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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                            ------------------------

                                AMENDMENT NO. 2
                                       TO

                                   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 DECEMBER 27, 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: 0-15086

                             SUN MICROSYSTEMS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<CAPTION>
                        DELAWARE                                                 94-2805249
<S>                                                       <C>
            (STATE OR OTHER JURISDICTION OF                         (I.R.S. EMPLOYER IDENTIFICATION NO.)
             INCORPORATION OR ORGANIZATION)
</TABLE>

                   901 SAN ANTONIO ROAD, PALO ALTO, CA 94303
             (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES WITH ZIP CODE)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (650) 960-1300

                                      N/A
              (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
                         IF CHANGED SINCE LAST REPORT)

     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 [ ]

                     APPLICABLE ONLY TO ISSUERS INVOLVED IN
                         BANKRUPTCY PROCEEDINGS DURING
                           THE PRECEDING FIVE YEARS:

     Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.  Yes [X]  No [ ]

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date.

<TABLE>
<CAPTION>
                    CLASS                             OUTSTANDING AT DECEMBER 27, 1998
<S>                                            <C>
      Common Stock -- $0.00067 par value                        385,264,651
</TABLE>

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                                     INDEX

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Cover Page..................................................    1
Index.......................................................    2
Item 6. Exhibits and Reports on Form 8-K....................    3
Signatures..................................................    4
</TABLE>

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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(A) EXHIBITS

<TABLE>
    <S>      <C>
    10.64*   Registrant's 1998 Directors' Stock Option Plan as amended on
             August 12, 1998.
    10.66(1) Registrant's 1990 Long-Term Equity Incentive Plan, as
             amended on August 12, 1998.
    10.93+   Strategic Development and Marketing Agreement dated November
             23, 1998 by and between America Online, Inc. and the
             Registrant.
    27.0*    Financial Data Schedule for the period ended December 27,
             1998.
</TABLE>

---------------
 * Previously filed.

 + Portions of the exhibit have been omitted pursuant to an application for
   confidential treatment filed with the Securities and Exchange Commission.

(1) Incorporated by reference to Exhibit 4.2 filed as an exhibit to Registrant's
    Amendment No. 1 to Registration Statement Form S-8/A file number 333-67183
    filed with the Securities and Exchange Commission on January 26, 1999.

(B) REPORTS ON FORM 8-K

     No reports on Form 8-K were filed during the quarter ended December 27,
1998.

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                                   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.

                                          SUN MICROSYSTEMS, INC.

                                          By /s/ MICHAEL E. LEHMAN

                                            ------------------------------------
                                                     Michael E. Lehman
                                            Vice President, Corporate Resources
                                                and Chief Financial Officer

                                          By /s/ MICHAEL L. POPOV

                                            ------------------------------------
                                                      Michael L. Popov
                                                Vice President and Corporate
                                                         Controller,
                                                  Chief Accounting Officer

Dated: July 9, 1999

                                        4
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                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
    EXHIBIT
    NUMBER                                                                   PAGE
    -------                                                                  ----
    <S>        <C>                                                           <C>
    10.64 *    Registrant's 1998 Directors' Stock Option Plan as amended on
               August 12, 1998.............................................
    10.66(1)   Registrant's 1990 Long-Term Equity Incentive Plan, as
               amended on August 12, 1998..................................
    10.93+     Strategic Development and Marketing Agreement dated November
               23, 1998 by and between America Online, Inc. and the
               Registrant..................................................
    27.0  *    Financial Data Schedule for the period ended December 27,
               1998........................................................
</TABLE>

---------------
 * Previously filed.

 + Portions of the exhibit have been omitted pursuant to an application for
   confidential treatment filed with the Securities and Exchange Commission.

(1) Incorporated by reference to Exhibit 4.2 filed as an exhibit to Registrant's
    Amendment No. 1 to Registration Statement Form S-8/A file number 333-67183
    filed with the Securities and Exchange Commission on January 26, 1999.