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




                     SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549


                                 FORM 10-Q


          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

               FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997

                       Commission file number 1-3605




                   KAISER ALUMINUM & CHEMICAL CORPORATION
           (Exact name of registrant as specified in its charter)


              DELAWARE                               94-0928288
      (State of incorporation)            (I.R.S. Employer Identification 
                                             No.)


       6177 SUNOL BOULEVARD, PLEASANTON, CALIFORNIA        94566-7769
         (Address of principal executive offices)          (Zip Code)


                               (510) 462-1122
            (Registrant's telephone number, including area code)





     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       

     At April 18, 1997, the registrant had 46,171,365 shares of common
stock outstanding.







---------------------------------------------------------------------------
 KAISER ALUMINUM & CHEMICAL CORPORATION AND SUBSIDIARY COMPANIES

                       PART I - FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS
         --------------------

                        CONSOLIDATED BALANCE SHEETS
                          (In millions of dollars)
<TABLE>

<CAPTION>
                                                                 March 31,    December 31,
                                                                      1997            1996
                                                            ------------------------------
                           ASSETS                           (Unaudited)          
<S>                                                         <C>             <C>
Current assets:
     Cash and cash equivalents                              $        14.5   $        81.3 
     Receivables                                                    287.6           255.6 
     Inventories                                                    575.9           562.2 
     Prepaid expenses and other current assets                      135.9           127.8 
                                                            -------------   -------------
          Total current assets                                    1,013.9         1,026.9 
Investments in and advances to unconsolidated affiliates            161.4           168.4 
Property, plant, and equipment - net                              1,166.8         1,168.7 
Deferred income taxes                                               267.2           263.3 
Other assets                                                        329.7           308.6 
                                                            -------------   -------------
               Total                                        $     2,939.0   $     2,935.9 
                                                            =============   =============
             LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                       $       151.1   $       189.3 
     Accrued interest                                                23.3            35.6 
     Accrued salaries, wages, and related expenses                   91.1            95.4 
     Accrued postretirement medical benefit obligation -
          current portion                                            50.1            50.1 
     Other accrued liabilities                                      126.7           132.8 
     Payable to affiliates                                           90.5            96.9 
     Long-term debt - current portion                                 5.8             8.9 
     Note payable to parent                                           6.4             8.6 
                                                            -------------   -------------
          Total current liabilities                                 545.0           617.6 
Long-term liabilities                                               472.4           458.1 
Accrued postretirement medical benefit obligation                   719.3           722.5 
Long-term debt                                                    1,012.8           953.0 
Minority interests                                                   94.0            92.5 
Redeemable preference stock                                          26.7            27.5 
Commitments and contingencies
Stockholders' equity:
     Preferred stock                                                  1.6             1.7 
     Common stock                                                    15.4            15.4 
     Additional capital                                           1,856.3         1,829.8 
     Accumulated deficit                                           (198.0)         (201.3)
     Additional minimum pension liability                            (2.8)           (2.8)
     Less:  Note receivable from parent                          (1,603.7)       (1,578.1)
                                                            -------------   -------------
          Total stockholders' equity                                 68.8            64.7 
                                                            -------------   -------------
               Total                                        $     2,939.0   $     2,935.9 
                                                            =============   =============

</TABLE>


The accompanying notes to interim consolidated financial statements are an 
     integral part of these statements.

      KAISER ALUMINUM & CHEMICAL CORPORATION AND SUBSIDIARY COMPANIES

                     STATEMENTS OF CONSOLIDATED INCOME
                                (Unaudited)
                          (In millions of dollars)

<TABLE>

<CAPTION>
                                                                     Quarter Ended
                                                                       March 31,
                                                            ------------------------------
                                                                      1997            1996
                                                            ------------------------------
<S>                                                         <C>             <C>
Net sales                                                   $       547.4   $       531.1 
                                                            -------------   -------------
Costs and expenses:
     Cost of products sold                                          460.7           433.7 
     Depreciation                                                    23.1            24.0 
     Selling, administrative, research and development, and
          general                                                    30.8            32.8 
                                                            ------------- ---------------
               Total costs and expenses                             514.6           490.5 
                                                            ------------- ---------------
Operating income                                                     32.8            40.6 
Other income (expense):
     Interest expense                                               (27.7)          (22.7)
     Other - net                                                      2.6             (.3)
                                                            ------------- ---------------
Income before income taxes and minority interests                     7.7            17.6 
Provision for income taxes                                           (2.9)           (6.6)
Minority interests                                                    (.5)             .1 
                                                            ------------- ---------------
Net income                                                  $         4.3   $        11.1 
                                                            ============= ===============


</TABLE>

The accompanying notes to interim consolidated financial statements are an 
     integral part of these statements.

      KAISER ALUMINUM & CHEMICAL CORPORATION AND SUBSIDIARY COMPANIES

                   STATEMENTS OF CONSOLIDATED CASH FLOWS
                                (Unaudited)
                          (In millions of dollars)
<TABLE>

<CAPTION>
                                                                          Quarter Ended
                                                                            March 31,
                                                                 ------------------------------
                                                                           1997            1996
                                                                 ------------------------------
<S>                                                              <C>             <C>
Cash flows from operating activities:
     Net income                                                  $         4.3   $        11.1 
     Adjustments to reconcile net income to net cash used for
          operating activities:
          Depreciation                                                    23.1            24.0 
          Amortization of excess investment over equity in
               unconsolidated affiliates                                   2.9             2.9 
          Amortization of deferred financing costs and net
               discount on long-term debt                                  1.5             1.4 
          Undistributed equity in (income) loss of unconsolidated
               affiliates, net of distributions                            8.6            (7.0)
          Minority interests                                                .5             (.1)
          (Increase) decrease in receivables                             (39.5)            3.9 
          Increase in inventories                                        (13.7)          (44.5)
          Increase in prepaid expenses and other assets                  (27.2)          (24.4)
          Decrease in accounts payable                                   (38.3)          (20.8)
          Decrease in accrued interest                                   (12.3)          (18.0)
          Increase in payable to affiliates and accrued
               liabilities                                                 4.3             1.8 
          Increase (decrease) in accrued and deferred income
               taxes                                                        .3            (3.6)
          Other                                                             .6             1.4 
                                                                 ------------- ---------------
               Net cash used for operating activities                    (84.9)          (71.9)
                                                                 ------------- ---------------
Cash flows from investing activities:
     Net proceeds from disposition of property and investments             2.6              .4 
     Additions to property, plant, and equipment                         (21.8)          (19.8)
     Redemption fund for minority interests' preference stock             (2.8)           (2.3)
                                                                 ------------- ---------------
               Net cash used for investing activities                    (22.0)          (21.7)
                                                                 ------------- ---------------
Cash flows from financing activities:
     Borrowings under revolving credit facility, net                      42.0            91.6 
     Borrowings of long-term debt                                         19.0 
     Repayments of long-term debt                                         (3.9)           (1.2)
     Payments on notes payable to parent                                  (2.2)           (2.1)
     Increase in restricted cash, net                                    (12.6)
     Incurrence of financing costs                                         (.4)
     Dividends paid                                                        (.2)            (.3)
     Redemption of minority interests' preference stock                   (1.6)           (2.0)
                                                                 ------------- ---------------
               Net cash provided by financing activities                  40.1            86.0 
                                                                 ------------- ---------------
Net decrease in cash and cash equivalents                                (66.8)           (7.6)
Cash and cash equivalents at beginning of period                          81.3            21.7 
                                                                 ------------- ---------------
Cash and cash equivalents at end of period                       $        14.5   $        14.1 
                                                                 ============= ===============
Supplemental disclosure of cash flow information:
     Interest paid, net of capitalized interest                  $        38.5   $        39.2 
     Income taxes paid                                                     1.6             6.1 
     Tax allocation payments to Kaiser Aluminum Corporation                 .5             2.7 


</TABLE>



 The accompanying notes to interim consolidated financial statements are an
     integral part of these statements.

             NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
       (In millions of dollars, except prices and per share amounts)

1.   GENERAL

     Kaiser Aluminum & Chemical Corporation (the "Company") is the
principal operating subsidiary of Kaiser Aluminum Corporation ("Kaiser"). 
Kaiser is a subsidiary of MAXXAM Inc. ("MAXXAM").  MAXXAM and one of its
wholly owned subsidiaries together own approximately 62% of Kaiser's Common
Stock, assuming the conversion of each outstanding share of 8.255% PRIDES,
Convertible Preferred Stock (the "PRIDES"), into one share of Kaiser's
Common Stock, with the remaining approximately 38% publicly held.

     The foregoing unaudited interim consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q
and Article 10 of Regulation S-X as promulgated by the Securities and
Exchange Commission.  Accordingly, these financial statements do not
include all of the disclosures required by generally accepted accounting
principles for complete financial statements.  These unaudited interim
consolidated financial statements should be read in conjunction with the
audited consolidated financial statements for the year ended December 31,
1996.  In the opinion of management, the unaudited interim consolidated
financial statements furnished herein include all adjustments, all of which
are of a normal recurring nature, necessary for a fair statement of the
results for the interim periods presented.

     The preparation of financial statements in accordance with generally
accepted accounting principles requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities known to exist as of the
date the financial statements are published, and the reported amounts of
revenues and expenses during the reporting period. Uncertainties, with
respect to such estimates and assumptions, are inherent in the preparation
of the Company's consolidated financial statements; accordingly, it is
possible that the actual results could differ from these estimates and
assumptions, which could have a material effect on the reported amounts of
the Company's consolidated financial position and results of operations.

     Operating results for the quarter ended March 31, 1997, are not
necessarily indicative of the results that may be expected for the year
ending December 31, 1997.

     See Note 6 regarding the impact of recent accounting pronouncements.

2.   INVENTORIES

     The classification of inventories is as follows:

<TABLE>

<CAPTION>
                                                                            March 31,   December 31,
                                                                                1997            1996
                                                                      ------------------------------
<S>                                                                   <C>             <C>
Finished fabricated aluminum products                                 $        106.3  $        113.5
Primary aluminum and work in process                                           213.1           200.3
Bauxite and alumina                                                            126.6           110.2
Operating supplies and repair and maintenance parts                            129.9           138.2
                                                                      ------------- ---------------
     Total                                                            $        575.9  $        562.2
                                                                      ============= ===============

</TABLE>

     Substantially all product inventories are stated at last-in, first-out
(LIFO) cost, not in excess of market. Replacement cost is not in excess of
LIFO cost.

3.   SOLID WASTE DISPOSAL REVENUE BONDS

     In March 1997, the Company entered into an agreement (the "Sale
Agreement") with the Industrial Development Corporation of Spokane County,
Washington (the "IDC") pursuant to which the IDC issued $19.0 of 7.6% Solid
Waste Disposal Revenue Bonds due 2027 (the "Bonds") and loaned the proceeds
to the Company to finance the construction of certain qualifying
expenditures at its Mead smelter, which are part of the previously
announced modernization and expansion of Mead's carbon baking furnace.  The
net proceeds from the sale of the Bonds of approximately $18.6 were
deposited into a restricted construction account (the balance of which is
included in Other assets) and may be withdrawn from time to time by the
Company, pursuant to the Sale Agreement and Bond indenture.  The Sale
Agreement requires the Company to make payments to the IDC on the dates and
in the amounts required to permit the IDC to satisfy all of its payment
obligations under the Bonds.

4.   CONTINGENCIES

ENVIRONMENTAL CONTINGENCIES
     The Company is subject to a number of environmental laws, to fines or
penalties assessed for alleged breaches of such environmental laws, and to
claims and litigation based upon such laws.  The Company currently is
subject to a number of lawsuits under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the
Superfund Amendments Reauthorization Act of 1986 ("CERCLA"), and, along
with certain other entities, has been named as a potentially responsible
party for remedial costs at certain third-party sites listed on the
National Priorities List under CERCLA. 

     Based on the Company's evaluation of these and other environmental
matters, the Company has established environmental accruals primarily
related to potential solid waste disposal and soil and groundwater
remediation matters. At March 31, 1997, the balance of such accruals, which
are primarily included in Long-term liabilities, was $32.7. These
environmental accruals represent the Company's estimate of costs reasonably
expected to be incurred based on presently enacted laws and regulations,
currently available facts, existing technology, and the Company's
assessment of the likely remediation actions to be taken. The Company
expects that these remediation actions will be taken over the next several
years and estimates that annual expenditures to be charged to these
environmental accruals will be approximately $3.0 to $9.0 for the years
1997 through 2001 and an aggregate of approximately $6.0 thereafter.

     As additional facts are developed and definitive remediation plans and
necessary regulatory approvals for implementation of remediation are
established or alternative technologies are developed, changes in these and
other factors may result in actual costs exceeding the current
environmental accruals.  The Company believes that it is reasonably
possible that costs associated with these environmental matters may exceed
current accruals by amounts that could range, in the aggregate, up to an
estimated $22.0 and that, subject to further regulatory review and
approval, the factors upon which a substantial portion of this estimate is
based are expected to be resolved during 1997.  While uncertainties are
inherent in the final outcome of these environmental matters, and it is
presently impossible to determine the actual costs that ultimately may be
incurred, management currently believes that the resolution of such
uncertainties should not have a material adverse effect on the Company's
consolidated financial position, results of operations, or liquidity.

ASBESTOS CONTINGENCIES
     The Company is a defendant in a number of lawsuits, some of which
involve claims of multiple persons, in which the plaintiffs allege that
certain of their injuries were caused by, among other things, exposure to
asbestos during, and as a result of, their employment or association with
the Company or exposure to products containing asbestos produced or sold by
the Company. The lawsuits generally relate to products the Company has not
manufactured for at least 15 years.  At March 31, 1997, the number of such
claims pending was approximately 72,500, as compared with 71,100 at
December 31, 1996.  In 1996, approximately 21,100 of such claims were
received and 9,700 were settled or dismissed.  During the quarter ended
March 31, 1997, approximately 2,600 of such claims were received and 1,200
of such claims were settled or dismissed.

     A substantial portion of the asbestos-related claims that were filed
and served on the Company during 1995 and 1996 were filed in Texas.  The
Company has been advised by its counsel that, although there can be no
assurance, the increase in pending claims may have been attributable in
part to tort reform legislation in Texas.  Although asbestos-related claims
are currently exempt from certain aspects of the Texas tort reform
legislation, management has been advised that efforts to remove the
asbestos-related exemption in the tort reform legislation relating to the
doctrine of forum non conveniens, as well as other developments in the
legislative and legal environment in Texas, may be responsible for the
accelerated pace of new claims experienced in late 1995 and its continuance
in 1996, albeit at a somewhat reduced rate.

     Based on past experience and reasonably anticipated future activity,
the Company has established an accrual for estimated asbestos-related costs
for claims filed and estimated to be filed through 2008. There are inherent
uncertainties involved in estimating asbestos-related costs, and the
Company's actual costs could exceed or be less than these estimates.  The
Company's accrual was calculated based on the current and anticipated
number of asbestos-related claims, the prior timing and amounts of
asbestos-related payments, and the advice of Wharton Levin Ehrmantraut
Klein & Nash, P.A. with respect to the current state of the law related to
asbestos claims.  Accordingly, an estimated asbestos-related cost accrual
of $134.4, before consideration of insurance recoveries, is included
primarily in Long-term liabilities at March 31, 1997.  While the Company
does not presently believe there is a reasonable basis for estimating such
costs beyond 2008 and, accordingly, no accrual has been recorded for such
costs which may be incurred beyond 2008, there is a reasonable possibility
that such costs may continue beyond 2008, and such costs may be
substantial.  The Company estimates that annual future cash payments in
connection with such litigation will be approximately $8.0 to $17.0 for
each of the years 1997 through 2001, and an aggregate of approximately
$80.0 thereafter.

     The Company believes that it has insurance coverage available to
recover a substantial portion of its asbestos-related costs. Claims for
recovery from some of the Company's insurance carriers are currently
subject to pending litigation and other carriers have raised certain
defenses, which have resulted in delays in recovering costs from the
insurance carriers. The timing and amount of ultimate recoveries from these
insurance carriers are dependent upon the resolution of these disputes. The
Company believes, based on prior insurance-related recoveries in respect of
asbestos-related claims, existing insurance policies, and the advice of
Thelen, Marrin, Johnson & Bridges LLP with respect to applicable insurance
coverage law relating to the terms and conditions of those policies, that
substantial recoveries from the insurance carriers are probable. 
Accordingly, an estimated aggregate insurance recovery of $112.0,
determined on the same basis as the asbestos-related cost accrual, is
recorded primarily in Other assets at March 31, 1997.

     Management continues to monitor claims activity, the status of
lawsuits (including settlement initiatives), legislative progress, and
costs incurred in order to ascertain whether an adjustment to the existing
accruals should be made to the extent that historical experience may differ
significantly from the Company's underlying assumptions.  While
uncertainties are inherent in the final outcome of these asbestos matters
and it is presently impossible to determine the actual costs that
ultimately may be incurred and insurance recoveries that will be received,
management currently believes that, based on the factors discussed in the
preceding paragraphs, the resolution of asbestos-related uncertainties and
the incurrence of asbestos-related costs net of related insurance
recoveries should not have a material adverse effect on the Company's
consolidated financial position, results of operations, or liquidity.

OTHER CONTINGENCIES
     The Company is involved in various other claims, lawsuits, and other
proceedings relating to a wide variety of matters.  While uncertainties are
inherent in the final outcome of such matters, and it is presently
impossible to determine the actual costs that ultimately may be incurred,
management currently believes that the resolution of such uncertainties and
the incurrence of such costs should not have a material adverse effect on
the Company's consolidated financial position, results of operations, or
liquidity.

     See Note 9 of the Notes to Consolidated Financial Statements for the
year ended December 31, 1996.

5.   DERIVATIVE FINANCIAL INSTRUMENTS AND RELATED HEDGING PROGRAMS

     At March 31, 1997, the net unrealized loss including unamortized net
option premiums on the Company's position in aluminum forward sales and
option contracts, (based on an average price of $1,636 per ton ($.74 per
pound) of primary aluminum), natural gas and fuel oil forward purchase and
option contracts, and forward foreign exchange contracts, was approximately
$19.2.

ALUMINA AND ALUMINUM
     The Company's earnings are sensitive to changes in the prices of
alumina, primary aluminum and fabricated aluminum products, and also depend
to a significant degree upon the volume and mix of all products sold. 
Primary aluminum prices have historically been subject to significant
cyclical fluctuations.  During the period January 1, 1993 through March 31,
1997, the Average Midwest United States transaction price for primary
aluminum has ranged from approximately $.50 to $1.00 per pound.  Alumina
prices as well as fabricated aluminum product prices (which vary
considerably among products) are significantly influenced by changes in the
price of primary aluminum but generally lag behind primary aluminum price
changes by up to three months.

     From time to time in the ordinary course of business, the Company
enters into hedging transactions to provide price risk management in
respect of the net exposure of earnings resulting from (i) anticipated
sales of alumina, primary aluminum and fabricated aluminum products, less
(ii) expected purchases of certain items, such as aluminum scrap, rolling
ingot, and bauxite, whose prices fluctuate with the price of primary
aluminum. Forward sales contracts are used by the Company to effectively
lock-in or fix the price that the Company will receive for its shipments. 
The Company also uses option contracts (i) to establish a minimum price for
its product shipments, (ii) to establish a "collar" or range of prices for
the Company's anticipated sales, and/or (iii) to permit the Company to
realize possible upside price movements.  As of March 31, 1997, the Company
had sold forward, at fixed prices, approximately 51,750, 93,600 and 24,000    *
tons  of primary aluminum with respect to 1997, 1998 and 1999,
respectively.  As of March 31, 1997, the Company had also purchased put
options to establish a minimum price for approximately 154,750 and 52,000
tons with respect to 1997 and 1998, respectively, and had entered into
option contracts that established a price range for an additional 103,000,
231,600 and 97,500 tons for 1997, 1998 and 1999, respectively.

     As of March 31, 1997, the Company had sold forward virtually all of
the alumina available to it in excess of its projected internal smelting
requirements for 1997, 1998 and 1999 at prices indexed to future prices of
primary aluminum.

*
 All references to tons in this report refer to metric tons of 2,204.6 pounds.

ENERGY
     The Company is exposed to energy price risk from fluctuating prices
for fuel oil and natural gas consumed in the production process.
Accordingly, the Company from time to time in the ordinary course of
business enters into hedging transactions with major suppliers of energy
and energy related financial instruments.  As of March 31, 1997, the
Company had a combination of fixed price purchase and option contracts for
the purchase of approximately 40,000 MMBtu of natural gas per day during
1997, and for 25,000 MMBtu of natural gas per day for 1998.  As of March
31, 1997, the Company also held option contracts for an average of 213,000
barrels of fuel oil per month for 1997 and 222,000 barrels of fuel oil per
month for 1998.

FOREIGN CURRENCY
     The Company enters into forward exchange contracts to hedge material
cash commitments to foreign subsidiaries or affiliates.  At March 31, 1997,
the Company had net forward foreign exchange contracts totaling
approximately $127.1 for the purchase of 165.5 Australian dollars from
April 1997 through June 1998, in respect of its commitments for 1997 and
1998 expenditures denominated in Australian dollars.

     See Note 10 of the Notes to Consolidated Financial Statements for the
year ended December 31, 1996.

6.   RECENT ACCOUNTING PRONOUNCEMENT

     In October 1996 the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position No. 96-1 ("SOP 96-1") which provides
authoritative guidance intended to improve and narrow the manner in which
existing accounting literature is applied to the recognition, measurement,
display, and disclosure of environmental remediation liabilities arising
pursuant to existing federal, state and local laws and regulations.  SOP
96-1 addresses the nature of items that are to be included in the
measurement of a company's liability related to any environmental
remediation efforts it is currently undertaking or required to complete in
the future.  In this regard, SOP 96-1 requires that all incremental direct
third party costs, as well as any internal compensation costs (including
benefits) for employees expected to devote a significant amount of time
directly to remediation efforts, should be included in the determination of
the estimated liability.  The term "remediation effort" is defined in SOP
96-1 to include such things as remedial risk assessment, feasibility
studies and operations and maintenance associated with corrective actions. 
The Company adopted SOP 96-1 effective January 1, 1997, as required.  The
adoption of SOP 96-1 had an immaterial impact on the Company's financial
position and results of operations.

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

     The following should be read in conjunction with the response to Item
1, Part I, of this Report.

     This section contains statements which constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995.  These statements appear in a number of places in this section
(see, for example, "Profit Enhancement and Cost Reduction Initiative,"
"Results of Operations," and "Liquidity and Capital Resources").  Such
statements can be identified by the use of forward-looking terminology such
as "believes," "expects," "may," "estimates," "will," "should," "plans" or
"anticipates" or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy.  Readers are
cautioned that any such forward-looking statements are not guarantees of
future performance and involve significant risks and uncertainties, and
that actual results may vary materially from those in the forward-looking
statements as a result of various factors.  These factors include the
effectiveness of management's strategies and decisions, general economic
and business conditions, developments in technology, new or modified
statutory or regulatory requirements, and changing prices and market
conditions.  This section and the Company's Annual Report on Form 10-K for
the year ended December 31, 1996, each identify other factors that could
cause such differences.  No assurance can be given that these are all of
the factors that could cause actual results to vary materially from the
forward-looking statements.

PROFIT ENHANCEMENT AND COST REDUCTION INITIATIVE

     The Company has set a goal of achieving significant cost reductions
and other profit improvements during 1997, with the full effect planned to
be realized in 1998.  The initiative is based on the Company's conclusion
that the current level of performance of its existing facilities and
businesses will not achieve the level of profits the Company considers
satisfactory based upon historic long-term average prices for primary
aluminum and alumina.  To achieve this goal, the Company plans reductions
in production costs, decreases in corporate selling, general and
administrative expenses, and enhancements to product mix.  There can be no
assurance that the initiative will result in the desired cost reductions
and other profit improvements.

RECENT EVENTS
     In April 1997 the Company announced that it had signed a letter of
intent with Reynolds Metals Company ("Reynolds") to purchase Reynolds'
McCook, Illinois, sheet and plate plant and Bellwood, Virginia, extrusions
plant.  The transaction is subject to regulatory and board approvals,
negotiation and execution of definitive agreements, and other customary
closing conditions; accordingly, no assurances can be given that the
transaction will ultimately be consummated.

RESULTS OF OPERATIONS

     The table on the following page provides selected operational and
financial information on a consolidated basis with respect to the Company
for the quarters ended March 31, 1997, and 1996.  As an integrated aluminum
producer, the Company uses a portion of its bauxite, alumina, and primary
aluminum production for additional processing at certain of its other
facilities.  Intracompany shipments and sales are excluded from the
information set forth on the following page.

     Interim results are not necessarily indicative of those for a full
year.

               SELECTED OPERATIONAL AND FINANCIAL INFORMATION
                                (Unaudited)
           (In millions of dollars, except shipments and prices)

<TABLE>

<CAPTION>
                                                                     Quarter Ended
                                                                       March 31,
                                                            ------------------------------
                                                                      1997            1996
                                                            ------------------------------
<S>                                                         <C>             <C>
Shipments: (1)
     Alumina                                                        385.5           476.2 
     Aluminum products:
          Primary aluminum                                           78.5            74.8 
          Fabricated aluminum products                               93.9            77.2 
                                                            ------------- ---------------
               Total aluminum products                              172.4           152.0 
                                                            ============= == =============
Average realized sales price:
     Alumina (per ton)                                      $         190   $         208 
     Primary aluminum (per pound)                                     .75             .72 
Net sales:
     Bauxite and alumina:
          Alumina                                           $        73.2   $        99.0 
          Other (2) (3)                                              26.6            24.4 
                                                            ------------- ---------------
               Total bauxite and alumina                             99.8           123.4 
                                                            ------------- ---------------
     Aluminum processing:
          Primary aluminum                                          129.2           119.1 
          Fabricated aluminum products                              314.4           284.9 
          Other (3)                                                   4.0             3.7 
                                                            ------------- ---------------
               Total aluminum processing                            447.6           407.7 
                                                            ------------- ---------------
                    Total net sales                         $       547.4   $       531.1 
                                                            ============= ===============
Operating income (loss):
     Bauxite and alumina                                    $        (1.5)  $         9.8 
     Aluminum processing                                             51.3            48.5 
     Corporate                                                      (17.0)          (17.7)
                                                            ------------- ---------------
          Total operating income                            $        32.8   $        40.6 
                                                            ============= ===============
Net income                                                  $         4.3   $        11.1 
                                                            ============= ===============
Capital expenditures:
     Property, plant, and equipment                         $        21.8   $        19.8 
     Investments in unconsolidated affiliates                                             
                                                            ------------- ---------------
          Total capital expenditures                        $        21.8   $        19.8 
                                                            ============= ===============

<FN>
____________________________________
(1)  In thousands of metric tons.
(2)  Includes net sales of bauxite.
(3)  Includes the portion of net sales attributable to minority interests
     in consolidated subsidiaries.

</TABLE>

Overview
     The Company's operating results are sensitive to changes in prices of
alumina, primary aluminum, and fabricated aluminum products, and also
depend to a significant degree on the volume and mix of all products sold
and on the Company's hedging strategies.  Primary aluminum prices have
historically been subject to significant cyclical fluctuations. Alumina
prices as well as fabricated aluminum product prices (which vary
considerably among products) are significantly influenced by changes in the
price of primary aluminum but generally lag behind primary aluminum price
changes by up to three months.

     During the first half of 1996, the Average Midwest United States
transaction price ("AMT Price") for primary aluminum remained relatively
stable in the $.75 per pound range.  However, during the second half of the
year the AMT Price fell, reaching a low of $.65 per pound for October 1996,
before recovering late in the year.  During the period 1993- March 31,
1997, the AMT Price for primary aluminum ranged from approximately $.50 to
$1.00 per pound.  The AMT Price for primary aluminum for the week ended
April 11, 1997, was approximately $.76 per pound.

     See Note 5 of the Notes to Interim Consolidated Financial Statements
for a discussion of the Company's hedging activities.

QUARTER ENDED MARCH 31, 1997 COMPARED TO QUARTER ENDED MARCH 31, 1996

Summary
     The Company reported net income of $4.3 million for the first quarter
of 1997, compared to net income of $11.1 million for the same period of
1996. Net sales in the first quarter of 1997 totaled $547.4 million
compared to $531.1 million in the first quarter of 1996.

Bauxite and Alumina
     Net sales of alumina decreased by 26% for the quarter ended March 31,
1997, from the comparable period in the prior year, as a result of a 19%
decrease in shipments of alumina and a 9% decline in average prices
realized from the sale of alumina.  Shipment volumes were down as compared
to the quarters ended March 31, 1996, and December 31, 1996, primarily as a
result of the timing of shipments.  The reduction in average prices
realized reflects the substantial decline in primary aluminum prices
experienced in the latter half of 1996 discussed above.

     The change in operating income (loss) for this segment from the prior
year period was to a substantial degree the result of the reduction in the
average alumina price realized and to a lesser extent due to the decline in
alumina shipments.<PAGE>
Aluminum Processing

     Net sales of primary aluminum increased by 8% for the quarter ended
March 31, 1997, from the comparable prior year period as a result of a 3%
increase in average prices realized and a 5% increase in shipments.  Net
sales of fabricated aluminum products were up 10% for the quarter ended
March 31, 1997, as compared to the prior year period as a result of a 22%
increase in shipments.  The increase in fabricated aluminum product
shipments over the fourth quarter of 1996 and the first quarter of 1996 is
due to seasonal factors and increased international sales of can sheet,
respectively.  The impact of increased product shipments on net sales was
to a limited degree offset by a 9% decrease in average prices realized from
the sale of fabricated aluminum products for the quarter ended March 31,
1997.

     Operating income for the aluminum processing segment was affected by
the price and volume factors discussed above and also reflects
approximately $5.0 million of operating income realized in the first
quarter of 1997 related to the settlement of certain energy service
contracts.

Corporate
     Corporate operating expenses represent normal and recurring corporate
general and administrative expenses which are not allocated to the
Company's business segments.

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities
     At March 31, 1997, the Company had working capital of $468.9 million,
compared with working capital of $409.3 million at December 31, 1996.  The
increase in working capital was due primarily to an increase in Receivables
and a decrease in Accrued interest and Accounts payable partially offset by
a decrease in cash and cash equivalents.

Investing Activities
     Capital expenditures during the first quarter of 1997 were $21.8
million, which were used primarily to improve production efficiency, reduce
operating costs, expand capacity at existing facilities, and construct new
facilities.  The Company's first Micromill TM facility, which was
constructed in Nevada during 1996 as a demonstration and production
facility, achieved operational start-up by year-end 1996.  The Company
expects that the Nevada Micromill TM facility will be in a start-up mode
for the first half of 1997 and will be able to commence limited product
shipments to customers in the latter part of the year.

     Total consolidated capital expenditures (of which approximately 7% is
expected to be funded by the Company's minority partners in certain foreign
joint ventures) are expected to be between $70.0 and $140.0 million per
annum in each of 1997 through 1999.  Management continues to evaluate
numerous projects all of which require substantial capital, including the
Company's Micromill TM project, the previously discussed transaction with
Reynolds, and other potential opportunities both in the United States and
overseas.

     In 1995, Kaiser Yellow River Investment Limited ("KYRIL"), a
subsidiary of the Company, entered into a joint venture agreement and
related agreements (the "Joint Venture Agreements") with the Lanzhou
Aluminum Smelters ("LAS") of the China National Nonferrous Metals Industry
Corporation ( the "CNNC") relating to the formation and operation of Yellow
River Aluminum Industry Company Limited, a Sino-foreign joint equity
enterprise (the "Joint Venture") organized under the laws of the People's
Republic of China ("PRC").  KYRIL contributed $9.0 million to the capital
of the Joint Venture in July 1995.  The parties to the Joint Venture are
currently engaged in discussions concerning the future of the Joint
Venture.  At a meeting of the board of directors of the Joint Venture held
in January 1997, the Joint Venture directors adopted a resolution that,
among other things, (i) extended until June 30, 1997, discussions
concerning the future of the Joint Venture, (ii) provided that KYRIL
granted to LAS the right to seek a buyer to purchase KYRIL's equity
interest in the Joint Venture, and (iii) provided that if a buyer to
purchase KYRIL's equity interest in the Joint Venture was not found by June
30, 1997, the Joint Venture would be terminated and dissolved.  More recent
negotiations between KYRIL and LAS have focused on LAS and/or the CNNC
making a payment to KYRIL in return for its existing interests in the Joint
Venture.  However, no agreement has been reached concerning the amount of
or terms for any such payment.  Governmental approval in the PRC will be
necessary in order to implement any arrangements agreed to by the parties,
and there can be no assurance such approvals will be obtained.

Financing Activities and Liquidity

     At March 31, 1997, the Company had long-term debt of $1,018.6 million,
compared with $961.9 million at December 31, 1996.  The change in long-term
debt between periods is the result of $42.0 million of borrowings under the
Company's Credit Agreement and $19.0 million of proceeds from the Spokane
County, Washington, Solid Waste Disposal Revenue Bonds which were loaned to
the Company to finance certain qualifying capital expenditures at its Mead
smelter.

     At March 31, 1997, $231.9 million (of which $73.9 million could have
been used for letters of credit) was available to the Company under the
Credit Agreement.  Loans under the Credit Agreement bear interest at a
premium (which varies based on the results of a financial test) over either
a base rate or LIBOR at the Company's option.  During the first quarter of
1997, the average per annum interest rate was 9.75%.  The Credit Agreement
does not permit the Company to pay any dividends on its common stock.

     Management believes that the Company's existing cash resources,
together with cash flows from operations and borrowings under the Credit
Agreement, will be sufficient to meet its working capital and capital
expenditure requirements for the next year.  Additionally, with respect to
long-term liquidity, management believes that operating cash flows,
together with the ability to obtain both short and long-term financing,
should provide sufficient funds to meet the Company's working capital and
capital expenditure requirements.


                        PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS
          -----------------

Matheson et al v. Kaiser Aluminum Corporation et al

     In March 1996, a lawsuit was filed in the Delaware Court of Chancery,
entitled Matheson et al v. Kaiser Aluminum Corporation et al, No. 14900,
against MAXXAM, Kaiser, and the directors of Kaiser, challenging and
seeking to enjoin a proposed recapitalization of Kaiser (the "Proposed
Recapitalization") and a special stockholders meeting at which the Proposed
Recapitalization was to be considered.  See Item 3. Legal Proceedings, of
the Report on Form 10-K of Kaiser for the fiscal year ended December 31,
1996, Commission File No. 1-9447.  On or about March 27, 1997, the Court of
Chancery signed a Final Order and Judgment awarding plaintiffs' attorneys
fees and expenses in the amount of $.8 million, dissolving the preliminary
injunction, and dismissing plaintiffs' case with prejudice.

DOJ Proceeding

     In August 24, 1994, the United States Department of Justice (the
"DOJ") issued Civil Investigative Demand No. 11356 requesting certain
information from Kaiser regarding its production and sales of primary
aluminum.  Kaiser was informed in April 1997 that the DOJ has officially
closed its investigation and will return the documents submitted by Kaiser.

Asbestos-related Litigation

     The Company is a defendant in a number of lawsuits, some of which
involve claims of multiple persons, in which the plaintiffs allege that
certain of their injuries were caused by, among other things, exposure to
asbestos during, and as a result of, their employment or association with
the Company or exposure to products containing asbestos produced or sold by
the Company.  The portion of Note 4 of the Notes to Interim Consolidated
Financial Statements contained in this report under the heading "Asbestos
Contingencies" is incorporated herein by reference.  See Part I, Item 3.
"LEGAL PROCEEDINGS - Asbestos-related Litigation" in the Company's Report
on Form 10-K for the year ended December 31, 1996.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K
          --------------------------------

     (a)  Exhibits.

     Exhibit No.                   Exhibit
     ----------                    -------

      3.1 Restated Certificate of Incorporation of Kaiser Aluminum &
Chemical Corporation (the "Company" or  "KACC"), dated July 25,
1989 (incorporated by reference to Exhibit 3.1 to the
registration Statement on Form S-1, dated August 25, 1989, filed
by KACC, Registration No. 33-30645).

      3.2 Certificate of Retirement of KACC, dated February 7, 1990
(incorporated by reference to Exhibit 3.2 to the Report on Form
10-K for the period ended December 31, 1989, filed by KACC, File
No. 1-3605).

      3.3 By-laws of KACC, amended and restated as of December 15, 1994
(incorporated by reference to Exhibit 3.3 to the Report on Form
10-K for the period ended December 31, 1994, filed by KACC, File
No. 1-3605).

     *27  Financial Data Schedule.

     (b)  Reports on Form 8-K.

     A Current Report on Form 8-K was filed on March 4, 1997, disclosing
the Company's fourth quarter 1996 results under Item 5.

---------------
*    Filed herewith

                                 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, who have signed this report on
behalf of the registrant as the principal financial officer and principal
accounting officer of the registrant, repsectively.

                                             KAISER ALUMINUM & CHEMICAL 
                                             CORPORATION


                                             /s/   John T. La Duc
                                        By: ----------------------------
                                                   John T. La Duc
                                                Vice President and 
                                              Chief Financial Officer
                                           (Principal Financial Officer)


                                             /s/Arthur S. Donaldson
                                        By: ----------------------------
                                                Arthur S. Donaldson
                                                     Controller
                                           (Principal Accounting Officer)



Dated:  April 25, 1997