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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 period                      Commission File Number 1-4947-1
       ended May 2, 1998

                      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 May 2, 1998.

     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  53 weeks ended  January 31,
     1998.


     Statements of Income and Reinvested Earnings 
     (Dollars in millions)


                                                             13 weeks ended  
                                                       _________________________
                                                         May 2,        April 26,
                                                          1998           1997 
                                                       __________     __________


     Interest earned from 
          JCPenney and affiliates                      $   34           $   82


     Interest expense                                      22               54  
                                                         ____              ___

     Income before income taxes                            12               28

     Income taxes                                           4               10 
                                                         ____             ____

     Net income                                             8               18

     Reinvested earnings at
        beginning of period                             1,007              964 
                                                        _____             ____

     Reinvested earnings at
        end of period                                  $1,015           $  982  
                                                       ======           ======

                                          1 

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     Balance Sheets
     (Dollars in millions)




                                              May 2,     April  26,   Jan. 31,
                                               1998        1997         1998  
                                             ________    ________     ________
     ASSETS
                    
     Loans to JCPenney and affiliates          $2,663      $3,717       $2,591  
                                               ______      ______       ______

                                               $2,663      $3,717       $2,591  
                                               ======      ======       ======
     LIABILITIES AND EQUITY OF JCPENNEY
                    
     Short-term debt                           $1,499      $2,580       $1,416

     Due to JCPenney                                4          10           23  
                                               ______      ______       ______

     Total liabilities                          1,503       2,590        1,439

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

     Reinvested earnings                        1,015         982        1,007 
                                               ______      ______       ______

     Total equity of JCPenney                   1,160       1,127        1,152  
                                               ______      ______       ______

                                               $2,663      $3,717       $2,591
                                               ======      ======      =======

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     Consolidated Statements of Cash Flows
     (Dollars in millions)


                                                             13 weeks ended  
                                                       _________________________
                                                         May 2,        April 26,
                                                          1998           1997   
                                                       __________     __________

     Operating Activities
                    
     Net income                                        $    8           $   18

     (Increase)Decrease in loans to
        JCPenney                                          (72)           1,345

     (Decrease)Increase in amount due to
        JCPenney                                          (19)               9 
                                                        _____            _____

                                                          (83)           1,372  
                                                        _____            _____

     Financing Activities
                    
     (Increase)Decrease in short-term debt                (83)           1,372  
                                                       ______            _____
           
     Increase in cash                                       0                0

     Cash at beginning of year                              0                0  
                                                        _____            _____

     Cash at end of first quarter                      $    0           $    0 
                                                       ======           ======

                                          3

 
<PAGE>
     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 first  quarter of 1998, income,  expenses, and provision for  taxes
     decreased as compared with the first quarter of 1997, as a result of  lower
     average borrowing levels.  Borrowing levels averaged $1,585  million during
     the  1998  first  quarter  as  compared  with  $3,938  million  during  the
     comparable 1997 period.  At the end of the first quarter of 1998, borrowing
     levels were $1,499  million as compared with  $2,580 million at the  end of
     the first quarter of 1997.  For the first quarter of 1998, average interest
     rates increased 16 basis points as compared with the same period in 1997.


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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 three months ended  
                           May 2, 1998.


             (b)    Reports on Form 8-K 
                    ___________________

                    None

                                          5 

<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 thereunto duly authorized.








                                        J. C. PENNEY FUNDING CORPORATION


                                        By: /s/ W. J. Alcorn 
                                           _____________________________
                                             W. J. Alcorn
                                             Controller  
                                             (Principal Accounting Officer)


     Date:  June 12, 1998


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