SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

___________________________________________________________

FORM 10-QSB
___________________________________________________________

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

For the Quarter Ended March 31, 2001

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 March 31, 2001
4,256,981 shares, no par value

Transitional Small Business Disclosure
                                           [  ] YES        [X] NO




                  WILLAMETTE VALLEY VINEYARDS, INC.
                       INDEX TO FORM 10-QSB


Part I - Financial Information

Item 1-Financial Statements

Balance Sheet

Statement of Operations

Statement of Cash Flows

Notes to Consolidated Financial Statements

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

Part II - Other Information

Item 1--Exhibits and Reports of Form 8-K

Signatures







PART 1              FINANCIAL INFORMATION
ITEM 1
                     Financial Statements

                  WILLAMETTE VALLEY VINEYARDS
                        Balance Sheet
                         (unaudited)
                                          March 31,         December 31,
                                            2001                2000
ASSETS.                                                    ____________
Current Assets:
  Cash and cash equivalents               $ 14,541          $  252,876
  Accounts receivable trade, net           827,290             564,020
  Inventories                            6,662,728           6,921,014
  Prepaid expenses and other
  current assets                           123,427              45,954
  Deferred income taxes                    118,951             118,951
                                         _________            _________
Total current assets                     7,746,937           7,902,815

Vineyard development cost, net           1,616,858           1,608,365
Property and equipment, net              5,839,858           5,989,169
Investments                                  4,974               4,974
Notes receivable                            57,899              56,869
Debt issuance costs, net                    48,273              50,061
Other assets                               229,482             185,619
                                         _________           _________
Total assets                       $    15,544,281        $ 15,797,872

LIABILITIES AND SHAREHOLDERS EQUITY

Current liabilities
  Line of credit                     $   2,700,000        $  2,616,549
  Current portion of long term debt        220,921             220,921
  Accounts payable                         916,693             847,883
  Accrued commissions and payroll          129,486             143,662
  Grapes payable                           620,048             914,366
                                          ________            ________
Total current liabilities                4,587,148           4,743,381

Long-term debt                           3,351,817           3,406,681
Deferred rent liability                     38,824              31,634
Deferred gain                              468,449             474,695
Deferred income taxes                   ___146,819          ___146,819
Total liabilities                        8,593,057           8,803,210

Shareholders' equity
  Common stock, no par value - 10,000,000
  shares authorized, 4,256,981 and 4,254,481
  shares issued and outstanding at March 31,
  2001 and December 31, 2000             6,821,597           6,817,613
Retained earnings                          129,627             177,049
                                        __________          __________
Total shareholders' equity               6,951,224           6,994,662

Total liabilities and shareholders'
equity                               $  15,544,281       $  15,797,872

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

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

                                            Three months ended March 31,
                                                2001               2000

Net Revenues
  Case Revenue                            $   1,477,278     $  1,257,421
  Bulk Revenue                                  210,355                -
Total Revenue                                 1,687,633        1,257,421


Cost of Sales
  Case                                          717,246          634,369
  Bulk                                          180,316                -
Total Cost of Sales                             897,562          634,369

Gross Margin                                    790,071          623,052


Selling, general and
  administrative expense                        718,960          592,322

Net operating income                             71,111           30,730

Other income (expense)
  Interest income                                 1,030              961
  Interest expense                             (125,966)        (119,176)
  Other income                                    6,403            7,015

Net loss before income taxes                    (47,422)         (80,470)

Income tax                                            -                -

Net loss                                        (47,422)         (80,470)

Retained earnings beginning of
  period                                         177,049         161,987

Retained earnings end of period                  129,627          81,517

Basic gain (loss) per common share                  (.01)          (.02)

Diluted loss per common share                       (.01)          (.02)

Weighted average number of
basic common shares
outstanding                                    4,256,981       4,253,431

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

                  WILLAMETTE VALLEY VINEYARDS, INC.
                      Statement of Cash Flows
                            (unaudited)
                                           Three Months Ended March 31,

                                                 2001             2000

Cash flows from operating activities:
  Net loss                                  $  (47,422)      $  (80,470)
Reconciliation of net loss to net cash used
for operating activities:
  Depreciation and amortization                186,489          185,852
  Stock issued for compensation                  3,984                -

Changes in assets and liabilities:
  Accounts receivable trade                   (263,270)          (8,079)
  Inventories                                  258,286          (37,305)
  Prepaid expenses and other current assets    (77,473)         (10,970)
  Notes receivable                              (1,030)           3,809
  Other assets                                 (43,863)         (27,089)
  Accounts payable                              68,810         (273,889)
  Accrued commissions and payroll              (14,176)               -
  Income tax payable                                 -          (42,429)
  Grapes payable                              (294,318)        (395,898)
  Deferred rent liability                        7,190                -
  Deferred gain                                 (6,246)          (6,351)

Net cash used for operating activities        (223,039)        (692,819)


Cash Flow from investing activities
  Construction expenditures and purchases
  of equipment                                 (19,733)         (23,344)
  Vineyard development expenditures            (24,150)          (1,599)

Net cash used by investing activities          (43,883)         (24,943)


Cash Flows from financing activities:
  Line of credit borrowings (repayment)         83,451          555,000
  Debt issuance cost                                 -            8,406
  Increase (decrease) in long term debt        (54,864)         (63,583)

Net cash provided by financing activities       28,587          499,823

Net increase (decrease)in cash and
  cash equivalents                            (238,336)        (217,939)

Cash and cash equivalents:
  Beginning of period                          252,876          219,041

  End of period                                 14,541            1,102

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


NOTES TO CONSOLIDATED FINANCIAL STATEMENT

1) BASIS OF PRESENTATION

The interim financial statements have been prepared by the Company,
without audit and 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 CLASSIFICATION ARE SUMMARIZED AS FOLLOW:


                                                March 31,    December 31,
                                                  2001           2000
Winemaking and packaging materials            $  481,608     $  273,189
Work-in-progress (costs relating
  to unprocessed and/or bulk
  wine products)                               2,003,253      2,415,006
Finished goods (bottled wines                  4,177,867      4,232,819
  and related products)                        _________     __________
                                           $   6,662,728     $6,921,014
                                               =========     ==========




3) PROPERTY AND EQUIPMENT CONSIST OF THE FOLLOWING:

                                                March 31,   December 31,
                                                  2001         2000

Land and improvements                  	      $  965,309    $  965,309
Winery building and hospitality center         4,552,321     4,549,081
Equipment                          	       4,302,078     4,285,585
                                               _________    __________
                                           $   9,819,708    $9,799,975

Less accumulated depreciation                 (3,979,850)   (3,810,806)
                                   	       _________    __________
                                 	   $   5,839,858    $5,989,169
                                  	       =========    ==========


4) SUBSEQUENT EVENTS:

None.





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

Forward Looking Statement:

This Management's Discussion and Analysis of Financial Condition and
Results of Operation and other sections of this Form 10-QSB 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, and other risks detailed below as
well as those discussed elsewhere in this Form 10-QSB and from time
to time in the Company's Securities and Exchange Commission filings
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

While the Company has always produced a net loss in the First Quarter,
the weakest quarter in the industry, our losses are lower than the
previous year due to improved sales in Oregon and in other states.
Management expects continued improvements in sales volumes during
the remainder of the year, particularly in states other than Oregon.

The first quarter of 2001 marked the Company's transition from
numerous independent distributors supported by a network of brokers
to a single network of affiliated distributors in over half of the
national market.  The Company has experienced numerous growing pains
from this transition, including increased sales salary and travel
expenses, high distributor bill-backs resulting from the termination
of the old distributors and final billings from terminated brokers.
However, the Company has seen the benefits of the new relationship in
the increased out of state sales achieved in the quarter.

During this first quarter, our products received numerous accolades.
The Company's '98 Willamette Valley Vineyards Hoodview Vineyard Pinot
Noir received a Gold Medal, and a first ever Best of Show, at the
McMinnville Wine Classic.  The Company's '00 Tualatin Estate
Vineyards (TEV) Semi-sparkling Muscat also received a Gold Medal at
the McMinnville Wine Classic.  At the Newport Seafood and Wine
Festival, the '00 Whole Cluster Pinot Noir, the '99 Pinot Gris, and
the '98 Tualatin Estate Vineyards Pinot Blanc received Gold Medals,
as well as the Best of Show for the TEV Pinot Blanc.

The Company continued to deal with the issue of white wine grape
contracts established in early 1997 which were in excess of sales
distribution capabilities.  The sale of bulk Pinot Gris in early
2001 resulted in a sales margin below normal, but still at a profit.
The first quarter of 2001 marked the end of numerous multiple year
grape contracts that contributed to the problem and management
believes there will be fewer problems regarding excess grapes in
the future.


RESULTS OF OPERATIONS

Revenue

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

                                                   Three Months Ended
                                                         March 31,
                                                   2001           2000

Tasting Room sales & Rental Income             $ 163,959       $ 146,411
On-site and off-site festivals                   109,512         133,046
In state sales                                   614,686         443,056
Out of state sales                               633,356         578,034
Bulk wine /misc sales                            210,355           6,280
                                               _________       _________
Gross Revenue                                 $1,731,868     $ 1,306,827

Less Excise Taxes                                 44,235          49,406

Net Revenues                                   1,687,633       1,257,421
                                              ==========      ==========

Tasting Room sales and rental income for the three months ending
March 31, increased 12% to $163,959 in 2001 from $146,411 for the
same period in 2000. Sales in the tasting room increased during the
first quarter of 2001 due in part to management's focus on the
retail performance.

On-site and off-site festival sales for the first quarter of 2001
decreased 18% to $109,512 from $133,046 over the first quarter of
2000. In January 2001, the Company continued the tradition of
holding its successful Crab Festival at its winery to pair its wines
with crab and local seafood. The Company also joined forces with a
local seafood restaurant to educate its customers on the pairing of
wine with popular seafood found at local restaurants.

Sales in the state of Oregon, through the Company's independent
sales force, increased 39% to $614,687 in the first quarter of
2001 from $443,056 in the first quarter of 2000.  The increase
was due in part to a large buy-in by customers before the price
for Riesling was increased, and in part to the continued strong
efforts of management to motivate the independent sales force to
improve.

Out-of-state sales in the first quarter of 2001 increased 10% to
$633,356 from $578,034 in the first quarter of 2000. In the first
quarter of 2001, the Company began a transition to a new network of
affiliated nationwide distributors.  This change included the hiring
of a new Executive Vice-President of Sales to oversee the distributor
relationship, increasing out of state sales expenses by 51%.
Expenses also increased due to the termination of old distributors
as many distributors sent in invoices in their efforts to become
current on all of the depletion and sample allowances owed them by
the Company.   The Company also sold 784 cases of its 1997 Tualatin
Estate Riesling at a substantially lower margin. This wine had been
moving slowly due to its direct competition with the more popular
Willamette Valley brand of Riesling. The net effect of this sale was
to generate an additional $24,000 in cash.

Excise taxes

The Company's excise taxes decreased in the first quarter of 2001 to
$44,235 from $49,406 the same period in 2000. This was due in part to
the increased sales of high margin products, and decreased case
depletions of lower margin products in the first quarter of 2001,
decreasing overall sales volumes and taxes paid by volume.

Gross Profit

Winery Operations

As a percentage of revenue, gross profit for the winery operations
decreased to 47% in the first quarter of 2001 as compared to 50% in
the first quarter of 2000.  After adjusting for the sale of bulk
Pinot Gris and 1997 TEV Riesling as described above, the gross margin
would have been 52% in the first quarter of 2001. The Company expects
the gross margins in 2001 to be higher than in 2000 due to the
Company's focus on, and improved distribution of, higher margin
products. The Company plan to continue to eliminate some of its
problem inventory by accepting lower margins and turning the
inventory into cash.  This will help bring inventory to what
management considers a desirable operation level, but could depress
the gross margin.

Selling, General and Administrative Expense

Selling, general and administrative expenses increased 21% to
$718,960 in the first quarter of 2001 from $592,322 in the first
quarter of 2000. As a percentage of revenue from winery operations,
selling, general and administrative expenses decreased to 43% in
the first quarter of 2001 from 47% in the first quarter of 2000.
The Company increased its spending in the first quarter of 2001 in
several categories. In the first quarter of 2001, the Company
invested in its new distribution agreement through increased sales
payroll expenditures, and sales and marketing travel expenses.


Interest Income, Other Income and Expense

Interest income increased to $1,030 for the first quarter of 2001
from $961 for the first quarter of 2000.  Interest expense
increased to $125,966 in the first quarter of 2000 from $119,176
in 2000. Interest costs were higher because the Company paid
additional interest on a higher balance on its line of credit.
Other income decreased to $6,403 for the first quarter 2001 from
$7,015 for the first quarter of 2000.

Income Taxes

As in prior years, the Company experienced a net loss for the
first three months in 2001. Therefore, no income tax expense was
accrued.

Liquidity and Capital Resources

At March 31, 2001, the Company had a working capital balance of
$3.2 million and a current ratio of 1.7:1.  At December 31, 2000,
the Company had a working capital balance of $3.2 million and a
current ratio of 1.7:1.

The Company had a cash balance of $14,541 at March 31, 2001.

At March 31, 2001, the line of credit balance was $2,700,000.
On February 1, 2001, the Company obtained an extension of its line
of credit from Farm Credit Services. This extended the maturity
date of the line of credit from February 1, 2001 to May 1, 2001.
As of this date, Farm Credit Services has extended the Company's
line of credit until August 1, 2001. The Company is researching
alternate financing sources and expects to have a new line of
credit in place by the August 1, 2001, the maturity date of the
current line of credit.

As of March 31, 2001, the Company had a total long-term debt
balance of $3,572,738 owed to Farm Credit Services. This debt
was used to finance the Hospitality Center, invest in winery
equipment to increase the Company's winemaking capacity, complete
the storage facility, and purchase Tualatin Vineyards. At
December 31, 2000, the Company was in violation of 3 of 5 of its
debt coverage covenants.  Farm Credit Services has signed a waiver
letter to the Company for these covenants.

At March 31, 2001, the Company owed $620,048 on grape contracts.
A large portion is owed to a single grape grower, which will be
paid as the wine made from those grapes is sold.



PART II.               OTHER INFORMATION


Item 1
               Exhibits and Reports on Form 8-K.

(a) No Exhibits


SIGNATURES


Pursuant to the requirements of the Security Exchange Act of 1934,
as amended, 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


Date:                          By /s/ Sean M. Cary
                                  Sean M. Cary
                                  Controller