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 August 27, 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 1,388,291 shares, $1 par value, was outstanding at
August 27, 1999.
<PAGE>
<TABLE>
                        PENOBSCOT SHOE COMPANY
                        CONDENSED BALANCE SHEET
                           (In thousands)
<CAPTION>
                                  August 27, 1999      November 27, 1998
                                   (Unaudited)             (Note (a))
<S>                                   <C>                   <C>
CURRENT ASSETS:
  Cash & Cash Equivalents            $   482               $   454
  Marketable Securities                3,860                 3,757
  Accounts receivable                  3,950                 3,825
  Inventories (Note 2)                 7,142                 6,568
  Other current assets                   416                   575
                                     _______               _______
        TOTAL CURRENT ASSETS         $15,851               $15,179

PROPERTY AND EQUIPMENT, AT COST:
  Buildings                          $ 1,443               $ 1,443
  All Other                              450                   496
  Less accumulated depreciation
    and amortization                   1,742                 1,725
                                     _______               _______
        NET PROPERTY AND EQUIPMENT   $   151               $   214
                                     _______               _______
  TOTAL ASSETS                       $16,002               $15,393
                                     =======               =======
LIABILITIES AND SHAREHOLDERS' EQUITY:

CURRENT LIABILITIES:
  Accounts payable                   $ 1,400               $ 1,088
  Notes payable	            		           365                 1,475
  Other current liabilities              842                   802
                                     _______               _______
        TOTAL CURRENT LIABILITIES    $ 2,607               $ 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                   11,004                 9,602
  Add net unrealized gain on
    available-for-sale securities        389                   455
  Less treasury stock at cost
   144,752 and 154,752 shares            808                   839

         NET SHAREHOLDERS' EQUITY    _______               _______
           (Note 3)                  $13,227               $11,860

TOTAL LIABILITIES AND SHARE-         _______               _______
  HOLDERS' EQUITY                    $16,002               $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                     For the
                              Third Quarter Ended         Nine Months Ended
                             August 27   August 28       August 27    August 28
                                1999        1998           1999          1998
<S>                           <C>          <C>            <C>            <C>
Net Sales                      $5,835        $5,637      $16,709        $14,657

Cost and operating expenses:

  Cost of sales                 3,670         3,782       10,448          9,888
  Selling and administrative
    expenses                    1,186         1,226        3,924          3,606
                               _______       _______      _______        _______
Operating income                  978           629        2,337          1,163

Other income                      148           216          350            481
                               _______       _______      _______        _______
Income before income taxes      1,126           845        2,687          1,644

Income taxes                      452           339        1,077            658
                               _______       _______      _______        _______
Net income                      $ 673         $ 506       $1,609          $ 986
                               =======       =======      =======        =======
Earnings Per Share:

  Basic                         $0.49         $0.37        $1.16          $0.72
  Diluted                       $0.48         $0.36        $1.16          $0.71

  Cash dividends per share       0.05          0.05         0.15           0.15

Average number of common shares
  outstanding
          		Basic           1,388,291     1,377,889    1,383,676      1,376,255
		          Diluted	        1,398,781    1,391,441    1,393,290     1,387,886
<FN>
See notes to the condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
                        PENOBSCOT SHOE COMPANY
                        STATEMENT OF CASH FLOWS
   For Nine Months Ended August 27, 1999 and August 28, 1998
                            (In thousands)
<CAPTION>
                                        1999                  1998
<S>                                    <C>                   <C>
Cash flows from operating
  activities:

  Net cash provided by
    operating activities              $  160                 $  554

Cash flows from investing
  activities:

  Proceeds from sale of assets             0                      0

  Capital expenditures                    46                    (26)
                                       _______                _______
    Net cash (used) by
      investing activities                46                    (26)

Cash flows from financing activities:

  Dividends paid                        (208)                  (206)

  (Purchase)/Sale of treasury stock       31                    (39)

    Net cash (used) by                _______                _______
      financing activities              (177)                  (245)

    Net increase in                   _______                _______
      cash and cash equivalents           28                    283

Cash and cash equivalent at
  beginning of period                    454                    403

Cash and cash equivalent at           _______                _______
  end of period                       $  482                $   686
                                      =======                =======


Supplemental Disclosure of Cash Flow Information
  Cash paid during the period for:

    Interest                          $  19                 $   23

    Income taxes                        852                    538
</TABLE>
<PAGE>
                        PENOBSCOT SHOE COMPANY
               NOTES TO CONDENSED FINANCIAL STATEMENTS
                             (Unaudited)

1.  CONDENSED FINANCIAL STATEMENTS

    The condensed balance sheet as of August 27, 1999, the statements of
income for the third quarter ended August 27, 1999 and August 28, 1998,
and the condensed statements of cash flows for the nine-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 August 27, 1999 and for the other periods
presented.  The results of operations for the period ended August 27, 1999
are not necessarily indicative of operating results for the full year.

2.  INVENTORIES

    Inventories are summarized as follows (in thousands):
<TABLE>
<CAPTION>
                            8/27/99     11/27/98      8/28/98
<S>                          <C>         <C>          <C>
FIFO Cost:
    finished shoes           $7,123       $6,618       $5,630
    raw materials                 5           11           15
                             _______     _______      _______
                             $7,128       $6,629       $5,645
Excess of FIFO cost over
LIFO inventory value             15          (61)        (112)
                             _______     _______      _______
                             $7,143       $6,568       $5,533
                             =======     =======      =======
</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 nine months ended August 27, 1999, shareholders' equity
changed due to the net income of $1,609,000, dividends declared of $208,000,
a sale of treasury stock of $31,000 and a $66,000 decrease in the net
unrealized gain on 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
August 27, 1999.


Liquidity and Capital Resources:

     At August 27, 1999, Penobscot Shoe Company had working capital of
approximately $13,244,000 versus approximately $11,815,000 at November
27, 1998, an increase of $1,429,000.  The ratio of current assets to current
liabilities at August 27, 1999, was 6.1 to 1, compared to 4.5 to 1, at
November 27, 1998.

     The statement of cash flows for the nine months ended August 27, 1999,
shows an increase of $28,000 in cash and cash equivalents since November
27, 1998.  The Company's operations provided $160,000 since November 27,
1998, including net income of $1,609,000 and ordinary fluctuations in various
current asset and liability accounts.  The fluctuations included increases in
accounts payable, inventory and accounts receivable, all mainly as a result
of timing. The Company's quarterly dividend amounted to a use of $208,000
during the nine month period. The Company received $31,000 in a sale of
treasury stock.

     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 Executive 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 all necessary modifications are now done. Testing is underway
to determine if any further modifications are necessary in this area. Testing
will continue throughout the year and into early 2000 as we watch for any
unforseen 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.

     Based on the Company's efforts to date, the Company presently believes
that 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 previosly in the period of 1989-1990.  This experience allowed the
Company to utilize in-house staff to make the modifications needed to be Year

<PAGE>

2000 compliant, and to make those modifications at a relatively modest cost.  If
the Company failed to make the necessary and proper modifications, 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 continues to communicate 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 aversely 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 third quarter ended August 27, 1999, were $5,835,000,
up 3% from $5,637,000 in the same quarter last year.  Net income for the
current quarter was $673,000, or $.48 per share, compared to $506,000, or
$.37 per share, in the third quarter last year.  Gains from the sales of
securities contributed approximately $.05 per share to third quarter earnings
compared to approximately $.08 per share a year ago.

     For the nine months year-to-date, net sales were $16,709,000, up 14%
from $14,657,000 a year ago.  Net income for the year-to-date period was
$1,609,000, or $1.16 per share, versus $986,000, or $.72 per share, last year.
Gains from the sales of securities added $.11 and $.17 per share to year-to-date
earnings in 1999 and 1998, respectively.


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

                No reports on Form 8-K have been filed during the
                last quarter of the period covered by this report.
<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:    October 8, 1999                       Irving Kagan
                                        _________________________
                                         By:   Irving Kagan
                                         Chairman of the Board and
                                         Chief Executive Officer

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