<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549


                                   FORM 10-K/A


                  FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
          SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(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, 1997

                                       OR

[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 0R 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934 [NO FEE REQUIRED] 

For the transition period from  ___ to ___

                         COMMISSION FILE NUMBER 0-18338

                               I-FLOW CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            CALIFORNIA                                 33-0121984
  -------------------------------            ---------------------------------
  (State or other jurisdiction of            (IRS Employer Identification No.)
   incorporation or organization)

20202 WINDROW DRIVE, LAKE FOREST, CA                                    92630
----------------------------------------                              ----------
(Address of principal executive offices)                              (Zip code)

Registrant's telephone number, including area code:               (714) 206-2700
--------------------------------------------------------------------------------

Securities registered pursuant to Section 12(b) of the Act:

                                      NONE

Securities registered pursuant to Section 12(g) of the Act:

                           COMMON STOCK, NO PAR VALUE
                                (Title of class)

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 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]

                            [COVER PAGE 1 OF 2 PAGES]



<PAGE>   2

The aggregate market value of the 11,992,998 shares of voting Common Stock of
the registrant held by non-affiliates of the registrant on February 27, 1998,
based on the last sale price of such stock on the Nasdaq Small Cap Market on
such date was $31,481,620.

Registrant's outstanding stock as of February 27, 1998 was 13,417,655 shares of
Common Stock and 656,250 shares of Series B Preferred Stock. The Series B
Preferred Stock is convertible by the holders thereof at any time into 700,000
shares of the Company's Common Stock and, except as otherwise provided by law or
the Certificate of Determination of Preferences of Series B Preferred Stock,
votes with the Common Stock as a single class on all matters submitted to
holders of Common Stock. All the Preferred Stock is held by affiliates.

                       DOCUMENTS INCORPORATED BY REFERENCE

Information required by Part III is incorporated by reference to portions of the
registrant's Proxy Statement for the 1998 Annual Meeting of Shareholders, which
will be filed with the Securities and Exchange Commission within 120 days after
the close of the registrant's year ended December 31, 1997.

Certain information required by Parts II and IV is incorporated by reference to
portions of the registrant's Annual Report to Shareholders for the fiscal year
ended December 31, 1997.



                                       2
<PAGE>   3

                                     PART I

ITEM 1.  BUSINESS

THE COMPANY

         I-Flow Corporation (the "Company" or "I-Flow") designs, develops,
manufactures and markets technically advanced, ambulatory infusion systems that
administer antibiotics, analgesics, chemotherapeutic agents, hormones,
nutrients, hydration therapies and other medical treatments to patients. These
compact, portable devices simplify and improve patient care, while reducing
costs through innovative product design. They are used most frequently in the
home, hospitals and physician offices.

         The Company was incorporated in the State of California in July 1985.
The Company's corporate offices are located at 20202 Windrow Drive, Lake Forest,
California 92630. The telephone number is (714) 206-2700 and its web site is
located at www.i-flowcorp.com.

ACQUISITION OF BLOCK MEDICAL, INC.

         On July 3, 1996, the Company entered into an agreement for the purchase
of substantially all of the assets of Block Medical, Inc. ("Block"), a wholly
owned subsidiary of Hillenbrand Industries, Inc. Block was a San Diego,
California based manufacturer and marketer of ambulatory infusion devices. The
transactions contemplated by this agreement were consummated on July 22, 1996.

ACQUISITION OF INFUSYSTEMS II, INC. AND VENTURE MEDICAL, INC.

         On February 9, 1998, the Company entered into an agreement and plan of
merger contemplating the merger of Infusystems II, Inc. and Venture Medical,
Inc. with and into a wholly-owned subsidiary of I-Flow. The transactions
contemplated by this agreement were consummated on February 11, 1998.

         Infusystems II and Venture Medical (collectively referred to as
"Infusystem") is a leading ambulatory infusion pump management firm based in
Madison Heights, Michigan. By delivering pumps from a variety of manufacturers
to private medical practices and clinics across the country, Infusystem uses a
unique approach to service the cancer infusion therapy market. InfuSystem
specializes in providing ambulatory infusion pumps and the related disposables
used primarily for cancer treatments. Infusystem believes it has captured
approximately 30% of the total target physician and clinical ambulatory pump
market for outpatient chemotherapy treatment. They currently serve over 1,000
physicians and clinics out of approximately 3,500 physicians and clinics in the
cancer treatment market which are believed to be targets for services relating
to outpatient chemotherapy treatment.

THE PRODUCTS

         I-Flow offers the health care professional a complete line of
cost-effective infusion therapy devices designed to meet the needs of today's
managed care environment both in the hospital and alternate site setting. The
I-Flow family of technically advanced infusion products is portable, reliable,
economical and versatile.



                                       3
<PAGE>   4

ELASTOMERICS

         The patented HOMEPUMP Eclipse(R) and HOMEPUMP Eclipse "C" Series are
durable, portable and compact elastomeric infusion systems designed to deliver
medications such as antibiotics, pain medication, and chemotherapy drugs in a
wide range of volumes and delivery times needed to meet today's sometimes
complex protocols. The HOMEPUMP Eclipse is the market leader in elastomeric
technology and provides the health care professional with a device that is both
safe and extremely easy to teach patients to self-administer.

         The ONE-STEP KVO(TM) is a new elastomeric infusion device intended to
be used as an alternative to flushing and as a means to help prevent catheter
occlusions. There are several hundred million flushes performed on catheters in
the U.S. every year and the process is expensive, cumbersome and difficult to
perform correctly. The complication rates for PICC line catheters exceed 20%,
many of which are attributable to improper flushing techniques. The ONE-STEP KVO
not only helps prevent complications associated with flushing, but it is
significantly more cost effective and easy to use. The ONE-STEP KVO is well
suited for hospitals, skilled nursing facilities and home healthcare
environments.

SYRINGE DELIVERY SYSTEMS

         The Medi-SIS(TM) 20 and Medi-SIS 60 Syringe Infusion Systems are
designed to provide an accurate intravenous ("IV") push delivery from a syringe.
This cost-effective syringe system delivers IV medications in single doses or in
multi-doses from one syringe over periods from 5 minutes to 12 hours. The
Medi-SIS Syringe Infusion System provides the healthcare professional with a
reusable, mechanical delivery system that can replace gravity based systems
while providing a low cost, accurate delivery with less teaching time required
for patients.

         The Band-It(TM) Syringe Delivery System and the Band-It One Dose(TM)
System deliver a variety of medications such as antibiotics, diuretics, and
other low volume drugs. The Band-It utilizes a standard Becton-Dickinson 10 or
20 cc syringe to infuse over 15 to 30 minutes, providing the lowest supply cost
per dose while still providing a safe and accurate alternative to gravity or IV
push methods.

NON-ELECTRONIC IV BAG DELIVERY SYSTEMS

         The Liberty(TM) 100, Liberty 250 and Liberty 1000 IV Bag Infusion
Systems deliver medications from standard Abbott Laboratories, Inc. or Baxter
International, Inc. IV bags. The Liberty System provides a safe, easy to use
means of providing a controlled infusion, eliminating the need to teach patients
to count drops, use a roller clamp, etc. The I-Flow Liberty system encourages
improved patient compliance, while providing a low cost means of infusion
delivery.

         The PARAGON(TM) ambulatory infusion pump provides accurate and cost
effective delivery of IV medications, including chemotherapy, heparin and
analgesics, which require precise and reliable delivery over extended periods of
time. The companion product, SIDEKICK, utilizes a patented spring technology to
deliver IV antibiotics over a shorter time period. These products are sold
outside of the United States.

         The Rely-A-Flow(TM) Gravity Set eliminates roller clamps and reduces
the risk of over infusion using gravity. Flow control tubing precisely controls
the rate of infusion, providing a safe and cost-effective method for delivering
medications from standard IV fluid containers at a controlled rate of flow.



                                       4
<PAGE>   5

ELECTRONIC PUMPS

         Verifuse(TM), Verifuse Plus(TM) and the I-Flow VIP(TM) are the only
infusion devices available today that can be used with the VOICELINK(R). These
electronic infusion pumps are multi-therapy, ambulatory infusion devices with
features similar to pumps currently on market.

         VOICELINK represents the "standard for tele-medicine". With VOICELINK,
the only piece of equipment a caregiver needs is a telephone. There is no
computer to carry and no special software to learn. Remote programming and
monitoring is as simple as dialing a telephone and following the verbal
instructions from a voice mail-like system. VOICELINK and a standard touch tone
telephone or cellular phone is all that is needed. The Company is currently
reviewing possibilities for licensing the VOICELINK technology for other
applications.

         Vivus 4000(R) is the only ambulatory, multi-channel, multi-therapy
electronic infusion pump available. It provides accurate and safe remote
programming and delivery of four individual protocols regardless of complexity.

THE MARKET

         Alternate site healthcare has grown significantly in the past few
years. Ambulatory infusion devices are one of the fastest growing segments in
the alternate site healthcare marketplace. An ambulatory pump allows patients to
leave the hospital earlier, making it very attractive to cost-conscious
hospitals and to patients who favor home treatment. Alternate site revenues for
infusion devices were estimated at $400 million in 1995 and are expected to
reach approximately $600 million by the year 2000. This field has been
identified by marketing research analysts as one of the fastest growing segments
in the U.S. healthcare market with revenues rising in excess of 20% annually.

         Infusystem's market further extends the reach of I-Flow's products into
physician offices and clinics, which specialize in cancer treatment. There are
over 7,000 physicians and clinics in the cancer treatment market, of which the
Company serves over 500. In addition, the Company also serves over 500 hospitals
and hospital outpatient centers. Two of I-Flow's newer products, the ONE-STEP
KVO and the Medi-SIS Syringe Infusion System, are well suited for the hospital
market. There has been tremendous growth in the number of hospital outpatient
centers as hospitals attempt to broaden the geographic reach within their
communities.

COMPETITION

         The IV drug and nutrient infusion segment of the alternate site
healthcare industry is highly competitive. The Company competes in this market
based on price, service and product performance. Some of the competitors have
significantly greater resources than the Company for research and development,
manufacturing and marketing, and may be better able to compete for a share of
the market, even in areas in which the Company's products may be superior. The
industry is subject to technological changes and there can be no assurance that
the Company will be able to maintain any existing technological lead long enough
to establish its products and to sustain profitability.

         The number of competitors and the Company's competitive position for
each of its product lines is noted in the table below.



                                       5
<PAGE>   6

<TABLE>
<CAPTION>
                                                                 Number of       Estimated Competitive
                     Market Description                         Competitors            Position
                     ------------------                         -----------            --------
<S>                                                             <C>              <C>
Electronic Ambulatory Infusion Pumps                                 7                     4
Syringe Pumps                                                        8                     7
Elastomerics                                                         3                     1
Gravity Infusion Systems                                             10                    8
Mechanical Infusion Systems                                          4                     2
</TABLE>

         The Company has focused its product development efforts on products in
the ambulatory infusion systems market and, with certain of its new products, it
is expanding its market to include hospitals. Amounts spent on Company-sponsored
product development activities are disclosed in the Statements of Operations in
the Financial Statements included elsewhere herein.

SALES AND DISTRIBUTION

         Distribution of the Company's products is currently managed directly
through its internal sales force as well as through a number of regional medical
product distributors. As of February 1998, the Company and its newly acquired
subsidiary, InfuSystem, had approximately 20 internal sales representatives
located throughout the United States. The Company is actively pursuing
additional distribution arrangements for its products.

      In March 1998, the Company entered into a letter of intent with B. Braun
Medical Inc., a world leader in the manufacture and distribution of
pharmaceuticals and infusion products, to distribute I-Flow's HOMEPUMP Eclipse,
HOMEPUMP Eclipse C-Series and One-Step KVO elastomeric products in the United
States. This relationship will strengthen I-Flow's existing distribution network
in the home care/alternate site market and open yet another new channel of
distribution directly into hospitals through the nationwide reach of B. Braun's
125 direct sales professionals.

         The Company sells several of its products into the international market
and has signed agreements with distributors in various countries. Currently, the
Company is selling its products through distributors in the Canada, Brazil, the
Benelux Countries, Germany, England, Ireland, Italy, Mexico, Spain, Korea,
Australia, New Zealand and Israel. Aggregate sales to countries outside of the
United States represented approximately 36%, 30% and 21% of the Company's
revenues for the years ended December 31, 1997, 1996 and 1995, respectively. The
Company does not have any capital investments in any foreign operations except
for its plant in Mexico.

         Net revenues attributable to each geographic area into which the
Company has sales are as follows:

<TABLE>
<CAPTION>
Sales to unaffiliated customers:            1997              1996               1995
--------------------------------            ----              ----               ----
<S>                                       <C>                 <C>                <C>       
     United States                        $11,447,000         $9,519,000         $7,925,000
     Europe                                 3,973,000          2,690,000          1,393,000
     Asia                                   1,986,000          1,383,000            678,000
     Other                                    336,000            300,000             51,000
</TABLE>



                                       6
<PAGE>   7

MANUFACTURING AND OPERATIONS

         Electromechanical assembly, calibration, pre and post-assembly quality
assurance inspection and testing, and final packaging for all products have
historically been performed at I-Flow facilities by I-Flow employees using parts
and materials acquired from a variety of outside vendors. Printed circuit board
manufacture and component integration are performed externally, with I-Flow
obtaining custom circuit boards and then providing the electronic materials and
engineering specifications to an outside assembler. In July 1997, the Company
consolidated its U.S. operations to a new facility in Lake Forest, California.

         With the acquisition of substantially all the assets of Block in July
1996, the Company acquired Block's wholly owned subsidiary, a manufacturing
plant in Northern Mexico. This plant has been in operation since 1994 and has
historically performed and is currently performing the manufacture of all of
Block's disposable IV infusion devices and tubing sets. The Company intends to
maintain the plant in Mexico and to manufacture a substantial portion of its
products there. The Company regularly reviews the use of outside vendors for
production versus internal manufacturing, analyzing factors such as the quality
of the products received from vendors, the costs of the products, timely
delivery and employee utilization.

         In each of the years ended December 31, 1997, 1996 and 1995, the
Company incurred expenses of $1,035,000, $1,139,000 and $840,000, respectively,
for research and development.

PATENTS AND TRADEMARKS

         The Company has filed U.S. patent applications for substantially all of
its products. The Company received a patent for the Medi-SIS Syringe Delivery
System in 1997 bringing the total number of patents now held by the Company to
40. These patents generally expire between 2009 to 2015, with the most
significant patents expiring in 2009. The Company has also filed for
intellectual property right protection in all foreign countries from which it
has significant revenues and, in the opinion of management, there are no related
limitations that would have a material adverse effect on the Company.

         Copyrights have been obtained for the Vivus 4000 programming software.
The product names "HOMEPUMP Eclipse", "VoiceLink" and "Vivus 4000" are
registered trademarks and trademark applications are pending for most of the
Company's other products. There can be no assurance that pending patent or
trademark applications will be approved or that any patents will provide
competitive advantages for the Company's products or will not be challenged or
circumvented by competitors.

REGULATIONS GOVERNING THE COMPANY'S MANUFACTURING OPERATIONS

         Development and manufacture of I-Flow products are regulated by the
U.S. Food, Drug and Cosmetic Act. The Food and Drug Administration ("FDA"),
which administers this Act, has issued a number of regulations that dictate the
method by which new products are allowed to enter the U.S. market, and the
documentation and control of the manufacturing processes. The Company regularly
receives its biannual inspections from the FDA, and to date, there have been no
reportable conditions found during these inspections.

         In addition to the FDA, the State of California has a set of similar
regulations and requires annual production-site inspections to maintain the
relevant manufacturing license. State regulations also address the storage and
handling of certain chemicals and disposal of their wastes.



                                       7
<PAGE>   8

         The Company is required to comply with federal, state and local
environmental laws, however, there is no significant effect of such on the
capital expenditures, earnings and competitive position of the Company as there
is no significant use of hazardous materials in the manufacture of the Company's
products.

         Products intended for export shipment are also subject to additional
regulations, including compliance with ISO 9000. In May 1995, the Company
received ISO 9001 certification, which ensures that I-Flow's products meet
specified uniform standards of quality and testing. The Company was also granted
permission to use the CE mark on its products, which reflects approval of the
Company's products for export into 18 member countries of the European
Community. In December 1996, the operations of Block were also added to the
Company's ISO certification and permission was granted to use the CE mark on the
Block products.

         The Company has passed all regulatory inspections and believes that it
is currently in compliance with all relevant federal, state and international
requirements in all material respects.

EMPLOYEES

         As of February 27, 1998, the Company and its newly acquired subsidiary,
InfuSystem, had a total of 120 full-time employees in the United States and the
Company had 119 employees in its wholly-owned subsidiary in Mexico. No U.S.
employees are covered by a collective bargaining agreement with a union. The
Company considers its relationship with its employees to be very good. The
Company also uses temporary employees as needed, mainly in manufacturing.

ITEM 2. DESCRIPTION OF PROPERTY

         In July 1997, the Company entered into a noncancelable operating lease
for a new 51,000 square foot building in Lake Forest, California, for its
primary facility. The lease agreement contains certain scheduled rent increases
(which are accounted for on a straight-line basis) and expires in June 2007 (see
Note 6 of Notes to Consolidated Financial Statements). The Company also leases a
facility for its manufacturing plant in Northern Mexico and a facility for the
operation of its newly acquired subsidiary in Detroit, Michigan.

ITEM 3. LEGAL PROCEEDINGS

         As of February 28, 1998, the Company was involved in legal proceedings
in the normal course of operations. Although the outcome of the litigations
cannot be determined as of February 28, 1998, in the opinion of management any
resulting future liability will not have a material adverse effect on the
Company, taken as a whole.

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

         There were no matters submitted to a vote of security holders during
the three months ended December 31, 1997.

EXECUTIVE OFFICERS OF THE REGISTRANT

         The following table sets forth information concerning the executive
officers of the Company as of February 28, 1998. There are no family
relationships between any of the executive officers or directors of the Company.
The executive officers are chosen annually at the first meeting of the Board 



                                       8
<PAGE>   9

of Directors following the annual meeting of shareholders and, subject to the
terms of any employment agreement, serve at the pleasure of the Board of
Directors.


<TABLE>
<CAPTION>
            Name (Age)                                             Position
            ----------                                             --------
<S>                                                   <C>
Donald M. Earhart (53)                                President, Chief Executive Officer and
                                                          Chairman of the Board
Henry Tsutomu Tai, Ph.D., M.D. (54)                   Secretary and Director
James J. Dal Porto (44)                               Executive Vice President, Chief Operating
                                                         Officer and Director
Gayle L. Arnold (36)                                  Chief Financial Officer and Treasurer
</TABLE>


         DONALD M. EARHART, former Corporate Officer and President of the
Optical Division of Allergan, Inc. (from 1986 to 1990), has been Chairman of the
Board since March 1991, and Chief Executive Officer since July 1990. Mr. Earhart
joined the Company as President and Chief Operating Officer in June 1990. Mr.
Earhart, who holds a Bachelor of Engineering from Ohio State University and a
Masters Degree in Business Administration from Roosevelt University, has over 23
years experience in the medical products industry. Prior to his employment at
Allergan, he was a Corporate Officer and Division President of Bausch and Lomb,
and was an operations manager of Abbott Laboratories. He has also served as an
engineering consultant at Peat, Marwick, Mitchell & Co., and as an engineer with
Eastman Kodak Company. Mr. Earhart currently serves on the Board of Directors of
Abacus Investments, Ltd.

         HENRY TSUTOMU TAI, PH.D., M.D. is the initial progenitor of the
Company's product and business concept in multiple-drug infusion systems and
founding director. Dr. Tai was Chairman of the Board from 1985 to 1988, and has
been a director and Secretary of the Company since 1990. Dr. Tai has been a
consultant in hematology and oncology since 1977. Dr. Tai holds a Bachelor of
Arts degree in Molecular Biology from Harvard University, a Ph.D. in Molecular
Biology and a M.D. from the University of Southern California. He has done
postdoctoral research in the molecular biology of tumor virus DNA at the Weizman
Institute of Science in Israel and at the California Institute of Technology.

         JAMES J. DAL PORTO joined the Company in October 1989 to serve as
Controller. Mr. Dal Porto was promoted to Treasurer in October 1990, to Vice
President of Finance and Administration in March 1991, to Executive Vice
President, Chief Financial Officer in March 1993 and to Chief Operating Officer
in February 1994. Mr. Dal Porto served as Financial Planning Manager and Manager
of Property Accounting and Local Taxation at CalComp, a high technology
manufacturing company, from 1984 to 1989. Mr. Dal Porto holds a Bachelor of
Science degree in Economics from the University of California, Los Angeles, and
a Masters in Business Administration from California State University,
Northridge.
         GAYLE L. ARNOLD joined the Company in April 1991 to serve as
Controller, was promoted to Vice President, Finance in February 1994 and given
the additional office of Treasurer in May 1996. Prior to joining the Company,
Ms. Arnold served as a Manager with the accounting firm, Deloitte & Touche LLP
where she was employed from 1984 to 1991. Ms. Arnold is a Certified Public
Accountant and holds a Bachelor of Business Administration degree from the
University of Texas, Austin.



                                       9
<PAGE>   10

                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS

         The Company's Common Stock trades on The Nasdaq Small-Cap Market under
the symbol "IFLO." The Company's Series B Preferred Stock is not publicly
traded, but is convertible by the holder at any time into shares of Common
Stock. The table below sets forth the high and low sales prices of the Company's
Common Stock as reported by The Nasdaq Small-Cap Market.

<TABLE>
<CAPTION>
                                         High                              Low
                                         ----                              ---
   1996
   ----
<S>                                     <C>                                <C>  
   1st   Quarter                        $5.50                              $3.81

   2nd   Quarter                        $5.94                              $3.69

   3rd   Quarter                        $4.94                              $3.81

   4th   Quarter                        $5.44                              $4.06

   1997
   ----
   1st   Quarter                        $5.88                              $4.00

   2nd   Quarter                        $4.31                              $3.88

   3rd   Quarter                        $5.00                              $3.91

   4th   Quarter                        $5.13                              $2.56
</TABLE>

         American Stock Transfer & Trust Company is the Company's transfer agent
for its Common Stock. As of February 27, 1998, the Company had approximately 500
shareholders of record, and based upon information received from nominee
holders, the Company believes it has in excess of 9,000 total beneficial
holders.

         The Company has not paid, and does not currently expect to pay in the
foreseeable future, cash dividends on its Common Stock.

         In July 1995, an aggregate of 758,681 shares of the Company's Common
Stock were issued upon exercise of various warrants issued to holders in
previous private placements at an exercise price of $2.25 per share, for net
proceeds of $1,707,000. In January and February 1996, an aggregate of 1,999,255
shares of the Company's Common Stock were issued upon exercise of Series G
warrants, which were issued to holders in a private placement in March 1991, at
an exercise price of $3.00 per share, for net proceeds of $5,998,000. The
Company relied on the exemption from registration provided by Section 4(2) of
the Securities Act of 1933, as amended. On February, 28 1997, the Company's
Registration Statement on Form S-3 (Registration No. 333-21493) relating to the
sale by certain selling shareholders of shares of common stock which were
previously issued, shares of common stock issuable upon the exercise of
outstanding warrants and shares of common stock issuable upon exercise of
outstanding options, became effective. The shares of Common Stock issued upon
exercise of such warrants were included in the Registration Statement.



                                       10
<PAGE>   11

         On July 3, 1996, the Company entered into an Agreement for Purchase and
Sales of Assets (the "Asset Agreement") by and among the Company, Block Medical,
Inc., a Delaware corporation ("Block") and Hillenbrand Industries, Inc., an
Indiana corporation and the parent of Block ("Hillenbrand") which contemplated
the purchase by the Company or its wholly-owned subsidiary of substantially all
of the assets of Block from Block and Hillenbrand. The transactions contemplated
by the Asset Agreement were consummated on July 22, 1996. Consideration for the
purchase included 433,018 shares of the Company's Common Stock (issued to
Hillenbrand) and a warrant to purchase 250,000 shares of the Company's Common
Stock at an exercise price of $4.62, expiring July 22, 2001 (issued to
Hillenbrand), exercisable at anytime. The Company relied on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as amended.
The shares of Common Stock issuable upon exercise of Hillenbrand's warrant were
included in the Registration Statement on form S-3 (Registration No. 333-21493)
filed by the Company in February 1997.

         On February 9, 1998, the Company entered into an Agreement and Plan of
Merger (the "Agreement") with, InfuSystems II, Inc. ("InfuSystem"), Venture
Medical, Inc. ("VMI") and the shareholders of InfuSystems and VMI, contemplating
the merger of InfuSystem and VMI with and into a wholly-owned subsidiary of the
Company. Pursuant to the Agreement, VMI and InfuSystem were merged (the
"Merger") with and into the subsidiary effective as of February 11, 1998 (the
"Effective Time"). In the Merger, all of the outstanding shares of Common Stock
of VMI and InfuSystem were exchanged for shares of Common Stock of the Company.
The aggregate number of shares of Common Stock of the Company issued in the
Merger to the shareholders of VMI and InfuSystem was 972,372 shares. IN
accordance with the terms of the Agreement, 59,395 shares of the Company's
Common Stock were issued to Amherst Capital Partners, L.L.C. (Amherst"),
investment banker for Infusystems and VMI, as payment of Amherst's fees and
expenses in connection with the Merger. The Company relied on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as amended.
Pursuant to the Merger Agreement, the Company is obligated to use its
commercially reasonable best efforts to register the shares of Common Stock
within six months after the Effective Time.

ITEM 6.  SELECTED FINANCIAL DATA

         The table entitled "Selected Consolidated Financial Data" shown on page
5 of the Company's 1997 Annual Report to Shareholders is incorporated herein by
reference.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

         The section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations" which appears on pages 6 to 9 of the
Company's 1997 Annual Report to Shareholders is incorporated herein by
reference.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

            Not applicable.
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

(a) Financial Statements



                                       11
<PAGE>   12

         The financial statements, including the notes thereto, included on
pages 11 through 26 of the Company's 1997 Annual Report to Shareholders together
with the section entitled "Independent Auditors Report" included on page 11 are
incorporated herein by reference.

(b)   Financial Statement Schedules

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS


<TABLE>
<CAPTION>
                              BALANCE AT       CHARGED TO      ADDITIONS FOR                            BALANCE
                               BEGINNING       COSTS AND         BUSINESS                                AT END
CLASSIFICATION                 OF PERIOD        EXPENSES        ACQUISITION         DEDUCTIONS         OF PERIOD
--------------                 ---------        --------        -----------         ----------         ---------
<S>                           <C>              <C>             <C>                  <C>                <C>
YEAR ENDED DECEMBER 31,
1995:
Allowance for doubtful
accounts                        247,000         262,000                                                 509,000
Reserve for obsolete
inventories                     461,000                                                 296,000         165,000

YEAR ENDED DECEMBER 31,
1996:
Allowance for doubtful
accounts                        509,000                             29,000              413,000         125,000
Reserve for obsolete
inventories                     165,000                          1,169,000              567,000         767,000

YEAR ENDED DECEMBER 31,
1997:
Allowance for doubtful
accounts                        125,000         338,000                                                 463,000
Reserve for obsolete
inventories                     767,000         612,000                                 244,000       1,135,000
</TABLE>



ITEM     9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

         None.



                                       12
<PAGE>   13

                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         There is incorporated herein by reference the information required by
this Item included in the Company's Proxy Statement for the 1998 Annual Meeting
of Shareholders under the caption "Election of Directors" which will be filed
with the Securities and Exchange Commission no later than 120 days after the
close of the fiscal year ended December 31, 1997 and the information from the
section entitled "Executive Officers of the Registrant" following Part I, Item 4
of this Report.

ITEM 11. EXECUTIVE COMPENSATION

         There is incorporated herein by reference the information required by
this Item included in the Company's Proxy Statement for the 1998 Annual Meeting
of Shareholders under the captions "Executive Compensation", "Compensation
Committee Interlock Insider Participation" and "Stock Performance Graph" which
will be filed with the Securities and Exchange Commission no later than 120 days
after the close of the fiscal year ended December 31, 1997.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         There is incorporated herein by reference the information required by
this Item included in the Company's Proxy Statement for the 1998 Annual Meeting
of Shareholders under the caption "Principal Shareholders and Stock Ownership of
Management" which will be filed with the Securities and Exchange Commission no
later than 120 days after the close of the fiscal year ended December 31, 1997.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         There is incorporated herein by reference the information required by
this Item included in the Company's Proxy Statement for the 1998 Annual Meeting
of Shareholders under the caption "Certain Relationships and Related
Transactions" which will be filed with the Securities and Exchange Commission no
later than 120 days after the close of the fiscal year ended December 31, 1997.



                                       13
<PAGE>   14



                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)      Documents filed as part of this Report:

         (1) Financial Statements

         The following financial statements of the Company and independent
         auditors' report are included on pages 10 to 26 of the Company's 1997
         Annual Report to Shareholders and are incorporated herein by reference:

<TABLE>
<CAPTION>
                                                                                                  Annual Report
                                                                                                      Page(s)
                                                                                                      -------
<S>                                                                                               <C>
                  Independent Auditors' Report                                                            10
                  Financial Statements
                           Consolidated Balance Sheets, December 31, 1997 and 1996                        11
                           Consolidated Statements of Operations for the years ended
                               December 31, 1997, 1996 and 1995                                           12
                           Consolidated Statements of Shareholders' Equity for the years
                               ended December 31, 1997, 1996 and 1995                                     13
                           Consolidated Statements of Cash Flows for the years ended
                               December 31, 1997, 1996 and 1995                                           14
                           Notes to Financial Statements                                                  15

         The following are included herein:                                                        Page in This
                                                                                                       Report
                                                                                                       ------
                  Independent Auditors' Report                                                            12
</TABLE>

         The Financial Statements and Independent Auditor's Report listed in the
         above index which are included in the Company's 1997 Annual Report to
         Shareholders are hereby incorporated herein by reference. With
         exception of the items referred to above and in Items 6, 7, and 8, the
         Company's Annual Report to Shareholders for the fiscal year ended
         December 31, 1997 is not deemed filed as part of this Report.

<TABLE>
<CAPTION>
                                                                                                 Page in This
          (2) Financial Statement Schedules included herein:                                        Report
                                                                                                    ------
<S>                                                                                              <C>
                  Schedule II - "Valuation and Qualifying Accounts"                                   9
</TABLE>

                  All other schedules are omitted as the required information is
inapplicable.

         (3) Exhibits

         The list of exhibits contained in the accompanying Index to Exhibits is
         herein incorporated by reference.

(b)      Reports on Form 8-K

         There were no reports on Form 8-K filed during the quarter ended
         December 31, 1997



                                       14
<PAGE>   15

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                             I-FLOW CORPORATION

     Dated:  January 6, 1999                 By: /s/ Donald M. Earhart
                                                 -------------------------------
                                                 Donald M. Earhart,
                                                 Chairman, President & CEO

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Registrant in the
capacities indicated on March 30, 1998:

<TABLE>
<CAPTION>
                 Signature                                          Title
                 ---------                                          -----
<S>                                                   <C>
     /s/ Donald M. Earhart                            Chairman, President and Chief Executive Officer
     -----------------------------
     Donald M. Earhart

     /s/ James J. Dal Porto                           Executive Vice President, Chief Operating
     -----------------------------                    Officer and Director
     James J. Dal Porto

     /s/ Gayle L. Arnold                              Chief Financial Officer (Principal Financial and
     -----------------------------                    Accounting Officer)
     Gayle L. Arnold

     /s/ John H. Abeles                               Director
     -----------------------------
     John H. Abeles, M.D.

     /s/ Jack H. Halperin                             Director
     -----------------------------
     Jack H. Halperin

     /s/ Joel S. Kanter                               Director
     -----------------------------
     Joel S. Kanter

     /s/ Erik H. Loudon                               Director
     -----------------------------
     Erik H. Loudon

     /s/ Charles C. McGettigan                        Director
     -----------------------------
     Charles C. McGettigan

     /s/ Henry Tsutomu Tai                            Director and Secretary
     -----------------------------
     Henry Tsutomu Tai, Ph.D., M.D.
</TABLE>



                                       15
<PAGE>   16

     INDEPENDENT AUDITORS' REPORT





     To  the Shareholders and Board of Directors of I-Flow Corporation:


     We have audited the consolidated financial statements of I-Flow Corporation
     as of December 31, 1997 and 1996 and for each of the three years in the
     period ended December 31, 1997, and have issued our report thereon dated
     February 19, 1998. Such financial statements and report are included in
     I-Flow Corporation's Annual Report to Shareholders and are incorporated
     herein by reference. Our audits also included the financial statement
     schedule of I-Flow Corporation listed in Item 8. The financial statement
     schedule is the responsibility of the Company's management. Our
     responsibility is to express an opinion based on our audits. In our
     opinion, such financial statement schedule, when considered in relation to
     the basic consolidated financial statements taken as a whole, presents
     fairly, in all material respects, the information set forth therein.







     DELOITTE & TOUCHE, LLP

     Costa Mesa,  California

     February 19, 1998



                                       16
<PAGE>   17

                                INDEX TO EXHIBITS

Set forth below is a list of the exhibits included as part of this report:

<TABLE>
<CAPTION>
     Exhibit No.                        Exhibit
     -----------                        -------
         <S>      <C>

         3.1      Restated Articles of Incorporation of the Company(2)

         3.2      Certificate of Amendment to Restated Articles of Incorporation
                  dated June 14, 1991(3)

         3.3      Certificate of Amendment to Restated Articles of Incorporation
                  dated May 12, 1992(5)

         3.4      Certificate of Determination covering Company's Series B
                  Preferred Stock filed with the Secretary of State on October
                  5, 1992(5)

         3.5      Restated Bylaws as of July 22, 1991 of the Company(3)

         4.1      Specimen Common Stock Certificate(5)

         4.2      Warrant Agreement between the Company and American Stock
                  Transfer & Trust Company, as Warrant Agent, dated February 13,
                  1990(1)

         4.3      Form of Warrant dated July 22, 1996, issued in conjunction
                  with the acquisition of Block Medical, Inc.(8)

        10.1      Employment Agreement with Donald M. Earhart dated May 16, 1990
                  (2)(6)*

         10.2     1987-1988 Incentive Stock Option Plan and Non-Statutory Stock
                  Option Plan Restated as of March 23, 1992(5)(6)*

         10.3     1992 Non-Employee Director Stock Option Plan(4)(6)

         10.4     License and Transfer Agreement with SoloPak Pharmaceuticals
                  Inc., dated March 6, 1996(7)

         10.5     1996 Stock Incentive Plan(6)(9)*

         10.6     Agreement for Purchase and Sale of Assets dated as of July 3,
                  1996 by and among I-Flow Corporation, Block Medical, Inc. and
                  Hillenbrand Industries, Inc.(8)

         10.7     Employment Agreement with James J. Dal Porto dated September
                  6, 1996(10)*

         10.8     Lease Agreement Between Industrial Developments International,
                  Inc. as Landlord and I-Flow Corporation as Tenant dated April
                  14, 1997(11)

         10.9     Agreement and Plan of Merger by and among I-Flow Corporation,
                  I-Flow Subsidiary, Inc., Venture Medical, Inc., and
                  Infusystems II, Inc. and the Shareholders of Venture Medical,
                  Inc. and InfuSystems II, Inc.(12)

         10.10    Loan and Security Agreement between Silicon Valley Bank and
                  I-Flow Corporation dated September 28, 1995

         10.11    Amendment to Loan Agreement between Silicon Valley Bank and
                  I-Flow Corporation dated March 2, 1998

         13       1997 Annual Report to Shareholders (not deemed to be filed
                  herein except for certain portions which have been
                  incorporated herein by reference)

         21       List of Subsidiaries

         23.1     Independent Auditors' Consent

         27       Financial Data Schedule
</TABLE>

(1)      Incorporated by reference to exhibit with this title filed with the
         Company's Registration Statement (#33-32263-LA) declared effective
         February 1, 1990.

(2)      Incorporated by reference to exhibit with this title filed with the
         Company's Form 10-K for its fiscal year ended September 30, 1990.



                                       17
<PAGE>   18

(3)      Incorporated by reference to exhibit with this title filed with the
         Company's Registration Statement (#33-41207-LA) declared effective
         August 8, 1991.

(4)      Incorporated by reference to exhibit with this title filed with the
         Company's Form 10-K for its fiscal year ended December 31, 1991.

(5)      Incorporated by reference to exhibit with this title filed with the
         Company's Post Effective Amendment to its Registration Statement
         (#33-41207-LA) declared effective November 6, 1992.

(6)      Management contract or compensatory plan or arrangement required to be
         filed as an exhibit pursuant to applicable rules of the Securities and
         Exchange Commission.

(7)      Incorporated by reference to exhibit with this title filed with the
         Company's Form 10-K for its fiscal year ended December 31, 1995.

(8)      Incorporated by reference to exhibit with this title filed with the
         Company's Report on Form 8-K dated July 22, 1996.

(9)      Incorporated by reference to exhibit with this title filed with the
         Company's Registration Statement (#333-16547) declared effective
         November 20, 1996.

(10)     Incorporated by reference to exhibit with this title filed with the
         Company's Form 10-K for its fiscal year ended December 31, 1996.

(11)     Incorporated by reference to exhibit with this title filed with the
         Company's Report on Form 8-K dated April 14, 1997.

(12)     Incorporated by reference to exhibit with this title filed with the
         Company's Report on Form 8-K dated February 9, 1998.

* Compensation plan, contract or arrangement required to be filed as an exhibit
pursuant to applicable rules of the Securities and Exchange Commission.



                                       18