UNITED STATES
             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 September 30, 1997

                             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:   0-26832

                    Lumisys Incorporated
      (Exact name of registrant as specified in its charter)

        Delaware                              77-0133232
(State of incorporation)     (I.R.S. Employer Identification No.)

  225 Humboldt Court, Sunnyvale, CA                    94089
(Address of principal executive offices)             (Zip Code)

                      (408) 733-6565
      (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 /  /
Indicate the number of shares outstanding of each of the issuer's 
classes of common stock, as of the latest practicable date.

As of November 10, 1997, 6,474,314 shares of the registrant's 
Common Stock, $.001 par value, were outstanding.



                    



                    Lumisys Incorporated
                           Index

                                                         Page
                                                         ---- 
Part I. FINANCIAL INFORMATION

        Item 1.  Financial Statements:

                 Consolidated balance sheets 
                  at September 30, 1997 and 
                  December 31, 1996                        3
		
                 Consolidated statements of 
                  income for the three and nine 
                  months ended September 30, 
                  1997 and 1996                            4

                 Consolidated statements of cash 
                  flows for the nine months ended 
                  September 30, 1997 and 1996              5

                 Notes to financial statements         6 - 7

        Item 2.  Management's Discussion and 
                  Analysis of Financial Condition 
                  and Results of Operations           7 - 10

Part II. OTHER INFORMATION

        Item 1.  Legal Proceedings                        10
	
        Item 6.  Exhibits and Reports on Form 8-K         10

SIGNATURES                                                11

			


Part I  - FINANCIAL INFORMATION

Item 1. Financial Statements

                   Lumisys Incorporated
               Consolidated Balance Sheets
                       (Unaudited)
                                      September 30,  December 31,
                                           1997           1996
                                      -------------  ------------
                                              (In thousands)
                         ASSETS
Current assets:
  Cash and cash equivalents               $21,389       $18,438
  Accounts receivable, net of 
   allowances of $331 and $296              3,584         3,199
  Inventories, net                          3,123         3,053
  Deferred tax assets                       1,429         1,429
  Other current assets                        158           453
                                      -------------  ------------
    Total current assets                   29,683        26,572
Property and equipment, net                   391           345
Other assets                                   43           173
                                      -------------  ------------
                                          $30,117       $27,090
                                      =============  ============

               LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                        $ 1,251       $   823
  Accrued expenses                          2,548         1,604
                                      -------------  ------------
    Total current liabilities               3,799         2,427
                                      -------------  ------------

Stockholders' equity
  Preferred stock, $0.001 par 
   value; 5,000 shares authorized; 
   no shares issued and outstanding           ---           ---
  Common stock, $0.001 par value; 
   25,000 shares authorized; 6,474 
   and 6,240 shares issued and 
   outstanding                                  6             6
  Additional paid-in capital               23,498        23,887
  Retained earnings                         2,836           918	
  Notes receivable from stockholders          ---          (114)
  Deferred compensation related to 
   stock options                              (22)          (34)
                                      -------------  ------------
    Total stockholders' equity             26,318        24,663
                                      -------------  ------------
                                          $30,117       $27,090
                                      =============  ============


The accompanying notes are an integral part of these financial
                           statements.










                    Lumisys Incorporated
               Consolidated Statements of Income
                         (Unaudited)

                          Three months ended   Nine months ended
                          ------------------  -------------------
                          Sept. 30, Sept. 30, Sept. 30, Sept. 30,
                             1997      1996      1997      1996
                          --------- --------- --------- ---------
                             (In thousands)      (In thousands)

Sales                       $ 6,032   $ 5,933   $17,161   $16,915
Cost of sales                 2,630     2,684     7,601     7,795
                          --------- --------- --------- ---------
  Gross profit                3,402     3,249     9,560     9,120
                          --------- --------- --------- ---------
Operating expenses:
  Sales and marketing           616       463     1,877     1,408
  Research and development    1,147     1,064     3,396     3,099
  General and administrative    533       621     1,551     1,828
  Litigation                    350       ---       350       ---
                          --------- --------- --------- ---------
    Total operating expenses  2,646     2,148     7,174     6,335
                          --------- --------- --------- ---------
Income from operations          756     1,101     2,386     2,785
Interest income                 255       238       757       668
                          --------- --------- --------- ---------
Income before income taxes    1,011     1,339     3,143     3,453
Provision for income taxes      395       522     1,225     1,019
                          --------- --------- --------- ---------
Net income                   $  616    $  817   $ 1,918   $ 2,434
                          ========= ========= ========= =========
	
Net income per share         $ 0.09    $ 0.12   $  0.29   $  0.36
                          ========= ========= ========= =========

Shares used to compute net
  income per share            6,688     6,805     6,703     6,829
                          ========= ========= ========= =========










 

The accompanying notes are an integral part of these financial
                           statements.


                     Lumisys Incorporated
             Consolidated Statements of Cash Flows
                         (Unaudited)
                                              Nine months ended
                                             -------------------- 
                                             Sept. 30,  Sept. 30,
                                                1997      1996
                                             ---------- ---------
                                                 (In thousands)
Cash flows from operating activities:
 Net income                                    $ 1,918   $ 2,434
 Adjustments to reconcile net income 
  to net cash provided by operating activities:
   Depreciation and amortization                   148       174
   Deferred income taxes                           ---       482
   Interest on notes receivable from stockholders  ---        (7)
   Changes in assets and liabilities 
    (net of effects of Imagraph and XRS 
     acquisitions):
      Accounts receivable                         (385)     (708)
      Inventories                                  (70)     (647)
      Other assets                                 425       320
      Accounts payable                             428      (566)
      Accrued expenses                             944       442
                                             ---------- ---------
Net cash provided by operating activities        3,408     1,924
                                             ---------- ---------
Cash flows from investing activities:
 Proceeds from sale of short-term investments      ---     3,934
 Purchases of property and equipment              (182)     (124)
                                             ---------- ---------
Net cash provided by (used in) 
 investing activities                             (182)    3,810
                                             ---------- ---------
Cash flows from financing activities:
 Proceeds from sale of common stock, net           174        86
 Payment on notes receivable from stockholders     114       184
 Purchase of treasury stock                       (563)      ---
                                             ---------- ---------
Net cash provided by (used in) 
 financing activities                             (275)      270
                                             ---------- ---------
Net increase in cash and cash equivalents        2,951     6,004
Cash and cash equivalents at 
 beginning of period                            18,438     11,426
                                             ---------- ---------
Cash and cash equivalents at end of period     $21,389    $17,430
                                             ========== =========

Supplemental disclosure of cash flow information:
 Cash paid for income taxes                    $   572    $   620

  The accompanying notes are an integral part of these financial
                          statements.




                      Lumisys Incorporated
           Notes to Consolidated Financial Statements

Note 1 - Basis of Presentation

The consolidated financial statements of Lumisys Incorporated 
(the "Company") presented herein have been prepared pursuant to 
the rules of the Securities and Exchange Commission for quarterly 
reports on Form 10-Q and do not include all of the information 
and note disclosures required by generally accepted accounting 
principles.  These statements should be read in conjunction with 
the consolidated financial statements and notes thereto for the 
year ended December 31, 1996, included in the Company's Annual 
Report on Form 10-K as filed with the Securities and Exchange 
Commission.  

The consolidated balance sheet as of September 30, 1997, and the 
consolidated statements of income for the three and nine months 
ended September 30, 1997 and 1996, and the consolidated 
statements of cash flows for the nine months ended September 30, 
1997 and 1996, are unaudited but, in the opinion of management, 
include all adjustments (consisting of normal, recurring 
adjustments) necessary for a fair statement of the results for 
these interim periods.

The results of operations for the three and nine months ended 
September 30, 1997, are not necessarily indicative of the results 
to be expected for the entire fiscal year ending December 31, 
1997.

Note 2 - Composition of Certain Financial Statement Amounts

                                     September 30,  December 31,
                                         1997            1996
                                     -------------  ------------      
                                            (In thousands)
       Inventories:  
         Raw materials                   $ 2,569       $ 2,607
         Work-in-process                     743           422
         Finished goods                      926           959
                                     -------------  ------------      
                                           4,238         3,988
       Less:  inventory reserves          (1,115)         (935)
                                     -------------  ------------      
                                         $ 3,123       $ 3,053
                                     =============  ============
       Accrued expenses:
         Payroll and related benefits    $   729       $   670
         Warranty                            465           471
         Accrued income taxes                772           204
         Litigation                          350           ---
         Other                               232           259
                                     -------------  ------------      
                                         $ 2,548       $ 1,604
                                     =============  ============




Note 3 - Recently Issued Accounting Pronouncements

In February 1997, the Financial Accounting Standards Board 
("FASB") issued Statement of Financial Accounting Standards No. 
128, "Earnings per Share" ("SFAS 128").  SFAS 128, which is 
effective for the Company's fiscal year ending December 31, 1997, 
redefines earnings per share under generally accepted accounting 
principles.  Under the new standard, primary earnings per share 
is replaced by basic earnings per share, and fully diluted 
earnings per share is replaced by diluted earnings per share.  If 
the Company had adopted this Statement for the three and nine 
month periods ended September 30, 1997 and September 30, 1996, 
the Company's earnings per share would have been as follows:

                          Three months ended   Nine months ended
                         -------------------  ------------------
                         Sept. 30, Sept. 30,  Sept. 30, Sept. 30,
                           1997      1996       1997      1996
                         --------- ---------  --------- ---------
Earnings per share:
   Basic                   $ 0.10    $ 0.13     $ 0.30    $ 0.39
   Diluted                 $ 0.09    $ 0.12     $ 0.29    $ 0.36

In June 1997, the FASB issued SFAS 130, "Reporting Comprehensive 
Income."  SFAS 130 establishes standards for the reporting of 
comprehensive income and its components in a full set of general-
purpose financial statements for fiscal years beginning after 
December 15, 1997.  Reclassifiaction of financial statements for 
earlier periods for comparative purposes is required.  The 
Company will adopt SFAS 130 for the year ending December 31, 
1998.

In June 1997, the FASB issued SFAS 131, "Disclosures about 
Segments of an Enterprise and Related Information."  This 
statement establishes standards for the way companies report 
information about operating segments in annual financial 
statements.  It also establishes standards for related 
disclosures about products and services, geographic areas, and 
major customers.  The Company has not yet determined the impact, 
if any, of adopting this new standard.  The disclosures 
prescribed by SFAS 131 are effective for fiscal years beginning 
after December 15, 1997.

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

Except for the historical information contained herein, the 
following discussion contains forward-looking statements that 
involve risks and uncertainties.  The Company's actual results 
could differ materially from those discussed here.  Factors that 
could cause or contribute to such differences include, but are 
not limited to, those discussed in this section, as well as those 
discussed in the Company's 1996 Annual Report on Form 10-K and 
other documents filed by the Company with the Securities and 
Exchange Commission.

Overview

Lumisys develops, manufactures and markets a broad product line 
of laser-based very high resolution medical film digitizers, CCD-
based film scanners and video digitizer products necessary for 
converting analog medical images into diagnostic quality digital 
formats.

Results of Operations

Total sales for the three months ended September 30, 1997 
increased 1.7% to $6.0 million from $5.9 million for the three 
months ended September 30, 1996. Total sales for the nine months 
ended September 30, 1997 increased 1.8% to $17.2 million from 
$16.9 million for the nine months ended September 30, 1996.  The 
increase for the three and nine month periods is due to an 
increase in board products.

Gross profit for the three months ended September 30, 1997 
increased 6.3% to $3.4 million  from $3.2 million for the 
corresponding period of 1996. Gross margin increased in the three 
month period ended September 30, 1997 to 56.4% from 54.8% in the 
same period of 1996 primarily due to a more favorable product 
mix.  Gross profit for the nine months ended September 30, 1997 
increased 5.5% to $9.6 million from $9.1 million for the nine 
months ended September 30, 1996.  Gross margin increased in the 
nine month period to 55.7% from 53.9% primarily due to stable 
prices for systems and continued product cost control. 

Sales and marketing expenses increased 33.0% in the three months 
ended September 30, 1997 to $616,000 from $463,000 in the same 
period of 1996.  As a percentage of sales, these expenses 
increased to 10.2% in the three months ended September 30, 1997 
from 7.8% in the same period of 1996.  Sales and marketing 
expenses increased 33.3% to $1.9 million for the nine months 
ended September 30, 1997 from $1.4 million for the same period of 
1996. As a percentage of sales, these expenses increased to 10.9% 
in the nine months ended September 30, 1997 from 8.3%  in the 
same period of 1996.  The increase in absolute dollars for the 
nine month period was primarily due to the increase in the 
Company's sales and marketing to explore new product ideas and 
expand our overseas activity.  The Company expects sales and 
marketing expenses to increase in absolute dollars as the Company 
grows.

Research and development expenses increased 7.8% in the three 
months ended September 30, 1997 to $1.15 million from $1.06 
million in the same quarter of 1996. As a percentage of sales, 
research and development expenses increased to 19.0% in the three 
months ended September 30, 1997 from 17.9% in the same quarter of 
1996.  For the nine months ended September 30, 1997, research and 
development expenses increased 9.6% to $3.4 from $3.1 for the 
nine months ended September 30, 1996.  As a percentage of sales, 
research and development expenses increased to 19.8% in the nine 
months ended September 30, 1997 from 18.3% in the same period of 
1996.  The increases for both the three and nine month periods 
were primarily due to increased engineering personnel expenses as 
a result of the continuing development of the computed 
radiography reader.  The Company believes that continuing product 
development is a key element in the success of its business and 
expects to continue to increase its research and development 
expenditures in absolute dollar amounts.   

General and administrative expenses decreased 14.2% in the three 
months ended September 30, 1997 to $533,000 from $621,000 in the 
same quarter of 1996.  As a percentage of sales, these expenses 
decreased in the three months ended September 30, 1997 to 8.8% 
from 10.5% in the same quarter of 1996.  General and 
administrative expenses decreased 15.2% in the nine months ended 
September 30, 1997 to $1.6 from $1.8 in the same period of 1996.  
As a percentage of sales, general and administrative expenses 
decreased to 9.0% in the nine months ended September 30, 1997 
from 10.8% in the same quarter of 1996. The decrease is due in 
part to lower acquisition related charges in the first half of 
1997 and to the reorganization of Imagraph which resulted in a 
decrease in administrative personnel.

Litigation expenses represent a non-recurring charge in the third 
quarter of 1997 of $350,000 relating to defense costs not 
expected to be covered by the Company's insurance policy for the 
class action complaints filed in Superior Court of the State of 
California, County of Santa Clara and the U.S. District Court for 
the Northern District of California.

The Company recognized a provision for income taxes of $395,000 
in the three months ended September 30, 1997 compared to a 
provision for income taxes of $522,000 in the same period of 
1996.  The Company recognized a provision for income taxes of 
$1,225,000 in the nine months ended September 30, 1997 compared 
to a net provision for income taxes of $1,019,000 in the same 
period of 1996.  The net provision for taxes in nine months ended 
September 30, 1996 reflected the recognition of $315,000 of 
deferred tax assets.  The Company has provided a partial 
valuation allowance against the balance of the deferred tax 
assets remaining as of September 30, 1997.  The Company expects 
to continue to be subject to an effective tax rate of 
approximately 39% for the remainder of 1997.  

Liquidity and Capital Resources

The Company has financed its activities primarily from net cash 
provided by operations which provided $3.4 million in the nine 
months ended September 30, 1997 and $1.9 million in the same 
period of 1996.

At September 30, 1997, the Company's working capital was $25.9 
million.  The Company's cash and cash equivalents increased by 
$3.0 million in the nine months ended September 30, 1997 to $21.4 
million at September 30, 1997 compared with $18.4 million of cash 
and cash equivalents at December 31, 1996.  The increase is 
primarily due to net income for the period adjusted for increases 
in accrued expenses, primarily associated with accrued legal 
expense and accrued income tax, and increased accounts payable 
and other assets.

The Company does not currently have any significant capital 
commitments and believes that existing sources of liquidity and 
funds expected to be generated from operations will provide 
adequate cash to fund the Company's anticipated working capital 
and other cash needs for the foreseeable future.

Recent Developments

The Company entered into an Agreement and Plan of Merger and 
Reorganization on September 28, 1997 (the "Reorganization 
Agreement") among Lumisys, SAC Acquisition Corporation, a wholly-
owned subsidiary of Lumisys ("Merger Sub"), and CompuRAD, Inc. 
("CompuRAD").  Pursuant to the Reorganization Agreement, Merger 
Sub will be merged with and into CompuRAD, and CompuRAD will 
become a wholly-owned subsidiary of Lumisys (the "Merger").  In 
the Merger, each outstanding share of CompuRAD common stock will 
be converted into the right to receive 0.928 shares of Lumisys 
common stock, and outstanding options to purchase CompuRAD common 
stock will be converted into options to purchase Lumisys common 
stock on the same basis.

CompuRAD is a leading provider of software that enables 
healthcare clinicians to access medical images and clinical 
information at any point of car.  CompuRAD pioneered the use of 
personal computer software in the point-to-point, on call 
teleradiology market, with the introduction of its PC 
Teleradiology product.  In response to the increasing acceptance 
of teleradiology and increasing demand for multi-user and multi-
access off-site teleradiology systems, CompuRAD introduced its 
iNET product line in late 1994.  In 1997, CompuRAD introduced 
ClinicalWare, an Internet/Intranet software solution which 
provides secure electronic access through a Web browser to 
clinical information systems at any point of care.

Part 2 - OTHER INFORMATION

Item 1.  Legal Proceedings

On July 9 and July 10, 1997, two class action complaints were 
filed by the law firm of Milberg, Weiss, Bershad, Hynes & Lerach 
in Superior Court of the State of California, County of Santa 
Clara and the U.S. District Court for the Northern District of 
California, on behalf of certain plaintiffs against the Company, 
several of its current and former officers and directors and its 
underwriters.  The complaints allege that the defendants made 
material misstatements, and failed to disclose information, 
concerning the Company's actual and expected performance and 
results, which statements and omissions are alleged to have 
artificially inflated the value of the Company's stock.  The 
complaints further allege that upon disclosure of accurate 
information concerning the Company's performance, the stock price 
lost substantial value causing financial injury to shareholders.  
The complaints do not specify the amount of damages sought.  The 
Company and other defendants vigorously deny all allegations of 
wrongdoing, and intend to aggressively defend themselves in this 
matter.  There can be no assurance that the Company will prevail 
in this action or that the plaintiffs will not recover damages.


 
 Item 6.  Exhibits and Reports on Form 8-K.
 
 a)  Exhibits furnished:
 
            Exhibit
             Number       Description of Document
           ---------    ------------------------------
              27         Financial Data Schedule
  
  b)  Reports on Form 8-K: 

     The Company filed a Report on Form 8-K on October 6, 1997 
     describing the Agreement and Plan of Merger and 
     Reorganization among the Company, CompuRAD, Inc. and a 
     wholly-owned subsidiary of the Company, SAC Acquisition 
     Corporation.







                         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.

                                     LUMISYS INCORPORATED
Dated:  November 12, 1997            By:  /s/ Stephen J. Weiss
        -----------------                 --------------------
                                          Stephen J. Weiss
                                          President, Chief
                                          Executive Officer	
	
        November 12, 1997                 /s/ Craig L. Klosterman
        -----------------                 -----------------------
                                          Craig L. Klosterman
                                          Chief Operating and  
                                          Chief Financial Officer