U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

(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, 1996

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

                  For the transition period from _______  to _______

                         Commission file number     0-22132
                                                --------------

                          BUCKHEAD AMERICA CORPORATION
--------------------------------------------------------------------------------
                     (Exact name of small business issuer as
                            specified in its charter)

           DELAWARE                                        58-2023732
------------------------------------        ------------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization

           4243 DUNWOODY CLUB DRIVE, SUITE 200, ATLANTA, GEORGIA 30350
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (770) 393-2662
--------------------------------------------------------------------------------
                           (Issuer's telephone number)

                                       N/A
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

    Check  whether  the issuer  (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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 CORPORATE ISSUERS

    State the number of  shares  outstanding of each of the  issuer's classes of
common equity, as of the latest practicable date:   October 31, 1996
                                                   ------------------
           Common stock, par value $.01 - 1,771,127 shares outstanding
           -----------------------------------------------------------

    Transitional Small Business Disclosure Format (Check one):
Yes       No  X
     ---     --- 
                                        1


<PAGE>



                         PART I - FINANCIAL INFORMATION

                          Item 1. Financial Statements


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                   Consolidated Condensed Financial Statements

                           September 30, 1996 and 1995

                                   (Unaudited)






































                                        2



<PAGE>

                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                      Consolidated Condensed Balance Sheet
                               September 30, 1996
                                   (Unaudited)


                                     Assets
                                     ------

Current assets:
   Cash and cash equivalents, including
    restricted cash of $1,547,983                                  $  2,418,924
   Short-term investments                                               670,800
   Current portions of notes receivable                                 451,676
   Other current assets                                                 958,308
                                                                   ------------
         Total current assets                                         4,499,708

Noncurrent portions of notes receivable                                 680,643
Property and equipment, at cost, net of
   accumulated depreciation                                          24,371,880
Other assets                                                          3,060,059
                                                                   ------------
         Total assets                                              $ 32,612,290
                                                                   ============


                      Liabilities and Shareholders' Equity
                      ------------------------------------

Current liabilities:
   Accounts payable and accrued expenses                           $  1,268,178
   Current portions of notes payable                                  2,228,104
                                                                   ------------
         Total current liabilities                                    3,496,282

Noncurrent portions of notes payable                                 16,577,383
                                                                   ------------
         Total liabilities                                           20,073,665
                                                                   ------------
Minority interest in partnership                                        603,994

Shareholders' equity:
   Common stock; par value $.01; 3,000,000
    shares authorized; 1,817,977 shares issued
    and 1,771,127 shares outstanding                                     18,180
   Additional paid-in capital                                         6,288,574
   Retained earnings                                                  5,985,770
   Unrealized gain on investment securities                              31,928
   Treasury stock (46,850 shares)                                      (389,821)
                                                                   ------------
         Total shareholders' equity                                  11,934,631
                                                                   ------------
         Total liabilities and shareholders' equity                $ 32,612,290
                                                                   ============
     See accompanying note to consolidated condensed financial statements.
                                        3

<PAGE>

                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                   Consolidated Condensed Statements of Income
                  Nine Months ended September 30, 1996 and 1995
                                   (Unaudited)


                                                         1996            1995
                                                     -----------     -----------
Revenues:
   Hotel revenues                                    $ 7,762,931       4,897,782
                                                     -----------     -----------

   Interest income:
     Notes receivable                                    401,250         623,111
     Investments                                         320,944         498,270
                                                     -----------     -----------
          Total interest income                          722,194       1,121,381
                                                     -----------     -----------


   Other income                                        1,682,657       2,287,265
                                                     -----------     -----------
           Total revenues                             10,167,782       8,306,428
                                                     -----------     -----------

Expenses:
   Hotel operations                                    5,593,179       3,405,115
   Depreciation and amortization                         722,300         476,334
   Other operating and administrative                  1,617,808       1,174,884
   Interest                                            1,143,954         989,531
                                                     -----------     -----------
          Total operating, administrative,
           and interest expenses                       9,077,241       6,045,864
                                                     -----------     -----------

          Income before income taxes                   1,090,541       2,260,564

Provision for income taxes                                  --              --
                                                     -----------     -----------

          Net income                                 $ 1,090,541       2,260,564
                                                     ===========     ===========


Net income per common and common
   equivalent share                                  $       .60            1.29
                                                     ===========     ===========

Weighted average number of common and
   common equivalent shares used to
   calculate net income per share                      1,813,431       1,743,082
                                                     ===========     ===========


     See accompanying note to consolidated condensed financial statements.

                                        4

<PAGE>
                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                   Consolidated Condensed Statements of Income
                 Three Months ended September 30, 1996 and 1995
                                   (Unaudited)


                                                           1996          1995
                                                       ----------     ----------
Revenues:
   Hotel revenues                                      $2,444,487      1,831,968
                                                       ----------     ----------

   Interest income:
     Notes receivable                                     130,040        203,052
     Investments                                           78,311        151,557
                                                       ----------     ----------
          Total interest income                           208,351        354,609
                                                       ----------     ----------

   Other income                                           818,828      1,579,459
                                                       ----------     ----------
           Total revenues                               3,471,666      3,766,036
                                                       ----------     ----------

Expenses:
   Hotel operations                                     1,805,361      1,431,106
   Depreciation and amortization                          238,600        195,600
   Other operating and administrative                     736,479        426,035
   Interest                                               364,245        296,476
                                                       ----------     ----------
          Total operating, administrative,
           and interest expenses                        3,144,685      2,349,217
                                                       ----------     ----------

          Income before income taxes                      326,981      1,416,819

Provision for income taxes                                   --             --
                                                       ----------     ----------

          Net income                                   $  326,981      1,416,819
                                                       ==========     ==========

Net income per common and common
   equivalent share                                    $      .18            .80
                                                       ==========     ==========
Weighted average number of common and
   common equivalent shares used to
   calculate net income per share                       1,818,582      1,755,480
                                                       ==========     ==========




     See accompanying note to consolidated condensed financial statements.

                                        5



<PAGE>



                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                 Consolidated Condensed Statements of Cash Flows
                  Nine Months Ended September 30, 1996 and 1995
                                   (Unaudited)


                                                         1996           1995
                                                    -----------     -----------

Increase (decrease) in cash and cash equivalents:

Cash flows from operating activities:
      Net income                                    $ 1,090,541       2,260,564
      Adjustments to reconcile net income
       to net cash provided by
       operating activities:
      Depreciation and amortization                     722,300         476,334
      Other, net                                       (907,673)     (1,308,588)
                                                    -----------     -----------
         Net cash provided by
          operating activities                          905,168       1,428,310
                                                    -----------     -----------

Cash flows from investing activities:
      Note receivable principal receipts              2,519,659       2,092,135
      Hotel assets acquired                          (4,419,778)           --
      Other, net                                       (545,031)       (857,192)
                                                    -----------     -----------
         Net cash provided (used) by
          investing activities                       (2,445,150)      1,234,943
                                                    -----------     -----------

Cash flows from financing activities:
     Repayments of notes payable                     (2,698,155)     (2,498,174)
      Additional borrowings                           3,450,000            --
      Other, net                                         34,400            --
                                                    -----------     -----------
         Net cash provided (used) by
          financing activities                          786,245      (2,498,174)
                                                    -----------     -----------

Net increase (decrease) in cash and
   cash equivalents                                    (753,737)        165,079

Cash and cash equivalents at beginning
   of period                                          3,172,661       4,616,866
                                                    -----------     -----------

Cash and cash equivalents at end of period          $ 2,418,924       4,781,945
                                                    ===========     ===========


     See accompanying note to consolidated condensed financial statements.

                                        6

<PAGE>



                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

               Note to Consolidated Condensed Financial Statements
                           September 30, 1996 and 1995
                                   (Unaudited)



      (1)   Basis of Presentation
            ---------------------

            The accompanying  unaudited financial  statements do not include all
            of the  information  and  footnotes  required by generally  accepted
            accounting  principles  for complete  financial  statements.  In the
            opinion  of  management,   all  adjustments  (consisting  of  normal
            recurring  accruals)  considered  necessary for a fair  presentation
            have been included.  The results of operations  for interim  periods
            are not  necessarily  indicative of the results that may be expected
            for  a  full  year  or  any  other  interim   period.   For  further
            information,  see the consolidated  financial statements included in
            the Company's Form 10-KSB for the year ended December 31, 1995.































                                         7



<PAGE>




Item 2.  Management's Discussion and Analysis.

FINANCIAL CONDITION AND CHANGES IN FINANCIAL CONDITION.
-------------------------------------------------------


1996
----

During  the third  quarter  of 1996,  the  Company  acquired  a 96 room hotel in
Dalton,  Georgia for approximately $1.5 million.  The purchase was financed by a
$1,050,000  (9.15%)  first  mortgage  loan from a local bank and a $70,000 (10%)
short term note from the  seller.  The  remainder  was paid in cash.  A $700,000
renovation is in process and the Company  expects to open the hotel as a Country
Hearth Inn before year end. The Company has commitments in place which will fund
the majority of the renovation costs.

Renovations at the Company's Atlanta hotel began shortly after the completion of
the Olympic Games. The $900,000  renovation is expected to be completed prior to
year end when the hotel will open as a Country  Hearth Inn. The Company plans to
finance a substantial portion of the renovation costs.

The Company's  joint venture  project in Mason,  Ohio broke ground in September.
The grand  opening of this new 93 room hotel is scheduled  for the 1997 Memorial
Day Weekend.

The Company  received a $4.6 million loan  commitment  to refinance  its Orlando
Country Hearth Inn.  Proceeds from the refinancing will allow the Company to pay
off the remaining balance of its obligation to Trilon International, Inc., which
was to be due on December 31, 1996.

The Company executed five new Country Hearth Inn license  agreements  during the
third quarter bringing the year to date total to twelve new agreements.


1995
----

The most  significant  event  occurring  in the  third  quarter  of 1995 was the
settlement of the "Glenstone"  litigation.  As a result of the  settlement,  the
Company's  claim reserves were  decreased by $1.5 million.  The Company was also
able to recognize a nonrecurring gain of $1.2 million from the settlement.

During the first nine months of 1995,  the Company  acquired and  converted  its
Orlando  Country  Hearth Inn.  Additionally,  note receipts of $2.1 million were
collected, most of which were used to reduce notes payable.



                                        8



<PAGE>




RESULTS OF OPERATIONS
---------------------

Periods ended September 30, 1996 and 1995
-----------------------------------------

Hotel  revenues  amounted to $2,444,487  and  $7,762,931 for the three month and
nine  month  periods  ended  September  30,  1996,  respectively,  as opposed to
$1,831,968  and  $4,897,782  during the same  periods in 1995.  Hotel  operating
profits  for the 1996 three and nine month  periods  amounted  to  $639,126  and
$2,169,752, respectively, versus $400,862 and $1,492,667 in 1995. Such increases
are  attributable  to the  acquisitions  of hotels in Orlando (May 1995),  Texas
(December  1995),  Atlanta (March 1996), and Dalton (August 1996). The Company's
two Days Inn properties (in Miami and Daytona)  experienced declines in revenues
and  operating  profits  during  the  three and nine  month  1996  periods.  The
Company's Country Hearth Inn properties  experienced  increased  performances in
1996.

Interest  income  continues  to  decline  as a result of  decreases  in the note
receivable  portfolio  and in funds  available for  investment.  As disclosed in
previous  filings with the  Commission,  management  intends to shift  financial
resources to other assets, such as the hotel acquisitions previously discussed.

Other income in the third  quarter of 1995  included the $1.2 million  Glenstone
gain.  During the third quarter of 1996,  the Company sold an option to purchase
its  equity  certificates  in Days Inn  Mortgage  Trust.  The  Company  received
$250,000 for the option sale and, if the option is exercised by the holder, will
receive an additional $100,000. The Company's cost basis in the certificates was
zero.

Franchise  fees included in other income in the third quarter of 1996  increased
57% to $191,156  versus the same period in 1995.  Such amount  excludes the fees
from Company owned hotels which are eliminated in consolidation.

Depreciation   and  interest   expense   increases   resulted   from  the  hotel
acquisitions.  Interest  expense on each individual  debt  obligation  generally
decreases as the principal  balances are reduced.  Most of the debt  obligations
are fixed rate,  thus the Company is not  susceptible  to a large amount of rate
risk.

Other operating and  administrative  expenses  increased $310,474 from the third
quarter of 1995 to the same period in 1996. All of this increase is attributable
to  increased  sales and  marketing  efforts  relating  to  Country  Hearth  Inn
franchising.  Management  intends to continue to focus its efforts on the growth
of the Country Hearth Inn chain.







                                        9



<PAGE>



                           PART II - OTHER INFORMATION



Item 6.         Exhibits and Reports on Form 8-K

         (a)    Index to Exhibits
                -----------------

         Exhibit        Description                                        Page
         -------        -----------                                        ----

         3(i)           Articles of Incorporation                             *

         3(i)(a)        Certificate of Amendment of
                        Certificate of Incorporation                         **

         3(ii)          By-Laws - Amended and Restated
                        as of June 27, 1994                                  **

         27             Financial Data Schedule                              ***



           *         Previously   filed  as  the  same  Exhibit  number  to  the
                     Registrant's  Registration  Statement  on Form 10-SB  which
                     became  effective  on November  22,  1993 and  incorporated
                     herein by reference.

           **        Previously   filed  as  the  same  Exhibit  number  to  the
                     Registrant's December 31, 1994 Form 10-KSB and incorporated
                     herein by reference.

           ***       Filed electronically only





         (b)    Reports on Form 8-K

The  Company  has not filed any reports on Form 8-K during the quarter for which
this report is filed.








                                       10



<PAGE>







                                   SIGNATURES


  In accordance with the requirements of the Exchange Act, the registrant caused
  this  report to be signed on its  behalf by the  undersigned,  thereunto  duly
  authorized.





  Buckhead America Corporation
  ----------------------------
         (Registrant)



  Date:    November 13, 1996         /s/Douglas C. Collins
        -------------------------    ------------------------------------------ 
                                     Douglas C. Collins
                                     President and Chief Executive Officer




  Date:    November 13, 1996         /s/Robert B. Lee
        -------------------------    ------------------------------------------ 
                                     Robert B. Lee
                                     Vice President and Chief Financial Officer













                                       11