SECURITIES AND EXCHANGE COMMISSION

                               Washington, DC 20549

                                    FORM 10-Q

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

For Quarter Ended February 26, 1999

Commission File No. 1-5548

Penobscot Shoe Company
(Exact name of registrant as specified in its charter)

Maine
(State or other jurisdiction of incorporation or organization)

01-0139580
(IRS Employer identification no.)

450 North Main Street, Old Town Maine   
(Address of principal executive offices)

04468
(Zip code)

Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)

Registrant's telephone number, including area code:  (207) 827-4431

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 _____

Common stock of 1,378,291 shares, $1 par value, was outstanding at 
February 26, 1999.
<PAGE>
<TABLE>
                        PENOBSCOT SHOE COMPANY
                        CONDENSED BALANCE SHEET
                           (In thousands)
<CAPTION>
                               February 26, 1999       November 27, 1998
                                   (Unaudited)             (Note (a))
<S>                                   <C>                   <C>
CURRENT ASSETS:
  Cash & Cash Equivalents            $   924               $   454
  Marketable Securities                3,748                 3,757
  Accounts receivable                  3,854                 3,825
  Inventories (Note 2)                 5,316                 6,568
  Other current assets                   511                   575
                                     _______               _______
        TOTAL CURRENT ASSETS         $14,353               $15,179

PROPERTY AND EQUIPMENT, AT COST:
  Buildings                          $ 1,443               $ 1,443
  All Other                              506                   496
  Less accumulated depreciation
    and amortization                   1,751                 1,725
                                     _______               _______ 
        NET PROPERTY AND EQUIPMENT   $   198               $   214
                                     _______               _______
  TOTAL ASSETS                       $14,551               $15,393
                                     =======               =======                
LIABILITIES AND SHAREHOLDERS' EQUITY: 

CURRENT LIABILITIES:
  Accounts payable                   $ 1,350               $ 1,088
  Notes payable  		                        0           	     1,475
  Other current liabilities              825                   802
                                     _______               _______ 
        TOTAL CURRENT LIABILITIES    $ 2,175               $ 3,365

DEFERRED INCOME TAXES                $   168               $   168

SHAREHOLDERS' EQUITY:
  Common stock, $1 par value:
    authorized 2,000,000 shares:
    issued 1,533,042                 $ 1,533               $ 1,533
  Capital in excess of par value       1,109                 1,109
  Retained earnings                    9,929                 9,602
  Add net unrealized gain on 
    available-for-sale securities        476                   455
  Less treasury stock at cost 
   154,152 shares                        839                   839

         NET SHAREHOLDERS' EQUITY    _______               _______
           (Note 3)                  $12,209               $11,860

TOTAL LIABILITIES AND SHARE-         _______               _______
  HOLDERS' EQUITY                    $14,551               $15,393
                                     =======               =======
<FN>
Note: (a) The balance sheet at November 27, 1998, has been derived from
          the audited financial statements at that date.

      

See notes to the condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
                        PENOBSCOT SHOE COMPANY
                         STATEMENT OF INCOME
               (In thousands, except per share amounts)
                             (Unaudited)
<CAPTION>                             
                                     For the                    
                               First Quarter Ended                    
                            February 26     February 27      
                                1999           1998           
<S>                           <C>          <C>            
Net Sales                      $5,705        $4,784       

Cost and operating expenses:

  Cost of sales                 3,715         3,172          
  Selling and administrative 
    expenses                    1,397         1,269          
                               _______       _______       
Operating income                  592           342        
Other income                       69           238        
                               _______       _______       
Income before income taxes        661           581        

Income taxes                      264           233         
                               _______       _______       
Net income                      $ 396         $ 348        
                               =======       =======       
Earnings Per Share:

  Basic                         $0.29         $0.25        
  Diluted                       $0.28         $0.25        
     
  Cash dividends per share       0.05          0.05        

Average number of common shares 
  outstanding
	Basic                      1,378,291     1,375,880   
	Diluted              		    1,393,075     1,385,403   
<FN>
See notes to the condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
                        PENOBSCOT SHOE COMPANY
                        STATEMENT OF CASH FLOWS
       For Three Months Ended February 26, 1999 and February 27, 1998
                            (In thousands)
<CAPTION>
                                        1999                  1998
<S>                                    <C>                   <C>
Cash flows from operating 
  activities:

  Net cash provided by 
    operating activities               $  549                 $  339

Cash flows from investing
  activities:

  Proceeds from sale of assets              0                      0

  Capital expenditures                    (10)                   (10)
                                        _______                _______
    Net cash (used) by 
      investing activities                (10)                   (10)

Cash flows from financing activities:

  Dividends paid                          (69)                   (69)  

  Purchase of treasury stock                0                    (60)

    Net cash (used) by                 _______                _______
      financing activities                (69)                  (129)

    Net increase in                    _______                _______
      cash and cash equivalents           470                    200
Cash and cash equivalent at 
  beginning of period                     454                    403         
 
Cash and cash equivalent at            _______                _______
  end of period                        $  924                 $  603  
                                       =======                =======


Supplemental Disclosure of Cash Flow Information
   Cash paid during the year-to-date period for:

    Interest                           $  16                  $    8

    Income taxes                          82                     173
</TABLE>
<PAGE>
                        PENOBSCOT SHOE COMPANY
               NOTES TO CONDENSED FINANCIAL STATEMENTS
                             (Unaudited)

1.  CONDENSED FINANCIAL STATEMENTS

    The condensed balance sheet as of February 26, 1999, the statements of 
income for the first quarter ended February 26, 1999 and February 27, 1998, 
and the condensed statements of cash flows for the three-month periods then 
ended have been prepared by the Company, without audit.  In the opinion of 
management, all necessary adjustments, which include normal recurring 
adjustments, have been made to present fairly the financial position, results 
of operations, and cash flows at February 26, 1999 and for the other periods 
presented.  The results of operations for the period ended February 26, 1999 
are not necessarily indicative of operating results for the full year.

2.  INVENTORIES

    Inventories are summarized as follows (in thousands):
<TABLE>
<CAPTION>
                            2/26/99     11/27/98      2/27/98 
<S>                          <C>         <C>          <C>
FIFO Cost:                      
    finished shoes           $5,645       $6,867       $4,917
    other materials               9           11           19  
                             _______     _______      _______
                             $5,654       $6,878       $4,936  
Excess of FIFO cost over
LIFO inventory value           (338)        (310)        (249)   
                             _______     _______      _______
                             $5,316       $6,658       $4,687
                             =======     =======      =======
</TABLE>   

    The Company uses the LIFO method because it more realistically
reflects operating results by charging current costs against current
revenues. 

3.  SHAREHOLDERS' EQUITY

    During the three months ended February 26, 1999, shareholders' equity 
changed due to the net income of $396,000, dividends declared of $69,000,
and a $21,000 increase in the netunrealized gain an available-for-sale 
securities held by the Company.  


4.  EARNINGS PER SHARE
    
     Basic earnings per share are calculated based on the weighted average
number of shares outstanding.  Diluted earnings per share are calculated
based on the same number of shares plus additional shares representing stock
distributable under stock-based plans computed using the treasury stock method.


<PAGE>
                        PENOBSCOT SHOE COMPANY
     MANAGEMENT DISCUSSION AND ANALYSIS OF THE SUMMARY OF OPERATIONS

Forward Looking Statements:

     This report contains certain forward looking statements regarding the
Company.  The Company desires to take advantage of the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995 and in that regard is
cautioning the readers of this report that a number of important risk factors
could affect the Company's actual results of operations and may cause changes
in the Company's strategy with the result that the Company's operations and
results may differ materially from those expressed in any forward looking
statements made by, or on behalf of, the Company.  These risk factors include,
among others, general economic and market conditions, the rate of growth in the
footwear market and consumer acceptance of the Company's product line, and the
risk factors that are discussed from time-to-time in the Company's SEC reports,
including, but not limited to, the report on Form 10-Q for the quarter ended
February 26, 1999.


Liquidity and Capital Resources:

     At February 26, 1999, Penobscot Shoe Company had working capital of 
approximately $12,179,000 versus approximately $11,815,000 at November 
27, 1998, an increase of $364,000.  The ratio of current assets to current
liabilities at February 26, 1999 was 6.6 to 1, compared to 4.5 to 1, at 
November 27, 1998.

     The statement of cash flows for the three months ended February 26, 1999, 
shows an increase of $470,000 in cash and cash equivalents since November 
27, 1998.  The Company's operations provided $549,000 since November 27, 
1998, including net income of $396,000 and ordinary fluctuations in various
current asset and liability accounts.  The fluctuations included an increase in 
accounts payable and accounts receivable, as well as a decrease in inventory.
The Company's quarterly dividend amounted to a use of $69,000 during the 
period. The Company used $10,000 for purchases of capital equipment.

     Management believes that Penobscot Shoe Company remains financially well 
structured to consider a variety of financing options should the need arise and
will make choices depending on economic conditions at the time.  Options 
available include conversion of marketable securities held by the Company into
cash and cash equivalents.  The Company also has an established line of credit
with a major bank available for direct borrowing at the prime rate minus 1.5%
should the need arise.


Year 2000 Disclosure:

      The Company continues to assess and work to mitigate its Year 2000 
exposure as it pertains to management and operational information systems,
 key outside vendor and key customer Year 2000 compliance programs. 

The assessment of all internal management and operational information  
systems is being supervised and conducted by a team led by the Vice President
of Finance and Administration that includes the Company's in-house information 
technology staff.  The assessment of all critical internal systems is complete 
and necessary modifications and testing are underway. Priority has been given 
to certain key elements of our systems and accordingly, modifications to the 
order processing and inventory management portions of our system have been 
completed. Testing is underway to determine if any further modifications are 
necessary in this area. It is anticipated that all research and modifications 
on all remaining portions of our internal management and operational 
information  systems will be completed by May 31, 1999. Testing will continue 
throughout the year and into early 2000 as we watch for any unforeseen problems 
that may arise. At this time, the Company is unable to determine the actual 
cost of correcting any deficiencies found during the assessment. Based on the 
fact that no significant unanticipated remedial costs have been identified to 
date, the Company does not anticipate that the ultimate costs of any additional 
required remediation will be significant.

<PAGE>

Based on the Company's efforts to date, the Company presently believes that 
with minor modifications to existing software the Year 2000 Issue will not 
pose significant operational problems for its computer systems.  The software 
used by the Company in its operations was  developed over time by in-house 
programmers.  Unlike many other software programs that used a two digit date 
and have led to the problems now being addressed worldwide, the Company's 
system was based on the use of a one digit date. As a result, many of the 
issues being faced for the Year 2000 problems were faced previously in the 
period of 1989-1990. This experience should allow the Company to utilize 
in-house staff to make the modifications needed to be Year 2000 compliant, 
and to make those modifications at a relatively modest cost.   However, if 
such modifications are not made, or are not completed in a timely manner, 
the Year 2000 Issue could result in a system failure or miscalculations 
causing disruptions to operations, including, among other things, a temporary 
inability to correctly process some transactions, send invoices, or engage in 
similar normal business activities. The Company's ongoing assessment of Year 
2000 risks relating to non-information technology components such as internal 
telecommunications, heating and ventilation equipment has not revealed any 
problem.
 
The Company is in the process of communicating with significant suppliers, 
shippers, telecommunications companies and customers to determine the extent 
to which the Company may be vulnerable to a failure by any of these third 
parties to remediate their own Year 2000 issues. The Company is dependent on 
many outside resources for both products and services. Regardless of the 
Company's efforts to verify Year 2000 compliance with domestic and non-domestic 
third parties involved in sourcing, manufacturing, shipping and ordering, 
there can be no assurance that one or more of such third parties will not 
encounter a Year 2000 problem that would materially and adversely impact the 
Company's results of operations. The failure of some of these third parties 
to be Year 2000 compliant  could have a material adverse impact on the 
Company's ability to deliver product. The Company is in the process of 
identifying contingency arrangements to minimize the adverse impact of third
party Year 2000 problems that could interfere with the Company's operations.  

Results of Operations:

      Net sales for the quarter ended February 26, 1999, were $5,705,000, up 19%
from $4,784,000 in the same quarter last year. Net income for the current 
quarter was $396,000, or $.29 per share, compared to net income of $348,000, or 
$.25 per share, in the corresponding quarter last year. 

The increase in net sales versus last year was due to the continuing strong 
performance of Trotters at retail. Operating income increased by 73% over the 
prior year's first quarter.

Both operating income and earnings for the first quarter were reduced by a 
one-time charge of approximately $175,000, pre-tax, to recognize a death benefit
liability due to the death of a corporate officer. The impact of this expense 
was to reduce first quarter earnings by approximately $.08 per share.

The gross profit margin for the first quarter was 34.9% compared to 33.7% in 
the corresponding period last year. This modest improvement was primarily due 
to the higher sales volume in the quarter. 

Gains from the sales of securities contributed $25,000, or $.02 per share to the
current quarter's earnings.  Such gains last year amounted to  $126,000, or $.09
per share. 

 
PART II.  OTHER INFORMATION

     Item 6.  Exhibits and Reports on Form 8-K

            (a) Exhibits          
 
                Exhibit 27.  Financial Data Schedule

            (b) Reports on Form 8-K

                Form 8-K was filed with the Securities and Exchange
                Commission on January 7, 1999

<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 under-
signed thereunto duly authorized.




                                          Penobscot Shoe Company
                                         _________________________
                                              (Registrant)


Date:    April 8, 1999                         Irving Kagan
                                         _________________________
                                         By:   Irving Kagan 
                                         Chairman of the Board and
                                         Chief Executive Officer

Date:    April 8, 1999                         David L. Keane
                                         _________________________  
                                         By:   David L. Keane
                                         Vice President/Finance and
                                         Administration