SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                 
                                   FORM 10-Q
                                
                                
            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
                                
                                
               For the quarterly period ended September 30, 1997
                                
                                
                        Commission File Number 1-13388
                                
                                
                                
                                GUIDANT CORPORATION
              (Exact name of Registrant as specified in its charter)
                                
                     INDIANA                            35-1931722
           (State or other jurisdiction of          (I.R.S. Employer
            incorporation or organization)          Identification No.)
                                
                                
                          111 MONUMENT CIRCLE, 29TH FLOOR
                         INDIANAPOLIS, INDIANA 46204-5129
                    (Address of principal executive offices)
                                
                                
 Registrant's telephone number, including area code: (317) 971-2000
                
                
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
    -----        ------
                                
                                
The number of shares of common stock outstanding as of October 28, 1997:
                                
               Class                Number of Shares Outstanding
               -----                ----------------------------
               Common
                                             148,134,251



                                      PART I
                              FINANCIAL INFORMATION

Item 1.  Financial Statements

                          GUIDANT CORPORATION and Subsidiaries
                            Consolidated Statements of Income
                          (In millions, except per-share data)
                                      (unaudited)

                                    Three Months Ended    Nine Months Ended
                                       September 30         September 30,
                                    ------------------    -----------------
                                      1997      1996      1997       1996
                                      ----      ----      ----       ----

Net sales                            $283.3    $260.1    $829.8     $777.7

Cost of sales                          69.5      69.1     207.7      246.1
                                      -----     -----     -----      -----

    Gross profit                      213.8     191.0     622.1      531.6

Research and development               45.2      37.6     129.9      110.6
Purchased research and development       -         -       57.4        -
Sales, marketing and administrative    92.0      78.7      65.4      238.4
                                      -----     -----     -----      -----

                                      137.2     116.3     452.7      349.0
                                      -----     -----     -----      -----

   Income from operations              76.6      74.7     169.4      182.6

Other income (expenses):
   Interest-net                        (5.0)     (5.8)    (15.2)     (19.7)
   Royalties--net                       3.3       3.3      12.7        5.7
   Amortization                        (3.8)     (4.2)    (11.7)     (16.5)
   Other--net                          (0.9)     (0.1)     (2.8)      (3.6)
   Impairment charges                    -         -         -       (66.9)
                                       -----     -----     -----     -----
                                       (6.4)     (6.8)    (17.0)    (101.0)
                                       -----     -----     -----     -----

Income before income taxes             70.2      67.9     152.4       81.6

Income taxes                           23.8      26.7      53.8       58.1
                                      -----     -----     -----      -----

Net income                            $46.4     $41.2     $98.6      $23.5
                                      =====     =====     =====      =====


Earnings per share                     $0.32     $0.29     $0.68      $0.16
                                      ======    ======    =======    ======


Weighted average shares outstanding   144.63    144.26    144.52     144.11

Dividends paid per share               $0.0125   $0.0125   $0.0375    $0.0375
                                      ========   ========= =======   ========



See notes to consolidated financial statements.




                     GUIDANT CORPORATION and Subsidiaries
                           Consolidated Balance Sheets
                              (Dollars in millions)


                                             September 30,     December 31,
                                                  1997             1996
                                             -------------     -----------
                                              (unaudited)

Assets

Current Assets
Cash and cash equivalents                          $5.8            $1.5

Accounts receivable, net of allowances
   of $7.5(1997) and $7.3(1996)                   258.6           212.4

Other receivables                                  10.4            17.5

Inventories                                       116.6           102.8

Deferred income taxes                              59.3            62.1

Prepaid expenses                                   23.4            22.6
                                                  -----           -----

   Total Current Assets                           474.1           418.9


Other Assets
Goodwill, net of allowances
   of 91.7(1997) and $82.1(1996)                  184.3           197.3

Other intangible assets, net of allowances
   of $10.9(1997) and $8.8 (1996)                   7.1             9.1

Investments                                        56.8            41.3

Sundry                                             26.4            16.3

Deferred income taxes                              10.8              -

Property and equipment                            574.4           531.6

Less accumulated depreciation                    (242.4)         (210.6)
                                                  -----           -----

Property and equipment, net                       332.0           321.0
                                                  -----           -----
 
                                               $1,091.5        $1,003.9
                                                =======         =======


See notes to consolidated financial statements.





                      GUIDANT CORPORATION and Subsidiaries
                           Consolidated Balance Sheets
                               (Dollars in millions)

                                                  September 30,    December 31,
                                                      1997              1996
                                                  -------------    ------------
                                                   (unaudited)

Liabilities and Shareholders' Equity

Current Liabilities
Accounts payable                                           $41.9       $21.9

Employee compensation                                       56.9        77.5

Restructuring liabilities                                    6.1         8.8

Income taxes payable                                         3.0         2.6

Other liabilities                                           91.2        67.2

Short-term borrowings                                      159.6       130.0
                                                           -----       -----

   Total Current Liabilities                               358.7       308.0

Noncurrent Liabilities
Long-term debt                                             187.5       233.5

Other                                                       11.6        14.2
                                                           -----       -----
                                                           199.1       247.7

Commitments and contingencies                                --          --

Shareholders' Equity
Common stock-no par value:
   Authorized shares: 250,000,000
   Issued and outstanding shares:  144,609,000 (1997)      192.5       192.5
                                   144,308,000 (1996) 

Additional paid-in capital                                 157.9       150.5

Retained earnings                                          255.1       162.0

Cumulative currency translation adjustments                (29.1)      (11.7)

Deferred cost, ESOP                                        (46.3)      (51.2)

Unrealized gain on investments, net                         10.7         9.4

Treasury stock, at cost:
     Shares: 106,542 (1997)
              66,763 (1996)                                 (7.1)       (3.3)
                                                            -----       -----
                                                           533.7       448.2
                                                           ------      ------
 
                                                        $1,091.5    $1,003.9
                                                         =======    ========
                                
                                
                                
                     GUIDANT CORPORATION and Subsidiaries
                     Consolidated Statements of Cash Flow
                               (In millions)

                                                       Nine Months Ended
                                                         September 30,
                                                       -----------------
                                                        1997        1996
                                                        ----        ----
                                                           (unaudited)

Cash Provided by Operating Activities:
   Net income                                          $98.6       $23.5

Adjustments to Reconcile Net Income to Cash
 Provided by Operating Activities:
   Depreciation                                         37.4        32.6
   Amortization of goodwill and other intangibles       12.0        16.5
   Provision for inventory and related losses            4.3        40.2
   Impairment charges                                     -         66.9
   Other noncash expenses                               18.7         1.2
                                                        ----        ----
                                                       171.0       180.9

Changes in Operating Assets and Liabilities:
   Receivables, increase                               (49.1)      (23.0)
   Inventories, increase                               (23.4)       (8.6)
   Prepaid expenses, increase                           (1.5)       (6.8)
   Accounts payable and accrued
    liabilities, increase (decrease)                    11.9       (16.8)
   Income taxes payable, increase (decrease)             1.0       (20.5)
   Other liabilities, increase (decrease)                4.6        (0.4)
                                                        ----        ----

Net Cash Provided by Operating Activities              114.5       104.8

Investing Activities:
   Additions of property and equipment, net            (51.9)      (42.1)
  (Additions) reductions of other assets, net          (23.6)        3.9
                                                        ----        ----

Net Cash Used for Investing Activities                 (75.5)      (38.2)

Financing Activities:
   Decrease in borrowings, net                         (15.5)      (58.1)
   Dividends                                            (5.5)       (5.4)
   Purchases of common stock and other capital
     Transactions                                      (13.2)         -
                                                        ----        -----

Net Cash Used for Financing Activities                 (34.2)      (63.5)

Effect of Exchange Rate Changes on Cash                 (0.5)        0.6
                                                        -----       -----

Net Increase in Cash and Cash Equivalents                4.3         3.7

Cash and Cash Equivalents at Beginning of Period         1.5         3.4
                                                        ----        ----

Cash and Cash Equivalents at End of Period              $5.8        $7.1
                                                        ====        ====
 


See notes to consolidated financial statements.

                                
                                
                                
                     GUIDANT CORPORATION and Subsidiaries
                  Notes to Consolidated Financial Statements
                               (In millions)
                                (unaudited)

NOTE 1 - General Information

Guidant Corporation (Guidant or the Company) is a multinational
company that designs, develops, manufactures, and markets a broad
range of medical devices for use in: (i)cardiac rhythm
management; (ii) vascular intervention; and (iii) minimally
invasive systems.  Guidant is a global company with principal
operations in the United States, Western Europe and Japan.  The
Company generally markets its products through a direct sales
force in the United States and a combination of direct sales
representatives and independent distributors in international
markets.


NOTE 2 - Basis of Presentation

The accompanying unaudited consolidated 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 of the information necessary
for a fair presentation of results of operations, financial
position, and cash flows in conformity with generally accepted
accounting principles.  In the opinion of management, the
consolidated financial statements reflect all adjustments
(consisting of normal recurring accruals) considered necessary
for a fair presentation of the results for the periods shown.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets, liabilities, revenues, expenses and related
disclosures at the date of the financial statements and during
the reporting period.

For further information, refer to the consolidated financial
statements and notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996.



NOTE 3 - Inventories

Inventories consisted of the following:

                                  September 30,    December 31,
                                       1997            1996
                                  --------------   ------------
     
     Finished products                60.4             $48.4
     Work in process                  31.1              28.8
     Raw materials and supplies       25.1              25.6
                                     -----             -----
                                    $116.6            $102.8
                                    ======            ======


NOTE 4 - Acquisition

In  May  1997, the Company acquired the assets of NeoCardia,  LLC
(Neocardia),  a  privately  held  development-stage  company   in
Houston,   Texas  for  $57.4  million.   Under  the   acquisition
agreement,  the  Company could pay as much as  $77.0  million  in
cash,  plus  subsequent  additional bonus  and  royalty  payments
contingent upon achieving certain product development  and  sales
goals.

                                
                                
                                
                     GUIDANT CORPORATION and Subsidiaries
                  Notes to Consolidated Financial Statements
                              (In millions)
                               (unaudited)

NOTE 4 - Acquisition (continued)

NeoCardia, which currently does not have any products available
for commercial sale, has pioneered the use of radiation therapy
for the treatment of restenosis.  The Company has financed the
acquisition with its existing credit lines.  The results of
NeoCardia's operations have been included in the Company's
consolidated results of operations from the date of acquisition.

This acquisition was accounted for by the purchase method.  In
conjunction with the acquisition, the Company recorded a pre-tax
charge of $57.4 million relating to the appraised value of the 
in-process research and development that must be expensed under
generally accepted accounting principles.  Substantially all of
the possible additional acquisition cost, when determined, will
also be treated as purchased research and development.  The pro
operating results from this acquisition did not have a material
forma impact on the Company's operations. (See Note 9 - Subsequent 
Event)



NOTE 5 - Earnings Per Share

Earnings per share of common stock has been computed by dividing
net income by the weighted average common shares outstanding
during the period.  In February 1997, the Financial Accounting
Standards Board issued Statement No. 128, Earnings per Share.
Under Statement No. 128, which is required to be adopted on
December 31, 1997, the disclosure of fully diluted earnings per
share will be mandatory in the consolidated financial statements.
At that time, the Company will be required to change the method
currently used to compute earnings per share and to restate all
prior periods.  The impact of the new requirements for
calculating earnings per share is not material for the three and
nine months periods ended September 30, 1997 and 1996.


NOTE 6 - Foreign Exchange Risk Management

A portion of the Company's cash flows is derived from
transactions denominated in foreign currencies.  The United
States dollar value of transactions denominated in foreign
currencies fluctuates as the United States dollar strengthens or
weakens relative to these foreign currencies.  In order to reduce
the uncertainty of foreign exchange rate movements on
transactions denominated in foreign currencies, the Company
enters into derivative financial instruments in the form of
foreign exchange forward and option contracts with major
international financial institutions.  These forward and option
contracts, which typically mature within one year, are designed
to hedge anticipated foreign currency transactions, primarily
intercompany inventory purchases for periods consistent with
commitments.  These contracts also hedge firm commitments,
primarily intercompany loans, payables and receivables. Realized
and unrealized gains or losses on contracts that qualify as
hedges are deferred and recognized in the same period as the
transactions occur.  Realized gains and losses on contracts
hedging intercompany inventory purchases are included in cost of
sales while realized gains and losses on firm commitment hedges
are recorded in other income (expenses).




                     GUIDANT CORPORATION and Subsidiaries
                  Notes to Consolidated Financial Statements
                              (In millions)
                               (unaudited)


NOTE 7 - Stock Split

On August 18, 1997, the Company's Board of Directors declared a
two-for-one stock split to be effected in the form of a 100%
stock dividend payable to shareholders of record at the close of
business September 2, 1997.  Distribution of the additional
shares resulting from the stock split occurred on September 16,
1997.  The stock split resulted in the issuance of approximately
74.1 million additional shares.  Treasury shares held by the
Company were not split. All references in the accompanying
consolidated financial statements to common shares and per-share
amounts for the current and prior periods have been restated to
reflect the stock split.



NOTE 8 - Contingencies

The Company is a party to various legal actions which have
occurred in the normal course of business.  In May 1995,
Intermedics, Inc., a division of Sulzermedica USA, Inc., filed
suit against the Company alleging patent infringement related to
certain of the Company's defibrillator and pacemaker models.
Intermedics is seeking injunctive and monetary relief of an
unspecified amount.

The Company has also been named as a defendant in an action
brought in 1995 by Boston Scientific Corporation and its
subsidiary, SCIMED Life Systems, Inc.  The lawsuit alleges
violation of federal and state antitrust laws, as well as state
unfair competition and abuse of process laws.  Boston Scientific
and SCIMED allege that the violations are based on the misuse of
the United States patent laws as a result of agreements
concerning certain rapid exchange catheter patents.  The lawsuit
seeks injunctive relief, unspecified monetary damages and a
declaration that certain patents are unenforceable.

On May 3, 1996, Pacesetter, Inc. filed suit against the Company
in the United States District Court for the District of Delaware.
The lawsuit was subsequently transferred to the United States
District Court for Minnesota.  The complaint, as subsequently
amended, alleges infringement of certain patents related to the
Company's VIGOR pacemaker and programmers.  The initial complaint
also asserted, in conjunction with Angeion Corporation, certain
patents of Angeion which, at that time, were licensed to
Pacesetter.  In July, 1997, the portion of the lawsuit dealing
with the Angeion patents was separated into a separate lawsuit
with Angeion as the sole plaintiff.  In this lawsuit, Angeion is
asserting infringement of certain of its patents by the VENTAK
MINI and VENTAK MINI II family of devices.  Both lawsuits seek
injunctive relief, unspecified monetary damages and an award of
attorneys' fees.




                     GUIDANT CORPORATION and Subsidiaries
                  Notes to Consolidated Financial Statements
                              (In millions)
                               (unaudited)

NOTE 8 - Contingencies (continued)

On June 6, 1997, C.R. Bard, Inc. (Bard) filed suit against the
Company in the United States District Court, District of
Delaware.  The complaint alleges that certain unspecified
dilatation catheters infringe two patents owned by Bard.  Bard is
seeking monetary and injunctive relief.

On October 3, 1997, Cordis Corporation (Cordis), a subsidiary of
Johnson and Johnson filed suit against the Company in the
District Court for the District of Delaware alleging that the
sale of the ACS MULTI-LINK Coronary Stent infringes certain
patents licensed to Cordis.  In addition, on October 8, 1997,
Cordis filed a motion for a preliminary injunction in this
lawsuit seeking to prevent the Company from selling the ACS MULTI-
LINK Coronary Stent other than in certain limited circumstances
and subject to certain conditions.  A hearing on the motion for a
preliminary injunction has been scheduled for January 5, 1998. In
the lawsuit, Cordis is seeking injunctive relief and unspecified
monetary damages.

The Company is a party to certain other legal actions arising in
the ordinary course of its business.  While it is not possible to
predict or determine the outcome of these legal actions, the
Company believes the costs associated with these actions will not
have a material adverse effect on its consolidated financial
position or liquidity, but could possibly be  material to the
consolidated results of operations in any one accounting period.

Further, product liability claims may be asserted in the future
relative to events currently unknown to management.  Management
believes that the Company's risk-management practices, including
insurance coverage, are reasonably adequate to protect against
potential product liability losses.



NOTE 9 - Subsequent Event

On October 6, 1997, the Company announced that it had entered
into a definitive agreement to acquire EndoVascular Technologies,
Inc. (EVT).  EVT is currently developing devices for minimally
invasive repair of abdominal aortic aneurysms.  Pursuant to the
terms of the agreement, each outstanding share of EVT common
stock will be exchanged for shares of Guidant common stock valued
at $20 per EVT share, subject to possible adjustment pursuant to
a collar arrangement.  The transaction is also subject to certain
conditions, including approval by the EVT shareholders and Hart-
Scott-Rodino anti-trust clearance.  The transaction, valued at
approximately $171.0 million, is expected to qualify as a tax-
free reorganization and is expected to be accounted for as a
pooling of interests.  Accordingly, the Company's financial
statements will be restated, for all periods presented, to include
the results of EVT, which are not material.  The transaction is 
expected to be consummated in the first quarter of 1998.





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


Guidant Corporation (Guidant or the Company), an Indiana
corporation, is a multinational company that designs, develops,
manufactures and markets a broad range of products for use in:
(i) cardiac rhythm management (CRM), (ii) vascular intervention
(VI), and (iii) other forms of minimally invasive systems (MIS).
In CRM, the Company is a worldwide leader in automatic
implantable cardioverter defibrillator (AICD) systems.  The
Company also designs, manufactures, and markets a full line of
implantable pacemaker systems used in the treatment of slow or
irregular arrhythmias.  In VI, the Company is a worldwide leader
in minimally invasive procedures used for opening blocked
coronary arteries.  In addition, the Company develops,
manufactures, and markets products for use in MIS procedures with
products focusing on laparoscopic market opportunities in both
general and cardiovascular surgeries.

Guidant's business strategy is to design, develop, manufacture
and market innovative, high quality therapeutic products
principally for use in treating cardiovascular and vascular
diseases and performing minimally invasive surgical procedures,
resulting in improved quality of patient care and reduced
treatment costs.  Cardiovascular disease is the leading cause of
death in the United States.  In implementing this strategy, the
Company focuses on the following three areas, which it believes
are critical to its future success: (i) global product
innovation, (ii) economic partnership with customers worldwide
and (iii) organizational excellence.

The Company was formed after Eli Lilly and Company (Lilly)
transferred its ownership interests in several businesses in its
Medical Devices and Diagnostics Division to Guidant.  The Company
consummated an initial public offering (IPO) of its common stock
in December 1994.  Lilly, whose beneficial ownership was reduced
to approximately 80% after the IPO, disposed of its remaining
ownership interest in September 1995 by means of a tax-free split-
off, an exchange offer pursuant to which Lilly shareholders were
given the opportunity to exchange their Lilly common stock for
Guidant's common stock.  The consummation of this exchange offer
resulted in Lilly distributing all of its Guidant common stock to
Lilly shareholders.


The following tables are summaries of the Company's net sales and
major costs and expenses:

                                       Three Months Ended    Nine Months Ended
                                          September 30,        September 30,
                                       ------------------   ------------------
                                        1997       1996      1997        1996
                                        ----       ----      ----        ----
                                                (Dollars in millions)
                                                    (unaudited)

Net sales:
  Cardiac rhythm management            $172.9     $144.7    $486.3     $422.7
  Vascular intervention                  95.8      104.7     297.7      320.7
  Minimally invasive systems             14.6       10.7      45.8       34.3
                                       ------     ------    ------     ------
            Total net sales            $283.3     $260.1    $829.8     $777.7

Cost of sales                            69.5       69.1     207.7      246.1(2)
                                       ------     ------    ------     ------

            Gross profit                213.8      191.0     622.1      531.6

Research and development                 45.2       37.6     129.9      110.6

Purchased research and development(1)      -          -       57.4         -

Sales, marketing and administrative      92.0       78.7     265.4      238.4
                                       ------     ------    ------     ------

  Income from operations                $76.6      $74.7    $169.4     $182.6
                                       ======     ======    ======     ======


                                               As a Percent of Net Sales
                                      ----------------------------------------
                                      Three Months Ended     Nine Months Ended
                                         September 30,          September 30,
                                      ------------------    ------------------
                                         1997      1996       1997       1996
                                         ----      ----       ----       ----

Net sales:
  Cardiac rhythm management              61.0%      55.6%     58.6%      54.4%
  Vascular intervention                  33.8       40.3      35.9       41.2
  Minimally invasive systems              5.2        4.1       5.5        4.4
                                       ------     ------    ------     ------

            Total net sales             100.0%     100.0%    100.0%     100.0%

Cost of sales                            24.5       26.6      25.0       31.6(2)
                                       ------     ------     -----     ------

            Gross profit                 75.5       73.4      75.0       68.4

Research and development                 16.0       14.4      15.7       14.2

Purchased research and development(1)      -          -        6.9         -

Sales, marketing and administrative      32.5       30.3      32.0       30.7
                                        -----      -----     -----      -----

  Income from operations                 27.0%      28.7%    $20.4%      23.5%
                                        ======     ======    ======     ======


(1)In conjunction with the asset acquisition of NeoCardia, LLC, the initial
   purchase price of $57.4 million represented the appraised value of 
   in-process research and development which must be expensed under generally 
   accepted accounting principles for purchase accounting.

(2)Includes the impact of $28.8 million in special noncash obsolescence 
   charges taken in 1996 on CRM products and programmers.



Operating Results -- Three and Nine Months Ended September 30, 1997

The Company had worldwide net sales of $283.3 million for the three 
months ended September 30, 1997, reflecting an increase of $23.2 million 
or 9% over the same period in 1996.  Growth in unit volume of 21% 
increased net sales, while lower net sale prices, including the effect 
of changes in product mix, and fluctuations in foreign currency exchange 
rates decreased net sales 7% and 5%, respectively.

The Company had worldwide net sales of $829.8 million for the
nine months ended September 30, 1997, an increase of $52.1
million or 7% over the nine months ended September 30, 1996.
Growth in unit volume of 18% was offset by net sales price
decreases of 7%, which also includes changes in product mix, and
unfavorable fluctuations in foreign currency exchange rates of 4%
during this period.

Net sales of CRM products grew $28.2 million or 19.5% for the
three months ended September 30, 1997 as compared to the same
period in 1996.  CRM net sales grew $63.6 million or 15.0% for
the nine months ended September 30, 1997 over the comparable
period in 1996.  The Company experienced record sales during the
quarter in AICD systems. Sales growth was led by the VENTAK AV,
market released in the United States in July 1997 and in Europe
in November 1996; strong worldwide sales of the VENTAK MINI II
advanced, tiered-therapy AICD, released in the United States in
July 1996; the VENTAK MINI HC released in the United States in
May 1996 and, to a lesser degree, the VENTAK AV II DR which was
recently market released in Europe.  The VENTAK AV II DR is the
world's first implantable defibrillator system to incorporate
dual-chamber adaptive-rate pacing capability.  This device's
exclusive Atrial View feature allows it to distinguish
ventricular rhythms that are life threatening from less dangerous
atrial arrhythmias. The Company's adaptive-rate pacemaker
products also contributed to sales growth during the period.
Sales of pacemaker systems in the United States during the third
quarter of 1997 increased 12.5% from the same period in 1996 led
by VIGOR DR and VIGOR SR.

Management believes that sales growth in AICDs is partially
driven by the recent studies which demonstrate the relative
superiority of implantable defibrillators to drug therapy.  In
December 1996, the New England Journal of Medicine published the
findings of the Multicenter Automatic Defibrillator Implantation
Trial (MADIT).  This study, the first large, randomized, clinical
trial comparing AICDs with conventional antiarrhythmic drug
therapy, was terminated early because of the significant
improvement in survival rates of patients with AICDs.  Currently,
the Company is the only AICD manufacturer to have United States
Food and Drug Administration (FDA) approval to expand its product
labeling to cover patients identified by MADIT.  In addition, the
National Institute of Health halted the Antiarrhythmic vs.
Implantable Defibrillators (AVID) study in April 1997, also
citing significantly increased patient survival with implantable
defibrillators over conventional drug therapy.

Net sales of VI products for the three months ended September 30,
1997 decreased $8.9 million or 8.5% from the same period in 1996.
For the nine months ended September 30, 1997, VI net sales
decreased $23.0 million or 7.2% from 1996.  The Company
experienced sales volume growth in rapid exchange coronary
dilatation catheters, primarily the high-pressure ACS RX ROCKET
recently released in international markets, the ACS RX COMET,
released in international markets in June 1996 and in the United
States in November 1996; and the ACS RX MULTI-LINK Coronary Stent
System (rapid exchange stent delivery), launched in Europe and
other international markets in April 1996. This unit sales growth
was offset by sales declines in perfusion coronary dilatation
catheters, atherectomy catheters, guide wires and, in
international markets, over-the-wire coronary dilatation
catheters; and lower net average selling prices of most coronary
dilatation catheters in the United States and Europe. These lower
net average selling prices include the impact of product mix
changes due to sales growth in rapid exchange catheters which
have a lower average selling price than perfusion catheters.  The
Company believes that, in addition to this shift in product mix,
net average selling prices in the market may continue to decline.

On October 2, 1997 the Company announced that the ACS MULTI-LINK
Coronary Stent System has been approved by the FDA for marketing
in the United States.  This device is marketed on a rapid
exchange platform.  Management believes the ACS MULTI-LINK
Coronary Stent System will have a positive impact on sales growth
for the fourth quarter of 1997.

Net sales of MIS products for the three months ended September
30, 1997 were $14.6 million, an increase of $3.9 million or 36.4%
over the same period in the previous year.  MIS net sales for the
nine months ended September 30, 1997 were $45.8 million, an
increase of 33.5% over the comparable period in 1996. MIS sales
growth occurred in both United States and international markets
and was primarily driven by the ORIGIN TACKER endoscopic fixation
device; custom configurations which incorporate this device along
with other MIS products; and, to some degree, the VASOVIEW
Balloon Dissection system market released in September 1996.

The Company's United States net sales increased 14.4% to $180.9
million and international net sales held relatively steady at
$102.4 million for the three months ended September 30, 1997 as
compared to the same period in 1996. United States net sales
growth was primarily due to sales of the VENTAK AV, VENTAK MINI
II, VENTAK MINI, VENTAK MINI HC, ACS RX COMET, VIGOR DR, VIGOR
SR, and ORIGIN TACKER and related custom configurations.
International net sales growth was primarily driven by the ACS RX
MULTI-LINK Coronary Stent System, VENTAK AV, VENTAK MINI II,
VENTAK MINI HC, and VENTAK AV DR.  Sales of the ACS RX COMET in
Europe and Japan, and ACS RX ROCKET in Europe also contributed to
the international sales growth.  The unfavorable foreign currency
exchange rate impact, due to the strengthening United States
dollar, reduced net sales by $12.0 million and $29.3 million for
the three and nine months ended September 30, 1997, respectively,
compared to the same periods in 1996.  This negative impact on
gross profit was partially offset by foreign exchange gains,
which were recorded in cost of sales, relating to the Company's
hedging activities established for this purpose.

Cost of sales increased 1% to $69.5 million for the three months
ended September 30, 1997, and represented 24.5% of net sales
versus 26.6% for the same period in 1996. This reduction in 1997
cost of sales as a percentage of net sales was due to: (i) gains
of $5.3 million realized on the foreign exchange hedges referred
to above; (ii) increased manufacturing volume; and (iii) enhanced
manufacturing efficiencies, particularly in CRM.  Cost of sales
for the nine months ended September 30, 1997 was $207.7 million
or 25.0% of net sales.  For the nine months ended September 30,
1996, cost of sales without the effect of special noncash
obsolescence charges of $28.8 million   would have been $217.3
million or 27.9% of net sales.  The factors accounting for this
reduction in cost of sales as a percentage of net sales during
the nine months ended September 30, 1997 are similar to those
listed above.  Management believes cost of sales as a percentage
of net sales will remain stable from the current level.

The Company continued its commitment to achieving long-term
growth by investing significant resources in research and
development.  Research and development expenses of $45.2 million
for the three months ended September 30, 1997 increased $7.6
million or 20.2% compared to the same period in 1996.
These expenses represented 16.0% and 14.4% of net sales for the
three months ended September 30, 1997 and 1996, respectively.
For the nine months ended September 30, 1997, research and
development expenses, excluding the purchased research and
development charge of $57.4 million taken in the second quarter
pursuant to the asset of acquisition of NeoCardia, LLC,
increased $19.3 million or 17.5% and increased as a percentage of
net sales to 15.7% from 14.2% during the same period last year.
Increased research and development spending resulted primarily
from: (i) new product development costs related to the
development of future generations of AICD and pacemaker products;
(ii) the development of radiation therapy devices for coronary
restenosis; (iii) the development of stent technology for other
parts of the vascular anatomy such as carotid arteries, (iv) the
clinical evaluation of implantable device systems for the
treatment of congestive heart failure; and (v) cardiovascular
product development in MIS.

Sales, marketing and administrative expenses grew $13.3 million
or 16.9% for the three months ended September 30, 1997 compared
to the same period in 1996. For the nine months ended September
30, 1997, sales, marketing and administrative expenses increased
11.3% in comparison to the same period the prior year.  Variable
CRM selling expenses associated with the growth in sales due to
products such as the VENTAK AV and VENTAK MINI family of AICDs,
increased legal costs associated with the defense of various
litigation, and increased investment in the United States field-
sales force were among the primary reasons for this increased
spending.  In addition, expenses incurred in preparation for the
October 1997 launch of the ACS MULTI-LINK Coronary Stent System
in the United States also contributed to the increase in sales,
marketing and administrative expenses.

Income from operations for the three months ended September 30,
1997, and 1996 were $76.6 million and $74.7 million, respectively. 
During the period, net sales growth combined with lower 
manufacturing costs were partially offset by increased research 
and development, and sales, marketing and administrative spending, 
resulting in a 2.5% growth in income from operations.

For the three months ended September 30, 1997, the Company had
net other expenses of $6.4 million compared to $6.8 million for
the same period in the prior year. The Company had net other
expenses of $17.0 million and $101.0 million for the nine months
ended September 30, 1997 and 1996, respectively.  Included in net
other expenses for the nine months ended September 30, 1996 are
noncash impairment charges of $66.9 million taken by the Company
against its atherectomy-related goodwill and other intangible
assets.  Without the effect of this special charge, net other
expenses would have been $34.1 million for this period.  The
decrease in net other expenses during both periods was primarily
due to:  (i) lower interest expenses due to the decline in
average outstanding borrowings and lower interest rates during
the period; (ii) decreased net royalty expenses on certain
vascular intervention technology patents; and (iii) reduced
amortization expense resulting from the lower intangible assets
following the aforementioned impairment charges taken in 1996.

The third quarter of 1997 benefited from the Company's reduction
of its effective income tax rate for the year from 36.5% to
35.3%.  Without considering the effect of the special charges in
1996, the effective income tax rate for the three and nine months
ended September 30, 1996, respectively, was 39.3%.  This decline
in the effective income tax rate was primarily due to: (i)
reduced state income taxes; (ii) increased income tax benefits in
certain international locations; (iii) increased research and
development income tax credits; and (iv) the reduced impact of
nondeductible expenses.

Net income for the three months ended September 30, 1997 was
$46.4 million, and earnings per share were $0.32. For the nine
months ended September 30, 1997 and 1996, the Company had net
income of $98.6 million and $23.5 million, respectively. Without
a third quarter $0.7 million adjust of income tax benefits
applicable to the purchased research and development charge
recorded in the second quarter, net income would have been a
record $47.1 million and earnings per share would have been $0.33
for the three months ended September 30, 1997, a 14.3% increase
from the same period last year.  Excluding special charges in
both 1997 and 1996, net income would have been $135.7 million and
$107.6 million, and earnings per share would have been $0.94 and
$0.75 for the nine months ended September 30, 1997, and September
30, 1996, respectively. Growth in income from operations along
with a decline in net other expenses and a lower effective income
tax rate accounted for this increase in adjusted net income.


Liquidity and Financial Condition

The Company generated cash flows which were more than sufficient
to fund operations.  For the nine months ended September 30,
1997, net cash provided by operating activities was $114.5
million compared to $104.8 million for the same period in 1996.
This increase in cash provided by operating activities was
primarily due to growth in net income during the period and the
final income tax payments in 1996 under a tax-sharing agreement
with Lilly.  Working capital was $115.4 million at September 30,
1997, a $4.5 million increase from the prior year end level. The
current ratio at September 30, 1997 was 1.3:1 compared to 1.4:1
at December 31, 1996.  The Company expects to generate sufficient
cash to fund future working capital needs.

Net cash used for investing activities totaled $75.5 million for
the nine months ended September 30, 1997, compared to $38.2
million for the same period in 1996.  This increase was due to
increases in other assets, primarily the extension of a line of
credit to another medical device company. The most significant
use of cash for investing activities related to net additions of
property and equipment of $51.9 million.

Net cash used for financing activities totaled $34.2 million for
the nine months ended September 30, 1997.  During the comparable
period in the prior year, the Company used $63.5 million for
financing activities.  This reduction in cash used for financing
activities was primarily due to the decreased paydown of debt and
repurchases of common stock.

At September 30, 1997, the Company had outstanding borrowings of
$347.1 million through the issuance of commercial paper and bank
borrowings at a weighted average interest rate of 5.86%.  The
commercial paper borrowings are supported by a credit facility
that permits borrowings up to $600.0 million through January 8,
2001.  This credit facility, under which there are currently no
outstanding borrowings, carries a variable market rate of
interest. The Company expects that a minimum of approximately
$187.5 million of borrowings will remain outstanding through the
next twelve months and, accordingly, has classified this portion
of borrowings as long-term at September 30, 1997.

The Company expects its cash from operations to be adequate to
meet its obligations to make interest payments on its debt and
other anticipated cash needs including capital expenditures which
are expected to be approximately $70.0 million in 1997.

During the third quarter, the Company's Board of Directors
declared a two-for-one stock split which was effected in the form
of a 100% stock dividend.  The stock split resulted in the
issuance of approximately 74.1 million additional common shares.

The Company has recognized net deferred tax assets aggregating
$70.1 million at September 30, 1997 and $61.9 million at December
31, 1996.  The assets relate principally to the establishment of
inventory and product-related reserves, the acquisition of
NeoCardia, and the acquisitions of certain intangible assets.  In
view of the consistent profitability of its past operations, the
Company believes that all these assets will be recovered and that
no significant additional valuation allowances are necessary.


                                
                                
                             PART II
                        OTHER INFORMATION

Item 1.  Legal Proceedings.

     On August 26, 1997, Johnson & Johnson, Inc. ("J&J") and
Expandable Grafts Partnership ("EGP") filed suit against the
Company's subsidiary, Guidant Canada Corporation ("Guidant
Canada"), in the Federal District Court of Canada alleging that
the sale of the ACS MULTI-LINK Coronary Stent in Canada by
Guidant Canada infringes certain Canadian patents of J&J and EGP.
J&J and EGP are seeking relief including an injunction and
unspecified damages.

     On September 24, 1997, General Surgical Innovations, Inc.
("GSI") filed suit against the Company's subsidiary, Origin
Medsystems, Inc. ("Origin") in the Northern District of
California alleging that Origin's VASOVIEW Balloon Dissection
System infringes a patent owned by GSI.  GSI is seeking
injunctive relief and unspecified monetary damages.

     On October 3, 1997, Cordis Corporation ("Cordis"), a
subsidiary of J&J filed suit against the Company and its
subsidiary, Advanced Cardiovascular Systems, Inc. ("ACS"), in the
District Court for the District of Delaware alleging that the
sale of the ACS MULTI-LINK Coronary Stent by ACS infringes
certain patents licensed to Cordis.  In addition, on October 8,
1997, Cordis filed a motion for a preliminary injunction in this
lawsuit seeking to prevent ACS from selling the ACS MULTI-LINK
Coronary Stent other than in certain limited circumstances and
subject to certain conditions.  A hearing on the motion for a
preliminary injunction has been scheduled for January 5, 1998.
In the lawsuit, Cordis is seeking injunctive relief and
unspecified monetary damages.


See also Note 8 - Contingencies, in Notes to Consolidated
Financial Statements, and Note 7 - Contingencies, in the
Company's quarterly report filed on Form 10-Q for the quarterly
period ended June 30, 1997.


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

     (a)  Exhibits.  The following documents are filed as exhibits to 
this Report:

          11.1  Statement of Computation of Per-Share Earnings
          27.1  Financial Data Schedule
          99.1  Factors Possibly Affecting Future Operating Results.

     (b)  Reports on Form 8-K.  During the quarter for which this Report
on Form 10-Q is filed, the Registrant filed no Report on Form 8-K.





                           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.


                              GUIDANT CORPORATION
                              (Registrant)




Date:  November 4, 1997         /s/Keith E. Brauer
                              -----------------------------------
                              Keith E. Brauer
                              Vice President, Finance and
                              Chief Financial Officer






Date:  November 4, 1997         /s/Roger Marchetti
                              ------------------------------------
                              Roger Marchetti
                              Corporate Controller and
                              Chief Accounting Officer
                                


                                
                                
                          Exhibit List

     11.1  Statement of Computation of Per-Share Earnings
     27.1  Financial Data Schedule
     99.1  Factors Possibly Affecting Future Operating Results