SECURITIES AND EXCHANGE COMMISSION 
                            Washington, D. C. 20549

                                  Form 10-QSB

            [X] QUARTERLY REPORT UNDER SECTION 13 OR 15[d] OF THE 
                       SECURITIES EXCHANGE ACT OF 1934 

                 For the quarterly period ended July 31, 1998

           [  ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE 
                                 EXCHANGE ACT 

                    For the transition period from      to    

                        Commission file number 1-6762

                          KILLEARN PROPERTIES, INC.

        (Exact name of small business issuer as specified in its charter )

                Florida                              59-1095497
   (State or other jurisdiction of       (I.R.S. Employer Identification No.)
   incorporation or organization)

                             385 Country Club Drive
                             Stockbridge, GA  30281
                        (Address of principal executive offices)

                             Issuer's telephone number
                                   (770)389-2020

Check whether the issuer (1) has filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act during the past 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]

State the number of shares outstanding of each of the issuer's classes of 
common equity, as of the last practicable date:  887,412.

Transitional Small Business Disclosure Format: No  [X].



KILLEARN PROPERTIES, INC. AND SUBSIDIARIES
INDEX

Part I.  Financial Information

   Item 1.  Consolidated Condensed Financial Statements (Unaudited):

    Consolidated Condensed Balance Sheet as of July 31, 1998                 3

    Consolidated Condensed Statements of Operations for the Three            4
      Months Ended and July 31, 1998 and 1997

    Consolidated Statements of Cash Flows for the Three Months               5
      Ended July 31, 1998 and 1997

    Notes to Consolidated Condensed Financial Statements                     6

   Item 2.  Management's Discussion and Analysis or Plan 
              Of Operations

Part II  Other Information

   Item 1.  Legal Proceedings                                                9
   Item 4.  Submission of Matters to a Vote of Security Holders              9
   Item 5.  Other Information                                                9
   Item 6.  Exhibits and Reports on Form 8-K                                10

Signatures                                                                  10
Exhibit Index                                                               11



<TABLE>
PART I. FINANCIAL INFORMATION 
ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 
KILLEARN PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET

<CAPTION>
ASSETS                                             7/31/98
                                                 (Unaudited)
<S>                                            <C>   
Cash                                            $    251,143
Accounts and notes receivable                      5,969,006
Land contracts receivable, net                       362,368
Real estate held for development and sale         21,659,154
Other property, plant and equipment, net             440,490
Other assets                                          27,090
                                                  __________
TOTAL ASSETS                                    $ 28,709,251
                                                  ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable & other liabilities            $  1,509,748
Income taxes payable                               3,750,009
Debt (including accrued interest)                 15,902,136
Deferred liabilities                                 543,355
Deferred income taxes                              2,381,565
Deferred income                                      914,163
                                                  __________
TOTAL LIABILITIES                               $ 25,000,976

STOCKHOLDERS' EQUITY

Common stock - $.10 par value;
  authorized 6,000,000 shares; 
  887,412 shares issued and outstanding         $     88,741
Additional paid-in capital                         1,942,998
Retained earnings                                  1,676,536
                                                  __________
TOTAL STOCKHOLDERS' EQUITY                      $  3,708,275
                                                  __________

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $ 28,709,251
                                                  ==========
The accompanying notes are an integral part of these consolidated financial 
statements.
</TABLE>


<TABLE>
KILLEARN PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<CAPTION>

                                         Three Months Ended     
                                       7/31/98        7/31/97
                                     (Unaudited)    (Unaudited)
<S>                                  <C>            <C> 
REVENUES:
 Net sales of land                    $6,662,637     $4,123,503
 Interest income                          59,304        148,123
 Commission income                        82,676         43,398
 Other revenues                            1,500          1,500
                                       __________     _________
Total Revenues                         6,806,117      4,316,524

COST AND EXPENSES:
 Cost of land sold                     5,579,931      2,737,304
 Commissions and selling expenses        393,366        447,572
 Interest expense                         50,075        161,097
 Depreciation                             18,373         19,440
 Property taxes                           59,309         49,057
 General and administrative costs        238,134        234,222
                                       _________      _________
TOTAL COST AND EXPENSES                6,339,188      3,648,693

EARNINGS BEFORE INCOME TAXES             466,929        667,831
Income tax                               186,772        251,305
                                       _________      _________
NET INCOME                            $  280,157    $   416,526
                                       =========      =========

EARNINGS PER SHARE                    
  (basic and diluted)                 $      .32   $        .47
                                       =========      =========

Weighted average number of
  common shares                          887,412        887,412
DIVIDENDS PER SHARE                         NONE           NONE
<FN>
The accompanying notes are an integral part of these consolidated financial 
statements.
</TABLE>


<TABLE>
KILLEARN PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<CAPTION>                                                Three Months Ended
                                                        7/31/98       7/31/97
                                                        --------      -------
                                                     (Unaudited)    (Unaudited)
<S>                                                <C>            <C>

NET CASH FROM OPERATING ACTIVITIES:                 $     9,933    $   431,812
                                                    ___________     __________

CASH FLOWS FROM INVESTING ACTIVITIES:                       -0-            -0-
                                                    ___________    ___________
CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from loans                               2,055,981     10,946,077 
    Principal payments on debt                       (2,160,959)   (11,266,080)
                                                    ___________    ___________
      Net used in financing activities                 (104,978)      (320,003)
                                                    ___________    ___________
NET CHANGE IN CASH                                     (114,911)       111,809

CASH - Beginning of period                              366,054        269,194
                                                    ___________    ___________

CASH - End of period                                $   251,143    $   381,003
                                                    ===========    ===========

Supplemental Information
Cash Paid:  Interest, net of amounts capitalized was $58,429 and $5,769 for 
            fiscal 1999 and 1998, respectively.
            Income taxes were $100,000 and $50,000 in fiscal 1999 and
            1998, respectively.
The accompanying notes are an integral part of these consolidated financial 
Statements.
</TABLE>


PART I. KILLEARN PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 
FOR THE QUARTER ENDED JULY 31, 1998

NOTE 1.  Basis of Presentation 

The accompanying unaudited consolidated condensed financial statements 
have been prepared in accordance with the instructions for Form 10-QSB 
and, therefore, do not include all information and footnotes necessary 
for a fair presentation of financial position, results of operations 
and changes in financial position in conformity with generally accepted 
accounting principles. 

The information furnished reflects all adjustments which are, in the 
opinion of management, necessary for a fair statement of the results for the
interim period covered.  For further information, refer to the complete
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-KSB for the year ended April 30, 1998.

NOTE 2.  Transfer of Assets

On August 1, 1996, the Company entered into an agreement, subject to
shareholder approval, pursuant to which it agreed to acquire the 551,321 shares
of common stock in the Company held by J.T. Williams, Jr., the Company's former
Chairman of the Board and Chief Executive Officer, and the cancellation of his
option to purchase an additional 100,000 shares of common stock through the
transfer of certain of its assets and liabilities.  The net assets identified
in the agreement consisted principally of the Eagle's Landing Golf Course and
Country Club, the Inn at Eagle's Landing, a note for approximately $2 million
and approximately 250 acres of commercial and industrial real estate, subject
to certain mortgages and other liabilities.  The agreement provided that
subject to shareholder approval, the redemption would be effective as of May 1,
1996.  Accordingly, the net cash flows related to the transferred assets from 
the effective date (May 1, 1996) until the closing date would be transferred to
or funded by J.T. Williams, Jr.

On September 30, 1996, the shareholders of the Company approved the
redemption, and the transaction closed on November 16, 1996.  The historical 
cost basis of approximately $17,191,000 of the net assets transferred has been 
reflected as retired treasury stock in the accompanying balance sheet and 
statement of changes in stockholders' equity.  The net operating results of the
transferred assets have been removed from the statement of operations 
retroactively to the effective date and have not been considered in the 
determination of net income of the Company for the year ended April 30. 1997.

NOTE 3  Earnings per share

Effective April 30, 1998, the Company adopted Statement of Financial 
Accounting Standards No. 128, "Earnings per Share" ("FAS 128") which replaces 
the presentation of primary earnings per share with basic earnings per share 
and which requires dual presentation of basic and diluted earnings per share
on the Consolidated Statements of Operations.  FAS 128 requires restatement of
all prior-period earnings per share data presented.  Basic net earnings per 
share is computed by dividing net income by the weighted average number of 
shares of common stock outstanding during the period, and diluted net earnings
per share includes the effect of unexercised stock options using the treasury 
stock method.  The treasury stock method assumes that common stock was 
purchased at the average market price during the period.  Because there were 
no stock options outstanding for the years July 31, 1998 and 1997, both basic 
and diluted earnings per share were the same.
NOTE 4  Financing

The Company obtained additional credit facilities during the three month period
ending July 31, 1998.  The facility of approximately $2.8 million is being 
used for the development of land in the Henry County area.  Additional 
borrowings were for the financing of development costs under various 
development loans.  These loans generally mature as the related lots are sold 
and bear interest rates at prime rate plus 1 to 1 1/2 points.

In May 1998, the Company borrowed $1,588,900 from a new lender of which the 
Company used $1 million to reduce debt and used $588,900 to pay development 
cost.  In addition, the Company had available $1,273,440 to draw from the new 
lender for additional development cost.  The agreement provides for interest 
to be paid at the bank's prime rates plus 1.0% per annum, and matures on 
May 18, 2000. The loan is collateralized by a first mortgage on 62.9 acres.

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

Results of Operations

Net sales of land increased $2.5 million (61.58%) during the current three 
month period when compared to the same period a year ago.  The primary reason 
for the increase was the sale of approximately $4.4 million to Proactive 
Technologies, Inc.  This sale was consummated pursuant to a settlement 
agreement entered into in January 1998 after the Company had made demand on 
Proactive Technologies, Inc. to pay notes which were in default. 

Cost of land sold, as a percentage of net sales of land, was 83.75% for the 
current three month period. This was a result of the $4.4 million dollar sale 
to Proactive Technologies, Inc. at a price slightly above book value.  The 
Company anticipates cost of lots sold as a percentage of land sales during the 
remainder of the year to be relatively consistent with the prior year. 

Interest income decreased $88,819 during the current three month period when 
compared to the same period a year ago, primarily due to the Company not 
recognizing accrued but unpaid interest on the $3.4 million receivable from 
International Realty Development Partners, LTD., L.L.C. which filed for 
Chapter 11 Bankruptcy in March 1998.

Commission income increased $39,278 in the current three month period as 
compared to the same period a year ago.  Additionally, commission and selling 
expenses decreased $54,206 in the current three month period.  These overall 
changes resulted from the Company's change in its method of marketing homes in 
its Georgia developments in the first quarter of fiscal 1999.  At this time, 
the Company is using Company-employed salespersons rather than independent 
brokers used last year.

Interest expense, when compared to the same period a year ago, decreased 
approximately $111,000 for the current three month period.  This decrease is 
due to the capitalization of a portion of the interest expense incurred by the 
Company, in accordance with Financial Accounting Standard 34, and a reduction
of Company debt in the current year by approximately $5.5 million.

General and administrative expenses remained constant in the current three 
month period when compared to the same period a year ago.  

The operating statements for the current three month period are not necessarily
indicative of the results expected for the year.

Liquidity and Capital Resources

The Company finances its operations with operating cash flow and bank 
borrowings.  On July 31, 1998 the Company had available lines of credit of 
approximately $1.4 million, which may be drawn as needed for the development of 
the Company's property and other working capital needs.  The Company continues 
to look for additional sources of lines of credit and other  financing 
alternatives and believes that such sources are available on acceptable terms 
when the need for additional financing arise.

In May 1998, the Company borrowed $1,588,900 from a new lender of which the 
Company used $1 million to reduce debt and $588,900 to pay development costs. 
In addition, the Company had available $1,273,440 to draw from the new lender 
for additional development cost.  The agreement provides for interest to be 
paid at the bank's prime rates plus 1.0% per annum, and matures on May 18, 
2000.  The loan is collateralized by a first mortgage on 62.9 acres.

In addition, the Company has other debt maturing in the amount of 
approximately $13.5 million in fiscal 1999 and $2.4 million in the following 
fiscal year.  The Company anticipates that these obligations will be paid with 
the proceeds of land sales from normal operations, extension of debt or new 
borrowings.

Other

The company is presently reviewing the potential impact of Year 2000 
compliance issues on its information systems and business operations, and has 
preliminarily determined that any cost, problems or uncertainties associated 
with the potential consequences of the Year 2000 issues will not have a 
material impact on its future operations or financial condition.

PART II - OTHER INFORMATION 

ITEM 1.
LEGAL PROCEEDINGS

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 following exhibit is being filed with this report:

      Exhibit No.       Description
      -----------       -----------
      27                Financial Data Schedule

  (b) Reports on Form 8-K

      NONE



SIGNATURES 

In accordance with the requirements of the Exchange Act, the Registrant
has caused this report to be signed on its behalf by the undersigned, 
thereunto duly authorized.


                                          KILLEARN PROPERTIES, INC. 
                                         (Registrant)

Date:  September 14, 1998                /s/ David K. Williams
                                         _________________________
                                         DAVID K. WILLIAMS 
                                         President & CEO



                                    EXHIBIT INDEX

                        Exhibit No.        Description          Page No.
                        -----------        -----------          --------

                           27        Financial Data Schedule      12