UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

                                    FORM 10-Q


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

     For the quarterly period ended September 30, 1997

                                       or

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

     For the transition period from _________________ to ________________

Commission File Number:  1-7558


                           LAWTER INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)


          Delaware                                       36-1370818
(State or other jurisdiction of                       (I.R.S. Employer
 incorporation or organization)                        Identification No.)


                8601 95th Street; Kenosha, Wisconsin  53142
                 (Address of principal executive offices)


                                 (414) 947-7300
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.    Yes [X]  No [ ]


                      APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

     Common stock $1.00 par value per share - 45,532,335 shares outstanding as
     of October 31, 1997.











                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.
The condensed financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission.  Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that disclosures are adequate to make
the information presented not misleading.  It is suggested that these condensed
financial statements be read in conjunction with the financial statements  and
the notes thereto included in the Company's latest annual report on Form 10-K.
In the opinion of the Company, all adjustments (consisting of normal recurring
accruals) necessary to present fairly the financial position of Lawter
International, Inc. and Subsidiaries as of September 30, 1997 and December 31,
1996 and the results of their operations for the three months and nine months
ended September 30, 1997 and 1996, and the statements of cash flows for the nine
months ended September 30, 1997 and 1996, have been included.  It should be
noted that these interim statements are based on certain annual estimates such
as the final level of LIFO inventories and the provision for income taxes.
These and other similar items may be subject to year end adjustments.  The
results of operations for such interim periods are not necessarily indicative of
the results for the full year.

                   Lawter International, Inc. and Subsidiaries
                        Condensed Statements of Earnings
                              (Shown in thousands)

                                    Three Months Ended        Nine Months Ended
                                       September 30              September 30
                                    -------------------     -------------------
                                      1997       1996         1997        1996
                                    --------   --------     --------   --------
Net Sales                           $ 50,411   $ 47,157     $151,208   $142,770
Cost of Products Sold                 34,397     31,360      103,544     99,224
                                    --------   --------     --------   --------
    Gross Margin                    $ 16,014   $ 15,797     $ 47,664   $ 43,546
Selling, Administrative, Research
  and Distribution Expenses            6,818      6,120       20,172     18,126
Subsidiary Closure Costs (Note 3)      9,535        ---        9,535        ---
                                    --------   --------     --------   --------
    Income from Operations          $   (339)  $  9,677     $ 17,957   $ 25,420
Net Investment Income                    546      1,044        1,870      3,988
Sale of Affiliate (Note 4)            32,030        ---       32,030        ---
                                    --------   --------     --------   --------
    Earnings before Income Taxes    $ 32,237   $ 10,721     $ 51,857   $ 29,408
Provision for Income Taxes            15,138      3,077       21,254      8,239
                                    --------   --------     --------   --------
    Net Earnings                    $ 17,099   $  7,644     $ 30,603   $ 21,169
                                    ========   ========     ========   ========

Earnings per Share of Common
    Stock (Note 2)                  $    .37   $    .17     $    .67   $    .47

Dividends per Share of Common Stock $    .10   $    .10     $    .30   $    .30

Weighted Average Shares Outstanding   45,467     45,109       45,401     45,087

The accompanying notes to the condensed financial statements are an integral
part of these statements.

                                       -2-




                   Lawter International, Inc. and Subsidiaries
                            Condensed Balance Sheets
                              (Shown in thousands)

                                                 September 30        December 31
                                                 ------------        -----------
Assets                                               1997                1996
--------                                           --------            --------
Current Assets
      Cash                                         $  8,373            $  8,221
      Time Deposits                                  83,524              46,710
      Marketable Securities                             ---               2,400
      Accounts Receivable (net)                      41,675              47,671
      Inventories (Note 1)
             Raw Materials                           22,614              24,094
             Finished Goods                          21,383              25,517
      Prepaid Expenses                                1,224               1,974
                                                   --------            --------
                Total Current Assets               $178,793            $156,587
                                                   --------            --------
Property, Plant and Equipment                      $126,745            $141,346
      Less Accumulated Depreciation                 (37,816)            (49,229)
                                                   --------            --------
                Net Property                       $ 88,929            $ 92,117
                                                   --------            --------
Investment in Affiliates                           $    ---            $ 24,833
                                                   --------            --------
Intangibles and Other Assets                       $ 15,668            $ 19,586
                                                   --------            --------
                Total Assets                       $283,390            $293,123
                                                   ========            ========
Liabilities and Stockholders' Equity
------------------------------------
Current Liabilities
      Accounts Payable and Accrued Expenses        $ 29,603            $ 41,844
      Short-Term Borrowings                          25,785              38,962
      Income Taxes Payable                            2,346               1,371
                                                   --------            --------
                Total Current Liabilities          $ 57,734            $ 82,177
                                                   --------            --------
Deferred Income Taxes                              $ 36,098            $ 36,281
                                                   --------            --------
Long-Term Obligations                              $ 29,050            $ 29,050
                                                   --------            --------
                Total Liabilities                  $122,882            $147,508
                                                   --------            --------
Stockholders' Equity
      Preferred Stock (None Issued)                $    ---            $    ---
      Common Stock                                   45,532              45,349
      Additional Paid-in Capital                     16,737              14,711
      Retained Earnings                             106,901              89,917
      Cumulative Translation Adjustments             (8,210)             (3,826)
      Other                                            (452)               (536)
                                                   --------            --------
                Net Stockholders' Equity           $160,508            $145,615
                                                   --------            --------
                Total Liabilities and Equity       $283,390            $293,123
                                                   ========            ========
The accompanying notes to the condensed financial statements are an integral
part of these balance sheets.

                                       -3-



                   Lawter International, Inc. and Subsidiaries
                       Condensed Statements of Cash Flows
                              (Shown in thousands)

                                                  Nine Months Ended September 30
                                                  ------------------------------
                                                      1997               1996
                                                    --------           --------
Cash Flow from Operating Activities:
    Net Earnings                                    $ 30,603           $ 21,169
Adjustments to Reconcile Net Earnings to
  Net Cash Provided by Operating Activities-
    Depreciation and Amortization                      4,340              3,779
    Deferred Income Taxes                                ---               (152)
    Undistributed Equity Income                       (1,456)            (1,643)
    Deferred Exchange Gain (Loss)                      3,206                730
    Purchase of Marketable Securities                    ---            (23,202)
    Proceeds from Sales of Marketable Securities       2,502             20,980
    Net (Gain) Loss from Marketable Securities            (2)              (628)
    Gain on Sale of Business                            (738)               ---
    Gain on Sale of Hach                             (33,730)               ---
(Increase) Decrease in Current Assets-
    Accounts Receivable                                3,902              3,078
    Inventories                                        2,593              2,748
    Prepaid Expenses                                     610             (2,522)
Increase (Decrease) in Current Liabilities-
    Accounts Payable and Accrued Expenses             (7,195)            (8,845)
    Income Taxes Payable                               1,114               (851)
                                                    --------           --------
Net Cash Provided by Operating Activities           $  5,749          $  14,641
                                                    --------           --------
Cash Flow from Investing Activities:
    Expenditures for Property, Plant
      & Equipment - Net                             $ (3,438)          $(23,768)
    Purchase of Business-Net of Cash                  (9,219)               ---
    Sale of Business                                   4,856                ---
    Proceeds from sale of Hach                        59,987                ---
    Loans to Officers                                    (18)                (2)
    Repayment of Officers' Loans                          43                 43
                                                    --------           --------
Net Cash Used for Investing Activities              $ 52,211           $(23,727)
                                                    --------           --------
Cash Flow from Financing Activities:
    Exercise of Stock Options                       $  2,209           $  2,452
    Payment of Long-Term Borrowings                      (50)               (50)
    Proceeds from Long-Term Borrowings                   ---             25,000
    Payment of Short-Term Borrowings                  (8,685)           (15,160)
    Proceeds from Short-Term Borrowings                  ---             16,475
    Cash Dividends Paid                              (13,619)           (13,542)
                                                    --------           --------
Net Cash (Used for) Provided by
  Financing Activities                              $(20,145)          $ 15,175
                                                    --------           --------
Effect of Exchange Rate Changes on Cash             $   (849)          $   (463)
                                                    --------           --------
Increase (Decrease) in Cash and Equivalents         $ 36,966           $  5,626
Cash and Equivalents, Beginning of Period             54,931             63,680
                                                    --------           --------
Cash and Equivalents, End of Period                 $ 91,897           $ 69,306
                                                    ========           ========

The accompanying notes to the condensed financial statements are an integral
part of these statements.
                                       -4-



                   Lawter International, Inc. and Subsidiaries

Notes to the Condensed Financial Statements

Note 1.  Inventories

At year end, the Company takes a complete physical inventory to determine
inventory values.  During interim periods, the Company uses a combination of
perpetual inventory records, physical inventories and the gross profit method to
determine inventory values.

The Company values its domestic inventories at last-in, first-out (LIFO) cost
which is not in excess of net realizable value.  The Company's other inventories
are valued at the lower of first-in, first-out (FIFO) cost or market.

Because the inventory determination under the LIFO method can only be made at
the end of each fiscal year based on the inventory levels and costs at that
point, interim LIFO determinations, including that at September 30, 1997, must
necessarily be based on management's estimates of expected year end inventory
levels and costs.  Such future estimates of inventory levels and prices are
subject to many forces beyond the control of management.

Note 2.  Earnings per Share

Earnings per share of common stock are computed on the weighted average shares
outstanding during the respective periods.  Net earnings per share would not be
materially different from reported earnings per share if all outstanding stock
options were exercised.

Note 3.  Subsidiary Closure Costs

The Subsidiary Closure Costs represent $4,236,000 for the write off of goodwill
related to the Company's Italian subsidiary along with $3,299,000 for the write
off of accumulated foreign currency translation losses and $2,000,000 for other
costs related to other subsidiaries that are in the process of being closed.
The after tax effect of these costs was $.20 per share.

Note 4.  Sale of Affiliate

During the third quarter of 1997, the Company sold its 28% stake in Hach Company
common stock for $59,987,000.  This resulted in an after tax gain of $19,570,000
or $.43 per share.

Note 5.  Restructuring Charges

In the fourth quarter of 1995, a new management team was formed.  The new
management, taking into account a change in market conditions, developed a new
corporate strategy.  Part of the decision making process included an evaluation
of the feasibility of continuing to utilize older manufacturing facilities.
With the anticipated completion of construction of the new ink vehicle and resin
facility in Europe combined with the new ink vehicle and resin facility in the
U. S., the Company decided to implement a restructuring plan.  This plan
included the decommissioning of older ink vehicle and resin plants.  This
resulted in a 1995 fourth quarter pretax charge of $8,449,000, of which
$2,791,000 was charged to Selling, Administrative, Research and Distribution
expenses for personnel redundancy and $5,658,000 was charged to Cost of Products
Sold for site decommissioning.  These restructuring activities commenced in the
fourth quarter of 1995 and will continue through 1997.

The personnel redundancy costs relate to cash outlays for benefits to be paid to
the manufacturing and office employees at older plants in Europe and North

                                      -5-



America.  The reduction in labor force as a result of the restructuring plan was
originally estimated at approximately 100 positions.  To date, 95 positions have
been eliminated. As of September 30, 1997, employee head count was at 521 versus
a high of 604 employees in 1995.  Redundancy payments charged against the
reserve through September 30, 1997 were $2,505,000 including $25,000 utilized in
the third quarter of 1997.  Redundancy payments are expected to be completed by
the end of 1997.

The site decommissioning costs represent demolition, cleanup and asset write
down costs for older facilities in Europe and North America.  Included in the
$5,658,000, is $4,461,000 for non-cash items which relate to the write down of
the net book value of the assets at these locations.  As of September 30, 1997,
five manufacturing facilities in North America and three manufacturing
facilities in Europe were shut down and/or sold.  The costs charged against the
reserve related to these facilities were $5,005,000, comprised of $3,880,000 for
the write down of the net book value of the assets, $435,000 for cleanup costs,
$835,000 for costs incurred during the wind down period of the European
facilities, $94,000 for equipment dismantling and $191,000 for relocation costs,
partially offset by the proceeds of $430,000 from the sale of one of the North
American facilities.

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

Liquidity and Capital Resources

Lawter's cash and equivalents, net of short-term borrowings, increased
$50,100,000 from $16,000,000 at December 31, 1996 to $66,100,000 at September
30, 1997.  On July 8, 1997, the Company sold its investment in Hach Company for
$60,000,000.  The after tax cash proceeds were approximately $47,500,000 which
will be used to further the Company's long term plans. In the short term, a
portion of the funds were used to pay off short term debt while the remainder
were invested in time deposits.  The Company generally relies on internally
generated funds from operations to satisfy working capital requirements and to
fund capital expenditures.  However, in certain circumstances, the Company finds
it is more advantageous to borrow funds to satisfy these requirements.

The Company has no plans for major capital expenditures at this time. Capital
expenditures in the near future will include additions and improvements to
existing facilities.  The Company currently anticipates using internally
generated funds for the majority of these capital expenditures.

Results of Operations

SALES.  The Company's consolidated net sales increased 7% in the third quarter
of 1997 when compared to the third quarter of 1996.  Included in the third
quarter of 1997 are $5,000,000 in sales of products, mostly in Europe, related
to the Wolstenholme and Hercules acquisitions.  Excluding the Wolstenholme and
Hercules products, sales were down 4% due primarily to the impact of a stronger
U. S. dollar versus European currencies and lower average selling prices as a
result of a change in sales mix, partially offset by increased sales volume in
all geographic areas.

Consolidated net sales for the nine months ended September 30, 1997 increased 6%
over sales for the nine months ended September 30, 1996.  Included in 1997 are
$15,900,000 in sales of products, mostly in Europe, related to the Wolstenholme
and Hercules acquisitions. Excluding the Wolstenholme and Hercules products,
sales were down 5% principally as a result of lower average selling prices due
to a change in sales mix and the impact of a stronger U. S. dollar versus
European currencies, partially offset by increased sales volume in all
geographic areas.

                                      -6-



GROSS MARGINS.  Gross margins as a percent of net sales were 31.8% and 33.5% for
the quarters ended September 30, 1997 and 1996, respectively and 31.5% and 30.5%
for the nine months ended September 30, 1997 and 1996, respectively.  The
quarter ended September 30, 1996 includes proceeds from business interruption
insurance. Excluding these proceeds the gross margin percentages were higher in
both 1997 periods when compared to 1996.  The higher percentages in 1997
excluding these proceeds were due to lower raw material costs domestically and
the lower costs as a result of the restructuring plan (See "Restructuring
Charges" below).

SELLING, ADMINISTRATIVE, RESEARCH AND DISTRIBUTION EXPENSES.  Selling,
administrative, research and distribution expenses were $6,818,000 in the
quarter ended September 30, 1997 versus $6,120,000 in the quarter ended
September 30, 1996 and $20,172,000 in the first nine months of 1997 versus
$18,126,000 in the first nine months of 1997.  1997 costs are higher due to
costs associated with the Wolstenholme acquisition, and higher research,
administrative and distribution costs in the U. S.

SUBSIDIARY CLOSURE COSTS.  The Subsidiary Closure Costs represent $4,236,000 for
the write off of goodwill related to the Company's Italian subsidiary along with
$3,299,000 for the write off of accumulated foreign currency translation losses
and $2,000,000 for other costs related to other subsidiaries that are in the
process of being closed.  The after tax effect of these costs was $.20 per
share.

NET INVESTMENT INCOME.  Net investment income decreased from $1,044,000 in the
quarter ended September 30, 1996 to $546,000 in the quarter ended September 30,
1997 due mainly to the decrease in the earnings of the Company's Hach investment
as a result of the sale of this investment at the beginning of the quarter.  Net
investment income decreased from $3,988,000 in the nine months ended September
30, 1996 to $1,870,000 in the nine months ended September 30, 1997 due mainly to
gains on marketable securities in 1996 along with the decrease in earnings in
Hach Company in 1997.

SALE OF AFFILIATE.  During the third quarter of 1997, the Company sold its 28%
stake in Hach Company common stock for $59,987,000.  This resulted in an after
tax gain of $19,570,000 or $.43 per share.

INCOME TAXES.  The effective tax rates were 47.0% and 41.0% for the three months
and nine months ended September 30, 1997, respectively versus 28.7% and 28.0%
for the three months and nine months ended September 30, 1996.  The higher rates
in 1997 were due to the higher tax rate on the sale of Hach Company common stock
along with the lack of tax benefit on the subsidiary closure costs.

Other Matters

RESTRUCTURING CHARGES.  In the fourth quarter of 1995, a new management team was
formed.  The new management, taking into account a change in market conditions,
developed a new corporate strategy.  Part of the decision making process
included an evaluation of the feasibility of continuing to utilize older
manufacturing facilities.  With the anticipated completion of construction of
the new ink vehicle and resin facility in Europe combined with the new ink
vehicle and resin facility in the U. S., the Company decided to implement a
restructuring plan.  This plan included the decommissioning of older ink vehicle
and resin plants.  This resulted in a 1995 fourth quarter pretax charge of
$8,449,000, of which $2,791,000 was charged to Selling, Administrative, Research
and Distribution expenses for personnel redundancy and $5,658,000 was charged to
Cost of Products Sold for site decommissioning.  These restructuring activities
commenced in the fourth quarter of 1995 and will continue through 1997.

The personnel redundancy costs relate to cash outlays for benefits to be paid to
the manufacturing and office employees at older plants in Europe and North
                                      -7-


America.  The reduction in labor force as a result of the restructuring plan was
originally estimated at approximately 100 positions.  To date, 95 positions
have been eliminated. As of September 30, 1997, employee head count was at 521
versus a high of 604 employees in 1995.  Redundancy payments charged against the
reserve through September 30, 1997 were $2,505,000 including $25,000 utilized in
the third quarter of 1997.  Redundancy payments are expected to be completed by
the end of 1997.

The site decommissioning costs represent demolition, cleanup and asset write
down costs for older facilities in Europe and North America.  Included in the
$5,658,000, is $4,461,000 for non-cash items which relate to the write down of
the net book value of the assets at these locations.  As of September 30, 1997,
five manufacturing facilities in North America and three manufacturing
facilities in Europe were shut down and/or sold.  The costs charged against the
reserve related to these facilities were $5,005,000, comprised of $3,880,000 for
the write down of the net book value of the assets, $435,000 for cleanup costs,
$835,000 for costs incurred during the wind down period of the European
facilities, $94,000 for equipment dismantling and $191,000 for relocation costs,
partially offset by the proceeds of $430,000 from the sale of one of the North
American facilities.

NEW ACCOUNTING PRONOUNCEMENTS.  The Financial Accounting Standards Board has
issued Statement 128, "Earnings per Share" in 1997.  The new statement changes
the method of calculating earnings per share.  The statement is effective for
interim and annual periods ending after December 15, 1997.  Earlier adoption is
prohibited.  The Company will apply the new standard in the fourth quarter of
this year.  The new standard should have no significant effect on the earnings
per share of the Company.

LOOKING FORWARD.  This Form 10-Q contains forward-looking statements which are
not historical facts.  These statements involve risks and uncertainties that
could cause actual results to differ materially, including, but not limited to,
foreign currency rate fluctuations, competitive factors, raw material costs and
certain global and regional economic conditions and factors which are beyond the
Company's control.

                                   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.


                                                    LAWTER INTERNATIONAL, INC.
                                                    --------------------------
                                                           (Registrant)


November 12, 1997                                   /s/ John P. O'Mahoney
-----------------                                   --------------------------
                                                    John P. O'Mahoney
                                                    Chairman and Chief
                                                      Executive Officer


November 12, 1997                                   /s/ Mark W. Joslin
-----------------                                   --------------------------
                                                    Mark W. Joslin
                                                    Chief Financial Officer
                                                      and Treasurer



                                      -8-