<PAGE 1>

             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 1-5236

               NAVISTAR  INTERNATIONAL  TRANSPORTATION  CORP.
               ----------------------------------------------
          (Exact name of  registrant as specified in its charter)

                 Delaware                           36-1264810
    -------------------------------             ------------------  
    (State or other jurisdiction of             (I.R.S. Employer
     incorporation or organization)             Identification No.)

455 North Cityfront Plaza Drive, Chicago, Illinois         60611
--------------------------------------------------       ---------- 
    (Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code (312) 836-2000


     Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months 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 June 9, 1997, the number of shares outstanding of the
registrant's Common Stock was 1,000.


THE REGISTRANT IS A WHOLLY OWNED SUBSIDIARY OF NAVISTAR
INTERNATIONAL CORPORATION AND MEETS THE CONDITIONS SET FORTH IN
GENERAL INSTRUCTIONS H(1) (a) AND (b) OF THE FORM 10-Q AND IS
THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT. 
<PAGE>
         <PAGE 2>




                    NAVISTAR INTERNATIONAL TRANSPORTATION CORP.
                         AND CONSOLIDATED SUBSIDIARIES
                          --------------------------


                                    INDEX
                                    -----

                                                             Page
                                                           Reference
                                                           ---------

Part I.  Financial Information:

  Item 1.  Financial Statements:

    Statement of Income --
      Six Months Ended April 30, 1997 and 1996 ............      3

  Statement of Financial Condition --
    April 30, 1997, October 31, 1996 and April 30, 1996 ...      4

  Statement of Cash Flow --
    Six Months Ended April 30, 1997 and 1996 ..............      5

  Notes to Financial Statements ...........................      6

  Item 2.  Management's Discussion and Analysis
           of Results of Operations and Financial Condition     12


Part II. Other Information:

  Item 1.  Legal Proceedings ..............................     17

  Item 6.  Exhibits and Reports on Form 8-K ...............     17

  Signature ...............................................     18

<PAGE>
         <PAGE 3>
                      PART I - FINANCIAL INFORMATION
                      ------------------------------
<TABLE>
<CAPTION> 
ITEM 1.  Financial Statements
 
STATEMENT OF INCOME (Unaudited)
-------------------------------------------------------------------
Millions of dollars
-------------------------------------------------------------------
                        Navistar International Transportation Corp.
                               and Consolidated Subsidiaries
                        -------------------------------------------
                        Three Months Ended         Six Months Ended
                             April 30                  April 30
                        ------------------         ----------------
                          1997      1996            1997      1996
                        -------    ------          ------    ------
<S>                     <C>        <C>             <C>       <C>
Sales and revenues
Sales of
  manufactured
  products ...........   $1,493    $1,423          $2,733    $2,785
Finance and
  insurance revenue ..       43        46              88       101
Other income .........        7         5              11        15
                         ------    ------          ------    ------
  Total sales
    and revenues .....    1,543     1,474           2,832     2,901
                         ------    ------          ------    ------
Costs and expenses 
Cost of products
  and services sold ..    1,292     1,231           2,368     2,430
Postretirement
  benefits ...........       57        54             108       111
Engineering and
  research expense ...       32        34              62        63
Marketing and
  administrative
  expense ............       87        75             170       148
Interest expense .....       41        44              79        83
Financing charges
  on sold receivables.        5         7              12        16
Insurance claims
  and underwriting
  expense ............        9        14              17        26
                         ------    ------          ------    ------
  Total costs
    and expenses .....    1,523     1,459           2,816     2,877
                         ------    ------          ------    ------
    Income before
      income taxes ...       20        15              16        24
    Income tax expense        4        17              15        20
                         ------    ------          ------    ------
Net income (loss) ....   $   16    $   (2)         $    1    $    4
                         ======    ======          ======    ======
<FN>
See Notes to Financial Statements.
</TABLE>
<PAGE>
         <PAGE 4>

<TABLE>
<CAPTION>
STATEMENT OF FINANCIAL CONDITION (Unaudited)
-------------------------------------------------------------------
Millions of dollars
-------------------------------------------------------------------
                       Navistar International Transportation Corp.
                              and Consolidated Subsidiaries
                       --------------------------------------------- 
                      April 30         October 31        April 30
                        1997              1996             1996
                     ----------        ----------       ----------
<S>                    <C>               <C>              <C>
ASSETS
-------------------
Cash and
  cash equivalents.    $   40            $  204           $  161
Marketable
  securities ......       132               144              136
                       ------            ------           ------
                          172               348              297
Receivables, net ..     1,614             1,646            1,796
Inventories .......       473               463              600
Property, net of
  accumulated
  depreciation and
  amortization of
  $869, $842 and
  $803 .............      748               770              703
Investments and
  other assets .....      331               211              233
Intangible pension
  assets ...........      267               314              284
                       ------            ------           ------
Total assets .......   $3,605            $3,752           $3,913
                       ======            ======           ======
LIABILITIES AND
  SHAREOWNER'S EQUITY
---------------------
Liabilities
Accounts payable,
  principally trade .  $  907            $  820           $  870
Debt due Parent
  Company ...........     881               884              904
  Debt:
    Manufacturing
      operations ....     109               115              125
    Financial services
      operations ....   1,213             1,305            1,379
Postretirement
  benefits
  liability .........   1,200             1,351            1,300
Other liabilities ...     801               806              854
                       ------            ------           ------
    Total liabilities   5,111             5,281            5,432
                       ------            ------           ------
Commitments
  and contingencies

Shareowner's equity
Capital Stock
  (1,000 shares
   issued) ..........     786               786              786
Retained earnings
  (deficit) .........  (2,292)           (2,315)          (2,305)
                       ------            ------           ------
    Total shareowner's
      equity ........  (1,506)           (1,529)          (1,519)
                       ------            ------           ------
Total liabilities
  and shareowner's
  equity ............  $3,605            $3,752           $3,913
                       ======            ======           ======
<FN>
See Notes to Financial Statements.
</TABLE>
<PAGE>
          <PAGE 5>

 <TABLE>
 <CAPTION> 
 STATEMENT OF CASH FLOW (Unaudited)
 ------------------------------------------------------------------
 For the Six Months Ended April 30 (Millions of dollars)
 ------------------------------------------------------------------
                                           Navistar International
                                          Transportation Corp. and
                                          Consolidated Subsidiaries
                                          -------------------------
                                            1997            1996
                                           ------          ------
<S>                                        <C>             <C>   
Cash flow from operations
Net income ............................    $    1          $    4
Adjustments to reconcile net income
  to cash used in operations:
  Depreciation and amortization .......        60              55
  Other, net ..........................       (16)              -
Change in operating assets
  and liabilities:
    Receivables .......................       (69)             49
    Inventories .......................       (18)           (184)
    Prepaid and other current assets ..        (5)            (23)
    Accounts payable ..................        93             (59)
    Other liabilities .................      (127)           (143)
                                           ------          ------
Cash used in operations ...............       (81)           (301)
                                           ------          ------
Cash flow from investment programs
Purchase of retail notes
  and lease receivables ...............      (445)           (576)
Collections/sales of retail notes
   and lease receivables ..............       518             561
Purchase of marketable securities .....       (53)           (194)
Sales or maturities of
  marketable securities ...............        66             283
Capital expenditures ..................       (58)            (55)
Other investment programs, net ........       (11)            (14)
                                           ------          ------
Cash provided by investment programs .         17               5
                                           ------          ------

Cash flow from financing activities
Issuance of debt .....................        79               -
Principal payments on debt ...........       (18)             (8)
Net increase (decrease) in notes
  and debt outstanding under bank
  revolving credit facility and
  asset-backed and other commercial
  paper programs .....................      (158)             42
Net decrease in loan from
  Navistar International Corporation .        (3)            (19)
                                          ------          ------
Cash provided by (used in)
  financing activities ...............      (100)             15
                                          ------          ------
Cash and cash equivalents
  Decrease during the period .........      (164)           (281)
  At beginning of the year ...........       204             442
                                          ------          ------
Cash and cash equivalents
  at end of the period ...............    $   40          $  161
                                          ======          ======
<FN>
See Notes to Financial Statements.
</TABLE>
<PAGE>
         <PAGE 6>

              Navistar International Transportation Corp.
                     and Consolidated Subsidiaries

              Notes to Financial Statements  (Unaudited)

Note A.    Summary of Accounting Policies

     Navistar International Transportation Corp., hereafter referred
to as "the company" and "Transportation" is the wholly owned
subsidiary of Navistar International Corporation, hereafter referred
to as "Parent Company."  The consolidated financial statements
include the results of Transportation's manufacturing operations and
its wholly owned financial services subsidiaries.  The effects of
transactions between the manufacturing and financial services
operations have been eliminated to arrive at the consolidated
totals.

     The accompanying unaudited financial statements have been
prepared in accordance with accounting policies described in the
1996 Annual Report on Form 10-K and should be read in conjunction
with the disclosures 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 periods presented. 
Interim results are not necessarily indicative of results for the
full year.  Certain 1996 amounts have been reclassified to conform
with the presentation used in the 1997 financial statements. 

Note B.  Supplemental Cash Flow Information

     Consolidated interest payments during the first six months of
1997 and 1996 were $79 million and $82 million, respectively.

Note C.  Income Taxes

     The Parent Company files a consolidated U.S. federal income tax
return which includes Transportation and its U.S. subsidiaries. 
Transportation has a tax allocation agreement (Tax Agreement) with
the Parent Company, which requires Transportation to compute its
separate federal income tax expense based on its adjusted book
income.  Any resulting tax liability is paid to the Parent Company. 
In addition, under the Tax Agreement, Transportation is required to
pay to the Parent Company any tax payments received from its
subsidiaries.  The effect of the Tax Agreement is to allow the
Parent Company rather than Transportation to utilize U.S. operating
losses and loss carryforwards (NOLs) generated in earlier years.
<PAGE>
         <PAGE 7>

              Navistar International Transportation Corp.
                     and Consolidated Subsidiaries

              Notes to Financial Statements  (Unaudited)

Note D.  Receivables

     On January 1, 1997, Transportation adopted Statement of
Financial Accounting Standards No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of
Liabilities," for all applicable transactions.  As a result, certain
1997 balance sheet items have been reclassified.  Restatement of
prior periods is not permitted.  The new standard did not have a
material effect on Transportation's net income or financial
position.

Note E.  Inventories

     Inventories are as follows:
 
                            April 30       October 31       April 30
Millions of dollars           1997            1996            1996
--------------------------------------------------------------------
Finished products ........  $   238          $   242        $   295
Work in process ..........      101               97            148
Raw materials and supplies      134              124            157
                            -------          -------        -------
Total inventories ........  $   473          $   463        $   600 
                            =======          =======        =======

Note F.  Financial Instruments

     During March through April 1997, Navistar Financial Corporation
(NFC) entered into $500 million of forward interest rate lock
agreements on a U.S. Treasury security maturing in 1999 related to
NFC's May 1997 sale of retail receivables. These hedge agreements
were closed in conjunction with the pricing of the sale.  The loss,
which was not material, was deferred at April 30, 1997, and included
in the gain on the sale of $500 million of retail notes in May 1997.

     In April 1997, NFC entered into a $100 million forward interest
rate lock agreement on a U.S. Treasury security maturing in 2002
related to NFC's May 1997 subordinated debt issue.  The hedge
agreement was closed in conjunction with the pricing of the
subordinated debt, and the loss, which was not material, will be
amortized over the life of the subordinated debt.

     In May 1997, NFC entered into a $50 million forward starting
swap agreement on a U.S. Treasury security maturing in 1999 related
to NFC's anticipated November 1997 sale of retail receivables.  This
swap agreement starts on October 31, 1997 and NFC  intends to sell
this position 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 recognized on the sale of receivables.
<PAGE>
         <PAGE 8>

              Navistar International Transportation Corp.
                     and Consolidated Subsidiaries

              Notes to Financial Statements  (Unaudited)

Note F.  Financial Instruments (continued)

     During May 1997, NFC sold $100 million of Senior Subordinated
Notes due 2002. NFC used the net proceeds to repurchase $6 million
of its outstanding 1998 Notes and to reduce outstanding indebtedness
under the Bank Revolving Credit Facility. 

Note G.  Environmental Matters

     In the fourth quarter of 1994, Transportation recorded a charge
for potential clean-up costs related to two formerly owned
businesses, Wisconsin Steel and Solar Turbines, Inc. (Solar), as
disclosed in Note 4 to Transportation's Annual Report on Form 10-K.

     In March 1997, the U.S. Department of Justice and
Transportation approved the final consent decree in settlement of a
dispute related to the Wisconsin Steel property.  In June 1997,
Transportation paid $11 million to the Economic Development
Administration in settlement of various commercial issues and past
environmental costs which is consistent with the estimate of
anticipated clean-up costs of the Wisconsin Steel and Solar sites
reported at October 31, 1996.
<PAGE>
         <PAGE 9>

              Navistar International Transportation Corp.
                     and Consolidated Subsidiaries

              Notes to Financial Statements  (Unaudited)

<TABLE>
<CAPTION>
Note H.  SUPPLEMENTAL FINANCIAL INFORMATION


Navistar International Transportation Corp.
(with financial services operations on an equity basis)
in millions of dollars:

                  Three Months Ended             Six Months Ended
                       April 30                      April 30
                --------------------          ---------------------
<S>             <C>          <C>              <C>          <C>
Condensed
Statement
of Income         1997          1996            1997          1996
                --------     --------         --------     --------- 

Sales of
  manufactured
  products ...  $  1,493     $  1,423         $  2,733      $  2,785
Other income .         7            2                9            12
                --------     --------         --------      --------
Total sales
  and revenues     1,500        1,425            2,742         2,797
                --------     --------         --------      --------

Cost of
  products
  sold .......     1,287        1,229            2,358         2,425
Postretirement
  benefits ...        57           54              108           111
Engineering and
  research
  expense ....        32           34               62            63
Marketing and
  administrative
  expense ....        79           67              154           132
Other expenses        41           42               83            85
                --------     --------         --------      --------
Total costs
  and expenses.    1,496        1,426            2,765         2,816
                --------     --------         --------      --------
Income (loss)
  before income
  taxes
    Manufacturing
     operations        4           (1)            (23)          (19)
    Financial
     services
     operations       16            16              39            43
                --------     --------         --------      --------
      Income
      before
      income
      taxes ..        20            15              16            24
Income tax
  expense ....         4            17              15            20
                --------     --------         --------      --------
Net income
  (loss) .....  $     16     $     (2)        $      1      $      4
                ========     ========         ========      ========
</TABLE>
<PAGE>
         <PAGE 10>

                 Navistar International Transportation Corp.
                        and Consolidated Subsidiaries

                 Notes to Financial Statements  (Unaudited)

<TABLE>
<CAPTION>
Note H.  SUPPLEMENTAL FINANCIAL INFORMATION


Navistar International Transportation Corp.
(with financial services operations on an equity basis)
in millions of dollars:


Condensed
Statement of
Financial Condition
                        April 30       October 31       April 30
                          1997            1996            1996
----------------------------------------------------------------
<S>                     <C>             <C>             <C>
Cash, cash equivalents
  and marketable
  securities .........  $     12        $    174        $    135
Receivables, net .....       260             172             169
Inventories ..........       473             463             600
Property and
  equipment, net .....       637             666             647
Equity in financial
  services
  subsidiaries .......       306             306             297
Other assets .........       515             460             462
                        --------        --------        --------
     Total assets ....  $  2,203        $  2,241        $  2,310
                        --------        --------        --------

Accounts payable,
  principally trade ..  $    862        $    772        $    806
Debt .................       109             115             125
Debt due Parent Company      881             884             904
Postretirement benefits
  liabilities ........     1,192           1,344           1,293
Other liabilities ....       665             655             701
Shareowner's equity ..    (1,506)         (1,529)         (1,519)
                        --------        --------        --------
     Total liabilities
       and shareowner's
       equity .......   $  2,203        $  2,241        $  2,310
                        ========        ========        ========
</TABLE>
<PAGE>
         <PAGE 11>

                 Navistar International Transportation Corp.
                        and Consolidated Subsidiaries

                 Notes to Financial Statements  (Unaudited)

<TABLE>
<CAPTION>
Note H.  SUPPLEMENTAL FINANCIAL INFORMATION


Navistar International Transportation Corp.
(with financial services operations on an equity basis)
in millions of dollars:

                                                Six Months Ended
                                                     April 30
                                                ----------------
Condensed Statement of Cash Flow                 1997      1996
                                                ------    ------
<S>                                             <C>       <C>
Cash flow from operations
Net income ...........................          $    1    $    4
Adjustments to reconcile net income
  to cash used in operations:
     Depreciation and amortization ...              49        47
     Equity in earnings of
       nonconsolidated companies,
       net of dividends received .....               6       (17)
     Other, net ......................              (6)        8
Change in operating assets
  and liabilities ....................             (51)     (305)
                                                ------    ------

Cash used in operations ..............              (1)     (263)

Cash flow from investment programs
Advance to Navistar Financial
  Corporation ........................             (98)      (29)
Purchase of marketable securities ....               -      (148)
Sales or maturities of
  marketable securities ..............               5       233
Capital expenditures .................             (58)      (55)
Other investment programs, net .......               4         5
                                                ------    ------ 
Cash provided by (used in)
  investment programs ................            (147)        6
                                                ------    ------ 

Cash flow from financing activities ..             (10)      (27)

Cash and cash equivalents
Decrease during the period ...........            (158)     (284)
At beginning of the year .............             170       418
                                                 ------    ------ 
Cash and cash equivalents
  at end of the period ...............           $   12    $  134
                                                 ======    ======
</TABLE>
<PAGE>
         <PAGE 12>

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
        OF OPERATIONS AND FINANCIAL CONDITION

RESULTS OF OPERATIONS

     Certain statements under this caption constitute "forward-
looking statements" under the Reform Act, which involve risks and
uncertainties.  Navistar International Transportation 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 Environment."

     Second Quarter Ended April 30, 1997
     -----------------------------------

     Transportation reported net income of $16 million for the
second quarter ended April 30, 1997, compared with a net loss of $2
million for the comparable quarter last year.

     Transportation's manufacturing operations reported income
before income taxes of $4 million compared with a pretax loss of $1
million in the second quarter of 1996 reflecting continued strong
demand for mid-range diesel engines.  The financial services
operations' pretax income for the second quarter of 1997 was $16
million, unchanged from the same period in 1996.

Sales and Revenues.  Second quarter 1997 industry retail sales of
Class 5 through 8 trucks totaled 86,800 units, equal to the number
of units sold during this period in 1996.  Class 8 heavy truck sales
of 48,500 units during the second quarter of 1997 were two percent
lower than the 1996 level of 49,700 units.  Industry sales of Class
5, 6 and 7 medium trucks, including school buses, increased three
percent to 38,300 units.  Industry sales of school buses, which
accounted for 18 percent of the medium truck market, decreased four
percent.

     Sales and revenues for the second quarter of 1997 totaled
$1,543 million, five percent higher than the $1,474 million reported
for the comparable quarter in 1996.  Sales of trucks, mid-range
diesel engines and service parts for the second quarter of 1997
totaled $1,493 million compared with $1,423 million reported for the
same period in 1996.

     Transportation maintained its position as sales leader in the
combined United States and Canadian Class 5 through 8 truck market
with a 27.1 percent market share for the second quarter of 1997, a
slight decrease from the market share reported in 1996.  (Sources:
American Automobile Manufacturer's Association, the United States
Motor Vehicle Manufacturer's Association and R.L. Polk & Company.)
<PAGE>
         <PAGE 13>

     Shipments of mid-range diesel engines by Transportation to
other original equipment manufacturers during the second quarter of
1997 totaled 48,300 units, a 19 percent increase from the same
period of 1996.  Higher shipments to a domestic automotive
manufacturer to meet consumer demand for the light trucks and vans
which use this engine was the primary reason for the increase.

     Service parts sales of $203 million in the second quarter of
1997 increased four percent from the prior year's level.

     Finance and insurance revenue was $43 million in the second
quarter of 1997 slightly lower than in 1996 primarily as a result of
a decline in wholesale note revenue.

Costs and expenses.  Manufacturing gross margin was 13.8 percent of
sales for the second quarter of 1997 compared with 13.7 percent for
the same period in 1996.  Consolidated marketing and administrative
expense increased to $87 million in 1997 from $75 million in the
second quarter of 1996 reflecting investment in the implementation
of the company's strategy to reduce costs and complexity in its
manufacturing processes.

     Six Months Ended April 30, 1997
     -------------------------------

     Pretax income for the first six months of 1997 was $16 million
compared with $24 million reported for the same period of 1996. 
Transportation's manufacturing operations reported a loss before
income taxes of $23 million during this period, compared to a pretax
loss of $19 million reported for the first six months of 1996.  The
financial services operations' pretax income for the first six
months of 1997 was $39 million, a decline from the $43 million
reported in 1996.  This change is a result of lower income on sales
of retail receivables and a lower volume of wholesale financing.

     Manufacturing operations' sales and revenues during this period
totaled $2,742 million, slightly lower than in 1996.  During the
first six months of 1997, sales of trucks declined six percent while
sales of diesel engines to original equipment manufacturers
increased ten percent. Service parts sales were five percent higher
than in the same period of 1996.  Finance and insurance revenue was
$88 million during the first two quarters of 1997 compared with $101
million in 1996.

     Industry retail sales of Class 5 through 8 trucks during the
first six months of 1997 totaled 159,000 units, a decrease from the
167,600 units sold during this period in 1996.  The company remained
the sales leader in the combined United States and Canadian Class 5
through 8 truck market for the first two quarters of the year with a
26.8 percent market share, an increase over the 26.2 percent market
share reported for the same period last year.
<PAGE>
         <PAGE 14>

     Manufacturing gross margin for the first six months of 1997 was
13.7 percent compared with 13.0 percent in 1996.  The increase in
gross margin reflects improved operating performance and pricing. 
Consolidated marketing and administrative expense was $170 million
during this period compared with $148 million during the first two
quarters of 1996.  The factors which influenced this expense during
the second quarter of 1997 were also responsible for the change
during the first half of the year.

Liquidity and Capital Resources

     Cash flow is generated from the manufacture and sale of trucks,
mid-range diesel engines and service parts as well as product
financing and insurance coverage provided to Transportation's
dealers and retail customers by the financial services operations.

     Historically, funds to finance Transportation's products are
obtained from a combination of commercial paper, short- and long-
term bank borrowings, medium- and long-term debt issues, sales of
finance receivables and equity capital.  NFC's current debt ratings
have made bank borrowings and sales of finance receivables the most
economic sources of cash.  Insurance operations are funded through
internal operations.

     Total cash, cash equivalents and marketable securities of the
company amounted to $172 million at April 30, 1997, $348 million at
October 31, 1996 and $297 million at April 30, 1996.

     Cash used in operations during the first six months of 1997
totaled $81 million primarily from a net change in operating assets
and liabilities of $126 million offset by $44 million of other
noncash items, principally depreciation.  The net change in
operating assets and liabilities includes a $93 million increase in
accounts payable offset by a slight increase in inventory, a $69
million increase in receivables and a $127 million decline in other
liabilities. The change in other liabilities includes the company's
contribution of $109 million to its hourly and salaried pension
plans in the second quarter.  This contribution is in addition to
the $105 million that the company contributed in the first quarter
of 1997.

     Investment programs provided $17 million in cash reflecting a
net decrease in marketable securities of $13 million and a net
decrease in retail notes and lease receivables of $73 million.  In
addition, $58 million was used to fund capital expenditures for
construction of a truck assembly facility in Mexico, to increase
mid-range diesel engine capacity, and for truck product
improvements. 

     Financing activities used cash to reduce notes and debt
outstanding under the bank revolving credit facility and asset-
backed and other commercial paper program by $158 million offset by
a $79 million increase in debt.
<PAGE>
         <PAGE 15>

     Receivable sales were a significant source of funding in 1997
and 1996.  During the first six months of 1997 and of 1996, NFC sold
$487 million and $525 million, respectively, of retail notes through
Navistar Financial Retail Receivables Corporation (NFRRC).  NFRRC
has filed registration statements with the Securities and Exchange
Commission which provide for the issuance of up to $5,000 million of
asset-backed securities.  At April 30, 1997, the remaining shelf
registration available to NFRRC was $1,973 million.

     During March through April 1997, NFC 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 were closed in conjunction with the pricing
of the sale.

     During May 1997, NFC sold $500 million of retail notes,
realizing net proceeds of $499 million which were used for general
working capital purposes.  A gain of approximately $6 million was
recognized on the sale.

     In May 1997, NFC entered into a $50 million forward starting
swap agreement on a U.S. Treasury security maturing in 1999 related
to the anticipated November 1997 sale of retail receivables. This
swap agreement starts on October 31, 1997 and NFC intends to sell
this position in October 1997 on the pricing date of the sale.

     NFC also utilizes a $400 million revolving wholesale note trust
that provides for the continuous sale of eligible wholesale notes on
a daily basis.  The trust is comprised of two $100 million tranches
of investor certificates maturing serially from 1997 to 1999 and a
$200 million tranche maturing in 2004. 

     At April 30, 1997, available funding under NFC's amended and
restated credit facility and the asset-backed commercial paper
facility was $440 million, of which $145 million was used to back
short-term debt at April 30, 1997.  The remaining $295 million, when
combined with unrestricted cash and cash equivalents made $298
million available to fund the general business purposes of NFC at
April 30, 1997.

     In April 1997, NFC entered into a $100 million forward interest
rate lock agreement on a U.S. Treasury security maturing in 2002
related to the May 1997 subordinated debt issue.  The hedge
agreement was closed in conjunction with the pricing of the
subordinated debt.

     During May 1997, the NFC sold $100 million of Senior
Subordinated Notes due 2002. NFC used the net proceeds to repurchase
$6.0 million of its outstanding 1998 Notes and to reduce outstanding
indebtedness under the Bank Revolving Credit Facility.
<PAGE>
         <PAGE 16>

     Transportation had outstanding capital commitments of $128
million at April 30, 1997, which consist of truck and engine
development, ongoing facility maintenance programs and construction
of a plant in Mexico.  In November 1996, Transportation announced
plans to spend $167 million, over the next two years, to construct
this new truck assembly facility in Mexico.

     It is the opinion of management that, in the absence of
significant unanticipated cash demands, current and forecasted cash
flow will provide a basis for financing operating requirements and
capital expenditures.  Management also believes that collections on
the outstanding receivables portfolios as well as funds available
from various funding sources will permit the financial services
operations to meet the financing requirements of Transportation's
dealers and customers.

Business Environment

     Sales of Class 5 through 8 trucks are cyclical, with demand
affected by such economic factors as industrial production,
construction, demand for consumer durable goods, interest rates and
the earnings and cash flow of dealers and customers.  Although the
general economy remains stable, demand for new trucks in 1997 is
anticipated to be lower than in 1996.  An improvement in the number
of new orders has increased Transportation's order backlog to 34,900
units at April 30, 1997 from 26,700 units at April 30, 1996.  Retail
deliveries during the remainder of 1997 continue to be highly
dependent on the rate at which new truck orders are received.
Transportation will evaluate order receipts and backlog throughout
the year and will balance production with demand as appropriate.

     Transportation currently projects 1997 United States and
Canadian Class 8 heavy truck demand to be 180,000 units, an eight
percent decrease from 1996.  Class 5, 6 and 7 medium truck demand,
excluding school buses, is forecast at 112,000 units, a slight
decrease from 1996.  Demand for school buses is expected to decline
slightly in 1997 to 31,500 units.  Mid-range  diesel engine
shipments by Transportation to original equipment manufacturers in
1997 are expected to be 178,100 units, nine percent higher than in
1996.  Transportation's service parts sales are projected to grow
eight percent to $817 million.
<PAGE>
         <PAGE 17>

                 Navistar International Transportation Corp.
                        and Consolidated Subsidiaries


                         PART II - OTHER INFORMATION
                         ---------------------------


 Item 1.  Legal Proceedings

          Incorporated herein by reference from Item 3 - "Legal
          Proceedings" in Transportation's definitive Form 10-K
          dated January 22, 1997, Commission File No. 1-5236.

 Item 6.  Exhibits and Reports on Form 8-K

          No reports on Form 8-K were filed for the three months
          ended April 30, 1997.
<PAGE>
         <PAGE 18>


                                 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 INTERNATIONAL TRANSPORTATION CORP.
-------------------------------------------
               (Registrant)






/s/     J. Steven Keate
-------------------------------------
        J. Steven Keate
       Vice President and Controller
       (Principal Accounting Officer)


June 13, 1997