Stock Purchase Agreement, dated December 22, 1997, between
               Mentor Corporation and Intracel Corporation

     11        Statement regarding computation of Per Share Earnings

Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.


MENTOR CORPORATION
(Registrant)



DATE:     August 14, 1998          BY:  /s/ANTHONY R. GETTE
          Anthony R. Gette
            President and
            Chief Operating Officer


DATE:     August 14, 1998          BY:   /s/GARY E. MISTLIN
          Gary E. Mistlin
            Chief Financial Officer

EXHIBIT 11
                   MENTOR CORPORATION AND SUBSIDIARIES
          STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
                (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


                             Three Months Ended
                                  June 30,
                              1998        1997
Numerator:                              
                                        
  Net income                $  7,839    $  7,803
  Numerator for basic                   
    earnings per share -                
    income available to     ________    ________
    common stockholders        7,839       7,803
                                        
  Numerator for diluted                 
    earnings per share -                
    income available to                 
    common stockholder                  
    after assumed           ________    ________
    conversions             $  7,839    $  7,803
                                        
Denominator:                            
  Denominator for basic                 
    earnings per share -                
    weighted-average                    
    shares                    25,036      24,782
                                        
  Effect of dilutive                    
securities:
    Employee stock options     1,252       1,529
                                        
    Denominator for diluted             
      earnings per share -              
      adjusted weighted-                
      average shares and    ________    ________
      assumed conversions     26,288      26,311
                                        
Basic earnings per share    $    .31    $    .31
Diluted earnings per share  $    .30    $    .30