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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                  FORM 10-Q/A

                                ---------------

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

                             For the quarter 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 ___________ to ____________
                         Commission file number 0-26304

                         SUNSTONE HOTEL INVESTORS, INC.
             (Exact name of registrant as specified in its charter)


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           Maryland                                              52-1891908
  (State or Other Jurisdiction                                (I.R.S. Employer
of Incorporation or Organization)                            Identification No.)

           115 Calle de Industrias, Suite 201, San Clemente, CA 92672
                 (Address of Principal Executive Offices)   (Zip Code)

       Registrant's Telephone Number, Including Area Code: (714) 361-3900

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    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
                                                           ---    ---

 As of May 14, 1998, there were 37,528,618 shares of Common Stock outstanding.

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ITEM 6. EXHIBITS AND REPORTS ON FORM 10-Q

     (b)  Reports on Form 8-K:

          A Current Report on Form 8-K dated January 29, 1998, was filed in the
quarter ended March 31, 1998, with disclosure under Items 5 and 7 regarding the
fourth quarter and year end 1997 financial results.

          A Current Report on Form 8-K dated February 6, 1998, was filed in the
quarter ended March 31, 1998 with disclosure under Item 7 incorporating certain
exhibits.
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                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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, in the City of San
Clemente, State of California, on June 5, 1998.

                                        SUNSTONE HOTEL INVESTORS, INC.

                                        By:  /s/ Robert A. Alter
                                             -----------------------------------
                                             Robert A. Alter
                                             President, Secretary and
                                             Chairman of the Board of Directors


                                        By:  /s/ Kenneth J. Biehl
                                             -----------------------------------
                                             Kenneth J. Biehl
                                             Vice President and 
                                             Chief Financial Officer