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: June 29, 1997 Commission File Number: 1-7911




                       JAMES RIVER CORPORATION of Virginia


             (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.)


                     120 Tredegar Street, Richmond, VA 23219
               (Address of principal executive offices) (Zip Code)


       Registrant's telephone number, including area code: (804) 644-5411




                                 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 August 1,
1997:
                                90,031,822 shares

<PAGE>


                             JAMES RIVER CORPORATION
                          of Virginia and Subsidiaries
                          QUARTERLY REPORT ON FORM 10-Q
                                  June 29, 1997


                                TABLE OF CONTENTS

                                                                       Page No.
PART I.  FINANCIAL INFORMATION:

         ITEM 1.  Financial Statements:
 
                  Consolidated Balance Sheets as of June 29, 1997 and
                      December 29, 1996                                       3
 
                  Consolidated Statements of Operations for the quarters
                     and six months ended June 29, 1997 and June 30, 1996     5
 
                  Consolidated Statements of Cash Flows for the six months 
                     ended June 29, 1997 and June 30, 1996                    6
 
                  Notes to Consolidated Financial Statements                  7
 
         ITEM 2.  Management's Discussion and Analysis of Results of 
                     Operations and Financial Condition                      14
 
 
PART II.  OTHER INFORMATION:

         ITEM 1.  Legal Proceedings                                          18
 
         ITEM 2.  Changes in Securities                                      18
 
         ITEM 3.  Defaults Upon Senior Securities                            18
 
         ITEM 4.  Submission of Matters to a Vote of Security Holders        18
 
         ITEM 5.  Other Information                                          18
 
         ITEM 6.  Exhibits and Reports on Form 8-K                           18
 
         SIGNATURES                                                          20
 


                                        2

<PAGE>

PART I.  FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                            JAMES RIVER CORPORATION
                          of Virginia and Subsidiaries
                          CONSOLIDATED BALANCE SHEETS
                       June 29, 1997 and December 29,1996
                        (in millions, except share data)

                                                                      June              December
                                                                      1997                  1996
-------------------------------------------------------------------------------------------------
ASSETS

Current assets:
<S>                                                                 <C>                    <C>  
  Cash and cash equivalents                                         $213.1                 $33.8
  Accounts receivable                                                696.5                 717.9
  Inventories                                                        683.2                 650.4
  Prepaid expenses and other current assets                           41.4                  39.1
  Deferred income taxes                                               77.4                  78.5
-------------------------------------------------------------------------------------------------

    Total current assets                                           1,711.6               1,519.7
-------------------------------------------------------------------------------------------------

Property, plant and equipment                                      5,781.4               5,867.2
Accumulated depreciation                                          (2,249.6)             (2,115.7)
-------------------------------------------------------------------------------------------------

    Net property, plant and equipment                              3,531.8               3,751.5

Investments in affiliates                                            161.5                 154.6

Other assets                                                         428.6                 385.7

Goodwill                                                             663.8                 730.0
-------------------------------------------------------------------------------------------------

    Total assets                                                  $6,497.3              $6,541.5
=================================================================================================
</TABLE>



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

                                        3

<PAGE>
<TABLE>
<CAPTION>

                                                 JAMES RIVER CORPORATION
                                               of Virginia and Subsidiaries
                                          CONSOLIDATED BALANCE SHEETS, Continued
                                             (in millions, except share data)

                                                                      June              December
                                                                      1997                  1996
-------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
<S>                                                                 <C>                   <C>   
  Accounts payable                                                  $502.0                $507.8
  Accrued liabilities                                                570.7                 595.6
  Current portion of long-term debt                                  126.0                 116.9
-------------------------------------------------------------------------------------------------

    Total current liabilities                                      1,198.7               1,220.3
-------------------------------------------------------------------------------------------------

Long-term debt                                                     1,824.2               1,853.9
Accrued postretirement benefits
  other than pensions                                                457.8                 458.0
Deferred income taxes                                                488.3                 443.0
Other long-term liabilities                                          224.2                 259.9
-------------------------------------------------------------------------------------------------

    Total liabilities                                              4,193.2               4,235.1
-------------------------------------------------------------------------------------------------

Preferred stock, $10 par value, 5,000,000
  shares authorized, issuable in series;
  shares outstanding, 3,626,811                                      738.4                 738.4

Common stock, $.10 par value, 150,000,000
  shares authorized; shares outstanding,
  June 29, 1997 -- 86,666,827 and
  December 29, 1996 -- 86,194,612                                      8.7                   8.6

Additional paid-in capital                                         1,321.2               1,307.6
Retained earnings                                                    235.8                 251.8
-------------------------------------------------------------------------------------------------

    Total shareholders' equity                                     2,304.1               2,306.4
-------------------------------------------------------------------------------------------------

    Total liabilities and shareholders' equity                    $6,497.3              $6,541.5
=================================================================================================
</TABLE>



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

                                        4

<PAGE>
<TABLE>
<CAPTION>

                             JAMES RIVER CORPORATION
                          of Virginia and Subsidiaries
                      CONSOLIDATED STATEMENTS OF OPERATIONS
           For the Quarters (13 Weeks) and Six Months (26 Weeks) Ended
                         June 29, 1997 and June 30, 1996
                     (in millions, except per share amounts)

                                                                      Second Quarter                    Six Months
                                                            -------------------------------------------------------------------
                                                                     1997              1996             1997              1996
-------------------------------------------------------------------------------------------------------------------------------

<S>                                                              <C>               <C>              <C>               <C>     
Net sales                                                        $1,412.4          $1,570.2         $2,794.3          $3,125.6
Cost of goods sold                                                1,029.1           1,177.9          2,048.3           2,359.9
Selling and administrative expenses                                 251.0             286.5            501.2             560.1
Severance and other items (income) expense                          (57.7)              7.0            (57.7)             30.4
-------------------------------------------------------------------------------------------------------------------------------

  Income from operations                                            190.0              98.8            302.5             175.2

Interest expense                                                     37.4              42.7             75.3              88.1
Other income, net                                                     4.9               4.4             12.7               8.4
-------------------------------------------------------------------------------------------------------------------------------

  Income before income taxes
    and minority interests                                          157.5              60.5            239.9              95.5

Income tax expense                                                   66.2              26.6            100.8              42.0
-------------------------------------------------------------------------------------------------------------------------------

  Income before minority interests                                   91.3              33.9            139.1              53.5

Minority interests                                                    (.5)             (3.4)             (.8)             (2.5)
-------------------------------------------------------------------------------------------------------------------------------

  Net income                                                        $90.8             $30.5           $138.3             $51.0
===============================================================================================================================

Preferred dividend requirements                                      (8.1)            (14.6)           (16.3)            (29.3)
-------------------------------------------------------------------------------------------------------------------------------

  Net income applicable
    to common shares                                                $82.7             $15.9           $122.0             $21.7
===============================================================================================================================

Net income per common share
  and common share equivalent                                        $.81              $.18            $1.19              $.25
===============================================================================================================================

Cash dividends per common share                                      $.15              $.15             $.30              $.30

Weighted average number of common
  shares and common share equivalents                               102.7              85.5            102.6              85.5
===============================================================================================================================

Net income per common share
  and common share equivalents, assuming full dilution               $.78              $.18            $1.16              $.25
===============================================================================================================================

Weighted average number of common
  shares and common share equivalents,
  assuming full dilution                                            115.2              85.5            105.6              85.5
===============================================================================================================================

</TABLE>



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

                                        5

<PAGE>
<TABLE>
<CAPTION>

                             JAMES RIVER CORPORATION
                          of Virginia and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                       For the Six Months (26 Weeks) Ended
                         June 29, 1997 and June 30, 1996
                                  (in millions)
                                                                                            1997              1996
-------------------------------------------------------------------------------------------------------------------
Cash provided by (used for) operating activities:
<S>                                                                                       <C>                <C>  
  Net income                                                                              $138.3             $51.0
  Depreciation expense and cost of timber harvested                                        190.6             205.3
  Amortization of goodwill                                                                  10.2              10.3
  Deferred income tax provision                                                             53.6               4.8
  Equity in earnings of unconsolidated affiliates                                           (4.9)             (1.4)
  Dividends received from unconsolidated affiliates                                          3.2               5.3
  Severance and other items                                                                (57.7)             30.4
  Retirement benefits expense in excess of funding                                          (5.0)              2.0
  Change in current assets and liabilities:
    Accounts receivable                                                                    (31.8)            (24.8)
    Inventories                                                                            (47.9)             67.0
    Prepaid expenses and other current assets                                                5.4               (.3)
    Accounts payable and accrued liabilities                                                23.2              31.5
    Foreign currency hedge                                                                 (31.5)
  Other, net                                                                               (37.6)            (22.6)
-------------------------------------------------------------------------------------------------------------------

      Cash provided by operating activities                                                208.1             358.5
-------------------------------------------------------------------------------------------------------------------
Cash provided by (used for) investing activities:
  Expenditures for property, plant and equipment                                          (133.7)           (185.7)
  Cash received from sale of assets                                                        113.3              66.5
  Other, net                                                                                 7.9               3.0
-------------------------------------------------------------------------------------------------------------------

      Cash used for investing activities                                                   (12.5)           (116.2)
-------------------------------------------------------------------------------------------------------------------
Cash provided by (used for) financing activities:
  Additions to long-term debt                                                               38.9               1.6
  Payments of long-term debt                                                               (10.5)           (192.6)
  Common and preferred stock cash dividends paid                                           (54.8)            (55.2)
  Other, net                                                                                10.1               1.7
-------------------------------------------------------------------------------------------------------------------

      Cash used for financing activities                                                   (16.3)           (244.5)
-------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents                                           179.3              (2.2)
Cash and cash equivalents, beginning of period                                              33.8              66.1
-------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of period                                                  $213.1             $63.9
===================================================================================================================
</TABLE>



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


                                        6

<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 James River  Corporation  of Virginia and  Subsidiaries
(the "Company" or "James  River")  contain all  adjustments  (consisting of only
normal   recurring   accruals)   necessary  to  present   fairly  the  Company's
consolidated  financial  position  as of  June  29,  1997,  and its  results  of
operations  and cash flows for the quarters (13 weeks) and six months (26 weeks)
ended June 29,  1997,  and June 30, 1996.  The balance  sheet as of December 29,
1996, was derived from audited financial statements as of that date. The results
of  operations  for the six months  ended  June 29,  1997,  are not  necessarily
indicative of the results to be expected for the full year.
         
     Derivative Financial Instruments:

     The Company's  debt  structure and  international  operations  give rise to
exposure to market  risks from  changes in interest  rates and foreign  currency
exchange rates. To manage these risks,  derivative financial  instruments may be
utilized  by the  Company  including  interest  rate  swaps and  options  on its
long-term debt and foreign exchange  contracts on certain of its net investments
in foreign operations.  The Company does not hold or issue financial instruments
for trading  purposes.  Occasionally,  the Company  may  terminate a  derivative
financial  instrument.  If an  interest  rate swap or an  option  is  terminated
because  related  debt no longer  exists,  any gain or loss is  recognized  into
income  immediately;  otherwise,  the gain or loss is deferred and  amortized to
interest expense over the remaining periods originally covered by the derivative
contract.  If a foreign  exchange  contract is  terminated,  the gain or loss is
recognized in a separate  component of equity,  net of tax,  consistent with the
accounting treatment of the hedged item.
         
     Reclassifications:

     Certain  amounts  in  the  prior  year's  financial  statements  have  been
reclassified  to  conform  to  the  current  year's  presentation   including  a
reclassification  of customer freight charges from net sales to cost of sales of
$68.8  million,  $73.4  million,  $71.4 million and $67.8 million for the first,
second, third and fourth quarters of 1996, respectively. Reportable segments for
all  periods  have  been  reconfigured  to  include  bleached  board  operations
(formerly in the North  American  Consumer  Products  segment) in the  Packaging
segment  and to include  the  foodwrap  operations  (formerly  in the  Packaging
segment) in the North American Consumer Products segment.

     Adoption  of  Accounting  Pronouncements:   

     In June 1997, the Financial Accounting Standards Board issued Statement No.
130, "Reporting  Comprehensive  Income"  ("SFAS  130") which is  effective  for
periods beginning after December 15, 1997,  including interim periods.  SFAS 130
establishes  standards for reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements,  either in the
statement of operations or a separate statement. Additionally, SFAS 130 requires
the display of the accumulated balance of other  comprehensive  income. On a pro
forma basis,  for the quarters and six months ended June 29, 1997,  and June 30,
1996, comprehensive income is a follows (in millions):

                                        7

<PAGE>
<TABLE>

<CAPTION>
 
                                                                 Second Quarter               Six Months
                                                          --------------------------------------------------------
                                                               1997          1996         1997          1996
------------------------------------------------------------------------------------------------------------------

<S>                                                           <C>           <C>          <C>           <C>       
Net income                                                    $     90.8    $      30.5   $   138.3    $     51.0

Other comprehensive income, net of tax:
     Foreign currency translation                                  (27.0)          (4.9)     (112.8)        (24.9)
     Unrealized gain (loss) on securities                           18.3            2.6        13.9          (0.6)
------------------------------------------------------------------------------------------------------------------
           Other comprehensive income                               (8.7)          (2.3)      (98.9)        (25.5)

------------------------------------------------------------------------------------------------------------------
Comprehensive income                                          $     82.1    $      28.2   $    39.4    $     25.5
==================================================================================================================

</TABLE>


     In  June  1997,  the  Financial  Accounting  Standards  Board  also  issued
Statement No. 131,  "Disclosures  about  Segments of an  Enterprise  and Related
Information"  ("SFAS  131")  which is  effective  for  periods  beginning  after
December 15, 1997, including interim periods after the year of initial adoption.
SFAS 131 establishes  standards for the way public companies report  information
about  operating  segments  in both  interim  and annual  financial  statements,
including related disclosures about products and services, geographic areas, and
major  customers.  The Company has not determined  what, if any, impact SFAS 131
will have on the operating  segments  reported nor the impact SFAS 131 will have
on the related disclosures.

     In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings per Share ("SFAS 128"), which is effective for periods ending
after  December 15,  1997",  including  interim  periods.  SFAS 128  establishes
standards for computing and  presenting  earnings per share ("EPS") by replacing
primary EPS with the  presentation of basic EPS and requiring dual  presentation
of basic and  diluted  EPS on the face of the income  statement.  On a pro forma
basis,  for the quarters and six months ended June 29, 1997,  and June 30, 1996,
EPS as reported would have been:
                                        Second Quarter           Six Months
                                     -------------------------------------------
                                       1997        1996        1997        1996
-------------------------------------------------------------------------------

Basic earnings per share               $.89        $.19       $1.28        $.26
Diluted earnings per share              .78         .19        1.18         .25

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

2.       Acquisitions and Dispositions

     On May 4, 1997, the Company, Fort Howard Corporation ("Fort Howard"), and a
newly formed  wholly-owned  subsidiary of the Company  entered into an Agreement
and Plan of Merger (the "Agreement")  pursuant to which Fort Howard would become
a  subsidiary  of the  Company  in a merger  transaction.  Under the  Agreement,
shareholders  of Fort Howard will receive 1.375 shares of the  Company's  common
stock for each share of Fort Howard common stock.  The transaction is structured
to qualify as a tax-free  reorganization  under  Section  368(a) of the Internal
Revenue Code of 1986, as amended,  and it is anticipated that the merger will be
accounted  for as a pooling of  interests.  The merger,  which is expected to be
completed  shortly after the special meeting of shareholders on August 12, 1997,
is conditioned on, among other things, receiving requisite regulatory clearances
and obtaining the requisite approvals of the shareholders of both companies.

                                       8
<PAGE>

     As a part of the Company's ongoing program of timberland  divestitures,  on
April 29, 1997,  pursuant to an offering  memorandum  dated  September 12, 1996,
James River  completed  the sale of  approximately  95,000 acres of  timberlands
located in Alabama  and  Mississippi  for cash  proceeds  of $111  million.  The
Company  recorded a gain of $57.7 million ($35.2  million net of taxes,  or $.34
per share) in severance and other items.

3.       Other Income
 
     The  components  of other  income were as follows for the six months  ended
June 29, 1997, and June 30, 1996 (in millions):
                                                 June                   June
                                                 1997                   1996
-------------------------------------------------------------------------------
Interest and investment income                   $4.3                   $3.3
Equity in earnings of
  unconsolidated affiliates                       4.9                    1.5
Gain on sale of assets                            2.6                    4.6
Foreign currency exchange gain (loss)             (.4)                   1.2
Other, net                                        1.3                   (2.2)
-------------------------------------------------------------------------------

    Total other income                          $12.7                   $8.4
===============================================================================




4.       Income Taxes

     The  Company's  effective  income tax rate was 42% for the six months ended
June 29, 1997, compared to 44% for the first six months of 1996. The decrease in
the  effective  tax rate from the prior year was  primarily  due to the relative
size of non-tax-deductible permanent differences to pretax income.

5.       Inventories

     The  components  of  inventories  were as follows as of June 29, 1997,  and
December 29, 1996 (in millions):
                                                         June          December
                                                         1997              1996
-------------------------------------------------------------------------------
Raw materials                                         $137.1            $135.7
Finished goods and work in process                     456.7             418.2
Stores and supplies                                    127.7             131.6
------------------------------------------------------------------------------
                                                       721.5             685.5
Reduction to state certain inventories
  at last-in, first-out cost                           (38.3)            (35.1)
-------------------------------------------------------------------------------

    Total inventories                                 $683.2            $650.4
===============================================================================




                                        9

<PAGE>

6.       Financial Instruments

     The  Company  held $638  million and $1,286  million in notional  amount of
interest rate swaps with fair value liabilities of $9 million and $15 million as
of June 29, 1997 and December 29, 1996,  respectively.  During the first quarter
of 1997,  the Company  effectively  unwound $648  million in notional  amount of
interest rate swaps at a cost of approximately $8 million. The cost of unwinding
the interest rate swaps will be amortized to interest expense over the remaining
periods  originally  covered by the contracts.  The original maturity dates were
between September 1998 and January 1999.

     During the first  quarter of 1997,  the  Company  unwound  $470  million in
notional  amount  of  foreign  exchange  contracts,  along  with  interest  rate
agreements,  at a cost of $31 million, net of tax benefits. The foreign exchange
contracts were designated as hedges of a portion of the Company's net investment
in its  European  Consumer  Products  Business.  The net  termination  cost  was
recorded as a component of equity.  The Company  terminated such contracts prior
to their original expiration in September 1998.
         
     The fair value of the Company's  debt was $2,033 million and $2,065 million
as of June 29, 1997, and December 29, 1996,  respectively.  Additionally,  as of
June 29, 1997, the pay-in-kind notes received from the spin-off of Crown Vantage
Inc.,  valued  at $89  million,  are  carried  on the  books at a fair  value of
approximately $109 million.

     The estimated fair values of the Company's financial instruments were based
on quoted market prices of comparable instruments and current market rates as of
June 29, 1997, and December 29, 1996, respectively.

7.       Commitments and Contingent Liabilities

     Environmental Matters:
 
     Like its  competitors,  James River 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  on the  discharge  of  materials  into the  environment,  including
effluent and emission limitations,  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.
 
     In  December  1993,  the  U.S.  Environmental   Protection  Agency  ("EPA")
published  draft rules which contain  proposed  regulations  affecting  pulp and
paper  industry  discharges  of  wastewater  and  gaseous  emissions,  generally
referred to as "Cluster Rules". The final rules are likely to be issued in 1997,
with a nominal  compliance  date of 2000.  These rules may  require  significant
changes in the pulping and/or bleaching process presently used in some U.S. pulp
mills, including several of James River's mills. The implementation of the rules
could materially  increase the Company's capital  expenditures  between 1998 and
2000. Based on its evaluation of the rules as they are currently  expected to be
issued,  the Company believes that capital  expenditures of  approximately  $100
million may be required to bring James River's facilities into compliance.  This
estimate could change,  depending on several factors,  including  changes to the
proposed  regulations,  new developments in control and process technology,  and
inflation.

     In addition,  James River has been identified as a potentially  responsible
party ("PRP"),  along with others, at various EPA designated Superfund sites and
is involved in remedial investigations and actions under federal and state laws.
It is James River's policy to accrue  remediation costs when it is probable that
such costs will be incurred  and when they can be  reasonably  estimated.  As of
June 29,  1997,  James  River's  accrued  environmental  liabilities,  including
remediation  and landfill  closure  costs,  totaled $21.3  million.  The Company
periodically  reviews  the  status  of all  significant  existing  or  potential
environmental  issues and adjusts its accrual as  necessary.  Estimates of costs
for future remediation are necessarily imprecise due to, among other things, the
identification  of presently  unknown  remediation  sites and the  allocation of
costs among PRP's.  The Company  believes that its share of the costs of cleanup
for its current remediation 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 quarter or year. As is the case
with most manufacturing and many other entities,  there can be no assurance that
the Company will not be named as a PRP at additional sites in the future or that
the costs associated with such additional sites would not be material.

                                       10
<PAGE>

         Litigation:
 
     In 1994, James River was sued in Morgan County,  Alabama, in a class action
and in  Bridgeport,  Connecticut,  by certain  former  holders of James  River's
10-3/4% Debentures due October 1, 2018. Most of these Debentures were retired by
means of a tender offer to all holders,  which  commenced on September 18, 1992.
The  remainder  were redeemed on November 2, 1992.  Merrill  Lynch & Co.,  which
acted as  James  River's  dealer  manager  for the  tender,  is also  named as a
defendant in the Alabama case. In general, the complaints allege violations of a
covenant  prohibiting  use of lower cost borrowed funds to redeem the Debentures
before October 1, 1998, and of various disclosure obligations,  and seek damages
in excess of $50 million plus punitive  damages in excess of $500  million.  The
Alabama case has been  certified as a class action and holders of  approximately
one-half of the  Debentures  elected not to be part of the class.  In June 1997,
the Alabama court granted James River summary judgement on the remaining claims,
and dismissed the action.  The plaintiffs  have appealed to the Alabama  Supreme
Court.  Most of the holders  electing out of the Alabama class are plaintiffs in
the  Connecticut  case.  James River  believes that all these claims are without
merit and intends to defend them  vigorously.  In May 1996,  James River settled
the claim of an institutional  holder of approximately  16.54% of the Debentures
for $425,000 plus reimbursement of attorney's fees.
 
     In May 1997,  the  Attorney  General of the State of Florida  filed a civil
action in the  Gainesville  Division of the United States District Court for the
Northern District of Florida against the Company and nine other manufacturers of
sanitary paper products  alleging  violations of federal and state antitrust and
unfair  competition laws. The complaint seeks civil penalty under Florida law of
$1 million for each alleged  violation  against each  defendant,  an unspecified
amount of treble  damages  and  injunctive  relief.  Over the  following  weeks,
additional  civil class  actions were filed in various  federal and state courts
against the same defendants  alleging  violations of federal and state antitrust
statutes and seeking treble damages and injunctive  relief.  The actions are the
subject of a motion for  transfer  and  consolidation  before the Joint Panel of
Multidistrict Litigation.  The litigation is in its earliest stages. The Company
intends to defend the litigation vigorously.

     Although the ultimate  disposition of legal proceedings cannot be predicted
with certainty,  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 materially  adverse effect on the  consolidated
financial  condition  of James River but could  materially  affect  consolidated
results of operations in a given quarter or year.


                                        11

<PAGE>

8.       Segment Information

     James River's net sales and income from operations by business segment were
as follows for the quarters  and six months  ended June 29,  1997,  and June 30,
1996 (in millions):
<TABLE>
<CAPTION>
                                                   CONSUMER PRODUCTS                          Communi-     Intersegment
                                                    North                                     cations     elimination/
                                                  America       Europe      Packaging          Papers        Corporate        Total
-----------------------------------------------------------------------------------------------------------------------------------
Quarter ended June 1997
<S>                                                <C>          <C>            <C>             <C>             <C>         <C>     
Net sales                                          $733.6       $417.1         $198.3          $112.0          $(48.6)     $1,412.4
Segment results before severance
  and other items                                    84.0         42.0           23.8              .4           (17.9)        132.3
Severance and other items income                     57.7                                                                      57.7
                                                  _______      _______        _______         _______          _______      _______
Income from operations                              141.7         42.0           23.8              .4           (17.9)        190.0

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

Quarter ended June 1996
Net sales                                          $745.2       $452.4         $319.9          $113.8          $(61.1)     $1,570.2
Segment results before severance
  and other items                                    60.4         41.8           24.0             3.2           (23.6)        105.8
Severance and other items expense                    (3.3)                       (3.0)                            (.7)         (7.0)
                                                  _______      _______        _______         _______          _______      _______
Income from operations                               57.1         41.8           21.0             3.2           (24.3)         98.8

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

Six months ended June 1997
Net sales                                        $1,421.1       $843.7         $395.0          $231.3          $(96.8)     $2,794.3
Segment results before severance
  and other items                                   152.4         87.3           45.0            (3.2)          (36.7)        244.8
Severance and other items income                     57.7                                                                      57.7
                                                  _______      _______        _______         _______          _______      _______
Income from operations                              210.1         87.3           45.0            (3.2)          (36.7)        302.5

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

Six months ended June 1996
Net sales                                        $1,456.1       $917.3         $661.1          $226.0         $(134.9)     $3,125.6
Segment results before severance
  and other items                                   124.0         66.6           53.8             7.4           (46.2)        205.6
Severance and other items expense                   (26.0)                       (3.3)                           (1.1)        (30.4)
                                                  _______      _______        _______         _______          _______      _______
Income from operations                               98.0         66.6           50.5             7.4           (47.3)        175.2

-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>





                                       12

<PAGE>

9.       Subsequent Event

     In July 1997,  James River  announced  that as of September 2, 1997,  it is
calling its Series P 9% Cumulative  Convertible  Preferred  Stock for conversion
into common stock at a conversion ratio of .9206 shares of common stock for each
Series P depositary share. The conversion of the Series P depositary shares will
reduce the Company's aggregate cash dividends by approximately $16.5 million per
year.  The  conversion  of Series P into common shares is not expected to have a
material impact on the Company's calculation of earnings per share.
         
     In August 1997,  James River  announced  that as of October 1, 1997,  it is
calling its Series O 8 1/4%  Cumulative  Preferred  Stock for  redemption at its
face value of $98.1 million.
                                       13

<PAGE>

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

Results of Operations

Overview

     James River  reported net income of $90.8 million,  or $.81 per share,  for
the second quarter ended June 29, 1997, compared with $30.5 million, or $.18 per
share for the same quarter of the prior year.  Net sales for the second  quarter
were $1,412  million,  compared to $1,570 million in the prior year. For the six
months ended June 29, 1997, net income was $138.3  million,  or $1.19 per share,
compared with $51.0 million,  or $.25 per share in 1996. Net sales for the first
six months of 1997 were $2,794  million  compared to $3,126 million in 1996. The
comparability of these results was impacted by nonrecurring charges and the 1996
divestitures of the Flexible  Packaging and related Inks  divisions,  as well as
several small domestic Consumer Products facilities.

Items Affecting Comparability

     Nonrecurring  charges for the  quarters and six months ended June 29, 1997,
and June 30, 1996, were as follows (in millions, except per share amounts):
<TABLE>
<CAPTION>

                                                       June 29, 1997                          June 30, 1996
                                          --------------------------------------- --------------------------------------
                                                             Net                                    Net
                                                           Income        Per                      Income        Per
                                              Gross        Impact       Share         Gross       Impact       Share
------------------------------------------------------------------------------------------------------------------------
Quarters ended:
<S>                                             <C>           <C>         <C>              <C>           <C>        <C>
  Severance costs                                                                         $4.9          $3.0       $.04
  Net (gain) loss on asset divestitures         ($57.7)       ($35.2)     ($.34)           2.1           1.2        .02
--------------------------------------------------------------------------------- --------------------------------------
     Total (income) expense                     ($57.7)       ($35.2)     ($.34)          $7.0          $4.2       $.06
========================================================================================================================
Six months ended:
  Severance costs                                                                        $18.7         $11.4       $.14
  Net (gain) loss on asset divestitures         ($57.7)       ($35.2)     ($.34)          11.7           7.1        .08
------------------------------------------------------------------------------------------------------------------------
     Total (income) expense                     ($57.7)       ($35.2)     ($.34)         $30.4         $18.5       $.22
========================================================================================================================
</TABLE>


Net  income for the  quarters  and six months  ended  June 29,  1997,  excluding
nonrecurring  items, was $55.6 million or $.47 per share, and $103.1 million, or
$.85 per share,  respectively,  compared with $34.7 million,  or $.24 per share,
and $69.5 million,  or $.47 per share in the same periods of 1996. Net sales for
the second quarter and six months,  excluding divested  operations,  were $1,412
million and $2,794 million in 1997,  respectively,  compared with $1,438 million
and $2,829 million for the comparable periods in 1996.

North American Consumer Products Business

     Operating  profits before  severance and other items for the North American
Consumer Products Business,  excluding results from  divestitures,  increased by
37%,  from $61.5  million in the second  quarter of 1996 to $84.0 million in the
current  quarter.  Net sales for the quarters were similar,  excluding  revenues
from divested  operations,  at $734 million in 1997, compared to $733 million in
1996. Second quarter results reflect volume gains in retail and commercial towel
and  tissue  and  retail  tabletop  categories,  reduced  manufacturing  and raw
material costs, and benefits of cost reduction initiatives,  partially offset by
foodservice  volume  declines  of 5% and lower  average  selling  prices  led by
competitors in the second quarter of 1996 for retail towel and tissue products.

                                       14
<PAGE>
        
     For the six  months  ended  June 29,  1997,  operating  profits,  excluding
divestitures,  were $152.4  million,  an increase of 22% over the comparable six
months in 1996.  Excluding  divestitures,  revenues  for the first six months of
1997 increased nearly 2% over the prior year. The increase in profitability over
the first half of 1997 as  compared to the prior year was also  attributable  to
strong sales  volumes,  and reduced wood costs,  combined  with  continued  cost
reduction benefits. Overall increased operating profits were partially offset by
a decline in  earnings  attributable  to market pulp sales.  This  business  has
approximately   200,000   tons  of  pulp   capacity  in  excess  of  its  annual
requirements,  which is sold as market pulp. Market pulp volume  improvements of
10% over prior year's  first six months  levels were more than offset by average
net selling price declines.

European Consumer Products Business

     Operating profits for the European  Consumer  Products  Business  increased
slightly to $42.0  million,  compared to $41.8 million in the second  quarter of
1996.  Operating  profits of $87.3  million for this business for the six months
ended June 29,  1997,  were 31% above the $66.6  million  reported  in the prior
year. The  improvement in the European  Consumer  Products  Business'  operating
profits was  attributable  to a  combination  of stronger  volumes and lower raw
material costs and other cost reductions,  partially offset by the strengthening
of the U.S. dollar, lower average pricing and additional  promotional costs. The
net impact of foreign currency translation to the U.S. dollar for the six months
ended June 29, 1997,  was a reduction in profits of  approximately  6%. As a net
buyer of  approximately  450,000  tons per year of  market  pulp,  the  European
Consumer Products Business  continues to benefit from year over year declines in
the cost of this raw material.  Net sales declined 8% in both the second quarter
and the first six  months of 1997 to $417  million  and $844  million  from $452
million  and $917  million in the  comparable  periods of 1996.  While  finished
product  sales  volumes  improved  more  than 4% over  the  first  half of 1996,
revenues  continue to be negatively  impacted by the  strengthening  of the U.S.
dollar and a decline in average pricing. Improved finished product sales volumes
reflect a continued volume growth in nearly all geographic markets.

Packaging Business

     Excluding  the results  attributable  to the  divestitures  of the Flexible
Packaging  and Inks  divisions  in the second  half of 1996,  operating  profits
before severance and other items for the Packaging  Business  improved by 18% to
$23.8 million in the current quarter from $20.1 million in the second quarter of
1996 while  profits for the first six months  decreased  2% to $45.0  million in
1997 from $45.9 million in the prior year. Net sales,  adjusted for the Flexible
Packaging  and Inks  transactions,  were  flat in the  second  quarters  at $198
million in 1997  compared to $200 million in the prior year and  decreased 6% to
$395  million  from $420 million for the six months ended June 29, 1997 and June
30, 1996,  respectively.  The current  quarter's and six months' results reflect
increased  volumes for folding cartons and paperboard,  lower  manufacturing and
raw material costs, partially offset by lower average selling prices.

Communications Papers Business

     Operating  profits for the  Communications  Papers Business declined to $.4
million from $3.2 million in the second quarter of 1996.  The operating  profits
for the six months  decreased  to a loss of $3.2  million  from a profit of $7.4
million  for the same  period in 1996.  Net sales for the  second  quarter  were
similar at $112  million in 1997 and $114  million in 1996,  while net sales for
the six months  improved  more than 2% to $231  million from $226 million in the
prior  year.  The  improvement  in net sales for the first half of 1997 over the
prior  year  is  attributable  to  increased  volumes  of 24% due  primarily  to
market-related  production  curtailments,  which  occurred  in the first half of
1996. However, volume gains were more than offset by selling price declines.

                                       15

<PAGE>

Other Income and Expense Items

     General corporate expenses, before severance and other items, totaled $17.9
million  and $36.7  million in the second  quarter and first six months of 1997,
respectively,  compared to $23.6  million and $46.2 million for the same periods
in the prior year.  The majority of the decrease  was related to  reductions  in
spending  on new  integrated  management  information  systems,  as  design  and
installation  projects  are being  completed  and  systems  become  operational.
Interest expense decreased from $88.1 million to $75.3 million between the first
six  months  of 1996 and the  first  six  months  of  1997.  This  decrease  was
attributable  to the  reduction  in  average  outstanding  debt since the second
quarter  of 1996.  Other  income  increased  to $12.7  million in 1997 from $8.4
million  in  1996,  principally  due  to  improved  earnings  of  unconsolidated
affiliates. The change in the effective tax rate for 1997 is discussed in Note 4
of Notes to Consolidated Financial Statements.

Adoption of Accounting Pronouncement

     In June 1997, the Financial Accounting Standards Board issued Statement No.
130,  "Reporting  Comprehensive  Income"  ("SFAS  130") which is  effective  for
periods beginning after December 15, 1997,  including interim periods.  SFAS 130
establishes  standards for reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements,  either in the
statement of operations or a separate statement. Additionally, SFAS 130 requires
the display of the accumulated balance of other comprehensive  income. Note 1 of
Notes to  Consolidated  Financial  Statements  describes the pro forma impact of
SFAS 130 for the quarters and six months ended June 29, 1997, and June 30, 1996.

     In  June  1997,  the  Financial  Accounting  Standards  Board  also  issued
Statement No. 131,  "Disclosures  about  Segments of an  Enterprise  and Related
Information"  ("SFAS  131")  which is  effective  for  periods  beginning  after
December 15, 1997, including interim periods after the year of initial adoption.
SFAS 131 established  standards for the way public companies report  information
about  operating  segments  in both  interim  and annual  financial  statements,
including related disclosures about products and services, geographic areas, and
major  customers.  The Company has not determined  what, if any, impact SFAS 131
will have on the operating  segments  reported nor the impact SFAS 131 will have
on the related disclosures.
         
     In February 1997, the Financial Accounting Standards Board issued Statement
No. 128,  "Earnings  per Share"  ("SFAS  128"),  which is effective  for periods
ending after December 15, 1997, including interim periods.  SFAS 128 establishes
standards for computing and  presenting  earnings per share ("EPS") by replacing
primary EPS with the  presentation of basic EPS and requiring dual  presentation
of basic and diluted EPS on the face of the income statement. Note 1 of Notes to
Consolidated Financial Statements describes the pro forma impact of SFAS 128 for
the quarters and six months ended June 29, 1997, and June 30, 1996.


Financial Condition 

     Cash provided by operating  activities  totaled $208.1 million in the first
half of 1997,  compared with the $358.5 million provided in the prior year. This
decrease in cash provided by operating activities resulted from a payment on the
unwinding  of the  Company's  foreign  currency  hedge  (See  Note 6 of Notes to
Consolidated  Financial  Statements)  and  increases  in  working  capital.  The
Company's  current ratio was 1.4 as of June 29, 1997, and 1.2 as of December 29,
1996,  reflecting a working  capital  increase to $513 million from $299 million
for the same periods  primarily  due to a temporary  increase in cash  balances.
Capital  expenditures  were $133.7 million in the current  quarter,  compared to
$185.7  million in the first half of 1996  reflecting  divested  operations  and
timing of expenditures.

                                       16
<PAGE>


     Total  indebtedness  decreased  modestly from $1,971 million as of December
29,  1996,  to $1,950  million as of June 29,  1997.  As of June 29,  1997,  the
Company had outstanding  borrowings of approximately  $383 million  supported by
revolving credit facilities.  These borrowings included $242 million outstanding
under such facilities,  $89 million of commercial paper and $52 million of money
market notes. Total outstanding debt as of June 29, 1997, included approximately
$1,492 million of fixed rate and $458 million of floating rate obligations. Note
6 of Notes to Consolidated Financial Statements describes the Company's interest
rate swap agreements.

     James River's ratio of net debt to total capitalization  decreased to 42.9%
as of the end of the  second  quarter,  from  45.5% as of the  prior  year  end,
resulting  from a temporary  increase in cash balances and a modest  decrease in
debt  levels.  For  purposes  of this  calculation,  the Company  defines  total
capitalization  as the sum of current and long-term  debt,  preferred and common
equity  and  minority  interests  and net debt as total  debt less cash and cash
equivalents.  As of June 29, 1997, under the most restrictive  provisions of the
Company's  debt  agreements,  James River had additional  borrowing  capacity of
approximately  $1.6 billion and net worth in excess of the minimum  requirements
specified by such agreements of approximately $390 million.

     In August 1997,  James River  announced  that as of October 1, 1997,  it is
calling its Series O 8 1/4%  Cumulative  Preferred  Stock for  redemption at its
face value of $98.1 million.

     In July 1997,  James River  announced  that as of September 2, 1997,  it is
calling its Series P 9% Cumulative  Convertible  Preferred  Stock for conversion
into common stock at a conversion ratio of .9206 shares of common stock for each
Series P depositary share. The conversion of the Series P depositary shares will
reduce the Company's aggregate cash dividends by approximately $16.5 million per
year.  The  conversion  of Series P into common shares is not expected to have a
material impact on the Company's calculation of earnings per share.

     On May 4, 1997, the Company, Fort Howard Corporation ("Fort Howard"), and a
newly formed  wholly-owned  subsidiary of the Company  entered into an Agreement
and Plan of Merger (the "Agreement")  pursuant to which Fort Howard would become
a  subsidiary  of the  Company  in a merger  transaction.  Under the  Agreement,
shareholders  of Fort Howard will receive 1.375 shares of the  Company's  common
stock for each share of Fort Howard common stock.  The transaction is structured
to qualify as a tax-free  reorganization  under  Section  368(a) of the Internal
Revenue Code of 1986, as amended,  and it is anticipated that the merger will be
accounted  for as a pooling of  interests.  The merger,  which is expected to be
completed  shortly after the special meeting of shareholders on August 12, 1997,
is conditioned on, among other things, receiving requisite regulatory clearances
and obtaining the requisite approvals of the shareholders of both companies.
    
     As a part of the Company's ongoing program of timberland  divestitures,  on
April 29, 1997,  pursuant to an offering  memorandum  dated  September 12, 1996,
James River  completed  the sale of  approximately  95,000 acres of  timberlands
located in Alabama  and  Mississippi  for cash  proceeds  of $111  million.  The
Company recorded a second quarter after-tax gain of $35.2 million on this sale.
         
     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 ability to affect the merger
of James  River and Fort  Howard;  general  business  and  economic  conditions;
competitive  pricing  pressures  for  the  Company's  products;  changes  in raw
material, energy and other costs; and opportunities that may be presented to and
pursued by the Company.

                                       17

<PAGE>

PART II.  OTHER INFORMATION

Item 1.           LEGAL PROCEEDINGS.

         None.

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                                                         Starts
          Number                    Description                          on Page

              11  Computation of Earnings per Share -- filed herewith.       21

              12  Computation of Ratio of Earnings to Fixed Charges -- 
                  filed herewith.                                            24
 
            27(a) Financial Data Schedules for the six months ended 
                  June 29, 1997,(filed electronically only).
 
            27(b) Financial Data Schedules restated for the six months
                  ended June 30, 1996, (filed electronically only).          

                                       18

<PAGE>

          (b)  Reports on Form 8-K:
 
           During the quarter ended June 29, 1997, and subsequent thereto, the 
           Company filed the following Current Reports on Form 8-K:
 
           Date of Report           Event Reported


           May 4, 1997    The Company filed an Agreement and Plan of 
                          Merger with Fort Howard Corporation dated 
                          May 4, 1997.
 
           July 2, 1997   The Company filed a Registration Statement 
                          on Form S-4 relating to the proposed merger 
                          with Fort Howard Corporation.
 
           July 24, 1997  The Company published a press release 
                          announcing its results of operations for
                          the second quarter and six months ended
                          June 29, 1997.

                                       19

<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.
                                                     
                                  JAMES RIVER CORPORATION of Virginia
 
 
 
                                  By:/s/William A. Paterson                  
                                    William A. Paterson
                                    Senior Vice President & Controller
                                    (Principal Financial and Accounting Officer)


Date:  August 7, 1997


                                       20