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                                   FORM 10-K

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997    COMMISSION FILE NUMBER 333-15789

                                CHEMFIRST INC.
            (Exact name of Registrant as specified in its charter)

                 MISSISSIPPI                                   64-0679456
                 -----------                                   ----------
       (State or other jurisdiction of                      (I.R.S. Employer
       incorporation or organization)                      Identification No.)

      700 NORTH STREET, P. O. BOX 1249
            JACKSON, MISSISSIPPI                               39215-1249
  (Address of principal executive offices)                     (Zip Code)

      Registrant's telephone number, including area code: (601) 948-7550

          Securities registered pursuant to Section 12(b) of the Act:


       TITLE OF EACH CLASS             NAME OF EACH EXCHANGE ON WHICH REGISTERED
       -------------------             -----------------------------------------
    Common Stock, Par Value $1                  New York Stock Exchange
   Common Stock, Purchase Rights


  Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  YES  X    NO

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

  The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of March 5, 1998 is approximately $490,396,035.

  The number of shares of the Registrant's Common Stock outstanding as of
March 5, 1998 is 19,909,594.

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                                 CHEMFIRST INC.

                  SECURITIES AND EXCHANGE COMMISSION FORM 10-K

                             CROSS REFERENCE SHEET

                 Location in Annual Report to Stockholders and
                Definitive Proxy Statement of Items of Form 10-K


                                                          ANNUAL    DEFINITIVE
                                                        REPORT TO      PROXY
FORM 10-K ITEM                                         STOCKHOLDERS  STATEMENT
--------------                                         ------------ -----------
Part I.
  1. Business........................ pp. 9-11; Notes 2 and 3
                                      in Financial Review Insert
Part II.
  5. Market for Registrant's Common
   Equity and Related Stockholder
   Matters........................... p. 18
  6. Selected Financial Data......... p. 2
  7. Management's Discussion and
   Analysis of Financial Condition
   and Results of Operations......... Financial
                                      Review
                                      Insert
  8. Financial Statements and         Financial
   Supplementary Data................ Review
                                      Insert
Part III.
  10. Directors and Executive Officers of the Registrant........ pp. 4-8; 13-14
  11. Executive Compensation.................................... pp. 15-18
  12. Security Ownership of Certain Beneficial Owners and
      Management................................................ pp. 1-2; 8-11
  13. Certain Relationships and Related Transactions............ pp. 4-8; 18

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                                    PART I

ITEM 1. BUSINESS

GENERAL

  The principal businesses of ChemFirst Inc. (the "Company") at December 31,
1997 involve the continuous production of aniline, nitrobenzene, nitrotoluene
and toluidines; custom production of fine chemicals for chemical, agricultural
and pharmaceutical companies; production of electronic and performance
chemicals for the semiconductor and related industries; and the design and
production of low-emission burners, flares, incinerators and thermal plasma
equipment for the refining, chemical, petrochemical, pharmaceutical, wood
products, steel and waste treatment industries. The Company also produces
steel ingots and billets from melted scrap.

  At December 31, 1997, the Company had 1,175 employees, which includes
employees of the parent company and all wholly-owned subsidiaries.

 Recent History

  The Company was incorporated in Mississippi in 1983 under the name Omnirad,
Inc., as a wholly-owned subsidiary of First Mississippi Corporation ("First
Mississippi"). In November 1996, in anticipation of the Distribution (as
defined below), the Company's name was changed from Omnirad, Inc. to ChemFirst
Inc. On December 23, 1996 (the "Distribution Date"), First Mississippi
contributed all of its assets and subsidiaries, other than those relating to
its fertilizer business, to the Company, which at that time was a wholly-owned
subsidiary of First Mississippi and had engaged in no activities during the
previous five years. First Mississippi then spun-off the Company in a tax-free
distribution of the Company's common stock to First Mississippi shareholders
(the "Distribution") on the Distribution Date. The Distribution occurred
immediately prior to and in connection with the merger of First Mississippi
with a wholly-owned subsidiary of Mississippi Chemical Corporation on December
24, 1996, pursuant to an Agreement and Plan of Merger and Reorganization dated
as of August 27, 1996. The Company has operated as a publicly-held entity
since the Distribution Date. Prior to the Distribution Date, the Company's
subsidiaries were subsidiaries of First Mississippi and the Company's
operations were conducted through subsidiaries of First Mississippi.

 Recent Developments

  On January 14, 1997, the Company sold its aluminum dross processing business
to a subsidiary of Philip Environmental Inc. ("Philip"). The assets acquired
by Philip included proprietary technology and licenses, the Millwood, West
Virginia plant and related equipment, and a 50% interest in the Newminco Joint
Venture. The assets acquired by Philip did not include inventories of
nonmetallic product; however, Philip is obligated to purchase from the Company
its requirements of nonmetallic product until the Company's supply of
nonmetallic product is exhausted. The purchase price for the assets acquired
by Philip was $4.1 million ($2.0 million of which is in the form of a 5-year
interest-bearing balloon note) plus an annual royalty equal to 10% of Philip's
share of the profit from sales of certain products by the Newminco Joint
Venture. In addition, Philip is obligated to make certain other payments in
the event it receives a payment in connection with the sale, transfer or
termination of the Newminco Joint Venture.

  In November 1997, the Company sold its approximately 23% interest in
Melamine Chemicals, Inc. ("MCI"), consisting of 1,275,000 common shares, to
Borden Chemical, Inc. for approximately $26.1 million cash. This sale was
effected pursuant to Borden Chemical, Inc.'s $20.50 per share cash tender
offer for MCI shares. The Company no longer has an ownership interest in MCI.

  On December 31, 1997, the Company acquired the acylation derivatives
business of Clariant Corporation. This business will be conducted through a
limited partnership of which the Company owns an 87.5% interest, with the
remaining 12.5% interest owned by former members of Clariant Corporation's
acylation derivatives management group who are also employees of this limited
partnership. This acylation derivatives business is

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involved in the development and marketing of derivatives of
4-hydroxyacetophenone for deep ultraviolet ("DUV") photoresist resin
applications for 248-nanometer geometry integrated circuits and for polymer
additives and specialty adhesives. Also on December 31, 1997, the Company
acquired certain chemical mechanical planarization ("CMP") assets of Baikowski
International Corporation ("BIC"), a subsidiary of Baikowski Chimie, SA, and
the CMP assets of Moyco Technologies, Inc. and its affiliate, Sweet Pea
Technologies, Inc. The acquisition of these CMP assets provides the Company
with an entrance into the CMP market, which includes mechanical polishing of
silicon wafers utilizing a slurry of abrasives and chemicals to produce a
flatter surface for shorter wavelength lithography along with other
electronics applications. Initial cash consideration plus acquisition-related
expenditures for these three transactions totaled $11.2 million, with
contingent consideration of approximately $3.7 million due in five years.
These acquisitions are included in the Chemicals segment.

  On January 22, 1998, the Company sold its 50% interest in Power Sources,
Inc. ("PSI") to Trigen Energy Corporation ("Trigen") for approximately $20.0
million. In addition, there are contingencies specified in the purchase and
sale agreement with Trigen that could result in the Company refunding as much
as $3.0 million of the proceeds referenced above. The Company no longer has an
ownership interest in PSI. The Company's disposition of its interests in PSI
and MCI is in furtherance of the Company's strategy to focus on chemicals and
related products and services.

 Forward-Looking Statements

  In addition to historical information, this Form 10-K contains "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements, as well as other forward-
looking statements made from time to time by the Company in the Company's
press releases, Annual Report to Stockholders and other filings with the U.S.
Securities and Exchange Commission, are based on certain underlying
assumptions and expectations of management. These forward-looking statements
are subject to risks and uncertainties which could cause actual results to
differ materially from those expressed in such forward-looking statements.
Such risks and uncertainties include, but are not limited to, general economic
conditions, availability and pricing of raw materials, supply/demand balance
for key products, new product development, manufacturing efficiencies,
condition of and product demand by key customers, the timely completion and
start-up of construction projects, including the nitrobenzene and aniline
facility at Bayer Corporation's Baytown, Texas chemical complex, and pricing
pressure and lower demand for Company products as a result of the recent
downturn in Asian financial markets.

  The following contains further discussion of the Company's business and
properties as grouped by its segments: Chemicals, Engineered Products and
Services and Steel. Financial information regarding the Company's segments,
which includes sales, pretax operating results and identifiable assets, is
provided in Note 13 of the Consolidated Financial Statements incorporated by
reference in Part II of this Form 10-K. As used in this report, the term
"Company" includes subsidiaries of the registrant.

CHEMICALS

 General

  The Company's Chemical segment includes industrial chemical intermediates
and specialty chemicals and is operated through four subsidiaries: First
Chemical Corporation ("FCC"); Quality Chemicals, Inc. ("QCI"); EKC Technology,
Inc. ("EKC"); and TriQuest, L.P. ("TriQuest"). Industrial chemical
intermediates include aniline and nitrobenzene. The Company's specialty
chemicals include fine, performance and electronic chemicals for use by
companies for agricultural, pharmaceutical, polymer, electronic and
photosensitive applications and in the manufacture of integrated circuits. The
primary distinction between the two categories is that intermediates require
more processing to produce the end product used by consumers. Certain
specialty chemicals, such as performance chemicals, are not consumed into the
end product but are instead used during a manufacturing process for a specific
purpose.

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  Of these two categories, industrial chemical intermediates are more affected
by changes in the business cycle and the cost of raw materials. These
chemicals are typically sold in large volumes to industrial customers that
purchase on the basis of the chemical's molecular content. The key to
successful production of these chemicals is efficient chemical conversion of
large quantities of raw materials and productive use of plant capacity.
Providing technical services to customers is generally less important.

 Industrial Chemical Intermediates

  Through its manufacturing facility in Pascagoula, Mississippi, the Company
is engaged in the continuous production of aniline and nitrobenzene. This
facility is supported by storage, rail, truck and barge distribution
facilities. This facility utilizes state-of-the-art technology for nitration
and a proprietary process for continuous hydrogenation.

  The Company is among the largest merchant marketers of aniline in the United
States, and its Pascagoula complex is one of the largest aniline production
facilities in the United States. Aniline's primary end use is in rigid
polyurethane foam, an insulation material derived from MDI (methylene diphenyl
diisocyantate) that is widely used in residential and commercial construction.
Aniline is also used in the manufacture of impact-resistant plastic that is
used as a replacement for metal in automobile parts such as bumpers where
flexibility and impact resistance are important. Aniline's other primary
applications are in the production of an antioxidizing (anti-cracking) agent
used in the manufacture of synthetic rubber and in a widely used herbicide for
corn and soybeans. Aniline accounted for approximately 21%, 20% and 19% of the
Company's consolidated sales for 1997, 1996 and 1995, respectively. Most of
the Company's aniline production is sold under contracts containing price-
adjustment mechanisms that substantially protect the Company from fluctuations
in the prices of raw materials.

  In 1996, the Company entered into a long-term agreement with Bayer
Corporation ("Bayer") to build, own and operate a world scale nitrobenzene and
aniline facility at Bayer's Baytown, Texas chemical complex to supply Bayer's
MDI manufacturing operations. Phase I of the facility is under construction
and is scheduled for completion in 1998. Phase II, which is estimated to cost
less than Phase I, may be completed later. A majority of the Company's current
aniline production from the Pascagoula facility is sold to Bayer under a long-
term contract. If a potential Phase II is completed, it is intended that this
aniline sales contract with Bayer will terminate and that future aniline
production for sale to Bayer will be produced at the Baytown facility. The
estimated cost to the Company of Phase I is in excess of $50.0 million.

 Specialty Chemicals

  The Company's specialty chemicals include fine, performance and electronic
chemicals for use by companies in agricultural, pharmaceutical, polymer and
photosensitive applications and in the manufacture of integrated circuits.
These chemicals are produced at the Pascagoula facility, the Company's custom
manufacturing facilities located in Tyrone, Pennsylvania and Dayton, Ohio, the
Company's electronic chemical production facilities in Hayward, California and
East Kilbride, Scotland, and through the use of toll manufacturers.

  Fine chemicals are sold in relatively small volumes to a narrow base of
customers, which are either end-users or producers of performance chemicals.
Because of their specialized, complex molecular content, there are typically
few uses for fine chemicals and significantly more technical service is
expected from the customer. The key to successful production of fine chemicals
is identifying the markets for the product and developing a highly exacting
chemical synthesis for use in the production process. Profit margins typically
are higher than those associated with the production of industrial chemical
intermediates.

  Purchasers of performance and electronic chemicals, who are end-users,
acquire the product to achieve a specific performance objective. As with fine
chemicals, these chemicals are typically sold in relatively small volumes and
have relatively few uses, although the customer base is often larger than that
for fine chemicals.

                                       5
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The production and sale of these chemicals are labor intensive and are usually
dependent on a highly technical proprietary formulae and a sophisticated,
well-trained applications engineering staff. Profit margins are relatively
high and are usually not significantly affected by increases in the price of
raw materials.

  In its custom manufacturing operation, the Company is a batch producer of
fine and performance chemicals manufactured to the specifications of its
customers. Facilities for this custom manufacturing include equipment for
multi-step batch processing to custom produce complex fine chemicals used by
chemical, agricultural, electronic, pharmaceutical and cosmetic companies.
Although historically customers have purchased small quantities of custom
manufactured production capacity primarily for their new product development
and market testing, recently the amount of production capacity sold for the
production of commercially marketed products has increased significantly.
Companies involved in the mass production of chemically based consumer
products often find it expensive and inefficient to manufacture small
quantities of the complex chemicals required for new product development or
products with limited markets. By providing a versatile array of custom
services and capacity to a number of such companies, the Company achieves
economies of scale and is able to manufacture certain fine and performance
chemicals more economically and timely than they can be manufactured by its
customers. As a result, customers can reduce the time to market and capital
exposure associated with the manufacture and marketing of their products.

  Current production is based on multi-step organic syntheses. The Company's
custom manufacturing facilities use numerous reactors capable of producing
custom fine chemicals in quantities ranging from the very small amounts needed
for initial product testing, through pilot plant production of developmental
quantities and continuing through commercial production.

  A substantial portion of the Company's custom manufacturing revenue in 1997
was derived from sales of a herbicide ingredient to one manufacturer under an
agreement that will expire in 2002 with a substantial portion of the remaining
custom manufacturing revenue derived from a group of agricultural
intermediates and actives. In 1997, the largest growth in product mix was in
advanced pharmaceutical intermediates. Other significant products include
diphenyl isopthalate, an intermediate used in the production of fibers for
fire-retardant fabrics and in transparent, heat-resistant plastics; rubber
additives used in the manufacture of chemical-resistant rubber; and deep
ultraviolet photoresist for use in the semiconductor industry.

  The Company also manufactures specialty chemicals used in high growth
markets such as radiation curing and polymer additives. Nitrotoluene
derivatives are used in herbicides, rubber processing chemicals, photographic
chemicals, optical brighteners, dyestuffs and pigments, and photoinitiators.
The Company is the second largest producer of nitrotoluenes in the world and
the only producer of nitrotoluenes in the United States. Other specialties are
used as intermediates in the production of pharmaceutical, personal care and
agricultural products. These specialty chemicals are manufactured in large
scale, integrated batch facilities using proprietary processes. During 1997,
the Company completed a 25% capacity expansion for batch specialty chemicals
at its Pascagoula facility. This additional specialty chemicals capacity will
enable the Company to expand production of new specialty chemicals used as
intermediates in pharmaceutical and agricultural chemicals and to meet
increasing demand for performance polymer products.

  With the recent acquisition of Clariant Corporation's acylation derivatives
business, the Company is now a producer and marketer of products derived from
4-hydroxyacetophenone ("4HAP") and used in the semiconductor and specialty
polymer industries. Applications for these products include deep ultraviolet
photresist resins, coatings and polymer applications, antioxidants, surface
active materials, fuel and lubricant additives and new polymers for high
temperature performance. These products are currently produced by third party
custom manufacturers utilizing an extensive portfolio of intellectual
properties which includes over 35 patents. Out-sourcing the manufacture of
these products allows the Company to benefit from rapid time to market and
minimum capital exposure while capitalizing on the unique expertise of
individual contract manufacturers.

  The Company also produces electronic and performance chemicals used in the
semiconductor and related industries. These chemicals include organic
photoresist removers, which are cleaning solutions that remove photoresist and
dry-etch residue during the manufacture of semiconductors. As a result of the
recent acquisition

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of CMP assets from BIC and Moyco Technologies, Inc., the Company is now
supplying slurries and oxidizer chemicals for use in the CMP process, which is
currently the fastest growing segment in semiconductor materials.
Approximately 6% of electronic and performance chemical sales for 1997 were
outside of the United States.

  In conducting its electronic chemicals business, the Company owns and
operates manufacturing facilities in Hayward, California and East Kilbride,
Scotland. During 1997, the Company completed construction of a new research
and development laboratory at its 65,000 square-foot California facility and
made other improvements which allow for additional manufacturing and packaging
capabilities. The Company is also expanding and adding storage facilities at
its 26,300 square-foot Scotland facility with completion of this project
expected in 1998. The Company also leases office space in Tokyo, Japan to
provide marketing and technical support for the Japanese electronic chemical
markets and utilizes an applications laboratory in Phoenix, Arizona for the
development of CMP products.

 Marketing and Sales

  Chemicals are marketed globally. Approximately 7% of the Company's Chemical
sales in 1997 were exports from the United States. The Company has long-term
contracts with a number of its largest customers. A majority of chemicals
sales are made through the Company's internal sales force.

  Products are sold in drums and in bulk as intermediates into construction,
transportation, semiconductor, agricultural chemical, pharmaceutical, pigment,
photographic, specialty polymer and ultra violet (U.V.) curing markets such as
powder coatings, printing inks and overprint varnishes. Exported product is
shipped in ocean-going tankers, iso-containers or drums to European, Japanese
and South American markets. Domestic shipments are by barge, rail or tank
trucks. As discussed above, a significant amount of the Company's aniline is
sold to a single customer under a long-term contract. See "Industrial Chemical
Intermediates."

  Fine chemical products are sold into pharmaceutical, electronic chemical,
agricultural chemical, DUV resin and specialty polymer markets, both
domestically and in the Pacific Rim. A significant amount of custom
manufacturing sales are to three customers under long-term contracts.

  Electronic and performance chemicals are marketed domestically and
internationally within Europe and the Pacific Rim. Approximately 56% of these
sales are outside the United States. The California facility services North
America and the Pacific Rim and the Scotland facility services the European
community. Approximately 40% of all international electronic and performance
chemical sales are into Europe and 60% of such sales are into the Pacific Rim.
These chemicals are distributed in gallon, liter, returnable drum or large
volume dedicated containers. In Japan, the Company's electronic chemicals are
repackaged from bulk containers into returnable containers by the Company's
Japanese distributor.

 Raw Materials

  Two of the principal raw materials for production at the Company's
Pascagoula facility, benzene and toluene, are readily available commodity by-
products of oil refining. Like most commodities, the prices of benzene and
toluene are subject to fluctuation. Benzene prices are affected by the demand
for a variety of products, principally including styrene and phenolic resins.
The price of toluene, an octane-enhancing additive for unleaded gasoline, is
directly affected by the demand for and price of unleaded gasoline. The
Company is protected from fluctuations in raw material prices in the contracts
under which most of its aniline production is sold. The remainder of its
production is sold under short-term contracts or purchase orders at prices
that generally reflect its actual raw material cost. Other significant raw
materials include ammonia, natural gas and ethanol. The Company purchases
ammonia and ethanol at market prices. The Company purchases natural gas in the
spot market for use in producing the hydrogen necessary for its manufacturing
processes. This gas is transported into the Pascagoula plant through an
interstate pipeline. Prices paid by the Company for natural gas are affected
by the degree of interruptibility of the gas supply.

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  Fine chemicals primary raw materials include hydrogen, hydrogen peroxide,
o-aminophenol, o-nitrophenol, formaldehyde, butaldehyde and natural gas. These
raw materials are obtained from a number of different sources. The Company does
not believe that any one source of raw materials is material to the Company's
business. The Company currently has a ten (10) year contract in place to secure
supply of 4HAP, a primary raw material for the Company's acylation derivatives
business.

  The primary raw materials for the manufacture of electronic and performance
chemicals include free-base hydroxylamine, diglycolamine, N-methylpyrro-lidone
and alumina powders. With the exception of hydroxlyamine, raw materials are
generally available in adequate quantities from several suppliers, subject to
market variation in price. Hydroxylamine is currently available from one
supplier, located in Japan. Two major manufacturers have announced plans to
construct facilities capable of manufacturing aqueous hydroxylamine with
production anticipated to begin within the next two years.

 Research and Development

  The Company conducts research and development to improve existing products
and to produce new specialty and performance chemicals. The Company spent
approximately $5.8 million, $6.9 million and $6.3 million on research and
development in 1997, 1996 and 1995, respectively. Research facilities include
laboratories, pilot plant and semi-works for process research and development
with gram to multi-pound sample production capabilities. The Company also
sponsors applied research at leading universities in the United States and the
U.K. and maintains a radiation curing applications laboratory in Pascagoula to
evaluate new products and provide customer technical support. These closely
directed programs have led to the development and introduction of proprietary
technology in fine chemicals and in the FirstCure(R) line of performance
polymer products. In addition, the Company has entered into a joint
development agreement with an industry consortium to develop advanced products
to meet future semiconductor manufacturing technology.

 Competition

  The Company is one of five major United States producers of aniline, with
approximately 16% of domestic capacity and an estimated 5% of world capacity
and is the only United States producer of nitrotoluenes, with an estimated 12%
of world capacity. Major competitors are large chemical companies. Competition
is based on price, service, quality, marketing and research and development
support capabilities.

  Based on market share, the Company is among the top 10 custom chemical
manufacturing companies in the United States. Major competitors are both
smaller and larger companies. Competition is based on service, quality,
manufacturing expertise in batch chemical production, research and development
capabilities and price.

  The Company is also one of the world's largest producers of post-metal
cleaning solutions for semiconductor production. Although there are
approximately 12 companies participating in this market worldwide, only the
Company and three others have significant market share for advanced and
postmetal cleaning solutions required by the current state of the art
semiconductor and related industries. Competition is based on service, product
performance, quality, product development capabilities and price. The Company
has entered into a licensing agreement with a major competitor whereby the
Company licenses its HDA(TM) (hydroxylamine) technology. The agreement results
from a patent infringement complaint brought by the Company against the
competitor in federal court. The agreement allows the competitor to continue
to market its products which utilize the Company's hydroxylamine technology,
but provides for the Company to receive a royalty and license fee. Within CMP,
the oxide slurry market is dominated by two companies, with the larger company
holding a 90% market share. In the tungsten slurry market, the Company is now
the third largest supplier for this application.

 Seasonality of Business

  Generally, chemical sales are not seasonal and working capital requirements
do not vary significantly from period to period.

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ENGINEERED PRODUCTS AND SERVICES

 General

  The Engineered Products and Services segment principally includes the
development and marketing of proprietary equipment and systems for industrial
applications. These include design and production of low-emission burners,
flares, incinerators and thermal plasma equipment. Raw materials and
components for these operations are available from numerous vendors. The
businesses are not considered materially seasonal. This segment is operated
primarily through the Company's subsidiary, Callidus Technologies Inc.

 Combustion Equipment and Services

  Principal products and services are custom designed and fabricated
gas/liquid incinerators, flares, solid waste systems, vapor recovery units,
burners and predictive emissions monitoring and process optimization software
services. The Company also provides engineering and consulting services for
environmental and combustion applications.

  The Company markets these products and services worldwide to refining,
petrochemical, chemical, pharmaceutical, wood products and other industries
requiring disposal of gas, liquid and solid wastes. Marketing is primarily
through a combination of manufacturers' representatives and company personnel.
The market is well established but growing through advancements of existing
technology, driven primarily by increasingly strict environmental regulations
both in the United States and abroad. Approximately 25% of these sales during
1997 were made in the Pacific Rim. Competition is based on a wide variety of
factors, with the most prominent being price, technological innovation and
delivery schedule. The Company competes with the John Zink Company, which has
a significant share of the burner, flare and vapor recovery markets. Numerous
competitors exist in the gas and liquids incineration market. Primary
competition in the solid waste systems market comes from alternative
technologies. The Company offers predictive emissions monitoring and process
optimization software services utilizing products licensed by its customers.
The Company is affected by a variety of factors beyond its control, including
governmental control of environmental standards and compliance deadlines,
competitor pricing strategies and changing technology, any one of which could
impact operating results. In conducting this combustion equipment and services
business, the Company leases office space in Tulsa, Oklahoma, owns a
manufacturing and test facility in Beggs, Oklahoma and has leased foreign
offices in Belgium, England, Italy, France, Germany and Japan.

 Thermal Plasma

  The Company is a leading international supplier of plasma heating systems to
the metals and waste industries. Plasma heating systems instantly, and without
combustion, convert electrical energy into high temperature thermal energy.
The Company develops, manufactures, sells and services these systems for use
in steel manufacturing, specialty metals refinement and various environmental
waste recycling processes, including municipal solid waste ash vitrification.
The Company holds more than 20 patents in 10 countries, including several in
steel, vacuum melting and waste applications.

  Domestic marketing is performed directly, with international sales supported
by overseas representatives. The Company owns a testing facility used for
system integration, system and process development and customer training. This
operation has two principal domestic competitors and four foreign competitors.
Price competition is intense and competitors' pricing strategies may impact
operating results. The thermal plasma operations, which have been conducted in
Raleigh, North Carolina, are being functionally and operationally merged with
the combustion equipment and services business by relocating Raleigh personnel
and operations to Tulsa, Oklahoma. It is anticipated that the thermal plasma
test facility will also be relocated to Oklahoma. The Company expects the
consolidation of these operations to result in a more efficient utilization of
Company personnel and other efficiencies.

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STEEL

  The Company's Steel segment is operated through its subsidiary, FirstMiss
Steel, Inc. This segment's operations are conducted through a 400,000 square-
foot steel melting and production facility in Hollsopple, Pennsylvania, which
is approximately 100 miles east of Pittsburgh. The Company is actively seeking
a buyer for this facility. The Company leases the land on which the facility
is located, but has the right to purchase the land for a nominal price at the
conclusion of the lease. Following upgrades to one of two electric arc
furnaces in January 1995, annual capacity of the operation now includes
150,000 tons of carbon, alloy and specialty grade, bottom-poured ingots and
50,000 tons of high-grade steel billets through a horizontal continuous
caster. In January 1996, the second electric arc furnace was removed and a NOD
converter was constructed, which combined with the newly upgraded electric arc
furnace and the existing VOD units form the "Triplex" process for producing
stainless steel. The NOD converter, which was commissioned in July 1996, will
increase stainless steel capacity and lower stainless steel costs. The value-
added product line was introduced in 1992 and includes specialty stainless and
tool steel ingots or billets, which are converted into forged billets, bars
and plates by outside processors. Small quantities of cobalt, nickel, copper
and iron-based alloys in bars and wire are also produced from two small
horizontal continuous casters, small bottom-poured forging ingots and remelt
sand ingots. Raw materials consist of steel scrap and various alloys, of which
there is an adequate supply in the North American market.

  Carbon and alloy steel ingots are sold directly to the forging industry,
ring rollers, extruders and integrated steel producers. The Company competes
primarily with three other steel companies in this market and, within the
group, ranks second in total steel production capacity. Specialty steel
products are primarily sold to steel service centers and forgers. Ten
customers account for approximately 60% of the Company's steel revenue. Alloy
products are sold as feedstock directly to forgers, extruders and investment
casters. There are numerous competitors, both domestic and foreign, that
compete with the Company in the specialty steel and ferrous and non-ferrous
metals markets. Competitive factors include price, quality and service. Carbon
steel ingots and billets are commodities and are extremely price competitive.
Stainless and tool steel long product pricing is currently being pressured by
strong import penetration.

ENVIRONMENTAL CONSIDERATIONS

  The Company operations are subject to a wide variety of environmental laws
and regulations governing emissions to the air, discharges to water sources,
and the handling, storage, treatment and disposal of waste materials, as well
as other laws and regulations concerning health and safety conditions. The
Company holds a number of environmental permits and licenses regulating air
emissions, water discharges and hazardous waste disposal and, to the best of
its knowledge, is in material compliance with such requirements at all
locations. The Company makes capital and other expenditures in a continuing
effort to comply with environmental laws and regulations, or changing
interpretations of existing laws and regulations. The Company's environmental
capital expenditures for 1997 were $2.3 million. Projected environmental
capital expenditures for 1998 and 1999 are $1.1 million and $1.5 million,
respectively. While these expenditures are necessary to comply with
environmental laws and regulations, they may also reduce operating expenses
and improve efficiencies.

  The Company monitors and participates in the environmental regulatory
development process which assists it in evaluating new laws and regulations.
The Company does not anticipate a material increase in expenses related to
current environmental regulations, but because federal and state environmental
laws and regulations are constantly changing, the Company is unable to predict
their future impact.

  The Company has received notices from the United States Environmental
Protection Agency or a similar state agency that it has been deemed a
potentially responsible party ("PRP") under Superfund or a comparable state
statute at several sites and, thus, may be liable for a share of the
associated remediation cost. The Company paid $183,000 as its full share of
the cost of cleanup of one of these sites during 1996. During 1997, the
Company did not contribute any funds toward cleanup of these sites but did
receive rebates relating to the cleanup of one site because actual cleanup
costs have been less than previously projected. It is difficult to

                                      10
<PAGE>

estimate the Company's ultimate liability relating to the remaining sites due
to several uncertainties such as, but not limited to, the method and extent of
remediation, the percentage of material attributable to the Company at the
site relative to that attributable to other parties, and the financial
capabilities of the other PRPs. Based on currently available information,
however, the Company does not believe that its future liability at these sites
will be material to its financial condition, results of operations or cash
flow. The Company has been informed of another potential claim and is
evaluating the facts and circumstances relating to such claim in an effort to
ascertain the extent, if any, to which the Company might be liable for such
claim. However, preliminary information indicates that any future liability in
connection with this claim will not be material to the Company's financial
condition, results of operations or cash flow.

ITEM 2. PROPERTIES

  A description of various properties and the segments to which they relate is
included in the Business discussion located on pages 3 through 11 of this Form
10-K. In addition to those described above, the Company owns or leases the
following properties:

  The Company owns an approximately 26,000 square-foot office building in
Jackson, Mississippi, which is its corporate headquarters.

  FCC leases 7 acres of waterfront property from the Jackson County Port
Authority. This property is used by FCC for loading and unloading ocean-going
vessels and barges. The lease expires in 2003.

  FCC owns 70 acres of undeveloped industrial land within 2 miles of FCC's
Pascagoula plant and 23 acres directly adjacent to the Pascagoula plant. QCI
owns approximately 78 acres of undeveloped industrial land directly adjacent
to its Tyrone, Pennsylvania facility.

ITEM 3. LEGAL PROCEEDINGS

  The Company has pending several claims incurred in the normal course of
business which, in the opinion of management and legal counsel, can be
disposed of without material effect on the Company's financial statements.

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

  No matters were submitted to a vote of security holders of the Company,
through the solicitation of proxies or otherwise, during the fourth quarter of
1997.

                                    PART II

ITEMS 5-8. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS, SELECTED FINANCIAL DATA, MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS, AND FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA

  The information called for by Part II, Items 5-8, has been included in the
Registrant's Annual Report to Stockholders for the fiscal year ended December
31, 1997 (or the Financial Review insert attached thereto), which has been
furnished to the Commission. See the Cross Reference Sheet on Page 2 hereof
for the locations of such information.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

  Not applicable.

                                      11
<PAGE>

                                   PART III

ITEMS 10-13. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT, EXECUTIVE
COMPENSATION, SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT,
AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

  The information called for by Part III, Items 10-13, has been included in
the Registrant's definitive Proxy Statement, which will be mailed to the
Commission by March 30, 1998, pursuant to Regulation 14A, and is incorporated
herein by reference. See the Cross Reference Sheet on Page 2 hereof for the
location of such information.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

FINANCIAL STATEMENTS AND SCHEDULES

(a)(1) Financial Statements Incorporated by Reference to the Financial Review
       insert which is attached to the Registrant's Annual Report to
       Stockholders for the fiscal year ended December 31, 1997 and
       Supplementary Data

<TABLE>
<CAPTION>
                                                 PAGES IN  FINANCIAL REVIEW
                                                    INSERT TO  THE 1997
                                               ANNUAL REPORT TO STOCKHOLDERS
                                              INCORPORATED HEREIN BY REFERENCE
                                              --------------------------------
<S>                                           <C>
Consolidated Balance Sheets as of December
 31, 1997 and 1996...........................                 p. 4
Consolidated Statements of Operations, years
 ended December 31, 1997, 1996 and 1995 .....                 p. 5
Consolidated Statements of Stockholders'
 Equity, years ended December 31, 1997, 1996
 and 1995....................................                 p. 6
Consolidated Statements of Cash Flows, years
 ended December 31, 1997, 1996 and 1995......                 p. 7
Notes to Consolidated Financial Statements...             pp. 8-24
Independent Auditors' Report.................                p. 24
</TABLE>

(a)(2) Additional schedules are either not required under the applicable
       instructions or are inapplicable and have therefore been omitted.

(a)(3) EXHIBITS

 2(a) Agreement and Plan of Merger and Reorganization, dated as of August 27,
      1996, among Mississippi Chemical Corporation, MISS SUB, INC. and First
      Mississippi Corporation, was filed as Exhibit 2.1 to Amendment No. 1 to
      the Company's Form S-1 (Registration No. 333-15789) filed on November
      18, 1996, and is incorporated herein by reference.

 2(b) Agreement and Plan of Distribution between First Mississippi Corporation
      and the Company dated December 18, 1996 was filed as Exhibit 2.2, Form
      of Agreement and Plan of Distribution, to

                                      12
<PAGE>

     Amendment No. 1 to the Company's Form S-1 (Registration No. 333-15789)
     filed on November 18, 1996, and is incorporated herein by reference.
     The only modification to the text of the Form of Agreement and Plan of
     Distribution which is incorporated herein by reference was the
     substitution of "ChemFirst Inc." for "Newco" as a party to this
     agreement and the dating of the agreement as of December 18, 1996.

 2(c)Tax Disaffiliation Agreement between First Mississippi Corporation and
     the Company dated December 18, 1996 was filed as Exhibit 2.3, Form of
     Tax Disaffiliation Agreement, to Amendment No. 1 to the Company's Form
     S-1 (Registration No. 333-15789) filed on November 18, 1996, and is
     incorporated herein by reference. The only modification to the text of
     the Form of Tax Disaffiliation Agreement which is incorporated herein
     by reference was the substitution of "ChemFirst Inc." for "Newco" as a
     party to this Agreement and the dating of the agreement as of December
     18, 1996.

 2(d)Employee Benefits and Compensation Agreement between First Mississippi
     Corporation and the Company dated December 18, 1996 was filed as
     Exhibit 2.4, Form of Employee Benefits and Compensation Agreement, to
     Amendment No. 1 to the Company's Form S-1 (Registration No. 333-15789)
     filed on November 18, 1996, and is incorporated herein by reference.
     The only modification to the text of the Form of Employee Benefits and
     Compensation Agreement which is incorporated herein by reference was
     the substitution of "ChemFirst Inc." for "Newco" as a party to this
     Agreement and the dating of the agreement as of December 18, 1996.

 3(a)Amended and Restated Articles of Incorporation of the Company were
     filed as Exhibit 3.1 to Amendment No. 1 to the Company's Form S-1
     (Registration No. 333-15789) filed on November 18, 1996, and is
     incorporated herein by reference.

 3(b)Bylaws of the Company were filed as Exhibit 3.2 to Amendment No. 1 to
     the Company's Form S-1 (Registration No. 333-15789) filed on November
     18, 1996, and is incorporated herein by reference.

 4(a)Articles III, IV, V, VI, VII, VIII, IX and X of the Company's Charter
     of Incorporation and the Statements of Resolution establishing the
     Company's 1987-A, 1988-A, 1988-1, 1989-A, 1989-1, 1989-2, 1990-1,
     1990-2, 1991-1, 1991-2, and 1992-1 Series Convertible Preferred Stock
     and the Company's Series X Junior Participating Preferred Stock are
     included in Exhibit 3(a).

 4(b)Articles II, IV, IX and XII of the Company's Bylaws are included in
     Exhibit 3(b).

 4(c)ChemFirst Inc. 401(K) Savings Plan was filed as Exhibit 4.4 to the
     Company's Registration Statement on Form S-8 (Registration No. 333-
     18691) filed on December 24, 1996 and is incorporated herein by
     reference.

 4(d)Rights Agreement, dated as of October 30, 1996, between the Company
     and KeyCorp Shareholder Services, Inc., was filed as Exhibit 4 to
     Amendment No. 1 to the Company's Form S-1 (Registration No. 333-15789)
     filed on November 18, 1996 and is incorporated herein by reference.

 4(e)Post Spin-Off Agreement between First Mississippi and FirstMiss Gold
     Inc. dated as of September 24, 1995, which was assigned to the Company
     in connection with the Distribution, was filed as Exhibit 99.1 to
     First Mississippi's Form 8-K dated September 24, 1995, and is
     incorporated herein by reference.

 4(f)Tax Ruling Agreement between First Mississippi and FirstMiss Gold Inc.
     dated as of September 24, 1995, which was assigned to the Company in
     connection with the Distribution, was filed as Exhibit 99.2 to First
     Mississippi's Form 8-K dated September 24, 1995, and is incorporated
     herein by reference.

 4(g)Loan Agreement between First Mississippi and FirstMiss Gold Inc.,
     dated as of September 24, 1995, which was assigned to the Company in
     connection with the Distribution, was filed as Exhibit 99.3 to First
     Mississippi's Form 8-K dated September 24, 1995, and is incorporated
     herein by reference.

                                      13
<PAGE>

 4(h)Amended Tax Sharing Agreement between First Mississippi and FirstMiss
     Gold Inc. dated as of September 24, 1995, which was assinged to the
     Company in connection with the Distribution, was filed as Exhibit 99.4
     to First Mississippi's form 8-K dated September 24, 1995, and is
     incorporated herein by reference.

10(a)*
     Termination Agreement, dated May 29, 1996 and effective June 1, 1996,
     between the Company and its Chief Executive Officer, which was
     assigned to the Company in connection with the Distribution, was filed
     as Exhibit 10(c) to First Mississippi's Annual Report on Form 10-K for
     the fiscal year ended June 30, 1996, and is incorporated herein by
     reference.

10(b)*
     Form of Termination Agreement, dated May 29, 1996 and effective June
     1, 1996, between the Company and each of the following executive
     officers of the Company: Daniel P. Anderson, Robert P. Barker, William
     P. Bartlett, Max P. Bowman, Troy B. Browning, J. Steven Chustz, Paul
     J. Coder, Samir A. Hakooz, William B. Kemp, Scott A. Martin, James L.
     McArthur, George M. Simmons, R. Michael Summerford and Thomas G.
     Tepas, which was assigned to the Company in connection with the
     Distribution, was filed as Exhibit 10(d) to First Mississippi's Annual
     Report on Form 10-K for the fiscal year ended June 30, 1996, and is
     incorporated herein by reference. (Company's Termination Agreement
     with each such officer contains terms identical to those contained in
     the form of Agreement filed.)

10(c)*
     ChemFirst Inc. 1980 Long-Term Incentive Plan was filed as Exhibit 4.6
     to the Company's Registration Statement on Form S-8 (Registration No.
     333-18693) filed on December 24, 1996, and is incorporated herein by
     reference.

10(d)*
     ChemFirst Inc. 1988 Long-Term Incentive Plan was filed as Exhibit 4.5
     to the Company's Registration Statement on Form S-8 (Registration No.
     333-18693) filed on December 24, 1996, and is incorporated herein by
     reference.

10(e)*
     ChemFirst Inc. 1995 Long-Term Incentive Plan was filed as Exhibit 4.4
     to the Company's Registration Statement on Form S-8 (Registration No.
     333-18693) filed on December 24, 1996, and is incorporated herein by
     reference.

10(f)*
     1991 Restatement of the First Mississippi Directors' Retirement Plan,
     as revised and restated on May 14, 1991, which was assigned to and
     assumed by the Company pursuant to the Benefits Agreement, was filed
     as Exhibit 10(f) to First Mississippi's Annual Report on Form 10-K for
     the fiscal year ended June 30, 1991, and is incorporated herein by
     reference.

10(g)*
     First Mississippi Corporation 1989 Deferred Compensation Plan for
     Outside Directors, as amended on September 12, 1994, which was
     assigned to and assumed by the Company pursuant to the Benefits
     Agreement, was filed as Exhibit 10(g) to First Mississippi's Annual
     Report on Form 10-K for the fiscal year ended June 30, 1995, and is
     incorporated herein by reference.

10(h)Form of Indemnification Agreement between the Company and the
     following Directors or Officers of the Company, which was assigned to
     and assumed by the Company in connection with the Distribution,
     (Company's Indemnification Agreements with each such individual
     contains substantially identical provisions to those contained in the
     form): Richard P. Anderson, Paul A. Becker, James W. Crook, James E.
     Fligg, Charles R. Gibson, Robert P. Guyton, Charles P. Moreton, Paul
     W. Murrill, William A. Percy, II, Maurice T. Reed, Jr., Frank G.
     Smith, Leland R. Speed, R. Gerald Turner, J. Kelley Williams, R.
     Michael Summerford, O. E. Wall, Charles M. McAuley, J. Steve Chustz,
     James L. McArthur, Danny P. Anderson and Thomas G. Tepas was filed as
     Exhibit 10(t) to First Mississippi's Annual Report on Form 10-K for
     the fiscal year ended June 30, 1988, and is incorporated herein by
     reference.

10(i)ChemFirst Inc. 1997 Employee Stock Purchase Plan was filed as Exhibit
     4.3 to the Company's Registration Statement on Form S-8 (Registration
     No. 333-35221) filed on September 9, 1997, and is incorporated herein
     by reference.

                                      14
<PAGE>

13   ChemFirst Inc. 1997 Annual Report to Stockholders and Financial Review
     insert attached thereto (such Annual Report is not, except for those
     portions thereof which are expressly incorporated by reference, to be
     deemed "filed" as part of this Form 10-K).

21   List of the subsidiaries of the Company.

23   Consent regarding incorporation of auditor's report into Registration
     Statement Nos. 333-18691, 333-18693 and 333-35221.

27.1 Financial Data Schedule.

27.2 Restated Financial Data Schedule.
--------
*Indicates management contract or compensatory plan or arrangement.

  Certain debt instruments have not been filed. The Company agrees to furnish
a copy of such agreement(s) to the Commission upon request.

 (b)No Reports on Form 8-K were filed by the Company during the fourth quarter
   of 1997.

 (c)Please see (a)(3) above.

  The exhibits filed with the Commission are not included in the printed copy
of the Form 10-K. A copy of the exhibits will be provided upon payment of a
reasonable fee, to be specified at the time a request is made.

 (d)Please see (a)(2) above.

                                      15
<PAGE>

                                  SIGNATURES

  Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                          CHEMFIRST INC.

Date: March 27, 1998                      BY:   /s/  J. Kelley Williams
                                             __________________________________
                                                    J. Kelley Williams
                                                  Chief Executive Officer

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

              SIGNATURE                      TITLE                   DATE

      /s/ J. Kelley Williams         Chairman of the Board     March 27, 1998
-----------------------------------   of Directors, Chief
        J. KELLEY WILLIAMS            Executive Officer
                                      (Principal Executive
                                      Officer) and Director

        /s/ Thomas G. Tepas          President and Chief       March 27, 1998
-----------------------------------   Operating Officer
          THOMAS G. TEPAS

     /s/ R. Michael Summerford       Vice President and        March 27, 1998
-----------------------------------   Chief Financial
       R. MICHAEL SUMMERFORD          Officer (Principal
                                      Financial Officer)

       /s/ Troy B. Browning          Controller (Principal     March 27, 1998
-----------------------------------   Accounting Officer)
         TROY B. BROWNING

      /s/ Richard P. Anderson        Director                  March 27, 1998
-----------------------------------
        RICHARD P. ANDERSON

        /s/ Paul A. Becker           Director                  March 27, 1998
-----------------------------------
          PAUL A. BECKER

        /s/ James W. Crook           Director                  March 27, 1998
-----------------------------------
          JAMES W. CROOK

       /s/ Michael J. Ferris         Director                  March 27, 1998
-----------------------------------
         MICHAEL J. FERRIS

        /s/ James E. Fligg           Director                  March 27, 1998
-----------------------------------
          JAMES E. FLIGG

       /s/ Robert P. Guyton          Director                  March 27, 1998
-----------------------------------
         ROBERT P. GUYTON

                                      16
<PAGE>

              SIGNATURE                      TITLE                   DATE

        /s/ Paul W. Murrill          Director                  March 27, 1998
-----------------------------------
          PAUL W. MURRILL

     /s/ William A. Percy, II        Director                  March 27, 1998
-----------------------------------
       WILLIAM A. PERCY, II

         /s/ Dan F. Smith            Director                  March 27, 1998
-----------------------------------
           DAN F. SMITH

        /s/ Leland R. Speed          Director                  March 27, 1998
-----------------------------------
          LELAND R. SPEED

       /s/ R. Gerald Turner          Director                  March 27, 1998
-----------------------------------
         R. GERALD TURNER

                                       17
<PAGE>

                                    EXHIBITS

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER
 -------
 <C>     <S>
 13      ChemFirst Inc. 1997 Annual Report to Stockholders and Financial Review
         insert attached thereto (such Annual Report is not, except for those
         portions thereof which are expressly incorporated by reference, to be
         deemed "filed" as part of this Form 10-K).
 21      List of the subsidiaries of the Registrant.
 23      Consent regarding incorporation of auditor's report into Registration
         Statement Nos. 333-18691, 333-18693 and 333-35221.
 27.1    Financial Data Schedule [For EDGAR filing only].
 27.2    Restated Financial Data Schedule [For EDGAR filing only].
</TABLE>
--------
(Note: The exhibits filed with the Commission are not included in this copy of
the Form 10-K. A copy of the exhibits will be provided upon payment of a
reasonable fee, to be specified at the time a request is made.)