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:  March 31, 1997

-----          TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number: 0-20179

                           RECYCLING INDUSTRIES, INC.
                    ----------------------------------------

             (Exact Name of Registrant as Specified in its Charter)


     Colorado                                        84-1103445            
-------------------------------         -----------------------------------
(State or Other Jurisdiction of        (IRS Employer Identification Number)
Incorporation or Organization)


  384 Inverness Drive South, Suite 211    
         Englewood, Colorado                                      80112
------------------------------------------------               ------------
(Mailing Address of Principal Executive Offices)                (Zip Code)

    Registrant's Telephone Number, Including Area Code:  (303) 790-7372

     Securities Registered Pursuant to Section 12(b) of the Act:  None

Securities Registered Pursuant to Section 12(g) of the Act:  Common Stock,
$.001 Par Value

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

                                                  Yes   X       No       
                                                      ------       ------

Indicate the number of shares outstanding of each of the Issuer's classes
of common stock as of the close of the period covered by this Report.

                                        Number of Shares Outstanding As Of
         Class                                       March 31, 1997        
----------------------------              ---------------------------------
Common Stock, $.001 Par Value                           13,555,793 

                              TABLE OF CONTENTS



PART I -- FINANCIAL INFORMATION                                 PAGE
                                                               ------

   Item 1.  Financial Statements*

     Consolidated Balance Sheets - March 31, 1997 
       and September 30, 1996                                    1-2

     Consolidated Statements of Earnings for the three
       months and six months ended March 31, 1997 and 1996       3-4

     Consolidated Statement of Stockholders' Equity 
       for the six months ended March 31, 1997                    5

     Consolidated Statements of Cash Flows 
       for the six months ended March 31, 1997 and 1996           6

     Notes to the Consolidated Financial Statements               7

   Item 2.  Management's Discussion and Analysis of Financial
            Condition and Results of Operations                  8-11


PART II -- OTHER INFORMATION

Item  6                                                          12

Signatures                                                       13
















-------------------------------
*The accompanying interim financial statements have not been audited 
by an independent certified public accountant.  Only those statements
corresponding to a fiscal year-end (September 30) are audited.

RECYCLING INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      MARCH 31, 1997 AND SEPTEMBER 30, 1996
                             (Thousands of Dollars)

                                    ASSETS
                                  ----------



                                               March 31,         September 30,
                                                 1997                1996
                                            -------------      ---------------

CURRENT ASSETS
     Cash                                    $      527          $      1,450
     Accounts receivable,
     less allowance for doubtful accounts
     of $20 and $10                               5,588                 4,379
     Accounts receivable, related party              86                    77
     Inventories                                  2,456                 2,473
     Deferred income taxes                          510                     -
     Prepaid expenses and deposits                  335                   392
                                            -------------      ---------------

Total Current Assets                              9,502                 8,771
                                            -------------      ---------------

PROPERTY, PLANT AND EQUIPMENT, net               20,455                20,492
                                            -------------      ---------------

OTHER ASSETS:

     Deferred income taxes                          585                   800
     Other assets, net of amortization            5,040                 4,792
                                            -------------      ---------------
          Total Other Assets                      5,625                 5,592
                                            -------------      ---------------

TOTAL ASSETS                                 $   35,582          $     34,855
                                            -------------      ---------------
                                            -------------      ---------------












        See Accompanying Notes to the Consolidated Financial Statements
                  RECYCLING INDUSTRIES, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                     MARCH 31,  1997 AND SEPTEMBER 30, 1996
                           (Thousands of Dollars)


                     LIABILITIES AND STOCKHOLDERS' EQUITY
                     ------------------------------------

                                                     March 31,    September 30,
                                                       1997            1996
                                                  --------------  -----------
 
CURRENT LIABILITIES:

     Current maturities of long-term debt          $     3,092     $     1,707
     Current maturities of long-term debt, 
        related parties                                  1,293           2,075 
     Accounts payable                                    2,688           2,673 
     Accounts payable - related parties                      -              61 
     Income taxes payable                                    -             107 
     Other current liabilities                             412             551 
                                                    -----------    ------------

       Total  Current Liabilities                        7,485           7,174
                                                    -----------    ------------


LONG-TERM DEBT:

     Long-term debt, less current maturities            10,306          10,067
     Long-term debt - related parties, 
        less current maturities                            736           1,951
                                                    -----------    -----------

          Total Long-term Debt                          11,042          12,018
                                                    -----------    ------------

          Total Liabilities                             18,527          19,192
                                                    -----------     -----------


COMMITMENTS & CONTINGENCIES:

Redeemable common stock,
     $.001 par value, 363,636 shares 
        issued and outstanding                           1,500           1,500
                                                    -----------     -----------


STOCKHOLDERS' EQUITY:

     Preferred stock, no par value, 10,000,000 
        shares authorized
        Series C, convertible, 10,000, and 0 shares 
        issued and outstanding                             907               -
     Common Stock ($.001 par value), 50,000,000 
        shares authorized, 13,555,793 and 13,430,793 
        shares issued and outstanding                       13              13
     Additional paid-in capital                         25,566          25,547
     Accumulated deficit                               (10,931)        (11,397)
                                                    -----------     -----------

          Total Stockholders' Equity                    15,555          14,163
                                                    -----------     -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $    35,582     $    34,855
                                                   -----------     -----------
                                                   -----------     -----------

          See Accompanying Notes To The Consolidated Financial Statements
                  RECYCLING INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF EARNINGS
                   Three Months Ended March 31, 1997 and 1996
                 (Thousands of dollars except per share amounts)



                                             March 31, 1997     March 31, 1996
                                            ---------------    ---------------

Net sales                                    $    12,741          $     7,305
Cost of sales and operating expenses              10,361                5,937
                                             --------------       ------------
Gross profit                                       2,380                1,368
Selling, general and administrative expenses       1,450                  797
                                             --------------       ------------
Operating income                                     930                  571
                                             --------------        -----------
Other income (expense):
     Interest expense                               (430)                (149)
     Miscellaneous                                    26                    -
                                             --------------       ------------
Total other income (expense)                        (404)                (149)
                                             --------------       ------------
Earnings before income taxes and 
     extraordinary gain                              526                  422
Extraordinary gain from settlement of debt             -                   48
                                             --------------       ------------
Earnings before income taxes                         526                  470
Income tax (expense) benefit                         295                   (4)
                                             --------------       ------------

Net earnings                                 $       821          $       466
                                             --------------       ------------
                                             --------------       ------------
Net earnings available to common 
     shareholders                            $       541          $       466
                                             --------------       ------------
                                             --------------       ------------
Earnings per common share
     Net earnings before extraordinary item  $      0.04          $      0.04
     Extraordinary item                               -                  0.01
                                             --------------       ------------
Earnings per common share                    $      0.04          $      0.05
                                             --------------       ------------
                                             --------------       ------------
Weighted average shares outstanding           14,847,000           10,341,000
                                             -------------        ------------
                                             -------------        ------------




        See Accompanying Notes To The Consolidated Financial Statements
                      RECYCLING INDUSTRIES, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF EARNINGS
                        Six Months Ended March 31, 1997 and 1996
                     (Thousands of dollars except per share amounts)


                                             March 31, 1997    March 31, 1996
                                            ---------------    ---------------

Net sales                                    $    23,502          $    10,763
Cost of sales and operating expenses              19,813                9,352
                                             ------------          ------------
Gross profit                                       3,689                1,411
Selling, general and administrative expenses       2,663                1,553
                                             ------------          ------------
Operating income (loss)                            1,026                (142)
                                             ------------          ------------
Other income (expense):
     Interest expense                              (889)               (245)
     Miscellaneous                                   34                  -
                                             ------------          ------------
          Total other income (expense)             (855)               (245)
                                             ------------          ------------
Earnings (loss) before income taxes and
     extraordinary gain                             171                (387)
Extraordinary gain from settlement of debt           -                   48
                                            ------------          ------------
Earnings (loss) before income taxes                 171                (339) 
Income tax benefit                                  295                 437
                                            ------------          ------------
     Net earnings                           $       466       $          98
                                             ------------          ------------
                                             ------------          ------------

Net earnings available to common
     shareholders                           $       186       $          98
                                             ------------        ------------
                                             ------------        ------------

Earnings per common share:
     Net earnings before extraordinary item $      0.01        $        0.01
     Extraordinary item                            -                      -
                                           ------------          ------------
Earnings per common share                 $       0.01          $        0.01
                                           ------------          ------------
                                           ------------          ------------

Weighted average shares outstanding         14,356,000            9,774,000
                                          ------------           ------------
                                          ------------           ------------


           See Accompanying Notes To The Consolidated Financial Statements


                  RECYCLING INDUSTRIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                        SIX MONTHS ENDED MARCH 31, 1997
                             (Thousands of Dollars)

<TABLE>
                                                                               Additional
                                       Preferred Stock      Common   Stock       Paid-in     Accumulated
                                       Shares   Amount     Shares    Amount      Capital      (Deficit)     Total   
                                      -----------------   -----------------    ---------    -----------   ---------
<S>                                   <C>       <C>       <C>         <C>        <C>         <C>            <C>                   
Balances, September 30, 1996              -     $    -    13,430,793  $   13      $ 25,547   $  (11,397)    $ 14,163 

Preferred stock Series C issued
for cash net of offerings
costs of $93                           10,000      907             -      -             -            -          907

Common stock issued on exercise or
conversion of Series I warrants             -        -       125,000      -            19            -           19

Net earnings for the period                 -        -             -      -             -          466          466
                                      -------  --------   ----------  -------   ---------     -----------   ---------

Balances, March 31, 1997               10,000   $  907    13,555,793 $   13      $ 25,566   $  (10,931)    $ 15,555 
                                      -------  --------   ----------  -------   ---------   -------------   ---------
                                      -------  --------   ----------  -------   ---------   -------------   ---------
</TABLE>



                    RECYCLING INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Six Months Ended March 31, 1997 and 1996
                             (Thousands of Dollars)




                                                   March 31,        March 31,
                                                     1997              1996
                                                ---------------  ---------------

Operating Activities:
     Net Earnings                                 $     466      $     98
     Adjustments to reconcile net earnings
      to net cash (used in) operating 
      activities:
          Depreciation and amortization               1,082           479
          Extraordinary gain from 
             settlement of debts                                      (48)
          Deferred income taxes                        (295)         (441)
     Changes in Assets and Liabilities:
          Accounts receivable                        (1,209)       (1,123)
          Inventories                                    17          (213)
          Prepaid expenses and deposits                  56          (307)
          Accounts payable                               15           647
          Current liabilities, excluding debt          (246)          160
                                                   ----------   ----------
             Net Cash (used in) 
             Operating Activities                      (114)         (748)
                                                   ----------    ---------

Investing Activities:
     Capital expenditures, net                         (755)         (302)
     Note receivable, related party                     (70)          128
     Other assets                                      (537)         (804)
                                                   ----------    ---------
            Net Cash (used in) 
            Investing Activities                     (1,362)         (978)
                                                   ----------    ---------

Financing Activities:
     Proceeds from borrowings                         5,348         5,547
     Principal payments on borrowings                (5,721)       (4,918)
     Deferred offering costs                            (93)         (125)
     Proceeds from issuance of stock                  1,019         2,278
                                                   ----------    ---------
           Net Cash Provided by 
           Financing Activities                         553         2,782
                                                   ----------    ---------
           Increase (decrease) in Cash                 (923)        1,056
           CASH, beginning of period                   1,450           184
                                                   ----------    ---------
           CASH, end of period                     $     527     $   1,240
                                                   ----------    ---------
                                                   ----------    ---------


        See Accompanying Notes To The Consolidated Financial Statements 

                   RECYCLING INDUSTRIES, INC. AND SUBSIDIARIES
                  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



General Information
-------------------

I.   The Financial Statements included herein have been prepared by the 
     Company without audit except the September 30, 1996 balance sheet, which
     was audited.  The Statements have been prepared pursuant to the rules and
     regulations of the Securities and Exchange Commission and reflect all
     adjustments, consisting of only normal recurring accruals which are, in
     the opinion of management, necessary for a fair statement of the results
     of operations for the periods shown.  These Financial Statements should
     be read in conjunction with the Financial Statements and notes thereto
     included in the Company's latest report on Form 10-K, dated September 30,
     1996.

II.  The results of operations for the six months ending March 31, 1997 and
     1996 are not necessarily indicative of the results to be expected for the
     full year.

III. Inventories as of March 31, 1997 and September 30, 1996, consisted of the
     following:


                                     March 31, 1997         September 30, 1996
                                     --------------         ------------------

           Raw materials              $      1,132                $      1,302

           Finished goods                    1,246                       1,171

           Other                                78                          -
                                       -----------                 -----------

                Total                 $      2,456                $      2,473

                                       -----------                 -----------
                                       -----------                 -----------

       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                        AND RESULTS OF OPERATIONS


The following discussion should be read in conjunction with the Company's
Consolidated Financial Statements and the notes thereto included elsewhere
herein.  Statements included on the following discussion concerning 
predictions of economic performance and management's plans and objectives are
forward looking statements.  These statements involve risks and uncertainties
that could cause actual results to differ materially from the forward looking
statements.  Factors which would cause or contribute to such differences
include, but are not limited to, factors detailed in the Company's 
Registration Statement on Form S-1 on file with the Commission, Commission
File No. 333-20289; particularly the "Risk Factors" section; downturns in the
Company's primary markets; disruptions to the Company's operations from acts
of God or extended maintenance; disruptions in the availability or pricing of
raw materials; transportation difficulties; and the unavailability of 
financing to complete management's plans and objectives.

LIQUIDITY AND CAPITAL RESOURCES

------------------------------------------------------------------------------
                                       March 31,                 September 30,
(Dollars in millions)                    1997                         1996
------------------------------------------------------------------------------
Current ratio                            1.27:1                       1.22:1
Working capital                        $    2.0                     $    1.6
------------------------------------------------------------------------------

Cash used by  operating activities for the six months ending March 31, 1997
was $0.1 million compared to $0.7 million for the same period one year
earlier.  The improvement in cash from operating activities was primarily
related to net earnings.  During the six months ending March 31, 1997,
accounts receivable increased as a result of increased sales volume resulting
from increased demand for ferrous materials.

The Company invested $0.8 million in property, plant and equipment through
March 31, 1997 for general modernization and efficiency upgrades.  Planned
capital expenditures during the next year for the Company's existing
facilities are estimated to be $1.5 million.  Included in this amount are
capital expenditures for the Company's shredders and materials handling
equipment designed to increase capacity and improve operating efficiencies.
Management anticipates the capital expenditures will be paid with cash from
operations and long-term debt financing.

Subsequent to the end of the second quarter, the Company acquired for $5.7
million substantially all the assets of Addlestone Recycling Corporation (ARC)
located in Metter, Georgia.  The purchase price consisted of $5.2 million
payable at closing from long-term debt and $.5 million or 10,000 shares of the
Company's Series D Convertible Preferred Stock (the "Series D Shares") also
delivered at closing.  The Series D Shares will automatically convert on April
1, 1999 into the number of shares of the Company's common stock whose average
market price for the ten trading days preceding the date of conversion is
equivalent to $0.5 million plus the amount of all accrued and unpaid dividends
on the Series D Shares to the date of conversion.  If a consolidation or
merger of the Company with or into another company or entity occurs and the
Company is not the surviving entity, the Series D Shares will convert
immediately into the number of shares the Company's common stock whose average
market price for the ten trading days preceding the date of consolidation or
merger is equivalent to $0.5 million plus the amount of all accrued and unpaid
dividends on the Series D Shares to the date of conversion.  Holders of the
Series D Shares are entitled to dividends on a cumulative basis at an annual
rate of eight percent, payable quarterly in cash.  At anytime prior to
April 1, 1999, the Company shall have the right to redeem the outstanding
shares of Series D Preferred Stock, in whole or in part, at a cash redemption
price equal to the sum of $50 per share, and the amount of all accrued but
unpaid dividends on the Series D Preferred Stock.  The Company has not assumed
or guaranteed any of the liabilities of  ARC.

Subject to completion of definitive documentation, the Company intends to
purchase substantially all the assets of Addlestone International Corporation
(AIC) a metals recycling facility located in Georgetown,  South Carolina.

At March 31, 1997 and September 30, 1996, the Company has $10.2 million and
$8.4 million, respectively, outstanding under a three year credit facility
with a lending institution totaling $12.5 million.

Subsequent to the end of the second quarter, the Company entered into a $20
million credit facility with a lending institution replacing the previously
maintained credit facility.  The facility has maturity terms ranging from six
months to three years.  Utilization of the credit facility is limited by
existing debt covenants.

On December 31, 1996, the  Company completed a private placement of $1.0
million of Series C Convertible Preferred Stock (Series C Preferred).  Net
proceeds to the Company were $907,000.  Each Series C  Preferred  is
convertible at a discount, without further payment, into the number of shares
of Common Stock determined by dividing ( I ) the sum of a (a) $100 plus (b)
the amount of all accrued dividends on the Series C Preferred by (ii) the
lessor of $1.58125 or 73% of the average reported closing bid price of  a
share of Common Stock for the five consecutive trading days immediately
preceding the date of conversion.  The discount provision is recognized as an
imputed deemed dividend in the amount of $0.4 million reducing income
available to common shareholders on a pro rata basis from the date of issuance
to the first conversion date that conversion can occur.  The funds from
issuing the Series C Preferred  were used  for general working capital
requirements.

Subsequent to the end of the quarter, Recycling Industries, Inc. gave notice
of it's intention to repurchase by May 30, 1997, all of its' outstanding
Series C Preferred for $1.3 million.  The Company will use a combination of
existing cash and financing to fund the repurchase of the Series C Preferred.

Subsequent to March 31, 1997, the Board of  Directors of Recycling Industries,
Inc. authorized the repurchase of up to 700,000 shares of common stock in open
market transactions.  The Company expects to fund the repurchase of common
stock with cash from operations.

The Company is required to implement Financial Accounting Standards Board
Statement No. 128,  "Earnings per Share," in fiscal year 1998.  Application
of the new rules would not have a significant impact upon the financial
statements of the Company for the three and six months ending March 31, 1997.

Management intends to continue seeking opportunities for expansion in the
metals recycling business and believes that the Company's liquidity, capital
resources and borrowing capabilities are adequate for its current operations.
The Company may, however, need to raise additional capital to fund the
acquisition and integration of additional metals recycling businesses which is
an integral component of the Company's strategy.  The Company may raise such
funds through warrant exercises, bank financing or public or private offerings
of its securities.  There can be no assurance that the Company will be able to
secure such additional financing. If the Company is not successful in securing
such financing, the Company's ability to pursue its acquisition strategy may
be impaired and the results of operations for future periods may be adversely
affected.


RESULTS OF OPERATIONS
The Company's operating results depend in large part on its ability to
effectively manage the purchase, processing and sale of scrap metals.  The
demand for processed ferrous and non-ferrous scrap is subject to general
economic, industry and market-specific conditions beyond the Company's 
control which may result in periodic fluctuations in the sales prices of the
Company's products.  The Company seeks to maintain its operating margins by
adjusting the purchase price for raw ferrous and non-ferrous scrap in
response to such fluctuations, subject to local market conditions.  Although
the Company is unable to hedge against changes in market prices, it seeks to
minimize this risk by maintaining low inventory levels of raw and processed
scrap.

Net sales for the three and six months ending March 31, 1997 were $12.7
million and $23.5 million, respectively.  This is an increase of $5.4
million and $12.7 million, respectively, compared to the same periods one year
earlier.  The increase in sales is primarily related to the acquisition of
Mid-America, Weissman and Anglo.  The average sales price per ton of prepared
ferrous scrap increased by six percent and three percent for the three and six
months ending March 31, 1997, respectively, compared  to the same periods one
year earlier.  The increase in the average selling price is primarily
attributable to increased demand for ferrous materials.

Gross profit for the quarter and year-to-date was $2.4 million and
$3.7 million, respectively.  This is an increase of  $1 million and
$2.3 million, respectively, compared to the same periods one year earlier.
The increase resulted primarily from the acquisition of Mid-America, Weissman
and Anglo.

Operating income for the quarter and year-to-date increased by $0.4 million
and $1.2 million, respectively, compared to the same periods one year earlier.
The increase resulted primarily from acquisitions of  Mid-America, Weissman
and Anglo.

Selling, general and administrative (SG&A) expenses for the quarter and year-
to-date totaled $1.5 million and $2.7 million, respectively.  S,G&A increased
by $0.7 million and $1.1 million  for the quarter and year-to-date,
respectively, compared to the same periods one year earlier.  The increase was
primarily the result of acquiring Mid-America, Weissman and Anglo.
  
Interest expense increased for the quarter and year-to-date by $0.3 million
and $0.6 million, respectively, compared to the same periods one year earlier.
The increase was primarily related to increases in long-term debt to finance
the acquisition of  Mid-America, Weissman and Anglo. 

During the quarter, the Company recorded a $0.3 million income tax benefit as
a result of utilizing a net operating loss carryforward to offset anticipated
taxable income.  Remaining net operating loss carry-overs available through 
the year 2011 are approximately $9.3 million.

Net earnings available to common shareholders for the three and six months
ending March 31, 1997 was reduced in computing earnings per common share by an
imputed deemed dividend in the amount of $0.3 million or $0.02 per common
share.  The imputed deemed dividend resulted from a discount provision
included in the Series C  Preferred  issued on December 31, 1996.

The Company does not believe its businesses have been adversely affected by
general inflation.





                          PART II - OTHER INFORMATION



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

   (a) Exhibits
         Number      Description
         ------      -----------
           11        Statement regarding computation of per share earnings.
           27        Financial data schedule (electronic version only)

   (b) Reports on form 8-K. Recycling Industries, Inc. has not filed any
       reports on Form 8-K during the three months ending March 31, 1997.





                              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.  

                      Date: May 14, 1997

                      Recycling Industries, Inc.



                      By: /s/ Thomas J. Wiens
                         ---------------------------------------------   
                          Thomas J. Wiens, Chairman & Chief Executive Officer



                      By: /s/ Brian L. Klemsz
                         ---------------------------------------------   
                          Brian L. Klemsz, Principal Financial Officer