UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                    Washington, D. C.  20549
 
                           FORM 10-Q
 
   X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934
 
         For the quarterly period ended April 30, 1997
                               OR
   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934
 
          For the transition period from      to
                           ----------
                Commission File Number 1-4146-1
                           ----------
 
                 NAVISTAR FINANCIAL CORPORATION
     (Exact name of Registrant as specified in its charter)
 
           Delaware                                  36-2472404
 (State or other jurisdiction of        (I.R.S. Employer Identification No.)
  incorporation or organization)
 
    2850 West Golf Road Rolling Meadows, Illinois         60008
     (Address  of  principal executive offices)         (Zip  Code)
 
 Registrant's telephone number including area code 847-734-4000
 
 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
 and  (2)  has been subject to such filing requirements for  the
 past 90 days.  Yes X No
 
              APPLICABLE ONLY TO ISSUERS INVOLVED
                IN BANKRUPTCY PROCEEDINGS DURING
                   THE PRECEDING FIVE YEARS:
 
 Indicate  by  check mark whether the registrant has  filed  all
 documents and reports required to be filed by Sections  12,  13
 or  15 (d) of the Securities Exchange Act of 1934 subsequent to
 the  distribution  of securities under a plan  confirmed  by  a
 court.  Yes   No
 
             APPLICABLE ONLY TO CORPORATE ISSUERS:
 
 As  of  May 31, 1997, the number of shares outstanding  of  the
 registrant's common stock was 1,600,000.
 
 THE   REGISTRANT  IS  A  WHOLLY-OWNED  SUBSIDIARY  OF  NAVISTAR
 INTERNATIONAL TRANSPORTATION CORP. AND MEETS THE CONDITIONS SET
 FORTH IN GENERAL INSTRUCTIONS H(1)(a) AND (b) OF FORM 10-Q  AND
 IS  THEREFORE  FILING  THIS FORM WITH  THE  REDUCED  DISCLOSURE
 FORMAT.

<PAGE>

                NAVISTAR FINANCIAL CORPORATION
                       AND SUBSIDIARIES


                            INDEX



                                                                         Page

PART I.   FINANCIAL INFORMATION

 Item 1.  Financial Statements:

          Statement of Consolidated Income and Retained Earnings--
          Three Months and Six Months Ended April 30, 1997 and 1996        2

          Statement of Consolidated Financial Condition --
          April 30, 1997; October 31, 1996; and April 30, 1996             3

          Statement of Consolidated Cash Flow --
          Six Months Ended April 30, 1997 and 1996                         4

          Notes to Consolidated Financial Statements                       5

 Item 2.  Management's Discussion and Analysis of Results of
          Operations and Financial Condition                               9


PART II.  OTHER INFORMATION

 Item 6.  Exhibits and Reports on Form 8-K                                14

Signature                                                                 14

<PAGE>

                       PART I - FINANCIAL INFORMATION


Item 1.   Financial Statements


              NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
     STATEMENT OF CONSOLIDATED INCOME AND RETAINED EARNINGS (Unaudited)
                           (Millions of dollars)

<TABLE>
<CAPTION>
                                              Three Months Ended    Six Months Ended
                                                   April 30             April 30
                                               1997        1996     1997        1996
<S>                                            <C>       <C>        <C>       <C>
Revenue
 Retail notes and lease financing  . . . . .   $ 26.2    $ 20.9     $ 51.9    $ 48.1 
 Wholesale notes . . . . . . . . . . . . . .      9.3      15.3       18.5      31.4 
 Accounts  . . . . . . . . . . . . . . . . .      7.1       6.0       14.3      12.8 
 Servicing fee income  . . . . . . . . . . .      4.5       5.0       10.1      10.6 
 Insurance premiums earned . . . . . . . . .      8.1      10.7       16.5      21.1 
 Marketable securities . . . . . . . . . . .      2.1       2.8        4.1       5.4 
       Total . . . . . . . . . . . . . . . .     57.3      60.7      115.4     129.4 


Expense
 Cost of borrowing
     Interest  . . . . . . . . . . . . . . .     17.2      19.7       31.5      36.8
     Other . . . . . . . . . . . . . . . . .      1.4       2.2        3.0       5.3
       Total . . . . . . . . . . . . . . . .     18.6      21.9       34.5      42.1

 Credit, collection and administrative . . .      7.5       7.0       14.5      13.8
 Provision for losses on receivables . . . .      0.5       1.6        1.2       2.7
 Insurance claims and underwriting . . . . .      9.7      13.6       17.6      24.5
 Depreciation expense and other. . . . . . .      5.8       2.1       10.5       4.9
       Total . . . . . . . . . . . . . . . .     42.1      46.2       78.3      88.0


Income Before Taxes on Income  . . . . . . .     15.2      14.5       37.1      41.4

Taxes on Income  . . . . . . . . . . . . . .      5.9       5.8       14.4      16.1

Net Income . . . . . . . . . . . . . . . . .      9.3       8.7       22.7      25.3

Retained Earnings

 Beginning of period . . . . . . . . . . . .    120.8      90.6      107.4      84.0

 Dividends paid  . . . . . . . . . . . . . .     30.0       0.0       30.0      10.0

 End of period . . . . . . . . . . . . . . .   $100.1    $ 99.3     $100.1     $99.3
</TABLE>


See Notes to Consolidated Financial Statements.

<PAGE>

              NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
         STATEMENT OF CONSOLIDATED FINANCIAL CONDITION (Unaudited)
                           (Millions of dollars)

<TABLE>
<CAPTION>
                                                  April 30    October 31    April 30
                                                    1997         1996         1996 
                ASSETS

<S>                                               <C>          <C>          <C>
Cash and Cash Equivalents . . . . . . . . . . .   $    2.8     $    6.7     $    6.7
Marketable  Securities  . . . . . . . . . . . .      122.3        128.1        125.0

Finance Receivables
   Retail  notes and lease financing  . . . . .      681.1        733.3        746.4
   Wholesale  notes . . . . . . . . . . . . . .      200.8        100.5        323.9
   Accounts . . . . . . . . . . . . . . . . . .      358.2        371.4        298.6
                                                   1,240.1      1,205.2      1,368.9  

   Allowance for losses . . . . . . . . . . . .      (12.0)       (11.6)       (10.4)
      Finance Receivables, Net  . . . . . . . .    1,228.1      1,193.6      1,358.5

Amounts Due from Sales of Receivables . . . . .      209.1        264.3        267.3
Equipment on Operating Leases, Net  . . . . . .      107.3        101.1         54.0
Repossessions . . . . . . . . . . . . . . . . .       29.9         13.2          9.8
Reinsurance Receivables . . . . . . . . . . . .       23.6         21.2         22.8
Other Assets  . . . . . . . . . . . . . . . . .       59.3         65.6         58.6
Total Assets  . . . . . . . . . . . . . . . . .   $1,782.4     $1,793.8     $1,902.7

     LIABILITIES AND SHAREOWNER'S EQUITY


Short-Term Borrowings . . . . . . . . . . . . .   $  145.0     $   99.4    $    49.3
Accounts Payable
   Affiliated companies . . . . . . . . . . . .      126.2         24.5         49.0
   Other  . . . . . . . . . . . . . . . . . . .       39.9         42.2         56.7
      Total . . . . . . . . . . . . . . . . . .      166.1         66.7        105.7

Dealers' Reserves . . . . . . . . . . . . . . .       22.0         22.3         22.5
Unpaid Insurance Claims and Unearned Premiums .       92.0         99.6        103.8
Accrued Income Taxes  . . . . . . . . . . . . .        9.6         10.8         10.9
Accrued Interest  . . . . . . . . . . . . . . .        7.5          8.9         11.0
Senior and Subordinated Debt  . . . . . . . . .    1,067.8      1,206.4      1,328.8

Shareowner's Equity
  Capital stock (Par value $1.00, 1,600,000
      shares issued and outstanding)
      and paid-in capital . . . . . . . . . . .      171.0        171.0        171.0
   Retained earnings  . . . . . . . . . . . . .      100.1        107.4         99.3
  Unrealized gains (losses) on marketable
      securities  . . . . . . . . . . . . . . .        1.3          1.3          0.4
      Total . . . . . . . . . . . . . . . . . .      272.4        279.7        270.7
Total Liabilities and Shareowner's Equity . . .   $1,782.4     $1,793.8     $1,902.7
</TABLE>


See Notes to Consolidated Financial Statements.

<PAGE>

              NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
              STATEMENT OF CONSOLIDATED CASH FLOW (Unaudited)
                           (Millions of dollars)

<TABLE>
<CAPTION>
                                                              Six Months Ended
                                                                  April 30
                                                              1997        1996
<S>                                                          <C>        <C>
Cash Flow From Operations
  Net income  . . . . . . . . . . . . . . . . . . .  . . . . $ 22.7     $ 25.3
  Adjustments to reconcile net income to cash
     provided from operations:
     Gains on sales of receivables . . . . . . . . . . . . .   (6.9)     (12.2)
     Depreciation and amortization . . . . . . . . . . . . .   10.8        7.8
     Provision for losses on receivables . . . . . . . . . .    1.2        2.7
     Increase (decrease) in accounts payable to affiliates .    3.4      (69.4)
     Other . . . . . . . . . . . . . . . . . . . . . . . . .  (13.3)       3.7
         Total . . . . . . . . . . . . . . . . . . . . . . .   17.9      (42.1)

Cash Flow From Investing Activities
  Proceeds from sold retail notes  . . . . . . . . . . . . .  481.0      514.2
  Purchase of retail notes and lease receivables . . . . . . (444.5)    (575.6)
  Principal collections on retail notes and
    lease receivables. . . . . . . . . . . . . . . . . . . .   43.3       47.1
  Acquisitions (over) under cash collections of wholesale
     notes and accounts receivable . . . . . . . . . . . . .  (71.1)      12.1
  Purchase of marketable securities. . . . . . . . . . . . .  (46.5)     (36.1)
  Proceeds from sales and maturities
     of marketable securities  . . . . . . . . . . . . . . .   53.9       42.4
  Increase in property and equipment leased to others. . . .  (16.0)     (19.2)
         Total . . . . . . . . . . . . . . . . . . . . . . .    0.1      (15.1)

Cash Flow From Financing Activities
  Net increase (decrease) in short-term borrowings . . . . .   45.6       (1.2)
  Net decrease in bank revolving credit facility usage . . . (204.0)     (50.0)
  Net increase in asset-backed commercial paper
     facility usage  . . . . . . . . . . . . . . . . . . . .    0.3       93.3
  Proceeds from long-term debt . . . . . . . . . . . . . . .   78.9        0.0
  Principal payments on long-term debt . . . . . . . . . . .  (11.0)       0.0
  Net increase in advance from Transportation  . . . . . . .   98.3       28.9
  Dividends paid to Transportation . . . . . . . . . . . . .  (30.0)     (10.0)
         Total . . . . . . . . . . . . . . . . . . . . . . .  (21.9)      61.0

(Decrease) increase in Cash and Cash Equivalents . . . . . .   (3.9)       3.8

Cash and Cash Equivalents at Beginning of Period . . . . . .    6.7        2.9

Cash and Cash Equivalents at End of Period . . . . . . . .  $   2.8    $   6.7

Supplemental disclosure of cash flow information

  Interest paid  . . . . . . . . . . . . . . . . . . . . .  $  32.1    $  37.9

  Income taxes paid  . . . . . . . . . . . . . . . . . . .  $  15.3    $  16.5
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>

                NAVISTAR FINANCIAL CORPORATION
                       AND SUBSIDIARIES


          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         (Unaudited)

1.   The consolidated financial statements include the accounts
     of Navistar Financial Corporation ("NFC") and its wholly-owned
     subsidiaries    ("Corporation").    Navistar    International
     Transportation Corp. ("Transportation"), which is wholly-owned
     by  Navistar International Corporation ("Navistar"),  is  the
     parent company of NFC.

     The  accompanying  unaudited financial statements  and  notes
     have   been   prepared  in  accordance  with  the  accounting
     policies  set  forth in the Corporation's 1996 Annual  Report
     on  Form  10-K  and  should be read in conjunction  with  the
     Notes to the Consolidated Financial Statements therein.

     In   the  opinion  of  management,  these  interim  financial
     statements  reflect  all adjustments,  consisting  of  normal
     recurring   accruals,  necessary  to   present   fairly   the
     financial position, results of operations and cash  flow  for
     the  interim  periods  presented.  Interim  results  are  not
     necessarily  indicative of results to  be  expected  for  the
     full  year.   Certain 1996 amounts have been reclassified  to
     conform  with  the  presentation used in the  1997  financial
     statements.


2.   Finance  receivable  balances do not include  receivables
     sold  by the Corporation to public and private investors with
     limited  recourse  provisions.  Uncollected sold  receivables
     balances, net of unearned finance income, are as follows:

<TABLE>
<CAPTION>
                                         April 30     October 31     April 30
                                           1997          1996          1996
                                                      ($Millions)

     <S>                                 <C>           <C>           <C>
     Retail notes . . . . . . . . . .    $1,373.7      $1,366.4      $1,325.4
     Wholesale notes  . . . . . . . .       400.0         500.0         500.0
         Total  . . . . . . . . . . .    $1,773.7      $1,866.4      $1,825.4
</TABLE>

     In  November  1996, the Corporation sold  $487  million  of
     retail notes, net of unearned finance income, through Navistar
     Financial Retail Receivables Corporation ("NFRRC"), a wholly-
     owned subsidiary, to an owner trust which, in turn, sold $455
     million of notes and $32 million of certificates to investors.
     The proceeds, net of underwriting fees and credit enhancements,
     were $474 million.

     On  January  1,  1997, the Corporation adopted  Statement  of
     Financial  Accounting  Standards No. 125  ("SFAS  No.  125"),
     "Accounting  for Transfers and Servicing of Financial  Assets
     and  Extinguishments  of  Liabilities",  for  all  applicable
     transactions.  SFAS No. 125 requires that amounts  previously
     classified  as excess servicing be reclassified  as  interest
     only  receivables  and  that  such  amounts  be  recorded  at
     estimated   fair   value.  Restatement   of   the   financial
     statements  of  prior  periods  is  not  permitted.  The  new
     standard  did not have a material effect on the Corporation's
     net income or financial condition.

<PAGE>
  
                NAVISTAR FINANCIAL CORPORATION
                       AND SUBSIDIARIES


          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         (Unaudited)


     The  Corporation's  subordinated retained  interests  in  sold
     receivables  are generally restricted and subject  to  limited
     recourse  provisions.   The terms of retail  receivable  sales
     require  the  Corporation to maintain cash reserves  with  the
     trusts  as  credit  enhancement for public  sales.   The  cash
     reserves  held  by the trusts are restricted for  use  by  the
     securitized sales agreements.  The following is a  summary  of
     amounts included in "Amounts Due from Sales of Receivables":

<TABLE>
<CAPTION>
                                          April 30    October 31    April 30
                                            1997         1996         1996
                                                     ($ Millions)

    <S>                                    <C>          <C>          <C>
    Cash held and invested by
       trusts  . . . . . . . . . . . .     $ 75.7       $ 85.2       $ 80.3
    Subordinated retained interests
       in wholesale receivables  . . .       69.4         85.4         85.8
    Subordinated retained interests
       in retail receivables . . . . .       67.3         96.0         99.7
    Interest only receivables. . . . .        9.2            -            -
    Excess servicing . . . . . . . . .          -         10.1         12.8
    Allowance for credit losses  . . .      (12.5)       (12.4)       (11.3)
           Total . . . . . . . . . . .     $209.1       $264.3       $267.3
</TABLE>

    The allowance for losses on receivables is summarized as
    follows:

<TABLE>
<CAPTION>
                                          April 30    October 31    April 30
                                            1997         1996         1996
                                                      ($Millions)
   <S>                                      <C>          <C>          <C>
   Allowance pertaining to:
       Owned notes . . . . . . . . .        $12.0        $11.6        $10.4
       Sold notes  . . . . . . . . .         12.5         12.4         11.3
          Total  . . . . . . . . . .        $24.5        $24.0        $21.7
</TABLE>

On  May  7,  1997, the Corporation sold $500 million  of  retail
notes,  net  of unearned finance income, through "NFRRC"  to  an
owner  trust,  which  in turn, sold $500  million  of  notes  to
investors.   The proceeds, net of underwriting fees  and  credit
enhancements,  were $477 million.  A gain of  $6.4  million  was
recognized on the sale.

<PAGE>

                NAVISTAR FINANCIAL CORPORATION
                       AND SUBSIDIARIES


          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         (Unaudited)



3.   Average short-term debt outstanding during the first  six
     months of fiscal 1997 and 1996, which included commercial paper 
     and  bank borrowings, was approximately $126 million and  $56
     million,  at  an average cost of 5.9% and 6.1%, respectively.
     The weighted average interest rate on all debt, including short-
     term debt and the effect of discounts and related amortization,
     was 6.2% and 6.6% for the first six months of fiscal 1997 and
     1996, respectively.

     Accounts payable due to affiliated companies at April  30,
     1997 and 1996 include an inter-company advance of $98.3 million
     and $28.9 million, respectively.  The advance, which is payable
     to  Transportation,  accrues interest at  the   Corporation's
     incremental  short-term  borrowing  rate. There was no inter-
     company advance outstanding at October 31, 1996.


4.   The  Corporation  has  $1,325  million  of  contractually
     committed support facilities, consisting of a $925 million bank
     revolving  credit  facility  and a $400  million  asset-backed
     commercial paper ("ABCP") program supported by a bank liquidity
     facility.   Each  of these facilities has a maturity  date  of
     March  31, 2001.  At April 30, 1997, unused commitments  under
     these  facilities  were $440 million, of  which  $145  million
     provided  funding backup for the outstanding short-term  debt.
     The  remaining  $295 million, when combined with  unrestricted
     cash and cash equivalents, made $298 million available to fund
     the  general business purposes of the Corporation at April 30,
     1997.

     In  the  first quarter of fiscal 1997, the Corporation entered
     into  two sale-leaseback transactions involving vehicles  that
     were  subject  to retail leases with end users. The  aggregate
     value  of  the leased vehicles was approximately $75  million.
     In   these  transactions,  the  Corporation  transferred   the
     vehicles to third party lessors and simultaneously leased  the
     vehicles  back  from  the lessors.  In each  transaction,  the
     Corporation  pledged  the  associated  retail  leases  to  the
     lessors  as  collateral.  As of April 30, 1997 the outstanding
     capital lease obligation was $68 million.

     In  May  1997,  the  Corporation sold $100 million  of  Senior
     Subordinated Notes due June 2002.  The net proceeds  from  the
     sale  of  the  Notes offered were approximately $97.5  million
     after  deduction of the underwriting compensation and  certain
     other  estimated  expenses.   The  Corporation  used  the  net
     proceeds to repurchase $6.0 million of its outstanding  Senior
     Subordinated   Notes   due  November  1998   and   to   reduce
     outstanding  indebtedness  under  the  bank  revolving  credit
     facility.

     Effective  May 27, 1997, the Corporation amended and  restated
     its  bank  revolving credit facility to permit the Corporation
     to  lend  up  to  $100 million to Transportation,  secured  by
     Transportation's  service  parts  and  new  and   used   truck
     inventories,  and  to  enable the  Corporation,  with  certain
     covenant   limitations,  to  make  loans  to  Transportation's
     Mexican finance affiliates.

<PAGE>

                NAVISTAR FINANCIAL CORPORATION
                       AND SUBSIDIARIES


          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         (Unaudited)


5.   The  Corporation manages its exposure to  fluctuations  in
     interest  rates  and limits the amount of  fixed  rate  assets
     funded  with  variable rate debt by selling fixed rate  retail
     receivables on a fixed rate basis and, to a lesser extent,  by
     utilizing  derivative financial instruments. These  derivative
     financial instruments may include interest rate swaps, interest
     rate caps and forward interest rate contracts.  The Corporation
     manages exposure to counter-party credit risk by entering into
     derivative   financial   instruments  with   major   financial
     institutions that can be expected to fully perform  under  the
     terms of such agreements.

     During March through April 1997, the Corporation entered into
     $500 million of forward interest rate lock agreements on a U.S.
     Treasury security maturing in 1999 related to the May 1997 sale
     of  retail  receivables.  These hedge agreements,  which  were
     closed in conjunction with the pricing of the sale, resulted in
     a  $0.7 million loss which was deferred at April 30, 1997, and
     netted against the gain on the sale of receivables recognized in
     May 1997.

     In  April 1997, the Corporation entered into a $100 million
     forward interest rate lock agreement on a U.S. Treasury security
     maturing in March 2002 related to the May 1997 subordinated debt
     issue.   The  hedge agreement, which was closed in conjunction
     with  the pricing of the subordinated debt, resulted in a $0.9
     million  loss which will be amortized and included in interest
     expense over the life of the subordinated debt.

     In the third quarter of fiscal 1997,  the  Corporation entered
     into $100  million of forward  starting  swaps related to  the
     anticipated  November  1997  sale of  retail receivables.  The
     swap agreements start on October 31,  1997  and expire on July 
     15, 1999.  The  Corporation  intends to close these  positions
     in  October 1997 on the pricing date of the sale.  The gain or
     loss  which  will  result  from  the  swap transaction will be
     included in  the gain or  loss  on  the  sale  of  receivables
     recognized in November 1997.


6.   During  1992,  auditors  of  the  Illinois  Department  of
     Revenue ("Department") began an income tax audit of NFC for the
     fiscal  years  ended  October 31, 1989,  1990  and  1991.   On
     February 1, 1994, the Department issued a Notice of Deficiency
     to NFC for approximately $12 million.  The Department has taken
     the  position  that nearly 100% of NFC's income  during  these
     years  should  be  attributed to and taxed  by  Illinois.   On
     February  14, 1997, a state law was enacted which will  negate
     the   Department's  position  and  will  relieve  NFC  of  the
     aforementioned Notice of Deficiency.
  
     The  Corporation and its subsidiaries are subject  to  various
     other  claims arising in the ordinary course of business,  and
     are  parties  to  various legal proceedings  which  constitute
     ordinary routine litigation incidental to the business of  the
     Corporation  and  its subsidiaries.  In  the  opinion  of  the
     Corporation's management, none of these proceedings or  claims
     are  material  to the business or the financial  condition  of
     the Corporation.
  
<PAGE>

                NAVISTAR FINANCIAL CORPORATION
                         AND SUBSIDIARIES
                               
                               
                               
ITEM  2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF  RESULTS  OF OPERATIONS
          AND FINANCIAL CONDITION


Certain statements under this caption constitute "forward-looking
statements" under the Securities Reform Act, which involve risks
and   uncertainties.  Navistar  Financial  Corporation's  actual
results  may differ significantly from the results discussed  in
such  forward-looking statements.  Factors that might cause such
a  difference  include, but are not limited to, those  discussed
under the heading "Business Outlook".

Financing Volume

In the first six months of fiscal 1997 industry demand for Class
5  through 8 trucks declined approximately 5% compared with  the
same   period  of  1996.   In  the  first  half  of  1997,   the
Corporation's  retail financing acquisitions,  including  retail
notes and finance and operating leases, were $472 million or 18%
lower  than the comparable period of fiscal 1996.  The  decrease
is  primarily  the result of the lower industry demand  and  the
highly    competitive   commercial   financing   market.     The
Corporation's  share  of  the retail  financing  of  new  trucks
manufactured by Transportation and sold in the United States was
13%  during the first half of 1997 compared with 18% during  the
first  six  months  of  1996. Serviced retail  notes  and  lease
financing  balances  were $2.2 billion at  April  30,  1997  and
October 31, 1996 compared with $2.1 billion at April 30, 1996.

During  the  first  six  months of fiscal  1997  and  1996,  the
Corporation  supplied  95%  of the wholesale  financing  of  new
trucks sold to Transportation's dealers, slightly above the  94%
supplied  in  the  comparable period of  1996.  Transportation's
dealers  have reduced inventory levels from year ago  levels  in
part  due  to  lower customer demand.  Serviced  wholesale  note
balances were $670 million at April 30, 1997 compared with  $676
million at October 31, 1996 and $910 million at April 30, 1996.

Owned finance receivables and lease balances, including retained
interests  in sold retail and wholesale receivables,  were  $1.4
billion  at April 30, 1997 and October 31, 1996 and $1.5 billion
at  April  30, 1996.  Owned balances as of April 1997 were  $0.1
billion  lower  than April 1996 primarily as a result  of  lower
wholesale  financing  activity, offset in  part  by  lower  sold
wholesale  balances due to the maturity of one  tranche  of  the
wholesale note trust.  Net sold retail receivable balances  were
$1.4 billion at April 30, 1997 and October 31, 1996 compared  to
$1.3 billion at April 30, 1996.  Sold wholesale notes receivable
declined  to $400 million from $500 million at October 31,  1996
and April 30, 1996.


<PAGE>

                 NAVISTAR FINANCIAL CORPORATION
                        AND SUBSIDIARIES


ITEM  2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF  RESULTS  OF OPERATIONS
          AND FINANCIAL CONDITION (continued)


Results of Operations

The components of net income for the three and six month periods
ended April 30 are as follows:

<TABLE>
<CAPTION>
                                              Three Months        Six Months
                                             Ended April 30     Ended April 30
                                             1997      1996     1997      1996
<S>                                         <C>       <C>       <C>      <C>
Income before income taxes:
  Finance operations. . . . . . . . . . .   $14.9     $14.7     $34.4    $39.7
  Insurance operations. . . . . . . . . .     0.3       (.2)      2.7      1.7
     Income before taxes. . . . . . . . .    15.2      14.5      37.1     41.4
Taxes on income . . . . . . . . . . . . .     5.9       5.8      14.4     16.1
     Net income . . . . . . . . . . . . .   $ 9.3     $ 8.7     $22.7    $25.3
</TABLE>

In  the  second quarter of fiscal 1997, the Corporation's pretax
income  of $15.2 million was $.7 million higher than the  second
quarter  of  fiscal  1996.   The Corporation  experienced  lower
borrowing  costs  due to the maturity of high yield  fixed  rate
debt  in  the  third quarter of fiscal 1996 and a  reduction  in
provision for losses due to lower retail financing activities.

Pretax income during the first six months of 1997 decreased $4.3
million to $37.1 million compared to 1996 primarily as a  result
of lower wholesale financing activities and lower gains on sales
of retail notes partially offset by lower borrowing costs due to
the maturity of the high yield fixed rate debt.

Retail note and lease revenue increased $3.8 million to $51.9 in
the  first  half  of  1997 compared to 1996.   The  increase  is
primarily the result of higher average owned finance receivables
and  investment  in operating leases offset, in part,  by  lower
gains  on sales of retail notes.  Gains on sales of retail notes
receivable  during the first half of 1997 were $6.9  million  on
$487  million sold compared with gains of $12.2 million on  $525
million  sold  in the first half of 1996.  The higher  gains  in
fiscal 1996 resulted from higher margins on retail notes due  to
declining  market interest rates prior to the sale  in  November
1995.   During  a  declining  interest  rate  environment,   the
Corporation's  acquisition spreads improve as the  Corporation's
cost of borrowing differs from the time when interest rates  are
quoted  to  borrowers and the time when notes are acquired.   In
addition, the effective interest rate for each sale is based  on
market interest rates at the time of the sale, which may  be  up
to six months after the Corporation acquired the retail notes.

Wholesale note revenue decreased 41% in 1997 to $18.5 million as
a  result  of  lower average wholesale note balances  and  lower
average yields relating to a lower prime interest rate.

<PAGE>


                       NAVISTAR FINANCIAL CORPORATION
                        AND SUBSIDIARIES



ITEM  2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF  RESULTS  OF OPERATIONS
          AND FINANCIAL CONDITION (continued)



Results of Operations (continued)

Borrowing costs declined $7.6 million to $34.5 million during the
first  half  of 1997 due to lower wholesale funding requirements
and  lower  borrowing rates. The Corporation's weighted  average
interest  rate  on all debt declined to 6.2% from  6.6%  in  the
first  six months of 1996 primarily due to the maturity of  high
fixed  rate  public debt in June 1996 and lower market  interest
rates.

The  provision for losses decreased $1.5 million to $1.2 million
during  the  first six months of 1997 as compared  to  the  same
period  of fiscal 1996.  The lower provision for losses in  1997
is   a  result  of  lower  retail  financing  activities.    The
Corporation's allowance for losses as a percentage  of  serviced
finance  receivables was .77%, .74% and .65% at April 30,  1997,
October 31, 1996 and April 30, 1996, respectively.

Depreciation  expense and other during the first six  months  of
1997  was  $10.5  million  compared  to  $4.9  million  in   the
comparable period of 1996.  The increase is primarily the result
of a larger investment in equipment under operating leases.

Harco Insurance Company ("Harco"), the Corporation's wholly-owned
insurance subsidiary, had pretax income of $2.7 million  in  the
first  six months of fiscal 1997 up $1.0 million from the  first
six  months of fiscal 1996.  This increase was primarily due  to
improved  loss experience in Harco's liability insurance  lines,
offset  in  part  by lower earned premiums in  Harco's  physical
damage and liability lines.


Liquidity and Funds Management

The Corporation's operations are substantially dependent upon the
production  and sale of Transportation's truck products  in  the
United  States.   Navistar Financial has traditionally  obtained
the  funds to provide financing to Transportation's dealers  and
retail  customers  from sales of receivables, commercial  paper,
short- and long-term bank borrowings, medium and long-term  debt
issues  and  equity capital.  The current debt  ratings  of  the
Corporation  have  made bank borrowings  and  sales  of  finance
receivables  the  most  economical sources  of  financing.   The
Corporation's  insurance operation generates its  funds  through
internal operations and has no external borrowings.

Operations provided $17.9 million in cash in the first six months
of  1997.  Investment activities provided $0.1 million  in  cash
during this period principally as a result of the proceeds  from
sold retail notes offset by the purchase of retail notes and the
maturity  of  one $100 million tranche of sold wholesale  notes.
The  cash  generated by operations was used to reduce  financing
activities by $21.9 million.

<PAGE>

                NAVISTAR FINANCIAL CORPORATION
                        AND SUBSIDIARIES


ITEM  2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF  RESULTS  OF OPERATIONS
          AND FINANCIAL CONDITION (continued)


Liquidity and Funds Management (continued)

Receivable sales were a significant source of funding in 1997 and
1996.  Through  the asset-backed public market, the  Corporation
has  been  able  to fund fixed rate retail note  receivables  at
rates  offered  to  companies  with  investment  grade  ratings.
During  the  first  six  months of  fiscal  1997  and  1996  the
Corporation sold $487 million and $525 million, respectively, of
retail  notes,  through  Navistar Financial  Retail  Receivables
Corporation  ("NFRRC"),  a  wholly-owned  subsidiary,  to  owner
trusts which, in turn, sold notes and certificates to investors.
At April 30, 1997, the remaining shelf registration available to
NFRRC  for issuance of asset-backed securities was $2.0 billion.
The  Corporation  has  a  revolving wholesale  note  trust  that
provides for the continuous sale of eligible wholesale notes  on
a  daily basis.  The trust is funded by securities sold  to  the
public  comprised  of  three $100 million tranches  of  investor
certificates  maturing serially from 1997 to  1999  and  a  $200
million  tranche maturing in 2004.  As of April 30,  1997,  $100
million  of the tranche maturing in 1997 has been paid, and  the
outstanding securities are $400 million.

In the first quarter of fiscal 1997, the Corporation entered into
two  sale-leaseback  transactions involving vehicles  that  were
subject to retail leases with end users.  The aggregate value of
the  leased  vehicles was approximately $75 million.   In  these
transactions, the Corporation transferred the vehicles to  third
party  lessors and simultaneously leased the vehicles back  from
the  lessors.  In each transaction, the Corporation pledged  the
associated  retail  leases to the lessors as collateral.  As  of
April 30, 1997, the outstanding capital lease obligation was $68
million.

At  April  30,  1997, available funding under  the  amended  and
restated  bank  revolving credit facility and  the  asset-backed
commercial  paper  facility  was $440  million,  of  which  $145
million  provided funding backup for the outstanding  short-term
debt.   The   remaining  $295  million,   when   combined   with
unrestricted  cash  and  cash  equivalents,  made  $298  million
available  to  fund  the  general  business  purposes   of   the
Corporation.

The Corporation paid dividends of $30.0 million to Transportation
during  the first six months of 1997 compared with $10.0 million
of   dividends  paid  during  the  first  half  of  1996.    The
Corporation's debt to equity ratio was 4.5:1 at April 30,  1997,
4.7:1 at October 31, 1996 and 5.1:1 at April 30, 1996.

In  May 1997, the Corporation sold $500 million of retail notes,
net  of unearned finance income, through NFRRC to an owner trust
which  in turn sold notes to investors.  A gain of approximately
$6.4 million was recognized on the sale.

In  May  1997,  the  Corporation issued $100 million  of  Senior
Subordinated  Notes  due June 2002.  The Company  used  the  net
proceeds  to  repurchase $6.0 million of its outstanding  Senior
Subordinated  Notes due November 1998 and to reduce  outstanding
indebtedness under the bank revolving credit facility.

<PAGE>

                NAVISTAR FINANCIAL CORPORATION
                        AND SUBSIDIARIES


ITEM  2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF  RESULTS  OF OPERATIONS
          AND FINANCIAL CONDITION (continued)


Liquidity and Funds Management (continued)

The Corporation manages sensitivity to interest rate changes  by
funding  floating rate assets with floating rate debt, primarily
by  borrowing under the bank revolving credit agreement.   Fixed
rate assets are funded with fixed rate debt, equity and floating
rate  debt.   Management has limited the amount  of  fixed  rate
assets   funded  with  floating  rate  debt  by  selling  retail
receivables  on a fixed rate basis and, to a lesser  extent,  by
utilizing  derivative financial instruments.  See notes  to  the
Consolidated  Financial Statements. Corporate  policy  prohibits
the use of derivatives for speculative purposes.

Under a state law enacted February 14, 1997, the Corporation will
be  relieved  of  any liability under the Notice  of  Deficiency
issued  by the Illinois Department of Revenue ("Department")  to
the  Corporation  for the fiscal years 1989 through  1991.   See
Note  6  to  the Consolidated Financial Statements  for  further
discussion.


Business Outlook

Fiscal 1997 full year demand for heavy trucks is expected to  be
below  fiscal  1996 levels and correspondingly the Corporation's
profitability  and wholesale and retail financing  activity  are
anticipated  to  be  lower.  Competition will  continue  to  put
pressure  on the Corporation's retail note acquisition  activity
and retail note margins.

Management   believes  that  collections  on   the   outstanding
receivables   portfolio   plus   funds   available   from    the
Corporation's  various  funding  sources  will  permit  Navistar
Financial to meet the financing requirements of Transportation's
dealers and retail customers through 1997 and beyond.

<PAGE>

                NAVISTAR FINANCIAL CORPORATION
                       AND SUBSIDIARIES



                 PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

         No reports on Form 8-K were filed during the six months ended
         April 30, 1997.



                          SIGNATURE


Pursuant to the requirements of the Securities Exchange Act  of
1934,  the registrant has duly caused this report to be  signed
on its behalf by the undersigned thereunto duly authorized.



                                        Navistar Financial Corporation
                                                (Registrant)



Date June 13, 1997                      /s/ P. E. Cochran
                                            P. E. Cochran
                                            Vice President and Controller
                                            (Principal Accounting Officer)