SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

                 (X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                    For the Quarter Ended September 28, 1996

                                       OR

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

                         Commission File Number 0-20666

                                 MICROTEST, INC.
                                 ---------------
             (Exact name of registrant as specified in its charter)


          Delaware                                                86-0485884
          --------                                                ----------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              identification no.)

                   4747 N. 22nd Street, Phoenix, Arizona 85016
                   -------------------------------------------
              (Address of principal executive offices and Zip Code)

       Registrant's telephone number, including area code: (602) 952-6400
       ------------------------------------------------------------------

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
                                   -----     -----

As of October 30, 1996,  8,127,042 shares of the registrant's  common stock were
outstanding.



                         This document contains 13 pages
                         -------------------------------
<PAGE>
                                      INDEX
                                      -----

                                 MICROTEST, INC.

                                                                          Page
Facing Page                                                                 1

Index                                                                       2

PART I. FINANCIAL INFORMATION
-----------------------------

Item 1 - Financial Statements (Unaudited)

      Condensed Consolidated Balance Sheets                                 3

      Condensed Consolidated Statements of Income                           4

      Condensed Consolidated Statements of Cash Flows                       5

      Notes to Unaudited Condensed Consolidated Financial Statements        6-7

Item 2 - Management's Discussion and Analysis of Financial
      Conditions and Results of Operations                                  7-10

PART II.  OTHER INFORMATION
---------------------------

Item 1 - Legal Proceedings                                                  10

Item 2 - Changes in Securities                                              11

Item 3 - Defaults Upon Senior Securities                                    11

Item 4 - Submission of Matters to a Vote of Security Holders                11

Item 5 - Other Information                                                  11

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

Signatures                                                                  12

Exhibit 11 - Statement regarding computation of per share earnings          13

                                        2
<PAGE>
PART 1.  FINANCIAL STATEMENTS

                                 Microtest, Inc.
                      Condensed Consolidated Balance Sheets
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                September 28,       December 31,
                                                                               1996 (unaudited)         1995
                                                                               ----------------     ------------ 
<S>                                                                           <C>                  <C>          
                                  ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                                  $          28,291    $      19,907
   Accounts receivable - less allowance for doubtful
      accounts of $361 and $521, respectively                                            16,830           15,857
   Inventories - net                                                                      4,774            6,814
   Prepaid expenses                                                                         287              681
   Income taxes receivable                                                                  247            2,100
   Deferred income taxes                                                                  1,819            1,819
                                                                              -----------------    -------------
     Total current assets                                                                52,248           47,178

PROPERTY, PLANT & EQUIPMENT - less accumulated
    depreciation of $4,828 and $3,841, respectively                                       3,158            3,212

INTANGIBLES AND OTHER ASSETS                                                                202              448

DEFERRED INCOME TAXES                                                                       240              239
                                                                              -----------------    -------------

TOTAL                                                                         $          55,848    $      51,077
                                                                              =================    =============

                    LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts payable                                                           $           4,954    $       4,757
   Accrued liabilities                                                                    3,201            2,411
   Accrued payroll and employee benefits                                                    990              882
                                                                              -----------------    -------------
     Total current liabilities                                                            9,145            8,050

STOCKHOLDERS' EQUITY:
   Common stock, $.001 par value - authorized,
     15,000,000 shares; issued and outstanding,
     8,159,682 and 8,159,058 shares, respectively                                             8                8
   Additional paid-in capital                                                            32,589           32,546
   Retained income                                                                       14,594           11,455
   Common stock in treasury at cost - 32,304 shares
     and 63,834 shares, respectively                                                       (488)            (982)
                                                                              -----------------    ------------- 
     Total stockholders' equity                                                          46,703           43,027
                                                                              -----------------    -------------

TOTAL                                                                         $          55,848    $      51,077
                                                                              =================    =============
</TABLE>
See notes to condensed consolidated financial statements
                                        3
<PAGE>
                                 Microtest, Inc.
             Condensed Consolidated Statements of Income (Unaudited)
                      (In thousands, except per share data)
<TABLE>
<CAPTION>
                                                            Three Months Ended                     Nine Months Ended
                                                     ---------------------------------    -----------------------------------

                                                      September 28,     September 30,      September 28,       September 30,
                                                          1996              1995               1996                1995
                                                     ---------------   ---------------    ---------------    ----------------
<S>                                                  <C>               <C>                <C>                <C>            
TOTAL REVENUES                                       $        13,007   $        15,154    $        38,287    $        41,811

TOTAL COST OF SALES                                            5,071             6,408             15,736             16,697
                                                     ---------------   ---------------    ---------------    ---------------

GROSS PROFIT                                                   7,936             8,746             22,551             25,114

OPERATING EXPENSES:
   Sales and marketing                                         3,323             3,272             10,150              9,076
   Research and development                                    1,586             1,563              4,642              4,537
   General and administrative                                  1,028             1,029              2,982              3,009
                                                     ---------------   ---------------    ---------------    ---------------
     Total operating expenses                                  5,937             5,864             17,774             16,622
                                                     ---------------   ---------------    ---------------    ---------------

UNUSUAL ITEM - Purchased R&D                                       -               450                  -              8,776
                                                     ---------------   ---------------    ---------------    ---------------

INCOME FROM OPERATIONS                                         1,999             2,432              4,777               (284)

INVESTMENT INCOME - NET                                          175               285                586                908
                                                     ---------------   ---------------    ---------------    ---------------

INCOME BEFORE INCOME TAXES                                     2,174             2,717              5,363                624

INCOME TAXES:
     Provision for income taxes                                  739             1,057              1,906              3,329
     Income tax benefit related to purchased R&D                   -              (180)                 -             (3,390)
                                                     ---------------   ---------------    ---------------    ---------------
NET INCOME TAX (BENEFIT)/PROVISION                               739               877              1,906                (61)

NET INCOME                                           $         1,435   $         1,840    $         3,457    $           685
                                                     ===============   ===============    ===============    ===============

NET INCOME PER COMMON AND
   EQUIVALENT SHARE                                  $          0.17   $          0.22    $          0.42    $          0.08
                                                     ===============   ===============    ===============    ===============

SHARES USED IN PER SHARE
   CALCULATION                                                 8,291             8,452              8,255              8,573
                                                     ===============   ======== ======    ===============    ===============
</TABLE>
See notes to condensed consolidated financial statements
                                        4
<PAGE>
                                 Microtest, Inc.
           Condensed Consolidated Statements of Cash Flows (Unaudited)
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                           Nine Months Ended
                                                                                -------------------------------------

                                                                                 September 28,          September 30,
                                                                                     1996                  1995
                                                                                ---------------        --------------

<S>                                                                             <C>                    <C>           
OPERATING ACTIVITIES:
    Net Income                                                                  $        3,457         $          685
   Adjustments to reconcile net income to net cash
    provided by (used in) operating activites:
     Depreciation and amortization                                                       1,101                    854
     Unusual items net of related tax benefit                                                -                  5,386
     Deferred rent                                                                           -                    (16)
     Changes in operating assets and liabilities:
       Accounts receivable                                                                (973)                (8,323)
       Inventories                                                                       2,040                 (1,591)
       Prepaid expenses and other assets                                                   525                    (52)
       Accounts payable                                                                    197                    460
       Accrued liabilities                                                                 790                    (64)
       Accrued payroll and employee benefits                                               108                  1,046
       Income taxes payable                                                                  -                   (852)
       Income taxes receivable                                                           1,853                      -
                                                                                --------------         --------------
Net cash provided by (used in) operating activities                                      9,098                 (2,467)

INVESTING ACTIVITES:
       Purchases of equipment and leasehold
         improvements                                                                     (933)                (1,040)
       Acquisition of Optical Media International                                            -                 (4,650)
       Acquisition of Hotware                                                                -                   (450)
                                                                                --------------         --------------
Net cash provided by (used in) investing activities                                       (933)                (6,140)
                                                                                --------------         --------------

FINANCING ACTIVITIES:
       Proceeds from sale of common stock and treasury stock                               180                  2,192
       Reduction in income tax liability from disqualifying
         dispositions of incentive stock options and
         exercises of non-qualified stock options                                           39                  1,667
       Purchase of treasury stock                                                            -                 (1,919)
                                                                                --------------         --------------
Net cash provided by financing activities                                                  219                  1,940
                                                                                --------------         --------------

INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS                                                                           8,384                 (6,667)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                          19,907                 31,590
                                                                                --------------         --------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                        $       28,291         $       24,923
                                                                                ==============         ==============
</TABLE>
See notes to condensed consolidated financial statements
                                          5
<PAGE>
                                 MICROTEST, INC.
                               NOTES TO UNAUDITED
                   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  and the  instructions  to Form  10-Q and  Rule  10-01 of
Registration  S-X.  Accordingly,  they do not include all of the information and
notes  required  by  generally  accepted  accounting   principles  for  complete
financial  statements.  In  the  opinion  of  management,  all  adjustments  and
reclassifications  considered  necessary for a fair and comparable  presentation
have been included and are of a normal recurring  nature.  Operating results for
the  three  months  and the  nine  months  ended  September  28,  1996,  are not
necessarily  indicative  of the results that may be expected for the year ending
December 31,  1996.  The  accompanying  financial  statements  should be read in
conjunction with the Company's most recent Annual Report and Form 10-K.

1.    BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

      A. Principles of  Consolidation - The  consolidated  financial  statements
      include the accounts of Microtest,  Inc. and its wholly-owned subsidiaries
      (collectively, the "Company"). The Company develops, markets, and supports
      products  that make it easier to install,  service,  and manage local area
      networks ("LANs").

      B. For interim  reporting  purposes,  the Company ends its quarters on the
      Saturday  closest to the  calendar  quarter end,  with the fourth  quarter
      ending on December 31, 1996.

      C. Reclassifications  - Certain  reclassifications  have been  made to the
      1995   consolidated   financial   statements   to   conform  to  the  1996
      presentation.

      D. In October,  1995,  the  Financial  Accounting  Standards  Board issued
      Statement of Financial  Accounting  Standards ("SFAS") No. 123 "Accounting
      for Stock-Based  Compensation" which will become effective for the Company
      beginning January 1, 1996. SFAS No. 123 requires  expanded  disclosures of
      stock-based  compensation  arrangements with employees and encourages (but
      does not require) compensation cost to be measured based on the fair value
      of the equity instrument  awarded.  Companies are permitted,  however,  to
      continue to apply APB Opinion No. 25, which recognizes  compensation  cost
      based on the intrinsic value of the equity instrument awarded. The Company
      will continue to apply APB Opinion No. 25 in its financial  statements and
      will  disclose  in a  footnote  the pro  forma  effect on net  income  and
      earnings per share,  as if the Company had applied the new Standard in its
      year-end financial statements.

2.    COMMITMENTS AND CONTINGENCIES

      In September and October 1996, two shareholder lawsuits were filed against
      the Company,  Richard G. Meise,  Richard R. Douglas and David C. Bolles in
                                        6
<PAGE>
      connection with reporting of interim  results.  The Company  believes that
      the shareholders'  lawsuits are without merit and it intends to vigorously
      defend against them.

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

      This Quarterly  Report on Form 10-Q contains  forward-looking  statements.
Additional written or oral forward-looking statements may be made by the Company
from time to time in filings  with the  Securities  and Exchange  Commission  or
otherwise.  The words  "believe,"  "expect,"  "anticipate,"  and  "project"  and
similar expressions identify forward-looking statements,  which speak only as of
the date the statement was made. Such forward-looking  statements are within the
meaning of that term in Section 27A of the  Securities  Act of 1933, as amended,
and  Section  21E of the  Securities  Exchange  Act of 1934,  as  amended.  Such
statements may include,  but not be limited to, projections of revenue,  income,
or loss, capital expenditures,  plans for future operations,  financing needs or
plans,  and plans  relating to products or services of the  Company,  as well as
assumptions  relating to the foregoing.  The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events, or otherwise.

      Forward-looking   statements   are   inherently   subject   to  risks  and
uncertainties,  some of which cannot be predicted or  quantified.  Future events
and actual results could differ materially from those set forth in, contemplated
by, or underlying the forward-looking  statements.  Statements in this Quarterly
Report,  including the Notes to the Condensed  Consolidated Financial Statements
and "Management's  Discussion and Analysis of Financial Condition and Results of
Operations,"  describe factors,  among others, that could contribute to or cause
such differences.  Additional  factors that could cause actual results to differ
materially from those expressed in such forward-looking statements are set forth
in "Management's  Discussion and Analysis of Financial  Condition and Results of
Operations"  in the  Company's Annual  Report  on Form  10-K for the year  ended
December 31, 1995.

Results of Operations
---------------------
<TABLE>
<CAPTION>
                          Qtr. End                     Qtr. End       Y-T-D                       Y-T-D
(in thousands)             9/28/96        Change       9/30/95       9/28/96        Change       9/30/95
---------------------------------------------------------------------------------------------------------
<S>                       <C>            <C>           <C>           <C>            <C>          <C>    
Total Revenues            $ 13,007       (14.2%)       $ 15,154      $38,287        (8.4%)       $41,811
---------------------------------------------------------------------------------------------------------
</TABLE>


During both the third  quarter and the nine months  ended  September  28,  1996,
total revenues  decreased  compared to the same periods in 1995 due primarily to
increased competition in the Category 5 cable testing market.
                                        7
<PAGE>
<TABLE>
<CAPTION>
                          Qtr. End                     Qtr. End       Y-T-D                       Y-T-D
(in thousands)             9/28/96        Change       9/30/95       9/28/96        Change       9/30/95
---------------------------------------------------------------------------------------------------------
<S>                        <C>            <C>          <C>           <C>            <C>          <C>     
Gross Profit               $ 7,936        (9.3%)       $ 8,746       $ 22,551       (10.2%)      $ 25,114
% of Total
Revenues                      61.0%                       57.7%          58.9%                       60.1%
---------------------------------------------------------------------------------------------------------
</TABLE>

Gross profit  decreased during the nine months ended September 28, 1996 compared
to  the  same  period  in  1995  primarily  due  to the  Company's  response  to
competitive   pricing   pressures  and  an  increased   focus  on  lower  margin
connectivity  products.  However, gross profit improved during the third quarter
of 1996 due to a change in the Company's  discount  structure  stemming from the
initiation of a new  manufacturers'  representative  program near the end of the
second quarter of 1996,  Compas sales growth and increased  software  content in
its connectivity products.

<TABLE>
<CAPTION>
                          Qtr. End                     Qtr. End       Y-T-D                       Y-T-D
(in thousands)             9/28/96        Change       9/30/95       9/28/96        Change       9/30/95
---------------------------------------------------------------------------------------------------------
<S>                        <C>             <C>          <C>          <C>            <C>           <C>   
Sales &                    $3,323          1.6%         $3,272       $10,150        11.8%         $9,076
Marketing
% of Total
Revenues                     25.5%                        21.6%         26.5%                       21.7%
---------------------------------------------------------------------------------------------------------
</TABLE>


For both the quarter ended and the nine months ended  September 28, 1996,  sales
and  marketing  expenses  increased in absolute  dollars and as a percentage  of
total revenues compared to the same periods in 1995. The increase is due largely
to the addition of personnel to bolster the  Company's  sales force,  as well as
the implementation of a new manufacturers' representative compensation program.

<TABLE>
<CAPTION>
                          Qtr. End                     Qtr. End       Y-T-D                       Y-T-D
(in thousands)             9/28/96        Change       9/30/95       9/28/96        Change       9/30/95
---------------------------------------------------------------------------------------------------------
<S>                        <C>             <C>          <C>           <C>            <C>          <C>   
Research &                 $1,586          1.5%         $1,563        $4,642         2.3%         $4,537
Development                
% of Total                                                         
Revenues                     12.2%                        10.3%         12.1%                       10.9%
</TABLE>

Research  and  development  expenses  increased  in  absolute  dollars  and as a
percentage of total revenues in both the third quarter and the nine months ended
September 28, 1996, compared with the same periods in 1995. The nominal increase
in  absolute  dollars  is due to  inflation  and a higher  number of  prototypes
developed  during the third  quarter.  To date, the Company has expensed all R&D
costs as incurred.
                                        8
<PAGE>
<TABLE>
<CAPTION>
                          Qtr. End                     Qtr. End       Y-T-D                       Y-T-D
(in thousands)             9/28/96        Change       9/30/95       9/28/96        Change       9/30/95
---------------------------------------------------------------------------------------------------------
<S>                        <C>            <C>           <C>           <C>           <C>           <C>   
General &                  $1,028         (0.0%)        $1,029        $2,982        (0.8%)        $3,009
Administrative
% of Total 
Revenues                      7.9%                         6.8%          7.8%                        7.2%
---------------------------------------------------------------------------------------------------------
</TABLE>

General and administrative expenses remained relatively flat in absolute dollars
in both the third quarter and the nine months ended September 28, 1996, compared
to the same periods in 1995.

<TABLE>
<CAPTION>

                          Qtr. End                     Qtr. End       Y-T-D                       Y-T-D
(in thousands)             9/28/96        Change       9/30/95       9/28/96        Change       9/30/95
---------------------------------------------------------------------------------------------------------
<S>                         <C>          <C>            <C>           <C>          <C>            <C>   
Income Taxes                $739         (30.1%)        $1,057        $1,906       (42.7%)        $3,329
(excluding income 
tax benefit related to
purchased R&D)
Effective Tax 
Rate                        34.0%                         33.4%         35.5%                       35.4%
---------------------------------------------------------------------------------------------------------
</TABLE>

The Company's  effective tax rate experienced a nominal increase during both the
third quarter and the nine months ended September 28, 1996, compared to the same
periods of the preceding year primarily because the benefits of the research and
development  tax credit  formerly  afforded  under  Section  41 of the  Internal
Revenue Code were not available  throughout the entire nine months September 28,
1996.

<TABLE>
<CAPTION>
                          Qtr. End                     Qtr. End       Y-T-D                       Y-T-D
(in thousands)             9/28/96        Change       9/30/95       9/28/96        Change       9/30/95
---------------------------------------------------------------------------------------------------------
<S>                        <C>            <C>           <C>           <C>           <C>            <C> 
Net Income                 $1,435         22.0%         $1,840        $3,457        404.7%         $685
% of Total
Revenues                     11.0%                        12.1%          9.0%                       1.6%
---------------------------------------------------------------------------------------------------------
</TABLE>

Net income  decreased  in both  absolute  dollars and as a  percentage  of total
revenues for the third  quarter of 1996 as compared to the third quarter of 1995
and increased in both absolute dollars and as a percentage of total revenues for
the nine months ended September 28, 1996 as compared to the same period in 1995.
The decrease  from the third quarter of 1996 as compared to the third quarter of
1995 is due  primarily to a decrease  in sales  during the same time  periods as
discussed  above. The nine months ended September 30, 1995 included a net of tax
charge of $5.4 million of research  and  development  charged off in  connection
with the acquisition of Optical Media International and Hotware.
                                        9
<PAGE>
Liquidity and Capital Resources
-------------------------------

The Company has financed its operations  primarily  through operating cash flows
and equity  financings.  At September  28,  1996,  the Company had cash and cash
equivalents of $28.3 million.  This  represents a $8.4 million  increase in cash
equivalents  during the nine months ended  September 28, 1996,  due primarily to
reductions  in  inventory  and income  taxes  receivable.  The Company  does not
anticipate  significant  capital  expenditures  and expects that  existing  cash
balances and  anticipated  cash flows from operations will satisfy the Company's
working capital requirements for the foreseeable future.



PART II.  OTHER INFORMATION

Item 1 - Legal Proceedings
      In September and October 1996, the Company,  Richard G. Meise,  Richard R.
Douglas and David C. Bolles were named as defendants in two shareholder lawsuits
brought in the Maricopa County Superior Court for the State of Arizona, entitled
James T. Zelloe,  et al. v.  Microtest,  Inc. et al.,  Cause No.  CV96-16655 and
Richard  Fluegel et al. v.  Microtest,  Inc. et al., Cause No.  CV96-19144.  The
plaintiffs  in these  lawsuits  purport to represent a class of  plaintiffs  who
purchased  the  Company's  common stock  between  April 13, 1995 and January 17,
1996. The plaintiffs allege, among other things, that certain statements made by
the  Company  and  its  representatives,  as well  as the  financial  statements
contained  in the  Company's  Quarterly  Reports on Form 10-Q filed during 1995,
were false and misleading due to the Company's purported improper recognition of
revenue on certain sales of products to distributors  and resellers in violation
of generally accepted accounting principles.  More specifically,  the plaintiffs
allege that  certain  sales of  products  to  distributors  and  resellers  were
contingent on resale and, as a result,  the Company  should not have  recognized
revenue on such sales and did not  properly  reserve  for returns on such sales.
Furthermore, according to the plaintiffs, the Company should have disclosed that
future demand for its products would be constrained by the alleged excess levels
of products  held by its  distributors  as a result of the  Company's  purported
contingent  sales in 1995. The lawsuits  include causes of action for securities
fraud and common law fraud and  seek  unspecified  damages  and the  recovery of
attorneys'  fees and  costs.  The  Company  maintains  that its  statements  and
financial  statements  were true and correct and that its recognition of revenue
was proper and in accordance with generally accepted accounting principles.  The
Company  believes that the shareholder  class action lawsuits are without merit,
and it intends to file a motion to dismiss the lawsuits and to vigorously defend
against them.

      The Company is from time to time involved in other legal proceedings  of a
character  normally  incident  to its  business,  including  various  claims and
pending actions against the Company seeking damages.
                                       10

<PAGE>
Item 2. - Changes in Securities
      None

Item 3. - Defaults Upon Senior Securities
      Not applicable

Item 4. - Submission of Matters to a Vote of Security Holders
      None

Item 5. - Other Information

      On September 4, 1996, the Board of  Directors accepted the  resignation of
David C. Bolles. Mr. Bolles  founded  Microtest  in  1984 and  has served on the
Board since then.

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

      a) Exhibit 11 - Statement regarding computation of per share earnings


      b) Reports on Form 8-K
         None

                                       11
<PAGE>
                                   SIGNATURES

Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                 MICROTEST, INC.
                                 ---------------
                                   Registrant



Date: November 8, 1996                             /s/ Richard G. Meise
                                                   ----------------------------
                                                   Richard G. Meise
                                                   Chief Executive Officer




Date: November 8, 1996                             /s/ Richard R. Douglas
                                                   ----------------------------
                                                   Richard R. Douglas
                                                   Chief Financial Officer

                                       12