SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549

                                 FORM 10-K

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

     For the fiscal year ended December 31, 1996
                                   -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 1-6035


                         THE TITAN CORPORATION
     (Exact name of registrant as specified in its charter)


          Delaware                                   95-2588754     
(State or other jurisdiction of                    (IRS Employer    
incorporation or organization)                   Identification No.)

                        3033 Science Park Road
                       San Diego, CA  92121-1199
             (Address of principal executive offices, zip code)

             Registrant's telephone number, including area code: 
                          (619) 552-9500

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

   Title of each class          Name of exchange on which registered
   ===================          ====================================
$1.00 Cumulative Convertible          New York Stock Exchange
Preferred Stock, $1.00 par value 
Common Stock, $.01 par value
Preferred Stock Purchase Rights

Securities registered pursuant to Section 12(g) of the Act: None


     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 
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 
                                                                ====
     Aggregate market value of the voting stock held by non-
affiliates of the registrant as of March 17, 1997: $ 58,476,049.

     Number of shares of Common Stock outstanding at March 17, 1997: 
16,035,157

                   Document Incorporated By Reference

     Proxy Statement for the 1997 Annual Meeting of Stockholders on 
May 15, 1997.  (The Company has or will have filed a definitive 
proxy statement with the Commission within 120 days after the close 
of the fiscal year pursuant to Regulation 14A.)  With the exception 
of those portions which are incorporated by reference in this Form 
10-K Annual Report, the Proxy Statement for the 1997 Annual Meeting 
of Stockholders is not deemed to be filed as part of this Report, 
Part III.

                             PART I

Item 1. Business

General Development and Description of Business

The Titan Corporation ("Titan" or the "Company") is an innovative 
high technology company which groups its businesses in four industry 
segments:  Communications Systems, Software Systems, Defense 
Systems, and Emerging Technologies.  The Communications Systems 
segment contains two start-up business units, both targeting rapidly 
growing commercial markets. The first business unit is satellite 
communications, which develops and sells satellite earth station 
networks and related systems.  The second business unit, broadband 
communications, specializes in providing complete turnkey security 
for television delivery systems.  The Software Systems segment 
provides custom software products and services to assist customers 
in moving from older mainframe systems to distributed computing 
systems utilizing client/server software.  The Defense Systems 
segment, serving primarily the U.S. Government, includes satellite 
communications products, systems analysis and design, object-
oriented software development services, and systems integration 
services for customers with large data management needs.  The 
Emerging Technologies segment contains environmental consulting and 
medical product sterilization, together with established businesses 
generally involved in Department of Defense (DoD) funded research 
and development contracts and the manufacture of pulsed power 
electron systems and linear accelerators for both government and 
industrial customers.

For the past several years, the Company has pursued a strategy to 
use the technology and experience gained in its defense business to 
build commercial business.  At the same time, the Company has 
continued to focus on growing its defense business in key market 
areas.  As part of this strategy to strengthen its core defense 
operations, the Company acquired three information technology 
companies, Eldyne, Inc., Unidyne Corporation, and Diversified 
Control Systems, Inc. in May 1996.

COMMUNICATIONS SYSTEMS SEGMENT

The Communications Systems segment contains two start-up business 
units, both targeting rapidly growing commercial markets.  The 
first business is satellite communications, which develops and 
sells bandwidth-efficient, cost-effective satellite earth station 
networks and related systems which address the demand for telephony 
services.  Some of these products include high-efficiency network 
management systems and voice processing and redundant control 
circuitry for reliable transmissions.  A key feature of the 
Company's products is its defense-derived DAMALink(TM) network 
management software system, which allows for multiple simultaneous 
users to access efficiently the same satellite channel, resulting 
in cost savings and improved operational flexibility for the 
customer.  To address the need for telecommunications 
infrastructure in developing countries, the Company has designed 
and developed its Xpress Connection(TM) system as a cost-effective 
means to link remote locations into the public switched network in 
developing countries.  These systems are being marketed in Asia and 
Latin America.

In the third quarter of 1995, the Company received a $9.6 million 
fixed price contract to develop a rural telephony system in 
Indonesia.  In September 1996, the contract was amended to add a 
Singapore company as a second party.  The revised contract provides 
the two parties the option to purchase additional terminals and 
other equipment.  In addition, the two parties have the exclusive 
right to market and sell the Xpress Connection for use in Indonesia 
and jointly with the Company in the remainder of the Asian Palapa 
C1 and C2 satellites' coverage area.  Delivery of certain 
components of the telephony system commenced in 1996.  In addition, 
in the third quarter of 1996, the Company received a $4 million 
contract to provide a communications network for a bank in 
Thailand.

The second business unit, broadband communications, specializes in 
providing complete turnkey security for television delivery 
systems, with applications for delivery of television programming 
via wireless, satellite, coaxial cable, and fiber optics.  In 
January 1995, the Company signed its first equipment purchase 
agreement to provide analog equipment and software to control 
access to a wireless television service in New York City.  During 
1996, the Company received a $12.75 million purchase order from 
this customer for delivery of additional conditional access system 
equipment and set-top box decoders.  In addition, the Company was 
awarded a $2.7 million contract with this customer for a system in 
Thailand.

During 1996, the Company continued to make significant investments 
adapting its analog system for use in digital video transmission 
systems in order to address the digital and wireless direct-to-home 
satellite and private business television markets.  The Company is 
actively marketing its systems in domestic and international 
markets.  The Company has been pursuing a process to identify 
potential strategic investors for the broadband communications 
business.  To date, an appropriate strategic investor has not been 
identified.  Furthermore, the Company is assessing other strategic 
alternatives related to the broadband communications business.  The 
Company has taken certain actions early in 1997 to significantly 
reduce the broadband unit's operating costs.

SOFTWARE SYSTEMS SEGMENT

The Software Systems segment provides custom software products and 
services to clients desiring to upgrade their information systems.  
These services assist customers in moving from older mainframe 
systems to distributed computing systems utilizing client/server 
object-oriented software.  The Company provides the services and 
resources necessary to design, develop and implement these 
projects, including systems consulting, project management, work-
flow analysis, industry and application knowledge, implementation, 
training and program maintenance.  

To date, the Company's software systems work has focused on the 
telecommunications industry, the FAA, and financial institutions.  
The Company's work has included development and support for access 
carrier client/server applications, system-to-system communications 
for the real-time exchange of maintenance information between an 
access customer and long-distance providers, real time customer 
support applications, new client/server data management 
architectures and improved trouble shooting and reporting for 
telecommunications systems.

The Software Systems segment has been, and for at least the near 
future is anticipated to be, substantially dependent on business 
from a major telecommunications customer.  Revenues in 1996 from 
this customer were approximately $8.3 million.  The Company 
continues to do a significant amount of work for this customer, and 
has been actively seeking to build on its work for this customer to 
obtain additional clients in the telecommunications and other 
industries.  The Company is also developing and implementing 
enterprise-wide information networks for a federal agency and is 
providing information services activities, which include process 
re-engineering and development for network management, for a major 
financial institution.

DEFENSE SYSTEMS SEGMENT

The Defense Systems segment includes two business units, 
information and communications systems.  These units provide their 
information and communications systems solutions primarily to the 
U.S. Department of Defense (DoD) and intelligence agencies, 
focusing on key areas of secure satellite communications and 
information process re-engineering using distributed computing and 
client/server software.

The Company provides information systems solutions to government 
customers with large data management and control requirements.  The 
Company's services include systems analysis and design, object-
oriented software development services and systems integration.  
The Company focuses on marketing its services to intelligence 
agencies, NATO and other government agencies where the Company has 
extensive knowledge of the enterprise's operations and information 
systems needs.  This knowledge assists the Company in providing a 
comprehensive solution to a customer's problem which is compatible 
with the customer's overall information systems architecture and 
strategy, as opposed to developing merely a technical solution to a 
specific problem.  The Company's initial work generally involves a 
thorough analysis of the customer's enterprise structure and 
processes and information system needs.  Once this strategic 
analysis is completed, the Company designs the technology solution 
to meet the customer's needs.  This process typically involves 
software development by the Company, coupled with integration of 
commercial "off-the-shelf" software and hardware as available.  On 
many procurements, the Company will team with other industry 
participants in order to offer a multi-company solution to the 
customer.

In May 1996, the Company acquired Eldyne, Unidyne and DCS, which 
provide the Department of Defense and other government customers 
with systems research, development and prototyping, and integration 
and life cycle support of electronic, information and control 
systems.  In particular, Eldyne provides engineering, assembly and 
installation services for communications, sonar and navigation 
systems.  These services include designing digital communications 
hardware and software, planning and managing U.S. Navy programs, 
designing high-speed data acquisition and process control software, 
researching electromagnetic interference and control, performing 
communciations hardware integration, testing and evaluating 
prototype shipboard electronic systems, and performing complex 
computer simulations of magnetic and electrical fields.  Unidyne 
provides its customers with a variety of technical support 
services, including electronics and mechanical design, computer-
aided drafting and computer-aided manufacturing services, technical 
documentation, prototyping, electronics and mechanical fabrication 
and various industrial activities such as equipment installation, 
overhaul/refurbishment and providing skilled trades personnel.  
Subsequent to year-end, the Company received a $50 million task 
order contract to provide communications systems integration 
support for the U.S. government.  In addition, Titan received new 
awards from the U.S. Navy, with an initial value of $5 million in 
1997 and a total potential value of $25.3 million over the next 
five years for electronic systems, support and equipment for 
submarine undersea warfare.

The defense communications business develops and produces advanced 
satellite terminals and associated voice/data processing modems 
using DAMA (Demand Assigned Multiple Access) technologies.  These 
products are specifically tailored to meet defense requirements, 
provide highly secure communications and are produced in relatively 
small quantities.  Until recently, the government generally 
obtained new products that were designed and developed under fixed 
price development contracts which require the products to meet very 
rigorous military specifications.  The government has now shifted 
to a nondevelopment procurement approach under which companies are 
encouraged to perform their own research and development programs 
to have products readily available for purchase and to incorporate 
commercial "off-the-shelf" components where feasible in order to 
reduce costs.  To address this trend, the Company has combined 
expertise gained under government-sponsored development projects 
and its own internal development efforts to enable it to provide 
advanced technology solutions based on commercial components.  The 
Company was contracted by the U.S. Air Force in 1987 to develop a 
satellite communications technique called DAMA, and has 
subsequently been awarded more than $100 million in government 
funded development projects related to this technology.  The 
Company has enhanced this position by investing significant 
resources in internal development projects to create a variety of 
DAMA-based products which utilize commercial components.  These 
efforts have resulted in the Mini-DAMA terminal used by the U.S. 
Navy, as well as other satellite communications products based on 
DAMA technology.  In early 1997, the Company was awarded a $4.5 
million contract to provide Mini-DAMA terminals for installation on 
patrol aircraft for the Royal Australian Air Force.

Marketing for the Defense Systems segment involves identifying the 
requirements of the U.S. Government and other potential customers 
for the types of products and services provided by the Company.  
The information is then evaluated to determine if the Company can 
prepare a responsive proposal to the customer.  This business is 
highly dependent upon continued funding of certain U.S. Government 
contracts.

EMERGING TECHNOLOGIES SEGMENT

The Emerging Technologies segment contains a group of mature 
businesses generally involved in Department of Defense funded 
research and development contracts, the design and manufacture of 
pulsed power systems, and various early stage commercial 
businesses, involved in medical product sterilization services and 
systems and environmental consulting services.  The Company's 
strategy is to cultivate the research and development activities as 
a source of additional DoD and commercial products, systems or 
services.  

The Emerging Technologies segment performs various government-
sponsored research and development projects, primarily comprised of 
cost-reimbursable contracts.  These research and development 
activities involve a number of technologies including those 
necessary to develop and manufacture high-powered microwave tubes.  
The Company also designs and manufactures custom particle 
accelerators and pulsed power systems.  These systems include 
linear electron accelerators for applications including medical 
products sterilization and food pasteurization.

The Company's medical product sterilization business is based upon 
advanced linear accelerator technology developed from the Company's 
research and development activities. This business provides 
sterilization services and systems to the medical device 
marketplace in two ways; (i) its owner-operated facilities; and 
(ii) sales and installations of turnkey sterilization systems.  The 
Company owns and operates two medical sterilization facilities - 
one in Denver, Colorado and one in San Diego, California.  These 
facilities provide electron beam sterilization services using 
Titan's SureBeam(R) process to producers of disposable medical 
products.  The facility in Denver, now operating at near full 
capacity, has been operational since July 1993, and the facility in 
San Diego became operational in January 1996.  In 1996, the Company 
secured a five-year contract with a customer in San Diego as its 
anchor customer.  In December 1996, the Company sold its second 
turnkey electron beam sterilization system.

The environmental consulting and services business provides a range 
of professional environmental consulting and engineering services 
to commercial customers.  These services include remediation 
strategy development, site assessment, risk assessment, remediation 
technology selection, contract management and oversight of 
regulatory agency approvals.

Government Contracts

Sales to the United States Government, including both defense and 
non-defense agencies, and sales as a subcontractor as well as direct 
sales, aggregated $102,925,000 in 1996, $81,632,000 in 1995 and 
$93,107,000 in 1994.  These amounts represent 75%, 61% and 68% of 
total revenues in 1996, 1995, and 1994, respectively.

Titan's Government customers include the Navy, the Army, the Air 
Force, and other Government agencies, including the Federal Aviation 
Administration, the Federal Emergency Management Agency, the 
Department of Commerce, the National Aeronautics and Space 
Administration, the Defense Nuclear Agency and others.  The 
Company's business is dependent to a large extent upon continued 
funding from these and other government agencies.

The Company's contracts with the Government and subcontracts to 
prime contractors are subject to termination for the convenience of 
the Government;  termination, reduction, or modification in the 
event of change in the Government's requirements or budgetary 
constraints; and, when the Company participates as a subcontractor, 
the failure or inability of the prime contractor to perform its 
prime contract.  In addition, the Company's contract costs and fees, 
including allocated indirect costs, are subject to audits and 
adjustments by negotiation between the Company and the Government.

In addition to the right to terminate, Government contracts are 
conditioned upon the continuing availability of Congressional 
appropriations.  Congress usually appropriates funds on a fiscal 
year basis even though contract performance may take several years.  
Consequently, at the outset of a major program, the contract is 
usually incrementally funded and additional funds are normally 
committed to the contract by the procuring agency as appropriations 
are made by Congress for future fiscal years.

The Company's business with the Government and prime contractors is 
generally performed under cost reimbursement, fixed price or time 
and materials contracts.  Cost reimbursement contracts for the 
Government provide for reimbursement of costs plus the payment of a 
fee. Under fixed price contracts, the Company agrees to perform 
certain work for a fixed price.  Under time and materials contracts, 
the Company is reimbursed for labor hours at negotiated hourly 
billing rates and is reimbursed for travel and other direct expenses 
at actual costs plus applied general and administrative expense.

The following table gives the percentage of revenues realized by the 
Company from the three primary types of Government contracts during 
the years indicated.

   Contract Type                      1996     1995     1994
   =============                      ====     ====     ====
   Cost Reimbursement..............   52.9%    54.7%    59.9%
   Fixed Price.....................   40.9     40.2     36.8 
   Time and Materials..............    6.2      5.1      3.3 
                                      ====     ====     ====
                                     100.0%   100.0%   100.0%

Industry Segments, Significant Customers and Export Revenues

Reference is made to Note 5 to the accompanying consolidated 
financial statements.

Raw Materials

The Company operates both fabrication and assembly facilities and 
also purchases certain components and assemblies from other 
suppliers.  No one supplier accounts for a significant portion of 
total purchases.

Patents, Trademarks and Trade Secrets

The policy of the Company is to apply for patents and other 
appropriate statutory protection when it develops new or improved 
technology.  The Company presently holds over 40 U.S. patents, as 
well as a number of trademarks and copyrights.  However, it does not 
rely solely on such statutory protection to protect its technology 
and intellectual property.  In addition to seeking patent protection 
for its inventions, the Company relies on the laws of unfair 
competition and trade secrets to protect its unpatented proprietary 
rights.  The Company attempts to protect its trade secrets and other 
unpatented proprietary information through agreements with 
customers, vendors, employees and consultants.  In addition, various 
names used by the Company for its products and services have been 
registered with the U.S. Patent and Trademark Office.

Backlog

Contracts undertaken by the Company may extend beyond one year, and 
accordingly, portions are carried forward from one year to the next 
as part of backlog.  Because many factors affect the scheduling of 
projects, no assurance can be given as to when revenue will be 
realized on projects included in the Company's backlog.  Although 
backlog represents only business which is considered to be firm, 
there can be no assurance that cancellations or scope adjustments 
will not occur.  The majority of backlog represents contracts under 
the terms of which cancellation by the customer would entitle the 
Company to all or a portion of its costs incurred and potential 
fees.

The Company's commercial backlog represents contracts primarily for 
services.  By segment, the commercial backlog is approximately $26.3 
million, $12.5 million, $5.2 million and $3.1 million for 
Communications Systems, Emerging Technologies, Software Systems and 
Defense Systems, respectively.

Many of the Company's contracts with the U.S. Government are funded 
by the procuring agency from year to year, primarily based on its 
fiscal requirements.  This results in two different categories of 
U.S. Government backlog:  funded and unfunded backlog.  "Funded 
backlog" consists of the aggregate contract revenues remaining to be 
earned by the Company at a given time, but only to the extent such 
amounts have been appropriated by Congress and allocated to the 
contract by the procuring Government agency.  "Unfunded backlog" 
consists of (i) the aggregate contract revenues which are expected 
to be earned as the Company's customers incrementally allot funding 
to existing contracts, whether the Company is acting as a prime 
contractor or subcontractor, and (ii) the aggregate contract 
revenues which remain to be funded on contracts which have been 
newly awarded to the Company.  "Backlog" is the total of the 
commercial and government funded and unfunded backlog.

The Company's backlog consists of the following approximate amounts 
as of December 31:

           Backlog                    1996           1995     
Commercial ba...............       $ 47,113,000    $25,949,000
U.S. Government funded backlog.....  49,256,000     32,903,000
U.S. Government unfunded backlog..   98,881,000     19,883,000
                                   $195,250,000    $78,735,000
                                   ============     ==========
Backlog at December 31, 1996 includes $97.7 million from Eldyne, 
Unidyne and DCS, which were acquired by the Company in May 1996 and 
excludes backlog of the Company's Electronics division which was 
sold in July 1996.

In addition to the backlog described above, at December 31, 1996, 
the Company had remaining priced options of over $60 million from 
the U.S. Navy for full-scale production of its Mini-DAMA satellite 
communications terminal.  The Company expects that a substantial 
number of these options will be exercised in the future, although 
there is no assurance that any options will be exercised.

Management believes that year-to-year comparisons of backlog are 
difficult and not necessarily indicative of future revenues.  The 
Company's backlog is typically subject to large variations from 
quarter to quarter as existing contracts are renewed or new 
contracts are awarded.  Additionally, all U.S. Government contracts 
included in backlog, whether or not funded, may be terminated at the 
convenience of the U.S. Government.

The Company expects to realize approximately 75% of its 1996 backlog 
by the end of 1997.

Research and Development

The Company maintains a staff of engineers, other scientific 
professionals and support personnel engaged in development of new 
applications of technology and improvement of existing products.  
These programs' costs are expensed as incurred.  Total expenditures 
for research and development were $9,295,000, $16,667,000, and 
$12,699,000 in 1996, 1995, and 1994, respectively.  These 
expenditures included company funded research and development of 
$4,789,000, $5,904,000, and $5,339,000, and customer sponsored 
research and development of $4,506,000, $10,763,000, and $7,360,000, 
in 1996, 1995, and 1994, respectively.  The majority of the 
Company's customer sponsored research and development activity is 
funded under contract to the U.S. Government.  

Competitive Conditions

Communications Systems.  The Company is one of many companies 
providing satellite earth station networks and related subsystems in 
commercial markets.  The products compete based primarily on 
quality, reliability, service and price.  Competition is intense, 
and many competitors have greater financial and personnel resources 
than does the Company.

The Company is one of a few companies in the secure distribution of 
television business. These products compete based primarily on 
quality, reliability, service and price.  The Company's major 
competitors include General Instrument Corporation and Scientific 
Atlanta, Inc., both of whom have significantly greater resources 
than the Company.

Software Systems.  The Company is one of many developers producing 
custom software for high technology clients.  The custom software 
industry is rapidly changing and is subject to technological 
obsolescence.  Many of the Company's customers in this business have 
their own in-house capabilities to perform certain types of services 
that might otherwise be performed by the Company.  The primary 
factors of competition in the business in which the Company is 
engaged include technical skills, knowledge of specific industry 
operations for which the software is being developed, management and 
marketing expertise and price.

Defense Systems.  The Company designs, manufactures and sells earth 
stations and related subsystems for use in military satellite 
communications systems.  Although the Company has significant market 
share in certain segments of the military satellite communications 
systems market, some competitors have greater financial and 
personnel resources than the Company.

The Company is one of many involved in providing sophisticated 
systems engineering for a variety of programs for agencies of the 
United States Government and prime contractors for these agencies.  
Most activities in which the Company engages are very competitive 
and require highly skilled and experienced technical personnel.  
Numerous companies compete in the service areas in which the Company 
is engaged, many of which have significantly greater financial and 
personnel resources than does the Company.  As is customary in the 
business, the Company expends time and effort in preparing 
competitive proposals, only a portion of which may result in the 
award of contracts.

Emerging Technologies.  The Company is one of a few companies 
involved in the sterilization of disposable medical products prior 
to their use.  This service competes primarily on quality, 
reliability, service, safety, environmental acceptability and price.  
The Company's major competitors are Isomedix, Inc. and Sterigenics 
International, Inc.

The Company competes against a wide variety of companies to perform 
funded research and development contracts for the Government.  Many 
of these companies have substantially greater financial and 
technical resources than the Company.

The Government's own in-house capabilities and federally-funded 
(non-profit) research and development centers are also, in effect, 
competitors of the Company in that they perform certain types of 
services that might otherwise be performed by the Company.  The 
primary factors of competition in the business in which the Company 
is engaged include technical skills, management and marketing 
expertise and price.

Employees

At the end of fiscal 1996, the Company employed approximately 1,449 
employees, predominantly located in the United States.

Item 2. Properties

The Company's operations occupy approximately 680,650 square feet of 
space located throughout the United States.  The large majority of 
the space is office space.   Substantially all of the Company's 
facilities are leased.  For lease commitment information, reference 
is made to Note 8 to the accompanying financial statements.

It is management's policy to maintain the Company's facilities and 
equipment in good condition and at a high level of efficiency.  
Existing facilities are considered to be generally suitable and 
adequate for the Company's present needs.  Substantially all of the 
machinery and equipment employed by Titan in its business is owned 
by the Company.

The locations of the principal operating facilities of the Company 
and its consolidated subsidiaries at the end of 1996 were as 
follows:

Communications Systems           Software Systems
San Diego, California            San Diego, California
                                 Reston, Virginia
                                 Washington, D.C.
Defense Systems                  Colorado Springs, Colorado
San Diego, California            Tampa, Florida
Reston,Virginia                  Dallas, Texas
Norfolk, Virginia
Richmond, Virginia               Emerging Technologies
Hanover, Maryland                San Diego, California
Vallejo, California              San Leandro, California
Heathrow, Florida                Dublin, California
Denver, Colorado                 Chatsworth, California
Boston, Massachusetts            Albuquerque, New Mexico
Dayton, Ohio                     Denver, Colorado
Huntsville, Alabama              Bozeman, Montana
Niantic, Connecticut             Princeton, New Jersey
                                 Tempe, Arizona

Item 3. Legal Proceedings

In the ordinary course of business, defense contractors are subject 
to many levels of audit and investigation by various government 
agencies.  Further, the Company and its subsidiaries are subject to 
claims and from time-to-time are named as defendants in legal 
proceedings.  In the opinion of management, the amount of ultimate 
liability with respect to these actions will not materially affect 
the financial position or results of operations of the Company.

The Company is involved in appeals of the judgments resulting from 
the trials of two separate lawsuits filed by former employees 
claiming, among other things, wrongful termination and 
discrimination.  The Company intends to vigourously pursue and 
defend against the appeals of these cases.  While it is not 
feasible to predict the outcome of these cases, management believes 
that their ultimate disposition will not have a material adverse 
effect on the financial position or results of operations of the 
Company.

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

None.

                            PART II

Item 5. Market for the Registrant's Common Equity and Related 
Stockholder Matters

The Company's common stock and cumulative convertible preferred 
stock are traded on the New York Stock Exchange ("NYSE").  As of 
March 3, 1997, there were approximately 3,400 holders of record of 
the Company's common stock and 740 holders of record of the 
Company's preferred stock, excluding beneficial owners of shares 
held in the names of brokers or other nominees.  The closing prices 
for the common and preferred stock on the New York Stock Exchange 
as of March 3, 1997, were $3.50 and $10.75, respectively.  The 
quarterly market price ranges for the Company's common and 
preferred stock on the New York Stock Exchange in 1996 and 1995 
were as follows:

Common Stock             1996                 1995     
                         ====                 ====
Fiscal Quarter        High     Low        High      Low
=============         ===      ===        ===       ===
First               $ 7.38   $6.00       $7.13    $5.63
Second                7.13    5.50        9.38     6.25
Third                 5.63    3.63       10.38     8.50
Fourth                4.38    2.50        9.63     6.63

Cumulative Convertible
Preferred Stock           1996                1995       
                          ===                 ===
Fiscal Quarter       High        Low      High       Low
==============       ====        ===       ===       ===
First               $12.63    $12.00    $11.88    $10.88
Second               12.13     11.38     12.25     11.63
Third                11.50     10.88     13.25     11.75
Fourth               10.88     10.00     12.88     11.88

No dividends were paid on the Company's common stock in 1996 or 
1995.  Regular quarterly dividends of $.25 per share were paid on 
the cumulative convertible preferred stock in both years.

Item 6. Selected Financial Data
<TABLE>
<CAPTION>
                                               
(in thousands of dollars, 
 except per share data)                1996       1995      1994       1993       1992

<S>                                 <C>        <C>       <C>       <C>        <C>
Operating Results:
   Revenues                         $137,722   $133,967  $136,206  $149,414   $148,762
   Net income (loss)                  (3,378)    (3,807)    5,953    (7,906)     3,631
   Net income (loss) per common 
      share                             (.27)      (.33)      .40      (.73)       .26

Financial Position:
   Cash and cash equivalents           2,052      5,833     5,129     5,374      4,344
   Total assets                      127,848     95,170    81,903    93,214     90,679
   Long-term debt                     40,071      4,281       765        --      9,500
   Redeemable preferred stock          3,000         --        --        --         --
   Stockholders' equity               46,645     38,639    38,768    29,321     36,016
   Preferred dividends                   803        695       695       695        695
</TABLE>

Item 7. Management's Discussion and Analysis of Results of 
Operations and Financial Condition   (The following should 
be read in conjunction with the consolidated financial 
statements and related notes.  Dollar amounts are expressed 
in thousands.)

COMPANY OVERVIEW

Throughout 1996, Titan continued to pursue its strategy of 
strengthening its core defense businesses and investing in its 
early stage commercial businesses.  Investment dollars were 
provided from the issuance of $34.5 million of convertible 
subordinated debentures, proceeds of which were used to repay 
borrowings under its bank credit facilities and to fund working 
capital requirements.  

Significant accomplishments achieved by Titan's emerging commercial 
businesses this year included the award of a $12.75 million 
purchase agreement for delivery of additional conditional access 
system equipment and set-top box decoders to a U.S. company and a 
$2.7 million award for a similar system in Thailand, the initial 
shipments on the Company's rural telephony development contract in 
Indonesia, the award of a $4 million contract to provide a 
communications network in Bangkok, and the opening of the San Diego 
medical sterilization facility.  These accomplishments marked 
significant progress for Titan.  However, the need to complete 
product development and realize positive profit contributions from 
the commercialization process has heightened the challenge of 
internally funding these start-up activities.  Titan's strategic 
plan focuses on the pursuit of various financing alternatives 
including, but not limited to, public and private offerings of 
minority interests in certain of its subsidiaries and the sale of 
non-core businesses, in order to provide additional funding for the 
development and commercialization of new products and services.

The Company is currently involved in a number of early stage 
businesses, most notably commercial satellite communications, 
broadband communications, and medical device sterilization.  
Certain investments made in these early stage businesses have been 
capitalized and are included in the balance sheet, primarily within 
the captions of Inventories, Property and Equipment, and Other 
Assets, which includes capitalized software costs.  At December 31, 
1996, these capitalized investments aggregate approximately $18.8 
million.  These early stage businesses are in various growth stages 
and have not yet generated sufficient revenues to achieve 
profitability.  The capitalized investments in these businesses are 
substantially complete.  However, significant sales and marketing 
efforts related to the commercialization process are expected to 
continue.  Management intends to carefully monitor its return on 
investment from all of its early stage businesses.  The Company has 
been pursuing a process to identify potential strategic investors 
for the broadband communications business.  To date, an appropriate 
strategic investor has not been identified.  The Company intends to 
reduce its investment in this area in 1997, and has taken actions 
to significantly reduce the broadband communications business 
operating costs.

An essential element of the Company's long-term strategy is the 
growth associated with its core Defense Systems segment.  As part 
of this strategy, Titan acquired Eldyne, Unidyne, and Diversified 
Control Systems ("the Acquired Companies") in May 1996.  The 
Acquired Companies provide the Department of Defense and other 
government customers with systems research, development and 
prototyping, and integration and life cycle support of electronic, 
information and control systems.  The services and systems provided 
by the Acquired Companies are complementary to those provided by 
the existing Defense Systems businesses. During 1996, achievements 
in this segment included the exercise of an additional $8.3 million 
production option and additional orders aggregating $6 million for 
Mini-DAMA satellite communications terminals, and a $2.9 million 
contract with NATO to provide hardware and software products, as 
well as systems integration.  Subsequent to year-end, the Company 
received a $50 million task order contract to provide 
communications systems integration support for the U.S. government.  
In addition, Titan received new awards from the U.S. Navy, with an 
initial value of $5 million in 1997 and a total potential value of 
$25.3 million over the next five years for electronic systems, 
support and equipment for submarine undersea warfare.

OPERATING RESULTS

The table below sets forth Titan's consolidated revenues, operating 
profit (loss), net interest expense, income tax provision (benefit) 
and net income (loss) for each of the three years ended December 
31, 1996:

                                         1996         1995        1994
                                         ====         ====        ====
Revenues                             $ 137,722    $ 133,967   $ 136,206
Operating profit (loss)                 (2,157)      (3,955)      9,635
Interest expense, net                    2,961        1,059         632
Income tax provision (benefit)          (1,740)      (1,207)      3,050
Net income (loss)                       (3,378)      (3,807)      5,953

Titan's consolidated revenues were $137,722, $133,967 and  $136,206 
in 1996, 1995 and 1994, respectively.  The revenue growth in 1996 
was attributable to the Defense Systems segment, primarily 
reflecting the revenues generated by Eldyne, Unidyne and DCS from 
the date of acquisition, offset by revenue declines in the 
Communications Systems, Software Systems and Emerging Technologies 
segments.  Excluding revenues from Titan's Applications Group, 
which was sold in April 1994, Titan's pro forma 1994 revenues were 
$124,293.  Increased revenues in 1995 over pro forma 1994 were 
generated in all segments.

Titan's consolidated operating profit (loss) has been significantly 
impacted by a number of factors in each of the three years shown 
above.  Combined selling, marketing, and research and development 
expenses were $11,121, $12,008 and $9,686 in 1996, 1995 and 1994, 
respectively, reflecting Titan's efforts to expand commercial 
applications of its technologies and to continue developing certain 
defense communication technologies.  General and administrative 
expenses have remained relatively constant over the 3 year period, 
with savings from cost-cutting actions offset by increased  
investment in the Company's emerging commercial businesses, 
primarily the Communications Systems segment. Restructuring charges 
were recorded in both 1995 and 1994 reflecting management's efforts 
to adapt to both internal and external forces impacting Titan's 
long-term operating strategy.  The 1994 charge was offset by a 
$12,700 pre-tax gain resulting from the sale of Titan's 
Applications Group.

Net interest expense has fluctuated significantly over the three 
year period ended December 31, 1996.  Generally, the principal 
component of interest expense is the Company's borrowings under its 
bank lines of credit.  In addition, the 1996 interest expense 
includes the interest related to the convertible subordinated 
debentures issued by the Company in November 1996.  Borrowings from 
the Company's bank lines of credit averaged $12,315, $6,400, and 
$4,180 at weighted average interest rates of 8.2%, 8.8% and 7.6% 
during 1996, 1995 and 1994, respectively.  Also affecting interest 
expense is interest on the Company's deferred compensation and 
retiree medical obligations.  Interest expense related to these 
items was $801, $726 and $529 for 1996, 1995 and 1994, 
respectively.  Interest on the deferred compensation obligation 
will continue to increase as the total obligation increases, while 
interest on the retiree medical obligation is expected to decrease.

Income taxes reflect effective rates of 34%, 24% and 34% in 1996, 
1995 and 1994, respectively.  The difference between the actual 
provision and the effective provision (based on the United States 
statutory tax rate) in 1995 was due to the alternative minimum tax 
and to permanent differences between financial statement income and 
taxable income.

Business Segments

Communications Systems:  The Communications Systems segment 
contains two business units, both targeting rapidly growing 
commercial markets.  The first business unit is satellite 
communications, which develops and sells satellite earth station 
networks and related systems which address the demand for telephony 
services.  The second business unit, broadband communications, 
specializes in providing complete turnkey security for television 
delivery systems, with applications for delivery of television 
programming via wireless, satellite, coaxial cable and fiber 
optics.

Revenues in this segment were $5,885, $7,490 and $6,319 in 1996, 
1995 and 1994, respectively.  The composition of the revenues was 
significantly different over the three year period.  Revenues in 
the satellite communications business unit were approximately 
$3,600 in 1996, $5,100 in 1995, and $6,000 in 1994.  However, in 
early 1995, Titan sold its transceiver manufacturing division which 
was part of this business unit.  On a pro forma basis, excluding 
the sold division, the satellite communications revenues were 
approximately $4,600 and $2,200 in 1995 and 1994, respectively.  
The decrease in pro forma revenues to $3,600 in 1996 from $4,600 in 
1995 was principally due to delays in shipments on the Company's 
rural telephony contract.  The increase in pro forma revenues from 
1994 to 1995 resulted primarily from obtaining and performing on a 
contract to develop and integrate a satellite communications 
network in Thailand.  Revenues in 1996 included approximately 
$2,200 of broadband communications revenues from the completion of 
the Company's first contract in this business area and revenues 
from a follow-on order with this same customer.  The decrease in 
revenues from 1995 to 1996 was due to delays in receiving the 
follow-on order mentioned above.  The 1995 segment revenues 
included approximately $2,400 of broadband communications revenues 
from the Company's first contract in this business area.  There 
were no broadband communications revenues in 1994.

The segment's operating loss was $7,841 in 1996 compared to $4,488 
in 1995 and $7,927 in 1994. The losses in 1996 and 1995 reflect the 
start-up nature of this segment's businesses which requires 
significant selling, marketing and research and development 
activities disproportionate to the level of revenues generated.  
The Company has been pursuing a process to identify potential 
strategic investors for the broadband communications business.  To 
date, an appropriate strategic investor has not been identified.  
The Company intends to reduce its investment in this area in 1997, 
and has taken certain actions to significantly reduce the broadband 
communications business operating costs.  The loss in 1994 includes 
approximately $5,400 of losses and restructuring charges associated 
with Titan exiting its transceiver manufacturing business.

Software Systems:  The Software Systems segment provides custom 
software products and services to assist customers in moving from 
older mainframe systems to distributed computing systems utilizing 
client/server, object-oriented software.

Revenues in this segment were $18,505 for 1996, $33,175 in 1995, 
and $28,868 in 1994.  One customer accounted for approximately 
$8,000 of this segment's revenue in 1996 and $24,000 of this 
segment's revenue in both 1995 and 1994.  In the second half of 
1995, this segment experienced reduced demand from this customer 
and this trend continued in 1996.  Excluding the revenues from this 
customer, there was moderate growth in other custom software 
business.

Segment operating loss was $137 in 1996, compared to operating 
income of $3,803 in 1995 and $6,237 in 1994.  The 1996 results were 
due primarily to reduced sales from the previously mentioned 
customer, the timing of corresponding decreases in selling, general 
and administrative expense, and additional costs associated with a 
negotiated conclusion of certain programs with this customer.  The 
1995 decrease was principally due to the effect of restructuring 
charges for severance and other reorganization costs and the impact 
of reduced sales volume mentioned previously.

Defense Systems:  The Defense Systems segment includes two business 
units, information and communications systems, which provide 
systems solutions primarily to U.S. and allied government and 
defense customers.  The defense information systems business 
supports high priority government programs by providing information 
systems engineering services, development and integration of 
systems and specialized products, as well as systems research, 
development and prototyping.  The defense communications business 
develops and produces advanced satellite terminals and associated 
voice/data processing modems.  These products are specifically 
tailored to meet defense requirements, provide highly secure 
communications and are produced in relatively small quantities.

Revenues in this segment were $90,902, $67,948, and $78,780 for 
1996, 1995 and 1994, respectively.  However, excluding revenues 
attributable to the Company's Applications Group, which was sold in 
1994, pro forma segment revenues were $66,867 in 1994.  Revenues 
increased in 1996 principally due to $33,600 revenues generated 
from the acquired companies Eldyne, Unidyne and DCS.   Revenue 
growth from the Mini-DAMA production contract also contributed to 
the revenue increase in this segment.   Revenues in 1996, 1995 and 
1994 included approximately $6,100, $18,300 and $9,700, 
respectively, for work subcontracted to the buyer of the 
Applications Group.  There was no operating profit associated with 
these revenues.  This contract was substantially completed in 1996.  
Revenues and operating profit for 1995 included approximately 
$1,400 recovered from a termination for convenience claim with the 
U.S. Government for work performed in prior years.

Segment operating income in 1996 was $10,018, compared with $4,456 
in 1995, and $4,725 in 1994. The operating income increase in 1996 
is attributable to the revenue growth discussed previously, and 
certain non-recurring credits resulting from the reevaluation of 
estimates of certain allowable contract costs based upon favorable 
developments with certain government audit agencies, as well as 
changes in the carrying value of assets being disposed of. 
Operating results for 1994 include $2,500 of profit resulting from 
a favorable settlement and from improved contract performance on 
the Company's Mini-DAMA fixed price development contract.  This 
profit was offset by a charge of approximately $3,200 for 
restructuring costs related to the Electronics division. 

Emerging Technologies:  Emerging Technologies contains a group of 
mature businesses generally involved in Department of Defense (DoD) 
funded research and development contracts and various early stage 
commercial businesses, involved in medical product sterilization 
services and systems and environmental consulting services.  The 
Company's strategy is to use the research and development 
activities as a source for developing additional DoD and commercial 
products, systems and services.

Revenues in this segment were $22,430, $25,354 and $22,239 in 1996, 
1995 and 1994, respectively.  Approximately $7,600 of 1996 and 
$7,400 of 1995 revenue was generated by the segment's early stage 
businesses.  Substantially all remaining revenue for all periods 
presented was derived from the various established business lines.  
The decline in 1996 revenue is primarily attributable to the sale 
of the Company's shaped-charged munitions business in September 
1995 and the completion of certain pulsed power systems contracts 
with the French government.  This segment's operating profit (loss) 
has not been material in relation to the Company's consolidated 
operating results.  Generally losses experienced by the start-up 
operations have offset profits contributed by the segment's other 
lines of business.

LIQUIDITY AND CAPITAL RESOURCES

During 1996, Titan used $12,684 cash for operating requirements.  
In addition to funding the net loss, other significant cash uses 
included an increase in inventories of $5,461 principally related 
to commercial rural telephony products and to government satellite 
communications, funding requirements for certain accrued 
compensation obligations of $2,427 and funding of $4,099 of 
restructuring activities.  Cash was provided primarily by 
collection of receivables in the Defense Systems segment of $3,633, 
the proceeds from the issuance of the convertible subordinated 
debentures, net of issuance costs and the repayments of borrowings 
under the Company's revolving lines of credit, of $9,739, the 
refinancing of the Company's Denver Scan facility for $1,773, and 
proceeds from the sale of the Company's Electronics division of 
$2,492.

In November 1996, the Company issued $34,500 of 8.25% convertible 
subordinated debentures due 2003.  The net proceeds of 
approximately $32,400 were used to repay the borrowings under the 
Company's revolving lines of credit.  The remaining funds were used 
to fund working capital requirements and other general purposes.   

As of December 31, 1996, there were no borrowings outstanding under 
the Company's $14,000 bank line of credit, and the Company had 
available cash of $2,052.  The Company had commitments under 
letters of credit at December 31, 1996 of $1,104, which reduced 
availability under the line of credit to $12,896. The maturity date 
of the line of credit is May 31, 1997.  Subsequent to December 31, 
1996, the Company received a commitment from the bank to renew the 
facility through May 31, 1998.

In connection with the Company's acquisition of Eldyne, Unidyne and 
DCS in May 1996, the Company's Eldyne and Unidyne subsidiaries 
assumed and renegotiated a separate credit agreement with a lender 
which provides, among other things, for a working capital line of 
credit facility of up to $7,000 for Eldyne and Unidyne.  The actual 
borrowing base is limited for each of Eldyne and Unidyne to the sum 
of various percentages of billed and certain unbilled government 
and commercial receivables. At  December 31, 1996, there were no 
borrowings outstanding under this line of credit. The Company had 
commitments under letters of credit at December 31, 1996 of $85, 
which, in addition to borrowing base limitations, reduced 
availability under the line of credit to $4,663.  The Company has 
guaranteed up to $2,500 of indebtedness under this line of credit.  
The maturity date of the line of credit is May 31, 1997.  The 
Company intends to renegotiate this line of credit with the lender 
and/or other banks.

Cash requirements for 1997 are expected to continue to be 
significant.  Investments in product development within the 
Communications Systems segment were substantially complete in 1996, 
however, the Company plans to continue aggressive sales and 
marketing efforts. The Company has been pursuing a process to 
identify potential strategic investors for the broadband 
communications business.  To date, an appropriate strategic 
investor has not been identified.  Because there can be no 
assurance that the Company will be successful in obtaining outside 
funding, the Company will continue to reassess its investment in 
all its early stage businesses, in relation to the availability of 
funding sources, both internal and external.  As part of this 
assessment, the Company has taken certain actions in early 1997 to 
reduce operating costs in the broadband communications business.

FORWARD LOOKING INFORMATION:  CERTAIN CAUTIONARY STATEMENTS

Certain statements contained in this Management's Discussion and 
Analysis of Results of Operations and Financial Condition that are 
not related to historical results are forward looking statements.  
Actual results may differ materially from those stated or implied 
in the forward looking statements.  Further, certain forward 
looking statements are based upon assumptions of future events 
which may not prove to be accurate.  These forward looking 
statements involve risks and uncertainties including but not 
limited to those referred to below.

Entry Into Commercial Business.  Prior to 1992, the Company's 
revenues had been derived principally from business with the 
Department of Defense and other government agencies.  Since that 
time, the Company has pursued a strategy of using the technology 
from its defense business to build commercial businesses.  This 
strategy presents certain significant risks for the Company.  Many 
of the Company's commercial businesses, such as satellite 
communications, broadband communications, and medical 
sterilization, remain in an early stage.  As such, the Company is 
subject to all the risks inherent in the operation of a start-up 
venture, including the need to develop and maintain marketing, 
sales and customer support capabilities, to secure appropriate 
third party manufacturing arrangements, to respond to the rapid 
technological advances inherent in these markets, to secure the 
necessary financing to support these activities and, ultimately, to 
design and manufacture products or provide services acceptable to 
buyers in its target markets.  Certain of the Company's new 
products, including products for which the Company has contracts 
for delivery, are still in the testing stage.  There can be no 
assurance that such tests will be completed satisfactorily or that 
the Company will be able to satisfy all of the requirements for 
delivery of and payment for these products.  In addition, many of 
the opportunities in the satellite communications and broadband 
communications businesses are large, international projects which 
involve lengthy sales cycles.  The Company's efforts to address 
these risks have required, and will continue to require, 
significant expenditures and dedicated management time and other 
resources.  There can be no assurance that the Company will be 
successful in addressing these risks or in developing these 
commercial businesses.

Reliance on Major Software Customer.  The Company's Software 
Systems business is substantially dependent on business from a 
major telecommunications company to develop and support access 
carrier client/server software applications.  Revenues from this 
customer totaled approximately $8.3 million, $24.5 million, and 
$24.3 million or 6%, 18%, and 18% of total Company revenues in 
1996, 1995, and 1994, respectively.  In the second half of 1995, 
the Company experienced reduced demand from this customer and this 
trend continued in 1996.  The loss of this customer, or a 
substantial delay or continued decrease in the amount of its 
business, could have a material adverse effect on the Software 
Systems segment's results of operations and financial condition.

Dependence on Defense Spending.  The Company's Defense Systems 
segment is dependent upon continued funding of U.S. Department of 
Defense programs.  Titan, like other companies doing business with 
the U.S. Department of Defense, has been affected by declining 
defense budgets and has experienced increased competition in 
certain of its defense business areas.  The size and scope of any 
reductions in future defense budgets is uncertain, and management 
anticipates that competition in most defense-related areas will 
continue to be intense.

Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements and Financial Statement 
Schedules

                                                           Page
Report of Independent Public Accountants.............................      15
Financial Statements
   Consolidated Statements of Operations.............................      16
   Consolidated Balance Sheets.......................................      17
   Consolidated Statements of Cash Flows.............................      18
   Consolidated Statements of Stockholders' Equity...................      19
   Notes to Consolidated Financial Statements........................   20-31

Supporting Financial Statement Schedule Covered by the Foregoing Report of
Independent Accountants:

Schedule II - Valuation and Qualifying Accounts......................      38

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To The Titan Corporation:

We have audited the accompanying consolidated balance sheets of The 
Titan Corporation (a Delaware corporation) and subsidiaries as of 
December 31, 1996 and 1995, and the related consolidated statements 
of operations, stockholders' equity and cash flows for each of the 
three years in the period ended December 31, 1996.  These financial 
statements and the schedule referred to below are the 
responsibility of the Company's management.  Our responsibility is 
to express an opinion on these financial statements and schedule 
based on our audits.

We conducted our audits in accordance with generally accepted 
auditing standards.  Those standards require that we plan and 
perform the audit to obtain reasonable assurance about whether the 
financial statements are free of material misstatement.  An audit 
includes examining, on a test basis, evidence supporting the 
amounts and disclosures in the financial statements.  An audit also 
includes assessing the accounting principles used and significant 
estimates made by management, as well as evaluating the overall 
financial statement presentation.  We believe that our audits 
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present 
fairly, in all material respects, the financial position of The 
Titan Corporation and subsidiaries as of December 31, 1996 and 
1995, and the results of their operations and their cash flows for 
each of the three years in the period ended December 31, 1996 in 
conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the 
basic financial statements taken as a whole.  The schedule listed 
in the index to financial statements is presented for purposes of 
complying with the Securities and Exchange Commission's rules and 
is not part of the basic financial statements.  This schedule has 
been subjected to the auditing procedures applied in the audit of 
the basic financial statements and, in our opinion, fairly states 
in all material respects the financial data required to be set 
forth therein in relation to the basic financial statements taken 
as a whole.


ARTHUR ANDERSEN LLP

San Diego, California
February 20, 1997
<TABLE>
<CAPTION>

                            The Titan Corporation
                       Consolidated Statements of Operations
                      (in thousands, except per share data)


                                                          For the years ended December 31,
                                                            1996         1995       1994     
<S>                                                       <C>         <C>        <C>
Revenues                                                  $137,722    $133,967   $136,206 

Costs and expenses:
   Cost of revenues                                        110,589     102,231     99,921 
   Selling, general and administrative expense              24,501      23,538     22,511 
   Research and development expense                          4,789       5,904      5,339 
   Restructuring and other (income) expense, net              --         6,249     (1,200)

   Total costs and expenses                                139,879     137,922    126,571


Operating profit (loss)                                     (2,157)     (3,955)     9,635

Interest expense                                            (3,026)     (1,154)      (923)
Interest income                                                 65          95        291


Income (loss) before income taxes                           (5,118)     (5,014)     9,003
Income tax provision (benefit)                              (1,740)     (1,207)     3,050


Net income (loss)                                           (3,378)     (3,807)     5,953
Dividend requirements on preferred stock                      (803)       (695)      (695)


Net income (loss) applicable to common stock              $ (4,181)   $ (4,502)  $  5,258


Net income (loss) per weighted average common share       $   (.27)   $   (.33)  $    .40


Weighted average common shares outstanding                  15,278      13,445     13,288

The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
                                     The Titan Corporation
                                    Consolidated Balance Sheets
                     (in thousands of dollars, except shares and per share values)

                                                                    As of December 31,
                                                                    1996          1995   
<S>                                                               <C>         <C>
Assets
Current Assets:
   Cash and cash equivalents                                      $  2,052     $ 5,833
   Accounts receivable - net                                        47,509      39,360
   Inventories                                                      13,157      10,399
   Prepaid expenses and other                                        2,059       2,872
   Deferred income taxes                                             6,037       4,809

      Total current assets                                          70,814      63,273

Property and equipment - net                                        21,005      18,295
Goodwill - net of accumulated amortization of $4,723 and $3,842     21,348       3,550
Other assets - net                                                  14,681      10,052

      Total assets                                                $127,848     $95,170

Liabilities and Stockholders' Equity
Current Liabilities:
   Accounts payable                                               $  8,394     $10,184
   Line of credit                                                      --        9,200
   Note payable to related party                                     1,000         -- 
   Current portion of long-term debt                                 1,010       1,019
   Accrued compensation and benefits                                 8,680       9,192
   Other accrued liabilities                                        10,615      13,803
      Total current liabilities                                     29,699      43,398

Long-term debt                                                      40,071       4,281
Other non-current liabilities                                        8,433       8,852
Commitments and contingencies

Series B cumulative convertible redeemable preferred stock,
   $3,000 liquidation preference, 6% cumulative annual dividend,
   500,000 shares issued and outstanding                             3,000         --

Stockholders' Equity:
   Preferred stock: $1 par value, authorized 
      2,500,000 shares:
      Cumulative convertible, $13,897 liquidation preference:
         694,872 shares issued and outstanding                         695        695
      Series A junior participating, authorized 250,000 shares: 
         none issued                                                    --        -- 
   Common stock: $.01 par value, authorized 30,000,000
      shares, issued and outstanding: 17,133,680 and                                 
      15,087,087 shares                                                171        151
   Capital in excess of par value                                   42,751     31,148
   Retained earnings                                                 5,988     10,169
   Treasury stock (1,106,114 and 1,161,147 shares), at cost         (2,960)    (3,524)

      Total stockholders' equity                                    46,645     38,639

      Total liabilities and stockholders' equity                  $127,848    $95,170

     The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
                                 The Titan Corporation
                         Consolidated Statements of Cash Flows
                             (in thousands of dollars)

                                                       For the years ended December 31,  
                                                          1996       1995       1994     
<S>                                                    <C>        <C>        <C>
Cash Flows from Operating Activities:
Net income (loss)                                       $(3,378)   $(3,807)   $ 5,953
Adjustments to reconcile net income (loss) to 
   net cash provided by (used for) operating activities:
      Depreciation and amortization                       5,793      4,117      3,424 
      Deferred income taxes and other                    (1,909)       178        681 
      Change in operating assets and liabilities,
         net of effects from businesses sold and
         acquired:                                                                  
            Accounts receivable                           3,453     (3,196)     8,091 
            Inventories                                  (5,461)    (3,287)      (494)
            Prepaid expenses and other assets               344        811        160 
            Accounts payable                             (3,496)     2,782        (44)
            Income taxes payable                           (653)        --         -- 
            Accrued compensation and benefits            (2,427)    (1,808)     1,559
            Restructuring activities                     (4,099)      (486)    (1,200)
            Other liabilities                              (851)    (1,249)   (12,218)


Net cash provided by (used for) operating 
   activities                                           (12,684)    (5,945)     5,912 


Cash Flows from Investing Activities:
Proceeds, net of transaction costs, from sale
   of businesses                                          2,492      1,835     16,766 
Capital expenditures                                     (6,179)    (8,988)    (6,244)
Capitalized software costs                               (3,570)    (1,957)    (1,345)
Payment for purchase of businesses, net of cash acquired (2,679)        --         --
Other                                                       170        117         33 

Net cash provided by (used for) investing activities     (9,766)    (8,993)     9,210 


Cash Flows from Financing Activities:
Additions to debt                                        37,000     13,800        --  
Retirements of debt                                     (15,841)      (621)   (16,871)
Deferred debt issuance costs                             (2,035)        --         -- 
Proceeds from stock issuances                               348      3,158      2,199 
Dividends paid                                             (803)      (695)      (695)


Net cash provided by (used for) financing activities     18,669     15,642    (15,367)

Net increase (decrease) in cash and cash equivalents     (3,781)       704       (245)
Cash and cash equivalents at beginning of year            5,833      5,129      5,374 

Cash and cash equivalents at end of year                $ 2,052   $  5,833    $ 5,129


The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
                                                         The Titan Corporation
                                             Consolidated Statements of Stockholders' Equity
                                          (in thousands of dollars, except per share data)

                                            Cumulative
                                            Convertible                Capital
                                             Preferred    Common     in Excess of    Retained     Treasury
                                               Stock       Stock       Par Value     Earnings       Stock        Total
<S>                                        <C>          <C>         <C>             <C>          <C>          <C>
Balances at December 31, 1993               $    695     $    138    $   24,974      $ 9,413      $(5,899)     $29,321
   Exercise of stock options                      --            8         2,191           --           --        2,199
   Shares contributed to employee
      benefit plans and other                     --           --            --           --        1,295        1,295
   Income tax benefit from
      employee stock transactions                 --           --           695           --           --          695
   Dividends on preferred stock -
      $1 per share                                --           --            --         (695)          --         (695)
   Net income                                     --           --            --        5,953           --        5,953

Balances at December 31, 1994                    695          146        27,860       14,671       (4,604)      38,768
   Stock issuance                                 --           --         1,413           --          912        2,325
   Exercise of stock options                      --            5         1,209           --         (381)         833
   Shares contributed to employee
      benefit plans                               --           --           322           --          549          871
   Income tax benefit from employee
      stock transactions                          --           --           344           --           --          344
   Dividends on preferred stock -
      $1 per share                                --           --            --         (695)          --         (695)
   Net loss                                       --           --            --       (3,807)          --       (3,807) 

Balances at December 31, 1995                    695          151        31,148       10,169       (3,524)      38,639 
   Stock issuance for acquisition                 --           18        10,659           --           --       10,677
   Exercise of stock options and other            --            2           408           --          (62)         348
   Shares contributed to
      employee benefit plans                      --           --           466           --          626        1,092
   Income tax benefit from employee stock
      transactions                                --           --            70           --           --           70
   Dividends on preferred stock --
      Cumulative Convertible, $1.00 per share     --           --            --         (695)          --         (695)
      Series B, 6% annual                         --           --            --         (108)          --         (108)
   Net loss                                       --           --            --       (3,378)          --       (3,378)
Balances at December 31, 1996               $    695      $   171       $42,751      $ 5,988     $ (2,960)    $ 46,645 

The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
                   The Titan Corporation 
            Notes to Consolidated Financial Statements
        (in thousands of dollars, except per share data)

Note 1. Summary of Significant Accounting Policies

Nature of Operations.  The Titan Corporation provides engineering, 
technical, management and consulting services in the areas of 
national security, software systems, communication systems, 
information systems, electronic control systems, advanced research 
and development, sterilization and the environment.  The Company 
also develops, designs, manufactures and markets satellite 
communications subsystems, broadband communications systems, and 
pulsed power products including linear accelerators.

Principles of Consolidation.  The consolidated financial statements 
include the accounts of The Titan Corporation ("Titan" or "the 
Company") and its subsidiaries.  All significant intercompany 
transactions and balances have been eliminated.  Also, certain 
prior year amounts have been reclassified to conform to the 1996 
presentation.

Use of Estimates.  The preparation of financial statements in 
conformity with generally accepted accounting principles requires 
management to make estimates and assumptions that affect the 
reported amounts of assets and liabilities and disclosure of 
contingent assets and liabilities at the date of the financial 
statements and the reported amounts of revenues and expenses during 
the reporting period.  Actual results could differ from those 
estimates.

Start-up Activities.  The Company is involved in a number of start-
up ventures, most notably commercial satellite communications, 
broadband communications, and medical device sterilization.  
Certain investments made in these start-up ventures are reflected 
in the balance sheet, primarily within the captions of Inventories, 
Property and Equipment, and Other Assets, which includes 
capitalized software costs.  These capitalized investments 
aggregate approximately $18,810 at December 31, 1996.  The 
capitalized investments in these businesses were substantially 
complete in 1996.  These start-up ventures are in various early 
growth stages and have not yet generated sufficient revenues to 
achieve profitability.  At this time, management plans to continue 
to invest in these ventures, though the level of such investment 
may change based on the business' operating performance and cash 
flows.  Furthermore, management will continue to review and 
evaluate all alternatives related to these investments, including 
strategic partnering, joint venturing, or sale.  The realizability 
of the related assets is routinely  assessed by management from 
both an operating perspective, as well as through giving 
consideration to strategic alternatives believed to be available.

Revenue Recognition.  A majority of the Company's revenue, both 
commercial and government, is derived from products manufactured 
and services performed under cost-reimbursement and fixed-price 
contracts wherein revenues are generally recognized using the 
percentage-of-completion method.  Certain other revenues are 
recognized as units are delivered.  Estimated contract losses are 
fully charged to operations when identified.

Cash Equivalents.  All highly liquid investments purchased with an 
original maturity of three months or less are classified as cash 
equivalents.

Inventories.  Inventories include the cost of material, labor and 
overhead, and are stated at the lower of cost, determined on the 
first-in, first-out (FIFO) and weighted average methods, or market.

Property and Equipment.  Property and equipment are stated at cost.  
Depreciation is provided using the straight-line method, with 
estimated useful lives of 32 years for buildings, 2 to 15 years for 
leasehold improvements and 3 to 7 years for machinery and equipment 
and furniture and fixtures.  Certain machinery and equipment in the 
Company's medical sterilization business is depreciated based on 
units of production.

Goodwill.  The excess of the cost over the fair value of net assets 
of purchased businesses ("goodwill") is amortized on a straight-
line basis over varying lives ranging from 5 to 30 years.  The 
Company periodically re-evaluates the original assumptions and 
rationale utilized in the establishment of the carrying value and 
estimated lives of these assets.  The criteria used for these 
evaluations include management's estimate of the asset's continuing 
ability to generate positive income from operations and positive 
cash flow in future periods as well as the strategic significance 
of the intangible asset to the Company's business objectives.

Capitalized Software Costs.  The Company's policy is to amortize 
capitalized software costs over the greater of (a) the ratio that 
current gross revenues for a product bears to the total of current 
and amortized future gross revenues for that product, or (b) the 
straight-line method over the remaining estimated economic life of 
the product, including the period being reported on.  
Notwithstanding the above, the maximum amortization period is four 
years.  It is reasonably possible that those estimates of 
anticipated future gross revenues, the remaining estimated economic 
life of the product, or both, could be reduced in the future which 
could significantly impact the carrying amount of the capitalized 
software costs.

Impairment of Long-Lived Assets.  Effective January 1, 1996, the 
Company adopted Statement of Financial Accounting Standards No. 
121, "Accounting for the Impairment of Long-Lived Assets and for 
Long-Lived Assets to be Disposed Of" (SFAS 121).  The statement 
requires that long-lived assets and certain identifiable 
intangibles to be held and used by an entity be reviewed for 
possible impairment whenever events or changes in circumstances 
indicate that the carrying amount of an asset may not be fully 
recoverable.  The adoption of this statement had no material effect 
on the Company's financial statements.

Stock Based Compensation.  The Company has elected to adopt the 
disclosure only provisions of Statement of Financial Accounting 
Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS 
123).  Accordingly, the Company will continue to account for its 
stock based compensation plans under the provisions of APB No. 25.  
Therefore, the adoption of SFAS 123 by the Company had no effect on 
the Company's financial position and results of operations.

Income Taxes.  The Company accounts for income taxes under 
Statement of Financial Accounting Standards No. 109, "Accounting 
for Income Taxes" (SFAS 109), which requires the use of the 
liability method of accounting for deferred income taxes.  Under 
this method, deferred income taxes are recorded to reflect the tax 
consequences on future years of differences between the tax bases 
of assets and liabilities and their financial reporting amounts at 
each year-end.  If it is more likely than not that some portion or 
all of a deferred tax asset will not be realized, a valuation 
allowance is recognized.

Per Share Information.  Per share information is based on the 
weighted average number of  common shares and all dilutive common 
share equivalents outstanding.  Common stock equivalents consist 
primarily of shares issuable upon the exercise of stock options.  
Conversion of the Series A Preferred Stock has not been assumed as 
the effect of the conversion would not be dilutive in any of the 
periods presented.  Neither the Series B Preferred Stock nor the 
Company's convertible subordinated debentures are considered common 
stock equivalents for the purpose of earnings per share 
calculations.  Common stock equivalents were not considered in the 
calculation of net loss per share in 1996 and 1995, as the impact 
would be antidilutive.

Note 2.  Acquisition

On May 24, 1996, the Company completed the acquisition of three 
privately-held affiliated businesses -- Eldyne, Inc. ("Eldyne"), 
Unidyne Corporation ("Unidyne") and Diversified Control Systems, 
LLC ("DCS").  Eldyne, Unidyne, and DCS are information technology 
businesses that provide the Department of Defense and other 
government customers with systems research, development and 
prototyping, and integration and life cycle support of electronic, 
information and control systems. The overall transaction 
consideration, excluding associated transaction costs and expenses, 
consisted of $1 million cash, 1,921,534 shares of Titan common 
stock with an assigned value of $6.00 per share, the issuance of 
500,000 shares of a new class of cumulative convertible redeemable 
preferred stock (see Note 9), assumption of indebtedness (see Note 
7), and a promissory note for $1 million issued to the principal 
stockholder of the acquired companies.  The $1 million note is due 
on March 15, 1997, and interest of 10% per annum is due quarterly 
and at maturity.  The Company also entered into an agreement with 
the principal stockholder, providing for annual payments of $.3 
million, payable monthly, for 6 years beginning May 24, 1996.  The 
net present value this agreement ($1.5 million) was recorded as 
additional purchase price at the acquisition date.  This obligation 
was settled in full on January 2, 1997.  Estimated other direct 
costs of the acquisition were approximately $3 million.

The acquisition has been accounted for as a purchase, and, 
accordingly, the Company's consolidated financial statements 
include the operating results of the three acquired companies since 
May 24, 1996.  The purchase agreements provided for a post-closing 
adjustment to the purchase price based on the final valuation of 
the acquired assets and assumed liabilities, pursuant to which 
142,036 shares of the Company's common stock were returned to the 
Company by the seller in December 1996.  This transaction was 
recorded as a reduction of $852 to the purchase price in the fourth 
quarter of 1996.  The excess of the purchase price over the 
estimated fair value of net assets acquired of $18,200 at December 
31, 1996 is being amortized using a straight-line method over 30 
years.

Unaudited pro forma data giving effect to the purchase of Eldyne, 
Unidyne and DCS as if they had been acquired at the beginning of 
1995 are shown below:

                           1996         1995     
                           ====         ====
Revenues                $162,058    $185,052 
Net loss                  (5,068)     (3,356)
Net loss per share          (.37)       (.28)

The pro forma net loss for 1996 includes certain unanticipated 
operating adjustments made to the Eldyne, Unidyne and DCS 
historical financial statements including, but not limited to, 
long-term contract earnings revisions, and changes to the carrying 
value of certain assets, primarily receivables.

Note 3.  Restructuring

In 1995, the Board of Directors adopted a formal plan of 
restructuring that redefined Titan's businesses into four business 
segments:  Communications Systems, Software Systems, Defense 
Systems, and Emerging Technologies.  The plan was an integral part 
of management's strategy to position the Company for access to 
capital markets as a significant source of continued development 
funding.  The plan resulted in charges of approximately $5,431 that 
provided for disposition of businesses not central to the Company's 
long-term strategy, as well as significant reorganization of the 
Software Systems and sterilization businesses, reductions of 
personnel, and other actions associated with reorganizing the 
structure of the Company.  As of December 31, 1996, the planned 
restructure activities have been substantially accomplished.  
Management currently anticipates that the remaining reserves will 
be applied to costs estimated to be incurred in the first half of 
1997.  During 1996, charges against restructuring reserves for 
severance were $1,125, related to 85 employees terminated 
throughout the Company, and other charges to the reserves, 
primarily related to the exiting of businesses, were $2,974.  These 
other charges reflect the sale on July 26, 1996 of the Company's 
Electronics division, which was part of the Defense Systems 
segment.  At December 31, 1996, approximately $815 of the initial 
restructuring accrual remained in other accrued liabilities for 
costs associated with the exiting of businesses and the termination 
of certain agreements.  The group of businesses planned to be 
exited in the restructuring plan had revenues of $14,160 and 
$19,384 and operating income (loss) of $2,802 and $(298) for 1996 
and 1995, respectively.

In early 1994, Titan sold its Applications Group (its Army training 
and simulation service business) as part of a formal plan of 
restructuring adopted at that time.  The sale resulted in a pre-tax 
gain of approximately $12,700 and generated net cash proceeds of 
approximately $17,000.  The gain on sale was substantially offset 
by provisions made for the estimated costs of planned disposals 
and/or consolidations of certain operations deemed not compatible 
with the Company's long range strategy at that time.  Such strategy 
was primarily reliant upon Titan internally funding the product 
development efforts and commercialization activities relating to 
its start-up ventures.

Note 4. Other Financial Data
<TABLE>
<CAPTION>
Following are details concerning certain balance sheet accounts:

                                                          1996          1995
<S>                                                   <C>            <C>
Accounts Receivable:
   U.S. Government - billed                            $ 17,768       $ 14,449
   U.S. Government - unbilled                            19,885         10,758
   Trade                                                 10,093         14,447
Less allowance for doubtful accounts                       (237)          (294)
                                                       $ 47,509       $ 39,360
</TABLE>
Unbilled receivables include approximately $11,200 and $5,000 at 
December 31, 1996 and 1995 representing work-in-process which will 
be billed in accordance with contract terms and delivery schedules.  
Also included in unbilled receivables are amounts billable upon 
final execution of contracts, contract completion, milestones or 
completion of rate negotiations. Generally, unbilled receivables 
are expected to be collected within one year.  Payments to the 
Company for performance on certain U.S. Government contracts are 
subject to audit by the Defense Contract Audit Agency.  Revenues 
have been recorded at amounts expected to be realized upon final 
settlement.
<TABLE>
<CAPTION>

                                                          1996          1995
<S>                                                   <C>           <C>
Inventories:
   Materials                                           $  2,051      $  3,152
   Work-in-process                                        9,840         4,159
   Finished goods                                         1,266         3,088
                                                       $ 13,157      $ 10,399

Property and Equipment:
   Machinery and equipment                             $ 29,986      $ 23,429
   Furniture and fixtures                                 5,351         3,207
   Land, buildings and leasehold improvements             7,584         3,503
   Construction in progress                                 996         6,041
                                                         43,917        36,180

Less accumulated depreciation and
   amortization                                         (22,912)      (17,885)

                                                       $ 21,005      $ 18,295
</TABLE>

Deferred income taxes of $4,094 and $5,904 and capitalized software 
costs of $6,413 and $3,088 are included in Other Assets at December 
31, 1996 and 1995, respectively.  At December 31, 1996 and 1995, 
respectively, other liabilities, current and non-current, include 
$1,352 and $958 related to estimated losses on contracts.  In 
addition, these captions include liabilities for post-retirement 
benefits for employees of previously discontinued operations of 
$2,923 and $3,016 at December 31, 1996 and 1995, respectively.  
Also included in other accrued liabilities are customer advance 
payments of approximately $2,414 and $1,653 at December 31, 1996 
and 1995, respectively, and $815 and $4,914 related to 
restructuring activities at December 31, 1996 and 1995, 
respectively.

Note 5.  Segment Information

Titan classifies its businesses in four industry segments, 
Communications Systems, Software Systems, Defense Systems, and 
Emerging Technologies.  The Communications Systems segment contains 
two start-up business units, both targeting rapidly growing 
commercial markets.  The first business unit is satellite 
communications, which develops, manufactures and sells satellite 
earth station networks and related subsystems.  The second business 
unit, broadband communications, specializes in providing complete 
turnkey security for television delivery systems.  The Software 
Systems segment provides custom and semi-custom software 
development services to assist customers in moving from older 
mainframe systems to distributed computing systems utilizing 
client/server software.  The Defense Systems segment, serving 
primarily the U.S. Government, includes satellite communications 
products; test and evaluation of complex systems; management and 
technical consulting; training and simulation support; and other 
consulting and  engineering services.  The Emerging Technologies 
segment contains a group of businesses including the start-up 
medical product sterilization services and systems and 
environmental consulting services businesses as well as several 
established businesses generally involved in broad-based technology 
development primarily for the U.S. Government.  Substantially all 
operations are located in the United States. Export revenues 
amounted to approximately $10,713, $14,240, and $8,498 in 1996, 
1995 and 1994, respectively, primarily to countries in Western 
Europe and the Far East.
<TABLE>
<CAPTION>
The following tables summarize industry segment data for 1996, 1995 
and 1994.

                                          1996         1995         1994 
<S>                                   <C>          <C>           <C>
Revenues:
   Communications Systems              $  5,885     $  7,490     $  6,319
   Software Systems                      18,505       33,175       28,868
   Defense Systems                       90,902       67,948       78,780
   Emerging Technologies                 22,430       25,354       22,239

                                       $137,722     $133,967     $136,206
</TABLE>
Sales to the United States Government, including both defense and 
non-defense agencies, and sales as a subcontractor as well as 
direct sales, aggregated approximately $102,925 in 1996, $81,632 in 
1995, and $93,107 in 1994.  In the Defense Systems segment, 
revenues in 1996, 1995 and 1994 included approximately $6,100, 
$18,300, and $9,700, respectively, for work subcontracted to the 
buyer of the Applications Group which was sold in April 1994.  
There was no operating profit associated with these revenues.  This 
contract was substantially completed in 1996.  Defense Systems 1995 
revenues and operating profit included approximately $1,400 
recovered from a termination for convenience claim with the U.S. 
Government for work performed in prior years.  Within the Software 
Systems segment, sales to one customer, a telephone company, 
totaled $8,325, $24,451, and $24,323, in 1996, 1995 and 1994, 
respectively.  No other single customer accounted for 10% or more 
of the consolidated revenues for these years.  Intersegment sales 
were not significant in any year.  
<TABLE>
                                           1996         1995          1994 
<S>                                    <C>          <C>           <C>
Operating Profit (Loss):
   Communications Systems               $ (7,841)    $ (4,488)     $ (7,927)
   Software Systems                         (137)       3,803         6,237 
   Defense Systems                        10,018        4,456         4,725 
   Emerging Technologies                     355           14          (305)
   Corporate                              (4,552)      (7,740)        6,905 

                                         $(2,157)    $ (3,955)     $  9,635

The Defense Systems segment includes Applications Group revenue of 
$11,913 and operating profit of $919 in 1994 through the date of 
sale.

Corporate includes corporate general and administrative expenses, 
certain Corporate restructuring charges, and gains or losses from 
the sale of businesses.  Corporate general and administrative 
expenses are generally recoverable from contract revenues by 
allocation to operations.

</TABLE>
<TABLE>
                                          1996         1995         1994 
<S>                                   <C>           <C>           <C> 
Identifiable Assets:
   Communications Systems              $ 19,035      $ 8,287       $ 4,813
   Software Systems                       6,139        8,945         6,084
   Defense Systems                       66,204       39,587        38,859
   Emerging Technologies                 20,014       19,191        12,165
   General corporate assets              16,456       19,160        19,982

                                       $127,848      $95,170       $81,903
</TABLE>

General corporate assets are principally cash, prepaid expenses, 
deferred income taxes, and other assets.
<TABLE>
                                           1996         1995         1994 
<S>                                     <C>        <C>           <C>
Depreciation and Amortization
   of Property and Equipment,
   Goodwill, and Other Assets:
      Communications Systems            $ 1,072     $   366       $   387
      Software Systems                    1,152       1,044           533
      Defense Systems                     2,346       1,744         1,838
      Emerging Technologies               1,094         712           630
      Corporate                             129         251            36

                                        $ 5,793     $ 4,117       $ 3,424

Capital Expenditures:
   Communications Systems               $ 1,837     $   697       $   397
   Software Systems                         261       1,709         1,784
   Defense Systems                        2,266       1,431         2,003
   Emerging Technologies                  1,726       5,007         1,963
   Corporate                                 89         144            97

                                        $ 6,179     $ 8,988       $ 6,244
Note 6.  Income Taxes

The components of the income tax provision (benefit) are as follows:

                                         1996         1995        1994 
Current:
   Federal                             $    --     $(2,232)     $1,377
   State                                    --        (220)        203

                                            --      (2,452)      1,580 

Deferred                                (1,740)      1,245       1,470

                                       $(1,740)    $(1,207)    $ 3,050
</TABLE>


Following is a reconciliation of the income tax provision (benefit) 
expected (based on the United States federal income tax rate 
applicable in each year) to the actual tax provision (benefit) on 
income (loss):

<TABLE>
                                       1996         1995         1994 
<S>                                 <C>          <C>           <C>
Expected Federal tax provision 
   (benefit)                         $(1,740)     $(1,705)      $3,061
State income taxes, net 
   of Federal income tax
   benefits                             (256)         (44)         450 
Loss carryforwards/carrybacks             --           --         (216)
Research credit                           --           --         (338)
Goodwill amortization                     88          160          149
Alternative minimum tax                   --          100           --
Keyman life insurance                     36           75           83
Other                                    132          207         (139)
Actual tax provision (benefit)       $(1,740)     $(1,207)     $ 3,050 
</TABLE>

The deferred tax assets as of December 31, 1996 and 1995, result 
from the following temporary differences:
<TABLE>
                                                    1996         1995
                                                   =====         =====
<S>                                             <C>          <C>
Inventory and contract loss reserves             $ 1,678      $ 3,005
Employee benefits                                  4,507        4,289
Restructuring                                        361        2,786
Tax credit carryforwards                           1,383          815
Depreciation                                      (3,051)      (1,875)
Loss carryforward                                  6,932        1,680
Other                                               (479)       1,213
                                                  11,331       11,913
Valuation allowance                               (1,200)      (1,200)

Net deferred tax assets                          $10,131      $10,713 
</TABLE>

Realization of certain components of the net deferred tax asset is 
dependent upon Titan generating sufficient taxable income prior to 
expiration of loss and credit carryforwards. Although realization 
is not assured, management believes it is more likely than not that 
the net deferred tax asset will be realized.  The amount of the net 
deferred tax asset considered realizable, however, could be reduced 
in the near term if estimates of future taxable income during the 
carryforward period are changed.  Also, under Federal tax law, 
certain potential changes in ownership of the Company which may not 
be within the Company's control may limit annual future utilization 
of these carryforwards.

Net tax refunds in 1996 and 1995 were $322 and $828, respectively.  
Cash paid for income taxes was $1,252 in 1994.

Note 7.  Debt

In November 1996, the Company issued $34,500 of 8.25% convertible 
subordinated debentures due 2003.  The debentures are convertible 
into common stock of the Company at a conversion price of $3.50 per 
share, subject to adjustment upon the occurrence of certain events.  
The debentures are redeemable, on or after November 2, 1999, 
initially at 104.125% of principal amount and at decreasing prices 
thereafter to 100% of principal amount through maturity, in each 
case together with accrued interest.  The debentures also may be 
repaid at the option of the holder upon a change in control, as 
defined in the indenture governing the debentures, at 100% of 
principal amount plus accrued interest.  The net proceeds of the 
offering were used to repay borrowings under the Company's bank 
lines of credit and for working capital and general corporate 
purposes.  At December 31, 1996, other assets include $1,987 in 
capitalized costs related to the issuance, which are being 
amortized to interest expense ratably over the life of the debt.

At December 31, 1996, the Company had no borrowings outstanding 
under a $14,000 bank line of credit with a maturity date of May 31, 
1997.  The Company had commitments under letters of credit at 
December 31, 1996 of $1,104, which reduced availability under the 
line of credit.  The Company currently has the option to borrow at 
prime plus 0.5 percent or at LIBOR plus 2.5 percent, decreasing to 
prime or to LIBOR plus 2% after two consecutive quarters of 
positive net income.  Subsequent to December 31, 1996, the Company 
received a commitment from the bank to renew the facility through 
May 31, 1998.  At December 31, 1995, borrowings outstanding under 
this agreement were $9,200 at a weighted average interest rate of 
8.13%.  Borrowings under the Company's lines of credit, including 
the line with a lender discussed below, averaged $12,315, $6,400, 
and $4,180 at weighted average interest rates of 8.2%, 8.8% and 
7.6% during 1996, 1995 and 1994, respectively.

In September 1996, the Company entered into an amendment to the 
line of credit under which the Company and its wholly owned 
subsidiary, Titan Information Systems Corporation ("TIS"), granted 
the bank a security interest in substantially all of their non-real 
property assets, including accounts receivable, inventory, 
equipment and patents, and the Company pledged the stock of TIS, 
Eldyne and Unidyne to the bank.  The amendment also eliminated or 
revised certain financial covenants.  The amended line of credit 
does, however, contain financial covenants which require the 
Company to maintain stipulated levels of net worth, a specified 
ratio of total liabilities to tangible net worth and a specified 
quick ratio.  The Company was in compliance with these covenants as 
of December 31, 1996.

In connection with the acquisition of Eldyne, Unidyne, and DCS, the 
Company's Eldyne and Unidyne subsidiaries assumed and renegotiated 
a separate credit agreement with a lender which provides for a 
working capital line of credit facility, a mortgage note and an 
equipment note. The agreement allows borrowings on the line through 
May 31, 1997, at an interest rate of LIBOR plus 2.75% and up to an 
aggregate of $7,000, limited by the sum of various percentages of 
billed and certain unbilled government and commercial receivables.  
At December 31, 1996, there were no borrowings outstanding under 
the line of credit facility.  The Company had commitments of $85 
under letters of credit, which, in addition to limitations based on 
receivables, reduced availability under the line of credit to 
$4,663.  The line of credit is collateralized by substantially all 
of the assets of the acquired companies, and borrowings up to 
$2,500 under the line have been guaranteed by the Company.  The 
line of credit also requires that borrowings be used only for 
Eldyne and Unidyne, and prohibits these entities and DCS from 
transferring funds to the Company.  The mortgage note of $1,244 and 
the equipment note of $122 at December 31, 1996, are collateralized 
by real estate and equipment, bear interest at LIBOR plus 2.5% and 
require monthly payments through February 15, 2000 and December 15, 
1998, respectively.  This credit agreement contains, among other 
financial covenants, provisions which require Eldyne and Unidyne to 
maintain stipulated levels of tangible net worth and working 
capital.  Eldyne and Unidyne were in compliance with these 
covenants as of December 31, 1996.

At December 31, 1996 and 1995, the Company had $5,215 and $5,300, 
respectively, outstanding under two promissory notes, secured by 
certain machinery and equipment, at interest rates of 8.5% and 
7.42%, and 8.5% and 8.56%, respectively.

Cash paid for interest, primarily on these borrowings, was $2,000, 
$572, and $578, in 1996, 1995, and 1994, respectively.

Note 8.  Commitments and Contingencies

Titan is obligated for aggregate rentals of $37,502 under operating 
lease agreements, principally for facilities.  These leases 
generally include renewal options and require minimum payments of 
$5,460 in 1997, $4,861 in 1998, $4,152 in 1999, $3,536 in 2000, 
$3,522 in 2001, and $15,971 for the years thereafter.  Rental 
expense under these leases was $7,975 in 1996, $7,496 in 1995 and 
$7,367 in 1994.  The Company has entered into a long-term lease 
agreement for facilities which are owned by an entity in which the 
Company has a minority ownership interest.  Rental expense in 1996, 
1995 and 1994 includes $884, $868, and $838, respectively, paid 
under this agreement.

The Company is involved in appeals of the judgments resulting from 
the trials of two separate lawsuits filed by former employees 
claiming, among other things, wrongful termination and 
discrimination.  The Company intends to vigourously pursue and 
defend against the appeals of these cases.  While it is not 
feasible to predict the outcome of these cases, management believes 
that their ultimate disposition will not have a material adverse 
effect on the financial position or results of operations of the 
Company.

In the ordinary course of business, defense contractors are subject 
to many levels of audit and investigation by various government 
agencies.  Further, the Company and its subsidiaries are subject to 
claims and from time to time are named as defendants in legal 
proceedings.  In the opinion of management, the amount of ultimate 
liability with respect to these actions will not materially affect 
the financial position or results of operations of the Company.

Note 9.  Series B Cumulative Convertible Redeemable Preferred Stock

In connection with the acquisition of Eldyne, Unidyne and DCS, the 
Company issued 500,000 shares of Series B Cumulative Convertible 
Redeemable Preferred Stock (the "Series B Preferred Stock").  The 
Series B Preferred Stock accrues dividends at a rate of 6% per 
annum payable quarterly in arrears cumulatively, has a liquidation 
preference of $6.00 per share plus accrued and unpaid dividends 
(the "Series B Liquidation Preference") and entitles the holder 
thereof to one vote per outstanding share, voting together as a 
class with the holders of shares of outstanding Common Stock (and 
any other series or classes entitled to vote therewith) on all 
matters submitted for a shareholder vote.  The Series B Preferred 
Stock is convertible at the holder's option into shares of the 
Company's common stock at a conversion price of $9.00 per share 
(subject to customary anti-dilution adjustments) on or after 
November 24, 1996 until November 24, 1997.  The Series B Preferred 
Stock also is redeemable at the Series B Liquidation Preference (i) 
at the holder's option, after May 24, 1998 until May 24, 2001, and 
(ii) at the Company's option, after May 24, 2001 until May 24, 
2006.  The Series B Preferred Stock is not considered a common 
stock equivalent for the purpose of earnings per share 
calculations.

Note 10.  Cumulative Convertible Preferred Stock

Each share of $1.00 cumulative convertible preferred stock is 
entitled to 1/3 vote, annual dividends of $1 per share and is 
convertible at any time into 2/3 share of the Company's common 
stock.  Common stock of 463,248 shares has been reserved for this 
purpose.  Upon liquidation, the $1.00 cumulative convertible 
preferred stockholders are entitled to receive $20 per share, plus 
cumulative dividends in arrears, before any distribution is made to 
the common stockholders.  

Note 11.  Common Stock

At December 31, 1996, 12,800,181 aggregate common shares were 
reserved for future issuance for conversion of convertible 
subordinated debentures, preferred stock, all stock incentive plans 
and warrants.

On August 17, 1995, the Board of Directors adopted a Shareholder 
Rights Agreement and subsequently distributed one preferred stock 
purchase right ("Right") for each outstanding share of the 
Company's common stock.  Each Right entitles the registered holder 
to purchase from the Company one one-hundredth of a share of Series 
A Junior Participating Preferred Stock, par value $1.00 per share 
(the "Preferred Shares") at a price of $42.00 per one one-hundredth 
of a Preferred Share, subject to adjustment.  The Rights become 
exercisable if a person or group acquires, in a transaction not 
approved by the Company's Board of Directors ("Board"), 15% or more 
of the Company's common stock or announces a tender offer for 15% 
or more of the stock.

If a person or group acquires 15% or more of the Company's common 
stock, each Right (other than Rights held by the acquiring person 
or group which become void) will entitle the holder to receive upon 
exercise a number of shares of Company common stock having a market 
value of twice the Right's exercise price.  If the Company is 
acquired in a transaction not approved by the Board, each Right may 
be exercised for common shares of the acquiring company having a 
market value of twice the Right's exercise price.  The Company may 
redeem the Rights at $.01 per Right, subject to certain conditions.  
The Rights expire on August 17, 2005.

In September 1995, the Company completed a private placement of 
300,000 shares of its common stock, receiving net proceeds of 
$2,325.  Treasury shares were used for the issuance.  The Company's 
shares were placed with offshore institutional investors pursuant 
to Regulation S under the Securities Act of 1933, as amended.

Note 12.  Stock-Based Compensation Plans

The Company provides stock-based compensation to officers, 
directors and key employees through various fixed stock option 
plans and to all non-executive employees through an employee stock 
purchase plan.  The Company has adopted the disclosure only 
provisions of Statement of Financial Accounting Standards No.  123, 
"Accounting for Stock-Based Compensation."  Accordingly, no 
compensation cost has been recognized for the fixed stock option or 
stock purchase plans.  Had compensation cost for the Company's 
stock-based compensation plans been determined based on the fair 
value at the grant dates for awards under those plans consistent 
with the method of SFAS 123, the Company's results of operations 
would have been reduced to the pro forma amounts indicated below
<TABLE>
<CAPTION>
                                                 1996             1995
                                                 ====             ====
<S>                                          <C>             <C>
Net loss                As reported           $(3,378)        $(3,807)
                          Pro forma            (3,795)         (3,981)

Net loss per share      As reported           $  (.27)        $  (.33)
                          Pro forma              (.30)           (.35)
</TABLE>
The Company currently has options available for grant under the 
Stock Option Plans of 1990 and 1994, The 1992 Directors' Stock 
Option Plan and The 1996 Directors' Stock Option and Equity 
Participation Plan (the "1996 Directors' Plan").  Options 
authorized for grant under the employee plans and under the 
directors' plans are 2,000,000 and 230,000, respectively.  Under 
the 1996 Directors' Plan, a director may elect to receive stock in 
lieu of fees, such stock to have a fair market value equal to the 
fees.  Under all plans, the exercise price of each option equals 
the market price of the Company's stock on the date of grant.  
Under the employee plans, an option's maximum term is ten years.  
Under the directors' plans, options expire 90 days after the option 
holder ceases to be a director.  Employee options may be granted 
throughout the year; directors' options are granted annually during 
the first two or three years as a director.  All options vest in 
25% increments beginning one year after the grant date.

The fair value of each option grant is estimated on the date of 
grant using the Black-Scholes option-pricing model with the 
following weighted-average assumptions used for grants in 1996 and 
1995: zero dividend yield; expected volatility of 87%; a risk-free 
interest rate of 6.57%; and an expected life of 5 years.

A summary of the status of the Company's fixed stock option plans 
as of December 31, 1996 and 1995, and changes during the years 
ending on those dates is presented below: 

<TABLE>
                                                 1996                             1995     
                                    ===========================      ===========================
                                    Shares     Weighted-Average      Shares     Weighted-Average
                                    (000)       Exercise Price        (000)      Exercise Price     
<S>                                <C>        <C>                    <C>        <C>
Fixed Options
==============
Outstanding at beginning of year    1,219      $ 5.05                 1,429      $3.41 
Granted                               723        4.42                   429       8.02 
Exercised                            (125)       3.28                  (454)      2.71 
Cancelled                            (305)       6.20                  (185)      5.16 
Outstanding at end of year          1,512        4.66                 1,219       5.05

Options exercisable at year-end       480                               452
Weighted-average fair value of
   options granted during the year  $3.18                             $5.76
</TABLE>
The following table summarizes information about fixed stock 
options outstanding at December 31, 1996:

<TABLE>
          Options Outstanding                       Options Exercisable          
          =================================         ============================================
Range of     Number         Weighted-Average                      Number
Exercise     Outstanding    Remaining          Weighted-Average   Exercisable   Weighted-Average
Prices       at 12/31/96    Contractual Life   Exercise Price     at 12/31/96   Exercise Price     
<S>           <C>          <C>                 <C>                <C>            <C>
$2.63 - 3.50   470,400      6.67 years          $3.23              331,300       $ 3.24   
 4.00 - 5.88   792,500      9.07                 4.33              105,500         4.86   
 6.25 - 9.50   249,500      8.84                 8.41               43,400         9.03   
             1,512,400      8.28                 4.66              480,200         4.12   
</TABLE>

Under the 1995 Employee Stock Purchase Plan, the Company is 
authorized to issue up to 500,000 shares of common stock to its 
full-time employees.  Elected officers are not eligible to 
participate.  Under the terms of the plan, employees may elect to 
have between 1 and 10 percent of their regular earnings, as defined 
in the plan, withheld to purchase the Company's common stock.  The 
purchase price of the stock is 85 percent of the lower of its 
market price at the beginning or at the end of each subscription 
period.  A subscription period is six months, beginning January 1 
and July 1 of each year.  The first subscription period under the 
plan began January 1, 1996.  Approximately 11% of eligible 
employees participated in the Plan and purchased 89,865 shares of 
Company stock in 1996.  Pro forma compensation cost is recognized 
for the fair value of the employees' purchase rights, which was 
estimated using the Black-Scholes model with the following 
assumptions:  zero dividend yield; a life of 1 year; expected 
volatility of 87%; and a risk-free interest rate of 6.57%.  The 
weighted-average fair value of the purchase rights granted in 1996 
was $1.71.  

Three of the Company's emerging business subsidiaries have issued 
stock options for subsidiary stock, which is not publicly traded.

Note 13.  Benefit Plans

The Company has various defined contribution benefit plans covering 
certain employees.  The Company's contributions to these plans were 
$2,269, $2,514, and $2,291 in 1996, 1995 and 1994, respectively.  
The Company's discretionary contribution to its Employee Stock 
Ownership Plan was $339 in 1994.  There were no discretionary 
contributions for 1996 or 1995.  During 1996, 1995 and 1994, the 
Company utilized treasury stock of $1,092, $871, and $1,267, 
respectively, for benefit plan contributions.

The Company has a non-qualified executive deferred compensation 
plan for certain officers and key employees.  The Company's expense 
for this plan was $901, $970, and $668 in 1996, 1995, and 1994, 
respectively.  At December 31, 1996 and 1995, respectively, Other 
non-current liabilities include $3,492 and $2,975 for obligations 
under this plan.  Interest expense for the years ended December 31, 
1996, 1995, and 1994 includes $561, $486, and $229, respectively, 
related to the plan.  The Company also has performance bonus plans 
for certain of its employees.  Related expense amounted to 
approximately $1,169, $2,679, and $5,220 in 1996, 1995 and 1994, 
respectively.

The Company has previously provided for post-retirement benefit 
obligations of operations discontinued in prior years.  The Company 
has no post-retirement benefit obligations for any of its 
continuing operations.

Note 14.  Quarterly Financial Data (Unaudited)
<TABLE>
                              First      Second      Third      Fourth       Total
1996                         Quarter    Quarter     Quarter     Quarter       Year .
====                         =======    =======     =======     =======      ======
<S>                        <C>         <C>        <C>         <C>        <C>
Revenues                    $ 31,172    $ 29,162   $ 34,854    $ 42,534   $ 137,722 
Gross profit                   6,317       7,051      5,889       7,876      27,133 
Net income (loss)               (864)       (747)    (1,969)        202      (3,378)
Net income (loss)per
   common share                 (.07)       (.06)      (.14)        .00        (.27)

                              First      Second      Third      Fourth        Total
1995                         Quarter     Quarter    Quarter     Quarter(a)    Year     
====                         =======     =======    =======     =======       ======
Revenues                    $ 30,165    $ 34,307   $ 34,983    $ 34,512    $133,967
Gross profit                   8,464       9,222      7,346       6,704      31,736
Net income (loss)                535         719        470      (5,531)     (3,807)
Net income (loss) per 
   common share                  .03         .04        .02        (.41)       (.33)

(a)  Net loss in the fourth quarter of 1995 includes a net restructuring charge (see Note 
3 of Notes to Consolidated Financial Statements).
</TABLE>

The above financial information for each quarter reflects all 
normal and recurring adjustments.


Item 9. Disagreements with Accountants on Accounting and Financial 
Disclosure

Not applicable.

                          PART III

Item 10. Directors and Executive Officers of the Registrant

The information required by Item 10 with respect to the directors 
and the executive officers of the Company is incorporated herein by 
this reference to such information in the definitive proxy statement 
for the 1997 Annual Meeting of Stockholders.

Item 11. Executive Compensation

The information required by Item 11 is incorporated herein by this 
reference to such information in the definitive proxy statement for 
the 1997 Annual Meeting of Stockholders.


Item 12. Security Ownership of Certain Beneficial Owners and 
Management

The information required by Item 12 is incorporated herein by this 
reference to such information in the definitive proxy statement for 
the 1997 Annual Meeting of Stockholders.

Item 13. Certain Relationships and Related Transactions

The information required by Item 13 is incorporated herein by this 
reference to such information in the definitive proxy statement for 
the 1997 Annual Meeting of Stockholders.

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on 
Form 8-K

(a) 1 and 2. Financial statements being filed as part of this report 
are listed in the index in Item 8 on page 14.

(b) The Company filed a current report on Form 8-K dated October 22, 
1996 to report preliminary unaudited results for the three months 
and nine months ended September 30, 1996.

(c) Exhibits

3.1     Titan's Restated Certificate of Incorporation dated as of 
November 6, 1986, which was Exhibit 3.1 to Registrant's 1987 
Annual Report on Form 10-K is incorporated herein by this 
reference.  Titan's Certificate of Amendment of Restated 
Certificate of Incorporation dated as of June 30, 1987, which 
was Exhibit 3.2 to Registrant's 1987 Annual Report on Form 10-K 
is incorporated herein by this reference.

3.2     Titan's by-laws, as amended, which was Exhibit 6(a)(3) to 
Registrant's Quarterly Report on Form 10-Q dated November 13, 
1995, is incorporated herein by this reference.

4.1     Warrant to Purchase Common Stock of Registrant issued to 
Corporate Property Associates 9, L.P., a Delaware limited 
partnership, which was Exhibit 4.1 to Registrant's Form 8-K 
dated July 11, 1991, is incorporated herein by this reference.

4.2     Amendment to Warrant dated December 3, 1996, between the 
Registrant and Corporate Property Associates 9, L.P.

4.3     Warrant to Purchase Common Stock of Registrant issued to 
Corporate Property Associates 10 Incorporated, a Maryland 
corporation, which was Exhibit 4.2 to Registrant's Form 8-K 
dated July 11, 1991, is incorporated herein by this reference.

4.4     Amendment to Warrant dated December 3, 1996, between the 
Registrant and Corporate Property Associates 10, Incorporated.

4.5          Rights Amendment, dated as of August 21, 1995, between 
The Titan Corporation and American Stock Transfer and Trust 
Company, which was Exhibit 1 to Registrant's Form 8-A dated 
September 5, 1995, is incorporated herein by this reference.

4.6          Certificate of Designations of Series B Cumulative 
Convertible Redeemable Preferred Stock which was Exhibit 4.1 to 
Registrant's Registration Statement on Form S-3 (No. 333-10919) 
is incorporated herein by this reference.

4.7          Registration Rights Agreement, dated May 24, 1996, 
which was Exhibit 2 to Schedule 13D filed on behalf of Mr. Jack 
D. Witt on June 5, 1996, is incorporated herein by this 
reference.

4.8          Stockholders Agreement, dated May 24, 1996, which was 
Exhibit 1 to Schedule 13D filed on behalf of Mr. Jack D. Witt 
on June 5, 1996, is incorporated herein by this reference.

4.9          Form of Indenture relating to the Registrant's 8 1/4% 
Convertible Subordinated Debentures due November 1, 2003, which 
was Exhibit 4.1 to Amendment No. 1 to Registrant's Registration  
Statement on Form S-3 (No. 333-10695) is incorporated herein by 
this reference.

10.1     Stock Option Plan of 1983, as amended though January 1, 
1987, which was Exhibit 10.2 to Registrant's 1987 Annual Report 
on Form 10-K is incorporated herein by this reference.

10.2     Stock Option Plan of 1986, as amended through January 1, 
1987, which was Exhibit 10.3 to Registrant's 1987 Annual Report 
on Form 10-K is incorporated herein by this reference.

10.3     Stock Option Plan of 1990, which was filed in the 1990 
definitive proxy statement and was Exhibit 10.11 to 
Registrant's 1989 Annual Report on Form 10-K is incorporated 
herein by this reference.

10.4     Stock Option Plan of 1994, which was filed in the 1994 
definitive proxy statement and was Exhibit 10.17 to 
Registrant's 1993 Annual Report on Form 10-K is incorporated 
herein by this reference.

10.5     1989 Directors' Stock Option Plan which was filed in the 
1990 definitive proxy statement and was Exhibit 10.12 to 
Registrant's 1989 Annual Report on Form 10-K is incorporated 
herein by this reference.

10.6     1992 Directors' Stock Option Plan which was filed in the 
1993 definitive proxy statement and was Exhibit 10.14 to 
Registrant's 1992 Annual Report on Form 10-K is incorporated 
herein by this reference.

10.7     1996 Directors' Stock Option and Equity Participation Plan 
which was filed in the 1996 definitive proxy statement and was 
Exhibit 10.7 to Registrant's 1995 Annual Report on Form 10-K  
is incorporated herein by this reference.

10.8     Supplemental Retirement Plan for Key Executives which was 
filed in the 1990 definitive proxy statement and was Exhibit 
10.13 to Registrant's 1989 Annual Report on Form 10-K is 
incorporated herein by this reference.

10.9     1995 Employee Stock Purchase Plan, which was Exhibit 4 to 
Registrant's Form S-8 dated December 18, 1995, is incorporated 
herein by this reference.

10.10     Lease Agreement dated as of July 9, 1991, by and between 
Torrey Pines Limited Partnership, a California limited 
partnership, as landlord, and Registrant, as tenant, which was 
Exhibit 10.1 to Registrant's Form 8-K dated July 11, 1991 is 
incorporated herein by this reference.

10.11     Agreement and Plan of Reorganization of Eldyne, Inc. dated 
as of April 19, 1996, by and among Eldyne, Inc., Jack Witt, ELD 
Acquisition Sub, Inc. and Registrant, which was Exhibit 2.1 to 
Registrant's Form 8-K dated May 24, 1996, is incorporated 
herein by this reference.

10.12     Agreement and Plan of Reorganization of Unidyne 
Corporation dated as of April 19, 1996, by and among Unidyne 
Corporation, Jack Witt, UNI Acquisition Sub, Inc. and 
Registrant, which was Exhibit 2.2 to Registrant's Form 8-K 
dated May 24, 1996, is incorporated herein by this reference.

10.13     Asset Purchase Agreement as of March 5, 1994, by and 
between Registrant and Cubic Corporation which was Exhibit 2 to 
Registrant's Form 8-K dated March 5, 1994, is incorporated 
herein by this reference.

10.14     Line of Credit Agreement dated as of August 8, 1994, by 
and between Sumitomo Bank of California and Registrant, which 
was Exhibit 10.16 to Registrant's 1994 Annual Report on Form 
10-K, is incorporated herein by this reference.

10.15     Executive Severance Plan entered into by the Company with 
Gene W. Ray, Eric M. DeMarco, Philip J. Englund, Ronald B. 
Gorda, Cornelius L. Hensel, and Frederick L. Judge, which was 
Exhibit 6(a)(10) to Registrant's Quarterly Report on Form 10-Q 
dated November 13, 1995, is incorporated herein by this 
reference.

10.16     First Amendment to Commercial Loan Agreement dated May 25, 
1995, by and between Registrant and Sumitomo Bank of 
California, which was Exhibit 10.15 to Registrant's 1995 Annual 
Report on Form 10-K, is incorporated herein by this reference.

10.17     Second Amendment to Commercial Loan Agreement dated 
December 29, 1995, by and between Registrant and Sumitomo Bank 
of California, which was Exhibit 10.16 to Registrant's 1995 
Annual Report on Form 10-K, is incorporated herein by this 
reference.

10.18     Third Amendment to Commercial Loan Agreement dated May 9, 
1996, by and between Registrant and Sumitomo Bank of 
California.

10.19     Fourth Amendment to Commercial Loan Agreement dated 
September 6, 1996, by and between Registrant and The Sumitomo 
Bank of California, which was Exhibit 10.1 to the Company's 
Registration Statement on Form S-3/A No. 333-10919, is 
incorporated herein by this reference.

10.20     Security Agreement dated September 6, 1996, made by 
Registrant in favor of The Sumitomo Bank of California, which 
was Exhibit 10.19 to the Company's Registration Statement on 
Form S-3/A No. 333-10919, is incorporated herein by this 
reference.

10.21     Pledge Agreement executed as of September 6, 1996, by 
Registrant in favor of The Sumitomo Bank of California, which 
was Exhibit 10.3 to the Company's Registration Statement on 
Form S-3/A No. 333-10919, is incorporated herein by this 
reference.

10.22     Patent Collateral Assignment made and entered into as of 
September 6, 1996, by Registrant in favor of The Sumitomo Bank 
of California, which was Exhibit 10.4 to the Company's 
Registration Statement on Form S-3/A No. 333-10919, is 
incorporated herein by this reference.

10.23     Security Agreement dated as of September 6, 1996, made by 
Titan Information Systems Corporation in favor of The Sumitomo 
Bank of California, which was Exhibit 10.5 to the Company's 
Registration Statement on Form S-3/A No. 333-10919, is 
incorporated herein by this reference.

10.24     Patent Collateral Assignment made and entered into as of 
September 6, 1996, by Titan Information Systems Corporation in 
favor of The Sumitomo Bank of California, which was Exhibit 
10.6 to the Company's Registration Statement on Form S-3/A No. 
333-10919, is incorporated herein by this reference.

10.25     Continuing Guaranty executed as of September 6, 1996, by 
Titan Information Systems Corporation in favor of The Sumitomo 
Bank of California, which was Exhibit 10.7 to the Company's 
Registration Statement on Form S-3/A No. 333-10919, is 
incorporated herein by this reference.

10.26     Fifth Amendment to Commercial Loan Agreement dated October 
18, 1996, by and between Registrant and Sumitomo Bank of 
California.

10.27     Loan and Security Agreement, dated December 29, 1995, by 
and between Registrant and Capital Associates International, 
Inc., which was Exhibit 10.17 to Registrant's 1995 Annual 
Report on Form 10-K, is incorporated herein by this reference.

10.28     Rider dated August 13, 1996, to Loan and Security 
Agreement dated December 29, 1995 by and between Registrant and 
Capital Associates International, Inc.

10.29     Loan and Security Agreement dated January 31, 1996, by and 
between Registrant and Sanwa General Equipment Leasing, a 
division of Sanwa Business Credit Corporation, which was 
Exhibit 10.18 to Registrant's 1995 Annual Report on Form 10-K, 
is incorporated herein by this reference.

10.30     Amended and Restated Loan and Security Agreement dated May 
24, 1996, by and between Crestar Bank and Eldyne, Inc., Unidyne 
Corporation and DCS Acquisition Sub, Inc.

10.31     Formal modification dated December 23, 1996, of the 
Amended and Restated Loan and Security Agreement dated May 24, 
1996, by and between Crestar Bank and Eldyne, Inc., Unidyne 
Corporation and DCS Acquisition Sub, Inc.

21.     Titan Subsidiaries as of December 31, 1996.

23.     Consent of Independent Public Accountants.

27.          Financial Data Schedule

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.

                             THE TITAN CORPORATION                


                             By:  /s/ Gene W. Ray     
                                  ====================
                                  Gene W. Ray            
                             President and Chief Executive Officer

March 26, 1997

     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.

         Signatures         Title                      Date
/s/ J.S. Webb               Chairman of the            March 26, 1997
         J.S.               Board of Directors

    /s/ Gene W. Ray        President, Chief            March 26, 1997
        Gene W. Ray        Executive Officer and
                           Director

    /s/ Eric M. DeMarco  Senior Vice President and     March 26, 1997
      Eric M. DeMarco    Chief Financial Officer
                        (Principal Financial Officer)

    /s/ Deanna H. Petersen                             March 26, 1997
     Deanna H. Petersen   Corporate Controller
                         (Principal Accounting Officer)

    /s/ Charles R. Allen     Director                  March 26, 1997
     Charles R. Allen

                             Director                  March 26, 1997
    Joseph F. Caligiuri

    /s/ Daniel J. Fink       Director                  March 26, 1997
      Daniel J. Fink

                             Director                  March 26, 1997
    Robert E. La Blanc

    /s/ Thomas G. Pownall    Director                  March 25, 1997
     Thomas G. Pownall

                                  THE TITAN CORPORATION
                       SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                   For the years ended December 31, 1996, 1995 and 1994
                           (in thousands of dollars)

<TABLE>
                                       Balance                               Balance
                                          at                                    at
                                       beginning                               end
                                        of year    Additions   Deductions    of year
                                       =========   =========   ==========   =========
<S>                                    <C>         <C>         <C>          <C>
1996:
   Allowance for doubtful accounts      $ 294       $  --       $  57        $ 237

1995:
   Allowance for doubtful accounts        412         193         311          294

1994:
   Allowance for doubtful accounts        764           1         353          412
</TABLE>