<PAGE> 1

                     SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549
                          ----------------------

                                FORM 10-QSB


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

    For the quarterly period ended September 30, 1997

                                    
    [ ]  Transition Report Pursuant to Section 13 or 15(d) of the Exchange Act

    For the transition period from _______ to ________


                           Commission File Number 0-4057

                              PORTSMOUTH SQUARE, INC.

             (Exact Name of Registrant as Specified in its Charter)

           California                               94-1674111
   (State or Other Jurisdiction of                 (IRS Employer
    Incorporation or Organization)                Identification No.)

Mailing Address:  P.O. Box 80037
                  San Diego, CA 92138

Street Address:   2251 San Diego Avenue, Suite A-151
                  San Diego, CA 92110

                                  (619) 298-7201
                (Registrant's Telephone Number, Including Area Code)

   Check whether the issuer (1) has filed all reports required to be filed by 
Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 
months, and (2) has been subject to such filing requirements for the past 90 
days. Yes X   No
     
   State the number of shares outstanding of each of the issuer's classes of 
common equity, as of the latest practicable date: 736,383 shares of issuer's
No Par Value Common Stock were outstanding as of October 22, 1997.

   Transitional Small Business Disclosure Format (check one): Yes    No X



<PAGE>  2
                                     INDEX

                             PORTSMOUTH SQUARE, INC.
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION                                  PAGE NO.
<S>                                                              <C>
Item 1. Financial Statements

    Balance Sheet--September 30, 1997 (Unaudited)                 3
   
    Statements of Income (Unaudited)--Three Months
    ended September 30, 1997 and 1996 and for the 
    Nine Months ended September 30, 1997 and 1996                 4

    Statements of Cash Flow (Unaudited)--Nine Months
    ended September 30, 1997 and 1996                             5

    Notes to Financial Statements--September 30, 1997             6

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

PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K                         11

SIGNATURES                                                       11
</TABLE>

<PAGE> 3
                         PART 1 - FINANCIAL INFORMATION

Item 1 - Financial Statements

                             Portsmouth Square, Inc.
                                  Balance Sheet
                                   (Unaudited)
<TABLE>
<CAPTION>                                        September 30
                                                      1997        
                                                 -------------
<S>                                                <C>            
Assets
Current assets:
  Cash and cash equivalents                        $   400,210
  Investment securities                              1,721,337
  Other investments                                    250,203
  Deferred income taxes                                 53,345     
  Other current assets                                  11,832       
                                                    ----------     
Total current assets                                 2,436,927
                                                    ----------

Investment in Justice Investors                      1,610,906
Deferred income taxes                                    3,788         
                                                    ---------- 
Total assets                                       $ 4,051,621
                                                    ==========     

Liabilities and shareholders' equity
Current liabilities:
  Accounts payable and accrued expenses            $    15,620    
  Income taxes payable                                  79,860     
  Amount owed to Santa Fe Financial Corp.               49,728
  Due securities broker                              1,196,411
  Deferred income taxes                                136,308
                                                    ----------  
Total current liabilities                            1,477,927   
                                                    ----------  
Commitments and contingencies

Shareholders' equity:
  Common stock, no par value:
    Authorized shares - 750,000
    Issued and outstanding shares - 737,583          2,092,300
   Additional paid - in capital                      1,052,353
   Unrealized gain on investment securities,
     net of deferred taxes                             203,290      
   Accumulated deficit                                (774,249)  
                                                    ----------   
Total shareholders' equity                           2,573,694
                                                    ----------  

Total liabilities and shareholders' equity         $ 4,051,621 
                                                    ==========  
See accompanying notes.
</TABLE>


<PAGE> 4

                                    Portsmouth Square, Inc.
                                     Statements of Income 
                                          (Unaudited)

<TABLE>
<CAPTION>                                 Three Months ended               Nine Months ended 
                                             September 30                     September 30
                                          1997            1996             1997          1996
                                       ----------      ----------       ----------    ----------
<S>                                    <C>             <C>             <C>           <C>
Revenues:
  Equity in net income of Justice     
    Investors                          $  755,033      $  630,553      $ 1,866,018   $ 1,304,101
  Dividend and interest income             29,611          24,516           95,163        57,272
  Investment gain (loss)                  (51,572)              -         (130,344)            -  
  Other income                              6,000           6,000           18,000        18,872
                                        ---------       ---------        ---------     ---------
                                          739,072         661,069        1,848,837     1,380,245
                                        ---------       ---------        ---------     ---------

Cost and expenses:
  General and administrative               76,825          41,238          243,341       153,590
  Professional and outside services        24,549          16,398          106,015        41,978
                                        ---------       ---------        ---------     ---------
                                          101,374          57,636          349,356       195,568
                                        ---------       ---------        ---------     ---------
Income before income taxes                637,698         603,433        1,499,481     1,184,677

Income taxes                              255,959         242,205          601,862       475,505
                                        ---------       ---------        ---------     ---------
Net income                             $  381,739      $  361,228       $  897,619    $  709,172
                                        =========       =========        =========     =========


Net income per share                   $     0.51      $     0.48       $     1.20    $     0.95
                                        =========       =========        =========     =========
Dividends per share                    $      .25      $     0.25       $     0.50    $     0.65
                                        =========       =========        =========     =========
Weighted average number of 
  shares outstanding                      743,423         750,000          746,694       750,000
                                        =========       =========        =========     =========
See accompanying notes.
</TABLE>


<PAGE> 5
                            Portsmouth Square, Inc.
                           Statements of Cash Flows
                                 (Unaudited)
<TABLE>
<CAPTION>                                              Nine Months ended
                                                          September 30
                                                       1997           1996
                                                  ------------   ------------
<S>                                                <C>            <C>
Operating activities
  Net income                                       $   897,619    $   709,172
  Adjustments to reconcile net income to net
   cash used in operating activities:   
    Equity in net income of Justice Investors       (1,866,018)    (1,304,101)
    Increase deferred taxes & taxes payable              1,720              -
    Decrease in receivable, Justice Investors                -         18,000
    Decrease in other current assets                     8,703              -
    Net decrease in current liabilities                 10,699         51,790 
                                                    ----------     ----------
Net cash used in operating activities                 (947,277)      (525,139)
                                                    ----------     ----------

Investing activities
  Cash distribution from Justice Investors           1,224,601        941,220
  Purchases of investment securities                (1,782,051)      (928,574)
  Purchase of other investments                       (190,203)             -
  Proceeds from sale of investment securities        1,439,115              -
                                                    ----------     ----------
Net cash provided by investing activities              691,462         12,646
                                                    ----------     ----------

Financing activities
  Increase in amount due securities broker           1,196,411              -
  Dividends paid                                      (373,673)      (487,500)
  Purchase of Portsmouth stock                        (187,938)             -
                                                    ----------     ----------
Net cash provided by (used in) 
   financing activities                                634,800       (487,500)
                                                    ----------     ----------
Net increase (decrease) in cash and cash
  equivalents                                          378,985       (999,993)
Cash and cash equivalents at the beginning
  of the year                                           21,225      1,206,138
                                                    ----------     ----------
Cash and cash equivalents at the end of the
  period                                           $   400,210    $   206,145
                                                    ==========     ==========

See accompanying notes.
</TABLE>

<PAGE> 6


                          NOTES TO FINANCIAL STATEMENTS

1.   Basis of Presentation and Significant Accounting Policies
     ---------------------------------------------------------
The financial statements included herein have been prepared by Portsmouth
Square, Inc. (the "Company"), without audit, according to the rules and
regulations of the Securities and Exchange Commission.  Certain information 
and footnote disclosures normally included in financial statements prepared 
in accordance with generally accepted accounting principles have been 
condensed or omitted pursuant to such rules and regulations, although the 
Company believes the disclosures that are made are adequate to make the 
information presented not misleading.  Further, the financial statements 
reflect, in the opinion of management, all adjustments (which included only 
normal recurring adjustments) necessary to state fairly the financial 
position and results of operations as of and for the periods indicated.

It is suggested that these financial statements be read in conjunction with 
the audited financial statements and the notes therein included in the 
Company's Form 10-K for the year ended December 31, 1996.

The results of operations for the nine months ended September 30, 1997 are not
necessarily indicative of results to be expected for the full fiscal year 
ending December 31, 1997.

In February 1997, the Financial Accounting Standards Board issued Statement 
No. 128, (Earnings per Share) which will be required to be adopted on 
December 31, 1997.  The impact of Statement 128 on the calculation of earnings 
per share for these quarters is not expected to be material.


2.  Investment in Justice Investors
    -------------------------------

The Company's principal sources of revenue continue to be derived from its
49.8% interest in the Justice Investors limited partnership which owns and 
leases a Holiday Inn in San Francisco, California. The Company also serves as 
one of the two general partners of Justice Investors. Portsmouth records its 
investment on the equity basis.

Condensed financial statements for Justice Investors are as follows:

       
         
                           JUSTICE INVESTORS
                        CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>

                                                   September 30, 1997
                                                   ------------------
<S>                                                    <C>              
Assets
Total current assets                                   $1,325,082
Property, plant and equipment, net of
  accumulated depreciation of $10,496,135               6,068,037
Loan fees and deferred lease costs,
  net of accumulated amortization of $77,980              232,433
                                                        ---------
                                                       $7,625,552      
                                                        =========
<PAGE> 7

Liabilities and partners' capital 
Total current liabilities                              $   72,171       
Long-term debt                                          3,221,334
Partners' capital                                       4,332,047
Total liabilities and                                   ---------
  partners capital                                     $7,625,552
                                                        =========
</TABLE>

<TABLE>
<CAPTION>
                        
                                JUSTICE INVESTORS
                        CONDENSED STATEMENTS OF OPERATIONS

       
                              Three Months ended          Nine Months ended 
                                 September 30                September 30   
                             1997          1996           1997         1996 
                           ---------     ---------      ---------    ---------
<S>                       <C>            <C>           <C>          <C> 
Revenues                  $1,780,605     $1,495,360    $4,543,178   $3,290,129
Costs and expenses           264,475        229,189       805,192      671,452
                           ---------      ---------     ---------    ---------
Net income                $1,516,130     $1,266,171    $3,737,986   $2,618,677
                           =========      =========     =========    =========
        
</TABLE>


3. Contingencies
   -------------
On May 30, 1996, the Company was served with a personal injury action in the
San Francisco Superior Court.  The suit, which was filed on March 26, 1996,
names more than 60 defendants, including the managing general partner of
Justice Investors, and alleges injuries suffered as a result of exposure to
asbestos-containing materials.   The Complaint seeks an unspecified amount of 
damages, including recovery for loss of income and medical expenses.  The 
Company is being defended through its insurance carrier under a reservation of 
rights. On September 16, 1997, an order granting a motion for summary judgment 
was entered in favor of the Company.  At this time it is not known whether 
plaintiff will seek appellate or other review of that order.


4. Related Party Transactions
   -------------------------- 

Certain costs and expenses, primarily salaries, rent and insurance, are 
allocated between the Company and its parent company, Santa Fe Financial 
Corporation ("Santa Fe") based on management's estimate of the utilization of 
resources.  During the nine months ended September 30, 1997, the Company also 
made payments to The InterGroup Corporation ("InterGroup") in the amount of 
$41,899 for administrative costs and reimbursement of direct and indirect 
costs associated with the management of the Company's investments, including 
its partnership asset.  

The Company's President and Chief Executive Officer, John V. Winfield, directs 
the investment activity of the Company in public and private markets pursuant 
to authority granted by the Board of Directors.  Mr. Winfield also serves as 
Chief Executive Officer of Santa Fe and InterGroup and directs the investment 
activity of those companies.  Depending on certain market conditions and 
various risk factors, the Chief Executive Officer, his family, Santa Fe and 
InterGroup may, at times, invest in the same companies in which the Company 

<PAGE>  8

has invested.  The Company encourages such investments because it places 
personal resources of the Chief Executive Officer and his family members, and
the resources of Santa Fe and InterGroup, at risk in connection with 
investment decisions made on behalf of the Company.  Three of the Company's 
Directors serve as directors of InterGroup and three of the Company's Directors
serve on the Board of Santa Fe.


Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS AND PROJECTIONS

The Company may from time to time make forward-looking statements and
projections concerning future expectations.  When used in this discussion,
the words "estimate," "project," "anticipate" and similar expressions, are
intended to identify forward-looking statements.  Such statements are subject
to certain risks and uncertainties, including partnership distributions, 
general economic conditions of the hotel industry in the San Francisco area,
securities markets, litigation and other factors, including those discussed 
below and in the Company's Form 10-K for the year ended December 31, 1996, 
that could cause actual results to differ materially from those projected.  
Readers are cautioned not to place undue reliance on these forward-looking 
statements, which speak only as to the date hereof.  The Company undertakes no 
obligation to publicly release the results of any revisions to those 
forward-looking statements which may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.

RESULTS OF OPERATIONS

The Company's principal sources of revenue continue to be derived from its 
49.8% interest in the Justice Investors limited partnership and income 
received from the investment of its cash and securities assets.  The 
partnership derives most of its income from a lease with Holiday Inns, Inc., 
which has been assumed by Bristol Hotel Company ("Bristol") and from a lease 
with Evon Garage Corporation.

Three Months Ended September 30, 1997 Compared to Three Months 
Ended September 30, 1996

Comparison of operating results for the three months ended September 30, 1997 
to the three months ended September 30, 1996, shows a net increase in total 
revenues of 11.8% and that costs and expenses increased 75.9% and net income 
increased 5.7%.

The 11.8% net increase in total revenues from $661,069 to $739,072 was 
primarily due to a 19.7% increase in partnership income from $630,553 to 
$755,033 and a 20.8% increase in dividend and interest income from $24,516 to 
$29,611.  The increase in partnership income is primarily attributable to a 
21.6% increase in hotel rental income as a result of both higher occupancy 
rates and an increase in the average daily room rate.  The increase in 
dividend and interest income reflects management's efforts to diversify the 
Company's investments to provide for an overall higher yield.  The realized 
loss on investments of $51,572 should be considered in the context that the 
Company had pre-tax unrealized gains on investments of $390,881 and pre-tax 
unrealized losses in the amount of $51,283 as of September 30, 1997.  The net 
unrealized gain on investments of $203,290 after tax, is included in 
shareholders' equity. 

The 75.9% increase in costs and expenses from $57,636 to $101,374 reflects an 
increase in general and administrative expenses from $41,238 to $76,825 and an 
increase in professional and outside service fees from $16,398 to $24,549.  

<PAGE> 9

The increase in general and administrative expenses reflects adjustments in 
the Company's proportionate share of operating expenses with its parent, Santa 
Fe, and higher administrative costs and direct and indirect costs associated 
with the management of the Company's investments, including its partnership 
asset. The increase in professional and outside service fees is primarily 
attributable to the retention of a consultant by the Company to advise it on
certain operational and partnership matters as part of its more active role as 
a general partner in Justice Investors. 

Effective April 28, 1997, Holiday Inns, Inc. merged with Bristol of Dallas, 
Texas, a publicly held company listed on the New York Stock Exchange.  Bristol 
has agreed to assume and perform all of Holiday's obligations under the lease 
with the partnership and will continue to operate the hotel as a Holiday Inn 
or one of Holiday's related brands.  The partnership and Bristol have made 
substantial improvements to the hotel property and further improvements are 
expected to be made in the future in an effort to achieve Select or Crowne 
Plaza status.  
 

Nine Months Ended September 30, 1997 Compared to Nine Months
Ended September 30, 1996

Comparison of the results of operations for the first nine months of 1997 to 
the first nine months of 1996 reveals a net increase in total revenues of 
33.9% and that costs and expenses increased approximately 78.6%, and net 
income increased 26.6%

The 33.9% net increase in total revenues from $1,380,245 to $1,848,837 was 
primarily due to a 43.1% increase in partnership income from $1,304,101 to 
$1,866,018 and a 66.2% increase in dividend and interest income from $57,272 
to $95,163.  The increase in partnership income is primarily attributable to a 
48.7% increase in hotel rental income as a result of both higher occupancy 
rates and an increase in the average daily room rate.  The increase in 
dividend and interest income reflects management's efforts to diversify the 
Company's investments to provide for an overall higher yield.  The realized 
loss on investments of $130,344 should be considered in the context that the 
Company had pre-tax unrealized gains on investments of $390,881 and pre-tax 
unrealized losses in the amount of $51,283 as of September 30, 1997.  The net 
unrealized gain on investments of $203,290 after tax, is included in 
shareholders' equity. 

The 78.6% increase in costs and expenses from $195,568 to $349,356 reflects
an increase in general and administrative expenses from $153,590 to $243,341 
and an increase in professional and outside service fees from $41,978 to 
$106,015.  The increase in general and administrative expenses reflects 
adjustments in the Company's proportionate share of operating expenses with 
its parent, Santa Fe, and higher administrative costs and direct and indirect 
costs associated with the management of the Company's investments, including 
its partnership asset. The increase in professional and outside service fees 
is primarily attributable to the retention of a consultant by the Company to 
advise it on certain operational and partnership matters as part of its more 
active role as a general partner in Justice Investors and higher annual audit 
fees.

<PAGE> 10
 
LIQUIDITY AND SOURCES OF CAPITAL

The Company's cash flows are primarily generated by its investment in the
Justice Investors limited partnership, which derives the majority of its
income from its lease with Bristol and a lease with Evon Garage Corporation. 
In addition to its monthly limited partnership distributions from Justice
Investors, the Company also receives monthly management fees as a general
partner.  The Company also derives revenue from the investment of its cash and
securities assets.  

As a result of increases in the amount of rental income from the hotel lease,
the general partners of Justice Investors decided that there would be a
special one-third increase in the monthly distribution to limited partners
effective with the February 1997 distribution.  As a result, Portsmouth's 
monthly distribution increased to $139,440 from $109,580.  Although it is 
planned that the distribution at the higher level will continue for a period 
of 12 months, the increase was clearly identified as a special distribution 
and, at any time, unforeseen circumstances could dictate a change in the 
amount distributed.  The general partners will conduct an annual review and 
analysis to determine an appropriate monthly distribution for the ensuing
year.  At that time, the monthly distribution could be decreased or increased.

The Company has diversified its investment of its cash and securities assets 
in an effort to obtain an overall higher yield while seeking to minimize the 
associated increased degree of risk.  The Company has invested in short-term, 
income-producing instruments and in equity and debt securities when deemed 
appropriate.  The Company's securities investments are classified as 
available-for-sale and unrealized gains and losses, net of deferred taxes, are 
included in shareholders' equity.  As of September 30, 1997, the Company had a 
net unrealized gain on investments of $203,290 after tax, which consists of 
pre-tax unrealized gains of $390,881 and pre-tax unrealized losses of $51,283.

Realized investment gains and losses may fluctuate significantly from period
to period in the future and could have a meaningful effect on the Company's
net earnings.  However, the amount of realized investment gain or loss for any
given period may have no predictive value, and variations in amount from
period to period may have no practical analytical value.

In December 1996, the Board of Directors authorized a limited buy-back program
of the Company's common stock.  The Company may, from time to time, in the
discretion of management, purchase those shares depending on market conditions
and other factors consistent with Company policy and as limited by state and
federal law.  In instituting the buy-back program, the Company reaffirmed its
intention of continuing with its reporting requirements under the Exchange Act
and the program is not intended to directly or indirectly cause the cessation
of those requirements.  As of September 30, 1997, the Company had repurchased 
12,417 of its common shares, primarily in open market transactions.  On 
October 28, 1997, the Board of Directors elected to terminate the limited 
buy-back program to preserve the Company's capital as it considers other 
investment options.

At September 30, 1997, the Company's current assets were $2,436,927.  The 
Company remains liquid with a current ratio of approximately 1.6 to 1 at the
end of the quarter.  Management believes that its capital resources are 
currently adequate to meet its short- and long-term obligations.

<PAGE> 11

PART II.     OTHER INFORMATION


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

         (a) Exhibit 27 - the Financial Data Schedule is filed 
             as an exhibit to this report.
          
         (b) Registrant did not file any reports on Form 8-K 
             during the period covered by this report.
                     


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.

PORTSMOUTH SQUARE, INC.
    (Registrant)

Date:    October 30, 1997

by /s/   John V. Winfield
-------------------------------------
         John V. Winfield, President,
         Chairman of the Board and
         Chief Executive Officer


Date:    October 30, 1997

by /s/   L. Scott Shields
-------------------------------------
         L. Scott Shields, Treasurer
         and Chief Financial Officer