UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C.  20549
                                -------------------

                                  FORM 10-Q




        (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                 THE SECURITIES EXCHANGE ACT OF 1934.

           For the quarterly period ended September 30, 1996
                                  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 2-98260
                         PAINEWEBBER R&D PARTNERS, L.P.
             (Exact name of registrant as specified in its charter)






                   DELAWARE                            13-3304143

        (State or other jurisdiction of             (I.R.S. Employer
        incorporation or organization)             Identification No.)


1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK           10019
   (Address of principal executive offices)            (Zip code)




    Registrant's telephone number, including area code: (212) 713-2000




         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 (or for 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         




<PAGE>




<TABLE>
<CAPTION>

                               TABLE OF CONTENTS
<S>               <C>                                         <C>

PART I.           FINANCIAL INFORMATION                             Page

Item 1.           Financial Statements
                  Statements of Financial Condition
                  (unaudited) at September 30, 1996 and               2
                  December 31, 1995

                  Statements of Operations
                  (unaudited) for the three months ended
                  September 30, 1996 and 1995                         3

                  Statements of Operations
                  (unaudited) for the nine months ended
                  September 30, 1996 and 1995                         3

                  Statement of Changes in Partners' Capital
                  (unaudited) for the nine months ended
                  September 30, 1996                                  4

                  Statements of Cash Flows
                  (unaudited) for the nine months ended
                  September 30, 1996 and 1995                         5

                  Notes to Financial Statements
                  (unaudited)                                        6-9

Item 2.           Management's Discussion and Analysis of
                  Financial Condition and Results of                 10
                  Operations

PART II.          OTHER INFORMATION

Item 1.           Legal Proceedings                                  11

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

                  Signatures                                         12
</TABLE>



All schedules are omitted either because they are not applicable or the 
information required to be submitted has been included in the financial 
statements or notes thereto.





<PAGE>
Page 2



   PART I. FINANCIAL INFORMATION
   
   Item 1. Financial Statements
   
   PAINEWEBBER R&D PARTNERS, L.P.
   (a Delaware Limited Partnership)
   
   Statements of Financial Condition
   (unaudited)
<TABLE>
<CAPTION>



                                                       September 30,         December 31,
                                                                 1996                 1995
-------------------------------------------------------------------------------------------
<S>                                                    <C>                   <C>
   Assets:
   
      Cash                                              $       25,215        $      74,542
   
      Marketable securities, at market value                    33,914              105,814
   
      Interest receivable                                            -                  581
   
      Royalty income receivable                                  3,236                1,500
                                                        ---------------       --------------
   
   Total assets                                         $       62,365        $     182,437
                                                        ===============       ==============
   
   
   Liabilities and partners' capital:
   
      Accrued liabilities                               $       52,255        $      92,372
   
      Partners' capital                                         10,110               90,065
                                                        ---------------       --------------
   
   Total liabilities and partners' capital              $       62,365        $     182,437
                                                        ===============       ==============
--------------------------------------------------------------------------------------------
</TABLE>
   See notes to financial statements.
   
<PAGE>
Page 3


   PAINEWEBBER R&D PARTNERS, L.P.
   (a Delaware Limited Partnership)
   
   Statements of Operations
   (unaudited)

<TABLE>
<CAPTION>

   For the three months ended September 30,                         1996                1995
---------------------------------------------------------------------------------------------
<S>                                                     <C>                  <C>
   Revenues:
      Interest income                                      $         814       $       5,183
      Income from product development projects                     1,736               1,100
                                                           --------------      -------------- 
                                                                   2,550               6,283
                                                           --------------      --------------
   
   Expenses:
      General and administrative costs                            46,108              81,485
                                                           --------------      -------------- 
   
   
   Net loss                                                $     (43,558)      $     (75,202)
                                                           ==============      ==============
   
   Net loss per partnership unit:
      Limited partners (based on 37,799 units)             $       (1.14)      $       (1.97)
      General partner                                      $     (435.58)      $     (752.02)
---------------------------------------------------------------------------------------------
   
   
   For the nine months ended September 30,                          1996                1995
---------------------------------------------------------------------------------------------
   Revenues:
      Interest income                                      $       4,015       $      22,941                   
      Income from product development projects                     4,764           1,073,416
      Realized loss on sale of marketable
       securities                                                      -             (10,456)
                                                           --------------      -------------- 
                                                                   8,779           1,085,901
                                                           --------------      --------------
      
   Expenses:
      General and administrative costs                           109,447             178,945
                                                           --------------      --------------
   
   Net income (loss)                                       $    (100,668)      $     906,956
                                                           ==============      ============== 
   
   Net income (loss) per partnership unit:
      Limited partners (based on 37,799 units)             $       (2.64)      $       23.75
      General partner                                      $   (1,006.68)      $    9,069.56
   ------------------------------------------------------------------------------------------
</TABLE>
   See notes to financial statements.

<PAGE>
Page 4   
   
   PAINEWEBBER R&D PARTNERS, L.P.
   (a Delaware Limited Partnership)
   
   Statement of Changes in Partners' Capital
   (unaudited)

<TABLE>
<CAPTION>

   <S>                                                   <C>                   <C>               <C>          
                                                                   Limited            General
   For the nine months ended September 30, 1996                    Partners           Partner           Total
---------------------------------------------------------------------------------------------------------------
   
   Balance at January 1, 1996                             $         109,899     $     (19,834)    $     90,065
   
   Net loss                                                         (99,661)           (1,007)        (100,668)
   Partner contribution                                                   -            20,713           20,713
                                                          ------------------    ---------------   ------------- 
   
   Balance at September 30, 1996                          $           10,238     $        (128)   $     10,110
---------------------------------------------------------------------------------------------------------------
</TABLE>
   See notes to financial statements.

<PAGE>
Page 5

   PAINEWEBBER R&D PARTNERS, L.P.
   (a Delaware Limited Partnership)
   
   Statements of Cash Flows
   (unaudited)


<TABLE>
<CAPTION>

   <S>                                                   <C>                   <C>
   For the nine months ended September 30,                            1996                  1995
-------------------------------------------------------------------------------------------------
   
   Cash flows from operating activities:
   Net income (loss)                                      $       (100,668)     $         906,956
   
   Decrease (increase)  in operating assets:
     Marketable securities                                          71,900                376,616
     Interest receivable                                               581                    739
     Royalty income receivable                                      (1,736)             1,329,700
   
   Decrease in operating liabilities:
     Accrued liabilities                                           (40,117)               (85,214)
                                                          -----------------     ------------------ 
   
   Cash (used for) provided by operating activities                (70,040)             2,528,797
                                                          -----------------     ------------------ 
   
   Cash flows from financing activities:
     Contribution by partner                                        20,713                      -
     Distributions to partners                                           -             (2,481,752)
                                                          -----------------     ------------------
   Cash provided by (used for) financing activities                 20,713             (2,481,752)
                                                          -----------------     ------------------
   
   (Decrease) increase in cash                                     (49,327)                47,045
   
   Cash at beginning of period                                      74,542                 25,667
                                                          -----------------     ------------------
   Cash at end of period                                  $         25,215             $   72,712
                                                          =================     ==================
--------------------------------------------------------------------------------------------------
</TABLE>
   
   Supplemental disclosure of cash flow information:
   The Partnership paid no cash for interest or taxes during the nine months
   ended September 30, 1996 and 1995.
-------------------------------------------------------------------------------
   See notes to financial statements.


<PAGE>
Page 6

                             PAINEWEBBER R&D PARTNERS, L.P.
                            (a Delaware Limited Partnership)

                             NOTES TO FINANCIAL STATEMENTS
                                      (UNAUDITED)



1. ORGANIZATION AND BUSINESS

   The  financial  information as of and for the periods ended September 30,
1996 and 1995 is  unaudited.   However,  in  the opinion of management of
PaineWebber  R&D  Partners,  L.P. (the "Partnership"),  such  information
includes all adjustments, consisting  only  of normal recurring accruals,
necessary for a fair presentation.  The results  of  operations  reported
for  the  interim  periods  ended September 30, 1996, are not necessarily
indicative of results to be expected  for  the  year  ended  December 31,
1996. These financial statements should be read in conjunction  with  the
most  recent  annual  report of the Partnership on Form 10-K for the year
ended December 31, 1995  and  the previously issued quarterly reports for
the quarters ended March 31, 1996 and June 30, 1996.

   The  Partnership  is a Delaware  limited  partnership  that  commenced
operations on March 6,  1986  with a total of $62.1 million available for
investment.  PWDC Holding Company  is  the general partner of PaineWebber
Technologies, L.P. (the "General Partner"),  which is the general partner
of the Partnership. PWDC Holding Company is a  wholly owned subsidiary of
PaineWebber Development Corporation ("PWDC"), an  indirect,  wholly owned
subsidiary  of Paine Webber Group Inc. The Partnership will terminate  on
December 31,  1998  unless its term is extended or reduced by the General
Partner.  The principal objective of the Partnership was to provide long-
term  capital  appreciation   to   investors  through  investing  in  the
development  and  commercialization  of   new  products  with  technology
companies  ("Sponsor  Companies"),  which  were   expected   to   address
significant market opportunities.

   The  General  Partner  has  commenced  with  the  dissolution  of  the
Partnership's  assets but does not intend to terminate the Partnership as
long as it continues  to  receive  on behalf of the Partners (hereinafter
defined)  the contingent payment rights  ("CPR")  due  from  Amgen,  Inc.
("Amgen") from  the  sale of Neupogen<reg-trade-mark> and until a lawsuit
with Centocor, Inc. ("Centocor")  has  been  fully resolved (see note 5).
Amgen is required to make CPR payments through  the  year 2005.  On April
21, 1995, the Partnership distributed the CPR to its General  Partner and
limited  partners  (the  "Limited  Partners";  together  with the General
Partner, the "Partners"). The distribution of the CPR had  no  impact  on
the  financial statements of the Partnership at the date of distribution.
In June  1995,  the Partnership received its final CPR payment for income
accrued as of March  31,  1995,  but continues to receive CPR payments on
account of, and for distribution to,  the  Partners.  The General Partner
has been advised that on September 17, 1996,  a  third-party  commenced a
tender offer for the CPR's at a price of $420 per CPR unit.





<PAGE>
Page 7

                             PAINEWEBBER R&D PARTNERS, L.P.
                            (a Delaware Limited Partnership)

                             NOTES TO FINANCIAL STATEMENTS
                                      (UNAUDITED)




(Note 1 Continued)

   All distributions to the Partners from the Partnership will initially be 
made   pro   rata   in  accordance  with  their  respective  net  capital
contributions.  The following  table  sets  forth  the proportion of each
distribution  to  be  received by the Limited Partners  and  the  General
Partner, respectively:

<TABLE>
<CAPTION>
                                                                       Limited Partners     General Partner
                                                                       ----------------    ----------------
<S>            <C>                                                    <C>                 <C>

I.             Until the value of the aggregate distributions for
               each limited partnership unit ("Unit") equals $1,850
               plus interest on such amount accrued at 5% per annum,
               compounded annually ("Contribution Payout")               99%                 1%

II.            After Contribution Payout and until the value of the
               aggregate distributions for each Unit equals $9,250       80%                 20%
               ("Final Payout")........................

III.           After Final Payout......................                  75%                 25%
</TABLE>


   For  the  nine months ended Septemer 30, 1996, the Partnership made no
cash or security  distributions.   At September 30, 1996, the Partnership
has made cash and security distributions since inception of $889 and $593
per  Unit,  respectively.  The  security  distributions  of  $593  do not
include the distribution of the CPR in April 1995.

   In  March  1996,  the  General  Partner  restored  its deficit capital
account balance as of December 31, 1995, to appropriately  reflect  a  1%
investment in the Partnership.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   The  financial  statements  are  prepared  in  conformity  with generally
accepted accounting principles which require management to make estimates
and  assumptions  that  affect  the  amounts  reported  in  the financial
statements  and  accompanying  notes.   Actual results could differ  from
those estimates.

   Marketable securities consist of a money market fund that is valued at
market value.  Marketable securities were not considered cash equivalents
for the Statements of Cash Flows.

   Realized and unrealized gains or losses  are  determined on a specific
identification method and are reflected in the Statements  of  Operations
during the period in which the change in value occurs.



<PAGE>
Page 8
                             PAINEWEBBER R&D PARTNERS, L.P.
                            (a Delaware Limited Partnership)

                             NOTES TO FINANCIAL STATEMENTS
                                      (UNAUDITED)




3. Related Party Transactions

   The Partnership's portfolio of a money market fund is managed by affiliates
of PaineWebber Incorporated ("PWI").

   PWDC  and PWI, and its affiliates, have acted in an investment banking
capacity for several of the Sponsor Companies.  In addition, PWDC and its
affiliates  have  had  direct  limited  partnership interests in the same
product development limited partnerships as the Partnership.

4. INCOME TAXES

   The Partnership is not subject to federal,  state  or local income taxes.
Accordingly,  the  individual  Partners  are  required  to  report  their
distributive  shares  of  realized  income  or  loss  on their individual
federal and state income tax returns.





<PAGE>
Page 9

                             PAINEWEBBER R&D PARTNERS, L.P.
                            (a Delaware Limited Partnership)

                             NOTES TO FINANCIAL STATEMENTS
                                      (UNAUDITED)



5.       LEGAL PROCEEDING

    On July 12, 1995, the Partnership commenced an action  against  Centocor in
the Supreme  Court  of New York  arising from certain agreements entered into by
Centocor and Eli Lilly & Company  ("Lilly")  in  July 1992.  In April 1996, the
Court dismissed the action on the grounds that New  York  was  an  inconvenient
forum.   Accordingly,  the Partnership refiled its claims in Delaware  Superior
Court.

   In 1986, the Partnership  and others purchased limited partnership interests
in Centocor Partners II, L.P.  ("CP  II"),  a  limited  partnership  formed  to
develop  and  sell  Centoxin,  a Centocor drug.  On February 21, 1992, Centocor
exercised its option to purchase all of the limited partnership interests in CP
II, including those held by the  Partnership.   The purchase agreement provided
that  Centocor  would  thereafter pay to the former  limited  partners  50%  of
Centocor's revenues from  the  licensing  or sublicensing of Centoxin and 8% of
Centocor's revenues from Centoxin sales, with  such  payments to be made on the
last business day of the calendar quarter in which they were earned.

   In July 1992, Centocor entered into a set of agreements  with  Lilly for the
stated purposes of Lilly making an equity investment in Centocor and furthering
the   testing   and  eventual  distribution  of  Centoxin.  Pursuant  to  those
agreements, Lilly  paid Centocor a total of $100 million, and Centocor conveyed
to Lilly, among other  things,  two  million  shares  of Centocor common stock,
exclusive  marketing  rights  to  Centoxin and an option to  acquire  exclusive
marketing rights to CentoRx (now ReoPro), another Centocor drug.

   The Partnership's complaint alleges,  among  other  things, that part of the
$100 million paid by Lilly constitutes revenues to Centocor from the licensing,
sublicensing and/or sale of Centoxin, and that Centocor  is  obligated to pay a
percentage of that part to the former limited partners of CP II,  including the
Partnership.  Centocor has taken the position that it is not obligated  to make
any  such  payment.   The Partnership is seeking to proceed on behalf of itself
and all other former limited partners of CP II whose interests were acquired by
Centocor  in February 1992  (the  "Class").   The  Partnership  seeks  damages,
interest and expenses.  There is no assurance that the Partnership's claim will
be successful.

   PWDC has  been  advancing, and may continue to advance,  the funds necessary
to pay the Partnership's  legal  fees and expenses relating to this action.  In
the event of a recovery on behalf  of the Class, the court may award legal fees
and expenses to the Partnership's counsel,  to be paid out of the recovery.  It
is anticipated that:  the net proceeds of any  recovery  will be distributed to
the members of the Class, including the Partnership, on a  pro  rata basis; the
Partnership   and/or  its  counsel  will  reimburse  PWDC;  and  any  remaining
Partnership proceeds will be distributed to the  Partners of the Partnership on
a pro rata basis.



<PAGE>
Page 10



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

LIQUIDITY AND CAPITAL RESOURCES

   Partners' capital decreased from approximately $90,000 at December 31, 1995,
to  approximately  $10,000 at September 30, 1996.  The decrease resulted from a
net  loss of  $100,700  offset  by a contribution by the General Partner in the
amount of approximately $20,700.  In March 1996,  the  General Partner restored
its deficit capital account balance as of December 31, 1995,  to  appropriately
reflect a 1% investment in the Partnership.

   Liquid assets of the Partnership decreased  from  a balance of approximately
$180,000 as of December 31, 1995, to approximately $59,000  as of September 30,
1996.   The liquid assets will be used for the payment of administrative  costs
related to the dissolution of the Partnership.

RESULTS OF OPERATIONS

THREE MONTHS  ENDED  SEPTEMBER  30,  1996  COMPARED  TO  THE THREE MONTHS ENDED
SEPTEMBER 30, 1995:

   The net loss for  the  quarter  ended September 30, 1996, was  approximately
$43,600 compared to a net loss of $75,200  for  the quarter ended September 30,
1995.  Revenues  for the  two quarters  ended  September  30, 1996   and  1995
consisted  of income  from  product  development  projects and interest income.
Expenses, consisting  of general and administrative costs, were $46,100 for the
quarter ended September 30, 1996, as compared to $81,500 for the same period in
1995.  The  decrease in  expenses is  attributable to the decreased activity of
the Partnership.

   NINE  MONTHS  ENDED  SEPTEMBER  30,  1996  COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1995:

   The net loss for  the nine months ended September  30,  1996,  was  $100,700
compared  to  net income  of  $907,000  for  the  same  period  in  1995.   The
unfavorable variance  of $1,007,700 was due primarily to a decrease in revenues
of $1,077,200 offset by a decrease in expenses of $69,500.

   Revenues for the nine  months  ended  September  30,  1995,  were $1,085,900
consisting primarily of the product development income from Amgen  relating  to
sales  of  Neupogen<reg-trade-mark>  as  compared to $8,700 for the nine months
ended September 30, 1996.  Effective April 1, 1995, the Partnership distributed
its rights to future payments from Amgen to its Partners.  Therefore, no income
from  Amgen was recognized by the Partnership  during  the  nine  months  ended
September 30, 1996.

   Expenses,  consisting of general and administrative costs, were $109,400 and
$178,900 for the  nine  months ended September 30, 1996 and 1995, respectively.
The  decrease in  expenses  is  reflective of  the  decreased  activity  of the
Partnership.



<PAGE>
Page 11





                        PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

        ACTION AGAINST CENTOCOR, INC.

           Information regarding this action was disclosed on the Partnership's
        Form 10-K for the year ended December 31,  1995  and  the Partnership's
        Forms 10-Q for the quarters ended March 31, 1996 and June 30, 1996.

        IN RE: PAINEWEBBER LIMITED PARTNERSHIP LITIGATION

           Information regarding this action was disclosed on the Partnership's
        Form 10-K for  the  year  ended December 31, 1995 and Form 10-Q for the
        quarter  ended  June 30,  1996.  On  July 17, 1996,  the United  States
        District  Court   for  the  Southern District of New York (the "Court")
        granted  preliminary approval  of  the proposed settlement of the class
        action  litigation.   As  part  of  the  class   action settlement, PWI
        agreed to pay  $125  million  and  additional  consideration  to  class
        members.  A  final  hearing  on the  proposed  settlement  commenced on
        October 25, 1996, and is scheduled to continue in November 1996.

        ACTION ENTITLED ABBATE V. PAINEWEBBER INC.

        Information  regarding  this  action  filed  in  Sacremento, California
        Superior  Court  against  PWI  and  various  affiliated  entities   was
        disclosed on the Partnership's Form 10-K for the year ended December 31,
        1995. In September, the California Superior Court dismissed many of the
        plaintiffs claims as barred by the  applicable  statutes of limitation.
        In June, 1996, additional complaints, similar to ABBATE VS. PAINEWEBBER
        INC. but involving fewer plaintiffs, have been filed in Sacramento, San
        Diego  and  Arizona.  Certain  of  these complaints have been dismissed
        with prejudice while others remain pending.
        

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
        a)      Exhibits:
                None

        b)      REPORTS ON FORM 8-K:

                On October 1, 1996, the Partnership filed a current report on
        Form 8-K relating to the election of a President  of  PaineWebber
        Development Corporation and PWDC Holding Company.





<PAGE>
Page 12



                                  SIGNATURES




          Pursuant to the requirements of Section 13 or 15(d) 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,  on
        this 14th day of November 1996

                  PAINEWEBBER R&D PARTNERS, L.P.



               By:           PaineWebber Technologies, L.P.
                             (General Partner)


               By:           PWDC Holding Company
                             (general partner of the General Partner)



               By:           /s/ Dhananjay M. Pai
                             Dhananjay M. Pai
                             President



               By:           /s/ Pierce P. Smith
                             Pierce R. Smith
                             Principal Financial and Accounting Officer


  *The capacities listed are with respect to PWDC Holding Company, the Manager,
  as well as the general partner of the General Partner of the Registrant.





<PAGE>
Page 12


                            


Pursuant to the requirements of Section 13 or 15(d) 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, on this 14th day of
November 1996.


PAINEWEBBER R&D PARTNERS, L.P.



By:           PaineWebber Technologies, L.P.
              (General Partner)


By:           PWDC Holding Company
              (general partner of the General Partner)



By:           /s/Dhananjay M. Pai
              Dhananjay M. Pai
              President



By:           /s/Pierce R. Smith
              Pierce R. Smith
              Principal Financial and Accounting Officer



*The capacities listed are with respect to PWDC Holding Company, the Manager,
  as well as the general partner of the General Partner of the Registrant.