SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             -----------------------

                                    FORM 10-Q

   
                                AMENDMENT NO. 2
    

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

For the quarterly period ended March 31, 1997

Commission File Number:  1-8967

                      ATLANTIC GULF COMMUNITIES CORPORATION
             (Exact name of Registrant as specified in its charter)

DELAWARE                                  59-0720444
--------                                  ----------
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
incorporation or organization)


2601 South Bayshore Drive
MIAMI, FLORIDA                            33133-5461
--------------                            ----------
(Address of principal executive offices)  (Zip Code)

         Registrant's telephone number:  (305) 859-4000
                                         --------------

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.

                                               [X]   Yes   [ ]   No

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate  by check mark  whether  the  Registrant  has filed all  documents  and
reports  required  to be filed by  Sections  12, 13, or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.

                                               [X]   Yes   [ ]   No

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

There are 9,721,720  shares of the Registrant's  Common Stock  outstanding as of
May 12, 1997.


<PAGE>


                                TABLE OF CONTENTS
                                -----------------


<TABLE>
<CAPTION>
                                                                                     Page
                                                                                      No.
                                                                                     ----
PART I.  -  FINANCIAL INFORMATION
<S> <C>       <C>                                                                     <C>
    Item 1.    Financial Statements

               Consolidated Balance Sheets as of March 31, 1997 and December 31,
               1996                                                                     1

               Consolidated  Statements of Operations for the Three Months Ended
               March 31, 1997 and 1996                                                  2

               Consolidated  Statements of Cash Flows for the Three Months Ended
               March 31, 1997 and 1996                                                  3

               Notes to Consolidated Financial Statements                               4


PART II. -  OTHER INFORMATION


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


SIGNATURES                                                                              7
</TABLE>
    

<PAGE>


PART I. -   FINANCIAL INFORMATION
ITEM 1.     FINANCIAL STATEMENTS
            --------------------


             ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
                           Consolidated Balance Sheets
                      March 31, 1997 and December 31, 1996
                            (in thousands of dollars)
<TABLE>
<CAPTION>
                                                        MARCH 31,     DECEMBER 31,
                                                          1997           1996
                                                      -----------     ------------
         ASSETS                                       (UNAUDITED)
         ------
<S>                                                    <C>            <C>      

Cash and cash equivalents                              $   2,458      $   7,050
Restricted cash and cash equivalents                       6,004          6,034
Contracts receivable, net                                  8,773          9,649
Mortgages, notes and other receivables, net               55,170         63,800
Land and residential inventory                           146,485        153,417
Property, plant and equipment, net                         2,802          2,911
Other assets, net                                         25,153         20,532
                                                       ---------      ---------

Total assets                                           $ 246,845      $ 263,393
                                                       =========      =========


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



Accounts payable and accrued liabilities               $   9,322      $  16,914
Customers' and other deposits                              5,945          5,483
Other liabilities                                         13,267         15,393
Notes, mortgages and capital leases                      169,145        169,215
                                                       ---------      ---------
                                                         197,679        207,005
                                                       ---------      ---------
Stockholders' equity
         Common stock, $.10 par value; 15,665,000
               shares authorized; 9,807,997 and
               9,795,642 shares issued                       981            980
         Contributed capital                             122,176        122,123
         Accumulated deficit                             (67,982)       (60,706)
         Minimum pension liability adjustment             (6,000)        (6,000)
         Treasury stock, 86,277 shares, at cost               (9)            (9)
                                                       ---------      ---------
Total stockholders' equity                                49,166         56,388
                                                       ---------      ---------
Total liabilities and stockholders' equity             $ 246,845      $ 263,393
                                                       =========      =========
</TABLE>


See accompanying notes to consolidated financial statements.

                                       1

<PAGE>
             ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Operations
                   Three Months Ended March 31, 1997 and 1996
                      (in thousands, except per share data)
                                   (unaudited)
   
<TABLE>
<CAPTION>

                                                                          Three Months Ended
                                                                               March 31,
                                                                          ------------------
Revenues:                                                                 1997        1996
                                                                          ----        ----
<S>                                                                     <C>         <C>     
    Real estate sales:
      Homesite                                                          $  2,550    $ 14,598
      Tract                                                                6,664       5,745
      Residential                                                          7,070       2,870
                                                                        --------    --------
         Total real estate sales                                          16,284      23,213
    Other operating revenue                                                  593       1,133
    Interest income                                                        1,372       1,341
                                                                        --------    --------
         Total revenues                                                   18,249      25,687
                                                                        --------    --------
Costs and expenses:
    Cost of real estate sales:
      Homesite                                                             1,988      10,919
      Tract                                                                6,155       4,703
      Residential                                                          5,316       2,175
                                                                        --------    --------
         Total cost of real estate sales                                  13,459      17,797

    Selling expense                                                        2,129       2,552

    Other operating expense                                                  330         699

    Other real estate costs                                                2,906       4,257

    General and administrative expense                                     2,200       3,130

    Depreciation                                                             184         249

    Cost of borrowing, net of amounts capitalized                          4,035       3,288

    Other expense                                                            175         207
                                                                        --------    --------
         Total costs and expenses                                         25,418      32,179
                                                                        --------    --------

Loss before non-recurring and extraordinary items                         (7,169)     (6,492)
                                                                        --------    --------
    Other income (expense) (non-recurring items):
      Reorganization reserves                                                429       1,267
      Utility condemnation                                                    --       4,151
      Miscellaneous                                                         (536)        669
                                                                        --------    --------
         Total non-recurring items                                          (107)      6,087
                                                                        --------    --------

Loss before extraordinary items                                           (7,276)       (405)
Extraordinary gain on extinguishment of debt                                  --       3,770
                                                                        --------    --------
Net income (loss)                                                       $ (7,276)   $  3,365
                                                                        ========    ========

Loss before extraordinary item per common share                         $   (.75)   $   (.04)
                                                                        ========    ========
Net income (loss) per common share                                      $   (.75)   $    .35
                                                                        ========    ========
Weighted average common shares outstanding                                 9,722       9,733
                                                                        ========    ========
</TABLE>
    

         See accompanying notes to consolidated financial statements 

                                       2

<PAGE>
             ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                   Three Months Ended March 31, 1997 and 1996
                            (in thousands of dollars)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED
                                                                             MARCH 31,
                                                                       --------------------
                                                                          1997         1996
                                                                       --------    --------
<S>                                                                    <C>         <C>     

Cash flows from operating activities:
  Net income (loss)                                                    $ (7,276)   $  3,365
  Adjustments to reconcile net income (loss) to net cash provided by
    (used in) operating activities:
      Depreciation and amortization                                       1,072       1,212
      Gain from utility condemnations or sales                               --      (4,846)
      Extraordinary gain from extinguishment of debt                         --      (3,770)
      Other (income) expense                                                 81        (231)
      Reorganization items                                                 (175)       (597)
      Other net changes in assets and liabilities:
        Restricted cash                                                      30       1,787
        Receivables                                                      (2,951)     13,483
        Land and residential inventory                                    6,956       8,029
        Other assets                                                     (4,999)     (4,242)
        Accounts payable and accrued liabilities                         (7,404)     (4,571)
        Customer deposits                                                   462      (1,320)
        Other liabilities                                                  (215)       (526)
        Other, net                                                           --         (11)
                                                                       --------    --------
          Net cash provided by (used in) operating activities           (14,419)      7,762
                                                                       --------    --------
Cash flows from investing activities:
    Additions to property, plant and equipment, net                         (75)        (48)
    Proceeds from utility system sale                                        --       1,244
    Funds withdrawn from utility trust accounts                          12,109          --
                                                                       --------    --------
          Net cash provided by investing activities                      12,034       1,196
                                                                       --------    --------
Cash flows from financing activities:
    Borrowings under credit agreements                                   52,857      15,935
    Repayments under credit agreements                                  (53,461)    (23,935)
    Principal payments on other liabilities                              (1,603)     (2,232)
          Net cash used in financing activities                        --------    --------
          Net cash used in financing activities                          (2,207)    (10,232)
                                                                       --------    --------


Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period                         (4,592)     (1,274)
Cash and cash equivalents at end of period                                7,050       3,560
                                                                       --------    --------
                                                                       $  2,458    $  2,286
                                                                       ========    ========
Supplemental cash flow information:

Interest payments, net of amounts capitalized
                                                                       $  2,483    $  4,625
                                                                       ========    ========
Reorganization item payments
                                                                       $  1,644    $  2,428
                                                                       ========    ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       3

<PAGE>
             ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                 March 31, 1997
                                   (unaudited)



(1)      The March 31, 1997  financial  statements  are unaudited and subject to
         year-end  adjustments.  In management's  opinion, the interim financial
         statements  reflect all adjustments,  principally  consisting of normal
         recurring accruals,  necessary for a fair presentation of the financial
         position and results of operations. Results for interim periods are not
         necessarily  indicative  of results  for the full year.  For a complete
         description  of  the  Company's  accounting  policies,  see  "Notes  to
         Consolidated  Financial  Statements"  included in the Company's  Annual
         Report on Form 10-K for the year ended December 31, 1996. Certain prior
         year  amounts  have  been   reclassified   to  conform  with  the  1997
         presentation.

(2)      The net income (loss) per common share is based on the weighted average
         number of shares of common stock  outstanding  during the periods.  The
         effect of any outstanding warrants and options to purchase common stock
         on the per share  computation was  anti-dilutive or not material during
         the periods.

(3)      The Company  capitalizes  interest  primarily on land  inventory  being
         developed  for sale which is  subsequently  charged to income  when the
         related  asset  is  sold.   Capitalized  interest  was  $1,275,000  and
         $1,892,000,  for the  three  months  ended  March  31,  1997 and  1996,
         respectively.

(4)      Revenue from the sale of  residential  units other than Regency  Island
         Dunes  ("Regency")  condominium  units is recognized  when the earnings
         process is complete. Revenue from the sale of Regency condominium units
         is recognized using the percentage-of-completion method. Earned revenue
         is based on the percentage of costs incurred to date to total estimated
         costs to be incurred.  This  percentage is then applied to the expected
         revenue associated with units that have been sold to date. Revenue from
         the sale of land is recognized when the cash received,  as a percentage
         of the sales  price,  is at least 20% for land sales  other than retail
         land sales and 10% for  retail  land  sales,  the  earnings  process is
         complete and the  collection of any remaining  receivable is reasonably
         assured.

(5)      The Company has made an estimate of Available  Cash,  as defined in the
         Company's loan agreements, at June 30, 1997, and has determined,  based
         on this  estimate,  that the Company will not have any  Available  Cash
         requiring it to make any portion of the  interest  payments on the Cash
         Flow  Notes for the  six-month  period  commencing  January 1, 1997 and
         ending  June  30,  1997.  In  addition,  the  Company  did not have any
         Available  Cash  requiring  it to make any  interest  payments  for the
         twelve month period ended December 31, 1996.  Interest on the Cash Flow
         Notes  is  noncumulative.  Therefore,  the  Company  has  not  recorded
         interest  expense  associated with the Cash Flow Notes during the three
         months ended March 31, 1997 and 1996. See "Management's  Discussion and
         Analysis of Financial Condition and Results of Operations Liquidity and
         Capital Resources."

                                       4
<PAGE>
             ATLANTIC GULF COMMUNITIES CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                 March 31, 1997
                                   (unaudited)

(6)      In January 1997, pursuant to the Company's 1996 Non-Employee Directors'
         Stock Plan, the Company issued 12,355 shares of Atlantic  Gulf's common
         stock to the Non-Employee Directors at a price of $4.3125 per share for
         the first quarter of 1997.

(7)      The Company  and AP-AGC,  LLC  ("Apollo")  entered  into an Amended and
         Restated Investment  Agreement dated as of February 7, 1997, amended as
         of March 20, 1997,  and amended and  restated as of May 12,  1997.  The
         Company, certain of its subsidiaries, and Apollo entered into a Secured
         Note  Agreement  dated as of February 7, 1997, and amended and restated
         as of May 12, 1997. Apollo, a Delaware limited liability company, is an
         affiliate of Apollo Real Estate  Investment Fund II, L.P. ("Apollo Fund
         II"), a private real estate  investment  fund,  the general  partner of
         which is  Apollo  Real  Estate  Advisors  II,  L.P.,  a New  York-based
         investment fund.

                                       5

<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
         --------------------------------

(a) Exhibits required by Item 601 of Regulation S-K


        *(10.1)         Utility Lot Trust  Agreement,  dated as of December  26,
                        1996, between Atlantic Gulf Communities  Corporation and
                        the  Division of Florida Land Sales,  Condominiums,  and
                        Mobile Homes, and Peninsula State Title, as Trustee.

        *(10.2)         Restated,  Amended  and  Consolidated  Trust  Agreement,
                        dated as of December  26,  1996,  amended as of December
                        30, 1996,  between the State of Florida,  Department  of
                        Business  Regulation,  Division  of Florida  Land Sales,
                        Condominiums,    and   Mobile   Homes,   Atlantic   Gulf
                        Communities Corporation and First Union National Bank of
                        Florida, as Trustee.

        *(10.3)         First   Amendment   to   the   Restated,   Amended   and
                        Consolidated  Trust  Agreement  dated as of December 26,
                        1996, amended as of December 30, 1996.


         (27)           Financial Data Schedule.

--------------------
* previously filed

(b) Reports on Form 8-K

         The Company  filed a report on Form 8-K on February 13, 1997,  pursuant
to Item 5, Other Events,  reporting that the Company  entered into an Investment
Agreement dated as of February 7, 1997 with Apollo.

                                        6
<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.


                      ATLANTIC GULF COMMUNITIES CORPORATION





   
Date:  October 16, 1997                 /s/ THOMAS W. JEFFREY
                                       -------------------------------
                                            Thomas W. Jeffrey
                                            Executive Vice President
                                            and Chief Financial Officer






Date:  October 16, 1997                 /s/ CALLIS N. CARLETON
                                       -------------------------------
                                            Callis N. Carleton
                                            Vice President and Controller
                                            (Principal Accounting Officer)
    


                                       7
<PAGE>

                                 EXHIBIT INDEX


         EXHIBIT   DESCRIPTION
         -------   -----------

        *(10.1)         Utility Lot Trust  Agreement,  dated as of December  26,
                        1996, between Atlantic Gulf Communities  Corporation and
                        the  Division of Florida Land Sales,  Condominiums,  and
                        Mobile Homes, and Peninsula State Title, as Trustee.

        *(10.2)         Restated,  Amended  and  Consolidated  Trust  Agreement,
                        dated as of December  26,  1996,  amended as of December
                        30, 1996,  between the State of Florida,  Department  of
                        Business  Regulation,  Division  of Florida  Land Sales,
                        Condominiums,    and   Mobile   Homes,   Atlantic   Gulf
                        Communities Corporation and First Union National Bank of
                        Florida, as Trustee.

        *(10.3)         First   Amendment   to   the   Restated,   Amended   and
                        Consolidated  Trust  Agreement  dated as of December 26,
                        1996, amended as of December 30, 1996.

         (27)           Financial Data Schedule.

--------------------
* previously filed

(b) Reports on Form 8-K

         The Company  filed a report on Form 8-K on February 13, 1997,  pursuant
to Item 5, Other Events,  reporting that the Company  entered into an Investment
Agreement dated as of February 7, 1997 with Apollo.