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                      SECURITIES AND EXCHANGE COMMISSION
                             Washington D.C. 20549
 
                                  FORM 10-K/A
 
(Mark One)
  [X]          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
              THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
                  For the fiscal year ended December 31, 1998
                                      OR
  [_]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
             THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
                       For the transition period from to
                         Commission File Number 1-4957
 
                            NALCO CHEMICAL COMPANY
                     Incorporated in the State of Delaware
                 I.R.S. Employer Identification No. 36-1520480
               One Nalco Center, Naperville, Illinois 60563-1198
                            Telephone 630-305-1000
          Securities registered pursuant to Section 12(b) of the Act:
           Title of Each Class                Name of Each Exchange on
                                                  Which Registered
        Common Stock par value                 Chicago Stock Exchange
           $0.1875 per share                   New York Stock Exchange
          Securities registered pursuant to Section 12(g) of the Act:
                                     None
   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
 
   Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K ((S)229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K.   [X]
 
   The aggregate market value of the voting stock held by non-affiliates of
the registrant was $1,812,008,725 at March 5, 1999.*
 
   The number of shares outstanding of each of the issuer's classes of Common
Stock, as of March 5, 1999 was 65,725,414 shares of Common Stock.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
   Portions of the Registrant's 1998 Annual Report to Shareholders are
incorporated by reference into Parts I and II.
 
   Portions of the Registrant's Proxy Statement dated March 29, 1999 for the
April 29, 1999 Annual Meeting of Shareholders are incorporated by reference
into Part III.
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*  Excludes reported beneficial ownership by all directors and executive
   officers of the Registrant; however, this determination does not constitute
   an admission of affiliate status for any of these stockholders.
 
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<PAGE>
 
                               TABLE OF CONTENTS
 
                                    PART II
 
<TABLE>
<CAPTION>
                                    Page
                                    ----
 <C>     <S>                        <C>
         Financial Statements and
 Item 8  Supplementary Data......     1
 
                                    PART IV
 
         Exhibits, Financial
         Statement Schedules and
 Item 14 Reports on Form 8-K.....   1
</TABLE>
<PAGE>
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 
   The Report of Independent Accountants, the Consolidated Financial
Statements and the Notes to Consolidated Financial Statements of the
Registrant and its subsidiaries, included in the Company's 1998 Annual Report
to Shareholders, are incorporated herein by reference.
 
   The Quarterly Summary in the Company's 1998 Annual Report to Shareholders
is incorporated herein by reference.
 
                                    PART IV
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
 
   (a)(1) The following consolidated financial statements of the Registrant
and its subsidiaries included in the Company's 1998 Annual Report to
Shareholders are incorporated herein by reference in Item 8:
 
     Statements of Consolidated Financial Condition
      December 31, 1998 and 1997
     Statements of Consolidated Earnings
      Years ended December 31, 1998, 1997 and 1996
     Statements of Consolidated Cash Flows
      Years ended December 31, 1998, 1997 and 1996
     Statements of Consolidated Common Shareholders' Equity
      Years ended December 31, 1998, 1997 and 1996
     Notes to Consolidated Financial Statements
     Quarterly Summary (Unaudited)
      Years ended December 31, 1998 and 1997
     Report of Independent Accountants
 
   (2) The following consolidated financial statement schedule for the years
1998, 1997 and 1996 is submitted herewith:
 
     Report of Independent Accountants on Financial Statement Schedule
 
     Schedule II--Valuation and Qualifying Accounts
 
   All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore
have been omitted.
 
   (3) Exhibits
 
<TABLE>
 <C>         <C> <S>
 Exhibit  3A --  Restated Certificate of Incorporation(/2/)*
 Exhibit  3B --  Certificates of Correction and Amendment to the Restated
                 Certificate of Incorporation(/6/)*
 Exhibit  3C --  Certificate of Designations, Preferences and Rights of Series
                 B ESOP Convertible Preferred Stock(/4/)*
 Exhibit  3D --  Certificate of Designations, Preference and Rights of Series C
                 Junior Participating Preferred Stock(/12/)*
 Exhibit  3E --  By-laws(/9/)*
 Exhibit 10A --  Form of Key Executive Agreement*
  10B        --  Agreements to Restore Benefits Reduced by Excess ERISA-Related
                 Limits(/1/)*
  10C        --  Form of Death Benefit Agreement(/2/)*
  10D        --  Management Incentive Plan(/8/)*
</TABLE>
 
                                       1
<PAGE>
 
<TABLE>
 <C>          <C> <S>
   10E        --  Restricted Stock Plan(/6/)*
   10F        --  1982 Stock Option Plan as amended April 26, 1984, January 30,
                  1987, February 12, 1993, and October 17, 1996(/10/)*
   10G        --  Deferred Compensation Plan for Directors(/3/)*
   10H        --  Supplemental Retirement Income Plan(/5/)*
   10I        --  1990 Stock Option Plan as amended April 23, 1992, February
                  12, 1993, and October 17, 1996(/10/)*
   10J        --  Stock Option Plan for Non-Employee Directors(/7/)*
   10K        --  Directors Benefit Protection Trust of Nalco Chemical
                  Company(/5/)*
   10L        --  Management Benefit Protection Trust of Nalco Chemical
                  Company(/5/)*
   10M        --  Restricted Stock Trust of Nalco Chemical Company(/5/)*
   10N        --  Performance Share Plan as amended effective February 16, 1996
                  and October 17, 1996(/10/)*
   10O        --  Employee Stock Compensation Plan as amended effective January
                  1, 1996 and October 17, 1996(/10/)*
   10P        --  Non-Employee Directors Stock Compensation Plan(/8/)*
 Exhibit  11  --  Computation of Earnings Per Share*
 Exhibit  13  --  Those portions of the 1998 Annual Report to Shareholders
                  expressly incorporated herein by reference
 Exhibit  21  --  Subsidiaries of the Registrant*
 Exhibit  23  --  Consent of Independent Accountants
 Exhibit  27A --  Financial Data Schedule*
 Exhibit  99A --  Notice of Annual Meeting and Proxy Statement(/13/)*
 Exhibit  99B --  September 16, 1996 Letter to Shareholders with Summaries of
                  the Preferred Share Purchase Rights Agreement(/11/)*
 Exhibit  99C --  Form 11-K Annual Report
</TABLE>
Exhibit Nos. 10A-10P constitute management contracts, compensation plans, or
arrangements covering directors and officers of the Company.
 
(b) Reports on Form 8-K filed in the fourth quarter of 1998 are: None
--------
(/1/Incorporated)herein by reference from the Registrant's Form 10-K for the
    year ended 1986.
(/2/Incorporated)herein by reference from the Registrant's Form 10-K for the
    year ended 1987.
(/3/Incorporated)herein by reference from the Registrant's Form 8-K dated July
    24, 1986.
(/4/Incorporated)herein by reference from the Registrant's Form 8-K dated May
    15, 1989.
(/5/Incorporated)herein by reference from the Registrant's Form 10-K for the
    year ended 1990.
(/6/Incorporated)herein by reference from the Registrant's Form 10-K for the
    year ended 1991.
(/7/Incorporated)herein by reference from the Registrant's Form 10-K for the
    year ended 1992.
(/8/Incorporated)herein by reference from the Registrant's Notice of Annual
    Meeting and Proxy Statement dated March 18, 1996.
(/9/Incorporated)herein by reference from the Registrant's Form 10-Q for the
    quarter ended June 30, 1998.
(/10/Incorporated)herein by reference from the Registrant's Form 10-Q for the
     quarter ended September 30, 1996.
(/11/Incorporated)herein by reference from the Registrant's Form 8-K dated
     June 24, 1996.
(/12/Incorporated)herein by reference from the Registrant's Form 8-A dated
     June 24, 1996.
(/13/Incorporated)herein by reference from the Registrant's Notice of Annual
     Meeting and Proxy Statement dated March 29, 1999.
 
*Exhibit was filed with Form 10-K for the year ended December 31, 1998.
 
                                       2
<PAGE>
 
                                   SIGNATURES
 
   Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
 
                                          NALCO CHEMICAL COMPANY
 
                                          By /s/ E. J. Mooney
                                             ----------------------------------
                                             E. J. Mooney
                                             Chairman, Chief Executive Officer
 
                                          Date: April 1, 1999
 
                                       3
<PAGE>
 
                     REPORT OF INDEPENDENT ACCOUNTANTS ON
                         FINANCIAL STATEMENT SCHEDULE
 
To the Board of Directors
of Nalco Chemical Company
 
   Our audits of the consolidated financial statements referred to in our
report dated February 6, 1999 appearing on page 42 of the 1998 Annual Report
to Shareholders of Nalco Chemical Company (which report and consolidated
financial statements are incorporated by reference in this Annual Report on
Form 10-K) also included an audit of the Financial Statement Schedule listed
in Item 14(a) of this Form 10-K. In our opinion, this Financial Statement
Schedule presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements.
 
                                          PricewaterhouseCoopers LLP
 
Chicago, Illinois
February 6, 1999
 
                                       4
<PAGE>
 
                    NALCO CHEMICAL COMPANY AND SUBSIDIARIES
 
                 SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
 
<TABLE>
<CAPTION>
         Col. A             Col. B           Col. C               Col. D        Col. E
         ------           ---------- -----------------------   ------------   ----------
                                            Additions
                                     -----------------------
                                                     (2)
                                         (1)      Charged To
                          Balance At  Charged To    Other                      Balance
                          Beginning     Costs     Accounts--   Deductions--     At End
      Description         of Period  and Expenses  Describe      Describe     Of Period
      -----------         ---------- ------------ ----------   ------------   ----------
<S>                       <C>        <C>          <C>          <C>            <C>
Reserves deducted in the
 Statements of
 Consolidated Financial
 Condition from the
 assets to which they
 apply
  Allowance for doubtful
   accounts
   Year Ended:
                                                   $683,000(A)
    December 31, 1998     $4,170,000  $3,602,000      6,000(C)  $2,411,000(B) $6,050,000
                          ==========  ==========   ========     ==========    ==========
                                                                $  938,000(B)
    December 31, 1997     $4,936,000  $  630,000   $ 22,000(A)     480,000(C) $4,170,000
                          ==========  ==========   ========     ==========    ==========
                                                   $738,000(A)
    December 31, 1996     $4,439,000  $  388,000     17,000(C)  $  646,000(B) $4,936,000
                          ==========  ==========   ========     ==========    ==========
</TABLE>
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Note A--Valuation of assets acquired.
Note B--Excess of accounts written off over recoveries.
Note C--Foreign currency translation adjustments.
 
                                       5