EXHIBIT 10.29
                              
                              
"[*]" = omitted, confidential material, which material has been separately 
filed with the Securities and Exchange Commission pursuant to a request for 
confidential treatment.
                              
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                    [NeoPath, Inc. logo]
                              
                  EQUIPMENT USER AGREEMENT
                            WITH
          SMITHKLINE BEECHAM CLINICAL LABORATORIES

                1201 South Collegeville Road
                   Collegeville, PA  19426

____________________________________________________________


Section 1.     Overview of Agreement

This  Agreement  is  made and entered into  by  and  between
NeoPath,  Inc.  ("NeoPath") and SmithKline Beecham  Clinical
Laboratories ("SBCL").  This Agreement supercedes all  prior
agreements   between  NeoPath  and  SBCL.   This   Agreement
includes,  and  incorporates  by  this  reference  NeoPath's
Standard  Terms  and  Conditions, NeoPath's  Equipment  User
Agreement  Supplemental Terms and Conditions, and  NeoPath's
AutoPap System Product Insert.

NeoPath  agrees  to provide SBCL, and SBCL agrees  to  order
from   NeoPath,  sufficient  AutoPap(R)  Primary   Screening
Systems   ("System")  to  process  100  percent  of   SBCL's
internally processed automated Pap smear volume by  the  end
of  the Term.  The initial upgrade of all AutoPap QC Systems
to  AutoPap Primary Screening Systems at the SBCL St.  Louis
and  Atlanta  sites  will be performed immediately,  but  no
later  than  September 30, 1998.  By [*], NeoPath  and  SBCL
will  agree  to  a  delivery schedule  for  AutoPap  Primary
Screening Systems to be shipped in 1998 and 1999.   By  [*],
NeoPath  and  SBCL  will  agree to a delivery  schedule  for
Systems to be shipped during the remaining Term.


Section 2.     Definitions

The  following  terms will have the following meanings  when
used in this Agreement with initial letters capitalized:

"Anniversary Date" means September 1, 1999, 2000, and 2001.

"Annual  Period"  means  any period  of  twelve  consecutive
calendar  months during the Term beginning on  September  1,
1998 or any Anniversary Date.

"Base  Fee-Per-Slide" or "Base FPS" means the minimum amount
due NeoPath per Pap smear slide processed on a System during
the  Term.  Unless adjusted, the Base FPS is established  as
follows:

     Period                                         Base FPS
     ______                                         ________ 

     1: September 1, 1998 - August 31, 1999           [*]
     2: September 1, 1999 - August 31, 2000           [*]
     3: September 1, 2000 - August 31, 2001           [*]
     4: September 1, 2001 - August 31, 2002           [*]

"Current   Payment"  means  the  national  average   payment
received by SBCL on a per Pap smear basis for all Pap  smear
slides processed between [*].

"Fee-Per-Slide"  means the Base FPS  or  the  Adjusted  Base
FPS, in either case as the same may be adjusted pursuant  to
Section 4 below.
_______________________
[*]Confidential treatment requested

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"Quarter" means a calendar quarter (i.e., a period of  three
consecutive months commencing with January, April,  July  or
October).

"Term" means a period of four years commencing September  1,
1998.

"Total  Payment" means the national average payment received
by  SBCL  on  a  per  Pap smear basis for Pap  smear  slides
processed  utilizing the AutoPap System  during  the  twelve
months ending [*].

The   parties  acknowledge  that  Total  Payment  does   not
encompass  [*].  The Parties agree that if SBCL incorporates
such technology into the Pap smear process, there may be  an
increase  in  the cost of Pap smear slides.  To  the  extent
these  increased  costs change total  payment,  the  parties
agree   to  factor  such  amounts  into  the  Total  Payment
calculation.

"System" means any AutoPap System subject to this Agreement.

"No  Review" means slides that the AutoPap System designates
as  needing  no  human review.  The No Review  rate  is  the
percent of all eligible slides that are so designated.


Section 3.     Prior Agreements

The  terms  of this Agreement also apply to AutoPap  Systems
currently  installed at SBCL sites in St. Louis and  Atlanta
under terms of earlier contracts signed October 5, 1995  and
May 9, 1996 respectively, except that the instrument minimum
volumes of [*] slides processed per year still apply to each
of those instruments.


Section 4.     Fee-Per-Slide


Section 4.1    General

The Fee-Per-Slide will be equal to the Base FPS, as the same
may be adjusted pursuant to Section 4.2 or 4.3.


Section 4.2    Adjusted Base FPS

The  Base FPS for any Annual Period may be adjusted  if  the
following formula yields a fee per slide different from  the
Base FPS specified for the corresponding period (in no event
is the Adjusted Base FPS less than the initial Base FPS):

  Adjusted Base FPS:  [*]
  
  Example for first
  Anniversary Date:   Current Payment assumption = [*]
                      Total Payment assumption = [*]
                      Then Adjusted Base FPS for the second Annual Period:  [*]

SBCL  or  NeoPath may exercise such option  only  by  giving
written notice of such exercise within 30 days prior to  the
commencement of the applicable Annual Period.
_________________
[*]Confidential treatment requested

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Section 4.3.   Workload Reduction Adjustment

Upon  NeoPath's delivery of an FDA-approved upgraded  System
capability,  the  Base  FPS  (or  Adjusted  Base   FPS,   as
applicable)  will be increased by [*] per  Pap  smear  slide
processed for [*].  Such increase per slide will be  payable
with respect to all slides processed after the beginning  of
the  Quarter  following  delivery,  installation,  and  full
implementation of the upgrade.


Section 5.     Records and Audit

SBCL will keep and maintain accurate records of any and  all
payments received for the processing of Pap smear slides.

NeoPath  may  designate  an  independent  certified   public
accountant  to  audit SBCL's documentation  and  records  as
required  to verify any proposed Adjusted Base FPS.   Unless
otherwise  agreed  by the parties, any such  audit  will  be
conducted upon not less than ten (10) business days' advance
written notice to SBCL, during SBCL's normal business  hours
and  in  a manner that does not interfere with SBCL's normal
business  operations.  The expense of  such  audit  will  be
borne by [*].  NeoPath will not conduct any such audit  more
than once in any twelve (12)-month period.


Section 6.     Exclusivity

During  the Term, SBCL agrees to exclusively utilize AutoPap
Systems for all eligible internally processed automated  Pap
smear reading needs.  By the end of the Term, SBCL agrees to
process  100  percent of eligible internally  processed  Pap
smear slides at installed sites through the AutoPap System.


Section 7.     Other Terms

NeoPath will deliver the AutoPap Systems FOB carrier at  the
NeoPath manufacturing facility.  [*] will be responsible for
all transportation costs.


Section 8.     Additional Systems

If  the average number of slides processed per Quarter  with
all  of the Systems located at any SBCL site during any  two
consecutive  Quarters  exceeds [*]  slides  per  System  per
Quarter, then SBCL may order additional Systems as needed to
bring  the  projected average requirement at such SBCL  site
down  to  approximately [*] slides per System  per  Quarter.
Unless  otherwise agreed upon by the parties,  NeoPath  will
use  its  best efforts to deliver such additional  System(s)
within  [*] days after receipt of SBCL's order for the same,  
and  the  Term with respect to any such System will commence 
upon [*] and will end upon [*].


Section 9.     Early Termination

If  the average number of slides processed per Quarter  with
all  of the Systems located at any SBCL site during any  two
(2)  consecutive  Quarters is significantly  less  than  [*]
slides  per  System per Quarter, then NeoPath may  terminate
the  Term  with respect to any Systems located at such  SBCL
site;  provided that after any such termination, the Systems
remaining  at  such SBCL site are sufficient  to  process  a
projected average requirement at such SBCL site not  greater
than  approximately [*] slides per System per  Quarter,  and
provided  that at least one System sufficient to handle  the
eligible slides at that site remains on-site.
______________________
[*]Confidential treatment requested

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Section 10.    Press Releases

Each  party  to  this agreement will give  the  other  party
reasonable advance notice of, and the opportunity to review,
comment  upon  and approve, any press release  or  marketing
materials  that the other party may desire to  publish  with
regard to either the utilization of Systems at SBCL's sites,
or the NeoPath system generally.


Section 11.    Accessories

11.1     Each  offered  AutoPap System includes  the  following
         NeoPath accessories:

               Quantity       Description
               ________       ___________

                 40           AutoPap Slide Trays

                  1           Operator Manual

                  1           Start-Up Kit*

  *   Start-Up Kit will include one package of printer paper
      and one roll of Bar Code Labels (5,000 sets of 4 labels
      per role)


11.2     The  following  additional accessories are  offered  by
         NeoPath at the current indicated prices (prices subject
         to change):

              Description           Price
              ___________           _____ 
           
              Bar Code Labels       [*] (U.S.) per roll
          
              AutoPap Slide Tray    [*] (U.S.) per tray


Section 12.    Contract Signatures


OFFERED BY:                             ACCEPTED BY:
NeoPath,  Inc.                          SmithKline Beecham Clinical Laboratories

Signature:  /s/ Alan C. Nelson          Signature:  /s/ John B. Okkerse, Jr.
____________________________________    ________________________________________
Printed Name:  Alan C. Nelson, Ph.D.    Printed Name:  John B. Okkerse, Jr.
                                  
Title:  President, CEO and Chairman     Title:  President
                                  
Date Signed:  September 29, 1998        Date Signed:  September 29, 1998
___________________________________     ________________________________________
                                        /s/ Edward A. Kaufman
                                        ________________________________________
                                        Edward A. Kaufman
                                        ________________________________________
                                        Vice-President/National Medical Director
                                        ________________________________________

                                        29 September 98
                                        ________________________________________
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