SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549

                                FORM 10-Q

              (Mark One)

[X]              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                   THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended        March 30, 1997
                                               -----------------------
                                       OR

[ ]              TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                   THE SECURITIES EXCHANGE ACT OF 1934

                 For the transition period from           to
                                                ----------  ---------

                          Commission File Number  1-4085


                         POLAROID CORPORATION
______________________________________________________________________
          (Exact name of registrant as specified in its charter)

         DELAWARE                                      04-1734655
   --------------------                          ----------------------
(State or other jurisdiction                     (I.R.S. Employer
incorporation or organization)                        Identification No.)

            549 TECHNOLOGY SQUARE, CAMBRIDGE, MASSACHUSETTS  02139
______________________________________________________________________

       (Address of principal executive offices)         (Zip Code)


 Registrant's telephone number, including area code:    (6l7) 386-2000
_____________________________________________________________________

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
                                    -----        -----

                 Shares of Common Stock, $1 par value,
           outstanding as of May 2, 1997: 44,904,787 shares
___________________________________________________________________

                     This document contains 16 pages.
                     Exhibit index appears on page 15

____________________________________________________________________


<PAGE>

                    PART I.   FINANCIAL INFORMATION
                Item 1.   Financial Statements

           POLAROID CORPORATION AND SUBSIDIARY COMPANIES
       Condensed Consolidated Statement of Earnings             (Unaudited)
         Periods ended MARCH 30, 1997 and MARCH 31, 1996
              (In millions, except per share data)


                                                            First Quarter

                                                            1997         1996
                                                        --------     --------
Net sales:
   United States                                         $189.3       $178.0
   International                                          268.2        283.1
-----------------------------------------------------------------------------
Total net sales                                           457.5        461.1
-----------------------------------------------------------------------------

   Cost of sales                                          259.8        280.9

   Marketing, research, engineering
      and administrative expenses                         178.5        175.7

   Restructuring and other                                    -        110.0
-----------------------------------------------------------------------------
Total costs                                               438.3        566.6
-----------------------------------------------------------------------------
Profit/(loss) from operations                              19.2       (105.5)

   Other income                                            17.3         17.6

   Interest expense                                        11.4         11.6
-----------------------------------------------------------------------------

Earnings/(loss) before income taxes                        25.1        (99.5)

   Federal, state and foreign income
      tax expense/(benefit)                                 9.3        (38.8)
-----------------------------------------------------------------------------
Net earnings/(loss)                                       $15.8       ($60.7)
=============================================================================

Primary earnings/(loss) per common share                  $0.35       ($1.33)

Fully diluted earnings per common share                       *            *
-----------------------------------------------------------------------------
Cash dividends per common share                           $0.15        $0.15

Weighted average common shares used for primary
  earnings/(loss) per share calculation (in thousands)   45,345 **    45,572

Common shares outstanding
  at end of period (in thousands)                        44,829       45,520
=============================================================================

*    Fully diluted earnings per share are not stated because
     they are greater than or equal to primary
     earnings per common share.

**   The weighted average shares used to calculate
     primary earnings per common share include the
     dilutive effect of stock options outstanding.



                                  2
<PAGE>


               POLAROID CORPORATION AND SUBSIDIARY COMPANIES
                Condensed Consolidated Statement of Earnings
                              (In millions)


                                    (Unaudited)                   (Unaudited)
                                      March 30,      December 31,   March 31,
Assets                                     1997           1996           1996
-----------------------------------------------------------------------------
Current assets
  Cash and cash equivalents               $29.5          $72.8         $104.6
  Short-term investments                    5.6            5.5            6.4
  Receivables                             502.3          535.2          437.7
  Inventories:
    Raw materials                          98.1          104.7          129.6
    Work-in-process                       218.0          225.3          245.0
    Finished goods                        232.7          218.8          275.9
-----------------------------------------------------------------------------
  Total inventories                       548.8          548.8          650.5
  Prepaid expenses and other assets       238.3          224.1          222.6
-----------------------------------------------------------------------------
Total current assets                    1,324.5        1,386.4        1,421.8
-----------------------------------------------------------------------------
Property, plant and equipment
  Gross property, plant and equipment   2,177.5        2,163.6        2,151.3
  Less accumulated depreciation         1,517.6        1,497.4        1,478.6
-----------------------------------------------------------------------------
  Net property, plant and equipment       659.9          666.2          672.7
-----------------------------------------------------------------------------
Deferred tax assets                        96.7           98.8          112.5
-----------------------------------------------------------------------------
Other assets                               51.2           50.2            8.8
-----------------------------------------------------------------------------
Total assets                           $2,132.3       $2,201.6       $2,215.8
=============================================================================


Liabilities and stockholders' equity
-----------------------------------------------------------------------------
Current liabilities
     Short-term debt                     $156.2         $124.9         $158.3
     Current portion of long-term debt     37.7           37.7           39.7
     Payables and accruals                251.2          310.5          245.3
     Compensation and benefits            207.4          238.4          275.9
     Federal, state and
        foreign income taxes               55.0           51.6           19.3
-----------------------------------------------------------------------------
Total current liabilities                 707.5          763.1          738.5
-----------------------------------------------------------------------------
Long-term debt                            497.0          489.9          526.8
-----------------------------------------------------------------------------
Accrued postretirement benefits           248.2          248.5          259.3

Accrued postemployment benefits            42.2           41.9           42.4
-----------------------------------------------------------------------------

Common stockholders' equity
     Common stock, $1 par value            75.4           75.4           75.4
     Additional paid-in capital           411.8          409.4          404.7
     Retained earnings                  1,466.9        1,457.8        1,458.4
     Cumulative translation adjustment    (29.7)             -              -
     Less:    Treasury stock, at cost   1,247.8        1,244.8        1,209.4
              Deferred compensation        39.2           39.6           80.3
-----------------------------------------------------------------------------
     Total common stockholders' equity    637.4          658.2          648.8
-----------------------------------------------------------------------------
Total liabilities and
     stockholders' equity              $2,132.3       $2,201.6       $2,215.8
=============================================================================




                                  3
<PAGE>


               POLAROID CORPORATION AND SUBSIDIARY COMPANIES
             Condensed Consolidated Statement of Cash Flows
          Periods Ended March 30, 1997 and March 31, 1996    (Unaudited)
                           (In millions)


Cash flows from operating activities             1997            1996
-----------------------------------------------------------------------
     Net earnings/(loss)                        $15.8          ($60.7)
     Depreciation of property, plant
        and equipment                            31.0            32.4
     Decrease in receivables                      5.1           106.5
     Increase in inventories                     (1.7)          (35.0)
     Increase in prepaids and other assets      (16.6)          (24.7)
     Decrease in payables and accruals          (44.5)          (24.8)
     Increase/(decrease) in compensation
        and benefits                            (31.3)           32.5
     Increase/(decrease) in federal, state
        and foreign income taxes payable          5.8           (26.5)
     Gain on sale of fixed assets                   -           (15.5)
     Other non cash items                        (9.5)           53.3
-----------------------------------------------------------------------
     Net cash provided/(used) by operations     (45.9)           37.5
-----------------------------------------------------------------------

Cash flows from investing activities
-----------------------------------------------------------------------
     Decrease in short-term investments             -             3.4
     Increase in other assets                    (1.0)              -
     Additions to property, plant
        and equipment                           (28.0)          (22.3)
     Proceeds from sale of fixed assets             -            22.1
-----------------------------------------------------------------------
     Net cash provided/(used) by
        investing activities                    (29.0)            3.2
-----------------------------------------------------------------------

Cash flows from financing activities
-----------------------------------------------------------------------
     Net decrease in short-term debt
        (maturities 90 days or less)              36.2             1.4
     Short-term debt having maturities
        more than 90 days
          Proceeds                                8.0              -
          Payments                               (8.3)             -
     Proceeds from issuances of long-term debt  295.6              -
     Repayments of long-term debt              (290.4)             -
     Cash dividends paid                         (6.7)           (6.8)
     Stock options exercised                      3.2             3.2
     Purchase of treasury stock                  (4.4)           (5.5)
-----------------------------------------------------------------------
     Net cash provided/(used) by financing       33.2            (7.7)
-----------------------------------------------------------------------

Effect of exchange rate changes on cash          (1.6)           (1.7)
-----------------------------------------------------------------------
Net increase/(decrease) in cash and cash        (43.3)           31.3

Cash and equivalents at beginning of period      72.8            73.3
-----------------------------------------------------------------------
Cash and cash equivalents at end of period      $29.5          $104.6

=======================================================================



                                  4
<PAGE>


              POLAROID CORPORATION AND SUBSIDIARY COMPANIES
                Condensed Consolidated Statement of Earnings
               Periods ended MARCH 30, 1997 and MARCH 31, 1996
                     (In millions, except per share data)


                                                       First Quarter
                                                     1997         1996
                                                  ---------     ---------
Common stock

  Balance at the beginning of the period            $75.4         $75.4
                                                  ---------     ---------
  Balance at the end of the period                   75.4          75.4
-------------------------------------------------------------------------
Additional paid-in capital

  Balance at the beginning of the period            409.4         401.9
    Stock options exercised - tax benefit             0.5           0.5
    Issuance of shares in connection with stock       1.9           2.3
                                                  ---------     ---------
  Balance at the end of the period                  411.8         404.7
-------------------------------------------------------------------------
Retained earnings

  Balance at the beginning of the period          1,457.8       1,525.8
    Net earnings/(loss)                              15.8         (60.7)
    Dividends declared-common stock                  (6.7)         (6.8)
    ESOP dividend tax benefit received                  -           0.1
                                                 ---------     ---------
  Balance at the end of the period                1,466.9       1,458.4
-------------------------------------------------------------------------
Cumulative Translation Adjustment

  Balance at the beginning of the period                 -            -
    Currency Translation Adjustment                 (29.7)          0.0
                                                  ---------     ---------
  Balance at the end of the period                  (29.7)          0.0
-------------------------------------------------------------------------

Less:

  Treasury stock

    Balance at the beginning of the period        1,244.8       1,205.4
      Repurchase of common shares                     4.4           5.5
      Issuance of shares in connection
          with stock incentive plan                  (1.4)         (1.5)
                                                  ---------     ---------
    Balance at the end of the period              1,247.8       1,209.4
-------------------------------------------------------------------------
  Deferred compensation

    Balance at the beginning of the period           39.6          80.0
      Stock options - 1993                           (0.3)         (0.3)
      Restricted stock                               (0.1)          0.6
                                                 ---------     ---------
    Balance at the end of the period                 39.2          80.3
-------------------------------------------------------------------------
Total common stockholders' equity                  $637.4        $648.8
=========================================================================




                                  5
<PAGE>


Polaroid Corporation and Subsidiary Companies
Notes to Condensed Consolidated Financial Statements    (Unaudited)


Basis of Presentation
---------------------

The condensed consolidated financial statements include the accounts of the
Company's domestic and foreign subsidiaries, all of which are either wholly
owned or majority owned.  Intercompany accounts and transactions are
eliminated.  This is an interim unaudited report, subject to year end audit
and adjustments.  The information furnished, however, reflects all
adjustments (consisting of normal recurring accruals) which, in the opinion
of management, are necessary for a fair presentation of the results of the
interim period.

Foreign Currency Translation
----------------------------

Effective January 1, 1997, the Company has determined that the local currency
is the functional currency for most of its subsidiaries outside of the U.S.
The U.S. dollar will continue to be the functional currency for subsidiaries
in highly inflationary economies.  This change did not have a material impact
on the Company's statement of financial position as of January 1, 1997.

Restructuring Charges and Other
-------------------------------

In December 1995, the Company announced a plan to make fundamental changes in
its operating structure. This plan features three principal components --
program reductions in certain product, research and manufacturing areas;
strategic refocusing of the Company's digital imaging businesses for the
medical diagnostic and graphic arts markets; and a reduction in corporate
overhead expenses. The total pre-tax charge for restructuring and other
expenses related to this plan was $280.0 million. Of that amount, $110.0
million was recorded in the first quarter of 1996 and $170.0 million was
recorded in the fourth quarter of 1995. The December 1995 early retirement
and severance programs are expected to result in the elimination of a total
of approximately 1,570 positions worldwide (approximately 810 from
manufacturing and 760 from marketing, research, engineering and
administrative functions).

The 1996 first quarter pre-tax charge of $110.0 million represents the
balance of severance and pension enhancement costs and inventory write downs
related to the December 1995 program. In the first quarter of 1996, the pre-
tax costs related to the severance program were approximately $55.4 million.
Additionally, approximately $44.6 million represents enhanced retirement
benefits provided under the early retirement program that will be funded from
the Company's pension plans.

Total cash severance payments related to the December 1995 program will be
approximately $110.4 million. As of March 30, 1997, 1,289 of these
terminations and $80.2 million of related cash severance payments were made.
Approximately $14.0 million of related severance payments are expected to be
paid in the second quarter of 1997. The remaining balance of cash severance
payments of approximately $16.2 million is expected to be paid in the second
half of 1997.




                                  6
<PAGE>


Legal Proceedings
-----------------

Certain legal proceedings to which the Company is a party are discussed in
Part II, Item 1 of this filing on Form 10-Q.


Independent Auditors' Report
----------------------------

The March 30, 1997 and March 31, 1996 condensed consolidated financial
statements included in this filing on Form 10-Q have been reviewed by KPMG
Peat Marwick LLP, independent certified public accountants, in accordance
with established professional standards and procedures for such review.  The
report by KPMG Peat Marwick LLP commenting upon their review of the condensed
consolidated financial statements appears on the following page.

New Accounting Standards
------------------------

In February 1997, the Financial Accounting Standards Board issued Financial
Accounting Standards No.128, "Earning Per Share" (FAS 128). FAS 128
supersedes Accounting Principle Board Opinion No.15 and specifies the
computation, presentation and disclosure requirements for earnings per share.
FAS 128 is effective for financial statements for both interim and annual
periods ending after December 15, 1997 and early application is not
permitted. Accordingly, the Company will apply FAS 128 for the quarter and
year ended December 31, 1997 and restate prior period information as required
under the statement.  The Company does not expect the adoption of FAS 128 to
have a material impact on reported earnings per share.




                                  7
<PAGE>



                       Independent Auditors' Report
                       ----------------------------

The Board of Directors
Polaroid Corporation

We have reviewed the condensed consolidated balance sheet of Polaroid
Corporation and subsidiaries as of March 30, 1997 and March 31, 1996, and the
related condensed consolidated statements of earnings, cash flows and changes
in common stockholders' equity for the three-month periods ended March 30,
1997 and March 31, 1996.  These condensed consolidated financial statements
are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants.  A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters.  It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole.  Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.

We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Polaroid Corporation and
subsidiaries as of December 31, 1996, and the related consolidated statements
of earnings, cash flows and changes in common stockholders' equity for the
year then ended (not presented herein); and in our report dated January 28,
1997, we expressed an unqualified opinion on those consolidated financial
statements.  In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 1996, is fairly
stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.



                                             /s/ KPMG Peat Marwick LLP




Boston, Massachusetts
April 15, 1997




                                  8
<PAGE>


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

First Quarter Results
---------------------

Worldwide sales of Polaroid Corporation and its subsidiaries were $457.5
million in the first quarter of 1997 compared with sales of $461.1 million in
the first quarter of 1996.  In the first quarter of 1997, worldwide shipments
of instant film increased slightly and worldwide shipments of instant cameras
decreased moderately compared with the same period last year.  Worldwide
shipments of conventional film were substantially higher and worldwide
shipments of videotapes were slightly lower in the first quarter of 1997 than
in the first quarter of 1996.

In the first quarter of 1997, sales in the United States were $189.3 million,
an increase of 6% compared with $178.0 million in the first quarter of 1996.
U.S. shipments of instant film increased slightly in the first quarter of
1997 compared to the same period a year ago.  Shipments of instant cameras
were up substantially in the first quarter of 1997 compared to the first
quarter of 1996.

International sales decreased 5% to $268.2 million in the first quarter of
1997 from $283.1 million in the same period a year ago, primarily due to the
negative impact of foreign currency translation.  Excluding the impact of
exchange, strong performances in the Asia Pacific region, particularly Japan,
as well as in Mexico, more than offset a decline in Russia. Sales in
developing markets increased by double digit percentages in the first quarter
of 1997 compared to the same period a year ago. While the Company believes
that developing markets in total present particularly attractive
opportunities, such markets tend to be significantly less stable than more
established markets.  There can be no assurance that developing markets will
continue to produce favorable results.

Gross margins as a percent of sales increased to 43% for the first quarter of
1997 from 39% for the first quarter of 1996.  The increase in gross margin in
the first quarter of 1997 reflects the impact of savings from restructuring
and favorable pricing on instant film. Marketing, research, engineering and
administrative expenses in the first quarter of 1997 and 1996 were $178.5
million and $175.7 million, respectively.

In December 1995, the Company announced a plan to make fundamental changes in
its operating structure. This plan features three principal components --
program reductions in certain product, research and manufacturing areas;
strategic refocusing of the Company's digital imaging businesses for the
medical diagnostic and graphic arts markets; and a reduction in corporate
overhead expenses. The total pre-tax charge for restructuring and other
expenses related to this plan was $280.0 million. Of that amount, $110.0
million was recorded in the first quarter of 1996 and $170.0 million was
recorded in the fourth quarter of 1995. The December 1995 early retirement
and severance programs are expected to result in the elimination of a total
of approximately 1,570 positions worldwide (approximately 810 from
manufacturing and 760 from marketing, research, engineering and
administrative functions).

The 1996 first quarter pre-tax charge of $110.0 million represents the
balance of severance and pension enhancement costs and inventory write downs
related to the December 1995 program. In the first quarter of 1996, the pre-
tax costs related to the severance program were approximately $55.4 million.
Additionally, approximately $44.6 million represents enhanced retirement
benefits provided under the early retirement program that will be funded from
the Company's pension plans.



                                  9
<PAGE>



First Quarter Results (continued)
---------------------------------

Total cash severance payments related to the December 1995 program will be
approximately $110.4 million. As of March 30, 1997, 1,289 of these
terminations and $80.2 million of related cash severance payments were made.
Approximately $14.0 million of related severance payments are expected to be
paid in the second quarter of 1997. The remaining balance of cash severance
payments of approximately $16.2 million is expected to be paid in the second
half of 1997.

Profit from operations was $19.2 million in the first quarter of 1997
compared to $4.5 million, excluding restructuring and other expenses of
$110.0 million, in the first quarter of 1996. The increase in operating
profit is primarily due to increased U.S. sales, reduced manufacturing costs
and continued improvement in reducing losses in the Company's digital imaging
businesses.  Including the restructuring and other expenses, the loss from
operations was $105.5 million in the first quarter of 1996.

Other income was $17.3 million and $17.6 million in the first quarter of 1997
and 1996, respectively. In the first quarter of 1997, other income included
$15.8 million primarily attributable to the change in the Company's method of
applying Financial Accounting Standards Board Statement No. 52, "Foreign
Currency Translation" (FAS 52) for translating the financial results of most
of its foreign subsidiaries from dollar functional to local currency
functional.  The change was adopted because of the Company's new operational
and financial structure in Europe and the increased globalization of the
Company's manufacturing since the initial adoption of FAS 52 in 1981. The
Company does not expect similar gains of this magnitude to recur. In the
first quarter of 1996, other income included a $15.5 million gain on the sale
of real estate.  Interest expense was $11.4 million and $11.6 million in the
first quarter of 1997 and 1996, respectively.

For the first quarter of 1997, the effective tax rate was 37%, compared with
39% for the same period last year.  The net after-tax foreign currency
exchange gain from balance sheet translation amounted to $9.9 million, or
$.22 per common share in the first quarter of 1997.

Net earnings for the first quarter of 1997 was $15.8 million, or $.35 primary
earnings per common share compared with a net loss of $60.7 million, or $1.33
primary loss per common share for the first quarter of 1996. Excluding the
net after-tax foreign currency exchange gain from balance sheet translation
in the first quarter of 1997, earnings per share were $.13 compared to $.07
loss per share before charges for restructuring and other expenses and a gain
on the sale of real estate in the first quarter of 1996.

Financial Liquidity and Capital Resources
-----------------------------------------

As of March 30, 1997, the Company's cash and cash equivalents and short-term
investments amounted to $35.1 million, compared to $78.3 million at December
31, 1996. In addition, working capital decreased to $617.0 million at March
30, 1997 from $623.3 at December 31, 1996. The primary source for cash in the
first quarter of 1997 was net cash provided by financing activities.  Capital
spending during the first quarter of 1997 of $28.0 million was less than
depreciation expense of $31.0 million.  Total capital expenditures in 1997
are expected to be approximately $120.0 million.



                                  10
<PAGE>


Financial Liquidity and Capital Resources (continued)
-----------------------------------------------------

During the first quarter of 1997, the Company also expended cash to make
severance payments of approximately $12.8 million under the December 1995
severance program, to purchase $4.4 million of the Company's common stock and
to pay $6.7 million of dividends to common stockholders.  Total cash
severance payments related to the December 1995 program will be approximately
$110.4 million of which approximately $14.0 million is expected to be paid in
the second quarter of 1997. The remaining balance of cash severance payments
of approximately $16.2 million is expected to be paid in the second half of
1997.

As of March 31, 1996, cash and cash equivalents and short-term investments
were $111.0 million and working capital was $683.3 million.   During the
period from March 31, 1996 to March 30, 1997, net cash provided by operating
activities was more than offset by cash used by investing and financing
activities.  Capital spending during the period from March 31, 1996 to March
30, 1997 was $127.5 million, which exceeded depreciation expense of $116.9
million.  The Company expended cash during the twelve month period from March
31, 1996 to March 30, 1997 to make cash severance payments under the 1995
first quarter and the December 1995 severance programs, to purchase the
conversion rights of the Company's $140.0 million Subordinated Convertible
Debentures, to reduce borrowings, to purchase treasury stock, and to pay
dividends to common stockholders.

In the first quarter of 1997, the Company replaced its $150.0 million
committed line of credit with a $350.0 million committed line of credit.  The
line of credit is available for general corporate purposes and expires in
2001. At the end of the first quarter of 1997 and 1996, there were no
borrowings under these facilities.  Gross borrowings from uncommitted lines
of credit for international operations were $156.2 million and $158.3 million
at the end of the first quarter of 1997 and 1996, respectively. Cash balances
of $15.4 million at March 30, 1997 were required to support international
borrowings and no such balances were required at March 31, 1996. Additional
available, uncommitted lines of credit for international operations were
$74.4 million and $128.4 million at March 30, 1997 and March 31, 1996,
respectively. As of March 30, 1997 and March 31, 1996, additional available,
uncommitted lines of credit for U.S operations were $190.0 million and $160.0
million, respectively, and there were no borrowings from these lines of
credit.

In January 1997, the Company issued $300.0 million of debt securities
consisting of $150.0 million 7-1/4% Notes due January 15, 2007 and $150 million
6_% Notes due January 15, 2002. The net proceeds from the sale of the Notes
were used primarily for the payment of $150.0 million principal amount of 7-1/4%
Notes due January 15, 1997 and to exercise its right to repurchase the
remaining principal amount of $139.5 million Debentures. The Company also has
available $200.0 million of unsold debt securities remaining from its
existing shelf registration available for general corporate purposes. The
Company's available borrowing capacity is limited by certain debt covenants.

During the first quarter of 1997, the Company repurchased 100,000 shares of
its common stock for $4.4 million.  In the first quarter of 1996, the Company
repurchased 135,000 shares of its common stock for $5.5 million. As of March
30, 1997, the unexpended balance under the Company's $100.0 million common
stock repurchase program, which was approved by the Board of Directors in
January 1995, was $37.2 million.  The Company may repurchase its common stock
on the open market, in privately negotiated transactions or otherwise (which
may include transactions with Polaroid stock option holders and with Polaroid
retirement plans, including the employee stock ownership plan).  The timing
and amounts of any future purchases under this program depend upon many
factors, including market conditions as well as the Company's business and
financial condition.



                                  11
<PAGE>



Financial Liquidity and Capital Resources (continued)
-----------------------------------------------------

The Company believes that its borrowing capacity and other existing corporate
resources are adequate for at least the next twelve months to meet working
capital needs, to fund planned capital expenditures, to pursue future growth
opportunities, and to fund other corporate requirements, including cash
severance payments for the December 1995 restructuring program.


Foreign Currency Exchange
-------------------------

The Company generates a substantial portion of its revenues in international
markets, which subjects its operations to the exposure of currency exchange
fluctuations. The impact of currency fluctuations can be positive or negative
in any given period. The Company's ability to counteract currency exchange
movement is primarily dependent on pricing.

Effective January 1, 1997, the Company has determined that the local currency
is the functional currency for most of its subsidiaries outside of the U.S.
The U.S. dollar will continue to be the functional currency for subsidiaries
in highly inflationary economies.

To minimize the adverse impact of currency fluctuations on its net assets
denominated in a currency other than its functional currency (nonfunctional),
the Company may engage in nonfunctional currency-denominated borrowings. The
Company determines the aggregate amount of such borrowings based on its
forecast of the Company's nonfunctional net asset position and the relative
strength of the functional currency as compared to nonfunctional currencies.
These borrowings create nonfunctional currency-denominated liabilities that
hedge the Company's nonfunctional currency-denominated net assets. Upon
receipt of the borrowed nonfunctional currency-denominated funds, the Company
converts those funds to the functional currency at the spot exchange rate.
Exchange gains and losses on the nonfunctional currency-denominated
borrowings are recognized in earnings as incurred. At March 30, 1997, the
amount of the Company's outstanding short-term debt incurred for hedging
purposes was $115.5 million.

From time to time, the Company may use over-the-counter currency exchange
swaps to reduce the interest expense incurred through the borrowings
described above and to replace the hedge created by those borrowings. When a
currency exchange swap is used to replace a hedge, the currency received by
the Company in the spot market component of the currency exchange swap is
used to close out the borrowings and, simultaneously, the hedge is
reinstituted through a forward contract (not exceeding six months). The net
interest value of the currency exchange swap contract is amortized to
earnings over the life of the contract. Exchange gains or losses on the
currency obligation component of the forward contract are recognized in
earnings as incurred in each accounting period. The Company does not enter
into currency exchange swaps for trading purposes. There were no currency
exchange swap contracts outstanding at March 30, 1997.




                                  12
<PAGE>


Foreign Currency Exchange (continued)
-------------------------------------

When the Company may not have sufficient flexibility to increase prices in
the local currency to reflect any appreciation of the U.S. dollar, the
Company may, from time to time, also purchase U.S. dollar call options. The
term of these call options typically does not exceed one year. The Company's
purchase of call options allows it to protect a portion of its expected
foreign currency-denominated revenues from adverse foreign currency exchange
movement. The Company does not buy call options which can be exercised prior
to the expiration date, nor does it write options or purchase call options
for trading purposes. The Company defers premiums and any gains for its call
options activity until the option exercise date. No option contracts were
outstanding at March 30, 1997.

The Company maintains a Monetary Control Center (the MCC), which operates
under written policies and procedures defining day-to-day operating
guidelines, including exposure limits, to contract for the nonfunctional
currency-denominated borrowings, foreign exchange swaps and call options
described above. The MCC is subject to random independent audits and reports
to a supervisory committee comprised of members of the Company's management.
The MCC publishes monthly reports to the Company's management detailing the
foreign currency activities it has engaged in for the prior month.


Impact of Inflation
-------------------
Inflation continues to be a factor in many countries in which the Company
does business. The Company's pricing strategy has offset to a considerable
degree inflation and normal cost increases. The overall inflationary impact
on earnings has been immaterial.


New Accounting Standards
------------------------

In February 1997, the Financial Accounting Standards Board issued Financial
Accounting Standards No.128, "Earning Per Share" (FAS 128). FAS 128
supersedes Accounting Principle Board Opinion No.15 and specifies the
computation, presentation and disclosure requirements for earnings per share.
FAS 128 is effective for financial statements for both interim and annual
periods ending after December 15, 1997 and early application is not
permitted. Accordingly, the Company will apply FAS 128 for the quarter and
year ended December 31, 1997 and restate prior period information as required
under the statement.  The Company does not expect the adoption of FAS 128 to
have a material impact on reported earnings per share.






                                  13
<PAGE>


                     PART II.  OTHER INFORMATION

                     Item 1. - Legal Proceedings
                     ---------------------------

The Company, together with other parties, is currently designated a
Potentially Responsible Party (PRP) by the United States Environmental
Protection Agency and certain state agencies with respect to the response
costs for environmental remediation at several sites. The Company believes
that its potential liability with respect to any site and with respect to all
sites in the aggregate will not have a materially adverse effect on the
financial condition or operating results of the Company.

Due to a wide range of estimates with regard to response costs at these sites
and various other uncertainties, the Company cannot firmly establish its
ultimate liability concerning these sites. In each case in which the Company
is able to determine its likely exposure, such amount has been included in
the Company's reserve for environmental liabilities. Where a range of
comparably likely exposures exists, the Company has included in its reserve
the minimum amount of the range. The Company's aggregate reserve for these
liabilities as of March 30, 1997 and March 31, 1996 was $4.0 million and $5.2
million, respectively. The Company currently estimates that the majority of
the $4.0 million amount reserved for environmental liabilities on March 30,
1997 will be payable over the next two to three years. The Company's analysis
of data which underlies its establishment of this reserve is undertaken on a
quarterly basis. The reserve for such liability does not provide for
associated litigation costs, which, if any, are expected to be
inconsequential in comparison with the amount of the reserve. The Company
will continue to accrue in its reserve such amounts as management believes
appropriate from time to time as circumstances warrant. This reserve does not
take into account potential recoveries from third parties.

The Company reviews its recurring internal expenditures on environmental
matters, as well as capital expenditures related to environmental compliance,
on a monthly basis, and reviews its third-party expenditures on environmental
matters on a quarterly basis. The Company believes that these expenditures
have not had and will not have a materially adverse effect on the financial
condition or operating results of the Company.

Federal law provides that PRPs may be held jointly and severally liable for
response costs. Based on current estimates of those costs and after
consideration of the potential estimated liabilities of other PRPs with
respect to those sites and their respective estimated levels of financial
responsibility, the Company does not believe its potential liability will be
materially enlarged by the fact that the liability is joint and several.

The Company is involved in various other legal proceedings and claims arising
in the ordinary course of business. Management believes that the disposition
of these matters will not have a materially adverse effect on the financial
condition or results of operations of the Company.






                                  14
<PAGE>


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

 (a)           Exhibits:

       (4)   Indenture dated as of January 9, 1997 between Polaroid
             Corporation and State Street Bank and Trust Company, as
             Trustee, including form of Note.
    (10.1)   $350,000,000 Credit Agreement dated as of March 19, 1997 among
             Polaroid Corporation, Morgan Guaranty Trust Company of New
             York, as Agent, and Banks listed therein.
    (10.2)   The Polaroid Board of Directors Stock Plan, effective January
             1, 1997 dated as of March 27, 1997.
    (10.3)   The Polaroid Board of Directors Retirement Plan, effective
             January 1,1997 as amended May 12, 1997.
    (10.4)   The 1993 Polaroid Stock Incentive Plan, effective March 19,
             1997 as amended March 27, 1997.
    (10.5)   Executive Deferred Compensation Plan, effective January 1, 1997
             dated as of May 12, 1997.
    (10.6)   Polaroid Non-Qualified Deferred Compensation Trust dated as of
             March 31, 1997 between Polaroid Corporation and State Street
             Bank and Trust Company.
    (10.7)   Employment Agreement dated as of April 29, 1997 between
             Polaroid Corporation and Serafino Posa.
    (10.8)   Employment Agreement dated as of May 12, 1997 between Polaroid
             Corporation and Thomas M. Lemberg.
    (10.9)   Employment Agreement amended and restated as of May 12, 1997
             between Polaroid Corporation and Gary T. DiCamillo.
   (10.10)   Change in Control Severance Agreement dated as of April 25,
             1997 between Polaroid Corporation and William J. O'Neill, Jr.
   (10.11)   Change in Control Severance Agreement dated as of April 25,
             1997 between Polaroid Corporation and Carole J. Uhrich.
   (10.12)   Change in Control Severance Agreement dated as of April 25,
             1997 between Polaroid Corporation and Robert M. Delahunt.
      (11)   Computation of earnings per share.
      (15)   Letter from KPMG Peat Marwick LLP re unaudited interim
             financial information.
      (27)   Financial Data Schedule
  
Exhibits are not included in copies of this Form 10-Q except those copies
filed with the Securities and Exchange Commission. A copy of these exhibits
will be furnished to stockholders upon written request.



(b) Reports on Form 8-K:

          During the first quarter of 1997, the Company did not file any
          reports on Form 8-K.




                                  15
<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.
   
   
   
   
   
   
   
                                POLAROID CORPORATION
                                -----------------------------------
                                (Registrant)
   
   
   
   
   
   
   May 12, 1997                 /s/ William J. O'Neill, Jr.
   ------------                 -----------------------------------
                                William J. O'Neill, Jr.
                                Executive Vice President and
                                Chief Financial Officer
   







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