SECURITIES AND EXCHANGE COMMISSION
                       Washington, D. C.  20549


                              FORM 10-Q


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


For the Quarterly Period Ended                      Commission File
March 31, 1997                                      No. 1-8013



                 AMERICAN FINANCIAL ENTERPRISES, INC.


Incorporated under                                  IRS Employer I.D.
the Laws of Connecticut                             No. 31-0996797


           One East Fourth Street, Cincinnati, Ohio  45202
                            (513) 579-2172





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, and (2) has been
subject to such filing requirements for the past 90 days.  Yes   X   No



As of May 1, 1997, there were 13,321,117 shares of the Registrant's
Common Stock outstanding.


                             Page 1 of 9
<PAGE>              
              AMERICAN FINANCIAL ENTERPRISES, INC. 10-Q
                                PART I
                        FINANCIAL INFORMATION

                 AMERICAN FINANCIAL ENTERPRISES, INC.
                            BALANCE SHEET
                        (Dollars in Thousands)


                                                 March 31,  December 31,
                                                     1997          1996
            Assets                                             

Cash and short-term investments                  $ 61,620     $  59,939
Investment in affiliates:
  American Financial Group, Inc.                  363,299       397,421
  American Annuity Group, Inc.                     41,009        43,237
Other equities - at market (cost - $7,368)          4,468         5,168
Other assets                                          470           499

                                                 $470,866      $506,264


    Liabilities and Shareholders' Equity

Accounts payable, accrued expenses and
  other liabilities                              $  1,693       $ 1,230
Payable to American Financial Corporation          68,374        80,935
                                                   70,067        82,165

Shareholders' Equity:
  Preferred Stock, none issued                       -             -
  Common Stock, $1 par value
    - 20,000,000 shares authorized
    - 13,291,117 shares outstanding                13,291        13,291
  Capital surplus                                 114,106       114,106
  Retained earnings                               280,806       278,802
  Net unrealized gain (loss) on marketable
    securities, net of deferred income taxes       (7,404)       17,900
      Total Shareholders' Equity                  400,799       424,099

                                                 $470,866      $506,264
                                   
                                  2
<PAGE>
             AMERICAN FINANCIAL ENTERPRISES, INC. 10-Q

                AMERICAN FINANCIAL ENTERPRISES, INC.
                       STATEMENT OF EARNINGS
               (In Thousands, Except Per Share Data)


                                                     Three months ended
                                                          March 31,
                                                       1997        1996
Income:
  Equity in net earnings of affiliates:
    American Financial Group, Inc.                   $ -         $8,621
    American Annuity Group, Inc.                      1,672       1,443
    Citicasters Inc.                                   -           (120)
  Dividend and interest income                        3,274          23
                                                      4,946       9,967

Costs and Expenses:
  Interest charges on borrowed money                   -            315
  Administrative and general expenses                   756         402
                                                        756         717

Earnings before federal income taxes and
  extraordinary items                                 4,190       9,250
Provision for federal income taxes                      857       2,628

Earnings before extraordinary items                   3,333       6,622

Extraordinary items - share of affiliates'
  losses on prepayment of debt, net of
  tax benefit of $390                                  -           (725)

Net Earnings                                         $3,333      $5,897


Average number of Common Shares                      13,291      13,291

Earnings (loss) per Common Share:
  Before extraordinary items                           $.25        $.50
  Extraordinary items                                   -          (.06)
  Net earnings                                         $.25        $.44

Cash dividends per Common Share                        $.10        $.10
                                  
                                  3
<PAGE>
              AMERICAN FINANCIAL ENTERPRISES, INC. 10-Q

                 AMERICAN FINANCIAL ENTERPRISES, INC.
                       STATEMENT OF CASH FLOWS
                            (In Thousands)


                                                         Three months ended
                                                              March 31,
                                                            1997       1996
Operating Activities:
  Net earnings                                           $ 3,333    $ 5,897
  Adjustments:
    Extraordinary items - share of affiliates'
      losses on prepayment of debt                          -           725
    Equity in net earnings of affiliates                  (1,672)    (9,944)
    Cash dividends from equity method affiliates            -         2,488
    Increase in payable to affiliates                        857      2,725
    Other, net                                               492         50
                                                           3,010      1,941

Financing Activities:
  Repayments of borrowings from affiliates                  -           (67)
  Cash dividends paid                                     (1,329)    (1,329)
                                                          (1,329)    (1,396)

Net Increase in Cash and Short-term Investments            1,681        545

Cash and short-term investments at beginning of period    59,939        506

Cash and short-term investments at end of period         $61,620    $ 1,051
                                  
                                  4
<PAGE>
              AMERICAN FINANCIAL ENTERPRISES, INC. 10-Q

                   NOTES TO FINANCIAL STATEMENTS


A.  Basis of Presentation  The accompanying financial statements for
    American Financial Enterprises, Inc. ("AFEI") are unaudited, but
    management believes that all adjustments (consisting only of
    normal recurring accruals unless otherwise disclosed herein)
    necessary for fair presentation have been made.  The results of
    operations for interim periods are not necessarily indicative of
    results to be expected for the year.  The financial statements
    have been prepared in accordance with the instructions to
    Form 10-Q and therefore do not include all information and
    footnotes necessary to be in conformity with generally accepted
    accounting principles.

    The preparation of the financial statements requires management to
    make estimates and assumptions that affect the amounts reported in
    the financial statements and accompanying notes.  Changes in
    circumstances could cause actual results to differ materially from
    those estimates.

    At March 31, 1997, American Financial Group, Inc. ("AFG") owned
    10,981,429 shares (83%) of AFEI's outstanding Common Stock.

    In April 1997, AFG proposed a merger transaction whereby all 2.3
    million shares of AFEI Common Stock not owned by AFG would be
    exchanged on a one-for-one basis for AFG common stock or $37.00
    per AFEI share in cash and AFEI would become wholly-owned.  The
    transaction is structured to be tax-free to AFEI shareholders who
    receive new stock and is subject to the approval by holders of two-
    thirds of AFEI's shares other than AFG and other customary
    approvals.

    Income Taxes  AFEI files consolidated federal income tax returns
    with American Financial Corporation ("AFC"), all of  whose common
    stock is owned by AFG.  Deferred income taxes are calculated using
    the liability method.  Under this method, deferred income tax
    assets and liabilities are determined based on differences between
    financial reporting and tax bases and are measured using enacted
    tax rates.  Current and deferred tax assets and liabilities are
    aggregated with other amounts receivable from or payable to AFC.

    Earnings Per Share  Earnings per share are calculated on the basis
    of the weighted average number of shares of common stock outstanding
    during the period and the dilutive effect, if material, of assumed
    conversion of common stock options.
 
    New accounting standards issued in 1997 revise current rules for
    computing and presenting earnings per share beginning with financial
    statements issued for periods ending after December 15, 1997.  The
    new rules require the presentation of basic and diluted earnings per
    share for entities with potentially dilutive securities.
    Implementation of these new rules will not materially affect AFEI's
    reported earnings per share amounts.
<PAGE>
    Statement of Cash Flows  For cash flow purposes, "investing
    activities" are defined as acquiring and disposing of debt or
    equity instruments.  "Financing activities" include obtaining
    resources from owners and providing them with a return on their
    investments, borrowing money and repaying amounts borrowed.  All
    other activities are considered "operating".  Short-term
    investments having original maturities of three months or less
    when purchased are considered to be cash equivalents for purposes
    of the financial statements.
    
                                 5
<PAGE>
             AMERICAN FINANCIAL ENTERPRISES, INC. 10-Q

             NOTES TO FINANCIAL STATEMENTS - CONTINUED


B.  Investment in Affiliates  In light of the proposed transaction
    discussed in Note A, AFEI suspended accounting for its investment
    in AFG under the equity method beginning in January 1997.  As a
    result, AFEI carries its investment in AFG at market value and
    recognizes only the dividends received as income from AFG.

    AFEI's and AFC's combined ownership of the common stock of
    American Annuity Group, Inc. exceeds 20%.  Accordingly, this
    investment is treated as an affiliate under the equity method of
    accounting.  Since AFEI's basis in certain assets and liabilities
    of affiliates differs from amounts reported by these companies,
    adjustments are made to their reported earnings in calculating
    AFEI's share of affiliate earnings.  Included in AFEI's balance
    sheet is its portion of affiliates' unrealized gains and losses on
    marketable securities.

    Investment in American Financial Group  AFEI owned 10.0 million
    shares (13%) of AFG common stock at March 31, 1997.  Since AFEI
    and AFC are AFG subsidiaries, AFG does not report shares owned by
    them as outstanding for financial reporting purposes.  AFEI (and
    AFC) receive dividends paid on AFG common stock; however, their
    shares generally will not be eligible to be voted as long as AFEI
    (and AFC) are owned by AFG.  The market value of AFEI's investment
    in AFG was $363 million and $376 million at March 31, 1997 and
    December 31, 1996, respectively.  The book value (cost plus equity
    in net earnings through December 31, 1996) of AFEI's investment in
    AFG was $374 million at March 31, 1997.  AFG's subsidiaries
    operate primarily in specialty and multi-line property and
    casualty insurance and the sale of tax-deferred annuities.
    
    Summarized financial information for AFG (for the period it was
    accounted for under the equity method) follows (in millions):
    
                                               Three months ended
                                                   March 31, 1996
        Revenues                                         $1,030.9
        Earnings Before Extraordinary Items                  81.2
        Extraordinary Items - Loss                 
          on Debt Prepayments                                (7.6)
        Net Earnings                                         73.6

    Investment in American Annuity Group  AFEI owned 4.2 million
    shares (10%) of American Annuity common stock at March 31, 1997.
    The market value of AFEI's investment in American Annuity was
    $66 million and $60 million at March 31, 1997 and December 31,
    1996, respectively.  American Annuity is engaged in the sale of
    tax-deferred annuities and certain life and health insurance.
<PAGE>
    Summarized financial information for American Annuity follows (in
    millions):

                                               Three months ended
                                                     March 31,
                                                  1997       1996
        Revenues                                $149.7     $139.0
        Income Before Extraordinary Item          18.0       14.7
        Extraordinary Item - Loss 
          on Debt Prepayments                       -        (1.6)
        Net Income                                18.0       13.1

   Investment in Citicasters  In September 1996, AFEI sold its
   investment in Citicasters to Jacor Communications for
   approximately $76 million in cash plus warrants to purchase Jacor
   common stock.  AFEI realized a pretax gain of approximately
   $57 million on the sale.
   
                                  6
<PAGE>
                AMERICAN FINANCIAL ENTERPRISES, INC. 10-Q

                NOTES TO FINANCIAL STATEMENTS - CONTINUED


C.  Payable to American Financial Corporation  In December 1995, AFEI
    paid the outstanding balance of its bank line using funds borrowed
    under a new $20 million credit agreement with AFC which expires in
    December 1997.  AFC assigned this credit agreement to American
    Premier in March 1996.  Borrowings bear interest at rates 1/8th of
    1% below the bank line rates.  All other terms are similar to
    those in the bank line agreement.  Maximum aggregate borrowings
    under the two lines may not exceed $25 million at any one time.
    AFEI had no borrowings under this agreement at March 31, 1997 or
    December 31, 1996.  AFEI's payable to AFC at these dates
    represents primarily tax payments due under AFEI's tax agreement
    and deferred taxes on AFEI's net unrealized gain (loss) on
    marketable securities.

D.  Bank Line Agreement  AFEI has a revolving credit agreement under
    which it may borrow a maximum of $20 million through December
    1997.  Loans under the line of credit bear interest at rates
    approximating prime and are collateralized by a pledge of AFG
    common stock having a market value of two times the amount
    borrowed under the line.  The lender charges an annual fee of 1/4%
    of the unused portion of the line of credit.  There was no
    outstanding balance under the bank line at March 31, 1997 or
    December 31, 1996.

E.  Shareholders' Equity  At March 31, 1997, there were 462,500 shares
    of AFEI Common Stock reserved for issuance upon exercise of stock
    options.

    The components of AFEI's net unrealized gain (loss) on marketable
    securities were as follows (in millions):
                                                 March 31,  December 31,
                                                     1997          1996

      American Financial Group common stock        ($10.6)        $  -
      Other equities                                 (2.9)         (2.2)
      Equity in affiliates' net unrealized gains:
        American Annuity Group                        2.2           6.1
        American Financial Group                       -           23.5
                                                    (11.3)         27.4
      Deferred taxes                                 (3.9)          9.5

      Net unrealized gain (loss)                   ($ 7.4)        $17.9
                                  
                                  7
<PAGE>
              AMERICAN FINANCIAL ENTERPRISES, INC. 10-Q

                                ITEM 2

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


GENERAL  AFEI's assets consist primarily of investments in the common
stock of American Financial Group and American Annuity.

LIQUIDITY AND CAPITAL RESOURCES  At the current indicated rate,
$10 million in annual dividends from AFG is expected to be more than
sufficient to cover AFEI's fixed charges and other operating expenses.
If, in the future, affiliate dividends are insufficient to meet its
fixed charges, AFEI would be required to meet them through bank
borrowings, sales of investments, borrowings from affiliates, or
similar transactions.

Since March 1995, AFEI has paid quarterly dividends of $1.3 million
($.10 per share).  Additionally, AFEI paid a special dividend in
December 1995 ($2.0 million or $.15 per share).

RESULTS OF OPERATIONS

Affiliates  Since AFEI's basis in certain assets and liabilities of
affiliates differs from amounts reported by these companies,
adjustments are made to AFEI's share of affiliate earnings.  The
following table presents the significant amounts used in calculating
AFEI's equity in net earnings of affiliates for the three months ended
March 31 (in millions):
<TABLE>
<CAPTION>
                                                     AFG        American Annuity    Citicasters
                                              1997(a)   1996      1997      1996       1996(b)
  <S>                                                 <C>       <C>       <C>         <C>
  Affiliate earnings before
      extraordinary items                              $81.2     $18.0     $14.7      ($0.6)

  AFEI's share of affiliate earnings                   $10.6     $ 1.7     $ 1.4      ($0.1)
  Basis adjustments, including amortization
    of goodwill                                         (2.0)       -         -          -
                                                                              
  Equity in net earnings of affiliates
    as shown in Statement of Earnings                  $ 8.6     $ 1.7     $ 1.4      ($0.1)
<FN>
  (a)  In light of a proposed transaction whereby AFEI would become wholly-owned, AFEI suspended
       accounting for AFG under the equity method in January 1997.  See Note A to the financial 
       statements.
  (b)  AFEI sold its Citicasters shares in September 1996.
</FN>
</TABLE>

Dividend and Interest Income  Dividends of $2.5 million received from
AFG in the first quarter of 1997 were included in dividend and
interest income.  Dividends of $2.5 million received from AFG for the
same period of 1996 were recorded as a reduction in AFEI's investment
in AFG under the equity method of accounting.
<PAGE>

Interest Expense  Interest expense for 1996 represents interest on
borrowings under AFEI's credit agreement with American Premier which
were repaid in September 1996.

Income Taxes  The provision for income taxes reflects the effects of
deductions relating to affiliate dividends.

                                  8
<PAGE>
              AMERICAN FINANCIAL ENTERPRISES, INC. 10-Q
                               PART II
                          OTHER INFORMATION


                                ITEM 1

                          Legal Proceedings

A lawsuit was filed following the April 23, 1997 public announcement
of a proposal whereby AFG would acquire the AFEI Common Stock not
owned by AFG.  See Note A to the Financial Statements.  The lawsuit
names AFG, AFEI and six of AFEI's directors as defendants, alleges
that the price offered in the proposal for AFEI's Common Stock is
inadequate, and seeks to temporarily or permanently enjoin any
transaction, or, alternatively, seeks recission or compensatory
damages.  The class action complaint was filed in Superior Court in
Hartford, Connecticut, as Harry Lewis v. Carl H. Lindner, et al.
Management believes that the suit is without merit and intends to
vigorously contest it.

                                ITEM 6

                   Exhibits and Reports on Form 8-K

(a)  Exhibit 27 - Financial Data Schedule - Included in Report filed
     electronically with the Securities and Exchange Commission.

(b)  Report on Form 8-K:  None.




                           Signature

Pursuant to the requirements of the Securities Exchange Act of 1934,
American Financial Enterprises, Inc. has duly caused this Report to be
signed on its behalf by the undersigned duly authorized.


                                   American Financial Enterprises, Inc.



May 12, 1997                       BY: FRED J. RUNK
                                       Fred J. Runk
                                       Vice President and Treasurer

                            
                                  9