SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q



(Check One)

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

For the quarterly period ended  June 30, 1997

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

For the transition period from ________________ to ________________

Commission file number  0-16577


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

          Minnesota                                            41-1472057
(State or other jurisdiction                                 (IRS Employer
of incorporation or organization)                          Identification No.)

              5900 Golden Hills Drive, Minneapolis, Minnesota 55416
                    (Address of principal executive offices)

                                 (612) 542-5000
                           (Issuer's telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

         Yes _X_  No __

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

At July 31, 1997, 5,227,665 shares of the issuer's Common Stock, no par value,
were outstanding.


<PAGE>


PART I.  FINANCIAL INFORMATION


ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS


                                     CYBEROPTICS CORPORATION
                                   CONSOLIDATED BALANCE SHEETS
                                         (In thousands)

                                             JUNE 30,
                                               1997     DEC. 31, 
                                            (UNAUDITED)   1996
                                              -------   -------
ASSETS
Cash and cash equivalents                     $ 2,922   $ 3,453
Marketable securities                          20,994    21,356
Accounts receivable, net                        5,725     5,031
Inventories                                     4,712     3,768
Other current assets                            1,381     1,635
                                              -------   -------
Total current assets                           35,734    35,243
Marketable securities                          14,114    12,500
Equipment and furnishings, net                  2,377     2,495
Capitalized patent costs, net                      88        78
                                              -------   -------
Total assets                                  $52,313   $50,316
                                              =======   =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable                              $ 1,270   $ 1,191
Income taxes payable                              781       233
Accrued expenses                                1,669     1,424
                                              -------   -------
Total current liabilities                       3,720     2,848
Commitments and Contingencies
Stockholders' equity:
Preferred stock, no par value, 5,000 shares
authorized, none outstanding
Common stock, no par value, 25,000 shares
authorized, 5,224 and 5,216 shares issued
and outstanding, respectively                  36,936    37,209
Retained earnings                              11,657    10,259
                                              -------   -------
Total stockholders' equity                     48,593    47,468
                                              -------   -------
Total liabilities and stockholders' equity    $52,313   $50,316
                                              =======   =======

SEE THE ACCOMPANYING NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.


<PAGE>


                             CYBEROPTICS CORPORATION
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)
                    (In thousands, except per share amounts)

                                            THREE MONTHS ENDED JUNE 30,
                                                 1997      1996
                                               -------   -------
Revenues                                       $ 8,257   $ 7,812
Cost of revenues                                 3,855     3,895
                                               -------   -------
Gross margin                                     4,402     3,917
Research and development expenses                1,552     1,635
Selling, general and administrative expenses     2,195     1,880
                                               -------   -------
Income from operations                             655       402
Interest income                                    536       611
                                               -------   -------
Income before income taxes                       1,191     1,013
Provision for income taxes                         382       313
                                               =======   =======
Net income                                     $   809   $   700
                                               =======   =======
Net income per share                           $  0.15   $  0.12
                                               =======   =======
Weighted average common and
common equivalent shares                         5,427     5,863
                                               =======   =======

                                            SIX MONTHS ENDED JUNE 30,
                                                 1997      1996
                                               -------   -------
Revenues                                       $15,337   $16,325
Cost of revenues                                 7,229     7,804
                                               -------   -------
Gross margin                                     8,108     8,521
Research and development expenses                2,978     2,936
Selling, general and administrative expenses     4,104     3,693
                                               -------   -------
Income from operations                           1,026     1,892
Interest income                                  1,029     1,182
                                               -------   -------
Income before income taxes                       2,055     3,074
Provision for income taxes                         657       953
                                               =======   =======
Net income                                     $ 1,398   $ 2,121
                                               =======   =======
Net income per share                           $  0.26   $  0.36
                                               =======   =======
Weighted average common and
common equivalent shares                         5,417     5,849
                                               =======   =======



SEE THE ACCOMPANYING NOTES TO INTERIM FINANCIAL STATEMENTS.


<PAGE>


                             CYBEROPTICS CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                 (In thousands)

                                         SIX MONTHS ENDED JUNE 30,
                                              1997        1996
                                            --------    --------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                  $  1,398    $  2,121
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization                    444         336
Provision for losses on inventories              198          61
Changes in operating assets and
liabilities:
Accounts receivable                             (694)      1,877
Inventories                                   (1,142)         19
Other current assets                             254        (254)
Accounts payable                                  79         530
Income taxes payable                             548        (538)
Accrued expenses                                 245         (79)
                                            --------    --------
Net cash provided
by operating activities                        1,330       4,073

CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities of marketable securities           76,095       8,146
Purchases of marketable securities           (77,347)    (15,500)
Additions to equipment and furnishings          (298)     (1,624)
Additions to patents                             (38)        (60)
                                            --------    --------
Net cash used by investing
activities                                    (1,588)     (9,038)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options          288         395
Repurchase of common stock                      (561)        -
                                            --------    --------
Net cash provided (used) by financing
activities                                      (273)        395

Decrease in cash and cash equivalents           (531)     (4,570)
Cash and cash equivalents - beginning
of period                                      3,453       8,718
                                            --------    --------
Cash and cash equivalents - end of period   $  2,922    $  4,148
                                            ========    ========

SEE THE ACCOMPANYING NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.


<PAGE>


                             CYBEROPTICS CORPORATION

         NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



1.    INTERIM REPORTING:

The interim consolidated financial statements presented herein as of June 30,
1997 and for the three and six months ended June 30, 1997 and 1996 are
unaudited; however, in the opinion of management, the interim consolidated
financial statements include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of financial position,
results of operations and cash flows for the periods presented.

The results of operations for the six-month period ended June 30, 1997 do not
necessarily indicate the results to be expected for the full year. These interim
consolidated financial statements should be read in conjunction with the
Company's consolidated financial statements and notes thereto, contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996.

The December 31, 1996 consolidated balance sheet data was derived from audited
consolidated financial statements, but does not include all disclosures required
by generally accepted accounting principles.


2.     STOCK REPURCHASE:

In June 1996, the Company announced that its Board of Directors authorized the
repurchase of up to 500,000 shares of CyberOptics' common stock. In 1996, all
500,000 shares were repurchased through open market purchases, block
transactions or privately negotiated purchases. In December 1996, the Company's
Board of Directors authorized the repurchase of up to an additional 500,000
shares of common stock. During the first quarter of 1997, the Company
repurchased 41,000 shares of common stock under the second authorization.
Repurchased shares will be utilized for employee compensation plans and other
corporate purposes.


3.     INVENTORIES (IN THOUSANDS):


                                         June 30,         Dec. 31,
                                           1997             1996
                                          ------           ------
         Raw materials                    $3,359           $2,522
         Work in process                     731              736
         Finished goods                      622              510
                                          ------           ------
               Total inventories          $4,712           $3,768
                                          ======           ======


4.     EARNINGS PER SHARE:

In February 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings Per Share". This statement modifies the methodology for
calculating earnings per share and must be adopted in the fourth quarter of
1997. There is no significant difference between the Company's earnings per
share as presented herein and as calculated under Statement No. 128.


<PAGE>


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

CyberOptics Corporation designs and manufactures intelligent sensors and systems
for high-precision, non-contact dimensional measurement and process control.
Utilizing proprietary laser and optics technology combined with advanced
software and electronics, the Company's products enable manufacturers to
increase operating efficiencies, product yields and quality by measuring the
characteristics and placement of components both during and after the
manufacturing process. The Company sells its products worldwide through a
combination of direct sales staff and independent distributors.

The following is management's discussion and analysis of certain significant
factors that have affected the Company's earnings and financial position during
the periods included in the accompanying consolidated financial statements. This
discussion should be read in conjunction with the financial statements and
associated notes.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. The following Management's Discussion
and Analysis contains "forward looking statements" within the meaning of federal
securities laws which represent management's expectations or beliefs relating to
future events, including statements regarding levels of orders, marketing and
research and development expenses, taxation levels, the sufficiency of cash to
meet operating expenses, needs for capital expenditures and the ability to
continue to price foreign transactions in U.S. currency. These, and other
forward looking statements made by the Company, must be evaluated in the context
of a number of factors that may affect the Company's financial condition and
results of operations, including the following:

         --       The cyclical nature of capital expenditures in the electronics
                  industry,

         --       The dependence of such operations on orders from several large
                  OEM customers;

         --       The dependence of the Company's manufacturing on outside
                  contractors and suppliers;

         --       The degree to which the Company is successful in protecting
                  its technology and enforcing its technology rights in the
                  United States and other countries;

         --       The dependence of the Company's operations on several key
                  personnel;

         --       The speed of changes in technology in the microelectronics
                  manufacturing industry from which most of the Company's sales
                  are derived;

         --       The significant proportion of the Company's revenue that is
                  derived from export sales;

         --       Competition for the functions that the Company's products
                  perform by larger "vision" companies and by other optical
                  sensor companies;

         --       Quarterly fluctuations in operating results caused by the
                  timing of shipments and other factors not entirely within the
                  Company's control.

These and other factors that may affect future operations are discussed in more
detail in Exhibit 99 to this Form 10-Q.


<PAGE>


                              RESULTS OF OPERATIONS

The table below lists certain financial data expressed as a percentage of
revenues for the periods ended June 30, 1997 and 1996.


                                    Three Months  Six Months
                                       Ended        Ended
                                      June 30,     June 30,
                                    1997   1996   1997   1996
                                  ----------------------------
Revenues                            100%   100%   100%   100%
Gross margin                         53%    50%    53%    52%
Research and development expenses    19%    21%    19%    18%
Selling, general and
    administrative expenses          27%    24%    27%    23%
Income from operations                8%     5%     7%    12%
Net income                           10%     9%     9%    13%


REVENUES

Revenues decreased 6% to $15.3 million during the six month period ended June
30, 1997 compared to $16.3 million for the comparable period in 1996. For the
second quarter of 1997, revenues increased 6% to $8.3 million from $7.8 million
in 1996. Beginning in the second quarter of 1996, the Company's revenues started
to be impacted by a slowdown in capital spending by the global surface mount
technology market (SMT), the primary market for the Company's products. Although
this reduction in capital spending by the electronics industry has had a
significant impact on the revenue levels of the Company, since the low point
during the third quarter of 1996, quarterly revenues have increased steadily. In
comparison to the first quarter of 1997, revenues for the second quarter
increased 17%. The Company anticipates the recovery of the SMT market will
continue into the second half of 1997, which should continue to have a positive
impact on the level of orders for the remainder of the year.

Sensor revenues decreased 14% to $10.0 million during the six months ended June
30, 1997 from the comparable period in 1996, and decreased 12% to $5.1 million
for the second quarter of 1997 compared to the second quarter of 1996. Sensor
revenues are primarily dependent on the shipment levels of the Company's
LaserAlign and Laser Lead Locator products to several large OEM customers, and
the decline in sensor revenue during 1997 reflects decreased shipments to such
OEM customers. Although some OEM customers have increased their order rates in
1997 and the level of Laser Lead Locator shipments is higher in 1997 than 1996,
overall sensor sales were down. The Company's largest customer, Juki
Corporation, accounted for approximately 25% and 26% of revenues for the six
month and three month periods ended June 30, 1997, and the five principal OEM
sensor customers accounted for approximately 52% and 53% of revenues,
respectively. In addition, following a 12 month delay in new orders, a customer
that represented 24% of revenue in the first half of 1996 began purchasing
product at reduced volume levels during the second quarter of 1997.


<PAGE>


System revenues increased 23% to $4.6 million during the six month period ended
June 30, 1997 from the comparable period in 1996, and increased 85% to $2.8
million for the second quarter of 1997 compared to the second quarter of 1996.
The increased systems revenues is primarily the result of increased shipments of
enhanced versions of the Company's solder paste inspection systems, CyberSentry
2000 and LSM2. The LSM2 started shipping in production volumes during the first
quarter of 1997, and production volumes of the CyberSentry 2000 began shipping
in the second quarter of 1997. These increases were somewhat offset by a decline
in the sales of general measurement systems during 1997, primarily as the result
of a pending changeover in the sensor line used on these systems and the delayed
introduction of a new general measurement system until early 1998.

International revenues comprised 66% and 70% of total revenues during the six
months ended June 30, 1997 and 1996, and 61% and 73% of total revenues during
the second quarter of 1997 and 1996. Revenue generated from products used
primarily for SMT production were approximately 85% of revenues for the three
month and six month periods ended June 30, 1997.

Substantially all of the Company's international export sales are negotiated,
invoiced and paid in U.S. dollars. Changes in the revenue levels have resulted
from changes in units shipped and new product introductions. The Company
believes that inflation has had no significant impact on operations.


COST OF REVENUES

Cost of revenues decreased as a percent of total revenues to 47% during the six
month period ended June 30, 1997 compared to 48% during the comparable period in
1996. For the second quarter of 1997, cost of revenue was 47% of total revenue
compared to 50% in 1996. During the first half of 1996, the Company was
expanding its program of using third party manufacturers for the production of
certain component parts. As part of this program, the Company sold portions of
its existing inventory at or about cost, which had the effect of increasing cost
of revenues during the first two quarters of 1996. In addition, higher selling
prices on newly introduced solder paste inspection systems and changes in the
sensor revenue mix towards higher margin products have had a positive impact on
reducing cost of revenues as a percent of total revenues during 1997. These
reductions in cost of revenue as a percent of total revenues were offset
somewhat by an increased fixed component of cost of revenues, primarily
associated with the Company occupying its new facility since May, 1996.


RESEARCH AND DEVELOPMENT

Net research and development expenses increased slightly to $3.0 million during
the six month period ended June 30, 1997 compared to $2.9 million during the
comparable period in 1996. For the second quarter of 1997, research and
development expenses decreased 5% to $1.5 million from the comparable period in
1996. As a percentage of revenue, expenses have increased from 18% in 1996 to
19% in 1997 during the six months ended June 30, and for the second quarter have
decreased from 21% in 1996 to 19% in 1997. Payments to the Company for customer
funded research and development are deferred and recognized as a reduction of
research and development expenses as costs are incurred. During the six months
ended June 30, 1997 and 1996, $166,000 and $475,000 of customer funded research
and development was recognized as a reduction of research and development
expense. During the second quarter of 1997 and 1996, no funded research and
development was recognized. As of June 30, 1997, all deferred research and
development has been recognized.

Research and development expenses during the first quarter of 1997 were
primarily focused on completion of the CyberSentry 2000 and the LSM2, which were
introduced in the first half of 1997, continuing development work on the
LaserAlign technology and developing a new sensor and systems product for the
general measurement market to be introduced early in 1998. The Company
anticipates that expense levels in research and development will remain fairly
flat for the remainder of 1997.


<PAGE>


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses increased 11% to $4.1 million
during the six month period ended June 30, 1997 compared to $3.7 million during
the comparable period in 1996. For the second quarter of 1997, selling, general
and administrative expenses increased 17% to $2.2 million compared to $1.9
million in 1996. As a percentage of revenues, selling, general and
administrative expenses have increased from 23% in 1996 to 27% in 1997 for the
six months ended June 30, and from 24% in 1996 to 27% in 1997 for the second
quarter. The increase in selling, general and administrative expenses is
primarily due to increased personnel and related costs required to support the
sales and service of the Company's product offerings. The Company has added
sales and service resources to support its end-user systems business, an area
management believes will be a source of growth in 1997. In addition, resources
have been added to the product marketing department, an area of focus for the
Company during 1997, and there are additional fixed costs associated with
occupying a new facility since May 1996. The Company anticipates that selling,
general and administrative expenses will remain relatively flat, including legal
costs associated with the suit against Yamaha Motor Company, Ltd., for the
remainder of 1997.


EFFECTIVE TAX RATE

The Company applied an effective tax rate of approximately 32% during the six
months ended June 30, 1997 and 31% during the same period in 1996. Benefits from
the Company's foreign sales corporation and the use of the research and
experimentation tax credit were primarily responsible for reducing the effective
tax rate below the statutory federal rate.


ORDER RATE AND BACKLOG

CyberOptics' order rate totaled $16.3 million during the six months ended June
30, 1997 compared to $13.0 million during the same period in 1996. For the
second quarter of 1997, the order rate totaled $8.0 million compared to $5.4
million in 1996. Backlog totaled $5.4 million and $3.6 million at June 30, 1997
and 1996, respectively. The scheduled shipment of the June 30, 1997 backlog is
as follows (In thousands):


                   3rd Quarter 1997                  $5,143
                   4th Quarter 1997                     228
                                                     ------
                         Total backlog               $5,371


LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents and marketable securities increased to $38.0 million
as of June 30, 1997 from $37.3 million as of December 31, 1996, primarily as the
result of cash provided by operations of $1.3 million. The cash provided by
operations was partially offset by $561,000 used to repurchase common stock
during 1997. Marketable securities generally consist of U.S. Government or U.S.
Government agency obligations, with maturities of three years or less. Working
capital decreased to $32.0 million as of June 30, 1997 from $32.4 million as of
December 31, 1996, primarily as the result of a greater portion invested in
marketable securities with maturities of over one year.


<PAGE>


The Company generated $1.3 million in cash from operations during the first six
months of 1997, primarily due to net income of $1.4 million, depreciation and
amortization of $444,000 and an increase in income taxes payable of $548,000.
These amounts were partially offset by an increase in inventory of $1.1 million
as the result of inventory purchases to support new product introductions during
the first half of 1997 and an increase in accounts receivable of $694,000 caused
by increased revenue levels. Investing activities used $1.6 million of cash
primarily due to the purchase of marketable securities, net of maturities.

In June 1996, the Company announced that its Board of Directors authorized the
repurchase of up to 500,000 shares of CyberOptics' common stock for the purposes
of providing the necessary common stock for the Company's stock option and
employee stock purchase plans. During 1996, the Company repurchased all 500,000
shares at a cost of approximately $6.3 million. In December 1996, the Company's
Board of Directors authorized the repurchase of up to an additional 500,000
shares of CyberOptics common stock. During 1997, 41,000 shares were repurchased
at a cost of $561,000. As of August 5, no additional shares have been
repurchased.

At the present time the Company has no material capital commitments. The Company
believes current working capital and anticipated funds from operations will be
adequate for anticipated operating needs.


<PAGE>



PART II. OTHER INFORMATION


ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The annual meeting of shareholders of CyberOptics Corporation was held at 3:30
p.m. on Thursday, May 8, 1997. Shareholders holding 3,543,156 shares, or
approximately 67.6% of the outstanding shares, were represented at the meeting
by proxy or in person. Matters submitted at the meeting for vote by the
shareholders were as follows:

a.       Election of Directors

         The following nominees were elected to serve as members of the Board of
         Directors until the annual meeting of shareholders in 1998 or until
         such time as a successor may be elected:


                                              TABULATION OF VOTES
                                              -------------------
                                            FOR              WITHHELD
                                            ---              --------
             Steve K. Case               3,515,153            28,003
             Alex B. Cimochowski         3,500,409            42,747
             George E. Kline             3,520,872            22,284
             Steven M. Quist             3,515,153            28,003
             P. June Min                 3,350,441           192,715
             Erwin A. Kelen              3,500,309            42,847

b.       Approval of amendment to Stock Option Plan for Nonemployee Directors

         Shareholders approved an amendment to the Company's Stock Option Plan
         for Nonemployee Directors to provide for a one-time grant to each
         director who is not also an employee of an option to purchase 12,000
         shares and to increase by 80,000 shares the number of shares reserved
         for issuance under the Plan to accommodate such grants by a vote of
         3,363,563 shares in favor, 150,741 shares against and 28,852 shares
         abstained.


ITEM 6 - EXHIBITS AND REPORTS ON 8-K

a.       Exhibits

         Exhibit 27--Financial Data Schedule (For SEC use only)

         Exhibit 99--Forward Looking Statements Cautionary Statement

b.       Reports on Form 8-K

         No reports on Form 8-K were filed during the quarter ended June 30,
         1997 or during the period from June 30, 1997 to the date of this
         quarterly report on Form 10-Q.


<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.


                                         CyberOptics Corporation


                                         /s/  John D. Beagan
                                         John D. Beagan, V.P. Operations and CFO
                                         (Principal Financial Officer and
                                         Duly Authorized Officer)



Dated:  August 13, 1997