SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


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


For Quarter Ended: September 26, 1999             Commission File Number: 1-7911
--------------------------------------------------------------------------------
                             FORT JAMES CORPORATION
--------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)


Virginia                                                    54-0848173
--------------------------------------------------------------------------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                               Identification No.)


1650 Lake Cook Road, Deerfield, IL                          60015-4753
--------------------------------------------------------------------------------
(Address of principal executive offices)                   (Zip Code)


Registrant's telephone number, including area code: (847) 317-5000
--------------------------------------------------------------------------------

                                 Not Applicable
--------------------------------------------------------------------------------
              (Former name, former address, and former fiscal year,
                          if changed since last report)

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

Number of shares of $.10 par value  common stock  outstanding  as of October 27,
1999:

                               216,372,382 shares


<PAGE>



                             FORT JAMES CORPORATION
                          QUARTERLY REPORT ON FORM 10-Q
                               September 26, 1999


                                TABLE OF CONTENTS



ITEM 1.     Financial Statements:

            Consolidated Balance Sheets as
              of September 26, 1999 and September 27, 1998                     3

            Consolidated Statements of Operations for
              the quarters and nine months ended  September 26, 1999
              and September 27, 1998                                           4

            Consolidated Statements of Cash Flows for
              the nine months ended September 26, 1999
              and September 27, 1998                                           5

            Notes to Consolidated Financial Statements                         7

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

ITEM 3.     Quantitative and Qualitative Disclosures About Market Risk        17


PART II.  OTHER INFORMATION:

ITEM 2.     Changes in Securities                                             17

ITEM 3.     Defaults Upon Senior Securities                                   17

ITEM 4.     Submission of Matters to a Vote of Security Holders               17

ITEM 5.     Other Information                                                 17

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

SIGNATURES                                                                    18





<PAGE>




18

PART I.  FINANCIAL INFORMATION

Item 1.           Financial Statements

<TABLE>
<S>     <C>






                             FORT JAMES CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                    September 26, 1999 and December 27, 1998


                                                          September     December
(in millions, except share data)                              1999          1998
--------------------------------------------------------------------------------
Assets:
Current assets:
  Cash and cash equivalents                                  $ 7.7        $ 5.3
  Accounts receivable                                        965.2        857.5
  Inventories                                                819.3        806.5
  Deferred income taxes                                      100.4        162.7
  Prepaid expenses and other current assets                   31.4         24.3
--------------------------------------------------------------------------------
   Total current assets                                    1,924.0      1,856.3
--------------------------------------------------------------------------------
Property, plant and equipment                              7,705.9      7,547.0
Accumulated depreciation                                  (3,455.9)    (3,225.4)
--------------------------------------------------------------------------------
   Net property, plant and equipment                       4,250.0      4,321.6
Goodwill, net                                                577.0        620.0
Net assets of discontinued operations                            -        403.4
Other assets                                                 525.4        526.7
--------------------------------------------------------------------------------
    Total assets                                          $7,276.4    $ 7,728.0
================================================================================
Liabilities and Shareholders' Equity:
Current liabilities:
  Accounts payable                                         $ 610.3      $ 679.2
  Accrued liabilities                                        700.4        644.6
  Current portion of long-term debt                          236.9        240.0
--------------------------------------------------------------------------------
    Total current liabilities                              1,547.6      1,563.8
--------------------------------------------------------------------------------
Long-term debt                                             2,876.6      3,646.4
Deferred income taxes                                        808.7        756.5
Accrued postretirement benefits other than pensions          418.8        446.8
Other long-term liabilities                                  273.6        263.1
--------------------------------------------------------------------------------
    Total liabilities                                      5,925.3      6,676.6
--------------------------------------------------------------------------------
Common stock, $.10 par value, 500.0 million shares authorized;
  219.6 million shares outstanding at September 26, 1999
  and 220.5 million at December 27, 1998                      22.1         22.1
Additional paid-in capital                                 3,185.0      3,215.6
Accumulated comprehensive loss                              (177.6)       (88.8)
Accumulated deficit                                       (1,678.4)    (2,097.5)
--------------------------------------------------------------------------------
    Total shareholders' equity                             1,351.1      1,051.4
--------------------------------------------------------------------------------
    Total liabilities and shareholders' equity            $7,276.4    $ 7,728.0
================================================================================


    The accompanying  notes are an integral part of the consolidated  financial
statements.




<PAGE>



                             FORT JAMES CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     For the Quarters and Nine months Ended
                    September 26, 1999 and September 27, 1998

                                           Quarter                Nine Months
                                       --------------------- -------------------
(in millions,
except per share amounts)                 1999       1998      1999      1998
--------------------------------------------------------------------------------
Net sales                                $ 1,739.3 $1,713.7   $5,126.8 $5,113.6
Cost of goods sold                        (1,207.7)(1,132.7)  (3,518.4)(3,432.1)
Selling and administrative expenses         (363.4)  (293.2)    (951.6)  (844.8)
Restructure and other items                   13.4    (12.7)      14.5    (28.0)
--------------------------------------------------------------------------------
  Income from operations                     181.6    275.1      671.3    808.7
Interest expense                             (53.6)   (65.6)    (175.5)  (203.0)
Other income (expense), net                    0.4     (4.3)      18.5     (1.8)
--------------------------------------------------------------------------------
  Income from continuing operations
    before income taxes, extraordinary
    items, and cumulative effect of a
    change in accounting principle           128.4    205.2      514.3    603.9
Income tax expense                           (34.3)   (57.6)    (166.7)  (208.4)
--------------------------------------------------------------------------------
  Income from continuing operations
  before extraordinary items and
  cumulative effect of a change
  in accounting principle                     94.1    147.6      347.6    395.5
Income (loss) from discontinued
  operations, net of taxes                    (1.5)     3.1       (6.4)     9.0
--------------------------------------------------------------------------------
Income before extraordinary items
  and cumulative effect of a change
  in accounting principle                     92.6    150.7      341.2    404.5
Extraordinary loss on early
   extinguishment of debt, net of taxes          -        -      (33.2)    (2.6)
Extraordinary gain on sale of
   discontinued operations, net of tax       232.5        -      232.5        -
Cumulative effect of a change
   in accounting principle, net of taxes         -        -      (22.1)       -
--------------------------------------------------------------------------------
  Net income                                 325.1    150.7      518.4    401.9
Preferred dividend requirements                  -        -          -     (5.2)
--------------------------------------------------------------------------------

 Net income available
   to common stockholders                  $ 325.1  $ 150.7    $ 518.4  $ 396.7
================================================================================
Basic earnings per share:
    Income from continuing operations
      before extraordinary items and the
      cumulative effect of a change in
      accounting principle                  $ 0.43   $ 0.69     $ 1.58   $ 1.82
    Income (loss) from discontinued
      operations, net of taxes               (0.01)    0.01      (0.03)    0.04
    Extraordinary loss on early
      extinguishment of debt, net of taxes       -        -      (0.15)   (0.01)
    Extraordinary gain on sale of
      discontinued operations, net of taxes   1.06        -       1.06        -
    Cumulative effect of a change in
       accounting principle, net of taes         -        -      (0.10)       -
--------------------------------------------------------------------------------
      Net income                            $ 1.48   $ 0.70     $ 2.36   $ 1.85
--------------------------------------------------------------------------------
Weighted average common
   shares outstanding                        219.2    219.0      219.4    215.0
================================================================================


Diluted earnings per share:
    Income from continuing operations
      before extraordinary items and
      the cumulative effect of a change
      in accounting priciple                $ 0.43   $ 0.68     $ 1.58   $ 1.80
    Income (loss) from discontinued
       operations, net of taxes              (0.01)    0.01      (0.03)    0.04
    Extraordinary loss on early
       extinguishment of debt, net of taxes      -        -      (0.15)   (0.01)
    Extraordinary gain on sale of
       discontinued operations, net of taxes  1.05        -       1.05        -
    Cumulative effect of a change
       in accounting principle, net of taxes     -        -      (0.10)       -
--------------------------------------------------------------------------------
         Net income                         $ 1.47   $ 0.69     $ 2.35   $ 1.83
--------------------------------------------------------------------------------

Weighted average common shares and
     common share equivalents outstanding    220.2    220.0      220.5    217.1
================================================================================
Cash dividends per common share             $ 0.15   $ 0.15     $ 0.45   $ 0.45
================================================================================


    The accompanying  notes are an integral part of the consolidated  financial
statements.


<PAGE>



                             FORT JAMES CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            For the Nine months Ended
                    September 26, 1999 and September 27, 1998

(in millions)                                                 1999       1998
--------------------------------------------------------------------------------
Cash provided by (used for)operating activities:
  Net income                                                  $518.4    $ 401.9
  Depreciation expense                                         332.9      318.0
  Amortization of goodwill                                      14.2       14.2
  Deferred income tax provision                                 52.7      128.0
  Restructure and other items                                  (14.5)     (20.5)
  (Income) loss from discontinued operations, net of taxes       6.4       (9.0)
  Gain on sale of discontinued operations, net of taxes       (232.5)         -
  Loss on early extinguishment of debt, net of taxes            33.2        2.6
  Cumulative effect of a change in accounting
     principle, net of taxes                                    22.1          -
  Change in current assets and liabilities, excluding
     effects of acquisitions and dispositions:
      Accounts receivable                                     (125.0)    (146.5)
      Inventories                                              (16.3)      (4.0)
      Prepaid expenses and other current assets                 (6.1)       7.2
      Accounts payable and accrued liabilities                 (26.6)     (34.3)
  Other, net                                                   (16.1)     (37.6)
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Cash provided by (used for)investing activities:
  Expenditures for property, plant and equipment              (346.5)    (321.7)
  Cash paid for acquisitions, net                              (56.7)      (2.5)
  Increase in net assets of discontinued operations            (34.4)      (9.9)
  Proceeds from sale of discontinued operations                825.8          -
  Other, net                                                     2.2       14.6
--------------------------------------------------------------------------------
Cash provided by (used for) investing activities               390.4     (319.5)
--------------------------------------------------------------------------------
Cash provided by (used for) financing activities:
  Additions to long-term debt                                  357.3      466.0
  Payments of long-term debt                                  (340.5)     (94.3)
  Net decrease in revolving debt                              (764.9)    (594.6)
  Premiums paid on early extinguishment of debt
    and debt issuance costs                                    (56.2)      (5.6)
  Redemption of preferred stock                                    -       (6.6)
  Common and preferred stock cash dividends paid               (98.9)    (106.6)
  Proceeds from exercise of stock options                       15.0       27.5
  Common stock purchases                                       (53.6)         -
  Other, net                                                    11.0          -
--------------------------------------------------------------------------------
Cash used for financing activities                            (930.8)    (314.2)
--------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents                 2.4      (13.7)
Cash and cash equivalents, beginning of period                   5.3       33.6
--------------------------------------------------------------------------------
Cash and cash equivalents, end of period                       $ 7.7     $ 19.9
================================================================================

    The accompanying  notes are an integral part of the consolidated  financial
statements.


<PAGE>




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       Significant Accounting Policies

   Basis of Presentation:

     In the  opinion of  management,  the  accompanying  unaudited  consolidated
financial  statements of Fort James Corporation  ("Fort James" or "the Company")
contain all adjustments (consisting of only normal recurring accruals, except as
described in Note 3 of Notes to Consolidated  Financial Statements) necessary to
present fairly the Company's consolidated financial position as of September 26,
1999, its results of operations for the quarters and nine months ended September
26, 1999 and  September  27, 1998,  and its cash flows for the nine months ended
September 26, 1999 and September 27, 1998.  The balance sheet as of December 27,
1998 was derived from audited financial  statements as of that date. The results
of operations  for the quarter and nine months ended  September 26, 1999 are not
necessarily indicative of the results to be expected for the full year.

     Certain  amounts  in  the  financial  statements  and  supporting  footnote
disclosures   have  been   reclassified   to  conform  to  the  current   year's
classification.

   Prospective Accounting Pronouncements:

     In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities".  This statement requires the recognition of
all  derivatives  in the  statement  of financial  position as either  assets or
liabilities  and their  measurement at fair value.  Depending upon the nature of
the  derivative,   changes  in  fair  value  are  either   recognized  in  other
comprehensive income or in earnings. FASB Statement No. 137, which was issued in
July 1999,  defers the  Company's  required  adoption of Statement No. 133 until
fiscal 2001. The Company has not determined what affect,  if any,  Statement No.
133 will have on its results of operations or financial position.

2.       Discontinued Operations

     On August 2, 1999, Fort James completed the sale of its Packaging  business
to ACX Technologies,  Inc. for $825.8 million in cash. The Company recognized an
extraordinary gain on the sale of $381.9 million ($232.5 million after taxes, or
$1.05 per diluted share).  The Packaging  business  consisted of the operations,
assets,  and  liabilities  of the  Company's  folding  carton,  healthcare,  and
microwave packaging manufacturing facilities.  The Packaging business is treated
as a discontinued  operation and the financial statements have been restated for
periods  prior to the  disposal  date.  The results of  discontinued  operations
include operating profits,  certain unusual items, and an allocation of interest
expense and taxes.
     Results of the  Packaging  business  for the quarters and nine months ended
September 26, 1999 and September 27, 1998 were as follows:

                                         Quarter                   Nine Months
                               -------------------------------------------------
(in millions)                       1999         1998          1999        1998
--------------------------------------------------------------------------------
Net sales                         $ 51.6      $ 148.1       $ 330.5     $ 441.4
================================================================================
Income (loss) from discontinued
   operations                     $ (2.3)       $ 5.8        $ (9.1)     $ 16.4
Tax benefit (expense)                0.8         (2.7)          2.7        (7.4)
--------------------------------------------------------------------------------
Income (loss) from discontinued
   operations, net of taxes       $ (1.5)       $ 3.1        $ (6.4)      $ 9.0
================================================================================


3.       Unusual and Non-recurring Items

     Results for the quarter and nine months ended  September  26, 1999 included
net non-recurring  credits of $13.4 million ($12.0 million after taxes, or $0.06
per diluted share) and $14.5 million  ($12.7  million after taxes,  or $0.06 per
diluted share), respectively. Non-recurring credits for the nine months included
a net  reversal of  merger-related  restructure  accruals  due to  revisions  of
estimates,  partially  offset  by a pretax  charge  for a  permanent  impairment
write-down of a non-operating asset.

     Results for the quarter and nine months ended  September  27, 1998 included
net pretax  charges of $12.7 million  ($7.8  million  after taxes,  or $0.03 per
diluted  share) and $28.0  million  ($17.3  million  after  taxes,  or $0.08 per
diluted  share),  respectively.  Net pretax charges for the nine months included
charges for severance,  relocation,  and other merger-related  costs, which were
not accruable in 1997 under  generally  accepted  accounting  principles.  These
charges were partially  offset by contract  terminations on terms more favorable
than  anticipated in the  restructure  plan. In addition,  the Company  reversed
$10.5 million  ($0.05 per diluted share for both the quarter and nine months) of
merger-related tax reserves established in 1997 in accordance with temporary IRS
regulations, which were subsequently rescinded.

     For the third quarter and nine months ended September 26, 1999, income from
operations included $46.0 million of unusual items for severance and other costs
related to a  reduction-in-force  program and for antitrust and other litigation
accruals,  of which $17.8 million is included in cost of sales and $28.2 million
is included in selling and administrative expense. The Company recorded a charge
of $25.0 million for a program that will reduce headcount by approximately 1,300
employees. As of September 26, 1999, headcount has been reduced by more than 400
employees and termination benefits of $0.9 million have been paid.

4.       Stock Repurchase Program

     Concurrent  with the sale of the  Packaging  business,  the  Company  began
execution of the  previously  announced  $500 million,  18 month stock  buy-back
program.  During the quarter,  1.5 million shares were purchased at a total cost
of $53.6 million.

5.       Inventories

     The components of inventories  were as follows as of September 26, 1999 and
December 27, 1998:
                                                        September      December
(in millions)                                                1999          1998
--------------------------------------------------------------------------------
Raw materials                                             $ 158.0       $ 164.2
Finished goods and work in process                          503.1         510.9
Stores and supplies                                         172.1         163.2
--------------------------------------------------------------------------------
Reduction to state certain inventories                      833.2         838.3
  at last-in, first-out cost                                (13.9)        (31.8)
--------------------------------------------------------------------------------
    Total inventories                                     $ 819.3       $ 806.5
================================================================================

6.       Comprehensive Income

     Comprehensive  income  for  the  quarters  ended  September  26,  1999  and
September 27, 1998 was $364.5 million and $229.8 million,  respectively. For the
nine months ended  September  26, 1999 and  September  27,  1998,  comprehensive
income was $429.6  million  and $450.0  million,  respectively.  The  difference
between  net  income  and  comprehensive  income  is  due  to  foreign  currency
translation  gains and losses.  Comprehensive  income for the nine months  ended
September 27, 1998 also included unrealized losses on securities.

7.       Income Taxes

     The  Company's  effective  income  tax rate was 32.4  percent  for the nine
months  ended  September  26, 1999  compared to 34.5  percent for the first nine
months of 1998. The difference  between the Company's  effective income tax rate
and the statutory  federal income tax rate for the first nine months of 1999, is
primarily due to state and foreign income taxes and the benefits of tax planning
strategies.

8.       Extraordinary Loss on Early Extinguishment of Debt

     The  extraordinary  loss on the early  extinguishment  of debt for the nine
months ended  September  26, 1999 and  September  27, 1998 was $54.4 million and
$4.2  million,   net  of  income  taxes  of  $21.2  million  and  $1.6  million,
respectively.  During  the first nine  months of 1999,  the  Company  refinanced
$125.3 million of 9.25% senior notes, $64.0 million of 8.38% senior notes, $62.0
million of 7.75%  senior  notes and $58.8  million of 9.0%  senior  subordinated
notes prior to their scheduled maturities.  The debt was substantially  replaced
with a e300 million, 4.75% Euro denominated bond.

9.       Income Per Common Share and Common Share Equivalent

     Income and share information used in determining earnings per share for the
quarters and nine months ended  September  26, 1999 and  September 27, 1998 were
calculated as follows:
<PAGE>
                                                    1999                1998
                                               ---------------------------------
(in millions, except per share amounts)        Income   Shares   Income   Shares
--------------------------------------------------------------------------------
Quarter:
Amounts used to  compute  basic  earnings  per  share:
Income  from  continuing operations before
extraordinary items and cumulative
effect of a change in accounting principle               $94.1           $ 147.6
    Weighted average common shares outstanding           219.2             219.0
Effect of dilutive securities:
     Options                                               1.0               1.0
--------------------------------------------------------------------------------
Amounts used to compute diluted
    earnings per share                            $94.1  220.2   $ 147.6   220.0
================================================================================

Nine months:
Amounts used to  compute  basic  earnings  per  share:
Income  from  continuing operations before
extraordinary items and cumulative
effect of a change in accounting principle            $ 347.6           $ 395.5
 Preferred stock dividends                                 -               (5.2)
--------------------------------------------------------------------------------
    Income available to
      common stockholders                         347.6             390.3
    Weighted average common
       shares outstanding                                219.4             215.0
Effect of dilutive securities:
   Options                                                 1.1               2.1
--------------------------------------------------------------------------------
Amounts used to compute
   diluted earnings per share                   $ 347.6  220.5    $ 390.3  217.1
================================================================================


     Series K, L and N preferred stocks, which were redeemed or converted in the
second quarter of 1998, were antidilutive in the first quarter of 1998.



10.      Fort James Operating Company

     Fort James Operating  Company ("FJOC") is an obligor of certain  securities
registered  under the  Securities Act of 1933,  thus  subjecting it to reporting
requirements  under Section 13 or 15(d) of the Securities  Exchange Act of 1934.
In accordance  with Staff  Accounting  Bulletin No. 53, the following  condensed
financial  information for FJOC for the quarters and nine months ended September
26, 1999 and  September  27, 1998 and as of September  26, 1999 and December 27,
1998 is  presented  in lieu of  consolidated  financial  statements  because the
securities are fully and unconditionally guaranteed by Fort James and management
has  determined  that such  information  is not  material  to the holders of the
securities.

                                              Quarter              Nine Months
                                          --------------------------------------
(in millions)                              1999     1998         1999       1998
--------------------------------------------------------------------------------
Condensed income statement information:
Net sales                               $ 1,244.5 $ 1,114.6  $ 3,512.4  $3,301.2
Gross profit                                367.1     373.0    1,055.9   1,080.6
Income from continuing operations
  before extraordinary items and
  the cumulative effect of a change
  in accounting principle                  (11.2)     (38.2)      31.9      46.8
Net income                                 (26.5)     (28.9)       6.1      66.2
================================================================================
                                            September     December
(in millions)                                    1999         1998
------------------------------------------------------------------
Condensed balance sheet information:
Current assets                                $ 975.0      $ 865.8
Noncurrent assets                             3,116.6      3,575.7
Current liabilities                             532.4        651.0
Noncurrent liabilities                        4,894.7      5,129.5
==================================================================
<PAGE>

11.      Commitments and Contingent Liabilities

   Environmental Matters:

     Like its  competitors,  Fort James is subject to  extensive  regulation  by
various federal,  state,  provincial,  and local agencies concerning  compliance
with  environmental  control statutes and regulations.  These regulations impose
limitations,  including effluent and emission  limitations,  on the discharge of
materials  into the  environment,  as well as require  the Company to obtain and
operate in  compliance  with the  conditions  of permits and other  governmental
authorizations.  Future  regulations  could  materially  increase the  Company's
capital requirements and certain operating expenses in future years.

     Fort  James,  along  with  others,  has been  identified  as a  potentially
responsible  party  ("PRP")  at various  U.S.  Environmental  Protection  Agency
("EPA")   designated   Superfund   sites  and  is  involved  in  other  remedial
investigations and actions under federal and state laws. The Company, along with
six other current and former  operators of pulp and paper  facilities,  has been
identified as a PRP for  contamination by hazardous  substances of the lower Fox
River.  Various  state and  federal  agencies  and tribal  entities  are seeking
sediment  restoration  and natural  resources  damages.  In February  1999,  the
Wisconsin  Department of Natural  Resources  released for public comment a draft
remedial investigation/feasibility study of the Fox River. While the draft study
did not advocate any specific  restoration  alternatives,  it included estimated
total costs  ranging from zero for 'no action' to  approximately  $720  million,
depending on the alternative or combination of alternatives  selected. The final
restoration alternative and the Company's share of the related costs are unknown
at this time. The Company,  along with other PRPs, is also  participating in the
funding of a remedial  investigation/feasibility  study of  contamination of the
Kalamazoo River.  Management does not anticipate  selection of a remedy prior to
2002.  The Company  believes that its share of the  restoration  costs for these
sites  will not have a material  adverse  impact on its  consolidated  financial
position but could have a material effect on consolidated  results of operations
in a given period.

     It is the Company's policy to accrue  remediation  costs on an undiscounted
basis when it is probable  that such costs will be incurred  and when a range of
loss can be reasonably estimated.  As of September 26, 1999, Fort James' accrued
environmental  liabilities,  including  remediation and landfill  closure costs,
totaled $68.4 million.

Litigation:

     In May 1997,  the  Attorney  General of the State of Florida  filed a civil
action in the United States District Court for the Northern  District of Florida
at Gainesville  (the "Florida  District  Court"),  against the Company and seven
other manufacturers of sanitary commercial paper products alleging violations of
federal and state  antitrust and unfair  competition  laws. The complaint  seeks
damages on behalf of the state  under  Florida  law of $1 million  against  each
defendant for each violation,  unspecified treble damages and injunctive relief.
Four  other  state  attorney  generals  have  brought  similar  suits  that were
consolidated  in the Florida  District  Court.  In October 1999,  the defendants
reached  agreement in  principal  with the State of Florida by which the Florida
state case was settled.  The Company admits no wrongdoing.  Numerous other suits
have been  filed in  federal  courts on  behalf  of an  alleged  class of direct
purchasers,  all seeking  similar damages for similar  alleged  violations.  The
class actions were consolidated in the Florida District Court, and in July 1998,
the Court conditionally  certified the class. Class actions also have been filed
in four states,  on behalf of an alleged class of indirect  purchasers,  seeking
similar  damages for similar  alleged  violations  under state law.  The Company
believes that these cases are without merit and is vigorously defending both the
federal and state actions.

     Although the ultimate disposition of the various legal proceedings to which
the Company is a party cannot be predicted with  certainty,  it is the Company's
policy to accrue  settlement  costs when it is probable  that such costs will be
incurred and when a range of loss can be reasonably estimated. It is the opinion
of the  Company's  management  that the outcome of any claim which is pending or
threatened, either individually or on a combined basis, will not have a material
adverse effect on the consolidated  financial  condition of Fort James but could
have a material effect on consolidated results of operations in a given period.
<PAGE>
12.      Segments

     Segment sales and income from operations  before unusual and  non-recurring
items for the quarters and nine months ended  September  26, 1999 and  September
27, 1998 and total assets as of September  26, 1999 and  September 27, 1998 were
as follows:


                                                       Tissue                          Communi-     Inter-
                                                  -----------------------              cations      company
                                                        North                        Papers and       and
(in millions)                                         America      Europe    Dixie      Fiber      Corporate        Total
-------------------------------------------------------------------------------------------------------------------------
Quarter ended September 1999
Net sales                                             $ 950.3     $ 452.1  $ 195.2    $ 209.3        $(67.6)    $ 1,739.3
Intercompany sales                                       24.2           -      0.8       42.6           -            67.6
Income from operations before
   restructure and other items (a)                      125.6        50.8     20.3        1.8         (30.3)        168.2
=========================================================================================================================
Quarter ended September 1998
Net sales                                             $ 935.7     $ 463.5  $ 193.3    $ 189.6        $(68.4)    $ 1,713.7
Intercompany sales                                       27.7           -      0.9       39.8            -           68.4
Income from operations before
   restructure and other items                          228.3        59.3     20.5        2.0         (22.3)        287.8
=========================================================================================================================
Nine months ended September 1999
Net sales                                           $ 2,763.4   $ 1,374.3  $ 591.1    $ 606.2       $(208.2)    $ 5,126.8
Intercompany sales                                       80.1           -      2.4      125.7           -           208.2
Income from operations before
   restructure and other items (a)                      501.2       169.3     78.2      (21.0)        (70.9)        656.8
Total assets                                          3,020.3     2,299.1    420.2      804.3         732.5       7,276.4
=========================================================================================================================
Nine months ended September 1998
Net sales                                           $ 2,729.4   $ 1,387.7  $ 590.6    $ 615.5       $(209.6)    $ 5,113.6
Intercompany sales                                       84.7           -      2.3      122.6           -           209.6
Income from operations before
   restructure and other items                          646.9       172.4     71.6       11.9         (66.1)        836.7
Total assets                                          3,046.8     2,333.0    412.9      840.2       1,181.1  (b)  7,814.0
=========================================================================================================================


   (a) For the quarter and nine months ended  September  26,  1999,  income from
    operations  included  $46.0  million  of  unusual  items for  severance  and
    litigation accruals, of which $17.8 million is included in cost of sales and
    $28.2 million is included in selling and administrative expense.  Details by
    segment are outlined below.

                                                       Excluding Unusual Items
                                                     ---------------------------
                                Unusual Items       Third Quarter   Year-to-Date
-----------------------------------------------     ----------------------------
 Tissue - North America           $ 34.7              $ 160.3           $ 535.9
 Tissue - Europe                       -                 50.8             169.3
 Dixie                               0.9                 21.2              79.1
 Communications Papers and Fiber     2.1                  3.9             (18.9)
 Corporate                           8.3                (22.0)            (62.6)
-------------------------------------------------   ----------------------------
   Total                          $ 46.0              $ 214.2           $ 702.8
=================================================   ============================

     (b) Includes net assets of discontinued  operations,  which were previously
     reported as a separate segment.


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

Results of Operations

     For the quarters and nine months ended September 26, 1999 and September 27,
1998, the Company recorded certain unusual and non-recurring items. These items,
which are further discussed below,  included unusual charges for severance costs
related to a reduction-in-force program, along with accruals for litigation, and
non-recurring   merger-related   restructure  and  other  charges,   results  of
discontinued  operations,  extraordinary  losses on the early  extinguishment of
debt, an  extraordinary  gain on the sale of  discontinued  operations,  and the
cumulative effect of a change in accounting principle.

                          1999 (a)(c)                             1998 (b)(d)
                        --------------------------------------------------------
                                       Excluding                   Excluding
(in millions,                          Unusual and                 Unusual and
except per share data)       Reported  Non-recurring   Reported    Non-recurring
--------------------------------------------------------------------------------
Quarter:
Net sales                 $ 1,739.3       $ 1,739.3   $ 1,713.7        $ 1,713.7
Income from operations        181.6           214.2       275.1            287.8
Net income                    325.1           110.2       150.7            144.9
Diluted earnings per share   $ 1.47          $ 0.50      $ 0.69           $ 0.66
================================================================================
Nine months:
Net sales                 $ 5,126.8       $ 5,126.8   $ 5,113.6        $ 5,113.6
Income from operations        671.3           702.8       808.7            836.7
Net income                    518.4           363.0       401.9            402.3
Diluted earnings per share   $ 2.35          $ 1.65      $ 1.83           $ 1.83
================================================================================

(a)  Income  from  operations  and net  income  for the  third  quarter  of 1999
     included net  non-recurring  credits of $13.4 million  ($12.0 million after
     taxes or $0.06  per  diluted  share)  for the  reversal  of  merger-related
     restructuring accruals due to revisions of estimates, partially offset by a
     permanent  impairment  write-down  of a  non-operating  asset,  and unusual
     charges of $46.0  million  ($28.1  million after taxes or $0.13 per diluted
     share)  for  severance  and other  costs  related  to a  reduction-in-force
     program and accruals for on-going  litigation.  Net income also  included a
     loss from discontinued operations of $2.3 million ($1.5 million after taxes
     or  $0.01  per  diluted  share)  and an  extraordinary  gain on the sale of
     discontinued  operations of $381.9 million  ($232.5  million after taxes or
     $1.05 per diluted share).

(b)  Income  from  operations  and net  income  for the  third  quarter  of 1998
     included  merger-related costs not accruable in 1997 of $12.7 million ($7.8
     million after taxes or $0.03 per diluted share). Net income also included a
     credit of $10.5  million  ($0.05 per  diluted  share) for the  reversal  of
     merger  related  tax  reserves  established  in  1997  in  accordance  with
     temporary IRS  regulations,  which were  subsequently  rescinded and income
     from  discontinued  operations of $5.8 million ($3.1 million after taxes or
     $0.01 per diluted share).

(c)  Income  from  operations  and net income for the first nine  months of 1999
     included net  non-recurring  credits of $14.5 million  ($12.7 million after
     taxes or $0.06  per  diluted  share)  for the  reversal  of  merger-related
     restructure  accruals due to revisions of estimates,  partially offset by a
     permanent  impairment  write-down  of a  non-operating  asset,  and unusual
     charges of $46.0  million  ($28.1  million after taxes or $0.13 per diluted
     share)  for  severance  and other  costs  related  to a  reduction-in-force
     program and accruals for on-going  litigation.  Net income also  included a
     loss from discontinued operations of $9.1 million ($6.4 million after taxes
     or $0.03 per diluted share), an extraordinary loss on early  extinguishment
     of debt of $54.4  million  ($33.2  million after taxes or $0.15 per diluted
     share),  the cumulative effect of a change in accounting for start-up costs
     of $34.1 million ($22.1 million after taxes or $0.10 per diluted share) and
     an  extraordinary  gain on the sale of  discontinued  operations  of $381.9
     million ($232.5 million after taxes or $1.05 per diluted share).

(d)  Income  from  operations  and net income for the first nine  months of 1998
     included merger-related relocation costs and costs not accruable in 1997 of
     $28.0 million ($17.3 million after taxes or $0.08 per diluted  share).  Net
     income also  included a credit of $10.5 million  ($0.05 per diluted  share)
     for the  reversal of merger  related tax  reserves  established  in 1997 in
     accordance  with  temporary  IRS  regulations,   which  were   subsequently
     rescinded,  income from  discontinued  operations  of $16.4  million  ($9.0
     million after taxes or $0.04 per diluted share) and an  extraordinary  loss
     on early  extinguishment  of debt of $4.2 million ($2.6 million after taxes
     or $0.01 per diluted share).

Tissue - North America
                                    Quarter                 Nine months
                         --------------------------  ---------------------------
(in millions)             1999     1998   Inc/(Dec)   1999       1998  Inc/(Dec)
---------------------------------------------------  ---------------------------
Net sales               $ 950.3  $ 935.7     1.6%   $ 2,763.4  $ 2,729.4    1.2%
Income from operations,
  before unusual items    160.3    228.3   -29.8%       535.9      646.9  -17.2%
Income from operations    125.6    228.3   -45.0%       501.2      646.9  -22.5%
===================================================  ===========================

     Tissue - North  America  sales and  income  from  operations  for the third
quarter  benefited  from strong retail bath tissue and towel and  away-from-home
bath tissue  volume  growth,  offset by higher retail  promotional  spending and
lower  away-from-home  pricing.  Higher  distribution and warehousing  costs and
accruals for unusual charges also adversely affected profits.

     Income from  operations  for the nine months was generally  affected by the
same factors as the quarter  except that the benefits of  away-from-home  volume
growth were lower and inflationary costs were higher.

Tissue - Europe
                          Quarter                           Nine months
               ------------------------------  ---------------------------------
(in millions)   1999     1998     Inc/(Dec)        1999        1998    Inc/(Dec)
---------------------------------------------  ---------------------------------
Net sales       $ 452.1  $ 463.5      -2.5%     $ 1,374.3   $ 1,387.7      -1.0%
Income from
  operations       50.8     59.3     -14.3%         169.3       172.4      -1.8%
=============================================  =================================

     The Tissue - Europe business  reported strong volume growth for the quarter
in primary  branded  markets,  which was  substantially  offset by lower private
label volumes,  competitive  pricing activity and higher  inflationary costs. In
addition, changes in foreign currency translation rates had a negative effect of
approximately  5% on sales and  operating  profits  compared  to the  prior-year
quarter.  The year-to-date effect of changes in exchange rates on both sales and
operating profits was not significant.

     For the nine months the  benefits of cost  reduction  efforts  were largely
offset by lower average selling prices and increased promotional spending due to
competitive market conditions.

     On July 1, 1999, the company completed the previously announced acquisition
of Demak'Up,  broadening  the  Company's  European  product  portfolio  with the
leading European brand of cotton facial cleansing pads.

Dixie
                                  Quarter                     Nine months
                       -----------------------------  --------------------------
(in millions)          1999       1998     Inc/(Dec     1999     1998  Inc/(Dec)
----------------------------------------------------  --------------------------
Net sales              $ 195.2    $ 193.3     1.0%     $ 591.1  $ 590.6     0.1%
Income from operations,
   before unusual items   21.2       20.5     3.4%        79.1     71.6    10.5%
Income from operations    20.3       20.5    -1.0%        78.2     71.6     9.2%
====================================================  ==========================

     Income from operations for the Dixie business was marginally lower than the
prior year quarter as strong retail  volumes and the benefits of cost  reduction
efforts  were offset by accruals for unusual  items.  Excluding  unusual  items,
profits improved by more than 3%. Retail volumes for the quarter and nine months
improved as a result of strong  growth in plates and  plastic  party cups due to
new value packs and strength in the warehouse club channel. In addition, for the
nine months,  cost  reduction  efforts also  contributed  to the  improvement in
Dixie's results.

Communications Papers and Fiber
                                  Quarter                       Nine months
                         ---------------------------   -------------------------
(in millions)            1999     1998    Inc/(Dec)     1999     1998  Inc/(Dec)
----------------------------------------------------   -------------------------
Net sales                $ 209.3  $ 189.6   10.4%      $ 606.2  $ 615.5    -1.5%
Income from operations,
   before unusual items      3.9      2.0   95.0%          (18.9)    11.9     NM
Income (loss) from
   operations                1.8      2.0  -10.0%          (21.0)    11.9     NM
====================================================  ==========================
NM - not meaningful
<PAGE>
     Communications  Papers and Fiber  results,  excluding the effect of unusual
items,  for the  quarter  and nine months  reflect  improvements  in market pulp
volumes and cost reduction benefits. However, lower average year-to-date pricing
for uncoated free sheet,  groundwood  papers, and market pulp continue to offset
increased uncoated free sheet paper and pulp volumes.
Other Income

     Other income for the nine months ended September 26, 1999 was $18.5 million
compared to other  expense of $1.8  million in the prior year.  The  increase is
primarily  attributable to interest income on a tax refund of $9.3 million and a
net improvement of $11.4 million in foreign currency translation gains (losses).

Discontinued Operations

     On August 2, 1999, Fort James completed the sale of its Packaging  business
to ACX  Technologies,  Inc. for $825.8 million in cash. As a result of the sale,
the Company  recorded an  extraordinary  gain of $381.9 million  ($232.5 million
after tax or $1.05 per diluted  share).  The operating  results of the Packaging
business are treated as a  discontinued  operation and the financial  statements
have been  restated  for  periods  prior to the  disposal  date.  The results of
discontinued operations include operating profits, certain unusual items, and an
allocation of interest expense and taxes.

Financial Condition

     Cash provided by operating  activities  totaled $542.8 million in the first
nine  months of 1999,  compared  with  $620.0  million  in the prior  year.  The
decrease is primarily due to lower earnings and decreased  accounts  payable and
accrued liabilities,  partially offset by reduced  merger-related  spending. The
Company's  current ratio was 1.2 as of September 1999 and December  1998,  while
working  capital  increased to $376.4  million from $292.5  million for the same
periods.  The increase in working  capital is primarily  due to higher  accounts
receivable, partially offset by decreased current deferred income taxes. Capital
expenditures  were  $346.5  million for the nine months  ended  September  1999,
compared to $321.7  million for the same period in the prior year.  In the third
quarter of 1999,  the Company  received cash proceeds of $825.8 million from the
sale of its Packaging  business,  which were primarily used to reduce  revolving
credit borrowings.

     As of September 1999, total  indebtedness was $ 3.1 billion and,  including
the effect of interest rate swaps, included  approximately $2.5 billion of fixed
rate and $0.6 billion of floating rate  obligations.  As of December 1998, total
indebtedness was $3.89 billion and, including the effect of interest rate swaps,
included  $2.8  billion  of  fixed  rate  and  $1.1  billion  of  floating  rate
obligations.  Outstanding borrowings of $0.2 billion were supported by revolving
credit and money  market  facilities  as of  September  1999,  compared  to $0.9
billion  as of  December  1998.  Under the most  restrictive  provisions  of the
Company's  debt  agreements,  the Company had additional  borrowing  capacity of
approximately $2.0 billion as of September 1999.

Restructuring

     Merger-related  restructuring liabilities changed during the nine months as
follows:

                                December  Estimate    Cash   Reclassi  September
(in millions)                     1998    Revisions Payments fications    1999
--------------------------------------------------------------------------------
Facility closures and
   write-downs of redundant
   property, plant and equipment$ 24.9     $ 5.9    $ (9.1)   $ (4.9)     $ 16.8
Severance and other
   employee-related costs         46.9     (21.3)    (17.9)     (3.1)        4.6
Costs of terminating
   contracts and other
   long-term agreements            7.8       2.9      (3.2)      (3.5)       4.0
================================================================================
   Accrued restructure costs    $ 79.6   $ (12.5)  $ (30.2)   $ (11.5)    $ 25.4
================================================================================
<PAGE>
Stock Repurchase Program

     Concurrent  with the sale of the  Packaging  business,  the  Company  began
execution of the  previously  announced  $500 million,  18 month stock  buy-back
program.  During the quarter,  1.5 million shares were purchased at a total cost
of $53.6 million.

Year 2000

     As  outlined in the  Company's  Form 10-K for the year ended  December  27,
1998,  the Company has  established a Y2K Project  Office to coordinate its Year
2000 ("Y2K")  efforts.  The Y2K Project  Office is  organized  into various work
categories which,  where appropriate,  include specific work plans,  contingency
plans, schedules,  and goals. The vast majority of the Company's Y2K remediation
work has been  completed  according to  previously  identified  time  schedules.
However,  the completion  date for  remediation of a limited number of Mainframe
Internal System applications has been revised to the fourth quarter of 1999. All
work categories are estimated to be completed  prior to year-end;  remaining in-
process  efforts  consist  of a limited  number  of  distinct  modules  and site
specific applications.
     The  Company's  business   continuity   planning  components  include  risk
management,  contingency planning, and disaster recovery. The Company's business
continuity  plans are  substantially  complete with mission  critical  processes
identified  and  executable  recovery  plans in place.  On-going  fourth quarter
activities will include command center  staffing and  communication  procedures,
critical  supply  inventory  build,  and  continued  customer  and  supplier Y2K
compliance  verification.  In the event of an unforeseen Y2K related issue,  the
command center will gather  information,  monitor  compliance  with  contingency
plans,  track resources,  and provide  centralized  communications and executive
briefings.
     The  Company  expects its Y2K project to be  completed  prior to  year-end;
however,  due to the  interdependent  nature of computer systems there can be no
assurance that the systems of other entities on which the Company's systems rely
will be  remediated in a timely  manner.  Though it is impossible to predict all
potential Y2K uncertainties,  management believes that the Company's Y2K project
will   significantly   reduce  its  risk  of  material  loss  in  the  event  of
non-compliance by the Company,  its vendors or its suppliers.  In the opinion of
management, delays in the production or processing of orders, or the delivery of
finished goods would be the most likely worst-case  scenario of the inability of
the Company or its customers or suppliers to resolve their Y2K problems.
     Approximately  $4 million  and $24  million in Y2K  related  expenses  were
incurred during the quarter and nine months ended September 1999,  respectively.
The Company anticipates incurring additional expense of $1 million to $2 million
to complete and test required Y2K system modifications and replacements.

Effect of New Accounting Standards

         See Note 1 to the Consolidated Financial Statements.

Information Concerning Forward-Looking Statements

     Forward-looking  statements  in this  report are made  pursuant to the safe
harbor provisions of the Private Securities  Litigation Reform Act of 1995. Such
forward-looking  statements  are not  guarantees of future  performance  and are
subject to risks and  uncertainties  that could cause actual results and Company
plans and objectives to differ  materially from those projected.  Such risks and
uncertainties  include, but are not limited to, the Company's ability to sustain
momentum in the retail marketplace,  maintain continuing improvement in the away
from home market, successfully introduce new products, increase customer service
levels  and  concurrently  manage  distribution  costs,  the  ability to achieve
projected net cost  reductions,  and the ability to successfully  remediate Year
2000 problems.





<PAGE>



Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         None

PART II.  OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS.

         See Note 10 to the Consolidated  Financial Statements of this Quarterly
         Report on Form 10-Q.

Item 2.  CHANGES IN SECURITIES.

         None.

Item 3.  DEFAULTS UPON SENIOR SECURITIES.

         None.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         None.

Item 5.  OTHER INFORMATION.

         None.

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

         (a)      Exhibits:

                  The exhibits  listed below are filed as part of this quarterly
                  report.  Each  exhibit  is  listed  according  to  the  number
                  assigned to it in the Exhibit  Table of Item 601 of Regulation
                  S-K.

                  Exhibit
                  Number

                  10       Separation Agreement and Mutual Release

                  27       Financial  Data  Schedules  for the nine months ended
                           September 26, 1999 (filed electronically only)




(b)      Reports on Form 8-K:

                         No reports on Form 8-K were filed by the Company during
                         the quarter ended  September 26, 1999,  and  subsequent
                         thereto.





<PAGE>




SIGNATURES

         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.


                            FORT JAMES CORPORATION


                            By:/s/Joseph W. McGarr
                                  Joseph W. McGarr
                                  Senior Vice President and Corporate Controller
                                  (Principal Accounting Officer)





Date:  November 5, 1999


</TABLE>