<PAGE>   1
                                  FORM 10-Q/A
                                AMENDMENT NO. 1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

(Mark One)

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

For The Quarterly Period Ended March 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   0-26964 
                      -------------


                              Carnegie Group, Inc.
--------------------------------------------------------------------------------

             Delaware                                     25-1435252
--------------------------------------------------------------------------------
   (State or other Jurisdiction of                     (I.R.S Employer 
    Incorporation or Organization)                  Identification Number)


   Five PPG Place, Pittsburgh, Pennsylvania                     15222
--------------------------------------------------------------------------------
  (Address of principal executive offices)                    (Zip Code)


                                 (412) 642-6900
--------------------------------------------------------------------------------
              (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 such shorter period that the registrant
was required to files 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:

<TABLE>
   <S>                                 <C>
               Class                   Outstanding at April 30, 1996
               -----                   ----------------------------- 
   Common Stock, $.01 par value                 6,186,788
</TABLE>

<PAGE>   2
                                   FORM 10-Q
                              CARNEGIE GROUP, INC.
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                          Page Number
<S>        <C>                                                 <C>
PART 1      FINANCIAL INFORMATION

  Item 1.   Financial Statements

            Carnegie Group, Inc. and Subsidiaries               3
            Consolidated Statements
            of Operations for the three months
            ended March 31, 1996 and 1995

            Carnegie Group, Inc. and Subsidiaries               4
            Consolidated Balance Sheets

            Carnegie Group, Inc. and Subsidiaries               5
            Consolidated Statements of
            Cash Flows

            Note to Unaudited Consolidated 
            Financial Statements                                6

   Item 2.  Management's Discussion and Analysis of             7-11
            Financial Condition and Results of Operations

PART 2      OTHER INFORMATION

     Item 6.  Exhibits and Reports on Form 8-K                  12

     Signatures                                                 13

</TABLE>


                                       2
<PAGE>   3

                         PART I - FINANCIAL INFORMATION

                     CARNEGIE GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
                                        
<TABLE>
<CAPTION>
                                                            Three Months Ended
                                                        ---------------------------                                      
                                                         March 31,        March 31,
                                                           1996             1995
                                                           ----             ----     
<S>                                                    <C>              <C>
Revenue
  Software services--Unrelated parties                  $7,442,750       $4,569,869
  Software services--Related parties                       750,649        1,388,255
                                                        ----------       ----------
     Total software services                             8,193,399        5,958,124
  Software licenses                                        129,941           93,553
                                                        ----------       ----------
     Total revenue                                       8,323,340        6,051,677
                                                        ----------       ----------
Costs and expenses:
  Cost of revenue - Unrelated parties                    4,701,682        3,112,588
  Cost of revenue - Related parties                        362,511          663,627
                                                        ----------       ----------
     Total cost of revenue                               5,064,193        3,776,215
  Research and development                                 179,014          153,848
  Selling, general and administrative                    2,135,969        1,550,123
                                                        ----------       ----------
     Total costs and expenses                            7,379,176        5,480,186
                                                        ----------       ----------
Income from operations                                     944,164          571,491
Other income (expense):
  Interest income                                          147,166            5,928
  Other income                                               6,099            6,099
  Interest expense                                          (4,857)          (2,969)
                                                        ----------       ----------
     Total other income                                    148,408            9,058
                                                        ----------       ----------
Income before income taxes                               1,092,572          580,549
Income tax provision                                      (409,387)        (102,117)
                                                        ----------       ----------
     Net income                                         $  683,185       $  478,432
                                                        ==========       ==========
Earnings per share of common stock                      $      .10       $      .09
                                                        ==========       ==========
Weighted average number of common shares outstanding     7,176,127        5,534,202
                                                        ==========       ==========
<FN>

  The accompanying note is an integral part of these financial statements.

</TABLE>


                                       3
<PAGE>   4
                     CARNEGIE GROUP, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                         March 31,       December 31,
                                                           1996             1995
                                                           ----             ----     
                                                       (Unaudited)
<S>                                                    <C>              <C>
                               ASSETS
CURRENT ASSETS:
Cash and cash equivalents                               $12,239,817      $12,394,588
Accounts receivable                                       5,145,880        5,131,922
Accounts receivable from related parties                    553,137           76,296
Accounts receivable--unbilled                             2,861,227        2,048,609
Accounts receivable related parties--unbilled               211,763           87,690
Deferred income taxes                                     1,076,468        1,222,061
Other current assets                                        382,108          397,883
                                                        -----------      -----------
   Total current assets                                  22,470,400       21,359,049
                                                        -----------      -----------
Property and equipment, net of 
   accumulated depreciation and amortization              1,957,312        1,812,894
Deferred income taxes                                     1,567,838        1,779,792
Other assets                                                 34,346           36,900
                                                        -----------      -----------
   Total assets                                         $26,029,896      $24,988,635
                                                        ===========      ===========

             LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable                                  $   902,339      $ 1,107,592
Payables to related parties                                 626,315          967,673
Accrued compensation                                        848,905        1,130,479
Advance billings and deferred revenue                       871,135          537,541
Accrued rent                                                621,734          626,253
Other accrued liabilities                                 1,606,789          801,544
Obligations under capital leases--current portion            48,691           48,691
                                                        -----------      -----------
   Total current liabilities                              5,525,908        5,219,773
                                                        -----------      -----------
Obligations under capital leases--noncurrent portion         26,336           39,671
                                                        -----------      -----------
   Total liabilities                                      5,552,244        5,259,444
                                                        -----------      -----------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 20,000,000 
   shares authorized, 6,436,300 and 6,386,200 shares 
   issued at March 31, 1996 and December 31, 1995 
   respectively                                              64,363           63,862
Capital in excess of par value                           30,901,092       30,836,317
Accumulated deficit                                     (10,012,803)     (10,695,988)
Treasury stock, 190,000 shares at March 31, 1996 and
     December 31, 1995 (at cost)                           (475,000)        (475,000)
                                                        -----------      -----------
   Total stockholders' equity                            20,477,652       19,729,191
                                                        -----------      -----------
   Total liabilities and stockholders' equity           $26,029,896      $24,988,635
                                                        ===========      ===========
<FN>

  The accompanying note is an integral part of these financial statements.

</TABLE>


                                       4
<PAGE>   5

                     CARNEGIE GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                             Three Months Ended
                                                        ---------------------------
                                                         March 31,        March 31,
                                                           1996             1995
                                                           ----             ----     
<S>                                                    <C>              <C>
Cash flows from operating activities:
  Net income                                            $   683,185      $   478,432
  Adjustments to reconcile net income to net cash
  (used in) provided by operating activities:
     Depreciation and amortization                          224,679          156,441
     Deferred income taxes                                  357,547           65,457
     Changes in working capital component:
      Accounts receivable                                  (826,576)      (1,231,683)
      Accounts receivable - Related parties                (600,914)         550,143
      Other assets                                           18,329         (164,343)
      Trade accounts payable                               (205,253)         769,940
      Payables to related parties                          (341,358)        (571,212)
      Accrued compensation                                 (281,844)        (461,818)
      Accrued rent                                           (4,519)         (56,924)
      Other accrued liabilities                             805,515          651,291
      Advance billings and deferred revenue                 333,594         (159,570)
                                                        -----------      -----------
         Net cash (used in) provided by operating
            activities                                      162,385           26,154
Cash flows from investing activities:
  Proceeds from the sale of fixed assets, net                    --               --                                     
  Capital expenditures                                     (369,097)        (480,878)
                                                        -----------      -----------
         Net cash used in investing activities             (369,097)        (480,878)
Cash flows from financing activities:
  Principal payments under capital lease obligations        (13,335)         (12,220)
  Proceeds from sales of common stock, net                   65,276            4,175
                                                        -----------      -----------
         Net cash (used in) provided by 
           financing activities                              51,941           (8,045)
                                                        -----------      -----------
Net change in cash                                         (154,771)        (462,769)
Cash and cash equivalents:
  Beginning of period                                    12,394,588          915,237
  End of period                                         $12,239,817      $   452,468
                                                        ===========      ===========        
<FN>

The accompanying note is an integral part of these financial statements.

</TABLE>


                                       5


<PAGE>   6

              NOTE TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

BASIS OF PRESENTATION

     In the opinion of the management of Carnegie Group, Inc. (the Company),
these unaudited consolidated financial statements include all adjustments,
consisting only of normal recurring adjustments, considered necessary for a
fair presentation of operating results for the three month period ended March
31, 1996.  Results for the interim periods are not necessarily indicative of
results for the full year.  The accompanying statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and pursuant to the rules and regulations of the Securities and
Exchange Commission and therefore do not include all information and footnotes
required by generally accepted accounting principles for complete financial
statements.  Accordingly, the information contained in this Form 10-Q should be
read in conjunction with the financial statements and notes thereto contained
in the Company's Form 10-K for the year ended December 31, 1995 as filed with
the Securities and Exchange Commission.


                                6
<PAGE>   7

ITEM 2

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

General

     Carnegie Group, Inc. ("Carnegie Group" or the "Company") provides
client/server software development services that integrate advanced software
technologies with clients' existing computing infrastructures to automate and
enhance complex business processes. The Company focuses on performing software
development, systems integration and technical consulting services to create
knowledge-intensive software solutions that improve its clients' productivity
and competitive market position in three business areas: customer contact;
customer service; and logistics, planning and scheduling. Carnegie Group
targets its services to clients in the telecommunications, financial services,
manufacturing, defense and healthcare industries.

     The Company's expertise encompasses a wide range of advanced software
technologies, including knowledge-based systems, object-oriented technology,
advanced graphical user interfaces, constraint-directed search and distributed
computing. The Company captures certain aspects of its business area experience
and advanced technology expertise in a portfolio of reusable software templates
that can be used as building blocks to create software solutions quickly and
effectively. In addition, Carnegie Group employs an iterative or "spiral"
approach to software design that begins with the construction of a prototype
and continues through testing of successive versions of the software against
project requirements. This iterative design facilitates rapid software
development, encourages client feedback and leads to greater congruence with
client needs and expectations.

     Since inception, Carnegie Group has emphasized relationships with leading
corporations in its targeted industries. These relationships have provided the
Company with opportunities for growth through the provision of additional
services to existing clients and through references to other companies within
the Company's targeted industries. Carnegie Group's clients include U S WEST
Communications, Inc., the United States Transportation Command, Caterpillar
Inc., the U.S. Army, BellSouth Telecommunications, Inc., First USA Bank, Ford
Motor Company and Blue Cross of Western Pennsylvania.

     The Company only includes in backlog signed contracts that either have
milestones yet to be attained or for which the Company can make a reasonable
estimate of work yet to be performed. The Company's backlog was $14.1 million
at March 31, 1996 compared to $9.6 million at March 31, 1995.  Backlog at March
31, 1996 decreased from backlog of $18.7 million at December 31, 1995,
reflecting the renegotiation of a large fixed-price contract with a major
customer, which partially offset new bookings for the quarter.  As most of the
contracts in backlog are terminable by the Company or the client upon short
notice, there can be no assurance that contracts reflected in backlog are a
reliable measure of future revenue.


                                     7
<PAGE>   8

COMPARISON OF QUARTERS ENDED MARCH 31, 1996 AND MARCH 31, 1995.

     Revenue.  Total revenue was $8.3 million in the first quarter of 1996
compared to $6.1 million in the first quarter of 1995, an increase of 
$2.2 million or 37.5%.  This growth resulted principally from volume increases 
in sales of software services.

     Total software services revenue was $8.2 million in the first quarter of
1996 compared to $6.0 million in the first quarter of 1995, an increase of $2.2
million or 37.5%. This increase was primarily attributable to an extension of a
logistics, planning and scheduling engagement for a defense industry client and
the commencement of a customer contact engagement for a new client in the
telecommunications industry.  Revenue from software services-unrelated parties
was $7.4 million in the first quarter of 1996 compared to $4.6 million in the
first quarter of 1995, an increase of $2.8 million or 62.9%. This increase was
primarily attributable to the extension of a logistics, planning and scheduling
engagement and the commencement of a customer contact engagement, both of which
are described above. A portion of the increase was also attributable to the
enlargement of the scope of a customer services engagement for a manufacturing
industry client. Revenue from software services-related parties was $.8 million
in the first quarter of 1996 compared to $1.4 million in the first quarter of
1995, a decrease of $.6 million or 45.9%. This decrease was primarily
attributable to the completion of customer contact engagements for a
telecommunications industry client.

     Revenue from software licenses was $130,000 in the first quarter of 1996
compared to $93,000 in the first quarter of 1995, an increase of $37,000 or
38.9%. This increase was attributable to an increase in revenue from licenses
of the Company's TestBench template.

     Cost of Revenue.  Cost of revenue consists primarily of salaries and
related benefits for personnel, and also includes an allocated portion of rent,
building services and computer equipment services and expenses. Total cost of
revenue was $5.1 million in the first quarter of 1996, compared to $3.8 million
in the first quarter of 1995, an increase of $1.3 million or 34.1%.  This
increase was primarily attributable to additional professional staff hired to
perform the increased volume of software services. Total cost of revenue was
60.8% of total revenue in the first quarter of 1996, compared to 62.4% of total
revenue in the first quarter of 1995. This percentage decrease was primarily
attributable to increased productivity of professional staff and lower company
fixed costs as a percentage of total revenue.  Cost of revenue-unrelated
parties was $4.7 million in the first quarter of 1996 compared to $3.1 million
in 1995, an increase of $1.6 million or 51.1%. This increase was primarily
attributable to additional professional staff hired or reassigned to perform
the increased volume of software services.  Cost of revenue-related parties was
$.4 million in the first quarter of 1996 compared to $.7 million in the first
quarter of 1995, a decrease of $.3 million or 45.4%. This decrease was
primarily attributable to the reallocation of professional staff to provide
additional software services to unrelated parties following the completion of
customer contact engagements for a telecommunications industry client.

     Research and Development.  Research and development expenses were $179,000
in the first quarter of 1996 compared to $154,000 in the first quarter of 1995,
an increase of $25,000 or 16.4%.  This increase was primarily due to product
development related to the TestBench template.

     Selling, General and Administrative.  Selling, general and administrative
expenses include costs of proposal development and proposal writing, marketing
communications and advertising, sales and management staff, and corporate
services functions including accounting, human resources and legal services,
along with corporate executive staff. Selling, general and administrative
expenses were $2.1 million in the first quarter of 1996 compared to $1.6
million in the first quarter of 1995, an increase of $.6 million or 37.8%. This
dollar increase resulted primarily from increases in sales and marketing
expenses to support growth in the Company's total revenue.


                                   8
<PAGE>   9

These expenses increased slightly as a percentage of total revenue from 25.6% 
in the first quarter of 1995 to 25.7% in the first quarter of 1996.

     Other Income (Expense).  Other income (expense) was $148,000 in the first
quarter of 1996 compared to $9,000 in the first quarter of 1995, an increase of
$139,000 or 1,538.4%.  This increase was due primarily to interest income
earned on net proceeds received in December, 1995 from the Company's initial
public offering, which were invested in an interest-bearing account.

     Income Tax Provision.  An income tax provision of $409,000 was recorded in
the first quarter of 1996. The effective income tax rate in the first quarter
of 1996 was higher than the effective income tax rate in the first quarter of
1995 as a result of the Company's current estimate of the deferred tax asset
believed more likely than not to be realized.

     SFAS No. 109, "Accounting for Income Taxes," requires a valuation
allowance when it is "more likely than not that some portion or all of the
deferred tax assets will not be realized." It further states that "forming a
conclusion that a valuation allowance is not needed is difficult when there is
negative evidence such as cumulative losses in recent years."  The ultimate
realization of its deferred income tax asset depends on the Company's ability
to generate sufficient taxable income in the future.  The Company has weighed
the negative objective evidence of recent results and dependence upon limited
number of customers, as well as other risk factors on the one hand, and the
positive subjective evidence of future expectations, on the other hand, and has
concluded that losses in recent years and other risk factors make it
appropriate to record a valuation allowance.  This reflects the Company's
conclusion under SFAS 109 as to the portion of the deferred tax asset expected
not to be realized in light of that standard's requirement to give greater
weight to the more objective evidence.

     In estimating the amount of its realizable deferred tax asset, the Company
gives substantial weight to recent historical results.  Significant changes in
circumstances or in enacted tax laws which affect the valuation allowance are
recorded when they occur.  The Company's annual strategic business planning
process takes place in the fourth quarter of the year, and the valuation
allowance is adjusted for future years' income expectations resulting from that
process.  When preparing subsequent interim and annual financial statements,
the Company reevaluates whether there has been any significant change in the
assumptions underlying its plan and adjusts the valuation allowance as
necessary.


                                        9
<PAGE>   10
Liquidity and Capital Resources

     The Company has funded its operations in recent years primarily through
cash generated from operations and the use of cash reserves. In 1995 the
Company also funded its operations in part through borrowing under available
lines of credit and through the net proceeds of the initial public offering of
its Common Stock consummated in December 1995.

     During the first quarter of 1996, the Company had a net use of cash of
$155,000, working capital increased in accounts receivable and property and
equipment to support business growth.

     The Company experienced growth in revenue earned but not yet billed, and
consequently an increase in the number of days' revenue in accounts receivable
for the quarter ended March 31, 1996.  Invoicing of amounts to clients
generally occurs within 45 days of time and materials cost incurrence, unless a
specific schedule is agreed upon, and payment follows invoicing in accordance
with customary terms.  The Company has not experienced any significant
write-downs of receivables, nor does the Company expect that payments are
doubtful; accordingly, the Company has not made any allowance for doubtful
accounts.

     Advance billings and deferred revenue increased at March 31, 1996 when
compared to December 31, 1995.  The increase reflects billings in advance of
revenue earned, but which were billed in accordance with established or agreed
billings schedules.  These amounts are recorded as deferred revenue until
earned.  The timing and magnitude of such advance billings vary from contract
to contract and from client to client.

     The Company currently has a committed line of credit agreement in the
amount of $3.0 million in place with PNC Bank, N.A. (the "Bank"), and a
discretionary line of credit agreement in the amount of $500,000 in place with
the Bank, both of which expire June 30, 1996. Borrowings under these agreements
are collateralized by accounts receivable. These lines of credit bear interest
at the Bank's prime interest rate plus 0.75% per annum, and the Bank charges a
0.25% fee per annum on the unused portion of the committed line of credit. The
Bank's prime interest rate was 8.5% at both March 31, 1996 and December 31,
1995.  Availability of $3.0 million of the funds under the committed line of
credit is also subject to the Company's compliance with certain covenants
customary with commercial loans, including covenants related to maintenance of
certain levels of working capital and tangible net worth.  The $500,000 under
the discretionary line of credit is available at the discretion of the Bank. No
borrowings were outstanding against the committed line of credit or the
discretionary line of credit at March 31, 1996 and December 31, 1995.

     The Company believes that the net proceeds from the sale of Common Stock
in the Company's initial public offering, together with cash balances, cash
generated from operations and borrowing available under its lines of credit,
will satisfy the Company's working capital and capital expenditure requirements
during fiscal year 1996 and the foreseeable period thereafter. In the longer
term, the Company may require additional sources of liquidity to fund future
growth. Such sources of liquidity may include additional equity offerings or
debt financings. Capital expenditures are typically made for computing
equipment, software, physical plant, and furniture and fixtures in order to
seek enhancements in the productivity of the Company's employees and to support
growth.

     In the normal course of business, the Company evaluates acquisitions of
businesses, products and technologies that complement the Company's business.
The Company has no present plans, intentions, understandings, commitments or
agreements, nor is it currently engaged in any negotiations, with respect to
any such transaction. However, the Company may acquire businesses, products or
technologies in the future.


                                      10
<PAGE>   11


     To the extent that any written or oral statement made by the Company,
including statements made herein, are deemed to be forward looking statements,
reference is made to the factors beginning on page 27 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1995, as filed with the
Securities and Exchange Commission, as important factors that could cause
actual results to differ materially from those in any such forward looking
statements.


                                        11
<PAGE>   12

                          PART II - OTHER INFORMATION

ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K


<TABLE>
<CAPTION>
Exhibits                      Description
<S>       <C>
10.01     Development Agreement, dated as of January 2, 1996, 
          by and between U S WEST Advanced Technologies, Inc., 
          U S WEST Communications Inc. and Carnegie Group, Inc.
          (confidential treatment with respect to certain
          information contained in this Exhibit has been
          requested of the Commission pursuant to Rule 24b-2
          under the Securities Exchange Act of 1934, as amended).

10.02     Development Agreement, dated as of March 1, 1996, 
          by and between U S WEST Advanced Technologies, Inc., 
          U S WEST Communications, Inc. and Carnegie Group, Inc.
          (confidential treatment with respect to certain
          information contained in this Exhibit has been
          requested of the Commission pursuant to Rule 24b-2
          under the Securities Exchange Act of 1934, as amended).

27        Financial Data Schedule

Reports on Form 8-K

          The registrant did not file any reports on Form 8-K during 
          the quarter ended March 31, 1996.
</TABLE>


                                12
<PAGE>   13

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this amendment to report on Form 10Q/A 
to be signed on its behalf by the undersigned thereunto duly authorized.


Date:   October 7, 1996                CARNEGIE GROUP, INC.


                                        /s/ DENNIS YABLONSKY  
                                        --------------------------------------
                                        Dennis Yablonsky 
                                        President, and Chief
                                        Executive Officer


                                        /s/ JOHN W. MANZETTI   
                                        --------------------------------------
                                        John W. Manzetti 
                                        Executive Vice President,
                                        Chief Financial Officer and Treasurer


                                        13
<PAGE>   14

                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
                                                                      Sequential
Exhibit No.               Description                                 page number
<S>       <C>                                                         <C>
10.01     Development Agreement, dated as of January 2, 1996, 
          by and between U S WEST Advanced Technologies, Inc., 
          U S WEST Communications Inc. and Carnegie Group, Inc. 
          (confidential treatment with respect to certain 
          information contained in this Exhibit has been 
          requested of the Commission pursuant to Rule 24b-2 
          under the Securities Exchange Act of 1934, as amended).

10.02     Development Agreement, dated as of March 1, 1996,
          by and between U S WEST Advanced Technologies, Inc., 
          U S WEST Communications, Inc. and Carnegie Group, Inc. 
          (confidential treatment with respect to certain 
          information contained in this Exhibit has been 
          requested of the Commission pursuant to Rule 24b-2 
          under the Securities Exchange Act of 1934, as amended).

27        Financial Data Schedule


</TABLE>


                                     14