FORM 10 - Q
                       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, 1998

                                       OR

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

         For the transition period from  ________________

Commission file Number:  000-22212

                              IVI PUBLISHING, INC.
                               ------------------
                          (Exact Name of Registrant as
                            specified in its charter)

         Minnesota                                          41-1686038
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)

                          808 Howell Street, Suite 400
                            Seattle, Washington 98101
                    (Address of principal executive offices)
                                   (Zip Code)

                                  206-583-0100
              (Registrant's telephone number, including area code)

                         7500 Flying Cloud Drive, #500
                         Eden Prairie, Minnesota 55344
                                (Former Address)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                           Yes  X           No

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

 Class                                      Outstanding as of May 15, 1998
 -----------------------------------        ------------------------------
 Common Stock                               10,139,710 shares
 Par Value $.01 Per Share



<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                              IVI Publishing, Inc.
                                 Balance Sheets
                                    Unaudited
                      (In Thousands, Except Per Share Data)

<TABLE>
<CAPTION>

                                               Dec. 31, 1997   Mar. 31, 1998
<S>                                               <C>            <C>
ASSETS

Current assets:
     Cash and cash equivalents                    $  2,488       $    571
     Accounts receivable, net of allowances
        for returns and doubtful accounts of
       $1,011 in 1997 and $991 in 1998                 337             65
     Inventories                                       150             46
     Other current assets                              332            263
                                                  --------       --------
Total current assets                                 3,307            945

Furniture and equipment:
     Computers and software                          2,856          2,874
     Office equipment                                1,403          1,403
                                                  --------       --------
                                                     4,259          4,277
     Accumulated depreciation                       (2,989)        (3,184)
                                                  --------       --------
                                                     1,270          1,093

Total assets                                      $  4,577       $  2,038
                                                  ========       ========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Accounts payable                             $  1,919       $  1,725
     Other accrued expenses                          2,640          2,464
                                                  --------       --------
Total current liabilities                            4,559          4,189

Shareholders' equity:
     Common stock, $.01 par value:
         Issued and outstanding shares -
             10,106 and 10,125 at 1997
             and 1998, respectively                    101            101
     Additional paid-in capital                     78,493         78,577
     Accumulated deficit                           (78,576)       (80,829)
                                                  --------       --------
Total shareholders' equity (deficit)                    18         (2,151)
                                                  --------       --------

Total liabilities and shareholders' equity        $  4,577       $  2,038
                                                  ========       ========

</TABLE>


<PAGE>

                              IVI Publishing, Inc.
                            Statements of Operations
                                    Unaudited
                      (In thousands, except per share data)
<TABLE>
<CAPTION>

                                         Three Months Ended
                                              March 31
                                        1997           1998
                                      --------       --------
<S>                                   <C>            <C>
Revenue                               $  1,719       $    330
Cost of revenue                            770            688
                                      --------       --------
Gross margin                               949           (358)
Operating expenses:
     Product development                 1,311            728
     Sales and marketing                   394            436
     General and administrative            766            743
                                      --------       --------
        Total operating expenses         2,471          1,907
Loss from operations                    (1,522)        (2,265)
Interest (expense) income                  (59)            12
                                      --------       --------
Net loss                                (1,581)        (2,253)
Preferred stock dividends                  (30)
Preferred stock accretion                  (13)
                                      --------       --------
Net loss applicable to
     common shareholders              ($ 1,624)      ($ 2,253)
                                      ========       ========

Net loss per common share --
     basic and diluted                ($  0.21)      ($  0.22)
                                      ========       ========

Weighted average number of
     common shares outstanding           7,653         10,150
                                      ========       ========
</TABLE>

<PAGE>
                              IVI Publishing, Inc.
                            Statements of Cash Flows
                                 (In Thousands)
<TABLE>
<CAPTION>

                                                                         Three Months Ended
                                                                              March 31
                                                                        1997         1998
                                                                      --------      -------

<S>                                                                   <C>           <C>
Operating activities:
   Net loss                                                           ($1,581)      ($2,253)
   Adjustments to reconcile net loss to
      net cash used in operating activities
         Depreciation and amortization                                    330           195
         Changes in assets and liabilities:
            Decrease in accounts receivable                               970           272
            Decrease (increase) in inventories                            (26)          104
            Decrease in other current assets                               20            69
            Decrease in other long-term assets                             27
            Decrease in accounts payable and accrued liabilities       (1,182)         (370)
                                                                      -------       -------
   Net cash used in operating activities                               (1,442)       (1,983)

Investing activities:
   Net furniture and equipment additions                                  (23)          (18)
                                                                      -------       -------
   Net cash used in investing activities                                  (23)          (18)

Financing activities:
   Proceeds from exercised stock options                                   74            84
                                                                      -------       -------
   Net cash provided by financing activities                               74            84
                                                                      -------       -------

Net decrease in cash and cash equivalents                              (1,391)       (1,917)
Cash and cash equivalents at beginning of period                        3,462         2,488
                                                                      =======       =======
Cash and cash equivalents at end of period                            $ 2,071       $   571
                                                                      =======       =======

</TABLE>
<PAGE>

                              IVI Publishing, Inc.
             Notes to the Condensed Financial Statements (Unaudited)
                                 March 31, 1998

Note A - Basis of Presentation

The accompanying  unaudited condensed financial statements have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information and with the  instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly,  they do not include all 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.
Operating  results  for the  three-month  period  ended  March 31,  1998 are not
necessarily  indicative  of the results  that may be expected for the year ended
December 31, 1998. For further information,  refer to the consolidated financial
statements and footnotes thereto included in the Company's annual report on Form
10-K for the year ended December 31, 1997.

Note B -- Product Development Costs

Product  development  costs  consist  principally  of  compensation  to  Company
employees,  interactive  design  costs paid to outside  consultants,  travel and
supplies. All costs are expensed as incurred.

Costs  related to research,  design and  development  of products are charged to
product  development   expenses  as  incurred.   Under  Statement  of  Financial
Accounting  Standards  No.  86 (SFAS No.  86),  software  development  costs are
capitalized  beginning  when a  product's  technological  feasibility  has  been
established  and  ending  when a product is  available  for  general  release to
customers.  The Company has not capitalized any software development costs since
such costs meeting the requirements of SFAS No. 86 have not been significant.

Note C -- Net Loss Per Share

Net loss per share is computed  using the weighted  average  number of shares of
common  stock  outstanding.  Common  equivalent  shares  from stock  options and
warrants are excluded from the computation as their effect is anti-dilutive.

In February  1997, the Financial  Accounting  Standards  Board issued  Statement
No.128, "Earnings Per Share." This statement establishes standards for computing
and  presenting  basic  and  diluted  earnings  per share  (EPS)  for  financial
statements  issued for periods  ending after  December 15, 1997. The adoption of
this statement will not have a material effect on the Company's reported EPS.

Note D -- Revenue Recognition

The Company's revenues consist of product sales and licensing revenue,  contract
development  revenue,  fees  relating to the licensing of its content for use on
cable television, and advertising fees for online services.

Product sales and licensing revenues are made up of retail  distribution  sales,
direct  mail  sales,  and product  sales and  royalties  on licenses to original
equipment  manufacturers.  These  revenues are  recognized  upon shipment of the
product or when the Company's  obligations  under the licensing  agreements  are
complete. Allowances for returns are recorded at the time revenue is recognized.

Contract  development  revenue is  generated  through  the use of the  Company's
personnel and facilities for the creation of custom  multimedia  products.  This
revenue is  recognized by contract on a  percentage-of-completion  basis or at a
specific hourly rate, depending on the terms of the contract.

Revenues are generated through the licensing of the Company's health and medical
content for use on cable television  channels.  For the three months ended March
31, 1997, the Company  recognized revenue under its cable agreement ratably over
the life of the contract. In 1998, revenue is recognized on a cash basis.


<PAGE>

Revenues are generated  through the sale of sponsorships  and advertising on the
Company's web site. These revenues are recognized as they are earned.

Note E -- Litigation Settlement

During  the  quarter,  the  Company  made a payment  of  $305,000  to  Berkshire
Multimedia  Group,  Inc. to fully satisfy the outstanding  judgment  against the
Company.

Note F -- Subsequent Event

On April 10,  1998,  the Company  received  gross  proceeds of $5 million from a
private  placement  of  5,000  shares  of  non-voting  Series  B 5%  Convertible
Redeemable  Preferred  Stock  (the  "Preferred  Shares")  and  66,778  five-year
warrants with an exercise price of $11.23125 per share. The Preferred Shares are
convertible  into shares of Common Stock at a price which  depends on the market
price and varies with respect to when the conversion occurs.


<PAGE>
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Overview

Since its inception, the Company's strategy has been to develop online and cable
television platforms, as well as maintain its staple platform, CD-ROMs, in order
to enhance an integrated  approach to publishing  electronic  health and medical
information.  In 1997,  the  Company  was  distributing  its health and  medical
information  to end users via all three  platforms.  Under  this  strategy,  the
Company was never able to attain  profitability,  and, at December 31, 1997, had
an accumulated deficit of $78,576,000. In 1997, the Company's Board of Directors
revised its business strategy and brought in an entirely new management team and
other key  employees  skilled  in the  development  of  internet  websites.  The
Company's  current  strategy is to focus its resources on the  development of an
internet-delivered, consumer-oriented network of health and wellness sites.

Results of Operations

The following table sets forth selected income statement data of IVI Publishing,
Inc.  and such data as a  percentage  of net revenues for the three months ended
March 31, 1998 and 1997.

                                     Three months ended March 31,
                                    (Dollar amounts in thousands)
                       ------------------------------------------------------
                                     1998                        1997
                                     ----                        ----
Net revenues                  $330          100%        $1,719          100%
Gross margin                  (358)        (108%)          949           55%
Operating expenses           1,907          578%         2,471          144%
Operating loss              (2,265)        (686%)       (1,522)         (89%)
Net loss                   ($2,253)        (683%)      ($1,624)         (94%)


Revenues
Revenues for the three months ended March 31, 1998 and 1997 were as follows:

                                                    1998          1997
                                                    ----          ----
Product sales and licensing revenue                $      44     $     888
Contract development revenue and other                   197           338
Cable television licensing revenue                         0           493
Online revenue                                            89             0
                                                 ------------  ------------

Net revenues                                       $     330      $  1,719

Sales for the three months ended March 31, 1998 of $330,000 represent a decrease
of 81% relative to the previous year. The decrease is primarily  attributable to
reduced  product sales and licensing  revenue which  decreased  from $888,000 to
$44,000 and cable television  licensing revenue which decreased from $493,000 to
$0. The decrease in product  sales and  licensing  revenue is a result of market
conditions  for CD ROM products,  and the  Company's  lack of new CD ROM product
releases as it  transitions  to an  internet-focused  business.  The decrease in
cable royalty revenues reflects a cash basis revenue  recognition policy related
to a cable  television  contract with America's  Health  Network  (AHN).  Online
revenue was  generated  from the  Company's  OnHealth.com  web site through site
sponsorships and advertising.

Gross margin

Gross  margin as a  percentage  of net  revenues was (108%) for the three months
ended March 31,  1998  compared to 55% for the  comparable  period in 1997.  The
negative  gross margin  percentage  in 1998 is  primarily  the result of royalty
expenses related to cable television  licensing  revenue,  but is in part due to
the high cost of revenues related to the CD ROM business.


<PAGE>

Operating expenses

Product  Development  For  the  three  months  ended  March  31,  1998,  product
development  expenses were $728,000,  representing a $583,000,  or 44%, decrease
relative to the same period in 1997. The decrease relates to the shift away from
the CD-ROM product development business and toward an internet focused business.

Sales and Marketing
Sales and marketing expenses for the three months ended March 31, 1998 increased
$42,000,  or 11%,  relative to the same three months in 1997.  Although expenses
are comparable,  1998 expenditures are focused  primarily on internet  marketing
and  sales  activities  while  1997  activities  include  expenditures  for  the
Company's CD-ROM business.

General and Administrative

For the  quarter  ended March 31,  1998,  general  and  administrative  expenses
decreased  $23,000,  or 3%,  relative to the same period in the  previous  year.
Lower  professional  fees in 1998 were  partially  offset by higher  travel  and
related expenses.

Interest Income (Expense)

The quarter ended March 31, 1998 has net interest income of $12,000  compared to
net interest  expense of $59,000 for the quarter ended March 31, 1997.  The 1998
net interest income includes  interest income  generated from cash  equivalents.
The 1997 net interest  expense  includes  interest income from cash  equivalents
that  is  more  than  offset  by  interest  expense  related  to  $3,500,000  in
convertible  subordinated  debentures,  which were  converted  into common stock
during the fourth quarter of 1997.

Financial Condition, Liquidity and Capital Resources

At March 31, 1998, the Company had cash and cash equivalents of $571,000.  Total
cash used by operating  activities  during the three months ended March 31, 1998
totalled $1,983,000 and is primarily due to a net loss of $2,253,000.  Investing
activities used cash of $18,000 for purchases of computer  equipment.  Financing
activities provided cash of $84,000 from stock option exercises.

On April 10, 1998,  the Company  completed a $5,000,000  non-voting  Convertible
Redeemable  Preferred Stock  financing.  The Company  believes that the proceeds
from this financing  transaction,  in addition to cash and cash  equivalents and
anticipated  operating cash flows will allow the Company to continue to meet its
ongoing financial obligations and operate through, at least, December 31, 1998.

Forward Looking Statements

The statement  made in this Form 10-Q relating to the Company's  ability to meet
its ongoing  financial  obligations  and  operations  through  December 31, 1998
depends  on (i) the  ability  of the  Company  to meet  its  expected  operating
revenues,  which are variable  with respect to consumer  demand and  advertising
revenues,  (ii) the  success  of its  ongoing  development  efforts  and  market
acceptance of the OnHealth web site, (iii) the success and  effectiveness of the
Company's new  management  team;  and (iv) other general  market  conditions and
competitive  conditions  within this  market,  including  the  introduction  and
further development of competitive web sites.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

<PAGE>

                           PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In 1996,  Berkshire  Multimedia Group, Inc.  ("Berkshire")  initiated  mediation
regarding a dispute with the Company.  Shortly after an  unsuccessful  mediation
conference was held in September 1996, Berkshire Multimedia Group filed a demand
for  arbitration  alleging  that the Company  breached its  obligations  under a
contract.  An arbitration hearing was completed in January 1997, and in February
1997  the  arbitration  panel  awarded  Berkshire   $300,000.   Hennepin  County
(Minnesota)  District  Court  vacated that award on May 29, 1997,  and Berkshire
appealed  the  case.  The  Court of  Appeals  heard  the  case in late  1997 and
reinstated the original  decision of the  arbitration  panel in January 1998. On
February 25, 1998,  the Hennepin  County  (Minnesota)  District  Court issued an
order  directing  that judgment be entered  against the Company in the amount of
$300,000 plus  interest.  In March 1998,  the Company made a payment of $305,000
to Berkshire Multimedia Group, Inc. in full satisfaction of such judgment.


ITEM 2.           CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.           DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.           OTHER INFORMATION

None.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

(a)      The following exhibits are included herein:

         (10.1)   Nonqualified Stock Option Agreement dated December 11, 1997
                  between the Company and Robert N. Goodman*

         (27)     Financial Data Schedule (included only in electronic version).

         *Management contract or compensatory agreement.

(b)      No  reports on Form 8-K were filed by the  Company  during the  quarter
         ended March 31, 1998.




<PAGE>



                                   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.


                                            IVI PUBLISHING, INC.



                                            By  /s/ Michael D. Conway
                                            Michael D. Conway
                                            Chief Financial Officer

Date:  May 20, 1998