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 March 31, 1998

                         OR

    [ ]  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: 734,183 shares of issuer's
No Par Value Common Stock were outstanding as of May 8, 1998.

   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--March 31, 1998 (Unaudited)                     3
   
    Statement of Income (Unaudited)--Three Months
    ended March 31, 1998 and 1997                                 4

    Statement of Cash Flow (Unaudited)--Three Months
    ended March 31, 1998 and 1997                                 5

    Notes to Financial Statements--March 31, 1998                 6

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

PART II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders      10

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>                                                  March 31,     
                                                             1998        
                                                         ------------
<S>                                                      <C>            
Assets

  Cash and cash equivalents                              $    47,309
  Investment in marketable securities                      2,286,132
  Investment in Justice Investors                          1,522,194
  Other investments                                          162,500
  Note receivable                                                  -
  Other assets                                               142,216       
                                                          ----------     
Total assets                                             $ 4,160,351
                                                          ==========


Liabilities and Shareholders' Equity

  Due to securities broker                               $   901,984
  Accounts payable and accrued expenses                       39,784
  Due to Santa Fe Financial Corp.                             32,756
  Other liabilities                                          266,446
                                                          ----------  
Total liabilities                                          1,240,970
                                                          ----------  
Commitments and contingencies

Shareholders' equity
  Common stock, no par value:
    Authorized shares - 750,000
    Issued and outstanding shares - 734,183                2,092,300  
   Additional paid-in capital                                915,676
   Unrealized gain on investment securities,
     net of deferred taxes                                   131,360      
   Accumulated deficit                                      (219,955)  
                                                          ----------   
Total shareholders' equity                                 2,919,381    
                                                          ----------  

Total liabilities and shareholders' equity               $ 4,160,351
                                                          ==========  
See accompanying notes.
</TABLE>


<PAGE> 4
                            Portsmouth Square, Inc.
                             Statement of Income 
                                 (Unaudited)

<TABLE>
<CAPTION>                                   Three Months ended March 31,
                                                1998            1997
                                            -----------     -----------
<S>                                         <C>             <C>
Revenues
  Equity in net income of Justice     
    Investors                               $  606,400      $  499,712
  Dividend and interest income                  18,778          13,885
  Net investment income                         76,540               -
  Other income                                   6,000           6,000
                                             ---------       ---------
                                               707,718         519,597
                                             ---------       ---------

Cost and expenses
  General and administrative                    84,760          76,094
  Professional and outside services             50,552          54,069
  Margin interest expense                       14,287               -
                                             ---------       ---------
                                               149,599         130,163
                                             ---------       ---------
             
Income before income taxes                     558,119         389,434

Income taxes                                   193,296         156,312
                                             ---------       ---------
Net income                                  $  364,823      $  233,122
                                             =========       =========

Basic earnings per share                    $     0.50      $     0.31
                                             =========       =========
Dividends per share                         $     0.25      $     0.25
                                             =========       =========
Weighted average number of 
  shares outstanding                           734,183         749,896
                                             =========       =========


Comprehensive income:
  Net income                                $  364,823      $  233,122
  Unrealized gains on securities:
   Unrealized holding gains arising
    during period, net of taxes                 34,884               -
                                             ---------       ---------
Comprehensive income                        $  399,707      $  233,122
                                             =========       =========

See accompanying notes.
</TABLE>


<PAGE> 5
                            Portsmouth Square, Inc.
                            Statement of Cash Flows
                                 (Unaudited)
<TABLE>
<CAPTION>                                        Three Months ended March 31, 
                                                       1998           1997
                                                  ------------   ------------
<S>                                                <C>            <C>
Operating activities
  Net income                                       $   364,823    $   233,122
  Adjustments to reconcile net income to net
   cash used in operating activities:   
    Equity in net income of Justice Investors         (606,400)      (499,712)
    Changes in assets and liabilities:
     Other assets                                       13,628          8,053
     Due to Santa Fe Financial Corporation              15,253              -
     Accounts payable and other liabilities             96,436        133,419
                                                    ----------     ----------
Net cash used in operating activities                 (116,260)      (125,118)
                                                    ----------     ----------

Investing activities
  Cash distributions from Justice Investors            418,320        387,961
  Purchase of investment securities                 (1,868,137)      (678,742)
  Purchase of other investments                        (75,000)             -
  Proceeds from sales of investment securities       1,577,812        594,817
                                                    ----------     ----------
Net cash provided by investing activities               52,995        304,036
                                                    ----------     ----------

Financing activities
  Increase in due securities broker                    237,772              -
  Purchase and retirement of common stock                    -        (46,377)
  Dividends paid                                      (183,546)      (187,500)
                                                    ----------     ----------
Net cash provided by (used in) financing
 activities                                             54,226       (233,877)
                                                    ----------     ----------
Net (decrease) increase in cash and cash
 equivalents                                            (9,039)        54,959
Cash and cash equivalents at the beginning
 of the year                                            56,348         21,225
                                                    ----------     ----------
Cash and cash equivalents at the end of the
 period                                            $    47,309    $    76,184
                                                    ==========     ==========

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-KSB for the year ended December 31, 1997.

The results of operations for the three months ended March 31, 1998 are not
necessarily indicative of results to be expected for the full fiscal year 
ending December 31, 1998.

Statement of Financial Accounting Standards No. 129, "Disclosure of
Information about Capital Structure" ("SFAS No. 129") issued by the FASB is
effective for financial statements with fiscal years ending after December 15,
1997.  The new standard reinstates various securities disclosure requirements
previously in effect under Accounting Principals Board Opinion No. 15, which
has been superseded by SFAS No. 128.  The Company does not expect the adoption
of SFAS No. 129 to have a material effect on its financial position or results
of operations.

Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" ("SFAS No. 130") issued by the FASB is effective for financial
statements with fiscal years beginning after December 15, 1997.  Earlier
application is permitted.  SFAS 130 establishes standards for reporting and
display of comprehensive income and its components in a full set of general-
purpose financial statements.  The Company has adopted SFAS effective for the
financial reporting period ended March 31, 1998.

Statement of Financial Accounting Standards No. 131, "Disclosure about
Segments of an Enterprise and Related Information" ("SFAS No. 131") issued by
the FASB is effective for financial statements beginning after December 15,
1997.  The new standard requires that public business enterprises report
certain information about operating segments in complete sets of financial
statements of the enterprise and in condensed financial statements of interim
periods issued to shareholders.  The Company does not expect the adoption of
SFAS No. 131 to have a material effect on its financial position or results of
operations.

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.

<PAGE> 7

Condensed financial statements for Justice Investors are as follows:

       
         
                           JUSTICE INVESTORS
                        CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>

                                                          March 31, 1998
                                                          --------------
<S>                                                       <C>              
Assets
Total current assets                                      $  542,818
Property, plant and equipment, net of
  accumulated depreciation of $10,496,135                  5,870,418
Loan fees and deferred lease costs,
  net of accumulated amortization of $93,501                 216,911
                                                           ---------
                                                          $6,630,147      
                                                           =========

Liabilities and partners' capital 
Total current liabilities                                 $   96,258       
Long-term debt                                             2,379,978
Partners' capital                                          4,153,911
Total liabilities and                                      ---------
  partners' capital                                       $6,630,147
                                                           =========
</TABLE>

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

       
                                    Three Months ended          
                                         March 31,
                                    1998           1997
                                 ---------      ----------
<S>                              <C>            <C>          
Revenues                         $1,495,605     $1,209,103
Costs and expenses                  277,934        264,704      
                                  ---------      ---------    
Net income                       $1,217,671     $  944,399
                                  =========      =========
        
</TABLE>


3. Commitments and Contingencies
   -----------------------------
During 1996, the Company was served with a personal injury action in the San
Francisco Superior Court.  The suit named 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 sought an unspecified amount of damages.  Portsmouth was defended by
an insurance carrier under a reservation of rights.  During 1997, the trial
court granted Portsmouth's motion for summary judgment, which became final on
April 13, 1998.  To date, no appeal from that judgment has been taken. 
Management believes that the ultimate resolution of this claim will not have a
material adverse effect on the Company's consolidated financial position.

<PAGE> 8

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 three months ended March 31, 1998, the Company also
made payments to The InterGroup Corporation ("InterGroup") in the amount of
$12,794 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.  Effective April 1, 1998, an employee of 
InterGroup was assigned to manage the portfolios of the Company and Santa Fe
in consultation with Mr. Winfield.  The Company and Santa Fe reimburse 
InterGroup for an allocated portion of the compensation and benefits of such 
employee.  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 invests.  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.  Four 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 OPERATION

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 natural disasters
those discussed below and in the Company's Form 10-KSB for the year ended
December 31, 1997, 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.

<PAGE> 9

Three Months Ended March 31, 1998 Compared to Three Months 
Ended March 31, 1997

Comparison of operating results for the three months ended March 31, 1998 to 
the three months ended March 31, 1997, shows that net income increased 64.8%,
resulting from a 36.2% increase in total revenues, partially offset by a 14.9%
increase in costs and expenses.

The 36.2% increase in total revenues from $519,597 to $707,718 was
attributable to a 21.3%  increase in partnership income, a 35.2% increase in
dividend and interest income and an 100% increase in net investment income in
the amount of $76,540.   The increase in partnership income is primarily
attributable to a 29.1% 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 and net investment income reflects
management's efforts to diversify the Company's investments to provide for an
overall higher yield.  As of March 31, 1998, the Company also had pre-tax
unrealized gains on investments of $359,570 and pre-tax unrealized losses in
the amount of $140,131.  The net unrealized gain on investments of $131,360
after tax, is included in shareholders' equity.

The modest increase in costs and expenses from $130,163 to $149,599 is
primarily attributable to margin interest expenses in the amount of $14,287
associated with the Company's investing activities.  The decrease in
professional and outside service fees from $54,069 to $50,552 reflect lower
annual audit fees.  The small increase in general and administrative expenses
from $76,094 to $84,760 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.
  
 
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.  In February 1998,
the general partners decided to continue monthly distributions at the higher
monthly rate for another year.  The increases in monthly distributions were
clearly identified as special distributions and, at any time, unforeseen
circumstances could dictate a change in the amount distributed.  The general
partners will continue to conduct an annual review and analysis to determine
an appropriate monthly distribution for the ensuing year.  At that time, the
monthly distribution could be increased or decreased, especially if the
partnership was to participate financially in the future upgrading of the
public areas of the hotel.

<PAGE> 10

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 March 31, 1998, the Company had a net 
unrealized gain on investments of $131,360 after tax, which consists of
pre-tax unrealized gains of $359,570 and pre-tax unrealized losses of
$140,131.

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.

At March 31, 1998, the Company's current assets were $2,428,348.  The 
Company remains liquid with a current ratio of approximately 2 to 1 at the
end of the first quarter of 1998.  Management believes that its capital 
resources are currently adequate to meet its short- and long-term obligations.



PART II.     OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders

The Annual Meeting of Shareholders of the Company was held on May 5, 1998, 
at the Park Hyatt Hotel in Los Angeles, California.  At that meeting all of 
management's nominees, John V. Winfield, Jerold R. Babin, Josef A. Grunwald,
John C. Love and William J. Nance were elected Directors of Portsmouth to
serve until the next Annual Meeting.  The shareholders also voted to ratify
the appointment of Price Waterhouse LLP as the Company's independent
accountants for the year ending December 31, 1998.  A tabulation of the vote
follows:

<TABLE>
<CAPTION>
Proposal (1) - Directors:         Votes For   Against   Abstained  
                                  ---------   -------   ---------   
<S>                                <C>           <C>     <C>            
  John V. Winfield                 653,631         -      1,545

  Jerold R. Babin                  634,213         -     20,963  
 
  Josef A. Grunwald                654,128         -      1,048
 
  John C. Love                     653,628         -      1,548  
 
  William J. Nance                 653,628         -      1,548


Proposal (2) Accountants:
  Price Waterhouse LLP             654,613       118        445          
</TABLE>


<PAGE> 11
 
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 filed the following reports on Form 8-K 
             during the period covered by this report:


        Date of Earliest Event                  Items Reported
        ----------------------                  --------------

         January 26, 1998                Changes in Registrants's certifying   
                                         accountant from Ernst & Young LLP to  
                                         Price Waterhouse LLP.

         March 2, 1998                   Resignation of Director of Registrant 
                                         and appointment of John C. Love as    
                                         Director.

                     


                                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: May 12, 1998                           by  /s/ John V. Winfield
                                                 ---------------------------
                                                 John V. Winfield, President,
                                                 Chairman of the Board and
                                                 Chief Executive Officer

         

Date: May 12, 1998                            by  /s/ L. Scott Shields
                                                  --------------------------   
                                                  L. Scott Shields, Treasurer
                                                  and Chief Financial Officer