<PAGE>   1




                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)
   [ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            ACT OF 1934

For quarterly period ended March 31, 2001

                                       OR

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

For the transition period from                        to
                               ----------------------    ---------------------

Commission File Number:  0-23335

                       MPW INDUSTRIAL SERVICES GROUP, INC.
             (Exact name of registrant as specified in its charter)

                  Ohio                                        31-1567260
     (State or other jurisdiction of                       (I.R.S. employer
     incorporation or organization)                      identification no.)

 9711 Lancaster Road, S.E., Hebron, Ohio                        43025
(Address of principal executive offices)                      (Zip code)

                                 (740) 927-8790
              (Registrant's telephone number, including area code)

                                 Not Applicable
              (Former name, former address and former fiscal year,
                         if changed since last report)



         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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

         As of April 30, 2001, 10,939,957 shares of the issuer's common stock,
without par value, were outstanding.




<PAGE>   2

                       MPW INDUSTRIAL SERVICES GROUP, INC.

                                      INDEX


<TABLE>
<CAPTION>
                                                                                                             PAGE
                                                                                                             ----
<S>                                                                                                         <C>
PART I.           FINANCIAL INFORMATION

Item 1.           Financial Statements

                  Consolidated Balance Sheets as of March 31, 2001 (unaudited) and June 30, 2000...............3

                  Consolidated Statements of Operations for the three and nine months ended March 31,
                  2001 and 2000 (unaudited)....................................................................4

                  Consolidated Statements of Cash Flows for the nine months ended March 31,
                  2001 and 2000 (unaudited)....................................................................5

                  Notes to Consolidated Financial Statements (unaudited).......................................6

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

Item 3.           Quantitative and Qualitative Disclosures About Market Risk..................................15


PART II.          OTHER INFORMATION

Item 1.           Legal Proceedings...........................................................................16

Item 2.           Changes in Securities and Use of Proceeds...................................................16

Item 3.           Defaults Upon Senior Securities.............................................................16

Item 4.           Submission of Matters to a Vote of Security Holders.........................................16

Item 5.           Other Information...........................................................................16

Item 6.           Exhibits and Reports on Form 8-K............................................................16


SIGNATURES        ............................................................................................18

EXHIBIT INDEX     ............................................................................................19
</TABLE>



                                                                          Page 2
<PAGE>   3



                        PART I. -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                       MPW INDUSTRIAL SERVICES GROUP, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                                   MARCH 31,         JUNE 30,
                                                                                     2001              2000
                                                                                  -----------        ---------
                                                                                  (UNAUDITED)
<S>                                                                               <C>               <C>
                                              ASSETS
Current assets:
   Cash and cash equivalents                                                       $     142         $     236
   Accounts receivable, net                                                           14,533            24,630
   Inventories                                                                         2,381             3,179
   Prepaid expenses                                                                    1,047             1,927
   Deferred income taxes                                                               2,544             3,112
   Other current assets                                                                  368             1,194
                                                                                   ---------         ---------
                                                                                      21,015            34,278

Property and equipment, net                                                           39,656            47,407

Noncurrent assets:
   Intangibles, net                                                                   20,607            49,250
   Investment in affiliate                                                             7,288                --
   Other assets                                                                          126               537
    Net assets of discontinued operations                                             34,284            30,607
                                                                                   ---------         ---------

Total assets                                                                       $ 122,976         $ 162,079
                                                                                   =========         =========

                               LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                                $   2,304         $   4,375
   Accrued compensation and related taxes                                              2,619             1,038
   Current maturities of noncurrent liabilities                                          224               250
   Accrued loss on sale of subsidiary                                                  5,843             7,247
   Other accrued liabilities                                                           7,083             6,023
                                                                                   ---------         ---------
                                                                                      18,073            18,933
Noncurrent liabilities:
   Long-term debt                                                                     63,646            82,938
   Deferred income taxes                                                               3,527             5,939


Minority interest                                                                         --             1,200

Shareholders' equity:
   Preferred stock, $0.01 par value; 5,000,000 shares authorized; no shares
     issued and outstanding Common stock, no par value; 30,000,000 shares
     authorized; 10,939,957 and 10,929,257 shares issued and outstanding
     at March 31, 2001 and June 30, 2000, respectively                                   109               109
   Additional paid-in capital                                                         41,507            41,461
   Retained earnings                                                                  (3,886)           11,499
                                                                                   ---------         ---------
                                                                                      37,730            53,069

Total liabilities and shareholders' equity                                         $ 122,976         $ 162,079
                                                                                   =========         =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.



                                                                          Page 3
<PAGE>   4

                      MPW INDUSTRIAL SERVICES GROUP, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (in thousands, except per share data)


<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED                 NINE MONTHS ENDED
                                                                             MARCH 31,                          MARCH 31,
                                                                     -------------------------         -------------------------
                                                                       2001             2000             2001             2000
                                                                     --------         --------         --------         --------
                                                                              (UNAUDITED)                 (UNAUDITED)
<S>                                                                 <C>              <C>              <C>              <C>
Revenues                                                             $ 22,427         $ 33,421         $ 74,373         $101,121

Costs and expenses:
   Cost of services                                                    15,360           22,229           50,590           65,086
   Selling, general and administrative expenses                         4,143            6,139           13,665           19,088
   Depreciation and amortization                                        2,000            2,289            5,950            6,526
   Special charges                                                      9,235               --            9,235               --
                                                                     --------         --------         --------         --------
   Total costs and expenses                                            30,738           30,657           79,440           90,700
                                                                     --------         --------         --------         --------
Income (loss)  from operations                                         (8,311)           2,764           (5,067)          10,421
Interest expense, net                                                     845            1,244            2,523            3,430
Loss on sale of subsidiary                                                 --            5,712               --            5,712
                                                                     --------         --------         --------         --------
Income (loss) from continuing operations before
    income taxes and equity in earnings of affiliate                   (9,156)          (4,192)          (7,590)           1,279
Provision (benefit) for income taxes                                     (747)          (1,677)             (89)             511
                                                                     --------         --------         --------         --------
Income (loss) from continuing operations before equity
    in earnings of affiliate                                           (8,409)          (2,515)          (7,501)             768
Equity in earnings of affiliate, net of tax                                75               --              324               --
                                                                     --------         --------         --------         --------
Net income (loss)  from continuing operations                          (8,334)          (2,515)          (7,177)             768

Discontinued Operations:
     Income (loss) from operations, net of tax                         (1,452)             348           (1,422)           1,677
     Loss on sale, net of tax                                          (6,786)              --           (6,786)              --
                                                                     --------         --------         --------         --------
Net income (loss) from discontinued operations                         (8,238)             348           (8,208)           1,677
                                                                     --------         --------         --------         --------
Net income (loss)                                                    $(16,572)        $ (2,167)        $(15,385)        $  2,445
                                                                     ========         ========         ========         ========

Net income (loss) per share:
    Continuing operations                                            $  (0.77)        $  (0.23)        $  (0.66)        $   0.07
    Discontinued operations                                             (0.75)            0.03            (0.75)            0.15
                                                                     --------         --------         --------         --------
Net income (loss) per share                                          $  (1.52)        $  (0.20)        $  (1.41)        $   0.22
                                                                     ========         ========         ========         ========

Net income (loss) per share, assuming dilution:
    Continuing operations                                            $  (0.77)        $  (0.23)        $  (0.66)        $   0.07
    Discontinued operations                                             (0.75)            0.03            (0.75)            0.14
                                                                     --------         --------         --------         --------
Net income (loss) per share, assuming dilution                       $  (1.52)        $  (0.20)        $  (1.41)        $   0.21
                                                                     ========         ========         ========         ========

Weighted average common shares outstanding                             10,940           10,908           10,938           10,877
Weighted average common shares outstanding, assuming dilution          10,940           10,908           10,938           11,520
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.



                                                                          Page 4
<PAGE>   5



                       MPW INDUSTRIAL SERVICES GROUP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                        NINE MONTHS ENDED
                                                                                            MARCH 31,
                                                                                    -------------------------
                                                                                      2001             2000
                                                                                    --------         --------
                                                                                           (UNAUDITED)
<S>                                                                                <C>              <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss)                                                                   $(15,385)        $  2,445

Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
   Depreciation                                                                        5,328            5,111
   Amortization                                                                        1,369            2,057
   Loss on sale of subsidiary                                                          5,843            5,712
   Equity in earnings of affiliate                                                      (324)              --
   Loss on disposals of assets                                                            79              248
   Change in deferred income taxes                                                      (575)             522
   Non-cash special charges (continuing and discontinued operations)                   8,946               --
   Changes in operating assets and liabilities:
     Accounts receivable                                                               1,222           (5,683)
     Inventories                                                                        (868)          (3,936)
     Prepaid expenses and other assets                                                  (977)            (532)
     Accounts payable                                                                 (3,752)             667
     Other accrued liabilities                                                         1,543           (4,144)
                                                                                    --------         --------
Net cash provided by operating activities                                              2,449            2,467

CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from recapitalization of Pentagon                                            22,631               --
Purchases of property and equipment                                                   (4,934)         (12,815)
Purchase of businesses, net of acquired cash                                              --           (9,656)
Proceeds from the disposal of property and equipment                                       9               37
                                                                                    --------         --------
Net cash provided by (used in) investing activities                                   17,706          (22,434)

CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net                                               --               29
Proceeds from revolving credit facility                                               43,164           56,982
Payments on revolving credit facility                                                (62,107)         (36,486)
Payments on notes payable                                                             (1,252)            (558)
Payments on capital lease obligations                                                    (54)             (52)
                                                                                    --------         --------
Net cash (used in) provided by financing activities                                  (20,249)          19,915
                                                                                    --------         --------
Decrease in cash and cash equivalents                                                    (94)             (52)
Cash and cash equivalents at beginning of year                                           236              318
                                                                                    --------         --------

Cash and cash equivalents at end of period                                          $    142         $    266
                                                                                    ========         ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.



                                                                          Page 5
<PAGE>   6

                       MPW INDUSTRIAL SERVICES GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2001
                                   (Unaudited)

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS MPW Industrial
Services Group, Inc. and its subsidiaries (the "Company") provide
technically-based services, including industrial cleaning and facility
maintenance, industrial container cleaning and industrial process water
purification. Such services are primarily provided at customer facilities.
The Company serves customers in numerous industries including automotive,
electric power, pulp and paper, chemical, steel and transportation. The Company
provides services primarily throughout the United States, Mexico and Canada.

         The accompanying unaudited consolidated financial statements presented
herein have been prepared by the Company and reflect all adjustments of a normal
recurring nature that are, in the opinion of management, necessary for a fair
presentation of financial results for the three and nine months ended March 31,
2001 and 2000, respectively, in accordance with generally accepted accounting
principles for interim financial reporting and pursuant to Article 10 of
Regulation S-X. Certain footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. These
interim consolidated financial statements should be read in conjunction with
the Company's Annual Report on Form 10-K for the year ended June 30, 2000
("Annual Report"). The results of operations for the three and nine months
ended March 31, 2001 and 2000, respectively, are not necessarily indicative of
the results for the full year.

         USE OF ESTIMATES The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the accompanying
consolidated financial statements. Actual results could differ from those
estimates.

NOTE 2.  PRIVATIZATION OF COMPANY

         On August 22, 2000, the Company announced that a Special Committee of
its Board of Directors had reached an agreement in principle with the Company's
Chairman and Chief Executive Officer, Monte R. Black, to acquire the Company in
a cash merger at $8.25 per share plus an additional amount if the sale of the
Facility Services Group generated proceeds in excess of targeted amounts. The
Company's Facility Services Group is comprised of its Industrial Filtration
Products and Services ("Filter") segment along with the labor support division
of its Industrial Cleaning and Facility Maintenance service line. On September
27, 2000, the Company announced that Mr. Black had withdrawn his previously
announced proposal to acquire the Company. Mr. Black advised the Company's
Special Committee, which had been evaluating the proposal, that he withdrew the
proposal primarily because he perceived uncertainty in the Company's core
business due to sluggish customer demand from certain industries. Mr. Black
also expected that the higher than anticipated level of current Company
indebtedness, when added to the debt to be incurred to finance the
privatization transaction, would adversely impact the Company if the
privatization transaction were completed.

NOTE 3.  SPECIAL CHARGES

         During the third quarter of fiscal year 2001, the Company recorded
special charges of $9.2 million ($5.5 million net of tax), of which $6.6 million
is non-cash. The following table sets forth the major components of the charge.

                                                                 MARCH 31,
               ($ in millions)                                     2001
                                                                ------------

               Accounts receivable/bad debt                        $ 4.5
               Goodwill and other asset write-downs                  1.6
               Workers compensation, financing fees and other        3.1
                                                                   -----
                                                                   $ 9.2
                                                                   =====

         The $4.5 million charge for accounts receivable/bad debt primarily
relates to an increase in the bad debt reserve as a result of recent bankruptcy
filings by several customers, as well as the write-off of certain other
accounts. Goodwill and other




                                                                          Page 6
<PAGE>   7

asset write-downs of $1.6 million primarily relate to an impairment charge for
goodwill and the abandonment of certain capital projects and other assets.
Compensation, financing fees and other of $3.1 million primarily consists of
adverse workers compensation claim developments and retroactive premiums and
claims assessments, financing fees associated with the amended revolving credit
facility and severance.

NOTE 4.  DISCONTINUED OPERATIONS

         In connection with the proposed privatization transaction, the Company
previously had announced its intention to sell the Facility Services Group,
which was defined as the Industrial Filtration Products and Services
("Filter") segment along with the labor support business of its Industrial
Cleaning and Facility Maintenance business (the "Facility Support Division"),
each of which represented separate segments under APB 30, Reporting the Results
of Operations--Reporting the Effects of Disposal of a Segment of a Business,
and Extraordinary, Unusual and Infrequently Occurring Events and Transactions.
The Company currently is only selling the Filter segment.

         The Company has signed a definitive agreement with CLARCOR Inc., a
filter manufacturer, for the sale of the Filter segment. In connection with the
sale, the Company has recorded an estimated net loss of $6.8 million, inclusive
of all selling and professional services expenses and related tax benefits of
1.3 million. Under the terms of the agreement, the purchase price is
approximately $31.0 million subject to final closing adjustments, with the net
proceeds being used to repay debt. The transaction is expected to close on or
about June 4, 2001.

         The Facility Support Division will be retained by the Company and
included as part of the Industrial Cleaning and Facility Maintenance segment.
As a result, the Company has restated all current and prior results of
operations to reflect the Facility Support Division as part of continuing
operations in accordance with EITF 90-16, Accounting for Discontinued Operations
Subsequently Retained.

         Discontinued operations include Filter segment net sales that totaled
$15.3 million and $15.0 million for the three months ended March 31, 2000 and
2001, respectively, and $42.4 and $47.1 million for the nine months ended March
31, 2000 and 2001, respectively.  Operating results for discontinued operations
for the three and nine months ended March 31, 2001 include a pre-tax charge of
$1.8 million primarily related to asset write-downs and other costs associated
with the sale of the Filter segment.  Interest expense is charged to
discontinued operations based on intercompany account balances at the Company's
effective external borrowing rate. Interest expense included in discontinued
operations was $395,000 and $599,000 for the three months ended March 31, 2000
and 2001, respectively, and $1.1 million and $1.8 million for the nine months
ended March 31, 2000 and 2001, respectively.  Net income/loss from discontinued
operations is net of income tax expense/(benefit) of $232,000 and ($1.2) million
for the three months ended March 31, 2000 and 2001, respectively, and $1.1
million and ($1.2) million for the nine months ended March 31, 2000 and 2001,
respectively.

NOTE 5.  RECAPITALIZATION OF PENTAGON

         On July 18, 2000, the Company closed a transaction related to its then
subsidiary, Pentagon Technologies Group, Inc. ("Pentagon"), pursuant to a
Recapitalization Agreement, dated as of April 25, 2000, by and among Pentagon,
the Company, MPW Management Services Corp., Pentagon Merger Sub, Inc., Baird
Capital Partners III Limited Partnership, BCP III Special Affiliates Limited
Partnership and BCP III Affiliates Fund Limited Partnership, as amended (the
"Recapitalization Agreement"). Pursuant to the Recapitalization Agreement, Baird
Capital Partners and certain of its affiliates ("BCP") invested in Pentagon, the
Company sold a majority of its equity interest in Pentagon to BCP and Pentagon's
indebtedness to the Company was repaid. The Company retained a 22.3% interest in
the capital stock of Pentagon.

         In connection with this transaction, the Company received $22.8
million ($22.6 million net of Pentagon cash), which was used to repay debt. The
Company's June 30, 2000 balance sheet includes a $7.2 million ($4.3 million net
of tax) accrued loss on sale of subsidiary to reduce the Company's investment in
Pentagon to 22.3% of Pentagon's equity upon completion of the recapitalization
transaction. As a result of the reduction in the Company's ownership of
Pentagon's capital stock to 22.3%, beginning in the first quarter of fiscal
2001, the Company has accounted for its remaining investment in Pentagon under
the equity method of accounting.

         The Company's third quarter of fiscal 2001 includes a non-cash tax
charge in continuing operations of $2.9 million for a valuation allowance
against the Company's net deferred tax assets related to the operating loss
carry-forward from the sale of Pentagon

         The preferred stock of Pentagon recorded in the Company's balance sheet
as of June 30, 2000 and prior periods as minority interest and common stock
options issued by Pentagon to certain of its executive officers were cancelled
in the recapitalization transaction. The Company's investment and earnings in
Pentagon are classified in the fiscal 2001 financial statements as "investment
in affiliate" and "equity in earnings of affiliate," respectively.



                                                                          Page 7
<PAGE>   8

NOTE 6.  INTANGIBLES

         Intangibles are summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                       MARCH 31,       JUNE 30,
                                         2001            2000
                                       ---------       --------
<S>                                   <C>            <C>
          Goodwill                      $12,280        $40,502
          Customer lists                  7,076          7,323
          Patents                         1,022          1,126
          Non-compete agreements            229            299
                                        -------        -------
                                        $20,607        $49,250
                                        =======        =======
</TABLE>

         Accumulated amortization of intangibles as of March 31, 2001 and
June 30, 2000 was $3.3 million and $4.0 million, respectively.

NOTE 7.  LONG-TERM DEBT

         In May, 2001, the Company amended its revolving credit facility based
on the impending sale of the Company's Filter segment. The amendment to the
Company's revolving credit facility reset the financial covenants for the
third quarter of fiscal 2001 and future periods. Upon the earlier of August 10,
2001 or the completion of the sale, available borrowings under the facility
will be reduced from $70.0 million to between $45.0 and $47.5 million,
depending on the final net proceeds from the sale of the Filter segment.

NOTE 8. INCOME TAXES

         The effective income tax rates for continuing operations for the three
and nine months ended March 31, 2001 were 8% and 1%, respectively.  The
effective income tax rates for continuing operations for the three and nine
months ended March 31, 2000 were 40%.

         The fiscal 2001 continuing operations' effective income tax rate
reflects a non-cash charge of $2.9 million for a valuation allowance against
the Company's net deferred tax assets related to the capital tax operating loss
carry-forward from the sale of Pentagon.  In addition, the tax benefit for
discontinued operations for the three and nine months ending March 31, 2001, is
net of a valuation allowance against the estimated capital tax operating loss
carry-forward element of the loss on sale of discontinued operations.



                                                                          Page 8
<PAGE>   9



NOTE 9.  EARNINGS PER SHARE

         The following table sets forth the computation of basic and diluted
earnings (loss) per share (in thousands, except per share data):
<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED                NINE MONTHS ENDED
                                                                         MARCH 31,                        MARCH 31,
                                                                 ------------------------         ------------------------
                                                                   2001             2000            2001             2000
                                                                 --------         -------         --------         -------
<S>                                                             <C>              <C>              <C>              <C>
          Numerator for basic and diluted earnings
             (loss) per share - net income (loss) from
           Continuing operations ........................        $ (8,334)        $(2,515)        $ (7,177)        $   768
           Discontinued operations ......................          (8,238)            348           (8,208)          1,677
                                                                 --------         -------         --------         -------
          Net income ....................................        $(16,572)        $(2,167)        $(15,385)        $ 2,445
                                                                 ========         =======         ========         =======
           Denominator for basic earnings (loss) per
             share - weighted average common shares .....          10,940          10,908           10,938          10,877
             Effect of dilutive securities:
             Dilutive employee stock options ............              --              --               --             643
             Preferred  stock of Pentagon ...............              --              --               --              --
                                                                 --------         -------         --------         -------
             Dilutive potential common shares ...........              --              --               --             643
           Denominator for diluted earnings (loss) per
             share - adjusted weighted average common
             shares and assumed conversions .............          10,940          10,908           10,938          11,520
                                                                 ========         =======         ========         =======
           Net income (loss) per share:
           Continuing operations ........................        $  (0.77)        $ (0.23)        $  (0.66)        $  0.07
           Discontinued operations ......................           (0.75)           0.03            (0.75)           0.15
                                                                 --------         -------         --------         -------
          Net income (loss) per share ...................        $  (1.52)        $ (0.20)        $  (1.41)        $  0.22
                                                                 ========         =======         ========         =======

          Net income (loss) per share,
            assuming dilution:
            Continuing operations .......................        $  (0.77)        $ (0.23)        $  (0.66)        $  0.07
            Discontinued operations .....................           (0.75)           0.03            (0.75)           0.14
                                                                 --------         -------         --------         -------
          Net income (loss) per share, assuming dilution.        $  (1.52)        $ (0.20)        $  (1.41)        $  0.21
                                                                 ========         =======         ========         =======
</TABLE>

         Options to purchase 1,670,249 and 773,350 shares of common stock at a
weighted average price of $6.01 and $10.07 per share, respectively, were
outstanding during the three months ended March 31, 2001 and 2000,
respectively, but were not included in the computation of diluted earnings per
share because the options' exercise price was greater than the average market
price of the common shares and, therefore, the effect would be antidilutive.
Options to purchase 897,000 shares of common stock at a weighted average price
of $2.51 per share were outstanding during the three months ended March 31,
2000 but were not included in the computation of diluted earnings per share
because the Company reported a net loss for the three months ended March 31,
2000 and, therefore, the effect would be antidilutive.

          Options to purchase 821,249 and 763,350 shares of common stock at a
weighted average price of $9.70 and $10.09 per share, respectively, were
outstanding during the nine months ended March 31, 2001 and 2000, respectively,
but were not included in the computation of diluted earnings per share because
the options' exercise price was greater than the average market price of the
common shares and, therefore, the effect would be antidilutive. Options to
purchase 849,000 shares of common stock at a weighted average price of $2.44 per
share were outstanding during the nine months ended March 31, 2001 but were not
included in the computation of diluted earnings per share because the Company
reported a net loss for the nine months ended March 31, 2001 and, therefore, the
effect would be antidilutive.





                                                                          Page 9
<PAGE>   10

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

         Except for historical information, certain statements in this
Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") are forward looking. These forward looking statements are
based on current expectations that are subject to a number of uncertainties and
risks and actual results may differ materially. The uncertainties and risks
include, but are not limited to, competitive and other market factors, customer
purchasing behavior, general economic conditions and other facets of our
business operations as well as other risk factors identified in "Investment
Considerations" in our Annual Report. We undertake no obligation and do not
intend to update, revise or otherwise publicly release the result of any
revisions to these forward looking statements that may be made to reflect future
events or circumstances.

         The following information should be read in conjunction with our
Unaudited Consolidated Financial Statements and related notes included elsewhere
in this Form 10-Q. The following information should also be read in conjunction
with our Audited Consolidated Financial Statements and related notes and MD&A
for the year ended June 30, 2000 as contained in our Annual Report.

OVERVIEW


         Privatization of Company. On August 22, 2000, we announced that a
Special Committee of our Board of Directors had reached an agreement in
principle with the Company's Chairman and Chief Executive Officer, Monte R.
Black, to acquire the Company in a cash merger at $8.25 per share plus an
additional amount if the sale of Facility Services Group generated proceeds in
excess of targeted amounts. The Company's Facility Services Group is comprised
of its Industrial Filtration Products and Services ("Filter") segment along
with the labor support division of its Industrial Cleaning and Facility
Maintenance service line. On September 27, 2000, we announced that Mr. Black
had withdrawn his previously announced proposal to acquire the Company. Mr.
Black advised the Company's Special Committee, which had been evaluating the
proposal, that he withdrew the proposal primarily because he perceived
uncertainty in the Company's core business due to sluggish customer demand from
certain industries. Mr. Black also expected that the higher than anticipated
level of current Company indebtedness, when added to the debt to be incurred to
finance the privatization transaction, would adversely impact the Company if
the privatization transaction were completed. See Note 2 to the Consolidated
Financial Statements.


         Proposed Sale of the Facility Services Group.  In connection with the
proposed privatization transaction, we had announced our intention to sell the
Facility Services Group, which was defined as the Industrial Filtration
Products and Services ("Filter") segment along with the labor support business
of our Industrial Cleaning and Facility Maintenance business (the "Facility
Support Division") each of which represented separate segments under APB 30,
Reporting the Results of Operations--Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions.  We are currently only selling the Filter segment.
Discontinued operations include Filter segment net sales that totaled $15.3
million and $15.0 million for the three months ended March 31, 2000 and 2001,
respectively, and $42.4 million and $47.1 million for the nine months ended
March 31, 2000 and 2001, respectively.

         We have signed a definitive agreement with CLARCOR Inc., a filter
manufacturer, for the sale of the Filter segment. In connection with the sale,
we have recorded an estimated net loss of $6.8 million, inclusive of all selling
and professional services expenses and related tax benefits of $1.3 million.
Under the terms of the agreement, the purchase price is approximately $31.0
million subject to final closing adjustments, with the net proceeds being used
to repay debt.  The transaction is expected to close on or about June 4, 2001.

         The Facility Support Division will be retained by the Company and
included as part of our Industrial Cleaning and Facility Maintenance segment.
As a result, we have restated all current and prior results of operations to
reflect the Facility Support Division as part of continuing operations in
accordance with EITF 90-16, Accounting for Discontinued Operations Subsequently
Retained.

         Recapitalization of Pentagon. On July 18, 2000, we sold a majority of
our equity interest in Pentagon to Baird Capital Partners. We retained a 22.3%
interest in the capital stock of Pentagon. See Note 5 to the Consolidated
Financial Statements.



                                                                         Page 10
<PAGE>   11

         In connection with this transaction, we received payments totaling
$22.8 million, which were used to repay debt. Our June 30, 2000 balance sheet
includes a $4.3 million accrued loss on sale of subsidiary, net of related tax
benefits, to reduce our investment in Pentagon to 22.3% of Pentagon's equity
upon completion of the recapitalization transaction. As a result of the
reduction in our ownership of Pentagon's capital stock to 22.3%, our remaining
investment in Pentagon has been accounted for using the equity method of
accounting.

         Our third quarter of fiscal 2001 includes a non-cash tax charge of
$2.9 million for a valuation allowance against the Company's net deferred tax
assets related to the operating loss carry-forward from the sale of Pentagon.

         Income from continuing operations before equity in earnings of
affiliate for the nine months ended March 31, 2000 includes the results of
Pentagon.

         Special charges. During the third quarter of fiscal year 2001, we
recorded special charges of $9.2 million ($5.5 million net of tax), of which
$6.6 million is non-cash. The following table sets forth the major components of
the charge.

<TABLE>
<CAPTION>
                                                                  MARCH 31,
              ($ in millions)                                       2001
                                                                  ---------
<S>                                                               <C>
              Accounts receivable/bad debt                          $ 4.5
              Goodwill and other asset write-downs                    1.6
              Workers compensation, financing fees and other          3.1
                                                                    -----
                                                                    $ 9.2
                                                                    =====
</TABLE>

         The $4.5 million charge for accounts receivable/bad debt primarily
relates to an increase in the bad debt reserve as a result of recent bankruptcy
filings by several customers, as well as the write-off of certain other
accounts. Goodwill and other asset write-downs of $1.6 million primarily relate
to an impairment charge for goodwill and the abandonment of certain capital
projects and other assets. Compensation, financing fees and other of $3.1
million primarily consists of adverse workers compensation claim developments
and retroactive premiums and claims assessments, financing fees associated
with the amended revolving credit facility and severance.


GENERAL

         We primarily derive our revenues from services under time and
materials, fixed price and unit price contracts. We recognize revenues from time
and materials type contracts based on performance and efforts expended. We
record revenues from non-contract activities as we perform services or sell
goods.

         Cost of services includes all direct labor, materials, subcontractor
and other costs related to the performance of our services. Cost of services
also includes all costs associated with our operating equipment, excluding
depreciation and amortization.

         Selling, general and administrative expenses include management
salaries, clerical and administrative overhead, professional services, costs
associated with marketing and sales efforts and costs associated with our
information systems.

         Depreciation and amortization consists of depreciation of operating
equipment and amortization of capital leases and intangibles. Depreciation is
calculated using the straight-line method over the estimated useful lives of
property and equipment. We amortize capital leases on a straight-line basis over
the lease term and goodwill and other intangibles on a straight-line basis over
periods not exceeding 25 years.





                                    Page 11
<PAGE>   12

RESULTS OF OPERATIONS

         The following table sets forth selected statement of operations data
for continuing operations as a percentage of revenues adjusted to exclude the
revenues and expenses of Pentagon for the three and nine months ended March 31,
2000:

<TABLE>
<CAPTION>
                                                                         THREE MONTHS ENDED            NINE MONTHS ENDED
                                                                              MARCH 31,                    MARCH 31,
                                                                         2001          2000           2001           2000
                                                                        -----          -----          -----          -----
<S>                                                                   <C>            <C>            <C>            <C>
          Revenues                                                      100.0%         100.0%         100.0%         100.0%
          Costs and expenses:
             Cost of services                                            68.5           67.4           68.0           65.2
             Selling, general and administrative expenses                18.5           17.4           18.4           17.6
             Depreciation and amortization                                8.9            7.5            8.0            6.8
             Special charges                                             41.2           --             12.4           --
                                                                        -----          -----          -----          -----
             Total costs and expenses                                   137.1           92.3          106.8           89.6
                                                                        -----          -----          -----          -----
          Income (loss) from operations                                 (37.1)           7.7           (6.8)          10.4
          Interest expense, net                                           3.7            3.8            3.4            7.3
          Loss on sale of subsidiary                                       --           22.5             --            3.4
                                                                        -----          -----          -----          -----
          Income (loss) from continuing operations before
             income  taxes and equity in earnings of affiliate          (40.8)         (18.6)         (10.2)          (0.3)
          Provision (benefit) for income taxes                           (3.3)          (7.4)           (.1)          (0.1)
                                                                        -----          -----          -----          -----
          Income (loss) from continuing operations
             before equity in earnings of
             affiliate                                                  (37.5)%        (11.2)%        (10.1)%         (0.2)%
                                                                        =====          =====          =====          =====
</TABLE>



                                                                         Page 12
<PAGE>   13

THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31, 2000


         Basis of Presentation. Our analysis of the three months ended March 31,
2001 compared to the three months ended March 31, 2000 utilizes actual
information as presented above that has been adjusted to reflect the Filter
segment as a discontinued operation. The information presented above with
respect to the three months ended March 31, 2000 excludes the operating results
of Pentagon, which has been accounted for under the equity method of accounting
for the three months ended March 31, 2001. Pentagon accounted for $8.0 million
of our revenues and $0.9 million of the Company's income from operations for the
three months ended March 31, 2000.

         Revenues. Revenues decreased from $33.4 million to $22.4 million for
the three months ended March 31, 2000 and 2001, respectively. This decrease was
primarily the result of the sale of Pentagon in July 2000. Excluding the results
of Pentagon, total revenues decreased $3.0 million, or 11.8%, for the three
months ended March 31, 2001. The decrease was primarily due to the slowdown in
the economy and its impact on many of the customers and industries that we
serve.

         Cost of Services. Total cost of services was $15.4 million for the
three months ended March 31, 2001 compared with $22.2 million for the three
months ended March 31, 2000. Excluding Pentagon, cost of services as a
percentage of revenue increased from 67.4% to 68.5% for the three months ended
March 31, 2001. This increase was due primarily to higher fuel and labor costs.

         Selling, General and Administrative Expenses. Total selling, general
and administrative expenses were $4.1 million and $6.1 million for the three
months ended March 31, 2001 and 2000, respectively. Excluding Pentagon, selling,
general and administrative expenses were $4.4 million for the three months ended
March 31, 2000. As a percentage of revenue, selling, general and administrative
expenses increased from 17.4% to 18.5% for the three months ended March 31,
2001.

         Income (loss) from Operations. The loss from operations was $8.3
million for the three months ended March 31, 2001 compared with operating income
of $2.8 million for the three months ended March 31, 2000. Excluding the special
charges in third quarter of fiscal 2001 and the results of Pentagon in the third
quarter of fiscal year 2000, operating income was $0.9 million and $1.9 million
for the three months ended March 31, 2001 and 2000, respectively. As a
percentage of revenue, income from operations decreased to 4.0% in third quarter
fiscal 2001 compared with 7.7% in the prior year. The decrease in operating
income was due to the loss of higher margin accounts that occurred during the
second half of fiscal 2000 due primarily to aggressive competitor pricing,
continued sluggish customer demand in certain industries and higher costs.

         Interest Expense. Interest expense decreased to $0.8 million from $1.2
million for the three months ended March 31, 2001 and 2000, respectively. The
decrease was primarily the result of lower average outstanding borrowings due to
the proceeds from the recapitalization of Pentagon being used to repay debt.

         Provision for Income Taxes. The benefit for income taxes for the three
months ended March 31, 2001 and 2000 reflects an effective rate of 8% and 40%,
respectively. The benefit for income taxes for the three months ended March 31,
2001 reflects a charge of $2.9 million for a valuation allowance against our
net deferred tax assets related to the operating loss carry-forward from the
sale of Pentagon. Excluding the valuation allowance, our effective tax rate
was 40%.


NINE MONTHS ENDED MARCH 31, 2001 COMPARED TO NINE MONTHS ENDED MARCH 31, 2000

         Basis of Presentation. Our analysis of the nine months ended March 31,
2001 compared to the nine months ended March 31, 2000 utilizes actual
information as presented above that has been adjusted to reflect the Filter
segment as a discontinued operation. The information presented above with
respect to the nine months ended March 31, 2000 excludes the operating results
of Pentagon, which has been accounted for under the equity method of accounting
for the nine months ended March 31, 2001. Pentagon accounted for $23.0 million
of our revenues and $2.3 million of our income from operations for the nine
months ended March 31, 2000.

         Revenues. Revenues decreased from $101.1 million to $74.4 million for
the nine months ended March 31, 2000 and 2001, respectively. This decrease was
primarily the result of the sale of Pentagon in July 2000. Excluding the results
of Pentagon, revenue for the nine months ended March 31, 2000 was $78.1 million,
which represents a 4.7% decrease in 2001 revenues from the prior year. The
decrease in revenue was primarily attributable to the slowdown in the economy
and its impact on many of the customers and industries that we serve.


                                                                        Page 13
<PAGE>   14

         Cost of Services. Total cost of services was $50.6 million for the nine
months ended March 31, 2001 compared with $65.1 million for the nine months
ended March 31, 2000. Excluding Pentagon, cost of services as a percent of
revenue increased from 65.2% in the prior year to 68.0% for the nine months
ended March 31, 2001. This increase was due primarily to higher fuel and labor
costs.

         Selling, General and Administrative Expenses. Total selling, general
and administrative expenses were $13.7 million and $19.1 million for the nine
months ended March 31, 2001 and 2000, respectively. Excluding Pentagon, selling,
general and administrative expenses were $13.8 million for the nine months ended
March 31, 2000. As a percentage of revenue, selling, general and administrative
expenses increased from 17.6% to 18.4% for the nine months ended March 31, 2000
and 2001, respectively.

         Income (loss) from Operations. The loss from operations was $5.1
million for the nine months ended March 31, 2001 compared with operating income
of $10.4 million for the nine months ended March 31, 2000. Excluding the special
charges in fiscal 2001 and the results of Pentagon in fiscal 2000, operating
income was $4.1 million and $8.1 million for the nine months ended March 31,
2001 and 2000, respectively. As a percentage of revenue, income from operations
decreased to 5.5% in the nine months ended March 31, 2001 compared with 10.4% in
the prior year. The decrease in operating income was primarily due to the same
factors impacting the three months ended March 31, 2001.

         Interest Expense, net. Interest expense was $2.5 and $3.4 million for
the nine months ended March 31, 2001 and 2000, respectively. The decrease was
primarily the result of lower average outstanding borrowings due to the proceeds
from the recapitalization of Pentagon being used to repay debt.


         Provision for Income Taxes. The benefit/provision for income taxes for
the nine months ended March 31, 2001 and 2000 reflects an effective rate of 1%
and 40%, respectively. The benefit for income taxes for the nine months ended
March 31, 2001 reflects a charge of $2.9 million for a valuation allowance
against our net deferred tax assets related to the operating loss carry-forward
from the sale of Pentagon. Excluding the valuation allowance, our effective
tax rate for the nine months ended March 31, 2001 was 40%.


QUARTERLY RESULTS AND SEASONALITY

         Our quarterly results of operations tend to vary seasonally, and may
fluctuate significantly as a result of a number of factors over which we have no
control, including our customers' budgetary constraints, the timing and duration
of our customers' planned maintenance activities and shutdowns, changes in our
competitors pricing policies and general economic conditions. Also, certain
operating and fixed costs remain relatively constant throughout the fiscal year,
which when offset by differing levels of revenues, may result in fluctuations in
quarterly results.


LIQUIDITY AND CAPITAL RESOURCES

         As of March 31, 2001, we had cash and cash equivalents of $142,000 and
working capital of $2.9 million. During the nine months ended March 31, 2001,
operating activities provided $2.4 million of cash and we made capital
investments of $4.9 million.

         During October 1999, we entered into a $100.0 million revolving credit
facility with our principal banks and two additional banks. On August 30, 2000,
because of decreased borrowing needs, we reduced the availability under our
revolving credit facility to $70.0 million. The revolving credit facility
terminates in October 2002, subject to extension by the banks each year on the
anniversary of the agreement. Under the terms of our current credit facility,
the entire $70.0 million is available for general corporate purposes, including
working capital, capital expenditures and acquisitions. Borrowing under our
current credit facility is at rates, based on the prime or Eurodollar rate, that
we believe to be very favorable. Availability of borrowing is subject to the
maintenance of a minimum level of net worth, certain levels of interest coverage
and maintenance of a specific ratio of funded debt to earnings before interest,
taxes, depreciation and amortization that we believe will not affect the
availability of borrowings under our current credit facility. As of March 31,
2001, borrowings under the current credit facility were $63.5 million.



                                                                         Page 14
<PAGE>   15

         In May, 2001, we amended our revolving credit facility based on the
impending sale of the Filter segment. The amendment to our revolving credit
facility reset the financial covenants for the third quarter of fiscal 2001
and future periods. Upon the earlier of August 10, 2001 or the completion of
the sale, available borrowings under the facility will be reduced from $70.0
million to between $45.0 and $47.5 million, depending on the final net proceeds
from the sale of the Filter segment.

INFLATION

         The effects of inflation on our operations were not significant during
the periods presented in the Consolidated Financial Statements.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         We are exposed to certain market risks from transactions that are
entered into during the normal course of business. We have not entered into
derivative financial instruments for trading purposes. Our primary market risk
exposure relates to interest rate risk. We had a balance of $63.5 million on our
revolving credit facility at March 31, 2001, which is subject to a variable rate
of interest based on the prime or Eurodollar rate. Assuming borrowings at March
31, 2001, a one hundred basis point change in interest rates would impact net
interest expense by approximately $635,000 per year.




                                                                         Page 15
<PAGE>   16

                          PART II. -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         Various legal actions arising in the ordinary course of business are
         pending against the Company. None of the litigation pending against the
         Company, individually or collectively, is expected to have a material
         adverse effect on the Company.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

         Not Applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         Not Applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         Not Applicable.

ITEM 5.  OTHER INFORMATION.

         None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits.

                  3(a)     Amended and Restated Articles of Incorporation of the
                           Company effective November 4, 1999 (filed as Exhibit
                           3(a) to the Company's Quarterly Report on Form 10-Q
                           for the quarter ended September 30, 1999, and
                           incorporated herein by reference).

                  3(b)     Amended and Restated Code of Regulations of the
                           Company effective November 4, 1999 (filed as Exhibit
                           3(b) to the Company's Quarterly Report on Form 10-Q
                           for the quarter ended September 30, 1999, and
                           incorporated herein by reference).

                  4(a)     Credit Agreement, dated as of October 20, 1999, among
                           the Company and its subsidiaries, Bank One, NA,
                           National City Bank, LaSalle Bank, National
                           Association, SunTrust Bank, Central Florida, N.A.,
                           and Banc One Capital Markets, Inc. (filed as Exhibit
                           4 to the Company's Quarterly Report on Form 10-Q for
                           the quarter ended September 30, 1999, and
                           incorporated herein by reference).

                  4(b)     First Amendment to Credit Agreement and other Loan
                           Documents, dated as of July 17, 2000, among the
                           Company and its subsidiaries, Bank One, NA, National
                           City Bank, LaSalle Bank, National Association,
                           SunTrust Bank, Central Florida, N.A., and Bank One
                           Capitol Markets, Ins. (filed as Exhibit 4(b) to the
                           Company's Annual Report on Form 10-K for the year
                           ended June 30, 2000, and incorporated herein by
                           reference).

                  4(c)     Second Amendment to Credit Agreement, dated as of
                           November 10, 2000, among the Company and its
                           subsidiaries, Bank One, NA, National City Bank,
                           LaSalle Bank, National Association, and SunTrust Bank
                           (filed as Exhibit 4(c) to the Company's Quarterly
                           Report on Form 10-Q for the quarter ended September
                           31, 2000, and incorporated herein by reference).

                  4(d)     Third Amendment to Credit Agreement, dated as of
                           May 11, 2001, among the Company and its subsidiaries,
                           Bank One, NA, National City Bank, LaSalle Bank,
                           National Association, and SunTrust Bank.

                 10        Stock Purchase Agreement, dated as of May 10, 2001,
                           by and among MPW Industrial Services Group, Inc.,
                           MPW Management Services Corp., CLARCOR Filtration
                           Products, Inc. and CLARCOR Inc.

                                                                        Page 16
<PAGE>   17



         (b)      No reports on Form 8-K were filed during the period.



                                                                        Page 17
<PAGE>   18


                                   SIGNATURES

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

                                 MPW INDUSTRIAL SERVICES GROUP, INC.,
                                 an Ohio corporation


Dated: May 15, 2001              By: /s/ Richard R. Kahle
      --------------                ------------------------------------------
                                    Richard R. Kahle
                                    Vice President and Chief Financial Officer
                                    (on behalf of the Registrant and as
                                    Principal Financial Officer)




                                                                         Page 18
<PAGE>   19

                                  EXHIBIT INDEX


    Exhibit
    Number       Description of Exhibit
    -------      ----------------------

     3(a)         Amended and Restated Articles of Incorporation of the Company
                  effective November 4, 1999 (filed as Exhibit 3(a) to the
                  Company's Quarterly Report on Form 10-Q for the quarter ended
                  September 30, 1999, and incorporated herein by reference).

     3(b)         Amended and Restated Code of Regulations of the Company
                  effective November 4, 1999 (filed as Exhibit 3(b) to the
                  Company's Quarterly Report on Form 10-Q for the quarter ended
                  September 30, 1999, and incorporated herein by reference).

     4(a)         Credit Agreement, dated as of October 20, 1999, among the
                  Company and its subsidiaries, Bank One, NA, National City
                  Bank, LaSalle Bank, National Association, SunTrust Bank,
                  Central Florida, N.A., and Banc One Capital Markets, Inc.
                  (filed as Exhibit 4 to the Company's Quarterly Report on
                  Form 10-Q for the quarter ended September 30, 1999, and
                  incorporated herein by reference).

     4(b)         First Amendment to Credit Agreement and Other Loan Documents,
                  dated as of July 17, 2000, among the Company and its
                  subsidiaries, Bank One, NA, National City Bank, LaSalle Bank,
                  National Association, SunTrust Bank, Central Florida, N.A.,
                  and Banc One Capital Markets, Inc. (filed as Exhibit 4(b) to
                  the Company's Annual Report on Form 10-K for the year ended
                  June 30, 2000, and incorporated herein by reference).

     4(c)         Second Amendment to Credit Agreement, dated as of November 10,
                  2000, among the Company and its subsidiaries, Bank One, NA,
                  National City Bank, LaSalle Bank, National Association and
                  SunTrust Bank (filed as Exhibit 4(c) to the Company's
                  Quarterly Report on Form 10-Q for the quarter ended September
                  30, 2000, and incorporated herein by reference).

     4(d)         Third Amendment to Credit Agreement, dated as of May 11, 2001,
                  among the Company and its subsidiaries, Bank One, NA, National
                  City Bank, LaSalle Bank, National Association and SunTrust
                  Bank.

    10            Stock Purchase Agreement, dated as of May 10, 2001, by and
                  among MPW Industrial Services Group, Inc., MPW Management
                  Services Corp., CLARCOR Filtration Products, Inc. and CLARCOR
                  Inc.



                                                                        Page 19