SECURITIES AND EXCHANGE COMMISSION
                           Washington,  D. C.  20549

                                    Form 10-Q


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

                  For the Quarterly Period Ended March 31, 1999

                  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 0-5214
                                PEERLESS MFG. CO.
             (Exact name of registrant as specified in its charter)


           Texas                                   75-0724417
   (State or other jurisdiction of              (I.R.S. Employer
   incorporation or organization)              identification No.)


             2819 Walnut Hill Lane           Dallas, Texas    75229
                P. O. Box 540667             Dallas, Texas    75354
   (Address of principal executive offices)        (Zip code)


  Registrant's telephone number, including area code    (214) 357-6181


           	None
  Former name, former address and former fiscal year, if changed since
  last report.

  Indicate by a 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 shorter periods that the
  registrant was required to file such reports), and (2) has been subject
  to such filing requirements for the past 90 days.

                           	Yes  xx     	No
                                   -----          -----

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

            Class                          Outstanding at May 14, 1999
 Common stock, $1.00 par value                   1,452,492 Shares
<PAGE>

                          PEERLESS MFG. CO.

                                INDEX



                                                                  Page
								 Number
                                                                 ------
Part I:  Financial Information

         Item 1: Consolidated Financial Statements

         Condensed Consolidated Balance Sheets for the
         periods ended March 31, 1999 and June 30, 1998.              3

         Condensed Consolidated Statements of Earnings for the
         three and nine months ended March 31, 1999 and 1998.         4

         Condensed Consolidated Statements of Cash Flows for
         the nine months ended March 31, 1999 and 1998.               5

         Notes to the Condensed Consolidated Financial Statements.  6 - 7

         Item 2: Management's Discussion and Analysis of Financial
                 Condition and Results of Operations.               8 - 11


Part II: Other Information

         Legal Proceedings                                           12

         Exhibits and Reports                                      12 - 13

         Signatures                                                   14

<PAGE>

				PART  I
			   FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
			     PEERLESS MFG. CO.
		CONDENSED CONSOLIDATED BALANCE SHEETS

<CAPTION>

                                                      March 31,     June 30,
                                                        1999          1998
                                                    ----------    ----------
<S>                                                <C>           <C>
Assets:                                              (UNAUDITED)    (AUDITED)
Current assets:
   Cash and cash equivalents                       $   607,543   $   428,482
   Short term investments                              268,065       268,065
   Accounts receivable-principally trade-net of
    allowance for doubtful accounts of $774,688 at
    March 31, 1999 and $806,200 at June 30, 1998    10,860,474    14,241,036
   Inventories:
      Raw materials                                    535,342       973,906
      Work in process                                1,278,201     1,114,524
      Finished goods                                   720,484       331,415
   Costs and earnings in excess of billings
    on uncompleted contracts                         3,337,479     1,838,641
   Deferred income taxes                               405,227       433,596
   Other                                               299,773       165,631
                                                    ----------    ----------
      Total current assets                          18,312,588    19,795,296

Property, plant and equipment-at Cost,
 less accumulated depreciation                       1,474,424     1,506,465
Property held for investment-at Cost,
 less accumulated depreciation                         802,274       830,840
Other assets                                           664,644       623,620
                                                    ----------    ----------
                                                   $21,253,930   $22,756,221
                                                    ==========    ==========
<PAGE>

Liabilities and Stockholders' Equity:
Current liabilities:
   Notes payable                                   $         0   $   200,000
   Accounts payable-trade                            3,808,084     5,566,068
   Billings in excess of costs and earnings
    on uncompleted contracts                           139,982        49,977
   Commissions payable                               1,294,933     1,205,391
   Accrued liabilities:
      Compensation                                   1,041,931     1,499,443
      Warranty                                         624,182       434,588
      Other                                            446,916       366,408
                                                    ----------    ----------
      Total current liabilities                      7,356,028     9,321,875

Deferred income taxes                                   40,749        38,543

Stockholders' equity:
   Common stock-authorized 10,000,000 shares
    of $1 par value; issued and outstanding,
    1,452,492 shares                                 1,452,492     1,457,492
   Additional paid-in capital                        2,539,951     2,583,701
   Unamortized value of restricted stock grants        (10,698)      (51,385)
   Cumulative foreign currency translation
    adjustment                                         (89,644)      (79,849)
   Retained earnings                                 9,965,052     9,485,844
                                                    ----------    ----------
                                                    13,857,153    13,395,803
                                                    ----------    ----------
                                                   $21,253,930   $22,756,221
                                                    ==========    ==========

  The accompanying notes are an integral part of these statements.

                                  3 of 15
</TABLE>
<PAGE>
<TABLE>
                               PEERLESS MFG. CO.
		       CONDENSED STATEMENTS OF EARNINGS
			          (UNAUDITED)

                                Three Months Ended        Nine Months Ended
                                    March 31,                 March 31,
                                1999         1998         1999         1998
                              ---------   ----------   ----------   ----------
<S>                          <C>         <C>          <C>          <C>
Revenues                     $9,741,644  $10,419,822  $30,043,169  $28,667,383
Cost of goods sold            6,226,860    6,765,114   19,949,123   18,658,985
                              ---------   ----------   ----------   ----------
      Gross profit            3,514,784    3,654,708   10,094,046   10,008,398

Operating expenses            2,670,421    2,752,457    7,991,510    8,072,344
                              ---------   ----------   ----------   ----------
      Operating income          844,363      902,251    2,102,536    1,936,054

Other income(expense)
   Interest income               16,840        6,158       40,513       21,562
   Interest expense                   0       (9,503)     (18,898)     (24,089)
   Foreign exchange
    gains (losses)              (25,808)      (6,357)    (119,163)     (57,341)
   Other, net                   (59,802)      (9,178)     (72,607)     (58,131)
                              ---------   ----------   ----------   ----------
                                (68,770)     (18,880)    (170,155)    (117,999)
                              ---------   ----------   ----------   ----------
Earnings from operations
   before Federal income tax    775,593      883,371    1,932,381    1,818,055

Federal income tax
   Current                      261,746      349,747      698,058      699,228
   Deferred                      18,713      (31,582)      27,618      (82,708)
                              ---------   ----------   ----------   ----------
                                280,459      318,165      725,676      616,520
                              ---------   ----------   ----------   ----------
Net earnings                    495,134      565,206    1,206,705    1,201,535
                              =========    =========    =========    =========
Basic and diluted earnings
per share                      $   0.34   $     0.39   $     0.83   $     0.83
                              =========    =========    =========    =========

Basic weighted average shares 1,454,048    1,455,698    1,456,361    1,453,209
Dilutive options                    563        1,404        3,084        2,702
                              ---------   ----------   ----------   ----------
Adjusted weighted average
 shares                       1,454,611    1,457,102    1,459,445    1,455,911
                              =========    =========    =========    =========
Cash dividend per common
 share                       $    0.125   $    0.125   $    0.375   $    0.375
                              =========    =========    =========    =========

The accompanying notes are an integral part of these statements.

                                  4 of 15
</TABLE>
<PAGE>
<TABLE>
                                PEERLESS MFG. CO.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                                     For the nine months ended
                                                             March 31,
                                                         1999         1998
                                                       ---------    ---------
<S>                                                   <C>          <C>
Cash flows from operating activities
  Net earnings                                        $1,206,705   $1,201,535
  Adjustments to reconcile earnings to net cash
     provided by (used in) operating activities:
         Depreciation and amortization                   251,740      271,151
         Other                                           (19,323)      15,426
         Changes in operating assets and liabilities
           Accounts receivable                         3,380,562     (132,691)
           Inventories                                  (114,182)    (908,877)
	   Cost and earnings in excess of billings
                 on uncompleted contracts             (1,498,838)   1,558,468
           Other current assets                         (105,773)     101,081
           Other assets                                  (41,030)    (182,746)
           Accounts payable                           (1,757,246)  (1,891,119)
	   Billings in excess of costs and earnings
                 on uncompleted contracts                 90,005     (344,399)
           Commissions payable                            89,543      202,791
           Accrued liabilities                          (366,767)     620,503
                                                       ---------    ---------
                                                         (91,309)    (690,412)
                                                       ---------    ---------
  Net cash provided by (used in) operating activities  1,115,396      511,123

Cash flows from investing activities:
   Net sales (purchases) of short-term investments             0       (8,837)
   Net sales (purchases) of property and equipment      (180,605)    (222,115)
                                                       ---------    ---------
  Net cash provided by (used in) investing activities   (180,605)    (230,952)

Cash flows from financing activities:
   Net change in short-term borrowings                  (200,000)           0
   Proceeds from issuance of common stock                      0       24,523
   Dividends paid                                       (545,935)    (544,935)
                                                       ---------    ---------
 Net cash provided by (used in) financing activities    (745,935)    (520,412)
Effect of exchange rate on cash and cash equivalents      (9,795)       7,194
                                                       ---------    ---------
 Net increase (decrease) in cash and cash equivalents    179,061     (233,047)
Cash and cash equivalents at beginning of period         428,482      772,553
                                                       ---------    ---------
Cash and cash equivalents at end period               $  607,543   $  539,506
                                                       =========    =========

The accompanying notes are an integral part of these statements.

                                  5 of 14
</TABLE>
<PAGE>

                             PEERLESS MFG. CO.

           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.   The accompanying consolidated financial statements of
     Peerless Mfg. Co. and its subsidiaries (the "Company") have
     been prepared by the Company without audit.  In the opinion
     of the Company's management, the financial statements
     reflect all adjustments necessary to present fairly the
     results of operations for the three and nine months ended
     March 31, 1999 and 1998, the Company's financial position at
     March 31, 1999, and June 30, 1998, and cash flows for the
     nine months ended March 31, 1999 and 1998.  These
     adjustments are of a normal, recurring nature which are, in
     the opinion of management, necessary for a fair presentation
     of the financial position and results of operations for the
     interim periods.


     Certain notes and other information have been condensed or
     omitted from the interim financial statements presented in
     this Quarterly Report on Form 10-Q.  Therefore, these
     financial statements should be read in conjunction with the
     Company's Annual Report Form 10-K for the Fiscal year ended
     June 30, 1998 and the consolidated financial statements and
     notes thereto included in the Company's June 30, 1998,
     audited financial statements.


2.   The results for interim periods are not necessarily
     indicative of the results to be expected for the full year.
     Peerless Mfg. Co. designs and manufactures custom contracted
     pressure vessels and other products to customer
     specifications, sales of which are obtained by competitive
     bids and may result in material sales and profitability
     increases or decreases when comparing interim periods
     between years.  The Company generally recognizes sales of
     custom-contracted products at the completion of the
     manufacturing process, which is normally less than one year.
     The percentage-of-completion method is used for long-term
     contracts.


3.   The backlog of uncompleted orders and letters of intent at
     March 31, 1999 was approximately $25,500,000 as compared to
     a March 31, 1998 backlog of $29,000,000.  Of the $25,500,000
     backlog at March 31, 1999, approximately 50% is scheduled to
     be completed in the current fiscal year.

                                  6 of 14
<PAGE>


4.   The Company has formal agreements with Bank of America N.A.,
     formerly NationsBank N.A., and Chase Bank of Texas N.A. for
     $3,500,000 each for an aggregate of $7,000,000 continuing
     lines of credit, renewable annually.  Under the terms of
     these agreements, loans bear interest at the prevailing
     prime rate and the Company is required to pay 1/4 of 1% per
     annum on the unused portion of the facility.  In addition,
     Chase Bank of Texas provided the Company a LIBOR rate
     option.  As of March 31, 1999 and 1998, the Company had
     nothing outstanding against these lines of credit.


5.   The Company consolidates the accounts of its wholly-owned
     foreign subsidiaries, Peerless Europe Limited and Peerless
     Europe B.V.  All significant intercompany accounts and
     transactions have been eliminated in the consolidation.


                                  7 of 14

<PAGE>

Item 2.   Management's discussion and analysis of financial
          condition and results of operations.


                             PEERLESS MFG. CO.


     This report contains certain forward-looking statements within
     the meaning of Section 27A of the Securities Act of 1933 and
     Section 21E of the Securities Exchange Act of 1934.  Such
     statements are subject to inherent risks and uncertainties, some
     of which cannot be predicted or quantified.  Actual results could
     differ materially from those projected in the forward-looking
     statements as a result of changes in market conditions, increased
     competition, global and domestic economic conditions, or other
     factors.  The following discussion and analysis should be read in
     conjunction with the attached consolidated financial statements
     and notes thereto, and with the Company's audited financial
     statements and notes thereto for the fiscal year ended June 30,
     1998.


     Capital Resources and Liquidity

     As a general policy, the Company maintains corporate liquidity
     at a level adequate to support existing operations and planned
     internal growth, and to allow continued operations through
     periods of unanticipated adversity.

     Cash and equivalents increased $179,061 from June 30, 1998. Net
     earnings of $1,206,705 and accounts receivable collections were
     $3,380,562.  These positive cash flows were offset by reductions
     in cost and earnings in excess of billings on uncompleted
     contracts of $1,498,838, decreases in accounts payable of
     $1,757,246, capital expenditures of $180,605, dividend payments
     of $545,935 and repayment of short term borrowing of $200,000.

     The Company continues to finance plant expansion, equipment
     purchases, acquisitions and working capital requirements
     primarily through the retention of earnings, which is reflected
     by the absence of long-term debt in the Company's statement of
     financial position.  In addition to retained earnings, the
     Company has from time to time used two short-term bank credit
     lines totaling $7,000,000 to supplement working capital.  The
     Company currently has no material commitments for capital
     expenditures other than with respect to its established plant
     and equipment maintenance program.


                                  8 of 14

<PAGE>

     REVENUE:  Revenue decreased 6.5% to $9,741,644 for the three
     months ended March 31, 1999, from $10,419,822 for the three
     months ended March 31, 1998.  For the nine month period ended
     March 31, 1999, revenues increased 5% to $30,043,169, from
     $28,667,383 for the nine months ended March 31, 1998.  Sales
     volumes continued to be firm for SCR products, filtration and
     separation products, nuclear steam dryers, commercial mist
     extractors, and other marine products, partially offset by
     reduced sales of pressure vessels for the three and nine months
     ended March 31, 1999 compared to the three and nine months ended
     March 31, 1998.


     GROSS PROFIT:  Gross profit at $3,514,784 for the three months
     ended March 31, 1999 was down 3.8% on lower volume compared to
     the $3,654,708 earned for the three months ended March 31, 1998.
     Gross profit increased approximately 1% to $10,094,046 for the
     nine months ended March 31, 1999 from $10,008,398 for the nine
     months ended March 31, 1998.  The $85,648 increase in gross
     profit is attributable to increased sales revenue.


     OPERATING EXPENSES:  Operating expenses decreased by 3% (as
     the result of reduced compensation based on lower income) to
     $2,670,421 for the three months ended March 31, 1999 from
     $2,752,457 for the three months ended March 31, 1998.  For
     the nine month period, operating expenses remained stable at
     $7,991,510 for the nine months ended March 31, 1999 from
     $8,072,344 for the nine months ended March 31, 1998.


     OTHER INCOME/(EXPENSE):  The Company recognized net other
     expenses of approximately $69,000 and $170,000 for the three and
     nine months ended March 31, 1999, for interest, foreign exchange
     losses and other expenses.  These expenses compare unfavorably
     to the $19,000 and $118,000 net other expenses reported for the
     three and nine month periods ended March 31, 1998, and are
     primarily due to expenses incurred to settle an employee injury
     claim.

                                  9 of 14
<PAGE>

     YEAR 2000 COMPLIANCE:

     The inability of computers, software and other equipment
     utilizing microprocessors to recognize and properly process data
     fields containing a two-digit year is commonly referred to as
     "the Year 2000 Compliance issue".  As the Year 2000 approaches,
     such systems may be unable to accurately process certain date-
     based information.

     As the case with most other companies using computers in their
     operations, the Company is in the process of addressing the Year
     2000 Compliance issue.  The Company began converting its
     information systems in 1996 through the purchase of a new
     information system that is already Year 2000 compliant.  The
     Company has incurred approximately $475,000 to date in
     implementing this new system and does not expect to incur any
     additional material costs to become year 2000 compliant.  The
     system was implemented during the quarter ending March 31, 1999,
     and was successfully tested.  Time sensitive schedules, purchase
     orders and invoices were successfully generated.

     The Company purchases computer hardware and software products
     from third parties for incorporation into the Company's products
     and these third-party products may be affected by the Year 2000
     problem.  There can be no guarantee that these products or the
     systems of other companies on which the Company's systems and
     operations rely will be timely converted or that the failure of
     these systems would not have an adverse effect on the Company's
     systems.  The Company has advised its customers inquiring about
     this issue to contact the Company's vendors for Year 2000
     information.  The Company is in the process of consulting with
     such vendors in an effort to ascertain whether they have
     addressed the risk of Year 2000 problems in the systems currently
     used by the Company.

                                 10 of 14
<PAGE>


     INTERNATIONAL MARKETS:

     Demand for the Company's products in Southeast Asia has declined
     as a result of the current financial situation there.  However,
     recent economic reports indicate business activity is improving
     in this area.

     The competition from local fabricators and the Company's
     traditional competitors in Latin America has intensified during
     the recent period of depressed oil prices.  The Company is
     attempting to address these trends with new technology and by
     utilizing less expensive global sources for materials and labor.
     Recently oil prices have improved and management anticipates
     increased demand for products utilized to process oil.

     SCR Products:

     Inquiries for the purchase of SCR environmental protection
     products have increased.  As previously reported, new SCR
     opportunities are the result of the new gas turbine powered
     electric generating facilities being built to fill demand for
     electric power in the U.S.  These projects require clean burning
     gas which in turn creates the opportunity to sell the Company's
     gas cleaning equipment.  Coal fired electric power plants are
     also adding SCR products to comply with US Government mandated
     lower NOx emission levels.


                                 11 of 14
<PAGE>
                             PEERLESS MFG. CO.

                                  PART II

                             OTHER INFORMATION


Item 1 -- Legal proceedings

     Reference is made to Form 10-K Annual Report, as amended,
     Item 3, Page 6, "Legal Proceedings" for the Fiscal year
     ended June 30, 1998.  For the three months ended
     March 31, 1999 there were no material developments or new
     proceedings filed against the Company.


Item 6 -- Exhibits and Reports -- Form 8-K


(a)       EXHIBITS:

          References to the Company's SEC File Number 0-05214.

3(a)      The Company's Articles of Incorporation, as amended to
          date (filed as Exhibit 3(a) to the Company's Quarterly
          Report on Form 10-Q, dated December 31, 1997, and
          incorporated herein by reference).


3(b)      The Company's Bylaws, as amended to date (filed as
          Exhibit 3(b) to the Company's Annual Report on Form 10-
          K, dated June 30, 1997, and incorporated herein by
          reference).


10(a)     Incentive Compensation Plan effective January 1, 1981,
          as amended January 23, 1991 (filed as Exhibit 10(b) to
          the Company's Annual Report on Form 10-K, dated June
          30, 1991, and incorporated herein by reference).


10(b)     1985 Restricted Stock Plan for Peerless Mfg. Co.,
          effective December 13, 1985 (filed as Exhibit 10(b) to
          the Company's Annual Report on Form 10-K, dated June
          30, 1993, and incorporated herein by reference).


10(c)     1991 Restricted Stock Plan for Non-Employee Directors
          of Peerless Mfg. Co., adopted subject to shareholder
          approval May 24, 1991, and approved by shareholders
          November 20, 1991 (filed as Exhibit 10(e) to the
          Company's Annual Report on Form 10-K dated June 30,
          1991, and incorporated herein by reference).

                                 12 of 14
<PAGE>

10(d)     Employment Agreement, dated as of April 29, 1994, by
          and between the Company and Sherrill Stone (filed as
          Exhibit 10(d) to the Company's Annual Report on Form
          10-K for the Fiscal year ended June 30, 1994, and
          incorporated herein by reference).


10(e)     Agreement, dated as of April 29, 1994 by and between
          Company and Sherrill Stone (filed as Exhibit 10(e) to
          the Company's Annual Report on Form 10-K dated June 30,
          1994 and incorporated herein by reference).


10(f)     Seventh Amended and Restated Loan Agreement, dated as
          of December 12, 1998, between Bank of America N.A.,
          formerly NationsBank of Texas, N.A., and the Company
          (filed as Exhibit 10(f) to the Company's Quarterly
          Report on Form 10-Q, dated December 31, 1998 and
          incorporated herein by reference).


10(g)     Amended and Restated Loan Agreement, dated as of
          December 12, 1998, by and between Chase Bank of Texas
          N.A, and the Company (Filed as Exhibit 10(g) to the
          Company's Quarterly Report on Form 10-Q, dated December
          21, 1998 and incorporated herein by reference).


10(h)     Peerless Mfg. Co. 1995 Stock Option and Restricted
          Stock Plan, adopted by the Board of Directors December
          31, 1995 and approved by the Shareholders of the
          Company November 21, 1996 (filed as Exhibit 10(h) to
          the Company's Annual Report on Form 10-K dated June 30,
          1997 and incorporated herein by reference).


10(i)     Rights Agreement between Peerless Mfg. Co. and
          ChaseMellon Shareholder Services, L.L.C., adopted by
          the Board of Directors May 21, 1997 (filed as Exhibit 1
          to the Company's Registration Statement on Form 8-A
          (File No. 0-05214) and incorporated herein by
          reference).


21        Subsidiaries of the Company (filed as Exhibit 21 to the
          Company's Annual Report on Form 10-K dated June 30,
          1997, and incorporated herein by reference).


27        Financial Data Schedule.*

* Filed herewith


(b)       Reports on form 8-K.  None.

                                 13 of 14
<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 thereto duly authorized.

                                PEERLESS MFG. CO.



     Dated: May 14, 1999



      /s/ Sherrill Stone                /s/  Paul W. Willey
     ----------------------------       ----------------------------
     By:  Sherrill Stone                By:  Paul W. Willey
          Chairman, President and            Chief Financial Officer
          Chief Executive Officer



                                   /s/  Kent J. Van Houten
                                   -----------------------
                                   By:  Kent J. Van Houten
                                        Controller
                                        Chief Accounting Officer




                                 14 of 14