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  September 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 November 7, 1997, 5,316,078 shares of the issuer's Common Stock, no par
value, were outstanding.


<PAGE>



PART I.  FINANCIAL INFORMATION

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                     CYBEROPTICS CORPORATION
                                   CONSOLIDATED BALANCE SHEETS
                                         (In thousands)

                                                                       SEPT. 30, 1997    DEC. 31, 1996
                                                                        (UNAUDITED)
<S>                                                                       <C>              <C>   
--------------------------------------------------------------------------------------------------
ASSETS

Cash and cash equivalents                                                 $5,456           $3,453
Marketable securities                                                     24,541           21,356
Accounts receivable, net                                                   5,163            5,031
Inventories                                                                4,660            3,768
Other current assets                                                       1,346            1,635
--------------------------------------------------------------------------------------------------
                    Total current assets                                  41,166           35,243
Marketable securities                                                     11,087           12,500
Equipment and furnishings, net                                             2,317            2,495
Capitalized patent costs, net                                                 95               78
--------------------------------------------------------------------------------------------------
                    Total assets                                         $54,665          $50,316
==================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable                                                          $1,230           $1,191
Income taxes payable                                                       1,327              233
Accrued expenses                                                           1,566            1,424
--------------------------------------------------------------------------------------------------
                    Total current liabilities                              4,123            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, 5,285 and 5,216 shares issued

       and outstanding, respectively                                      37,398           37,209
      Retained earnings                                                   13,144           10,259
--------------------------------------------------------------------------------------------------
                    Total stockholders' equity                            50,542           47,468
--------------------------------------------------------------------------------------------------
                    Total liabilities and stockholders' equity           $54,665          $50,316
==================================================================================================
SEE THE ACCOMPANYING NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.

</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                              CYBEROPTICS CORPORATION
                              STATEMENTS OF OPERATIONS
                                    (Unaudited)
                      (In thousands, except per share amounts)

                                                             THREE MONTHS ENDED SEPT. 30,
                                                                  1997         1996
<S>                                                             <C>           <C>   
-------------------------------------------------------------------------------------
Revenues                                                        $9,249        $5,025
Cost of revenues                                                 3,896         2,644
-------------------------------------------------------------------------------------
     Gross margin                                                5,353         2,381
Research and development expenses                                1,588         1,474
Selling, general and administrative expenses                     2,127         2,009
-------------------------------------------------------------------------------------
     Income (loss) from operations                               1,638        (1,102)
Interest income                                                    549           593
-------------------------------------------------------------------------------------
     Income (loss) before income taxes                           2,187          (509)
Provision for income taxes                                         700          (153)
-------------------------------------------------------------------------------------
     Net income (loss)                                          $1,487         ($356)
=====================================================================================
     Net income (loss) per share                                 $0.26        ($0.06)
=====================================================================================
Weighted average common and
     common equivalent shares                                    5,729         5,526
=====================================================================================

                                                             NINE MONTHS ENDED SEPT. 30,
                                                                1997          1996

-------------------------------------------------------------------------------------
Revenues                                                       $24,586       $21,350
Cost of revenues                                                11,125        10,449
-------------------------------------------------------------------------------------
     Gross margin                                               13,461        10,901
Research and development expenses                                4,566         4,410
Selling, general and administrative expenses                     6,231         5,703
-------------------------------------------------------------------------------------
     Income from operations                                      2,664           788
Interest income                                                  1,578         1,776
-------------------------------------------------------------------------------------
     Income before income taxes                                  4,242         2,564
Provision for income taxes                                       1,357           800
=====================================================================================
     Net income                                                 $2,885        $1,764
=====================================================================================
     Net income per share                                        $0.51         $0.30
=====================================================================================
Weighted average common and
     common equivalent shares                                    5,712         5,790
=====================================================================================
SEE THE ACCOMPANYING NOTES TO INTERIM FINANCIAL STATEMENTS.

</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                CYBEROPTICS CORPORATION
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      (Unaudited)
                                    (In thousands)

                                                                 NINE MONTHS ENDED SEPT. 30,
                                                                       1997    1996
<S>                                                                 <C>          <C>   
----------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:

        Net income                                                  $2,885       $1,764
        Adjustments to reconcile net income to
          net cash provided by operating
          activities:
          Depreciation and amortization                                676          549
          Provision for losses on inventories                          379          109
          Changes in operating assets and
             liabilities:
             Accounts receivable                                      (132)       4,207
             Inventories                                            (1,271)        (460)
             Other current assets                                      289         (119)
             Accounts payable                                           39          319
             Income taxes payable                                    1,094         (692)
             Accrued expenses                                          142         (576)
----------------------------------------------------------------------------------------
                 Net cash provided
                   by operating activities                           4,101        5,101

CASH FLOWS FROM INVESTING ACTIVITIES:
        Maturities of marketable securities                        112,778       13,146
        Purchases of marketable securities                        (114,550)     (15,500)
        Additions to equipment and furnishings                        (455)      (2,168)
        Additions to patents                                           (60)         (62)
----------------------------------------------------------------------------------------
                 Net cash used by investing
                  activities                                        (2,287)      (4,584)

CASH FLOWS FROM FINANCING ACTIVITIES:
        Proceeds from exercise of stock options                        465          418
        Proceeds from issuance of common stock
         under Employee Stock Purchase Plan                            285          181
        Repurchase of common stock                                    (561)      (3,923)
----------------------------------------------------------------------------------------
             Net cash provided (used) by financing
               activities                                              189       (3,324)

Increase (decrease) in cash and cash equivalents                     2,003       (2,807)
Cash and cash equivalents - beginning
        of period                                                    3,453        8,718
----------------------------------------------------------------------------------------
Cash and cash equivalents - end of period                           $5,456       $5,911
========================================================================================

SEE THE ACCOMPANYING NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.

</TABLE>


<PAGE>

                             CYBEROPTICS CORPORATION
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1997

1.    INTERIM REPORTING:

The interim consolidated financial statements presented herein as of September
30, 1997, and for the three and nine months ended September 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 nine-month period ended September 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):

                                             Sept. 30,        Dec. 31,
                                               1997             1996
                                            (unaudited)
                                            -------------------------
         Raw materials                        $2,754           $2,522
         Work in process                         921              736
         Finished goods                          985              510
                                            -------------------------
               Total inventories              $4,660           $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 results and financial position during
the periods included in the accompanying 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 and capital expenses 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 September 30, 1997 and 1996.

<TABLE>
<CAPTION>
                                                  Three Months Ended         Nine Months Ended
                                                       Sept. 30,                Sept. 30,
                                                 1997         1996           1997        1996
                                                 ----------------------------------------------

<S>                                              <C>          <C>            <C>         <C> 
         Revenues                                100%         100%           100%        100%

         Gross margin                             58%          47%            55%         51%

         Research and development expenses        17%          29%            19%         21%

         Selling, general and

             administrative expenses              23%          40%            25%         27%

         Income (loss) from operations            18%         (22)%           11%          4%

         Net income (loss)                        16%          (7)%           12%          8%

</TABLE>



REVENUES

Revenues increased 15% to $24.6 million during the nine month period ended
September 30, 1997 compared to $21.3 million for the comparable period in 1996.
For the third quarter of 1997, revenues increased 84% to $9.2 million from $5.0
million in 1996. Increased revenues are primarily the result of strong demand
for surface mount technology (SMT) process control sensors reflecting continued
improvement in the global SMT market, the primary market for the Company's
products. The Company anticipates a strong SMT market for the remainder of 1997
and into 1998, which should continue to have a positive impact on the level of
orders. Revenue levels in the third quarter of 1996 were affected by a
significant slowdown in capital spending in the SMT marketplace.

Sensor revenues increased 13% to $16.9 million during the nine months ended
September 30, 1997 from the comparable period in 1996, and increased 108% to
$6.9 million for the third quarter of 1997 compared to the third quarter of
1996. Sensor revenues are generated primarily from the Company's LaserAlign and
Laser Lead Locator products, which represented 60% and 69% of total revenues for
the nine-month and three-month periods ended September 30, 1997. Sales of Laser
Lead Locator were significantly stronger than planned during the three-month
period ended September 30, 1997, contributing to a shift in the overall revenue
mix toward sensor revenues. Sensor revenues are significantly affected by the
shipment levels to several large OEM customers. The Company's largest customer,
Juki Corporation, accounted for approximately 24% and 23% of revenues during the
nine-month and three-month periods ended September 30, 1997, and the five
principal OEM sensor customers accounted for approximately 53% and 61% of
revenues, respectively.

System revenues increased 27% to $6.7 million during the nine months ended
September 30, 1997 from the comparable period in 1996, and increased 37% to $2.0
million for the third quarter of 1997 compared to the third quarter of 1996. The
increase in systems revenues is due to increased shipments of enhanced versions
of the Company's solder paste inspection systems, CyberSentry 2000 and LSM2,
which were introduced in the first half of 1997. CyberSentry revenues increased
29% and 57% during the nine-month and three-month period ended September 30,
1997, and LSM2 revenues increased 74% and 37%, respectively. Increases in solder
paste inspection system revenues 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.


<PAGE>



International revenues comprised 71% and 70% of total revenues during the nine
months ended September 30, 1997 and 1996, and 77% and 72% of total revenues
during the third quarter of 1997 and 1996. Revenues generated from products used
primarily for SMT production were approximately 90% of revenues for the
nine-month and three-month periods ended September 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
primarily from changes in the volume of 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 45% during the
nine-month period ended September 30, 1997 compared to 49% during the comparable
period in 1996. For the third quarter of 1997, cost of revenue was 42% of total
revenue compared to 53% in 1996. Cost of revenues has been positively affected
by a shift in the sensor revenue mix towards higher margin sensor products,
higher selling prices on our enhanced solder paste inspection systems introduced
during 1997 and increased revenue volume over which to spread the fixed
component of cost of revenues. During 1997, the fixed dollar level of cost of
revenues has continued to be affected by cost containment measures taken by the
Company, particularly the 12% workforce reduction instituted during the third
quarter of 1996, offset somewhat by increased fixed costs associated with
occupying its new facility since May, 1996. In addition, during 1996 cost of
revenues were increased as the result of selling inventory to a third party
manufacturer, at or about cost, as part of a program to outsource the
manufacturing of certain component parts.

RESEARCH AND DEVELOPMENT

Net research and development expenses increased 4% to $4.6 million during the
nine-month period ended September 30, 1997 compared to $4.4 million during the
comparable period in 1996. For the third quarter of 1997, net expenses have
increased 8% to $1.6 million from the comparable period in 1996. As a percentage
of revenue, expenses have decreased to 19% during the nine months ended
September 30, 1997 from 21% during the comparable period in 1996, and decreased
to 17% in the third quarter compared to 29% in 1996. 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
nine months ended September 30, 1997 and 1996, $166,000 and $740,000 of customer
funded research and development was recognized as a reduction of research and
development expense. As of September 30, 1997, all deferred research and
development had been recognized.

Research and development expenses during the nine months ended September 30,
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 and Laser Lead Locator technology and developing a new sensor and
systems product for the general measurement market to be introduced in late 1997
and early 1998. The Company anticipates that expense levels in research and
development will remain fairly flat as a percentage of revenues for the next
several quarters.



<PAGE>


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses increased 9% to $6.2 million during
the nine-month period ended September 30, 1997 compared to $5.7 million during
the comparable period in 1996. For the third quarter of 1997, selling, general
and administrative expenses increased 6% to $2.1 million compared to $2.0
million in 1996. As a percentage of revenue, expenses have decreased from 27% in
1996 to 25% in 1997 for the nine months ended September 30, and from 40% in 1996
to 23% in 1997 for the third quarter. The dollar increase in selling, general
and administrative expenses is primarily due to increased personnel and related
costs added to support the sales and service of the Company's product offerings.
The Company has added sales, service and other support resources primarily to
provide support to its end-user system business, but also to support a growing
OEM revenue base. In addition, resources have been added to the product
marketing department, an area of focus for the Company in 1997, and there are
additional fixed costs associated with occupying a new facility since May 1996.

EFFECTIVE TAX RATE

The Company applied an effective rate of 32% during the nine months ended
September 30, 1997 and 31% during the same period in 1996. Benefits from the
Company's foreign sales corporation and 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 $27.3 million during the nine months ended
September 30, 1997 compared to $18.3 million during the same period in 1996. For
the third quarter of 1997, the order rate totaled $11.0 million compared to $5.2
million in 1996. Backlog totaled $7.1 million and $3.9 million at September 30,
1997 and 1996, respectively. The scheduled shipment of the September 30, 1997
backlog is as follows (In thousands):

                           4th Quarter 1997                   $6,072
                           1st Quarter 1998                      971
                           After 1st Quarter 1998                 53
                                                           ---------
                               Total backlog                  $7,096



<PAGE>




LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents and marketable securities increased to $41.1 million
as of September 30, 1997 from $37.3 million as of December 31, 1996, primarily
as the result of cash provided by operations of $4.1 million. The cash provided
by operations was partially offset by $561,000 used to repurchase common stock
and $455,000 used to purchase equipment and furnishings 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 increased
to $37.0 million as of September 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 less than one year.

The Company generated $4.1 million in cash from operations during the first nine
months of 1997, primarily due to net income of $2.9 million, depreciation and
amortization of $676,000 and an increase in income taxes payable of $1.1
million. These amounts were partially offset by an increase in inventory of $1.3
million as the result of inventory purchases to support a growing revenue base
and new product introductions during 1997. Investing activities used $2.3
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 November 10, no additional shares have been
repurchased.

During the fourth quarter of 1997 and the first half of 1998, the Company will
be in the process of purchasing and implementing a new enterprise business
system. Total external cost of implementation is anticipated to be approximately
$1.0 million. The Company believes current working capital and anticipated funds
from operations will be adequate for anticipated operating and capital needs.


<PAGE>



PART II. OTHER INFORMATION

ITEM 6 - EXHIBITS AND REPORTS ON 8-K

a.   Exhibits

         Exhibit 27--Financial Data Schedule (For EDGAR filing 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 September 30, 
     1997, or during the period from September 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 acting CFO
                                                (Principal Financial Officer and
                                                        Duly Authorized Officer)

Dated:  November  13, 1997