<PAGE> 1

                              
                              
             SECURITIES AND EXCHANGE COMMISSION
                              
                   Washington, D.C.  20549
                              
                          FORM 10-Q
                              


(Mark One)

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

          For the quarterly period ended June 30, 1998

                             OR

[    ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
          OF THE SECURITIES EXCHANGE ACT OF 1934

          For the transition period from_______________to_______________

          Commission file number 0-12992

                      SYNTHETECH, INC.
   (Exact name of registrant as specified in its charter)
                              
               Oregon                      84-0845771
    (State or Other Jurisdiction         (I.R.S. Employer
     of Incorporation or Organization)    Identification No.)
                              
       1290 Industrial Way, Albany, Oregon       97321
    (Address of Principal Executive Offices)   (Zip Code)

                        (541) 967-6575
    (Registrant's Telephone Number, Including Area Code)
                              
      Indicate by check mark whether the registrant: (1) has
filed  all  reports required to be filed by  Section  13  or
15(d)  of  the  Securities Exchange Act of 1934  during  the
preceding  12  months (or for such shorter period  that  the
registrant was required to file such reports), and  (2)  has
been  subject to such filing requirements for  the  past  90
days.

Yes  X    No_____

      The number of shares of the registrant's common stock,
$.001  par  value,  outstanding as of  August  7,  1998  was
14,199,383.


 <PAGE> 2
                              
                               SYNTHETECH, INC.
                                                                             
                                BALANCE SHEETS             
                                -------------- 
<TABLE>                                                                      
<CAPTION>                                                      
<S>                                             <C>             <C>
                                                 (unaudited)                 
                                                   June 30,        March 31,
                                                     1998            1998
 ------                                          ------------     -----------
 ASSETS                                                                      
 ------                                                                 
                                                                             
CURRENT ASSETS:                                                              
  Cash and cash equivalents                      $  5,540,000    $  4,976,000
  Accounts receivable, less allowance                                        
    for doubtful accounts of $15,000 for                                     
    both periods                                    1,766,000       1,470,000
  Inventories                                       3,872,000       3,184,000
  Prepaid expenses                                    116,000         196,000
  Deferred income taxes                                70,000          70,000
  Other current assets                                  5,000          24,000
                                                 ------------    ------------
    TOTAL CURRENT ASSETS                           11,369,000       9,920,000
                                                                             
                                                                             
PROPERTY, PLANT AND EQUIPMENT, at cost, net         9,638,000       9,439,000
                                                                             
OTHER ASSETS                                            5,000           5,000
                                                 ------------    ------------
    TOTAL ASSETS                                 $ 21,012,000    $ 19,364,000
                                                 ============    ============
</TABLE>                                                                     
                 See Notes To Financial Statements.   
<PAGE> 3
                              
                                 SYNTHETECH, INC.

                                  BALANCE SHEETS
                                  --------------                    
                                    (continued)
<TABLE>                                                                    
<CAPTION>                                                                  
<S>                                        <C>                  <C>
                                               (unaudited)                    
                                                 June 30,          March 31,
                                                   1998              1998
 ------------------------------------        -------------      -------------
 LIABILITIES AND SHAREHOLDERS' EQUITY                                     
 ------------------------------------                                   
                                                                           
CURRENT LIABILITIES:                                                       
  Current portion of note payable             $     14,000       $     14,000
  Accounts payable                                 969,000            672,000
  Accrued compensation                             216,000            221,000
  Deferred revenue                                 381,000            247,000
  Accrued income tax                               961,000            514,000
  Other accrued liabilities                         10,000             15,000
                                              ------------       ------------
    TOTAL CURRENT LIABILITIES                    2,551,000          1,683,000
                                                                           
DEFERRED INCOME TAXES                              209,000            209,000
                                                                           
NOTE PAYABLE, net of current portion               163,000            166,000
                                                                           
SHAREHOLDERS' EQUITY:                                                      
  Common stock, $.001 par value; 
   authorized 100,000,000 shares; issued 
   and outstanding, 14,199,000 and 
   14,143,000 shares                                14,000             14,000
  Paid-in capital                                8,506,000          8,467,000
  Employee notes receivable and deferred                                   
   compensation                                   (116,000)          (106,000)
  Retained earnings                              9,685,000          8,931,000
                                              ------------       ------------
    TOTAL SHAREHOLDERS' EQUITY                  18,089,000         17,306,000
                                              ------------       ------------
    TOTAL LIABILITIES AND SHAREHOLDERS'       
     EQUITY                                   $ 21,012,000       $ 19,364,000
                                              ============       ============
</TABLE>                                                                   
                  See Notes To Financial Statements.  

<PAGE> 4
                              
                                SYNTHETECH, INC.
                                                                
                              STATEMENTS OF INCOME     
                              --------------------
                                  (unaudited)        
<TABLE>                                                         
<CAPTION>                                                       
<S>                                           <C>            <C>
For The Three Month Period Ended June 30           1998           1997
----------------------------------------       -----------    -----------
                                                                
REVENUES                                       $ 4,128,000    $ 1,480,000
COST OF SALES                                    2,535,000        723,000
                                               -----------    -----------
GROSS PROFIT                                     1,593,000        757,000
                                                    
RESEARCH AND DEVELOPMENT                            81,000         61,000
SELLING, GENERAL AND ADMINISTRATIVE                355,000        289,000
                                               -----------    -----------
OPERATING EXPENSE                                  436,000        350,000
                                               -----------    -----------
OPERATING INCOME                                 1,157,000        407,000
OTHER INCOME                                        59,000         83,000
                                               -----------    -----------
INCOME BEFORE INCOME TAXES                       1,216,000        490,000
PROVISION FOR INCOME TAXES                         462,000        186,000
                                               -----------    -----------
NET INCOME                                     $   754,000    $   304,000
                                               ===========    ===========
                                                                
BASIC NET INCOME PER SHARE                           $0.05          $0.02
                                                     =====          =====
                                                                
DILUTED NET INCOME PER SHARE                         $0.05          $0.02
                                                     =====          =====
</TABLE>                                                        
                                                                
                  See Notes To Financial Statements.
                   
<PAGE> 5
                              
                               SYNTHETECH, INC.
            
                           STATEMENTS OF CASH FLOWS
                           ------------------------               
                                 (unaudited) 
<TABLE>                                                               
<CAPTION>                                                             
<S>                                           <C>            <C>
For The Three Month Period Ended June 30           1998             1997
----------------------------------------        ----------       ----------
CASH FLOWS FROM OPERATING ACTIVITIES:                                 
Net income                                     $   754,000      $   304,000
Adjustments to reconcile net income to                                
  net cash provided by (used in) operating                            
  activities:
    Depreciation, amortization and other           219,000           85,000
    Amortization of deferred compensation           29,000           27,000
    Accrued interest on securities available 
     for sale                                            -          (10,000)
    Loss on sale of property, plant and         
     equipment                                           -            1,000
                                                                      
    (Increase) decrease in assets:                                    
      Accounts receivable, net                    (296,000)        (286,000)
      Inventories                                 (688,000)        (325,000)
      Prepaid expenses                              80,000           54,000
      Income tax receivable                              -           68,000
      Other assets                                  19,000            3,000
                                                                      
    Increase (decrease) in liabilities:                               
      Accounts payable and accrued liabilities     734,000         (552,000)
      Deferred revenue                             134,000                -
                                               ------------     ------------
        Net cash provided by (used in)     
         operating activities                      985,000         (631,000)
                                               ------------     ------------
CASH FLOWS FROM INVESTING ACTIVITIES:                                 
   Property, plant and equipment purchases        (419,000)      (1,248,000)
   Proceeds from sale of property, plant and   
    equipment                                            -            1,000
                                               ------------     ------------
        Net cash used in investing activities     (419,000)      (1,247,000)
                                               ------------     ------------
                                                                      
CASH FLOWS FROM FINANCING ACTIVITIES:                                 
  Principal payments under long-term debt   
   obligations                                      (3,000)          (3,000)
  Proceeds from stock option exercises and                  
   disqualifying dispositions                        1,000           99,000
                                               ------------     ------------
        Net cash (used in) provided by  
         financing activities                       (2,000)          96,000
                                               ------------     ------------
NET INCREASE (DECREASE) IN CASH AND CASH            
 EQUIVALENTS                                       564,000       (1,782,000)
                                                                      
CASH AND CASH EQUIVALENTS AT BEGINNING OF      
 PERIOD                                          4,976,000        6,740,000
                                               ------------     ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD     $ 5,540,000      $ 4,958,000
                                               ============     ============
NON-CASH INVESTING ACTIVITIES:                                        
Unrealized gain on securities available for      
 sale                                                    -      $     1,000
Issuance of stock options at below fair value  $    38,000      $    21,000
</TABLE>                                                              
                       See Notes To Financial Statements.


<PAGE> 6
                              
                              
                NOTES TO FINANCIAL STATEMENTS

NOTE A.   GENERAL AND BUSINESS


The  summary financial statements included herein have  been
prepared,   without  audit,  pursuant  to  the   rules   and
regulations  of  the  Securities  and  Exchange  Commission.
Certain   information  and  footnote  disclosures   normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed
or  omitted pursuant to such rules and regulations, although
Synthetech  management  believes that  the  disclosures  are
adequate  to  make the information presented not misleading.
It  is suggested that these summary financial statements  be
read  in  conjunction with the financial statements and  the
notes thereto included in Synthetech's 1998 Form 10-K.

Interim  financial  statements are by  necessity  somewhat
tentative; judgments are used to estimate quarterly  amounts
for  items that are normally determinable only on an  annual
basis.   For  example,  provision for  income  taxes  is  an
estimate of the annual liability pro-rated over the quarters
of  the  fiscal  year based on estimates of  annual  income.
Further, all inventory quantities are verified by physically
counting  the units on hand at least once a year.  Normally,
selected inventories are counted at the end of each quarter.
For those inventories not counted at the end of the quarter,
quantities   are   determined  using  measured   sales   and
production data for the period.

The interim period information included herein reflects all
adjustments   which  are,  in  the  opinion  of   Synthetech
management, necessary for a fair statement of the results of
the  respective interim periods.  Results of operations  for
interim periods are not necessarily indicative of results to
be expected for an entire year.


NOTE B.   STATEMENTS OF CASH FLOWS

          Supplemental cash flow disclosures for the three
month period ended June 30:

<TABLE>
<CAPTION>
<S>                                    <C>        <C>
          Cash Paid
          ---------
                                            1998      1997
                                            ----      ----
            Income Taxes                 $ 15,000  $ 79,000
            Interest                     $  4,000  $  5,000
</TABLE>


<PAGE> 7



          NOTES TO FINANCIAL STATEMENTS (continued)
                              
NOTE C. EARNINGS PER SHARE
     
     
The   Company  adopted  Statement  of  Financial  Accounting
Standards  No. 128 "Earnings per Share" (SFAS  128)  in  the
quarter   ended   December  31,   1997.    Under   the   new
requirements, the Company reports basic and diluted earnings
per  share.   Basic  earnings  per  share  are  computed  by
dividing net income by the weighted average number of shares
of  common  stock  outstanding during the  period.   Diluted
earnings  per share are computed by dividing net  income  by
the  weighted average number of shares of common  stock  and
common  stock  equivalents outstanding  during  the  period,
calculated  using the treasury stock method  as  defined  in
SFAS  128.   Where necessary, prior year amounts  have  been
restated.   The following is a reconciliation of the  shares
used  to  calculate  basic earnings per  share  and  diluted
earnings per share:
<TABLE>
<CAPTION>
<S>                                       <C>         <C>
    For The Three Months Ended June 30        1998        1997
    ----------------------------------        ----        ----
    Weighted average shares                       
     outstanding for basic EPS             14,159,981  13,866,373
        
    Dilutive effect of Common stock                          
     options issuable under            
     treasurey stock method                   108,781     413,846               
                                           ----------  ----------           
    Weighted average common and common            
     equivalent shares outstanding for 
     for diluted EPS                       14,268,762  14,280,219
                                           ==========  ==========

</TABLE>

The  following  common stock equivalents were excluded  from
the  earnings  per  share computation because  their  effect
would have been anti-dilutive:
<TABLE>
<CAPTION>
<S>                                     <C>       <C>
    For The Three Months Ended June 30         1998      1997
    ----------------------------------         ----      ----
    Common stock options outstanding         466,800    276,000
</TABLE>

<PAGE> 8


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


RESULTS OF OPERATIONS

The  following table sets forth, for the periods  indicated,
the percentage of revenues represented by each item included
in the Statements of Income.
<TABLE>
<CAPTION>
<S>                                <C>            <C>

                             Percentage of Revenues 
                             ----------------------                           

For The Three Month Period Ended June 30          1998          1997 
----------------------------------------          ----          ----
                                                          
Revenues                                         100.0  %       100.0  %
Cost of sales                                     61.4  %        48.9  %   
                                                ---------      ---------
Gross Profit                                      38.6  %        51.1  %
                                                          
Research and Development                           2.0  %         4.1  %
Selling, General and Administrative                8.6  %        19.5  %
                                                ---------      ---------
Operating Income                                  28.0  %        27.5  %
Other Income                                       1.4  %         5.6  %   
                                                ---------      ---------
Income Before Income Taxes                        29.4  %        33.1  %
Provision For Income Taxes                        11.2  %        12.6  %  
                                                ---------      ---------
Net Income                                        18.2  %        20.5  %
                                                =========      =========
</TABLE>


Revenues
--------

Revenues  increased by 179% to $4.13 million  in  the  first
quarter  of  fiscal  1999 from $1.48 million  in  the  first
quarter  of  fiscal 1998.  International  sales,  mainly  to
Europe,  were $1.26 million in the first quarter  of  fiscal
1999 as compared to $767,000 for the first quarter of fiscal
1998.

<PAGE> 9

The  increase  in revenues for the first quarter  of  fiscal
1999  over  the  same  period  of  fiscal  1998  principally
reflected the $2.22 million revenue contribution from large-
scale orders for marketed drugs.  The Company expects large-
scale   orders   to  continue  to  provide   a   substantial
contribution to revenue for the balance of fiscal 1999.  PBB
sales  associated  with marketed drugs are  more  likely  to
provide  a  longer  term, ongoing revenue stream.   However,
continuation  of  customer demand  for  these  PBBs  remains
subject  to  various market conditions, including  continued
market demand for the drug, competition from other suppliers
of  PBBs and potential use of alternative drug manufacturing
routes not involving PBBs.  (See "Industry Factors" below.)


Gross Profit
------------

Gross  profit  was $1.59 million or 39% of revenues  in  the
first quarter of fiscal 1999 as compared to $757,000 or  51%
of  revenues  in  the  first quarter of  fiscal  1998.   The
decrease  in  gross profit margin for the first  quarter  of
fiscal  1999  resulted primarily from the  mix  of  products
which  included  nearly  54%  of revenues  from  large-scale
orders,   and   increased   fixed   manufacturing   overhead
associated  with  the  new  plant  expansion  completed   in
November of 1997.  While large-scale orders provide a  level
of  revenue  predictability for the duration of the  orders,
their  impact on the Company's mix of business  generates  a
lower  gross  profit margin than the levels  experienced  in
fiscal years 1996 and 1997.


Operating Expenses
------------------

Research  and  development (R&D) and  selling,  general  and
administrative (SG&A) expenses were $436,000  in  the  first
quarter  of  fiscal 1999 compared to $350,000 in  the  first
quarter  of  fiscal  1998.   The increases  in  R&D  expense
reflected  increases in staffing and staffing  compensation.
The  increases  in  SG&A  expense  reflected  increases   in
staffing   compensation   and   higher   professional   fees
associated  with  increased disclosure requirements  as  the
Company  transitioned  out of "small  business"  status  and
related matters.  As a percentage of revenues, R&D and  SG&A
expenses  decreased to nearly 11% in the  first  quarter  of
fiscal  1998  from nearly 24% in the same period  of  fiscal
1998 due to the higher level of revenues.


Operating Income
----------------

Operating  income increased to $1.16 million  in  the  first
quarter  of fiscal 1999 compared with $407,000 in the  first
quarter of fiscal 1998.  Both periods were approximately 28%
as a percentage of revenues.


Other Income
------------

The  net  other  income of $59,000 in the first  quarter  of
fiscal 1999 included $64,000 of interest earnings and $4,000
of interest expense.  The net other income of $83,000 in the
first  quarter  of fiscal 1998 primarily reflected  interest
earnings.

<PAGE> 10

Net Income
----------

For  the  first  quarter of fiscal 1999 the  Company  earned
$1.22  million before income taxes.  A provision for  income
taxes  of $462,000 resulted in net income of $754,000.   The
Company's  effective tax rate was 38% for the first  quarter
of fiscal 1999 and the first quarter of fiscal 1998.


INDUSTRY FACTORS

The   market   for  PBBs  is  driven  by  the   market   for
synthetically manufactured peptide-based drugs in which they
are  incorporated.  The drug development process  for  these
peptide-based  drugs  is dictated by the  marketplace,  drug
companies  and the regulatory environment.  The Company  has
no  control over the pace of peptide-based drug development,
which  drugs  get selected for clinical trials, which  drugs
are  approved by the FDA and, even if approved, the ultimate
market potential of such drugs.

The  three  stages of the drug development process  include:
R&D  or  discovery stage, clinical trial stage and  marketed
drug   stage.    Synthetech's  customers  can  spend   years
researching  and developing new drugs, taking only  a  small
percentage  to  clinical trials and fewer yet to  commercial
market.   A substantial amount of the activity continues  to
occur at the earlier stages of research and development  and
clinical  trials.   In spite of the two  large-scale  orders
received  by  the  Company in fiscal 1998,  the  market  for
peptide-based drugs is still very early in development.

While  the Company has recorded substantial annual sales  of
PBBs  for  discovery  and clinical trial stage  development,
recurring sales of PBBs for development programs is sporadic
at  best.   The high cancellation rate for drug  development
programs results in a significant likelihood that there will
be no subsequent or "follow-on" PBB sales for any particular
drug   development  program.   Accordingly,  the  level   of
purchasing  by  the  Company's customers for  specific  drug
development  programs varies substantially from  quarter  to
quarter and the Company cannot rely on any one customer as a
constant source of revenue.

While  the Company has been selling PBBs for marketed  drugs
for  several  years,  these sales represented  a  relatively
small  portion  of total revenue.  With the two  large-scale
orders  received  in  fiscal 1998 for PBBs  to  be  used  in
marketed   drugs,  revenues  of  PBBs  for  marketed   drugs
represent  a  significant portion of total revenue  for  the
first  time  in the Company's history.  Sales  of  PBBs  for
marketed drugs provide an opportunity for continuing longer-
term  sales.   Moreover,  the size of  the  PBB  orders  for
marketed  drugs can be substantially larger than  those  for
the  discovery or clinical trial stages.  While not  subject
to  the  same high cancellation rate faced by discovery  and
clinical  trial stage drug development programs, the  demand
for   the   approved   drugs   remains   subject   to   many
uncertainties,  including,  without  limitation,  the   drug
price,  the  drug  side effects and the existence  of  other
competing  drugs.  These factors, which are outside  of  the
control of the Company, will affect the level of demand  for
the  drug itself and, therefore, the demand for PBBs.  Also,
with  the  longer-term,  larger-scale  orders,  the  Company
expects  increased  competition to supply  these  PBBs,  and
industry   cost  pressures  can  also  cause  pharmaceutical
companies  to  investigate  alternative  drug  manufacturing
processes which may not include PBBs as an intermediate.


<PAGE> 11

Large-scale   PBB   orders  for  use   in   marketed   drugs
significantly  increases  the  size  and  the  term  of  the
Company's  current  order  base.  Also,  the  likelihood  of
recurring revenue from reorders is significantly higher  for
PBBs  used  in  marketed  drugs.   Nevertheless,  since  the
Company's  revenues are composed of PBB sales in  all  three
drug  development stages, and since even sales of  PBBs  for
marketed drugs are subject to cancellation or reduction, the
Company  is  likely  to  continue to experience  significant
fluctuations  in  its quarterly results.   Accordingly,  the
Company continues to lack a stable baseload of demand and an
ability  to  predict future demand beyond its current  order
base.


LIQUIDITY AND CAPITAL RESOURCES

At  June 30, 1998, the Company had working capital of  $8.82
million  compared to $8.24 million at March 31,  1998.   The
Company's cash and cash equivalents at June 30, 1998 totaled
$5.54  million.  In addition, the Company had a  $1  million
bank line of credit of which there was no amount outstanding
at June 30, 1998.

The increase in accounts receivable to $1.77 million at June
30,  1998 from $1.47 million at March 31, 1998 reflected the
timing  of  shipments during the quarter.  The  increase  of
inventory  to  $3.87  million at June 30,  1998  from  $3.18
million at March 31, 1998 primarily resulted from restocking
raw materials.

The   Company   had   approximately  $419,000   of   capital
expenditures  during the first three months of fiscal  1999.
Approximately $188,000 was spent for equipment and equipment
upgrades  in the existing plant and $231,000 was  spent  for
the  second  phase of the new plant expansion.  The  Company
anticipates total capital expenditures for fiscal  1999  for
the existing plant to be $1 million and for the second phase
of the new plant expansion to be $3.2 million for a total of
$4.2  million.   The Company  expects to finance  these  
capital expenditures from internal cash flow.


                   ______________________


This Form 10-Q includes  "forward-looking"  information  (as 
defined in  Section  27A  of  the Securities  Act  of 1933 and 
Section 21E of  the  Securities Exchange Act of 1934).  
Investors are cautioned that forward-looking  statements  
involve risks  and  uncertainties,  and various  factors  
could  cause  actual  results  to   differ materially  from  
those  in the forward-looking  statements. Forward-looking 
statements include, without limitation,  any statement  that  
may predict, forecast,  indicate  or  imply future results, 
performance or achievements, and may contain the  words  
"believe,"  "anticipate," "expect,"  "estimate," "project," 
"will be," "will continue," "will likely  result" or  words  
or  phrases of similar meanings.   The  following factors, 
among others, could cause actual results to  differ from 
those indicated in the forward-looking statements:  the uncertain   
market  for  products,  customer  concentration, potential  
quarterly  revenue fluctuations,  the  impact  of competitive  
products and pricing, the impact of  government regulation,  
product  liability risks, technological  change and  increased 
costs associated with the Company's  facility expansions.  
Investors are directed to the Company's filings with  the 
Securities and Exchange Commission, including  the Company's  
Form  10-K for the fiscal year  ended  March  31, 1998,  
which are available from the Company without  charge, for  
a  further  description of the risks and  uncertainties related 
to forward-looking statements made by the Company as well as 
to other aspects of the Company's business.
      

<PAGE> 12

                              
                 PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

       3.1*    Articles of Incorporation

       3.2*    Bylaws

      27       Financial Data Schedule
 __________________
      
      *Incorporated by reference herein from the Company's
       Form 10-KSB for the year ended March 31, 1997.


(b)  Reports

     No reports on Form 8-K were filed during the quarter.
      
      
<PAGE> 13

                         SIGNATURES



Pursuant to the requirements 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.




                                        SYNTHETECH, INC.
                                         (Registrant)



Date:    August  12,  1998              /s/M. Sreenivasan
                                        M. Sreenivasan
                                        President & C.E.O.



Date:    August  12,   1998            /s/Charles B. Williams
                                       Charles B. Williams
                                       Vice President, Finance
                                       and Administration, C.F.O.,
                                       Chief Accounting Officer