UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION 
                   Washington, D.C.  20549
                     
                            FORM 10-K


[X]  Annual Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934. For the fiscal year ended December 31, 1998.

[  ] 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 0-23666
                          
                    Tripos, Inc.
     (Exact name of registrant as specified in its charter)
       Utah                                    43-1454986
(State or other jurisdiction of         (I.R.S. Employer Identification No.)
incorporation or organization)

1699 S. Hanley Rd, St. Louis, MO                  63144
(Address of principal executive offices)         Zip Code

Registrant's telephone number, including area code: (314) 647-1099

Securities registered pursuant to Section 12(b) of the Act:

Title of each class      Name of each exchange on which registered:
       None                                  None

Securities registered pursuant to Section 12(g) of the Act:
                          
                  Common stock, $.01 Par Value
                 Preferred Stock Purchase Rights
                          

                       (Title of class)
                          
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 __.

Indicate by check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K is not contained herein, and will not be 
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of the 
Form 10-K or any amendment to this Form 10-K [X].

The aggregate market value of the voting stock held by nonaffiliates 
of the Registrant as of March 19, 1999, was $19,262,349 (based upon 
the March 19, 1999 closing price for shares of the Registrant's Common
Stock as reported by the NASDAQ National Market). Shares of Common Stock 
held by each officer, director and holder of 5% or more of the outstanding 
Common Stock have been excluded in that such persons may be deemed to be
affiliates.  This determination of affiliate status is not necessarily 
a conclusive determination for other purposes.

On March 19, 1999, 3,256,722 shares of the Registrant's Common Stock, 
$0.01 par value, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement for the Annual Meeting of 
Shareholders to be held May 11, 1999 are incorporated by reference into 
Part III.



Part I


Item 1.

Business

Tripos Inc., ("Tripos", the "Company" or the "Registrant"), is  a leader
in discovery services, informatics and products for  life science
organizations  worldwide.  Tripos'  current proprietary technologies 
and strategic relationships expand its reputation in computational  chemistry
for efficient pharmacological  activity prediction and  analysis, a major
factor  in  customers'  cost effective new product success.  Based on
scientific expertise  in these   areas  as  well  as  a worldwide  sales  and
marketing organization, Tripos expanded its business model  in 1997.   The 
Company now offers the following products and services: software, software
consulting  services, technology  transfer, screening libraries, and contract
discovery  research.    The Company continues to be a reseller of third party
hardware products  that are compatible with the Company's software products.

The  Company was originally incorporated in the state of Missouri on October
29, 1979. The Company was reincorporated  under  the laws  of  the State of
Utah effective June 1, 1994.  The  Company maintains its executive offices
and principal facilities at 1699 South Hanley Road, St. Louis, Missouri 63144.
The Company  also has  wholly  owned  subsidiaries with offices in  Milton
Keynes, England;   Antony, France;  Munich,  Germany; and laboratory
facilities  in Bude, England.  There are two leased offices for sales
activities  in Shrewsbury, New Jersey  and  Redwood  City, California.

The remainder of this Item 1 contains certain statements that are forward-
looking and involve risks and uncertainties.  Words  such as  "expects",
"anticipates", "projects", "estimates", "intends", "plans",  "believes",  
variations  of  such  words and similar expressions  are  intended  to
identify  such forward looking statements.   These statements are based on
current expectations and  projections  made by management and are  not
guarantees  of future  performance.  Therefore,  actual  events,  outcomes
and results may differ materially from what is expressed or forecast in such
forward-looking statements.  Among the factors that could cause  actual
results  to differ materially  from  the  forwardlooking statements  are set
forth under the caption "Cautionary Statements - Additional Important Factors
to be Considered"  in Item   7,  Management's Discussion  and  Analysis  of
Financial Condition and  Results  of  Operations  ("MD&A").   The Company
undertakes no obligation to update any forward-looking statements in this 
Form 10-K.

Industry Background

The  success  of  companies in the pharmaceutical, biotechnology, 
chemical  and agrochemical industries is substantially  dependent 
upon  their  ability to identify new pharmaceutical and  chemical 
compounds with targeted activities and properties which  can  be 
brought  to  market rapidly and on a cost-effective basis.   The 
discovery  and  development of a new pharmaceutical or  chemical 
product  candidate typically involves many investigative phases, 
including storage,  retrieval, analysis, review,  communication, 
management  and  manipulation  of large volumes of information 
relating to  chemical structures  and  properties, molecular
patterns,   statistical   information,  reactions involved  in
syntheses and biological properties.  Based on industry data, the 
average  pharmaceutical discovery process requires synthesis  and 
testing  of  over 10,000 chemical compounds for each new  product
brought to market.  The Company's products are used primarily  in the
pre-clinical  phases of new pharmaceutical development,  the equivalent 
pre-approval phase of agrochemical product development and  product 
discovery phases of chemical research.  These phases can  represent 
up to 30% of the expense of new product  research and development.

Industry pressure to reduce product development cost and time  to market  
are in part attributable to increased  competition  and increased political,
regulatory  and  consumer  scrutiny. By reducing  the  time  to  market,  
pharmaceutical companies can generate billions of dollars of additional 
profits. In addition, environmental  regulations  and consumer  activism  
are forcing chemical  andagrochemical  companies  to  evaluate  alternative
products  and  means of doing business, thereby increasing  their product  
development and operating costs.   Through  the  use  of effective integrated
discovery information and analysis  software in the key  initial  stages  of  
new compound research and development,  companies  in  these  industries  may
be able  to evaluate scientific data faster and more cost efficiently for 
the creation of new chemical lead candidates.  The industries  served by  
the Company have special requirements for the communication and  analysis  
of  chemical and biological data and the Company believes that  it  is
uniquely  qualified  to fulfill these requirements.

Pharmaceutical  and  biotech companies  have  focused their  R&D efforts  
on both novel compounds exhibiting demonstrable benefits over  existing
commercial drugs and on novel  targets,  many  of which  are  emerging  
from work being done on  the human  genome project. Many  companies
are  implementing  high   throughput screening  laboratories  with  robotic  
systems  for the   rapid analysis  of large numbers of compounds for
biological  activity. An  outgrowth  of  this development is the  increased
need  for material  to screen, or to test.  Companies are buying  thousands
of  compounds a year to screen in order to find a novel  compound with the 
desired biological activity. The Company believes it is positioned to provide
these compounds through its laboratories at Tripos Receptor  Research and 
its worldwide sales organization. By  coupling compounds with discovery
informatics, Tripos  offers its customers increased discovery efficiencies.

Tripos Receptor Research has established partnerships with  major companies 
in  the pharmaceutical and biotechnology  industries, supplying pure, novel
chemical  compounds for biological applications  in new drug discovery.  
These applications  involve the  testing  or  screening  of chemical  
compounds  against   a biological  target to  refine lead compounds.   
Tripos  Receptor Research  has  a  reputation  for providing excellent  
medicinal chemistry with  specific expertise in  solid  phase  chemistry.
Located   in   Bude,   England,  Tripos  Receptor Research  is
specifically  involved in custom chemical synthesis using  solidphase 
and solution methods.

The  Company's  goal  is  to facilitate  and accelerate  certain aspects of
the chemical discovery process for our clients.   This is  achieved through
a combination of both products and  services specifically targeted at the
development of new chemical entities for  use  in the pharmaceutical,
agrochemical, biotechnology  and associated  markets.  The Collaborative 
Research  business  unit draws upon the technology foundation within Tripos. 
The Company delivers  high  value products to the market including  software,
custom   software   development, specially designed chemical libraries for 
general screening and for targeted lead refinement, contract services for
drug discovery and full discovery partnerships.

Products

The Company offers its expertise for customer applications via  a 
complementary  range  of  new research  technologies including
Discovery  Software, Software Consulting Services and Accelerated 
Discovery Services.

Discovery Software (Chemical Design Software Systems)

The Company's software products and services collectively address the  needs
of the customer organizations' new compound  research team.   This is
achieved though the provision of expert  chemical design  tools that improve
the efficiency of the chemical  design process by providing important
structure and property data to the scientists.   This structure  and property
data  is  calculated through complex pattern analysis and 3D simulation  of
chemical structures  and  behaviors.  By reviewing data  produced  through
Tripos  software products, scientists can avoid costly  synthesis and  testing
expenses that are not likely  to  produce  positive results.

The information   produced  through   Tripos' expert design environment can
be easily accessed and reviewed by non-specialist users  of the software
such as medicinal chemists and biologists.  This easycommunication and
collaboration is accomplished through Tripos' chemical Intranet technology.

The  next few paragraphs highlight some of the many products  and services
available through Tripos Discovery Software.

Discovery Software Products:

Tripos  provides  a  highly integrated  set  of chemical  design systems 
consisting of the SYBYL Expert Molecular Design  System, UNITY  Chemical
Databases  System,  and  Discovery.Net  Chemical Intranet  System among 
others.   All of Tripos' software  systems combine   to   provide  a  total
discovery  solution for the pharmaceutical and biotechnology market.  The
exact needs of  our client  base  are  met through customization  of  these
systems. These customization  services are  provided  through  the new
Software Consulting Services group.  (See  Software Consulting Services for
more detail.)

The SYBYL Expert Molecular Design System:
     SYBYL   is  a  comprehensive  computational
     tool  kit for molecular design and analysis, with a 
     special focus  on  the creation of new chemical
     entities.  SYBYL provides essential construction
     and  analysis  tools  for  both  organic and
     inorganic molecular structures.

     SYBYL/Base  gives  our customers access to
     building  tools, molecular   mechanics,
     quantum  mechanical   calculations, molecular
     dynamics,   docking,   geometric   measurements,
     molecular  comparisons (fits), surfaces and
     grid  displays, journaling,  annotation, hard copy, a
     programming  language, an  object manager, and
     the Molecular Spreadsheet;  all  are included in
     the core module. Large (proteins, nucleic acids,
     etc.) and small molecules are modeled in the
     same window.

     SYBYL  is a modular program.  Researchers can
     take advantage of  as  many of the specialized
     tools as necessary by adding functionality
     through  optional  modules.    The   optional
     modules  are focused on conformational searching
     (AdvComp), biopolymer modeling (Biopolymer),
     combinatorial chemistry or library   design
     (Legion,   Selector,   DiverseSolutions),
     quantitative  structure activity statistics
     (QSAR,  Advanced CoMFAr),  protein homology
     modeling and analysis  (Composer, MatchMaker,
     ProTable), pharmacophore recognition  (RECEPTOR,
     DISCO),  and  others.   SYBYL also  connects
     seamlessly  to UNITY, Tripos' Chemical Database
     Searching system.

The UNITY Chemical Database System:
     Featuring  the industry-standard 3D-flexible
     search  engine, UNITY  produces  the  most
     relevant  responses  to  complex customer interactive
     queries.   UNITY  enables  effective chemical  structure 
     based searching of multiple, distributed databases of chemical
     information.   UNITY has been engineered for rapid data exploration
     and lead identification. Offering Markush-query definition,  
     powerful links  to  relational databases, and integration with  
     SYBYL and the Molecular  Spreadsheet,  UNITY  will  speed the
     discovery process.

     The new UNITY 3.0 version provides a series of flexible 3D searching
     enhancements.  UNITY's speed, accuracy and efficient interface makes 
     it a system of  fully integrated analysis  tools  to help analyze
     databases  in  a  way  that facilitates new compound discovery.
     
The GeneFold protein identification software:
     GeneFold,  released  in  fall of 1998,  is  a
     protein  fold identification  software  tool,
     developed  in  collaboration with  Professors
     Jeffrey Skolnick and Adam  Godzik  of  the
     Scripps  Research Institute.  GeneFold was the
     first product launched in an ongoing agreement
     between Tripos and  Scripps to  develop
     bioinformatics software applications  for  drug
     discovery.   Specifically, GeneFold bridges the
     gap  between Tripos' unique expertise in the
     area of cheminformatics  and the  expanding need
     for gene sequencing, allowing the wealth of
     knowledge in bioinformatics to be applied to
     drug design.
     
The FlexX library analysis product:
     FlexX  provides  fast analysis of potential drug
     libraries. Its  speed  makes  it  possible to
     rank these  libraries  of potential  drug
     compounds on how they "fit" into a  receptor
     site-critical  to  the effectiveness of
     therapeutics.  This combination of speed and ability 
     to score libraries based on fit  gives the program a
     unique advantage in meeting today's market
     demands for combinatorial and virtual high
     throughput screening.   Marketed  by  Tripos,
     FlexX  was  developed  by Professor Lengauer and
     co-workers at the GMD German National Research
     Center for Information Technology.
     
CombiLibMaker virtual library software:
     CombiLibMaker,  when paired with Tripos' Legion software, 
     creates a new set of tools for the generation and enumeration   
     of virtual  combinatorial libraries. This program,  developed  
     by  Professor Robert Pearlman  at  the Laboratory  for Molecular
     Graphics and Theoretical  Modeling at the University of Texas 
     at Austin, runs seamlessly with Tripos' flagship product, SYBYL.

The Alchemy 2000 Desktop Chemical Design System:
     Alchemy 2000 is a chemical discovery system for
     the personal computer  with advanced molecular
     graphic displays, accurate energy calculations,
     and customizable tools that allows  the user to
     tailor the program for their research team.
     Alchemy 2000  delivers high performance
     visualization with all types of  chemical
     structures including proteins,  polymers,  and
     small molecules. Local database storage, graphing,
     batchmode, and spreadsheet capabilities provide
     a means  for expanded  analysis  and
     investigation  on  all  families  of chemical
     compounds.   Alchemy  2000  includes
     application modules for specific research needs
     including QSAR, Protein, Polymer,  and  LogP.
     This is a complete chemical  discovery system
     that is easy to use, comprehensive, and
     powerful.  It is  also  a  key  component  of
     Tripos'  intranet  chemistry solution.
     
The New Discovery.Net Chemical Intranet System:
     The   mission  of  our  Discovery.Net  system
     is  to   help streamline  the  drug  candidate
     discovery  and  development process by providing
     useful, innovative, web-based solutions for  the
     efficient management and effective use of
     chemical information  by  chemists, modelers,
     and  biologists  in  a distributed  intranet-
     based environment.  Two  Discovery.Net products
     currently available are ChemEnlighten and GASP.
     A tool  kit is also available to allow custom
     solutions to  be assembled either by customer
     staff or Tripos personnel.
     
ChemEnlighten:
     Scientists  need  a tool accessible from
     multiple  platforms that  enables  them to
     filter very large chemical  structure data sets
     based on a variety of metrics.  Tripos has
     created the  ChemEnlighten environment for the
     analysis of large  or small data sets.
     ChemEnlighten integrates visual access  to large
     tables, the capability to generate a range of
     metrics, and the ability to perform analyses
     (selections) on the data in the table.
     
     ChemEnlighten  is a powerful product for the
     Intranet  age. The tables, metric engines and
     analysis routines reside on a UNIX  platform.
     The ChemEnlighten Graphical User  Interface
     (GUI) is Web-based, using Java applets that were
     built  with the  Discovery.Net toolkit.
     Customers access  ChemEnlighten through  any
     Java  enabled web browser.   Computational  or
     medicinal chemists who need to choose
     representative subsets from a very large number
     of compounds will be interested  in
     ChemEnlighten.   Researchers  who  are  using
     hierarchical clustering  as a step towards
     selection will  also  want  to examine
     ChemEnlighten for the OptiSim algorithm, which
     gives selection  sets that have the same
     properties as  sets  from hierarchical
     clustering.
     
GASP Chemical Structure Analysis Tool:
     GASP  (Genetic Algorithm Similarity Program)
     uses a  genetic algorithm  to  align sets of
     flexible molecules,  where  the genetic
     algorithm selects alignments with more
     pharmacophore overlaps  between  the molecules
     in the  set.   Drs.  Gareth Jones,  Peter
     Willett and Robert Glen  developed  the  GASP
     algorithm  at  the University of Sheffield and
     the  Wellcome Research   Laboratories.   Tripos
     has   incorporated   this algorithm in a Web-
     based application.  GASP 2.0 is  designed to
     allow medicinal chemists to perform molecular
     alignments and  analyze the results in order to
     assist in the  decision process of what
     compounds should be synthesized next.  It is
     easy  for the medicinal chemists to collaborate
     with one  or more molecular modelers who can
     help optimize the setup  and assist  in
     analyzing the pharmacophore information  in  the
     results.  GASP 2.0 is very easy to use and
     requires no prior knowledge   regarding   either
     the constraints or the pharmacophore.

Software Consulting Services

(Combining innovative web technology with attention to the
customer's specific information system needs)

Tripos offers its skills and experience to help at all stages  of an IS
project, whether the customers are only in the planning and budgeting stages,
or are looking for  a  partner  to take on maintenance of a customer system. 
The Company has twenty  years of experience developing scientific software
applications for the pharmaceutical and chemical industries.  Tripos can work
as  the Project Manager for a project, or work with the  customer  as a
supplier of key integration and development expertise along  with important
software components.

  Analysis: Tripos is skilled at interviewing end-
  user scientists to  determine  essential business
  tasks, current business  logic, and  workflow.  The
  Company can perform this phase of  a  project
  independently or work with other consultants that are
  engaged  by the  Client,  in  order  to  ensure that
  the  highest  level  of scientific understanding is
  part of any ongoing project.

  Specification:  The  Company's scientific  software
  teams  are skilled  at determining the functional,
  performance and interface requirements of a new
  application.  Tripos enlists real users for paper
  prototype systems to assist in validating
  requirements,  as well  as  ensuring  a  complete and
  shared understanding  of  the system requirements.

  Design:  Tripos software engineers are skilled in
  data  modeling and  object-oriented design, through
  which they reduce the  risks involved   in
  engineering  complex  chemical   and   biological
  information systems.

  Research: The Company's scientific skills can be used
  to help the Customer develop novel methods for drug
  discovery. Tripos has the inside  edge  for
  modifying and extending existing  Tripos  drug
  discovery  software to explore new ideas that  the
  Customer  may wish to integrate.

  Implementation:  Tripos  is  skilled  in  all  vital
  web-related technologies,  and has a large staff of
  skilled Ph.D.  scientists with  real  industry
  experience.  The Company created  the  first
  significant, and industry recognized chemistry
  applications to be written in Java.

  Maintenance: The Company is an industry leader in
  providing highquality  and high-value customer
  support for scientific  software applications.   Its
  customers have  always  ranked  the  Company highly
  when it comes to providing helpful and timely
  assistance.

Discovery  Software  products  and Software Consulting  Services combine
to provide a solid business offering to the pharmaceutical, agrochemical, 
and biotechnology markets.


Accelerated Discovery Services

(Chemistry theory put into practice in the laboratory)

Compounds:
     Recent  advances  in  the area of high throughput screening 
     (rapid screening of compounds for biological activity) have 
     given rise  to the need for large numbers of compounds  by 
     pharmaceutical, biotechnology and other life science companies. 
     These companies routinely acquire thousands  of compounds  a  year 
     to screen in search of novel  classes  of active  compounds.
     By  applying Tripos' compound design technology in conjunction 
     with its synthesis capabilities, the  Company  has  brought to
     market  LeadQuest,  a  growing compound  library which now includes 
     over 20,000  compounds that meet the Company's diversity and purity
     criteria.  This library  provides  an  efficient source  of compounds  
     for screening by removing redundant and impure samples from  the 
     screening effort.   When  LeadQuest  compounds demonstrate activity  
     in pharmaceutical company assays, the Company  can quickly   and
     efficiently  provide  hundreds   of   similar compounds for 
     follow-up screening and lead optimization.
                          
Contract Research:
     The  reforms  in health care have forced
     pharmaceutical  and related companies to
     restructure their operations, including their
     research  programs.   One  of  the  results  of
     this restructuring  is a significant emphasis on
     outsourcing  and partnering on the part of the
     large pharmaceutical companies with  smaller
     technology companies.  At the same  time,  the
     rapid   development   of  certain  technologies,
     including combinatorial chemistry and high throughput
     screening,  have forced  many  of  the smaller
     companies to look  to  outside groups to provide
     needed technology rather than invest in it
     themselves.   This  significant  trend  in
     outsourcing  has presented  the  opportunity for
     the  Company  to  offer  its expertise  to
     these organizations through compound  design,
     molecular  analysis, and a complete suite of
     lead  discovery and  lead optimization
     capabilities.  Tripos leverages these
     capabilities by entering into research
     agreements  with  its customers.
     
Collaborative Research:
     The  Collaborative Research group has two
     purposes.  One  is to  focus  on internal
     discovery collaborations  with  Arena
     Pharmaceuticals and the Wolfson Institute, and
     on associated opportunities  such  as that
     provided by  our  collaboration with  Phase-1
     Molecular Toxicology.  The second goal  is  to
     focus  on  external discovery collaborations
     with  customer companies.   Tripos  is  engaged
     in  finding  collaborative partnerships  in  the
     pharmaceutical,  biotechnology,       and
     related industries using any or all aspects of
     research that Tripos  has  access to or can
     provide directly.  Across  all areas,  Tripos
     will  work with customers  using  their  own
     targets   or   targets   that  we   identify
     through our collaborations.Tripos  is  combining  
     its strengths  in molecular  design, combinatorial   
     chemistry, and  data  capture with the pioneering  
     expertise of complimentary organizations.  Our
     investments  and  collaborative efforts  are
     structured  to deliver  long-term revenue and
     profits based  on  successful research that lead to new
     broad-based  products when partnered with pharmaceutical, 
     biotechnology, and  related companies.   This  unit  is
     dedicated  to  managing  efforts critical to the
     success of these projects and investments.
     
ChemSpace:
     Tripos  has developed unique and proprietary
     technology  for the  storage  and searching of
     vast numbers of combinatorial products  and
     related data.  The unique  searching  methods
     enable  the user to identify new compounds which
     are  likely to  have  similar  activity to the
     original  molecule  while avoiding  problematic
     side effects or toxicity.  Using  this
     technology,  Tripos  has  rapidly  created  a
     database   of trillions of synthetically
     accessible small organic chemical structures
     that are searchable in real time at the  rate
     of 500  billion  per hour.  The database can be
     customized  to include reactions and compounds
     that are proprietary to  its customer  base.
     Tripos may license this  technology  to  a
     limited  number of pharmaceutical companies.
     ChemSpace  has proven  to be an invaluable tool
     in performing the  compound design   activities
     in   both   contract   research   and
     collaborative research relationships.


Sales, Marketing and Distribution

The  Company sells its software products directly in the U.S. and Europe,  
through  an exclusive distributor arrangement  in  Japan with Sumisho
Electronics Company, Ltd., and through non-exclusive agency  relationships
in Korea with T & J Tech  Inc., in  Taiwan with FairTech Limited, in China and
Singapore with 3-Link Systems Pte.  Ltd, in India with Seascape Learning, and
in Australia with Worley Limited.  On December 31, 1998, the Company's sales
force consisted  of  37 management, technical, sales and administrative 
employees: 15 for the United States and Canada, 20 in Europe, and 2  for the
Pacific Rim.  The Company's domestic sales and support center  is  located at
its headquarters in St.  Louis,  Missouri. The  Company  also  maintains
sales offices  in  California,  New Jersey, Massachusetts, and near London, 
Paris and Munich.  For  its  software  product lines for workstations,
the  Company employs  pre-sales and post-sales support scientists resident in
the United States, England, France,  and  Germany.    These scientists,
working  in collaboration with the Company's  sales employees,  have 
developed a consultative sales approach  through which  the Company  has
created  relationships  with  its  key customers.   The Company believes
these relationships enable  the Company to understand and better serve
the information management needs   of  its customers.   Because the Company's
customers frequently  have both domestic and international operations,  the
Company's  sales staff and scientists in foreign  locations  work closely
with their counterparts in the United States  to  ensure that  the customer's
international needs are met in a coordinated and consistent fashion.

The  Company's workstation-based software products are sold in  a variety of
ways, one of which is term licenses on the basis of  a fixed  number  of
simultaneous users per module.   Network-based licensing  is  available,  
based on a  count  of  the number  of simultaneous users.  The Company has
also introduced one, two and three year token license options that offer 
customers the ability to  tailor their  product selections to their specific
research needs  and  that are renewable at the end of the selected  terms. 
The  Company expects to migrate its customer base to shorter-term license
renewals based on the flexibility to access all  of  its software products. 
This will provide a  predictable recurring revenue   stream  from  periodic
renewals.  Software   packages consisting  of  modules typically  purchased 
by  customers   in particular industry  segments have been defined  and  have
been specially  priced to facilitate customer purchase of an  optimal module
set for their problems.

Software Consulting Services are sold on a collaborative basis by direct 
salespersons and scientists to the end user chemist  and Information  
Technology departments at the Customer  site.   Each contract is negotiated
based on the custom software service needs of  the Customer.  The term of the
contract can  last  from two weeks  up  to  two  years.  The Company provides
programming  and scientific  expertise on a cost plus margin basis.  Services
may include  specifications, gap and risk  assessment,  up to full biological
and chemical data integration.

Sales of the compound libraries are made through a staff assigned to the 
product.   Tripos has dedicated sales professionals in the United  States and 
Europe along with distributors in the  Pacific Rim.   The LeadQuest library 
now includes over 20,000  compounds that  are  available for purchase.  The 
compounds are sold  on  a nonexclusive  basis  to  all purchasers
and  Tripos  retains  no trailing  rights to the compounds once they are
purchased  by  a customer.  The  Company's sales staff includes employees with
Ph.D.  degrees in  chemistry, various advanced degrees in the sciences and
work experience with various hardware and software suppliers  as  well as
with  the  industries served by the Company.   The Company's sales  
representatives are compensated through a  combination  of base  salary,  
commissions and bonuses  based  on  quarterly  and annual  sales
performance.  In addition, the Company's  pre-sales scientists,  all  of whom 
have Ph.D. degrees in chemistry  or  a closely  related field, receive
total compensation determined  in part  by  their success in supporting and 
generating sales  in  a particular territory.

Contract  research  relationships  are  offered through  a  team comprised  
of salespersons, discovery scientists and  members  of the  senior
management staff of the Company.  This  approach  is best   suited  for  the
long  cycle  of  developing meaningful partnerships with key customers for the
outsourcing of  discovery research.

The   Company   exhibits  its  software  at  various scientific conferences
and  trade  exhibitions, including  national  and regional conferences of the
American Chemical Society, at the IBC Drug  Discovery Conference and
the CHI High Throughput  Screening for  Drug Discovery  Conference.  Company 
scientists frequently publish  and  present results of original research at 
these  and other conferences throughout the world.

The Company sells  its  personal  computer software  products 
principally through direct mail and relationships with distributors.


Customer Training, Service and Support

The Company's licenses typically provide a limited warranty for a 90  day  
period.   Thereafter, support of the Company's  software products is provided
for an annual fee.  Approximately 80% of the Company's commercial customers 
and half of the Company's academic customers  have  contracted for support
service.   This  service gives  customers  access  to telephone  consultation
with the Company's technical personnel in local offices, on-line access to a  
Company-operated computer bulletin board, new release versions of  licensed
software and other support required to utilize  the Company's products 
effectively.

The  Company offers customer training in the use of its  products through  
staff  knowledgeable  in  both chemistry  and  computer science.  The Company
sends technical newsletters, bulletins, and advance notification  about  
future  software  releases  to its customers  to  keep them informed and to 
help them with  resource allocation  and  scheduling.  The Company also 
sponsors  seminars throughout  the world for its customers, involving  
presentations both  by Company personnel and guest lecturers.  These
seminars are  designed to enhance customer understanding of the  Company's 
products  and their potential utilization as an aid  to  customer research 
requirements.   The  Company  currently provides its customers with advice on
computer system configuration management and  frequently  provides
customers with  consulting  advice  in addressing particular research
questions as part of  the  normal pre- and post-sales process.


Product Development

The Company believes that its position as a leader in  discovery products and
services will depend in large part on its ability to enhance  its current
product line, develop new products, maintain technological  competitiveness,
integrate complimentary  thirdparty  products  and meet a rapidly evolving 
range  of  customer requirements.  The  Company  intends  to   continue  to
make substantial investments in product and technology development  to meet 
its customers' requirements.

The  Company has previously experienced delays in developing  new products 
ranging from a few days to approximately twelve  months. The   complexity  of
developing  new  and  enhanced   scientific information management software 
in a client/server environment is significant.  Delays or unexpected
difficulties in any segment of a  development project  can  result  in  late
or  undeliverable product.   In view of this complexity, there can be
no  certainty that  the  Company will be able to introduce its  products  on 
a timely  basis  in the future, or that the Company's new  products and
product enhancements will adequately meet the requirements of the marketplace
or achieve market acceptance.

The  Company's research and development activities are undertaken by  its  
Discovery  Software group and its Accelerated  Discovery Services  group.   
The Discovery  Software  group,  composed  of chemists and  other scientists, 
works closely with customers to identify market needs for new products.  Upon
identification of a market  need  for  a  new product, the Discovery  
Software  group collaborates with the Company's software engineers to develop
requirements  and  specifications,  implement  code and  perform regression
tests   for  the  new product.   Separate   quality assurance,  environment
management and systems groups manage  the final release, documentation and 
porting of the new product  to all supported platforms.  In addition,
the Company funds research at certain academic institutions.  The Company 
believes that this funding allows  it to gain access to significant technology
not otherwise available.

Tripos  and MDS Panlabs defined the market for diverse  screening libraries
with the introduction of the Optiverse compound library in  late 1995.
Optiverse was a general screening library of over 100,000 diverse chemical 
compounds.  In late 1996 and early 1997, a shift in the market demanded an
increase in the level of purity of this compound library. Despite the 
anticipation of this demand and the  purchase  of  a  specialized  apparatus  
for compound purification,  the  delay  in  receipt  of this  equipment and 
subsequent  further delay in the purification process  caused  a nine-month
slippage in new product.  In March 1998, the  Company restructured
its  agreement  with MDS  Panlabs  terminating  the Company's distribution of
the Optiverse product and simultaneously  announcing  the  launch  of  the 
Company's own LeadQuest compound library product.  In June 1998, the  Company
purchased  an inventory of highly-pure diverse chemical compounds from  a  
third-party  for  distribution  to  continue generating revenue from this 
market.  In September 1998, the Company  opened its  own  laboratory
operations in Bude, England for all chemical synthesis  operations.  
The Company began production of  a  newly designed  set of LeadQuest 
screening libraries which now includes over  20,000 compounds.  The 
Accelerated Discovery Services group has its own staff of scientists and 
programmers that are familiar with  the  research techniques and requirements 
of its  customers for chemistry, purification and diversity assessment.

Research  and  development  expenses  were  $2.8 million,  $3.8 million,  and  
$6.3 million in 1996, 1997 and 1998, respectively. Research  and
development  expenses,  including  the  amount  of capitalized costs were 
$6.4 million in 1996, $6.4 million in 1997 and  $6.3  in 1998, representing 
22%, 21% and 25% of  net  sales, respectively.   The Company capitalized $3.6
million  of  product development costs in 1996, $2.6 million in 1997 and
$1.3  million in  1998.   This  represented 56%, 40% and 17% of  total  
product research  and  development expenditures in  these  periods.   The 
Company anticipates that its investment in new product research will
continue to be significant as Tripos invests in the  growth of  web-based  
tools, discovery collaborations, diverse  compound libraries, and its 
recently acquired laboratory facilities.

The  Company  has entered into consulting contracts with  certain customers  
which provide for collaboration with  the  Company  in customizing
chemical compound libraries for  drug  discovery  in specific  therapeutic
areas.   The  Company recognizes  revenue related to such agreements as
contractual milestones are achieved and  delivered or,  absent  such 
contractual  milestones,  on  a completed contract basis.

Tripos offers its customers software consulting services by which the Company
builds customized systems solutions.   Chemical research  teams require
improved information access and usage  in their  discovery process.  The 
Company is helping  its  customers meet  these  needs by applying its 
expertise in web technologies, chemical information systems, and biological
data  handling to build integrated systems designed specifically for
the customer's environment and discovery process.


Proprietary Rights

The  Company  relies primarily upon a combination  of copyright, trademark
and trade secret laws and license and  non-disclosure agreements to establish
and protect the proprietary rights in its products.  In addition, the Company
has obtained one patent with respect  to its SYBYL QSAR product which expires
June  18,  2008.  In  1998  the  Company  was granted a patent  on  Hologram
QSAR. During the years 1996 to 1998, the Company applied for eight  (8)
additional  patents for its software and compound products.   The source  
code for the Company's products is protected  both  as  a trade  secret  and
as  an  unpublished,  copyrighted  work. In addition, the Company's core 
software products are developed  and manufactured only at its St. Louis
facility and the Company  does not  disclose  the source code for its 
products  to  any of its subsidiaries  or distributors.  The Company supplies
its  source code  under special, restrictive license provisions to  customers 
on  special request.  All software products are shipped from  its St.  Louis
facility.   General screening and  targeted  compound libraries  are  
manufactured  and  shipped  by Tripos   Receptor Research  from  its  Bude,  
England facilities.    Despite  these precautions,  it  may be possible for a
third party to  copy  or otherwise  obtain  and use the Company's products  
or  technology without authorization,   or  to  develop   similar technology
independently.  In addition, effective copyright and trade secret protection 
may  be  unavailable or limited  in certain  foreign countries  where the 
Company does business.  Because the  markets in   which  the Company  
competes  are  characterized  by  rapid technological change, the Company 
believes that factors  such  as the  technological  and  creative skills of
its  personnel,  new product development, frequent product enhancements,   
name recognition  and reliable product maintenance are more  important to  
establishing and maintaining a technology leadership position than the 
various legal protections of its technology.

The  Company  licenses  its  workstation  software through  the execution of
license  agreements.  The  Company  licenses  its personal  computer
software products by use of  a  "shrink  wrap" license.  A "shrink wrap" 
license agreement is a printed  license agreement  included within packaged
software that sets forth  the terms  and  conditions under which the  
purchaser  can  use  the product and is intended to bind the purchaser, by 
the purchaser's acceptance of the software, to such terms and conditions.

The  Company has a number of contracts with academic institutions and 
individuals  providing the Company the  right  to  license, market  and use
technology developed outside the Company.   These products, enhance  the 
Company's ability to  offer  an enriched product  line,  represent a material
percentage of the  Company's annual revenue.

Compound,   consulting,  contract  research   and collaborative agreements
entered  into  by  the  Company require specific documentation  regarding 
defined proprietary rights, responsibilities  of  the  parties, and/or  
allowed use  of  any related compounds or libraries of compounds.


Competition

The Company operates in a highly competitive industry characterized  by
rapidly changing technology, frequent new product  introductions  and 
enhancements, and evolving industry standards.  The Company competes with 
other vendors of  software products  designed  for  applications  in  analytical
chemistry, computational  chemistry,  chemical information management,  and
combinatorial chemistry; the four principal areas in the chemical and  
pharmaceutical  research market.  The Company's Accelerated Discovery Services
group competes with other vendors for the sale of contract  research, targeted 
libraries and  diverse  compound libraries.

Competition is likely to intensify as current competitors  expand their  
product offerings and as new companies enter  the  market. The  competition
experienced by the Company in its  existing  and targeted  markets  could  
result  in  price reductions,  reduced margins  and  loss  of market
share, all of which  could have a material  adverse effect  on  the  Company.   
A  number  of  the Company's   existing   competitors  have significantly 
greater financial,  technical and marketing resources than the Company.  The
Company believes that the principal  factors  affecting competition  in  its
markets are product  quality,  performance, reliability,  ease  of use, 
technical service  and support,  and price.   It  is  expected that these
factors  will  remain  major competitive  issues  in the future, but 
additional  factors  will become increasingly  important, including  
contribution  to the overall  efficiency  of  the  research  effort
through  enhanced integration,  communication and analysis.  Although  the  
Company believes that it currently competes favorably with  respect  to these
factors, there can be no assurance that the Company will be able to  compete  
successfully  against current  and   future competitors  or  that  the
competitive  pressures  faced  by  the Company  will  not  have  a  material  
effect  on its  business, operating results or financial condition.


Production

The Company's software production operations consist of assembling, 
packaging  and shipping the  software and database products and documentation
needed to fulfill  orders.   Outside vendors  provide  CD-ROM duplication, 
printing of  documentation, manufacturing of packaging materials and assembly
of the Company's desktop  products.  The Company typically ships its software 
products promptly after the acceptance  of  a  customer purchase order and the
execution of a software license agreement.  Accordingly, the Company does not
generally have any significant software  backlog, and the Company
believes that backlog  at  any particular  time, or fluctuations in backlog, 
are not  indicative of sales for any succeeding period.

LeadQuest  chemical  compounds are designed and manufactured  at Tripos  
Receptor Research in Bude, England.  Compound  sales are shipped shortly after
the execution of a sales contract  between the customer and Tripos.  The 
potential for backlogs exists  in the  delivery of compounds due to the
nature of the materials  to be  accumulated, packaged and shipped along with  
the sometimes lengthy compound  selection process of the customer.  Backlogs 
will  fluctuate  based on the number, size and timing  of  orders received, 
and availability of product.

Significant Customers

The Company does not derive 10% or more of its total sales from any single 
customer.


International Sales

The Company sells its software products through its wholly owned subsidiaries 
in Europe and through a network of distributors  in the  Pacific  Rim,
Australia and  India.   Net  sales  from  the Company's   activities outside  
of  North  America represented approximately 48%, 41% and 48% of the
Company's total  net  sales in  1996,  1997,  and 1998, respectively.  Net 
sales  in  Europe accounted for  38%, 32% and 40% of the Company's  net  sales
in 1996,  1997,  and  1998,  respectively,  with  the balance  from customers 
in the Pacific Rim.  The Company believes that revenues from  its  foreign
activities will continue  to  account  for  a significant percentage of its 
total net sales.  See Note 7 to the consolidated financial statements,
Geographic Segment Data, later in this Annual Report.

Employees

As of  December  31,  1998,  the Company  had  a total  of  187 employees, of
whom 113 were based in the United States and 74 were  based internationally. 
Of that total, 59 were engaged  in marketing,  sales and related customer-
support services,  52  in product development, 41 in chemistry laboratory
activities and 35 in operations, administration, MIS and finance.
The  Company's future  success  is  significantly dependent on the continued 
service of its key technical and senior management personnel  and its  
continuing ability to attract and retain  highly  qualified technical  and  
managerial  personnel.   None  of the  Company's employees  are  represented 
by a labor union  nor  covered  by  a collective bargaining agreement.  The 
Company has not experienced any work stoppages and considers its relations 
with employees to be good.

Executive Officers of the Registrant

The  information  required  by  this  item  is included  in  the Company's  
Proxy Statement in connection with its Annual  Meeting of  Shareholders
to be held on May 11, 1999  under  the  caption "Management", and is 
incorporated herein by reference.


Item 2.   Properties


The  Company's  principal administrative,  sales, marketing  and product 
development facilities  are located in St. Louis, Missouri.   These facilities 
are owned by the Company  and  are financed  by  a mortgage note.  Laboratory
facilities  in  Bude, England are  owned. The Company leases two domestic  
sales and service offices in Shrewsbury,  New  Jersey  and  South San
Francisco, California.  The Company's European subsidiaries lease sales  and
service  offices in the United  Kingdom,  France  and Germany.   The
Company believes that its existing facilities  are adequate for its current 
needs and that additional space will  be available as needed.


Item 3.   Legal Proceedings


The  Company is currently not a party to any material litigation and is 
currently  not  aware  of  any pending  or  threatened litigation that could
have any material adverse effect  upon  the Company's business, operating
results or financial condition.


Item 4.   Submission of Matters to a Vote of Security Holders


No matters were submitted to a vote of the Company's shareholders during  
the fourth quarter of its fiscal year ended December  31, 1998.



Part II


Item 5.  Market for Registrant's Common Stock and Related Shareholder Matters


The  Company's common stock trades on The NASDAQ National  Market System  
under the symbol "TRPS".  The following table sets  forth the  range  of  the
high and low sales prices per  share  of  the Company's  common  stock  for 
the fiscal quarters indicated,  as reported  by NASDAQ. Quotations
represent actual transactions  in NASDAQ's  quotation system  but do not  
include  retail  markup, markdown, or commission.


                                          1998
                                  High            Low
     First quarter              $14.875         $ 9.000     
     Second quarter             $14.750         $11.000
     Third quarter              $14.000         $ 6.625
     Fourth quarter             $ 9.625         $ 5.250
     

                                          1997
                                  High            Low
     First quarter              $23.750         $11.750
     Second quarter             $19.125         $13.250
     Third quarter              $19.500         $12.500
     Fourth quarter             $20.000         $13.375
     

The  Company had approximately 1,000 shareholders of record  and 2,600 street
name holders as of December 31, 1998.  The  Company has not declared or paid any
dividends on its Common Stock.   The Company currently  intends to retain 
earnings  for  use  in its business, therefore, it does not anticipate paying
cash dividends in the foreseeable future to common shareholders.


Item 6.   Selected Financial Data


Selected Consolidated Financial Data

                           Year      Year      Year      Year      Year
                           ended     ended     ended     ended     ended
Consolidated Statements    Dec 31,   Dec 31,   Dec 31,   Dec31,    Dec 31, 
of Operations              1998      1997      1996      1995      1994
                          
In thousands, except per
share amounts

Net Sales:

Software licenses........ $11,639   $10,117    $9,186   $8,651    $8,848 
Support..................   7,928     7,209     6,715    6,510     5,564
Accelerated discovery 
   services .............   2,831     7,737     9,053    2,111         -
Hardware.................   3,174     5,125     3,832    3,825     5,190

Total net sales..........  25,572    30,188    28,786   21,097    19,602 

Cost of sales............   6,685     9,999     9,990    6,458     6,416

Gross profit.............  18,887    20,189    18,796   14,639    13,186 

Operating expenses:

Sales and marketing......   9,737    10,065    10,705    9,951     8,259
Research and development.   6,263     3,810     2,796    2,978     2,909
General and administrative  4,182     2,940     2,991    2,030     1,708
Restructuring charge.....       -         -         -    2,165         -

Total operating expenses.  20,182    16,815    16,492   17,124    12,876

Income (loss) from 
   operations ...........  (1,295)    3,374     2,304   (2,485)      310

Other income (expense),net  1,404       511       408      450       228
      
Income(loss) before 
   income taxes..........     109     3,885     2,712   (2,035)      538

Income tax expense (benefit)   38     1,305       760     (339)      186
 
Net income (loss)........     $71    $2,580    $1,952  $(1,696)     $352
                             

Basic earnings (loss) 
   per share (1)(2)......   $0.02     $0.84     $0.67   $(0.59)    $0.10
Basic weighted average
   number of shares......   3,208     3,085     2,923    2,860     2,845

Diluted earnings per  
   share (1)(2)..........   $0.02     $0.74     $0.61   $(0.59)    $0.10
Diluted weighted average  
   number of shares......   3,480     3,504     3,222    2,860     2,846

Consolidated Balance Sheet Data
(at year end)  (3)
Working capital..........  $9,116    $9,544   $10,589   $8,800   $10,177  
Total assets...........   $36,810   $32,610   $24,509  $19,059   $21,134 
Long-term obligations,
   less current portion    $5,515    $3,367     $   -    $   -     $   - 
Total shareholders'equity $19,509   $18,909   $14,367  $11,322   $12,828
                   
(1)  The earnings per share calculation for 1994 is a pro forma calculation
     which reflects the effect of adjustments to historical results
     of operations for estimates of the costs which would have
     been incurred by Tripos during the period on a stand-alone basis.

(2)  Earnings per share for 1996 and prior periods has been restated to
     reflect the adoption of FAS 128. (3)  See Note 1 of the Notes to
     Consolidated Financial Statements for discussion regarding the 
     comparability of consolidated balance sheet data.



Item 7. Management's Discussion and Analysis of Financial Condition and
        Results of Operations

The  following discussion should be read in conjunction with  the audited
consolidated financial statements and notes thereto.


Overview

Tripos,  Inc.  is a discovery research organization with  unique expertise 
in molecular informatics and novel medicinal chemistry. Tripos  supplies  
software, research  services and compound libraries  to  the pharmaceutical, 
biotechnology and other  life science  industries  worldwide.  The customer  
base  includes  the world's largest scientific research organizations as well
as  the rapidly growing biotechnology industry.

Except for the historical information and statements contained in 
Management's  Discussion and Analysis of Financial Condition  and Results of 
Operations ("MD&A"), the matters and items  contained in this document, 
including MD&A, contain certain forward-looking statements  that involve 
uncertainties and risks, some  of  which are  discussed  below, including, 
under the  caption  "Cautionary Statements-Additional Important Factors to be 
Considered."   The Company  is  under  no  obligation to update any forward-
looking statements  in   this   section.  Words  such as "expects",
"anticipates",   "projects",  "estimates",  "intends", "plans", "believes", 
variations of such words and similar expressions  are intended to identify 
such forward looking statements.

The  Company's  revenues and expenses can vary  from quarter  to quarter 
depending upon, among other things, the Company's ability to produce compound
libraries in a timely manner,  the  capital expenditure  budgets  of  its 
customers,  lengthy sales  cycles, market  acceptance  of  new  products
and  enhanced  versions  of existing products, the timing of new product 
introductions by the Company and  other vendors, changes in pricing policies  by
the Company,  partners  and  other vendors, and changes  in general economic  
and competitive conditions.  In addition,  the  Company may chose to
negotiate a long-term software license contract that may,  subject to certain
rules of SOP 97-2, be recognized ratably over  the  life  of the contract.
See Note 1  of  the  Notes  to Consolidated Financial Statements for a  
further  discussion  of revenue  recognition  policies.  A  substantial
portion  of  the Company's revenues for each quarter is attributable to a  
limited number of orders and tends to be realized toward the end of  each 
quarter.  Thus, even short delays or deferrals of sales near the end of a 
quarter  can  cause quarterly results  to  fluctuate substantially.  The 
Company typically experiences  greater  gross margins  on software licenses,
contract research, custom software development  and  chemical  compound  
sales than on sales of hardware.  The Company's profitability depends in part
on the mix of its revenue components and not necessarily on total revenues.


Year 2000 Issues


The  Company  provides software licenses that are activated  and remain  
active based on date and time of the computer  where  the software resides. 
Tripos products sold to its customers are  Year 2000 compliant.  The Company 
relies on the hardware suppliers  to address  any  and  all Year 2000 issues
and  provide  letters  of compliance  to  the Company.  The total dollar  
amount  that  the Company estimates will be spent to remediate its Year 2000
issues will  not  be  material  and should not affect future  financial 
results of operations, liquidity or capital resources.

The  Company has no software used for internal processing,  other than its  
software products that are already Year 2000 compliant that  are more than
three years old.  When written, this software was Year 2000 compliant.  The 
Company has been verifying its Year 2000  compliance throughout 1998 and into
1999.  In  addition  to informal  testing  and purchases of Year 2000 
compliant  software and equipment, the Company started development of a
formal  plan in October 1998.  The second phase of the planning, which will 
be completed  in  April 1999 includes a full written description  of potential
problems.  The third phase is follow-up documentation, which  includes a 
written description of each solution and  workaround  as  well  as  the
testing plan to  validate  a  workable solution.  The third phase is 
estimated to be completed in  early May  1999.   Immediately following the 
third phase will  be  the validation  of  the  proposed solutions.  This
fourth  phase  is estimated  to  be completed by July 1, 1999.  In July 1999,
the Company  will implement the solutions.   Finally,  in  September 1999, 
the   Company  will  fully  implement  the plan.  The implementation  will  
mean that a) all computers  are Year  2000 compliant, or b) those computers 
not Year 2000 compliant will not affect  the  company's ability to conduct  
business,  and  c)  no changes will be made to already validated systems 
unless adequate testing (re-validation) is performed.

Tripos is dependent upon many third parties for the operation  of the  
business.   These  include hardware and software  suppliers, suppliers  of  
raw materials  to  the  compound  business, and suppliers  of  business 
services such as payroll  and accounting services.   To  date, the Company is 
not aware  of any  external agent  with  a Year 2000 issue that would materially
impact  the Company's results of operations, liquidity, or capital resources.
The  Company  will make appropriate contingency  plans  should  a vendor
or supplier report that it is not Year 2000 compliant or will not be by 
January 1, 2000.  However, the Company has no means of ensuring that external
agents will be Year 2000  ready.  The inability  of  external  agents  to  
complete  their Year   2000 resolution  process in a timely fashion
could  materially  impact the Company.  The effect of non-compliance by 
external agents  is not determinable.

The  costs of the Year 2000 project are included in the Company's annual 
software and hardware budget.  These amounts do not differ materially  from  
those costs  experienced  in  prior   periods. Acquisitions of new  hardware 
are dealt with  as  part  of  the ordinary capital purchase process and were 
not accelerated by the Year 2000.  In addition, the Company has allocated 
funds for  the purchase  of Year 2000 compliance testing software, estimated  to
be $7,000.  Other costs will be expensed or capitalized according to 
established Company procedures.  At present, no material costs are
anticipated, and during the periods presented there have been no costs 
incremental to normal operating activities.

Management of the Company believes it has an effective program in place to 
resolve  the Year 2000 issue in a timely  manner.   As noted  above,  the  
Company has not yet completed all  necessary phases of the year 2000 program.
In the event that the  Company does  not  complete any additional phases, the
Company  would  be unable  to take  customer orders for compounds, issue keys
to activate   software,  manufacture  or  ship products, invoice customers or
collect payments.  The amount of lost revenue cannot be reasonably
estimated at this time.

The  Company is currently assessing its contingency plans.  These contingency
plans will be developed as part of the remedial steps taken in the second and
third quarter of 1999.


European Union Conversion to Euro


The Company conducts  business  throughout  Europe and has transactions  
denominated  in  the currencies  of countries  not currently  participating
in  the European  Union  as  well as transactions  denominated in the Euro.
The Company is  following the  "triangulation" procedure for all
transactions  effected  by the  Euro.   This procedure is followed by first 
converting  one legacy currency into its Euro equivalent and then converting
the Euro  equivalent  into  the other legacy currency.   The  Company 
established Euro bank accounts in adherence to this procedure for collection
and  payment  of  invoices.   The Company  has not experienced any material
impact on its operations due to the Euro nor  does  it  anticipate any impact.
The  Company  historically conducts  35%  of  its business in Europe.   Any 
impact  of  the conversion would  be  material to the business,  but  cannot  be
determined at this time.


Results of Operations

The  following  table  sets forth, for the  periods indicated, certain
consolidated financial data as a percentage of net sales, (except  costs of
sales data, which is set forth as a  percentage of the corresponding net
sales data):
                           1998     1997    1996
Net sales:
     Software licenses      46%      33%     32%
     Support                31       24      23
     Accelerated discovery  11       26      32
         services
     Hardware               12       17      13
Total net sales            100      100     100

Cost of sales:
     Software licenses      21       17      19
     Support                 1        2       5
     Accelerated discovery  44       45      49
         services
     Hardware               91       91      92
Total cost of sales         26       33      35

Gross profit                74       67      65

Operating expenses:
  Sales and marketing       38       33      37
  Research and development  25       13      10
  General & administrative  16       10      10
Total operating expenses    79       56      57

Income (loss) from 
  operations                (5)      11       8

  Interest income            2       2        1
  Interest expense          (1)      -        -
  Other income 
     (expense), net          5       -        -
Net income before 
   income taxes              1       13       9

Income tax expense           0       4        2

Net income                   1       9        7


Net Sales    Net  sales  increased approximately  5% from  $28.8 million  in 
1996 to $30.2 million in 1997, and decreased  15%  in 1998  to $25.6 million.
These fluctuations in  net  sales  were principally  attributable to sales of
diverse chemical  compound libraries in the Accelerated Discovery Services 
("ADS") business. The  changes were augmented by increases in software and  
support sales.   New  product sales represented 11% of software license sales
in  1996, 17% in 1997, and 8% in 1998. Tripos generates a substantial portion
of  its revenues  from  the  pharmaceutical industry. Net sales to this 
industry accounted for approximately 58%, 62%, and 52% of the Company's
total net sales in 1996, 1997, and 1998, respectively.

The  Company  sells its products and services directly  in  North America, 
through its wholly owned subsidiaries in Europe, through an  exclusive
distributor arrangement in Japan, and through  nonexclusive agency 
relationships in Australia, China, India, Korea, Singapore,  and Taiwan.  Net
sales from the Company's  activities outside  of North America represented 
approximately 48%, 41%  and 48%  of  the Company's total net sales in 1996, 
1997  and  1998, respectively.   Net sales in Europe accounted for 38%,  32%,
and 40%  of  the  Company's  net  sales in  1996,  1997,  and  1998, 
respectively, with the balance from customers in the Pacific  Rim area, 
principally Japan.  The Company believes that revenues from its foreign 
activities will continue to account for a significant percentage of its total 
net sales.  List  prices for the Company's products have remained relatively 
stable  over  the  last few years.  In 1997, the Company  started selling
token  software  licenses  in  addition  to perpetual licenses. A token 
license includes a minimum level of modules for a   minimum  total  price.   
In  1997 and  1998,  18%  and  38%, respectively of software license sales 
were sold in the form of a token license.  As a result of selling more 
modules through token licenses,  the average software license revenue per 
customer  has increased.    The  average  sale price  for  chemical compound
libraries  decreased in 1997 and 1998 due to  the demand  for  a highly  
purified product which caused a decline in the  size  and number  of  orders 
based on the availability of purified  product for  sale.  Existing customers
represented 85% of total net sales in  1997 and 1998.  Increasing net sales 
from period to period is dependent,  in  part, on the Company's ability to  
introduce  new products  which are accepted by the market and on  the  
Company's ability to penetrate new and existing markets.

Software license sales increased 10% from $9.2 million in 1996 to $10.1 
million in 1997 and increased 15% to $11.6 million in 1998.  The increases 
for the three-year period are attributable to  the increase  in the number of
new products introduced, the  increase in   orders   of  worldwide licenses
for  large  pharmaceutical companies,  the increased  penetration  into  the 
biotechnology sector,  a large custom software development contract, two  
large software consulting contracts and token licensing.

Support  sales  increased 7% from $6.7 million in 1996 to $7.2 million in 
1997, and increased 10% to $7.9 million in 1998.  The increase  for the 
three-year period is primarily due to a  larger installed base of customers 
with more modules per customer  as  a result  of the overall increase in 
software license sales in  the prior years.

The Company introduced the Accelerated Discovery Services ("ADS") product 
line in September 1995.  The Company derives ADS revenues from its compound
library,  discovery  contract  research  and license  revenue  on  its
ChemSpaceT  technology.   ADS   sales decreased 15% to $7.7 million in 1997 
from $9.1 million  in  1996 and  decreased 63% to $2.8 million in 1998.  
Through an  alliance with  MDS Panlabs, Inc., the Company sold the 
Optiverse compound library  in  1996  and 1997.  Optiverse was a general  
screening library of over 100,000 diverse chemical compounds.  In late 1996
and early 1997, a shift in the market demanded an increase in the level
of purity  of  this  compound  library.   Despite the anticipation  of  this 
demand and the purchase of  a specialized apparatus for compound 
purification, the delay in receipt of this equipment  and  subsequent
further  delay  in  the  purification process  caused a nine-month slippage 
in new product.   In  1998, the Company   restructured  its  agreement  
with  MDS Panlabs terminating the Company's distribution of the
Optiverse  product. Simultaneously,  the  Company shifted  the  focus  of  
its  newly acquired laboratory, Tripos Receptor Research in Bude,
England, from   contract  research  synthesis  to synthesis  for  general 
screening  libraries  and announced the launch  of  the  its  own LeadQuest
compound library product.  In June 1998, the Company purchased an inventory 
of highly-pure diverse chemical compounds from  a  third-party  for
distribution  to  continue  generating revenue from this market.  In 
September 1998, the Company  opened its   larger  laboratory  facility  
suitable  for all chemical synthesis  operations.  The Company began 
production of  a  newly designed  set of screening libraries,
started pilot projects  for contract  research  and generated  focussed  
libraries  in its collaborative  work  with Arena Pharmaceutical  and
the  Wolfson Institute.  The Company expects to return to increased levels  
of ADS sales by third quarter 1999.

Hardware revenues increased 34% to $5.1 million in 1997 from $3.8 in 1996  
and  decreased by 38% to $3.2  million  in  1998.   The increase in 1997
reflects an increase in the average order amount from customers who 
purchased the Company's software  along with the  hardware.  The decrease 
in 1998 reflects the absence of  new models  of  hardware offered during
the year as well as customers decision to move from Unix based platforms 
to Windows NT systems. 

Cost of Sales  Total cost of sales decreased 33% from $10 million in 1996 
and 1997 to $6.7 million in 1998, which represents  35%, 33%  and  26%,
respectively, of total net sales.  In  1997,  the decline in the costs of 
diverse compound libraries as a result of the decline in sales was offset 
by the increase in hardware costs corresponding to the increase in hardware 
sales.   In  1998,  the decline in hardware costs and diverse compound 
library costs was the result of the decline in corresponding product sales.

Costs  of  software  licenses represented 19%,  17% and  21%  of software  
license  sales in 1996, 1997, and  1998,  respectively. Costs of software 
licenses consist of amortization of capitalized software, royalties to 
third-party developers, and the  cost of software  product  packaging and 
media.   The cost  of  software licenses  as a percentage of software 
license sales decreased  in 1997  due to a decrease in royalties paid to 
distributors in  the Pacific  Rim  resulting  from the decline  in
revenues  in  that territory  for  the year.  In 1998, the increase in  
costs as a percentage of sales is due to an increase in  third  party
royalties  based  on  an increase in the number  of third  party software 
modules sold during the year.  Costs of support represented 5%, 2% and 1%
of support sales  in 1996,  1997, and 1998, respectively.  Cost of support 
principally consists of  software product packaging, media  and  updates
to documentation.   The decrease in costs of sales for  support  in 1997 
and 1998 is due to lowered costs of documentation.

Costs  of ADS represented 49%, 45% and 44% of ADS sales in  1996, 1997,  
and 1998, respectively.  Cost of ADS represents the  costs associated with 
the design and creation of the diverse  compound libraries.   In  1997, 
the decrease in the costs of ADS as a percentage of sales is due to the
increase  of  higher  margin contract research and ChemSpace revenues, 
and the decrease in the royalties for  the Optiverse chemical compound 
libraries,  as a result of the decline in the sales of the library.
In 1998,  the decrease in the costs of ADS as a percentage of sales is  
due  to the  decrease  in sales  of  both the  Optiverse  and  LeadQuest
compound  libraries.  The Company expects the LeadQuest  library will have 
an overall lower cost than the Optiverse product.  The Company  expects
the costs of this product line  to  decline in future  periods  based on 
increases in compound sales offset  by increases in higher margin contract
research revenues.

Costs of hardware represented 92%, 91% and 91% of hardware sales in 1996, 
1997 and 1998, respectively. Cost of hardware consist primarily of the costs 
of hardware sold.  The Company expects the cost of hardware as a percentage 
of hardware sales to remain relatively stable in future periods. 

Gross Profit   Gross profit was $18.8 million in 1996, $20.2 million in  
1997, and $18.9 million in 1998, which represents gross profits of 65%, 
67% and 74%, respectively.  The increase in the  1997 gross profit
was due to a decline in the percentage  of compound  library sales and an 
increase in higher margin software license,  support,  contract research
and ChemSpace  sales.   The increase  in  the  gross profit margin in 1998  
was  due  to  the increase  in software license and support sales and the  
decrease in the compound library and hardware sales.  The Company believes 
that  gross  profit  will remain stable as  increases  in  higher margin  
contract research and software license  revenues  offset increases  in  
lower  margin sales of  compound libraries.   The overall decline in the 
gross margin dollars of 6% in 1998 was due to  the decrease in revenues of 
15% offset by increases in  sales of higher margin products and services.

Sales and Marketing Expenses   Sales and marketing  expenses decreased 6% 
from $10.7 million in 1996 to $10.1 million in 1997, and  decreased  3%
to $9.7 million in 1998.  The decrease in 1998 was due to the overall 
decrease in revenues.  Sales and marketing expenses as a percentage of 
net sales decreased from 37% in  1996 to 33% in 1997, and increased to 38% 
in 1998.  The fluctuation in sales and  marketing expenses as a percentage  
of  sales is  a function  of  the  overall fluctuation  in sales.   The  
Company expects total sales and marketing expenses as a percentage of net 
sales to decline as the Company increases its revenue.

Research and Development Expenses   Research and development expenses 
increased 36% from $2.8 million in 1996 to $3.8  million in  1997, and 
increased 64% to $6.3 million in 1998, representing 10%,  13%, and
25% of net sales, respectively.  The increases  in 1997  and  1998  are  
due to the decrease in the amount  of capitalized  costs  as the Company 
moves from long-term  software development  cycles to shorter-term 
development  cycle  for  webbased software applications, the increase in 
chemistry staff  at Tripos  Receptor  Research, shared costs for  the  
collaborations with  Arena  Pharmaceuticals and the Wolfson  Institute,  
and  an increase   in staff  and  facilities  for  software   consulting
programmers.

Research and development expenses, including the amount  of capitalized 
costs were $6.4 million in 1996, $6.4 million in 1997 and  $6.3 million 
in 1998 which represents 22%, 21%, and  25%  of net  sales, respectively.   
In  accordance  with  Statement of Financial Accounting Standards No. 86 
and SOP 98-1, the  Company capitalizes  software  development costs
for both external and internal use.  The total amount of costs capitalized  
were  $3.6 million, $2.6 million, and $1.3 million in 1996, 1997 and
1998, respectively.  This represented 56%, 41% and 17% of total product 
research and development expenditures in these periods.  In  1996 and  1997,
the  capitalized costs of compound  development  were classified  on  the  
balance sheet under "Capitalized  Discovery Services". Beginning in 1998, 
the Company capitalized  compound library  production and design costs to 
inventory. The  Company anticipates  that  its  investment in new product  
research  will increase  significantly as  Tripos  continues  participation  
in research collaborations, development in web-based tools, funded research  
and  development  of software,  and increases  diverse compound library 
production.

General and Administrative Expenses   General and administrative expenses  
decreased 2% from $3.0 million in 1996 to $2.9  million in  1997  and
increased 42% to $4.2 million in 1998, representing 10%, 10%, and 16% of 
net sales, respectively.  The increase as  a percentage of sales in 1998 
is due to the addition of Tripos Receptor Research administrative staff 
and a bonus  reserve  for general  staff.   The Company expects general 
and administrative expenses to remain at comparable levels to 1998 in the 
future.

Interest Income  Interest income of $425,000 in 1996, $544,000 in 1997   
and  $471,000  in  1998,  was  from  interest earned   on investments.

Interes Expense  Interest expense of $13,000 in 1996 was from miscellaneous 
bank fees. Interest expense of $50,000 in 1997  and $304,000  in  1998
was from interest due on the  long-term  note payable for  the  corporate 
building,  the  line-of-credit, and interest on capital leases.

Other  Income (Expense)  Other income (expense) was ($4,000)  in 1996,  
$17,800 in 1997, and $1.2 million in 1998.  In 1998, other income  was  
primarily  from the recognition  of  the  guaranteed settlement payment 
attributable to the transfer by the Company of the marketing and 
distribution rights of the Optiverse product to MDS Panlabs.

Income  Tax  Expense  The Company's tax expense was $760,000  in 1996,  
$1.3 million in 1997 and $ 38,000 in 1998.  The  Company's effective tax 
rate was 28%, 34% and 35% for 1996, 1997 and  1998, respectively. The 
effective rate for 1996 reflects the impact  of net  operating loss 
carryforwards for which current benefits were not recognized until the 
second quarter of 1996.

Liquidity and Capital Resources

The Company's working capital decreased from $9.5 million in 1997 to $9.1 
million in 1998.  The decrease in working capital is the result  of  the
Company's expansion of Tripos Receptor  Research Limited and investment 
in Arena Pharmaceuticals.

Net  cash  provided by operating activities decreased from  $4.4 million  
in 1997 to net cash used of $0.4 million in 1998.   This was primarily due 
to a decrease in net income of $2.5 million, an increase in short-term 
receivables of $2.2 million, an increase in  inventory of $2.0 million, 
an increase in notes receivable of $0.6  million  for customer accounts 
receivable due to  long-term installment sales offset by an increase in 
deferred  revenue  of $2.6  million due to both increased support billings
at  year-end and  token license contracts for the year.  During 1997, net 
cash provided  by operating activities decreased by $0.5 million  from 1996.
This  reduction  resulted  from  an  increase  in notes receivable  of  
$3.7  million along with a  decrease in  accrued liabilities  of $3.7 
million which were partially  offset  by  an increase  in net income of
$0.6 million, an increase in  deferred revenue  of $1.4 million and a 
decline in accounts receivable  of $3.1 million.

Net cash used in investing activities decreased from $8.6 million in  1997  
to $6.0 million in 1998.  The decrease relates to the capital acquisitions  
for Tripos Receptor Research, the equity investment in Arena Pharmaceuticals 
offset by lowered  purchases of marketable security investments throughout  
the year  and reduced  amounts  of capitalized development costs.  The  
Company invests available  cash  in bank  deposits,   investment-grade
securities   and,   short-term  interest-producing investments, including   
government  obligations  and other    money   market instruments.  The 
Company anticipates that 1999 capital purchases will  increase slightly 
above 1998 due to the continued expansion of  the  facilities at  the 
Company's Tripos  Receptor  Research subsidiary which will be funded 
through operating activities  and a line-of-credit.

Net  cash  provided by financing activities decreased from  $4.2 million in  
1997  to $3.0 million in 1998 as the  result  of  an increase  in the 
principal payments on long-term debt  offset  by draws on the negotiated 
line-of-credit.

Management believes that with the current cash position of $1.8 million,  
accounts  receivable of $12  million,  cash  flow  from operations, and
availability of a $12 million line-of-credit, the Company will be able to 
meet both its liquidity needs and capital expenditure needs for the next 
twelve months.  See Note 12 later in this Annual Report for further 
discussion of the credit facilities available to the Company.  Management  
believes  that the   Company  will  be  able  to  satisfy  its known  
long-term liabilities  and  liquidity  needs through  the  funding  sources 
identified  above. The Company may seek  to  obtain  additional financing  
at  any time in connection with the Company's  product development efforts 
and its efforts to penetrate existing and new markets  for its  products  
and services, depending upon the associated working capital requirements.

The  Company  was in violation of one covenant under its  current 
line-of-credit at December 31, 1998. The Company was  granted  a waiver  
by the bank for this variance and expects to comply with covenants
in 1999.  Subsequently, the Company has obtained a firm credit commitment 
from a financial organization that possesses  a strong  global  presence  
to better meet  the  worldwide  banking requirements  of  the Company and 
has decided  to  refinance  its present debt.  The refinancing is expected 
to be completed early in the second quarter of 1999.  For a further
discussion see Note 12 of this Annual Report.

Foreign Currency Translations

The  Company's foreign operations transact the majority of  their business  
in their respective local currencies and are  therefore generally  not
exposed to foreign currency gains or losses.   Due to the  relative 
stability of the currency of the countries  in which  the Company operates 
and the level of investment in each country, the Company's current intent 
is to retain assets within its foreign operations to fund those operations.  
The Company's foreign  currency  transaction gains and losses  have  not  
been significant  to  date,  and management  believes  the  Company's 
exposure to future foreign currency transaction gains and  losses
is minimal.


Cautionary Statements-Additional important factors to be considered

The Company's future results could differ materially from those discussed 
in this document. Factors that could contribute to such differences, 
include, but are not limited to, the following:

Rapid  Technological Change.  The software and discovery research 
industries are characterized by rapid change and uncertainty  due to  
new  and emerging  technologies.  The  pace of change has recently 
accelerated due to the Internet, combinatorial chemistry software products,
market demand for  high-throughput  purified chemical compound libraries, 
high throughput screening techniques and combinatorial chemistry companies
entering the market.  There can  be no assurance that Tripos will be 
successful in developing or acquiring product enhancements and new products 
necessary  to keep pace with the changing technologies.

Customer  Acceptance.  While the Company provides a database  of the  
chemical  compounds  in its library and  performs  extensive usability  
and  beta-testing of its new software  products,  user acceptance and
corporate penetration rates ultimately dictate the success of development 
and marketing efforts.

Competition.  The software and discovery research industries are highly  
competitive.  A number of companies offer  products  that target   these
markets.   Tripos  competes  with  software and discovery   research   
vendors  for  the  research budgets   of pharmaceutical and biotechnology
companies.  It is possible  that there will be consolidation in the market 
of competitive software and discovery  research  vendors.  Certain  of  the   
Company's competitors  have  substantially  greater  financial, technical, 
marketing and sales resources than Tripos.

Dependence  on key personnel.  Tripos' continued success  depends to  a  
significant degree upon the continued service of its President and CEO, 
John P. McAlister, and other key technical and senior management personnel.  
The loss of the  services  of Dr. McAlister  or any other key personnel, 
and the inability  of  the Company to attract and retain suitable 
replacements could have  a material adverse effect on the Company.

Possible Acquisitions.  The Company may make acquisitions in  the future.    
Acquisitions involve numerous risks, including difficulties  in the 
assimilation of the operations and  products of the acquired companies,  
the diversion  of  management's attention from other business concerns, 
risks of entering markets in which  the  Company has no or little direct
experience,  and potential loss of key employees of the acquired companies.


Item 7a. Market Risks


The  Company's  exposure to market risks is  limited to foreign exchange  
variances and fluctuations in interest rates.   Neither foreign exchange 
nor interest rate exposure has  resulted  in  a material impact on the 
Company.

The  Company's  foreign  exchange risk is  presently limited to currencies  
that historically  have exhibited   only   minor fluctuations.   Assets
outside the United States  are  primarily located in  England.   The  
Company's investments in foreign subsidiaries with a functional currency
other  than  the  U.S. dollar  are  not hedged.  The net assets in foreign  
subsidiaries translated  into U.S. dollars using the year-end  exchange  
rates were approximately  $2.5  million at  December  31,  1998.   The
potential  loss  in fair value resulting from a hypothetical  10% adverse  
change  in  foreign currency  exchange  rates  would  be approximately
$0.25 million at December 31, 1998.   Any  loss  in fair  value would be 
reflected in Other Comprehensive Income  and would  not  impact net income 
of the Company.   The  Company's foreign  currency transaction gains and  
losses  for  1998  were immaterial.

The Company's interest rate risk is attributable to its outstanding 
borrowings  under its  line-of-credit and  mortgage loan.  The Company 
has fixed a its floating rate interest risk on the mortgage loan
through the purchase of a swap instrument.  The Company  will  continue  
to  monitor  its  exposure to  floating interest  rate risk on outstanding 
line-of-credit borrowings  and endeavor  to  mitigate this risk through 
the use  of  appropriate hedging instruments.


Item 8.   Financial Statements and Supplementary Data

       Consolidated Balance Sheets
                                             Year ended        Year ended
Assets:                                     December 31,      December 31,
                                                   1998              1997
Current assets: 
  Cash and cash                              $1,773,663        $5,277,469
  Investments                                       --          1,647,073
  Accounts receivable, less allowance 
   for doubtful accounts of $98,783 
   in 1998 and $78,420 in 1997               12,451,041        10,246,743
  Inventory                                   2,389,442           414,626
  Prepaid expenses                            1,277,947           520,440     
  Deferred income taxes                         241,900           137,000
        
    Total current assets                     18,133,993        18,243,351      

  Notes receivable-trade                      2,303,698         1,703,056
  Notes receivable-other                        863,079           791,357
  Property and equipment, 
   less accumulated depreciation             11,075,870         5,994,500  
  Capitalized development costs, 
   net of accumulated amortization of
   $1,857,689 in 1998 and $7,220,643 in 1997    877,036         3,412,062
  Goodwill, net of accumulated amortization
   of $108,964 in 1998 and $12,450 in 1997    1,146,728         1,170,890
  Investment in unconsolidated affiliate      1,982,478           845,000
  Other, net                                    426,864           450,228

    Total assets                             36,809,746        32,610,444
                          
Liabilities and shareholders' equity:

Current liabilities:
  Current portion of long-term debt 
   and capital leases                         $ 328,405         $ 178,000
  Accounts payable                              827,604         1,389,946
  Accrued expenses                            2,857,734         3,216,366
  Deferred revenue                            5,004,701         3,914,627
   
    Total current liabilities                 9,018,444         8,698,939
         
  Long-term portion of capital leases           225,571                -
  Long-term debt                              5,289,167         3,367,167
  Long-term deferred revenue                  2,302,613           780,748  
  Deferred income taxes                         465,000           855,000  

Shareholders' equity
  Common stock, $.01 par value; authorized
   20,000,000 shares; issued and outstanding 
   3,256,722 shares in 1998 and 3,171,803
   shares in 1997                                32,567            31,718
  Additional paid-in capital                 17,980,295        17,342,956 
  Retained earnings                           1,268,980         1,198,360
  Other comprehensive income                    227,109           335,556
           
     Total shareholders' equity              19,508,951        18,908,590      
      
Total liabilities and shareholders' equity  $36,809,746       $32,610,444
     
See notes to consolidated financial statements




Consolidated Statements of Operations

                                    Year ended     Year ended      Year ended
                                   December 31,   December 31,    December 31,
                                          1998           1997            1996
 Net sales:

Software licenses..............    $11,638,804    $10,117,342      $9,185,917
Support........................      7,927,859      7,209,475       6,715,669
Accelerated discovery services.      2,830,681      7,736,952       9,053,042
Hardware.......................      3,174,169      5,124,531       3,831,765

Total net sales................     25,571,513     30,188,300      28,786,393

Cost of sales:

Software licenses..............      2,435,555      1,679,025       1,735,380
Support........................        113,175        163,277         305,000
Accelerated discovery services.      1,247,763      3,519,417       4,422,477
Hardware.......................      2,888,363      4,637,861       3,527,871

Total cost of sales............      6,684,856      9,999,580       9,990,728

Gross profit...................     18,886,657     20,188,720      18,795,665

Operating expenses:

Sales and marketing............      9,736,881     10,065,100      10,704,959
Research and development.......      6,262,661      3,809,562       2,795,543
General and administrative.....      4,182,278      2,940,524       2,990,960

Total operating expenses.......     20,181,820     16,815,186      16,491,462

Income (loss) from operations..     (1,295,163)     3,373,534       2,304,203

Interest income................        470,553        543,628         424,826
Interest expense...............       (303,848)       (49,744)        (12,860)
Marketing rights settlement....        977,167              -               -
Other income (expense), net....        260,411         17,796          (3,953)

Income before income taxes.....        109,120      3,885,214       2,712,216

Income tax expense.............         38,500      1,305,353         760,000

Net income.....................       $ 70,620    $ 2,579,861     $ 1,952,216

Basic earnings per share.......          $0.02          $0.84           $0.67

Basic weighted average number
 of shares.....................      3,207,853      3,085,077       2,923,284

Diluted earnings per share.....          $0.02          $0.74           $0.61

Diluted weighted average number 
 of shares.....................      3,480,241      3,503,946       3,221,980

See notes to consolidated financial statements




Consolidated Statements of Cash Flows


                                       Year ended    Year ended    Year ended
                                           Dec 31,       Dec 31,       Dec 31,
                                             1998          1997          1996
Operating activities:
Net income.................              $ 70,620    $2,579,861    $1,952,216

Adjustments to reconcile net income
to net cash provided (used) by 
operating activities:

Depreciation of property and 
  equipment................               970,127       825,854       790,190
Amortization of capitalized development
  costs and goodwill.......             2,890,129     2,302,976     2,484,897
Deferred income taxes......              (496,000)      234,000       289,000
Net gain from sale of property
  and equipment ...........                     -             -       (25,264)

Change in operating assets and liabilities:
Accounts receivable........            (2,189,016)       67,165    (3,055,248)
Notes receivable, trade....              (600,642)   (1,703,056)            -
Inventories................            (2,017,108)     (396,054)      (22,329)
Prepaid expenses and other 
  current assets...........              (776,400)      345,797        21,307
Accounts payable and 
  accrued expenses.........              (859,667)   (1,225,286)    2,449,341
Deferred revenue...........             2,605,831     1,383,401        25,826

Net cash provided (used) by 
  operating activities.....              (402,126)    4,414,658     4,909,936

Investing activities:
Purchases of investments...                     -      (851,037)   (2,465,000)
Notes receivable, other....               (71,722)     (791,357)            -
Sales and maturities of 
  investments..............             1,647,073     2,539,408     2,308,193
Purchases of property and 
  equipment................            (5,689,592)   (5,687,423)     (734,604)
Capitalized development costs            (224,562)   (2,341,589)   (3,320,411)
Acquisition, including investments
  in unconsolidated affiliates         (1,232,599)   (1,488,221)     (298,385)

Net cash used in investing 
  activities...............            (5,571,402)   (8,620,219)   (4,510,207)

Financing activities:
Proceeds from stock issuance
  pursuant to stock purchase 
  and option plans.........               638,188       657,471       984,297
Proceeds from issuance of 
  long-term debt...........             2,100,000     3,560,000             -
Payments on long-term debt and
  capital lease obligations              (229,739)      (14,833)            -

Net cash provided by financing 
  activities...............             2,508,449     4,202,638       984,297

Effect of foreign exchange rate
changes on cash and cash equivalents      (38,727)     (112,682)       54,244

Net increase (decrease) in cash 
  and cash equivalents.....            (3,503,806)     (115,605)    1,438,270

Cash and cash equivalents at 
  beginning of year........             5,277,469     5,393,074     3,954,804

Cash and cash equivalents at 
  end of year..............            $1,773,663    $5,277,469    $5,393,074

See notes to consolidated financial statements



Consolidated Statements of Shareholders' Equity

                                                               Other       Total
                    Common Stock    Additional     Retained  Compre-      Share-
                                       Paid-in     Earnings  hensive    holders'
                    Shares  Amount     Capital    (Deficit)   Income      Equity
Balance at December 31,
    1995         2,879,763 $28,798 $14,236,705 $(3,333,717) $390,569 $11,322,355

Stock issued under
stock purchase plan 32,602     326     164,435           -         -     164,761

Stock issued under
stock option plan   98,264     983     801,803           -         -     802,786

Stock issued 
under director 
compensation plan    1,423      14      16,736           -         -      16,750

Comprehensive income:
Translation 
 adjustment              -       -           -           -   108,514     108,514
Net income               -       -           -   1,952,216         -   1,952,216
Total comprehensive
 income                                                                2,060,730

Balance at December 31,
    1996         3,012,052  30,121  15,219,679  (1,381,501)  499,083  14,367,382

Stock issued under
stock purchase plan 42,321     423     360,729           -         -     361,152

Stock issued under
stock option plan   84,780     848     540,163           -         -     541,011

Stock issued 
under director 
compensation plan    2,650      26      44,157           -         -      44,183

Stock and warrants
issued related to 
acquisition         30,000     300   1,178,228           -         -   1,178,528

Comprehensive income:
Translation 
 adjustment              -       -           -           -  (163,527)  (163,527)
Net income               -       -           -   2,579,861         -   2,579,861
Total comprehensive 
 income                                                                2,416,334

Balance at December 31,
    1997         3,171,803  31,718  17,342,956   1,198,360   335,556  18,908,590
                        
Stock issued under
stock purchase plan 43,108     431     376,212           -         -     376,643

Stock issued under
stock option plan   38,428     384     228,740           -         -     229,124

Stock issued 
under director 
compesation plan     3,383      34      32,387           -         -      32,421

Comprehensive income:
Translation 
 adjustment                                                 (108,447)  (108,447)
Net income                                          70,620                70,620
Total comprehensive
 income                                                                 (37,827)

Balance at December 31,
    1998         3,256,722 $32,567  $17,980,295 $1,268,980  $227,109 $19,508,951
                       
See notes to consolidated financial statements



Notes to Consolidated Financial Statements   December 31, 1998


1. Description of Business and Summary of Significant Accounting Policies

Description  of  Business and Company Organization 
Tripos, Inc. delivers science,  tools  and  analysis  services that  advance 
customers'  creativity and productivity   in   pharmaceutical, agrochemical,
biotechnology  and related  research   industries worldwide.  The Company is 
also a value-added reseller of  thirdparty   hardware  products required  to
operate its software products.   A substantial portion of the Company's  
business  is conducted with pharmaceutical companies, however, the Company  
is not  economically dependent on any customer on an ongoing basis.

Effective  June  1, 1994, Evans and Sutherland Computer  Company ("E&S"),  
the  former  parent  of the  Company,  distributed  all outstanding  shares
of the common stock of the Company  (formerly Tripos Associates, Inc.) to 
E&S shareholders ("the Distribution") such  that  every three shares of E&S
yielded one  share  of  the Company.   Shortly before the Distribution, the 
Company  changed its name to Tripos, Inc.

Basis of  Consolidation   
The accompanying consolidated financial statements  include the accounts of 
the Company  and  its  wholly owned subsidiaries.  All significant 
intercompany  accounts and transactions  are  eliminated in consolidation.
Investments  in affiliates,  owned more than 20%, but not in excess of  50%,
are recorded  on  the  equity method.  Investments in unconsolidated 
affiliates less than 20% owned are accounted for under  the  cost method.

Cash and Cash Equivalents   
All highly liquid investments with  a maturity of three months or less when 
purchased are considered to be cash equivalents. 

Investments 
The Company's investments, which consist  primarily of  U.S.  government and 
other high-quality debt securities  with maturities  of less  than five years,
have  been  classified  as available-for-sale and are carried at fair value.
There were  no unrealized  holding  gains  and losses  since the fair value 
approximated the amortized cost of investments at each year-end.  

Inventory 
Inventory  consists of finished chemical compounds, supplies  and  work  in  
process at its U.K.  subsidiary,  Tripos Receptor  Research  Ltd., and is 
carried at  the  lower  of  cost (standard cost method approximating FIFO) or
market.

Notes Receivable-Trade   
Amounts shown for notes receivable-trade represent customer receivables with
maturities in excess  of  one year net of imputed interest discount.

Property and Equipment  
Property and equipment  are stated  at cost.  Depreciation is computed by
applying an accelerated method over the estimated useful lives of the assets, 
which range  from five to  ten  years for equipment and furniture, twenty-
five  to thirty-nine  years for buildings, the shorter of the useful  life
of the improvement or the life of the related lease for leasehold improvements,
and three years for purchased software.

Development Costs   
Development  costs  consist of software development  costs which are 
capitalized after the establishment of  technological  feasibility in
accordance  with  Statement  of Financial Accounting Standards No. 86.  
For 1997 and 1996,  costs associated  with  the  design and creation  of
diverse  compound libraries,  within  the Company's Accelerated Discovery  
Services relationship with MDS Panlabs, were capitalized.  Amortization of
capitalized software development costs is provided on a productby-product 
basis as the greater of (a) the ratio of current gross revenues for a product
to the total current  and  anticipated future  gross revenues or (b) the 
straight-line method  over  the remaining estimated economic life of the 
product.  Currently, the Company  is  using an estimated economic life of 
three  to  five years.  Capitalized costs associated with the  diverse
compound libraries  were amortized on a two-year straight-line  method  up 
until  the  time of the restructuring of the Agreement  with  MDS Panlabs,
at which time all remaining costs were written  off to cost  of sales.  
Beginning in 1998, library design and production costs  associated  with the
LeadQuest  compound  library   are accounted for under the inventory method 
of accounting.

The Company assesses the  recoverability of capitalized development costs by 
comparing the remaining unamortized  balance to  the  net realizable value of
the related product.  Any excess is written off.  All other research and 
development expenditures are  charged  to research and development expense 
in the period incurred.

Effective  January 1, 1998, the Company adopted AICPA's Statement of Position
98-1 ("SOP 98-1")  which requires capitalization  of certain costs incurred 
in connection with developing or obtaining internal use software.  Capitalized
costs are amortized over  the lesser  of  three  years  or the remaining  
useful  life  of  the software.

Goodwill  
Goodwill represents the excess of the cost of the net assets acquired of 
Tripos Receptor Research Ltd. over  its  fair value.  It is being amortized 
on a straight-line basis  over  15 years.   On a periodic basis, the Company 
evaluates goodwill  for impairment by comparing estimated future discounted
cash flows of the business to which the goodwill relates to its carrying value.

Revenue Recognition   
In late 1997,  the Accounting  Standards Executive Committee of the AICPA 
issued statement of Position 972  ("SOP 97-2"), "Software Revenue Recognition"
and updated it in early  1998 with SOP 98-4.  These SOPs became effective  
for  the Company for transactions entered into after January 1, 1998.  The 
Company  recognizes revenue from software licenses in  accordance with these 
SOPs upon product delivery, customer acceptance with all obligations fulfilled
at  the  date  of delivery, and determination  that collectibility of the sale
proceeds   is probable.   The Company recognizes revenue from software support 
contracts ratably over the term of the contract, typically one to three years.
In software arrangements that include rights  to multiple software products, 
specified upgrades, software  support services  and/or other services, the 
Company allocates the  total arrangement fee among each deliverable based on 
the relative fair value  of  each of the deliverables determined based  on  
vendor specific objective evidence.  Revenue  from  chemical  compound sales is
recognized upon delivery of the product.  Hardware sales are  recognized  on
delivery of the product from  the  Company's vendor to the Company's customer.

The  Company  has entered into contract research agreements  and software  
consulting  arrangements with certain  customers  which provide  for
collaboration with the Company in defining  related software  products,  
early access to the products, discounts  on licenses for the products 
developed and compound library  design. The  Company recognizes revenue 
related to contract research  and software consulting  agreements as 
contractual  milestones are achieved and delivered or, absent such contractual
milestones, on a completed contract basis or a percentage of completion basis.

Warranty    
The  Company  is a reseller of  hardware and  passes through to its customers 
the standard warranties provided by  the hardware supplier.  The Company 
warrants its application software products to perform in accordance with 
written user documentation and  the  agreements  negotiated with the customer.
Since  the Company  does  not customize its applications software,  software 
warranty costs are insignificant and expensed as incurred.

Foreign Currency Translation   
The local foreign currency is  the functional currency for the Company's 
foreign operations.  Assets and liabilities  of  foreign operations are 
translated to  U.S. dollars  at  the  current exchange rates  as of  the  
applicable balance sheet date.  Revenues and expenses are translated at  the 
average exchange rates prevailing during the period.  Adjustments resulting  
from translation are reported as a separate  component of  shareholders'  
equity.  Net gains  and  losses  from  foreign currency transactions were not
significant  during  any  of the years presented.

Comprehensive  Income  
In  June 1997,  the  Financial Accounting Standards Board issued SFAS 130,
"Reporting Comprehensive Income" which  became effective  for the Company  
for  1998.   SFAS  130 establishes  standards for reporting and display of
comprehensive income  and its components (revenue, gains and losses) in a  
full set  of  general purpose financial statements.  SFAS 130 requires that 
all components  of  comprehensive  income,  including net income,  be  
reported in a financial statement that is  displayed with the same prominence
as  other  financial statements. Comprehensive income is defined as the change
in equity during  a period from transactions and other events and circumstances
from non-owner sources.   Net income and other comprehensive income, including
foreign   currency   translation adjustments, and unrealized  gains and losses 
on investments, shall be  reported, net  of  their  related  tax effect, to
arrive  at  comprehensive income.   The adoption of SFAS 130 has not had an 
impact  on  the Company's financial position or results of operations.

Income  Taxes   
The provision for income taxes is computed  using the  liability method.  
The primary difference between  financial statement  and taxable income 
results from the use  of  different methods of computing depreciation, 
capitalized development costs, accrued vacation and customer deposits.

Earnings Per Common and Dilutive Share  
In 1997, the  Financial Accounting Standards Board issued Statement No. 128 
("FAS  128"), "Earnings  per Share".   FAS  128 replaced  the  calculation  
of primary  and  fully  diluted earnings per share  with basic  and diluted  
earnings per share.  Basic earnings per common share  is computed  using  the
weighted average number  of  common  shares outstanding during the year.   
Diluted earnings per common  share is  computed  using the weighted
average number of common  shares and potential dilutive common shares that 
were outstanding during the   period.   Potential  dilutive  common  shares
consist of outstanding   stock   options.   See  Note  14 for additional 
information regarding earnings per share.

Stock-based Compensation   
The  Financial Accounting  Standards Board issued SFAS 123, "Accounting For 
Stock-Based Compensation", effective for years beginning after December 1995.
However, the Company  has elected to continue following Accounting Principles
Board Opinion No. 25 ("APB 25"), "Accounting for Stock Issued  to Employees",
and  related Interpretations in accounting  for  its stock-based transactions.
Under APB 25, generally no compensation expense is recognized because the
exercise price  of the  options equal the fair value of the stock at the 
grant date. The  Company has adopted the disclosure-only provisions  of SFAS 
123 as shown in Note 6 to these financial statements.

Accounting Estimates  
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 and disclosure
of contingent  assets and liabilities at the date of the  financial statements
and  the  reported amounts of  revenue  and  expenses during  the  reporting
period.  Actual results could differ  from those estimates.

Recent  Accounting  Pronouncements 
In June 1998,  the Financial Accounting Standards Board issued Statement
No. 133, "Accounting for  Derivative Instruments and Hedging Activities" 
("FAS 133"), which  is  required to be adopted in years beginning after June 
15, 1999.  FAS 133 permits early adoption as of the beginning of any  fiscal
quarter after its issuance.  The Company expects  to adopt the new Statement
effective January 1, 2000.  FAS 133 will require  the Company to recognize 
all derivatives on the balance sheet  at  fair value.  The Company has not yet
determined  what the  effect  FAS  133  will  be on the earnings and financial 
position of the Company.

Reclassifications  
Certain amounts in the prior  year financial statements have been reclassified 
to conform with  the  current year presentation.


2.  Property and Equipment


Property and equipment at the end of each year are summarized below:

                                      1998                1997
      Computer equipment           $5,204,145          $4,649,805
      Capital leases -
       laboratory equipment           469,059                  -
      Furniture and fixtures        3,106,024           1,705,225
      Purchased software            1,335,899           1,107,828
      Company vehicles                 25,722                  -
      Land                          1,592,732           1,340,000
      Buildings                     6,292,876           3,240,927

                                   18,026,457          12,043,785

      Less accumulated              
       depreciation                 6,950,587           6,049,285       

                                  $11,075,870          $5,994,500
                                      



3.  Accrued Expenses

Accrued expenses consist of the following at the end of each year:


                                       1998               1997
       Payroll related              $1,224,260         $1,011,821
       Income taxes refundable        (714,429)          (653,713)
       Product royalties               797,622            286,442
       Compound development            105,000          1,426,011
       Other                         1,445,281          1,145,805
       
                                    $2,857,734         $3,216,366
                                         
                                         
                                         
4.  Income Taxes

The components of income (loss) before income taxes for the years ended 
were as follows:

                                 1998          1997          1996

  Domestic                    $712,260      $3,871,118    $2,523,411
  Foreign                     (603,140)         14,096       188,805 
                              $109,120      $2,712,214    $3,885,214 


The components of income tax expense (benefit) for the years ended were 
as follows:

                                   1998        1997        1996
Current tax expense (benefit)
       Federal                  $345,000    $862,000     $71,000
       State and local            83,000     183,000      87,000
       Foreign                   107,000      26,000     313,000
       
         Total current           535,000   1,071,000     471,000
      

Deferred tax expense (benefit)  (496,000)    234,000     289,000


       Total provision           $39,000  $1,305,000    $760,000
      

The difference between the effective income tax rate and the U.S. federal 
income tax rate for the years ended is explained as follows:

 
                                     1998        1997        1996
       Tax at U.S. federal
         statutory rate             34.00 %     34.00  %    34.00  %
       Effect of foreign operations
        (net of foreign taxes)      18.26        0.54        0.48
       Valuation allowance             -           -       (10.73)
       State taxes                  13.04        5.62        3.17
       R&D tax credits             (39.04)      (5.15)         -
       Other                         8.94       (1.41)       1.08
       
                                    35.20 %     33.60 %     28.00  %

The  tax  effects  of temporary differences  that give  rise  to deferred  
tax assets and liabilities at the end of each year  are summarized as follows:


                                             1998           1997
Current deferred income tax asset:
    Allowance for doubtful accounts        $25,000        $23,000    
    Vacation accrual                       129,000        109,000
    Customer deposits                           -           3,000
    NOL carryforward                            -          45,000
    Other                                   43,000          2,000
    Tax credit carryforward                 45,000             -
    Valuation allowance                         -         (45,000)
       
                                          $242,000       $137,000 

Noncurrent deferred income tax liability:
    Capitalized development costs         (516,000)     $(911,000)
    Property and equipment                   4,000         31,000
    Other                                   47,000         25,000
              
                                         $(465,000)     $(855,000)
                                               

Income tax payments for 1998, 1997 and 1996 were $361,500, $1,010,000 
and $262,000, respectively.

Three  of the Company's  foreign   subsidiaries had   loss carryforwards   
at  December  31,  1998, totaling  approximately $1,104,000 that have no
expiration date.  Undistributed  earnings of subsidiaries outside the 
United States are considered to  be permanently invested.  Accordingly, no 
provision for U.S.  income taxes  was  made for undistributed earnings of 
such subsidiaries, which aggregated $426,000 at December 31, 1998.


5.  Stock Plans

In  1994,  the  Company adopted the 1994 Employee Stock Purchase Plan,  
which allows eligible employees to purchase stock  at  the lower  of  85%  
of  the fair market value of  the  stock  on  the enrollment  date
or  exercise  date  as  defined  by  the  plan. Pursuant  to the plan, 
employee purchases are limited to  10%  of compensation.  The plan, which 
was amended in 1998 to  raise  the number  of  shares reserved for
issuance from 150,000 to  350,000 shares,  is in effect for ten years unless 
terminated or  amended sooner  by the Board of Directors.  At 
December 31, 1998, 149,661 shares have been purchased under this plan.

In  1994,  the  Company  adopted the 1994  Stock  Plan which  is administered
by  the  Compensation Committee and  provides  for incentive  stock  options,
nonstatutory stock options  and  stock purchase rights to be granted to 
employees and consultants of the Company.   Pursuant to the plan, incentive 
stock options  can  be exercised at a price which is not less than the fair 
value of the stock on the grant date, and nonstatutory stock options and 
stock purchase  rights can be exercised at a price which is  determined by
the  Compensation Committee.  The Compensation Committee  is responsible  for
establishing the period over which  options  and rights can be exercised.
Options vest at the rate of 25% on  the first anniversary of each grant and 
1/48th per  month  over the next  three years.  All options granted have 10-
year terms.  The plan,  which was amended in 1998 to increase the number
of shares of   common  stock  reserved  for  issuance from  1,100,000
to 1,280,000,  is  in  effect  for ten years  unless terminated  or amended 
sooner by the Board of Directors.

In 1994, the Company adopted the 1994 Director Option
Plan which provides  for nonstatutory stock options to
be granted  to  non-employee directors at the fair market value of the
stock at  the date  of  grant.  Options can be
exercised in 25% increments  on the  anniversary  of
its date of grant.  The  plan,  which  was amended in
1998 to decrease the number of shares of common stock
reserved for issuance from 300,000 to 240,000, is in
effect  for ten  years unless terminated or amended
sooner by the  Board  of Directors.
The  Company has elected to follow APB 25,
"Accounting for  Stock Issued  to  Employees", and
related interpretations in accounting for its
employee and director stock options because, as
discussed below,  the alternative fair value
accounting provided for  under SFAS 123, "Accounting
for Stock-Based Compensation", requires use of
option  valuation models that were not developed for
use  in valuing  employee  stock  options.  Under
APB  25,  because  the exercise  price  of  the
Company's employee  and  director  stock options
equals the market price of the underlying stock  on
the date of grant, no compensation expense is
recognized. 

Pro forma information regarding net income and
earnings per share is required by SFAS 123 and has
been determined as if the Company had  accounted for
its employee and director stock options  under the
fair  value  method of that Statement.  The fair
value  for these  options was estimated at the date
of grant using a  BlackScholes  option pricing model
with the following weighted average assumptions: risk-
free interest rates ranging from 5.13% to 6.64%
for  1996,  5.45% to 6.50% for 1997 and 4.26% to
5.65% for  1998; volatility factor of .85 for 1996,
 .86 for 1997 and .94 for 1998; and  a  weighted
average expected life of the option of 5.3 years for
both 1996 and 1997 and 4.2 years for 1998.  For the
Company's Employee  Stock  Purchase  Plan,
compensation  expense  was  also estimated  using a
Black-Scholes option pricing  model  with  the
following  assumptions:  risk-free interest  rates
ranging  from 5.05% to 5.25% for 1996, 5.7%
to 6.4% for 1997 and 5.36% to 5.65%
for  1998; volatility factors of .85 for 1996, .86
for  1997  and .94  for 1998; and a weighted average
expected life of the option of  6  months.   For  all
years presented,  the  Company  used  a dividend rate
of zero.

The Black-Scholes option valuation model was
developed for use in estimating the fair value of
traded options which have no vesting restrictions
and  are fully transferable.  In  addition,  option
valuation   models   require  the  input  of  highly
subjective assumptions   including  the  expected
stock  price  volatility. Because  the  Company's
employee and director stock options  have
characteristics  significantly different  from  those
of  traded options  and  because changes in the
subjective input assumptions can  materially  affect
the fair value estimate, in  management's opinion,
the  existing  models  do  not  necessarily  provide
a reliable  single  measure of the fair value of its
employee  and director stock options.

For  purposes of pro forma disclosures, the estimated
fair  value of  the options is amortized to expense
over the options' vesting period. The  Company's  pro
forma  information  follows (in thousands except for earnings 
per share information):

    Pro Forma                            1998      1997       1996
                          
    Pro forma net income (loss)        $(1,311)   $1,580      $1,299
    
    Pro forma earnings (loss) 
      per share:
          Basic                         $(0.41)     $0.51      $0.44
          Diluted                       $(0.41)     $0.48      $0.42

 


   Options        1998    Weighted    1997     Weighted    1996     Weighted
 Outstanding              Average              Average              Average
  Summary        Shares   Exercise   Shares    Exercise   Shares    Exercise
                          Price                Price                Price

Beginning        834,093  $7.7899    770,969  $6.0881     669,931  $5.2747
outstanding

Granted:
Price=Fair       161,575  $12.1595   195,700  $13.0313    215,700  $8.4899
Value                          

Exercised        (42,452)  $5.7222    (97,316)  $5.1889   (98,677)  $5.8116

Canceled/expired (72,325) $10.2501    (35,260)  $6.8504   (15,985)  $6.1111


Ending           880,891  $8.4890     834,093   $7.7899   770,969  $6.0881
outstanding

Exercisable-     547,082             417,038              299,929
end of year

Weighted
average fair
value per
share of           $8.21               $8.22               $5.29
options
granted during
the year


12/31/98            Options Outstanding           Options Exercisable
                           Weighted   Weighted                  Weighted
   Range of      Number    Average    Average      Number       Average
   Exercise    Outstanding Remaining  Exercise     Exercisable  Exercise
   Prices                  Life       Price                     Price

$4.2500-$4.7500    76,827   6.05      $4.3092       73,536      $4.2991
$5.0000-$5.0000   262,275   5.42      $5.0000      262,275      $5.0000
$5.7500-$7.8750   150,721   6.65      $7.3697      112,071      $7.3445
$8.0000-$12.500   317,068   8.57     $11.4875       85,075     $10.7488
$13.6875-$20.500   74,000   8.79     $15.1761       14,125     $15.9331

$4.2500-$20.500   880,891   7.20      $8.4890      547,082      $6.5623


In January 1996, the Board of Directors of the Company
authorized and declared a dividend of one preferred
share purchase right  (a "right")  for each share of
common stock outstanding  on  January 26,  1996.
Each  right  represents the right  to  purchase  one
preferred share of stock.  These rights can be
exercised only  if certain events occur, which
include, among other things,  when  a beneficial owner
of the Company's common stock acquires  a  total of
20% or more of the outstanding common stock of the Company.


6.  Benefit Plan

In  1994,  the Company established a defined
contribution  401(k) Plan covering all domestic
employees who are at least 21 years of age  and  have
completed at least six months of service (provided that
such  service represents a minimum of 1,000 hours
worked). Employees  may  contribute  to  the  plan  up
to  17%  of  their compensation, which is further
limited by law ($9,700  in  1998). The Company will
match employee contributions for an amount up to 50%
of  the  first 6% of each employee's compensation
deferral. Contributions  made  by the Company were
$177,600  in  1998  and $180,500 in 1997.


7.   Geographic Segment Data
In  June  1997, the Financial Accounting Standards
Board  issued SFAS  131, "Segment Information" which
became effective  for  the Company  for 1998.  SFAS 131
amends the requirements  for  public companies  to
report financial and descriptive information  about its
reportable operating segments in annual financial
statements and  selected  information about operating
segments  in  interim reports  issued  to shareholders.
It also establishes  standards for  related disclosures
about products and services,  geographic areas,  and
major customers.  Operating segments, as defined  in
SFAS  131,  are  components of the enterprise for which
separate financial information is available and is
evaluated regularly  by the  Company  in  deciding how
to allocate resources  and  assess performance.  The
Company believes it operates in one  reportable
business  operating  segment  and  therefore  presents
only  the following geographic data as representative
segment information.

The Company's foreign operations historically have been
conducted principally   through   the  Company's wholly 
owned foreign subsidiaries and distributors.  Information regarding
operations by geographic area for 1998, 1997 and 1996 is as follows :


              U.S.A.      U.K.      Germany    France   Pacific Rim     Total
1998                                                               
Net sales  $13,263,414 $2,622,418 $5,501,931 $2,183,765  $1,999,985  $25,571,513
Long-lived 
 assets      6,190,701  6,385,449     90,365     44,879           -   12,711,394


1997
Net sales   17,898,691  4,205,506  3,699,848  1,665,820   2,718,435   30,188,300
Long-lived
 assets      5,955,301  1,550,399    115,397     59,062           -    7,680,159


1996
Net sales   14,975,383  4,093,618  5,072,253  1,769,421   2,875,718   28,786,393
Long-lived
 assets      1,127,437    108,874    119,596     42,673           -    1,398,580


Most  services  of  the  Company are provided  on  an
integrated worldwide basis.  Because of the integration of
U.S. and non-U.S. services,  it  is not practical to
separate precisely  the  U.S.oriented services from
services resulting from operations outside the  United States and 
performed for customers outside the United States;  accordingly, the
separation set forth in  the  preceding table  is based upon internal 
allocations, which involve certain management judgments.

Net  sales  and  long-lived assets in the  preceding
table  are attributable to the country or territory
in which the  Company's subsidiaries or distributors
are located.


8.  Concentrations of Credit Risk

Financial  instruments that potentially subject  the
Company  to concentrations  of  credit  risk have
consisted  principally  of investments and trade
receivables.  The Company invests available cash  in
bank deposits, investment-grade securities, and
shortterm   interest-producing   investments,
including   government obligations and other money
market instruments.  The Company  has adopted  credit
policies  and standards  to  evaluate  the  risk
associated  with  its  sales  and requires
collateral,  such  as letters of credit and bank
guarantees, whenever deemed necessary. Management
believes  that  any risk  of  loss  is  significantly
reduced due to the nature of the customers and
distributors  with which it does business.


9.  Lease Obligations

The  Company leases certain office facilities and
equipment under noncancelable operating and capital
leases with terms from one to five  years.   The
capital leases specifically  pertain  to  the
acquisition  of  certain laboratory equipment
totaling  $442,046. Rent expense under such
arrangements was $406,100, $757,712,  and $629,505
in  1998, 1997, and 1996, respectively.
Noncancelable future minimum lease commitments as of
December 31, 1998 are:

              Year             Operating       Capital
                                 Leases         Leases
              1999              $413,800      $179,400
              2000               361,700       179,400
              2001               291,800        57,000
              2002               170,600             -
              2003                55,200             -
                               
                               1,293,100       415,800 
Less amount representing 
    interest                           -       (39,800)
Present value of minimum 
    lease payments            $1,293,100      $376,000 *

*  Includes the current portion of capital lease obligations of $150,405



10.  Selected Quarterly Financial Data            (Unaudited)


The following table presents unaudited financial data for
each quarter of 1998 and 1997 (in thousands, except per share data):

                               First  Second   Third  Fourth
  1998                       Quarter Quarter Quarter Quarter

Total net sales............   $6,184  $5,529  $5,587  $8,272
       
Gross profit...............    4,016   4,549   4,258   6,063

Income (loss) from operations   (541)   (321)   (769)    336

Net income (loss)..........     (302)     41      70     262

Net income (loss) per share:
     Basic.................   $(0.10)  $0.01   $0.02   $0.08
     Diluted................  $(0.10)  $0.01   $0.02   $0.08

                               First  Second   Third  Fourth
  1997                       Quarter Quarter Quarter Quarter

Total net sales............   $6,792  $6,351  $9,000  $8,045
       
Gross profit...............    4,468   3,976   5,889   5,855

Income from operations.....      116     515   1,192   1,551

Net income.................      168     387     842   1,183

Net income per share:
     Basic.................    $0.06   $0.13   $0.27   $0.38
     Diluted...............    $0.05   $0.11   $0.24   $0.34

The first three quarters of 1997 earnings per share
amounts have been  restated as required to comply
with Statement of Financial Accounting Standards No.
128, "Earnings Per Share".  For further discussion
of earnings per share and the impact of Statement
No. 128,  see  note  1  of  the consolidated
financial  statements, "Description  of Business and
Summary of Significant  Accounting Policies,
Earnings Per Common and Dilutive Share".


11.  Inventory

The  Company maintains a physical inventory of
chemical compound libraries  in  various states of
completion.   Costs  associated with  the
manufacture  of compounds are  calculated  using
the standard  cost method and are carried at the
lower  of  cost  or market.  Compounds that are acquired from 
third parties are also carried  at  the  lower  of  
cost  or  market.  Finished  Goods inventory  may  periodically 
contain costs of computer  hardware that has been acquired 
for resale to the Company's customers.


                                    December 31,    December 31,
                                           1998            1997
       
       Raw materials...........         $43,844         $41,260
       Work in process.........       1,764,643          18,808
       Finished goods..........         580,955         354,558
                                   
                                     $2,389,442        $414,626
                                   
                                   
12.  Long-term Debt

The  Company  entered  into  a  five-year $12,000,000 Credit
Agreement with a bank on October 16, 1998.  The Credit Agreement
requires  the  Company  to  meet  certain  financial
covenants, including  various coverage ratios and a
debt to  capitalization ratio.   The  line of credit
is secured by all of the  Company's U.S.  assets as
well as a pledge of its European assets.  As  of
December  31, 1998, the Company was in violation of
one covenant which  was  subsequently waived by the
bank for  that  quarterly reporting  period.
Interest  on borrowings  is  payable  under several
rate options.  Additionally, the Company is required
to pay  a  nominal  commitment fee for the unused
portion  of  the facility.   As  of December 31,
1998, $2,100,000  of  borrowings were  outstanding.
Average borrowings under  the  facility  for 1998
were  $1,153,000  from the date of the  first  draw
until December  31, 1998.  The weighted-average
interest rate incurred from the date of inception
until December 31, 1998 was 7.02%.

On  November  14,  1997, the Company acquired  its
headquarters building  and  grounds.   Financing  for
the  acquisition   was obtained  from the same bank
that provides the current  line  of credit in the
amount of $3,560,000.  The five-year mortgage note
amortizes  the  loan  principal on a straight-line
basis  on  a twenty-year schedule.  The variable
interest rate on the note is equivalent  to the
thirty-day LIBOR rate plus 1.75%.  The  note
requires   the  Company  to  meet  certain  financial
covenants consistent  with  those  of  the Credit
Agreement  above.   The property   acquired   acts
as  security  for   the   borrowing. Concurrent  with
the issuance of the mortgage note, the  Company
entered  into  an interest rate swap agreement  with
the  bank. This  agreement effectively changed the
Company's floating  rate exposure  to  a  fixed rate
of 8.26%.  The  interest  rate  swap agreement
matures at the same time as the mortgage note  and
is for  the same notional amount.  The Company is
exposed to credit loss  in  the  event  of
nonperformance  by  the  counterparty. However, the
Company does not anticipate nonperformance  by  the
counterparty  bank.  At December 31, 1998 the  thirty-
day  LIBOR rate plus 1.75% equaled 7.38%.  Interest
paid during the periods was $292,500 in 1998 and
$21,300 in 1997.

On March 22, 1999, the Company received a credit
commitment with a  bank,  that  will refinance the
existing $12  million  Credit Agreement and the
mortgage note.  The credit commitment is for a total
of $15,332,667 which is broken into three separate
credit facilities:   a   $3,332,667  secured  real
estate mortgage, $4,000,000 three-year secured term 
loan, and an $8,000,000 threeyear  revolving line of credit.
The  credit  commitment  is collateralized by substantially 
all of the Company's U.S. assets and stock  pledges for  
the  Company's  U.S.  and foreign subsidiaries.  The commitment 
also requires the Company to  meet certain  financial covenants,
including various coverage  ratios and  a debt to
capitalization ratio.  These covenants within the
credit commitment are less stringent than those
contained in the current Credit Agreement.  The Company 
expects to meet these new covenant requirements during 1999.

The  mortgage  note under the credit commitment calls
for  even quarterly principal payments based on a
twenty-year amortization schedule beginning June 30,
1999.  Borrowings under the mortgage will be subject
to a variable interest rate at LIBOR plus  2.25%.
The  new bank has agreed to assume the underlying
swap agreement which  was  issued associated with the
previous  mortgage  note. The term note under the
credit commitment will require quarterly principal
payments of $250,000 plus interest beginning March
31, 2000.   The revolving line of credit under the
credit commitment will require quarterly interest-
only payments with any remaining borrowings  due at
the end of the three-year commitment  period.
Availability under the revolving line of credit will
be based on eligible  U.S. accounts receivable.
Borrowings under  the term loan  will  bear interest 
at variable rates tied to LIBOR  while the  revolving  
line of credit will bear interest at  comparable LIBOR 
rates or at the bank's prime rate.

Long-term debt obligations were:
                                     December 31,  December 31,
                                            1998          1997
 Borrowings outstanding under
      Credit Agreement                $2,100,000             -

 8.26% mortgage note,
      due November 14, 2002            3,367,167    $3,545,167

 Less current maturities, as            (178,000)     (178,000)
     refinanced
 
Long-term debt                        $5,289,167    $3,367,167


At  December  31,  1998, the Company continues to
classify  the $5,289,167  related to the line of
credit and mortgage  note  as long-term  debt  based
on management's intent  and  ability  to refinance
this debt on a long-term basis.  Maturities  of
longterm debt, as refinanced, are $178,000 for 1999,
$1,178,000 for 2000, $1,178,000 for 2001 and $2,933,167 for 2002.


13.  Acquisition of Tripos Receptor Research Ltd.

On  November 11, 1997, the Company purchased all the
outstanding common  stock  of Receptor Research Ltd,
a U.K. company,  for  a mixture  of  cash,  warrants
and common stock  of  Tripos,  Inc. Warrants  for
20,000 shares of Tripos, Inc. Common Stock  vested
at  December 31, 1998.  Warrants for 30,000 shares
will vest  on December  31,  1999.  The warrants
were recorded at  their  fair market  value at the
date of the grant.  The purchase price  has been
allocated  to  net  identifiable assets  with  the
excess recorded as goodwill.  The goodwill is being
amortized  over  15 years  on a straight-line basis.
The results of operations  for Receptor  Research
are included in these  financial  statements from
the  date  of  the  acquisition.  Pro forma  results
of operations,  assuming the acquisition of Receptor
Research  had occurred  on  January 1, 1997, would
not materially differ  from the reported results of
operations.  The name of the company was changed to
Tripos Receptor Research Ltd. on January 7, 1998.


14.  Earnings Per Share

The following table sets forth the computation of
basis and diluted earnings per share:

                                 1998          1997         1996
Numerator:
  Numerator for basic and
  diluted earnings            $70,620    $2,579,861   $1,952,216
  per share-net income                     

Denominator:
  Denominator for basic
  earnings per share-       3,207,853    3,085,077     2,923,284
  weighted average shares                   

  Effect of dilutive securities:
  Employee stock options      272,388      418,869       298,696

  Denominator for diluted
  earnings per share-
  adjusted weighted         3,480,241    3,503,946     3,221,980 
  average shares and 
  assumed conversions

  Basic earnings per share      $0.02        $0.84         $0.67 
  Diluted earnings per share    $0.02        $0.74         $0.61
  


Report of Independent Auditors


Board of Directors and Shareholders

Tripos, Inc.

      We  have  audited  the  accompanying consolidated  balance 
sheets of Tripos, Inc. as of December 31, 1998 and 1997, and the 
related consolidated  statements of  operations, shareholders' 
equity  and cash flows for each of the three years in the period 
ended December 31, 1998.  Our audits also included the financial 
statement schedule listed in the index at  Item  14(a).  These 
financial statements and schedule are the responsibility of the 
Company's  management.   Our responsibility  is to express an 
opinion on these financial statements and schedule based on our
audits.
  
     We conducted our audits in accordance with generally accepted  
auditing standards.  Those standards require  that we plan and 
perform the audit to obtain reasonable assurance about whether
the   financial  statements  are  free   of material misstatement.   
An audit includes examining, on  a  test  basis, evidence supporting
the amounts and disclosures in the financial statements.   An  audit 
also includes assessing  the accounting principles used and significant 
estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for  our opinion.

      In our opinion, the financial statements referred to above present  
fairly,  in  all material respects,  the  consolidated financial position
of Tripos, Inc. at December  31,  1998 and 1997,  and  the consolidated 
results of its operations  and  its cash  flows  for  each of the
three years in  the  period  ended December 31, 1998,  in  conformity  
with  generally  accepted accounting  principles.   Also  in  our  opinion,
the   related financial statement schedule, when considered in relation 
to the basic financial statements taken as a whole, presents fairly  in 
all material respects the information set forth therein. 

                                               ERNST & YOUNG LLP 

St. Louis, Missouri
February 5, 1999, except for Note 13,
as to which the date is March 22, 1999



Item 9.   Changes in and Disagreements with Accountants on
          Accounting and Financial Disclosure

   None.



Part III


Item 10.  Directors and Officers of the Registrant

The  information  required by this item  is  included
under  the captions "Election of Directors" in the Company's 
Proxy Statement in  connection with its Annual Meeting of 
Shareholders to be held on  May 11,  1999 and is incorporated 
herein by reference.The information  required  by  this item 
relating  to the  Company's executive officers and key employees
is included in the Company's Proxy   Statement under  the  caption   
"Management"  and is incorporated herein by reference.


Item 11.  Executive Compensation


The  information  required by this item  is  included
under  the caption "Election of Directors - Director
Remuneration" and under the  caption  "Executive
Compensation and  Related  Information", except  for
the "Report of the Compensation Committee"  and  the
"Comparison  of  Shareholder  Return",  in  the
Company's  Proxy Statement  in  connection with its
Annual Meeting of Shareholders to  be  held  on  May 11, 
1999 and is  incorporated  herein  by reference.


Item 12.  Security Ownership of Certain Beneficial
          Owners and Management

The  information  required by this item  is  included under  
the caption "Ownership  of  Securities"  in  the  Company's
Proxy Statement  in  connection with its Annual Meeting of
Shareholders to  be  held  on  May  11,  1999 and is incorporated  
herein  by reference.


Item 13.  Certain Relationships and Related Transactions


The  Company  has  not  engaged in any  transaction
or  had  any relationship  with  any executive
officer  or  director  that  is required to be
disclosed pursuant to Item 404 of Regulation S-K.



Part IV


Item 14.  Exhibits, Financial Statement Schedule and Reports on Form 8-K


(a)  The following documents are filed as part of this Annual Report 
on Form 10-K:

     1.   Financial Statements.
          See Part II, Item 8  Financial Statements and Supplementary Data


     2.   Financial Statement Schedule

          The following financial statement schedule
          of Tripos, Inc. is included in this annual report on Form 10-K.

                                                            Page Number
          Schedule II - Valuation and Qualifying Accounts      II-1

     Schedules other than that which is listed above
     have been omitted since they are either not
     required, are not applicable, or the required
     information is shown in the financial statements
     or related items.

     3.   Exhibits - see the following Exhibit Index of this report.

     The following exhibits listed in the Exhibit Index are filed 
     with this report:

     12   See Part II, Item 8; Financial Statements and Supplementary Data
     23.1 Consent of Ernst & Young LLP, Independent Auditors
     27   Financial Data Schedule

(b)  Reports on Form 8-K filed in the fourth quarter of 1998:

     None.

(c)  Exhibits - see Exhibit Index:
     Management Contracts and Compensatory Plans -
     the following exhibits listed in the Exhibit
     Index are listed below pursuant to item 14(a)-3 of Form 10-K:
     
     10.1    Tripos, Inc. 1994 Stock Option Plan
     10.2    Tripos, Inc. 1994 Employee Stock Purchase Plan
     10.3    Tripos, Inc. 1994 Director Option Plan
     10.4    Tripos, Inc. 1994 401(k) Plan
     10.5    Amendment to the 1994 401(k) Plan
     10.6    Tripos, Inc. 1996 Director Stock Compensation Plan


 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.

                     SIGNATURES
                          
  TRIPOS, INC.
  By: /s/John P. McAlister                   March 26, 1999 
      John P. McAlister, III                 Date
      President, Chief Executive Officer 
      and Member of the Board of Directors

                  POWER OF ATTORNEY
                          
Know  all men by these presents, that each person
whose signature appears  below  constitutes and
appoints John P. McAlister,  III, Colleen  A.  Martin
and John D. Yingling, and each of them  (with full
power  to each of them to act alone), his true  and
lawful attorney-in-fact  and agent, with full power
of substitution  and resubstitution, for him and in
his name, place and stead, in  any and  all
capacities, to sign any or all amendments to this
report on  Form 10-K for the fiscal year ended
December 31, 1998, and to file  the same, with all
exhibits thereto and other documents  in connection
therewith,   with  the   Securities   and   Exchange
Commission, granting unto said attorneys-in-fact and
agents,  and each of them, full power and authority
to do and perform each and every  act  and thing
requisite and necessary to be done  in  and about
the premises, as fully to all intents and purposes
as  he might or could do in person, hereby ratifying
and confirming  all that  said attorneys-in-fact and
agents, or any of them, or their substitutes,  may
lawfully do or cause  to  be  done  by  virtue hereof.

Pursuant  to the requirements of the Securities
Exchange  Act  of 1934,  this report has been signed
below by the following persons on  behalf  of the
Registrant and in the capacities and on the dates indicated.

Name                        Title                            Date
/s/ John P. McAlister       Chief Executive Officer,         March 26, 1999
John P. McAlister III       President and Director
                            (Principal Executive Officer)

/s/ Colleen A. Martin       VP, Chief Financial Officer      March 26, 1999
Colleen A. Martin           and Secretary
                            (Principal Financial Officer)

/s/ John D. Yingling        Corporate Controller             March 26, 1999 
John D. Yingling            and Treasurer
                            (Principal Accounting Officer)

/s/ Ralph S. Lobdell        Chairman of the Board of         March 26, 1999
Ralph S. Lobdell            Directors

/s/ Stewart Carrell         Director                         March 26, 1999
Stewart Carrell

/s/ Gary Meredith           Director                         March 26, 1999
Gary Meredith

/s/ Ferid Murad             Director                         March 26, 1999
Ferid Murad

/s/ Alfred Alberts          Director                         March 26, 1999
Alfred Alberts




                         TRIPOS, INC.
                          
          SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1996, December 31,1997 and December 31, 1998
                        (in thousands)
                            
     Col. A        Col. B          Col. C          Col. D        Col. E
                                 Additions
                  Balance    Charged   Charged    Deductions    Balance
                  at         to Cost   Other      Charge to     at
  Description     Beginning  and       Accounts   Reserves      End of
                  of Period  Expenses                           Period

Allowance for
Doubtful Accounts
          1996      $40       $140        $--       $103        $77
          1997       77          1         --         --         78
          1998       78         60         --         39         99

Valuation
Allowance for
Deferred Income 
Tax Assets:
          1996     $414        $--       $143       $414       $143 
          1997      143         --         --         98         45 
          1998       45         --         --         45         --
          
          
          
          
          
Exhibit                  Exhibit Index
Number                   Description

2.1 a  Distribution Agreement between Tripos and E&S
3.1 c  Amended and Restated Articles of Incorporation dated January 26, 1996
3.2 a  Amended and Restated Bylaws of Tripos
10.1b  Tripos, Inc. 1994 Stock Option Plan
10.2b  Tripos, Inc. 1994 Employee Stock Purchase Plan
10.3b  Tripos, Inc. 1994 Director Option Plan
10.4b  Tripos, Inc. 1994 401(k) Plan
10.5c  Amendment to the 1994 401(k) Plan
10.6c  Tripos, Inc. 1996 Director Stock Compensation Plan 
10.7c  Master Collaboration Agreement between Tripos and MDL Information 
       Systems, Inc. dated February 2, 1996
10.8c  Rights Agreement between Tripos and Boatmen's Trust Company, as 
       Rights Agent, dated January 26, 1996
10.9c  Strategic Business Alliance Teaming Agreement between Tripos and 
       MDS Panlabs, Inc. dated June 30, 1995
10.10d Credit Agreement-Line of Credit, dated as of September 12, 1996, 
       between Tripos and NationsBank, N.A. formerly known as Boatmen's 
       National Bank of St. Louis)
10.11e Loan Agreement dated November 14, 1997 between NationsBank, N.A. 
       and Tripos Realty, LLC.
10.12e Purchase and Sale Agreement dated June 3, 1997 between
       Cahn Realty Associates and Tripos, Inc.
10.13f Settlement Agreement between Tripos, Inc. and Panlabs, Inc. dated
       March 30, 1998
10.14g Loan Agreement between Tripos, Inc. and NationsBank, N.A.
       dated October 16, 1998
21     Subsidiaries of the Registrant: Tripos Realty, LLC, 
       Tripos S.A.R.L., Tripos GMBH, Tripos UK Holdings Limited, 
       Tripos UK Limited, and Tripos Receptor Research Limited
23.1   Consent of Ernst & Young LLP, Independent Auditors
24     Power of Attorney, See the signature page
27     Financial Data Schedule

a      Previously filed as an exhibit to the Company's Registration 
       Statement on Form 10  dated May 27, 1994 and incorporated herein by
       reference 
b      Previously filed as an exhibit to the Company's Registration 
       Statement on Form S-8, 33-79610 dated May 31, 1994 and incorporated 
       herein by reference.
c      Previously filed as an exhibit to the Company's Form 10-K for the
       fiscal year ended December 31, 1995 and incorporated herein by
       reference.
d      Previously filed as an exhibit to the Company's Form 10-Q
       for the period ended September 30, 1996 and incorporated herein by 
       reference.
e      Previously filed as an exhibit to the Company's Form 10-K
       for the fiscal year ended December 31, 1997 and incorporated
       herein by reference.
f      Previously filed as an exhibit to the Company's Form 10-Q
       for the period ended June 30, 1998 and incorporated herein by
       reference. 
g      Previously filed as an exhibit to the Company's Form 10-Q
       for the period ended September 30, 1998 and incorporated herein 
       by reference.
     
     
Exhibit 23.1




             Consent of Independent Auditors
                            
                            
We  consent to the incorporation by reference in the
Registration Statements  (Form S-8, No. 33-79610)
pertaining  to  the  Tripos, Inc.  1994  Stock  Plan,
the Tripos, Inc.  1994  Director  Option Plan,  and  the
Tripos, Inc. 1994 Employee Stock Purchase  Plan, (Form
S-8,  No. 333-09459) pertaining to the Tripos,  Inc.
1996 Director  Stock Compensation Plan and the amendment
of  the  1994 Director  Option  Plan, and (Form S-8, No.
333-33163)  pertaining to  the  Tripos, Inc. 1996 Director Stock
Compensation Plan,  the 1994  Stock Option Plan, and
the 1994 Director Option Plan, (Form S-8,  No. 333-61829) 
pertaining to the Tripos, Inc. 1994 Employee Stock Purchase 
Plan and the 1994 Stock Option Plan of our report dated  
February 5, 1999 (except Note 13, as to which the date is 
March  22,  1999),  with respect to the  consolidated  
financial statements and schedule of Tripos, Inc. included 
in  its  Annual Report (Form 10-K) for the year ended December 31, 1998.
 
                                        /s/ Ernst & Young LLP
St. Louis, Missouri
March 26, 1999