SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549
   

                               FORM 10-QSB

           Quarterly Report Pursuant to Section 13 or 15(d)
               of the Securities Exchange Act of 1934

                  For the Quarter Ended September 30, 1997
                      Commission File Number 0-21522

              WILLAMETTE VALLEY VINEYARDS, INC.

      (Exact name of registrant as specified in charter)

   Oregon                             93-0981021
(State or other jurisdiction of      (I.R.S. Employer 
incorporation or organization)       Identification Number)

              _______________________________

        8800 Enchanted Way,  S.E., Turner, Oregon 97392
                          (503)-588-9463

 (Address, including Zip code, and telephone number,
  including area code, of registrant's principal                            
executive offices)
               ________________________________

      Indicate by check mark whether the registrant (1) has 
filed all reports required to be filed by Section 13 or 
15(d) of the Securities Exchange Act of 1934 during the 
preceding 12 months (or for such shorter period that the 
registrant was required to file such reports) and (2) has 
been subject to such filing requirements for the past 90 
days.
                                   [X] YES       [  ] NO

       Number of shares of common stock outstanding as of
        September 30, 1997 4,226,096 shares, no par value
              







                   WILLAMETTE VALLEY VINEYARDS, INC.

                               Balance Sheet


                              September 30,    December 31,
                                 1997               1996
                                (unaudited)
ASSETS

Current assets:
Cash and cash equivalents          $ 141,284 *   $ 794,885 
Accounts receivable trade, net       390,581       288,905 
Other receivable                          -         12,388 
Inventories                        4,060,682     2,843,053 
Prepaid expenses                      85,734        94,790 
Deferred income taxes                111,438       111,438 
                                  -----------  -----------
Total current assets               4,789,719     4,145,459 

Vineyard development cost, net     1,461,579       386,605 
Property and equipment, net        6,736,830     5,421,016 
Investments                           96,001       115,218 
Notes receivable                     145,838       138,511 
Debt issuance costs,net              173,994        56,896 
                                  -----------  -----------
Total assets                     $13,403,961   $10,263,705 
                                 ===========    ========== 

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
Line of credit                   $ 1,195,764   $   479,626 
Current portion of long term debt    124,191        97,819 
Accounts payable                     599,517       117,428 
Other accrued liabilities             41,712        51,511 
Accrued commissions and payroll      104,466       122,745 
Income taxes payable                  14,148        29,148 
Grapes payable                       354,049       551,014 
                                  ----------    ---------- 
Total current liabilities          2,433,847     1,449,291 

Long-term debt                     3,947,620     3,072,181 
Deferred income taxes                114,028       114,028 
                                 -----------    ---------- 
Total liabilities                  6,495,495     4,635,500 

Shareholders' equity
Common stock, no par value 
- 10,000,000   shares authorized,
 3,785,356 shares at 12/31/96 
and 4,226,096 at 9/30/97 
issued and outstanding             6,763,652     5,369,868 

Retained earnings                    144,814       258,337 
                                  ----------   ----------- 
Total shareholders' equity         6,908,466     5,628,205 

Total liabilities and 
shareholders' equity             $13,403,961   $10,263,705 
                                 ===========    ========== 
* $106,000 restricted cash see Liquidity and Capital 
Resources

The accompanying notes are an integral part of this 
financial statement.



                       WILLAMETTE VALLEY VINEYARDS, INC.
                            Statement of Operations
                                 (Unaudited)


                   Three Months Ended     Nine Months Ended             
                       September 30,         September 30, 
                    1997        1996      1997      1996
Revenues:

Net Revenue     $1,309,636 $1,127,965 $3,386,937 $2,756,539

 Cost of
 Sales             577,289    483,098  1,514,580  1,204,199
                 ---------   --------  ---------  ---------
Gross Margin       732,347    644,867  1,872,357  1,552,340 

Selling, general,
administrative 
expenses           636,134    491,827  1,723,170  1,276,128 

Other income (expense)
Interest income      4,808      2,747     24,540    11,798
Interest expense  (114,328)   (51,262)  (298,639) (147,403)
Other income         3,263     20,030     11,389    21,727
                ----------   --------  ---------  ---------
                  (106,257)   (28,485)  (262,710) (113,878)

Net income(loss) before 
income taxes       (10,044)   124,555   (113,523)  162,334

Income tax benefit     -      (27,712)       -     (27,712)

Net income(loss)   (10,044)    96,843   (113,523)  134,622
                   ========   =======   ========   =======
Retained earnings 
beginning of period 154,858   125,686    258,337    87,907 

Retained earnings 
end of period      $144,814  $222,529   $144,814  $222,529
                   ========  ========   ========  ========

Net income(loss)
per common share $     -     $  0.03   $  (0.03)  $   0.04 

Weighted average number
 of common shares
outstanding       4,226,096 3,785,356   4,056,411 3,785,356 


                      WILLAMETTE VALLEY VINEYARDS, INC.
                            Statement of Cash Flows
                                 (unaudited)
 
                            Nine Months Ended September 30,
                                      1997        1996   
Cash flows from operating activities:

Net loss                          $ (113,523)    $ 134,622
Reconciliation of net loss
 to net cash used
for operating activities:
Depreciation and amortization        368,834       265,856 
Changes in assets and liabilities:
Accounts receivable trade           (101,676)     (185,545)
Other receivable                      12,388        (9,395)
Inventories                       (1,217,626)      (95,566)
Prepaid exp                            9,056       (24,993)
Grapes payable                      (196,965)     (344,642)
Accounts payable                     482,089       160,301 
Taxes payable                        (15,000)       27,712
Accrued liabilities                  (28,080)      (39,370)
                                    ---------    ----------
Net cash used by operating 
activities                          (800,503)     (111,020)

Cash Flow from investing activities
Construction expenditures 
and purchases of equipment          (910,217)*    (485,656)
Vineyard development expenditures   (455,622)*     (17,067)
Cash received for investments         19,217        29,720 
Change in notes receivable            (7,327)       (7,118)
                                  -----------    ---------- 
Net cash used by investing
activities                        (1,353,949)     (480,121)

Cash Flows from financing activities:
Line of credit borrowings            716,138        40,741
Debt issuance cost                  (117,098)        1,547 
Mortgage loan funds                  901,811       (49,976)
                                   ---------       --------                 
                            
Net cash provided /(used) by
financing activities               1,500,851        (7,688)
                                    

Net decrease in cash and 
cash equivalents                    (653,601)     (598,829)

Cash and cash equivalents:
Beginning of period                  794,885       599,895 

End of period                    $   141,284      $  1,066 
                                     ========        ======
* excludes a non cash purchase of equipment and land in 
exchange for stock issued as part of the purchase of 
Tualatin Vineyards

The accompanying notes are an integral part of this 
financial statement.




                        WILLAMETTE VALLEY VINEYARDS, INC.
                         NOTES TO FINANCIAL STATEMENTS


1)  BASIS OF PRESENTATION

The interim financial statements have been prepared by the 
Company, without audit and are subject to year-end 
adjustment, in accordance with generally accepted accounting 
principles, except that certain information and footnote 
disclosure made in the latest annual report have been 
condensed or omitted for the interim statements. Certain 
costs are estimated for the full year and are allocated to 
interim periods based on estimates of operating time 
expired, benefit received, or activity associated with the 
interim period. The financial statements reflect all 
adjustments which are, in the opinion of management, 
necessary for fair presentation.

 


2)  Inventories by major classifications are summarized as 
follows: 
                                                                             
                                  September 31, December 31,
                                         1997         1996                  
                             


Winemaking and packaging material     $ 56,688     $  87,321
Work-in-progress (costs relating       582,573     1,559,612  
  to unprocessed and/or unbottled
  wine products)
Finished goods (bottled wines 
  and related products)              3,421,421     1,196,120
                                  ------------    ----------                  
                                                          
                                   $ 4,060,682    $2,843,053
                                   ===========    ==========


3)  Property and Equipment consist of the following:

                              September 30,     December 31,
                                    1997             1996                   
                               

Land and improvements           $ 1,037,071      $  563,077
Winery building and Hospitality   4,370,191       3,718,733
Center
Equipment                         3,029,808       2,576,748
Construction in progress            106,000          27,913
                               ------------      -----------
                                 $8,543,070      $6,886,471

Less accumulated depreciatio     (1,806,240)     (1,465,455) 
                              --------------   ------------
                               $  6,736,830     $ 5,421,016
                                ===========      ==========

4) Tualatin Acquisition:

On April 15, 1997, the Company acquired 100 percent of the 
outstanding stock of Tualatin Vineyards Inc. ("TVI") . The 
purchase price paid by the Company to the Tualatin 
Vineyards Inc. shareholders in exchange for their shares 
was $1,824,000 plus Tualatin Vineyards Inc.'s current 
assets minus Tualatin Vineyards Inc.'s current and long 
term liabilities as reflected in Tualatin Vineyards Inc.'s 
balance sheet dated April 15, 1997. The Company paid 35 
percent of the purchase price in the form of cash with the 
balance paid through the issuance of unregistered shares of 
the Company's Common Stock at an exchange rate based on an 
agreed price for the Company's Common Stock of $3.162366 
per share. The final purchase price was $1,988,601 paid to 
Tualatin Vineyards Inc. shareholders. This calculates to 
$696,010 in cash borrowed from Farm Credit Services plus 
$1,292,591 in common stock. The company incurred additional 
costs in the form of attorney costs of $46,000 and real 
estate closing costs and loan fee costs of $25,650 which 
will be amortized over the life of the loan.



5) Excise taxes: 

For the third quarter and the nine months of 1997,  the 
Company has reported its excise taxes as a deduction of 
sales revenue to equal a net revenue total (as shown on the 
Statement of Operations). Prior to 1997, the Company has 
reported  excise taxes as selling, general and 
administrative expense. Since the Company only collects 
these excise taxes for the federal and state governments, 
it should not consider these expense as legitimate selling, 
general and administrative expenses. The amount for the 
third quarter of 1997 and the first nine months of 1997 was 
$50,824 and $128,685. For the same periods in 1996, the 
excise taxes collected were $24,128 for the third quarter 
of 1996 and $70,331 for the first nine months of 1996. In 
1997, the federal excise tax rate increased significantly 
because the Company produced more wine in 1997 over 1996 
which placed itself in a higher tax rate category.  In this 
report, the Company reclassified the third quarter and 
first nine months of 1996 financial statements to reflect 
the current period presentation.

6) Cash Flow:

In the second quarter of 1997, the Company recorded the 
acquisition of Tualatin Vineyards on its balance sheet. 
Since 65% of the transaction was paid for with common stock 
of the Company, the statement of cash flow does not 
reflect this non-cash transaction.

7) Forward Looking Statement:

This Management's Discussion and  Analysis of Financial 
Condition and Results of Operation and other sections of 
this Form 10Q contain forward-looking statements within the 
meaning of the Private Securities Litigation Reform Act of 
1995.  These forward-looking statements involve risks and 
uncertainties that are based on current expectations, 
estimates and projections about the Company's business, and 
beliefs and assumptions made by management.  Words such as 
"expects, "anticipates, "intends," "plans," "believes," 
"seeks,"estimates" and variations of such words and 
similar expressions are intended to identify such forward-
looking statements.  Therefore, actual outcomes and results 
may differ materially  from what is expressed or forecasted 
in such forward-looking statements due to numerous factors, 
including, but not limited to:  availability of financing 
for growth, availability of adequate supply of high quality 
grapes, successful performance of internal operations, 
impact of competition, changes in wine broker or distributor 
relations or performance, impact of possible adverse weather 
conditions, impact of reduction in grape quality or supply 
due to disease, impact of governmental regulatory decisions, 
successful assimilation of Tualatin Vineyards Inc.'s 
business with that of the Company and other risks detailed 
below as well as those discussed elsewhere in this Form 10Q 
and from time to time in the company's Securities and 
Exchange Commission filing and reports.  In addition, such 
statements could be affected by general industry and market 
conditions and growth rates, and general domestic economic 
conditions.




             Management's Discussion and Analysis of
           Financial Condition and Results of Operations

For the third quarter of 1997 and for the nine months of 
1997, the Company has operated at a level where the sales 
revenues and operating expenses have not met the approved 
budget.  For the first nine months of 1997, the Company's 
actual sales revenue is 5% lower than its projections for 
this same period. The 1997 sales projections were based only 
on a percentage increase from the prior year and did not 
provide enough detail for the Company to determine in what 
market location the Company is not meeting projections. This 
is the first time in the Company's history it has not met 
its sales projection. The Company has returned to a strict 
policy of developing detailed sales projections in which 
each sales manager is directly responsible for his/her 
projections. Since the operating budgets were based on 
obtaining certain sales revenue goals, the actual operating 
expenses have exceeded their approved budgets. For the first 
nine months of 1997 the actual operating expenses have 
exceeded the budget by 14%. With sales projections not 
meeting budget and operating expenses exceeding the 
Company's authorized budgets, this creates the unprofitable 
condition in which the Company finds itself. Traditionally, 
the fourth quarter is the Company's strongest quarter and it 
expects to show a nominal profit for the year. 

During the third quarter of 1997, the Company's newly formed 
Executive Committee, made up of three members of the board 
of directors has taken action to solve these conditions. 
With the Company's management, the Executive Committee has 
developed an expenditure reduction plan which expects to 
show positive results in future quarters. The Company has  
eliminated six managers and directors of the Company in a 
move to reduce overhead expenses in the company. The Company 
has also eliminated two outside contractors to further 
reduce its operating costs. During the third quarter of 
1997, the Company's General Manager resigned. Jim Bernau, 
the President and CEO, has returned to the Company full time 
to take over the day-to-day operation.  


RESULTS OF OPERATIONS

Revenue

Winery Operations
The Company's revenues from winery operations are summarized 
as follows:

                   Three Months Ended      Nine Months Ended                
                                               
                    September 30,             September 30,
                       1997       1996       1997      1996, 
Tasting room and 
hospitality sales   $ 244,277  $ 250,706  $596,179  $615,001
On-site and off-site  144,992    127,713   323,005   320,240
In state sales        552,273    415,118 1,331,495 1,125,087
Bulk sales             18,792               56,516                              
Out of state sales    400,126    358,556 1,208,427   766,542
                     --------   -------- --------- ---------
Total Revenue     $ 1,360,460 $1,152,093$3,515,662$2,826,870 

Less Excise taxes      50,824     24,128   128,685    70,331
                   ----------   -------- ---------   -------
Net Revenue       $ 1,309,636 $1,127,965$3,386,937$2,756,539
                   ==========   ========= ======== =========

Tasting Room and Hospitality sales for the three months 
ended September 30, 1997 decreased 3% from the same period 
in 1996. For the first nine months of 1997, the sales 
decreased 3% from the same period in 1996. The management 
has scheduled several new events and programs to help 
bolster sales in the Tasting Room, in 1997.  The management 
has instituted internal procedures to track the buying 
habits of the customers who visit the tasting room. The 
Company will use the information to target individual groups 
to encourage the customers to perceive the tasting room and 
grounds as a pleasant and rewarding buying experience. In 
the past year, the Company allowed the Wholesale Division to 
sell wine that had been exclusively designated as wine to be 
sold in the tasting room . The Company intends to return to 
its policy of carrying exclusive and smaller lot wines in 
the tasting room with higher sales margins.

On-site and off-site festival sales for the third quarter of 
1997 increased 14% over the third quarter of 1996. For the 
nine months of 1997, sales in this category increased 1% 
over the same period in 1996.  Revenues from on-site and 
off-site festivals have increased slightly in 1997 primarily 
due to the increased number of events in this year over last 
year.  One off-site event, "Bite of Salem", had an increase 
of revenue of $11,500 over last year's event, but due to a 
large sponsor fee of $8,000 the event was not profitable. 
The Company has implemented a policy to require a cost 
benefit analysis for each event before a decision is made to 
participate in the event. The Company hopes to reduce its 
overhead cost in the Retail Department by only participating 
in events that return a desired profit rate. By eliminating 
events that do not meet the desired profit, the Company will 
cut its overhead costs in this department.

Sales in the state of Oregon, through the Company's 
independent sales force, increased 33% in the third quarter 
of 1997 from  the third quarter of 1996.  For the nine 
months of 1997, the sales increased 18% over the same period 
in 1996. The Company has made significant efforts to 
increase sales by expanding the supply of Edelweiss (a 
Muscat and Riesling base wine) to in-state wholesale 
accounts. This wine has proven to be a best seller in the 
Tasting Room since its introduction in 1995.  In the third 
quarter, the Company introduced a two pack of White 
Riesling, one of its most popular products, which has won 
five gold medals during 1997 including a double gold from 
the Tasting Guild International Competition. Revenues for 
White Riesling in the third quarter increased $48,000 over 
the same period in 1996.  Also in the quarter, the Company 
had a significant increase of $22,000 in revenues for its 
96' Pinot Gris which won a gold medal at the Oregon State 
Fair.


Out-of-state sales in the third quarter of 1997 have 
increased 12% over the third quarter of 1996.  In the nine 
months of 1997, these sales to distributors increased 58% 
over the first nine months of 1996.  The growth in out-of-
state sales slowed in the third quarter of 1997 yet the 
sales of certain products remained strong. The Pinot Noir 
product line showed a strong growth in the third quarter and 
the first nine months  of 1997. The revenue from sales of 
Pinot Noir shipped out-of-state in the third quarter of 1997 
increased to $198,643 from $172,952 in the third quarter of 
1996.  The revenue from sales in Pinot Noir shipped out-of-
state in the first nine months of 1997 increased to $678,593 
from $365,226 for the same period in 1996. This represents 
an increase of 86%. The overall sales increase is a result 
of the efforts of the Company focusing on developing 
domestic and international markets. The Company now sells 
wine in 39 states and six foreign countries.  



Gross Profit

Winery Operations

As a percentage of revenue, gross profit for the winery 
operations decreased to       56% of revenue in the third 
quarter of 1997 as compared to 57% in the third quarter of 
1996.  For the first nine months of 1997, the gross profit 
decreased from 55% as compared to 56% for the first nine 
months of 1996. The Company expects the gross margins to 
remain at this level through 1997.  During the third 
quarter of 1997, the Company sold $68,000 of Tualatin 
Vineyard wine at a lower gross margin which impacted the 
margin experienced in the quarter as compared to the same 
period in 1996. 



Selling, General and Administrative Expense

Selling, general and administrative expenses increased 29% 
to $636,134 in the third quarter of 1997 from $491,827 in 
the third quarter of 1996. Selling, general, and 
administrative expenses for the first nine months of 1997 
increased 35% to $1,723,170 from $1,276,128 over the same 
period in 1996. As a percentage of revenue from winery 
operations,  selling, general and administrative expenses 
increased to 49% in the third quarter of 1997 from 44% in 
the third quarter of 1996.  For the first nine months of 
1997, these costs as a percentage of revenue increased to 
51% in 1997 from 46% in 1996.  

During the third quarter of 1997, the selling, general, and 
administrative expenses increased by additional commissions 
paid to the independent sales force of $43,000 over the same 
period in 1996. Since commissions are based on the same 
percentage of revenue, there is no adverse effect in the 
expense to revenue ratio. In the third  quarter of 1997, 
the Company has experienced increased expenses relating to 
samples, travel,  point-of-sale expenses, and shipping 
charges for the development of new markets and the 
expansion of sales outside of the state. The out-of-state 
sales representatives are given a predefined percentage of 
revenue for wine samples and point of sale material. Thus, 
as the gross revenues increase, the actual dollar 
expenditures for wine samples and  point-of-sale material 
increases.

The Company is taking steps to reduce its selling, general, 
and administrative expenses due to the upward spiral of 
expense in the past year.  The first step was taken on 
October 1, when the Point of Sale design department was laid 
off.  The Company estimated that it lost $12,000 in the 
month of September to operate this department.  The Company 
will contract with the former employees to do all of its 
design and point of sales work.  The Company will operate at 
a reduced total budget of $4,000 per month. In addition, the 
Company has laid off additional personnel in the Retail 
Division as expenses were increasing faster than revenue.

The Company has targeted other administrative expenses and 
has reduced its spending in several key areas. The Company 
has suspended all new contracts on all outside consulting 
and placed very strict spending limits on the following 
expenditures; legal, office supplies, printing, postage, and 
telephone .   The Company feels that with these spending 
limits and elimination of outside consulting work, it will 
be able to reduce its administrative expenses to its 1996 
level.







Other Income and Expense

Interest and other income decreased to $8,071 for the third 
quarter of 1997 from $22,777 for the third quarter of 1996.  
For the first nine months of 1997, interest and other income 
increased  to $35,929 from $33,525 in 1996.   

Interest expense  increased to $114,328 in the third 
quarter of 1997 from $51,262 in 1996. For the first nine 
months of 1997,  the interest expense increased to $298,639 
from $147,403 in 1996. The Company incurred additional 
interest expense from funds borrowed from Farm Credit 
Services in the fall of 1996 to finance additional 
production capacity and added a storage facility for 
growing its business. The 20,000 square foot storage 
building was built to store wine which had previously been 
stored off-site at a cost of $8,000 per month to the 
Company. In April 1997, the Company borrowed an additional 
$1.3 million from Farm Credit Services to purchase Tualatin 
Vineyards and procure funds to plant an additional 50 acres 
of vineyards at Tualatin Vineyards.


Income Taxes

The Company has operated at a net loss for the first nine 
months in 1997 but  expects to show a nominal profit by the 
end of 1997.  Accordingly, no income tax benefit has been 
recorded for the quarter and nine months ending September 
30, 1997.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 1997, the Company had a working capital 
balance of $2.4 million and a current ratio of 2.0:1.  At 
December 31, 1996 , the Company had a working capital 
balance of $2.7 million and a current ratio of 2.9:1.

The Company has a cash balance of $141,284 at September 30, 
1997. It has committed $106,000 for the final payment on a 
20,000 square foot storage building on site, which was 
completed in September, 1997.
 
The Company obtained a line of credit of $1,000,000 from 
Farm Credit Services during the last quarter of 1996 and an 
additional $1,000,000 was added to the line in the second 
quarter of 1997.  At September 30, 1997, the line of credit 
balance was $1,195,764.

The Company has a total long term debt balance of 
$4,071,811, not including its line of credit, owed to Farm 
Credit Services. Of this debt, $2,771,811 was used to 
finance the Hospitality Center and invest in winery 
equipment to increase its capacity to produce 100,000 cases 
of wine per year. An additional $1,300,000 was borrowed to 
finance the acquisition of Tualatin Vineyards and to plant 
additional vineyards there. The total long term debt is 
represented by four separate notes with Farm Credit 
Services, each of which will be retired in fifteen years. 
The interest rates are 8.15%, 9.95%, 8.55%, and 8.1% .

At September 30, 1997, the Company has contracted  
$1,200,000 in grape contracts for the harvest in the fall 
of 1997. As of that date, the Company has processed about 
$350,000 of grapes.

At September 30, 1997, the total inventory of bulk wines and 
finished product is valued at cost, $4,060,682. This is up 
from $2,843,053 from December 31, 1996. In 1996, the Company 
anticipated a growth in business thus it expanded the size 
of its 1996 grape harvest. This resulted in an increase in 
inventory cost as the Company bottled the additional 
product.




PART II.  OTHER INFORMATION


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

    (a)   Exhibits:  None.

    (b)  No reports were filed on Form 8-K during the 
quarter for which this report is filed.





                                                                            
SIGNATURES


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


             WILLAMETTE VALLEY VINEYARDS, INC.




Date:          By /s/ James W Bernau                 
                      James W Bernau
                      President     



                                                                            
SIGNATURES


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


                    WILLAMETTE VALLEY VINEYARDS, INC.





Date:           By                      
                    James W Bernau
                    President