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                          SECURITIES AND EXCHANGE COMMISSION
                                   Washington, D.C.
                                        20549

                                     ___________

                                      FORM 10-Q

                   Quarterly Report Pursuant to Section 13 or 15(d)
                        of the Securities Exchange Act of 1934

                                      __________

     For the 13 week and 26 week periods         Commission File Number 1-4947-1
     ended July 31, 1999

                      J. C. PENNEY FUNDING CORPORATION
     _______________________________________________________________________
                (Exact name of registrant as specified in its charter)


                Delaware                                    51-0101524
     _______________________________________________________________________
         (State or other jurisdiction of               (I.R.S. Employer
          incorporation or organization)                Identification No.)


     6501 Legacy Drive, Plano, Texas                        75024-3698
     _______________________________________________________________________
     (Address of principal executive offices)               (Zip Code)


     Registrant's telephone number, including area code    972-431-1000
                                                          __________________

                               ___________________

     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
          ______             ______

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

     500,000 shares of Common Stock of $100 par value, as of July 31, 1999.

     THE REGISTRANT MEETS  THE CONDITIONS SET FORTH IN  GENERAL INSTRUCTION H(1)
     (a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
     DISCLOSURE FORMAT.

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     PART I - FINANCIAL INFORMATION

     Item 1 - Financial Statements
              ____________________

     The  following  interim financial  information  of  J.  C.  Penney  Funding
     Corporation ("Funding"), a wholly owned subsidiary of J. C. Penney Company,
     Inc. ("JCPenney"),  is unaudited;  however, in the  opinion of  Funding, it
     includes all  adjustments, consisting  only of  normal recurring  accruals,
     necessary for  a fair  presentation.  The  financial information  should be
     read  in conjunction  with  the audited  financial  statements included  in
     Funding's Annual Report  on Form 10-K  for the 52  weeks ended January  30,
     1999.


     Statements of Income and Reinvested Earnings
     (Dollars in millions)



                                    13 weeks ended         26 weeks ended
                                   ____________________   ____________________
                                   July 31,     Aug. 1,   July 31,     Aug. 1,
                                    1999         1998       1999        1998
                                    ____         ____       ____        ____
     Interest earned from
          JCPenney and affiliates   $  47        $  33      $ 94       $  67

     Interest expense                  31           22        62          44
                                     ____         ____      ____        ____

     Income before income taxes        16           11        32          23

     Income taxes                       6            4        12           8
                                     ____         ____      ____        ____

     Net income                        10            7        20          15

     Reinvested earnings at
          beginning of period       1,052        1,015     1,042       1,007
                                   ______       ______    ______      ______
     Reinvested earnings at
          end of period            $1,062       $1,022    $1,062      $1,022
                                   ======       ======    ======      ======

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     Balance Sheets
     (Dollars in millions)


                                                 July 31,   Aug. 1,     Jan.30,
                                                  1999       1998        1999
                                                  ____       ____        ____

     ASSETS
     Loans to JCPenney
          and affiliates                         $3,770     $2,738     $3,129
                                                 ______     ______     ______

                                                 $3,770     $2,738     $3,129
                                                 ======     ======     ======

     LIABILITIES AND EQUITY OF JCPENNEY

     Short-term debt                             $2,533     $1,563     $1,924

     Due to JCPenney                                 30          8         18
                                                 ______     ______     ______

     Total liabilities                           $2,563     $1,571     $1,942

     Equity of JCPenney:
              Common stock (including
              contributed capital),
              par value $100:
              Authorized, 750,000 shares
              Issued, 500,000 shares             $  145     $  145     $  145

     Reinvested earnings                         $1,062     $1,022     $1,042
                                                 ______     ______     ______

     Total equity of JCPenney                    $1,207     $1,167     $1,187
                                                 ______     ______     ______
                                                 $3,770     $2,738     $3,129
                                                 ======     ======     ======

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     Consolidated Statements of Cash Flows
     (Dollars in millions)





                                                     26 weeks ended
                                               _____________________________
                                               July 31,              Aug. 1,
                                                1999                  1998
                                                ____                  ____

     Operating Activities
          Net Income                          $    20               $    15
          (Increase) Decrease in
          loans to JCPenney                      (641)                 (147)

          (Decrease) Increase in
          amount due to JCPenney                   12                   (15)
                                              _______               ________
                                                 (609)                 (147)
                                              _______               ________

     Financing Activities
          Increase (Decrease) in
          short-term debt                         609                   147
                                                  ___                   ___


     Increase (Decrease) in cash                  -0-                   -0-

     Cash at beginning of year                    -0-                   -0-
                                              _______               _______

     Cash at end of second quarter            $   -0-               $   -0-
                                              =======               =======

                                          4
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     ITEM 2.     Management's Discussion and Analysis of Financial Condition and
     Results of Operations.


     Under the terms of the loan agreement which provides for unsecured loans to
     be made  by Funding to JCPenney  and the receivables agreement  pursuant to
     which  Funding  may purchase  an  undivided  interest  in certain  JCPenney
     customer receivables,  Funding derives  earnings on  loans to JCPenney  and
     income  from charges  to JCPenney.   The income  of Funding is  designed to
     cover  Funding's  fixed  charges  (interest expense)  at  a  coverage ratio
     mutually  agreed upon  by  Funding and  JCPenney.   The  earnings to  fixed
     charges  coverage ratio  has historically  been at  least one  and one-half
     times.

     Since 1986, Funding  has provided financing to JCPenney  in accordance with
     the loan agreement and no receivable balances have been purchased.

     Funding  is  not  and  has  not  been  involved in  the  administration  of
     JCPenney's  retail credit  operation  and  does not  bear  any expenses  or
     receive any finance charge revenue connected therewith.

     For the second quarter of 1999, income, expenses, and provision for taxes
     increased as compared with the second quarter of 1998, as a result of
     higher average borrowing levels. Borrowing levels averaged $2,327 million
     during the 1999  second quarter as compared with  $1,586 million during the
     comparable 1998 period. At the end of the second quarter of 1999, borrowing
     levels were $2,533  million as compared with  $1,563 million at the  end of
     the second quarter of 1998.  Average interest rates for the  second quarter
     of 1999 decreased  34 basis points as  compared with the second  quarter of
     1998. For the six month period  ended July 31, 1999, income, expenses,  and
     provision for  taxes increased as  compared to the 1998  comparable period.
     These increases were a result  of higher borrowing levels. Borrowing levels
     averaged $2,362 million  for the first half of 1999 as compared with $1,585
     million in the  comparable 1998  period due  to an  increase in  JCPenney's
     general capital needs.   For the  six month period  in 1999, average  rates
     decreased 40 basis points as compared with the same period in 1998.

     JCPenney  has initiated actions to address the  Year 2000 issue relating to
     Funding.  Year 2000 readiness work was more than 99 per cent complete as of
     July 31, 1999.  Since January 1999, JCPenney has been retesting all systems
     critical to  JCPenney's core businesses.  JCPenney  has also focused on the
     Year   2000  readiness  of  its  suppliers   and  service  providers,  both
     independently and in conjunction with the National Retail Federation. Total
     costs associated  with these efforts  are not  expected to have  a material
     impact  on  the  financial results  of  either  JCPenney  or  Funding.   In
     addition,  Funding has communicated  with its  commercial paper  dealers to
     determine their Year 2000  readiness.  However,  there can be no  guarantee
     that the  systems of these commercial paper dealers on which Funding relies
     will be converted in  a timely manner, or  that a failure to  convert would
     not have a material adverse effect on Funding's operations.

                                          5
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     PART II - OTHER INFORMATION


          Item 6.     Exhibits and Reports on Form 8-K
                      ________________________________

               (a)    Exhibits

                      The following document is filed as an exhibit to this
                      report:

                      27     Financial Data Schedule for the six months ended
                             July 31, 1999.

               (b)     Reports on Form 8-K
                       ___________________
                       None



                                   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.





                                        J. C. PENNEY FUNDING CORPORATION


                                        By:
                                           ___________________________________
                                             W. J. Alcorn
                                             Controller
                                             (Principal Accounting Officer)





     Date: September 14, 1999

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