SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                            FORM 10-K

    [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 1999Commission file number: 1-10434

              The Reader's Digest Association, Inc.
     (Exact name of registrant as specified in its charter)

                   Delaware                 13-1726769
        (State or other jurisdiction of       (I.R.S.
        incorporation or organization)       Employer
                                           Identificati
                                              on No.)

            Pleasantville, New York            10570
        (Address of principal executive     (Zip Code)
                   offices)

 Registrant's telephone number, including area code: (914) 238-1000

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

                                          Name of each
           Title of each class              exchange
                                            on which
                                           registered

     Class A Nonvoting Common Stock      New York Stock
        par value $.01 per share            Exchange

       Class B Voting Common Stock       New York Stock
        par value $.01 per share            Exchange

Securities  registered  pursuant to Section  12(g)  of  the  Act: None

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  the  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]

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 [ ]

The  aggregate market value of registrant's voting stock held  by
non-affiliates   of   registrant,  at  August   31,   1999,   was
approximately  $161,235,000  based  on  the  closing   price   of
registrant's Class B Voting Stock on the New York Stock Exchange-
-Composite Transactions on such date.

As  of  August  31,  1999, 85,975,940 shares of the  registrant's
Class  A  Nonvoting  Common Stock and 21,716,057  shares  of  the
registrant's Class B Voting Common Stock were outstanding.

               DOCUMENTS INCORPORATED BY REFERENCE

Annual Report to Stockholders of The Reader's Digest Association,
Inc. for the fiscal year ended June 30, 1999.  Certain
information therein is incorporated by reference into Part I and
Part II hereof.

Proxy Statement for the Annual Meeting of Stockholders of The
Reader's Digest Association, Inc. to be held on November 12,
1999.  Certain information therein is incorporated by reference
into Part III hereof.

<PAGE>

                        TABLE OF CONTENTS

                                                                  Page
PART I

   ITEM 1.  BUSINESS                                               1
     Strategic Initiatives                                         1
     Recent Developments                                           3
     Operating Segments                                            4
     Global Books and Home Entertainment                           4
      Select Editions                                              4
      Series Books                                                 4
      General Books                                                5
      Music                                                        5
      Video                                                        5
      Merchandise Catalogs                                         6
      Production and Fulfillment                                   6
     U.S. Magazines                                                6
      Circulation and Advertising                                  7
      Editorial                                                    8
      Production and Fulfillment                                   8
     International Magazines                                       9
      Circulation and Advertising                                  9
      Editorial                                                    9
      Production and Fulfillment                                   9
     Direct Marketing Operations                                  10
     Information Technology and Customer List Enhancement         11
     Competition and Trademarks                                   11
     Employees                                                    11
     Executive Officers                                           12

   ITEM 2.  PROPERTIES                                            14

   ITEM 3.  LEGAL PROCEEDINGS                                     14

   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS   14

PART II

   ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
            STOCKHOLDER MATTERS                                   15

   ITEM 6.  SELECTED FINANCIAL DATA                               15

   ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATION                    15

   ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
            MARKET RISK                                           16

   ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA           16

   ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
            ON ACCOUNTING AND FINANCIAL DISCLOSURE                16

PART III

   ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE               17
            REGISTRANT

   ITEM 11. EXECUTIVE COMPENSATION                                17

   ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
            AND MANAGEMENT                                        17

   ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS        17

PART IV

   ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
            REPORTS ON FORM 8-K                                   18

   SIGNATURES                                                     22

   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS                     23



Unless the context otherwise requires, references in this Annual
Report on Form 10-K to "Reader's Digest," "we" and "our" are to
The Reader's Digest Association, Inc. and its subsidiaries.

"Reader's Digest" and the Pegasus logo are registered trademarks
                               of
              The Reader's Digest Association, Inc.
<PAGE>


                             PART I
ITEM 1.BUSINESS

     We are a preeminent global leader in publishing and direct
marketing, and we create and deliver products that inform,
enrich, entertain and inspire, including magazines, books,
recorded music collections, home videos.

     We are a Delaware corporation, originally incorporated in
New York in 1926 and then reincorporated in Delaware in 1951.
The mailing address of our principal executive offices is
Pleasantville, New York  10570 and our telephone number is (914)
238-1000.

     We are best known for publishing our flagship Reader's
Digest magazine.  Reader's Digest is a monthly, general interest
magazine consisting of original articles, previously published
articles in condensed form, and a condensed version of a
previously published or soon-to-be published full-length book.
Reader's Digest also contains monthly humor columns such as
"Laughter, The Best Medicine," "Life's Like That,"  "Humor In
Uniform," and "All In A Day's Work," and other regular
features, including "Heroes For Today," "It Pays To Enrich Your
Word Power," "News From The World Of Medicine," "Tales Out of
School," "Virtual Hilarity," "Personal Glimpses," and "Campus
Comedy."  The international editions of Reader's Digest include
similar features.

     DeWitt and Lila Acheson Wallace founded Reader's Digest
magazine in 1922.  Today, Reader's Digest has a worldwide
circulation of about 25 million and over 100 million readers each
month.  Reader's Digest is published in 49 editions and 19
languages.

     Currently, our largest business unit is our global books and
home entertainment operations, which publish and market Reader's
Digest Select Editions, series books, general books, recorded
music collections and series, and home video products and series.

Strategic Initiatives

     We are undertaking a three-phase strategy to build on our
fundamental strengths and create growth opportunities.  In July
1998, we announced Phase I of our strategy, which involved:

-    reorganizing our business groups on a global basis;

-    restructuring our editorial organization;

-    establishing new reporting relationships; and

-    reassigning some of our executives.

We made further refinements to our organizational structure in
late fiscal 1999 to finalize the global operating segments
discussed below.

   We announced Phase II of our strategy in September 1998,
which targets:

-    reducing costs and streamlining processes;

-    raising capital by selling some underproductive assets; and

-    restructuring some underproductive businesses.

Actions that we have taken as part of the ongoing Phase II
include:

- reducing the number of individual promotional mailings
  globally, including eliminating related product development and
  overhead costs.  The purpose of this action is to increase
  response rates on continuing mailings;

- reducing the circulation rate base for Reader's Digest in
  the United States and in most international markets.  The purpose
  of this action is to improve the efficiency of our promotional
  spending;

- eliminating or redirecting some product lines, including
  adult and children's retail book publishing, the Today's Best
  Nonfictionr book series, and video or music businesses in
  selected international markets;

- selling our publishing operations in South Africa and
  closing our operations in Chile, Colombia and Peru;

- consolidating our operations in Benelux, the Nordic
  countries, Germany and Switzerland, and those in the Czech
  Republic and Hungary;

- selling important works from our fine art collection;

- outsourcing support functions where it is cost-effective;

- consolidating suppliers and combining purchasing efforts for
  greater negotiating leverage;

- selling international real estate holdings, including those
  in the United Kingdom, Canada and Italy; and

- reducing our quarterly dividend from $0.225 per share to
  $0.05 per share.

- We announced Phase III of our strategy in February 1999.
  Phase III targets long-term growth.  The key elements of Phase
  III include:

- expanding our presence in five areas of intense consumer
  interest-health, home, family, finance and faith;

- selling non-publishing products and services in those areas;

- continuing our geographic expansion;

- developing new marketing channels;

- broadening our customer base to include more younger
  customers and more products for older customers; and

- integrating the Internet into all of our businesses.

To implement Phase III, we expect to invest in internal growth
opportunities in our core businesses.  We also expect to target
acquisitions and form alliances that leverage our core strengths.


Recent Developments

WebMD Internet Healthcare Web Site Alliance and Investment

     In June 1999, we announced that we formed an alliance with
WebMD, Inc. as the first step in our strategy to expand our
business into providing health information and to integrate
Internet marketing into our businesses.  WebMD is a leading
healthcare Web site for physicians and consumers.  As part of our
business alliance, we also made a $13 million strategic equity
investment in WebMD, Inc.  WebMD has reported that it has also
forged strategic partnerships with other investors, including
Microsoft Corporation, E.I. duPont de Nemours and Company, Excite
Inc., Intel Corporation, Covad Communications Group Inc.,
Softbank America Inc. and Dell Computer Corporation.  WebMD has
announced that it plans to merge with Healtheon Corporation to
create one of the largest Internet companies in the health
information arena.

     Our alliance contemplates that WebMD will help develop a new
Reader's Digest health information Web site for consumers in the
U.S.  We expect to launch the Web site in the fall of 1999.  The
Reader's Digest Web site will draw content from our health-
related editorial products and from the WebMD Web site.  Our
health-related content will also be featured on the WebMD
consumer Web site.

     The alliance also contemplates that WebMD will provide
Reader's Digest magazine to its physician service subscribers,
purchasing a minimum of 3,000,000 copies over five years.  WebMD
will also purchase advertising in our magazines to promote the
WebMD Web site.  Each issue of the U.S. edition of Reader's
Digest will include WebMD advertorial pages, including an "Ask
WebMD" column and a calendar of online events that will occur on
both the WebMD and the Reader's Digest health Web sites.

Books Are Fun Display Marketing Company Acquisition

     On August 25, 1999, we agreed to purchase 100% of the stock
of Books Are Fun, Ltd. for approximately $380 million in cash.
Books Are Fun sells premium-quality books and gift items at
discount prices by display marketing those products on-site at
schools and businesses in all 50 states of the United States and
across Canada.

     The acquisition is part of our strategy to diversify
distribution channels for our current product lines, while also
using our brand strength to create new opportunities.

     The acquisition is subject to customary closing conditions,
including regulatory approvals.  We expect the acquisition to
close around October 1, 1999.  We expect to finance the
acquisition through a combination of internal funds and bank
borrowings under our principal revolving credit facility.


Torchmark and AIG Insurance Products and Services Marketing Alliances

     On September 13, 1999, we announced that we have formed an
exclusive alliance with Torchmark Corporation, which will market
life and health insurance products to our customers in the United
States and Canada.  The products will be marketed and sold by
Torchmark Corporation through direct mail, telemarketing, and
advertising in our magazines.  There will also be a significant
Internet marketing component.  Torchmark Corporation will
underwrite policies and provide customer and claims services.

     We also announced that we have agreed in principle with
American International Group, Inc. to develop a program under
which it will market a range of life, accident and health and
general insurance products and services to our customers in 26
other countries outside the United States.  American
International Group, Inc. member companies will manage the
products and provide customer and claims services and will
provide marketing support for all products.

gifts.com Online Gift Shopping Service

     On September 15, 1999, we announced that, together with our
Good Catalog Company subsidiary and StarTek, Inc., we have agreed
to create gifts.com, an online shopping service for gifts.  The
gifts.com Web site will initially feature 400 different products,
including leading brands and non-branded specialty items.  We
expect the site to be operational in the fall of 1999, in time
for the 1999 holiday shopping season.  The site will be supported
by a $20 million consumer marketing campaign.

     We and Good Catalog Company will contribute property and
financing in exchange for an 80.1% interest in the venture.
StarTek, Inc., a leading provider of outsourced services for e-
commerce and high-tech companies, will contribute property,
including the "gifts.com" domain name, and financing for a 19.9%
interest in the venture.  StarTek will also provide fulfillment
services for the venture.


Operating Segments

     We have three operating segments:  Global Books and Home
Entertainment, U.S. Magazines, and International Magazines.
Financial information about each of our operating segments is
included in Note 12 to our consolidated financial statements,
which are incorporated by reference into this report.


Global Books and Home Entertainment

     Our Global Books and Home Entertainment operations publish
Reader's Digest Select Editions, series books, general books,
recorded music collections and series and home video products and
series.  We market these products principally by direct mail.
Global Books and Home Entertainment also includes the operations
of our subsidiary, Good Catalog Company.  For more information
about how we market our products, please refer to the section of
this report captioned "Direct Marketing Operations."


  Select Editions

     Reader's Digest Select Editions, which were formerly called
"Condensed Books" in many markets, are a continuing series of
condensed versions of current popular fiction.  A condensed work
reduces the length of an existing text, while retaining the
author's style, integrity and purpose.  Today, we publish Select
Editions in 16 languages, and market them in 27 countries.
Select Editions generated worldwide revenues of $254.1 million in
fiscal 1999, $260.4 million in fiscal 1998 and $307.0 million in
fiscal 1997.

     International editions of Select Editions generally include
some material from the U.S. edition or from other international
editions, translated and edited as appropriate.  International
editions also include some condensed versions of locally
published works.  Each local editorial staff determines whether
existing Select Editions selections are appropriate for their
local market.

     We publish six volumes of Select Editions a year in the
United States.  Some of our international subsidiaries also
publish six volumes a year, while others publish four or five.


  Series Books

     We market two types of series books:  reading series and
illustrated series.  These book series may be either open-ended
continuing series or closed-ended series, which consist of a
limited number of volumes.  We publish series books in six
languages and market them in 11 countries.  Series books
generated worldwide revenues of $142.8 million in fiscal 1999,
$162.1 million in fiscal 1998 and $209.5 million in fiscal 1997.

     Our reading series include The World's Best Reading, which
consists of full-length editions of classic works of literature.
We publish six volumes of The World's Best Reading each year in
four countries in two languages.

     We publish illustrated series, which are generally closed-
ended, in 10 languages and market them in 16 countries.


  General Books

     Our general books consist primarily of reference books,
cookbooks, "how-to" and "do-it-yourself" books and children's
books.  We also publish books on subjects such as history,
travel, religion, health, nature and the home.  We publish some
of our general books in series.  We publish general books in 17
languages and market them in 39 countries.  General books
generated worldwide revenues of $540.4 million in fiscal 1999,
$606.0 million in fiscal 1998 and $679.9 million in fiscal 1997.

     New general books are usually original Reader's Digest
books, but may also be books acquired from other publishers.
During the development period for an original Reader's Digest
book, we conduct extensive research and prepare an appropriate
marketing strategy for the book.

     We sell most copies of a general book through initial bulk
promotional mailings.  We also sell substantial additional copies
through subsequent promotions, through catalog sales and through
the use of sales inserts in mailings for other Reader's Digest
products.  We also distribute our general books for retail sale
in stores through independent distributors.


  Music

     We publish recorded music packages on cassettes and compact
discs.  The music packages are generally collections of
previously recorded and newly commissioned material by a variety
of artists, although they may include selections from our almost
18,000-selection library.  The collections span a broad range of
musical styles.  Our marketing strategy for music packages is
similar to our marketing strategy for general books.  In some
markets, we also sell music series, which we market in the same
manner as series books.

     We market music products in 33 countries.  We offer
different music products in the various international markets
because of diverse tastes.  Music products generated worldwide
revenues of $345.5 million in fiscal 1999, $377.5 million in
fiscal 1998 and $404.2 million in fiscal 1997.

     We are a member of the Recording Industry Association of
America in the United States, and we have been recognized with 49
gold, platinum and multi-platinum certificates.


  Video

     Our home video products and series are in genres similar to
our general books. We continue to expand our video operations in
the United States and in international markets. We presently
market video products in the United States and 26 other
countries.  We also sell our home video products through retail
establishments.  Home video products generated worldwide revenues
of $200.5 in fiscal 1999, $215.8 million in fiscal 1998 and
$243.5 million in fiscal 1997.

     Most of our original programs have been licensed to cable
television networks. Several original programs have won awards of
excellence, including five Emmy awards.  In May 1999, we entered
into a multi-year agreement with CBS Productions to develop
television movies and mini-series based on the personal dramas
chronicled in Reader's Digest.


  Merchandise Catalogs

     In October 1998, we acquired Good Catalog Company, a catalog
marketer of home, garden and gift-related products.  In July
1999, Good Catalog Company launched the www.goodcatalog.com Web
site, which is currently conducting e-commerce business.


  Production and Fulfillment

     We hire independent contractors to print and bind the
various editions of Select Editions.  We have an exclusive
agreement with a printing company for printing English-language
Select Editions distributed in the United States and Canada.
That agreement expires in 2002.  We solicit bids for printing and
binding each general book or book series.  We usually hire
independent contractors to produce and manufacture our music and
video products.

     Paper is the principal raw material necessary for production
of our Select Editions, series books and general books.  We have
an exclusive agreement with a major supplier to supply paper for
Select Editions.  The agreement expires in 2002.  We purchase
paper for series books and general books for each printing.  We
believe that our existing contractual arrangements and other
available sources of paper provide us with an adequate supply of
paper at competitive prices.  We use independent contractors to
arrange for us to acquire some of the necessary raw materials to
manufacture music and video products.

     We usually hire independent contractors to handle our
fulfillment, warehousing, customer service and payment
processing. The printers or suppliers of our products generally
package and deliver those products directly to the postal
service.  For information about postal rates and postal services,
please refer to the section of this report captioned "Direct
Marketing Operations."

     It is our direct marketing policy that a customer may return
any book or home entertainment product to us for a refund, either
before or after payment.  We believe that our returned goods
policy is essential to our reputation and that it elicits a
greater number of orders.  Many of those orders are not returned
because a high number of consumers are satisfied with our
products.  Nevertheless, this policy and our "first book free"
policy for Select Editions and series books result in a
significant amount of returned goods.

     We sell more books and home entertainment products in some
seasons than others.  In the direct marketing industry as a
whole, more consumers respond in the winter months than during
the rest of the year.  Sales are also higher during the pre-
Christmas season than in spring and summer.


U.S. Magazines

     Our U.S. Magazines operations publish Reader's Digest and
several special interest magazines in the United States.  These
magazines and other products are sold through direct and retail
marketing, including the activities of our QSP, Inc. subsidiary.

     U.S. Magazines publishes Reader's Digest in several
editions, including an English-language edition, a Spanish
language edition and the Reader's Digest Large Edition for Easier
Reading.  We license independent contractors to publish a braille
edition and a recorded edition in the United States.

     We publish several special interest magazines that we
believe are consistent with our image, editorial philosophy and
market expertise.  The Family Handymanr magazine provides
instructions and guidance for "do-it-yourself" home improvement
projects.  New Choices: Living Even Better After 50r magazine is
aimed at active, mature readers and provides information on
entertainment, travel, health and leisure time activities.
Walkingr magazine provides information on health and fitness for
walking enthusiasts.  American Woodworkerr magazine and its
consumer trade show operations provide information, instruction
and guidance for professional and serious amateur woodworkers.
Prior to August 1999, we also published American Health for
Womenr magazine, which provided helpful information on medicine,
nutrition, psychology and fitness as those issues relate to
women.  In August 1999, we sold the American Health magazine
trademark, subscriber list and other circulation assets.

     We promote our U.S. special interest magazines to our U.S.
Reader's Digest customer list.  We also promote our other
products to each magazine's customer list, as appropriate.  This
strategy helps us to expand the customer base for all of our
products.

     We also publish other limited-edition special interest
publications in the United States, such as Reader's Digest
Christmas, which we have published annually since 1997 and
Reader's Digest Your Family, which debuted as a special edition
in May 1999.


  Circulation and Advertising

     The following table shows circulation and advertising
information for U.S. Magazines operations for fiscal 1999.

                                                  June 30,1999   Adver-
                                         Issues   Circulation    tising
                Magazine Title            Per      Rate Base     Pages
                                         Year                   Carried

     Reader's Digest-U.S. -English        12        12,500,000   1,137
        edition
     Reader's Digest Large Edition for    12           425,000     159
        Easier Reading
     The Family Handyman                  10         1,100,000     638
     American Health for Women            10         1,000,000     571
     New Choices: Living Even Better      10           600,000     412
        After 50
     Walking                               6           650,000     366
     American Woodworker                   7           324,000     187

     Approximately 70% of total U.S. fiscal 1999 revenues for
Reader's Digest was generated by circulation revenues and 30% by
advertising revenues.  Approximately 58% of total U.S. fiscal
1999 revenues for the special interest magazines was generated by
circulation revenues and 42% by advertising revenues.

     We have determined that the U.S.-English edition of Reader's
Digest has the largest paid circulation of any U.S. magazine,
other than those automatically distributed to all members of the
American Association of Retired Persons.  Our determination is
based on the most recent audit report issued by the Audit Bureau
of Circulation, Inc., a not-for-profit organization that monitors
circulation in the United States and Canada.  Approximately 95%
of the U.S. paid circulation of Reader's Digest consists of
subscriptions.  The balance consists of single copy sales at
newsstands and in supermarkets and similar retail establishments.
We sell our special interest magazines by subscription and at
newsstands.

     We maintain the circulation rate base for Reader's Digest
through annual subscription renewals and new subscriptions.  The
circulation rate base for the U.S.-English edition of Reader's
Digest was reduced from 15 million to 13.3 million copies per
issue for the January-June 1999 issues and to 12.5 million with
the July 1999 issue.  We sell approximately 3.4 million new
subscriptions in the United States to maintain the current
circulation rate base.  We sell new subscriptions primarily by
direct mail, with extensive use of sweepstakes entries.  We sell
the largest percentage of subscriptions between July and December
of each year.  Subscribers to Reader's Digest may cancel their
subscriptions at any time and we will refund the unused
subscription price.  For additional information regarding direct
marketing of subscriptions, please refer to the section of this
report captioned "Direct Marketing Operations."

     We also market and sell subscriptions to Reader's Digest and
the special interest magazines in the United States through QSP,
Inc., one of our wholly owned subsidiaries.  QSP helps schools
and youth groups prepare fundraising campaigns in which
participants sell magazine subscriptions, music and video
products, books, food and gifts.  QSP derives its revenues from
the sale of products to fundraising organizations.  A substantial
majority of QSP's sales occur during the first half of our fiscal
year, which includes the fall school semester.

     The U.S. editions of Reader's Digest offer advertisers
different regional editions, major market editions and
demographic editions.  These editions, which usually contain the
same editorial material, permit advertisers to concentrate their
advertising in specific markets or to target specific audiences.
Reader's Digest sells advertising in the United States
principally through an internal advertising sales force.  We sell
advertisements in multiple Reader's Digest editions worldwide,
and offer discounts for placing advertisements in more than one
edition.

     Like most other magazines, our special interest magazines
are highly dependent on advertising revenues.


  Editorial

     Reader's Digest is a reader-driven, family magazine.  Its
editorial content is, therefore, crucial to the loyal subscriber
base that constitutes the cornerstone of our operations.  The
editorial mission of Reader's Digest is to inform, enrich,
entertain and inspire.  The articles, book section and features
included in Reader's Digest cover a broad range of contemporary
issues and reflect an awareness of traditional values.

     A substantial portion of the selections in Reader's Digest
are original articles written by staff writers or free-lance
writers.  The balance is selected from existing published
sources.  All material is condensed by Reader's Digest editors.
We employ a professional staff to research and fact-check all
published pieces.

  Production and Fulfillment

     We hire independent contractors to print all U.S. editions
of Reader's Digest and our special interest magazines.  We have
an exclusive contract with a U.S. printer to print the U.S.
editions of Reader's Digest.  The contract will expire in 2007.
We believe that generally there is an adequate supply of
alternative printing services available to us at competitive
prices, should the need arise.  Nevertheless, significant short-
term disruption could occur.  We have developed plans to minimize
recovery time in the event of a disaster with current contract
printers.

     Lightweight coated and uncoated paper are the principal raw
materials used in the production of Reader's Digest. We have
supply contracts with a number of global and regional suppliers
of paper. We believe those supply contracts provide an adequate
supply of paper for our needs and that, in any event, alternative
sources are available at competitive prices.  A variety of
factors affect paper prices, including demand, capacity, pulp
supply, and general economic conditions.

     We deliver subscription copies of the U.S. edition of
Reader's Digest and the special interest magazines through the
United States Postal Service as "periodicals" class mail. For
additional information about postal rates and service, please
refer to the section of this report captioned "Direct Marketing
Operations."

     A distribution network handles newsstand and other retail
distribution.

     Several hundred other publishers make magazine subscriptions
available to QSP at competitive, discounted prices.  QSP also
obtains discounted music products from a large music publisher.
QSP engages an independent contractor to handle processing of
magazine and music orders.  A subsidiary of QSP handles
processing of video, book, gift and food orders.


International Magazines

     Our International Magazines operations publish Reader's
Digest in 48 editions and 19 languages outside the United States.
We license independent contractors to publish Reader's Digest in
Korea, India and South Africa.  These operations also publish
Moneywise, a magazine devoted to helping families manage their
finances, in the United Kingdom.  In August 1999, we acquired
Benchmark, Ltd., the publisher of four investment guides
distributed in Hong Kong, Taiwan and Singapore.


  Circulation and Advertising

     Reader's Digest is truly a global magazine.  Many of its
international editions have the largest paid circulation for
monthly magazines both in the individual countries and in the
regions in which they are published.  For most international
editions of Reader's Digest, subscriptions comprise almost 98% of
circulation.  The balance is attributable to newsstand and other
retail sales.  Approximately 83% of total international fiscal
1999 revenues for Reader's Digest was generated by circulation
revenues and 17% by advertising revenues.

     The following table shows circulation and advertising
information for International Magazines operations for fiscal
1999.


                                  Issues   June 30,1999   Advertising
       Magazine Title               Per    Circulation      Pages
                                   Year      Rate Base      Carried

     Reader's Digest                 12     12,278,585       11,729
     Moneywise                       12        108,075          660

     We maintain the circulation rate base for Reader's Digest
through annual subscription renewals and new subscriptions.  Each
year, we sell approximately three million new international
Reader's Digest subscriptions to maintain the international
circulation rate base.  We sell new subscriptions primarily by
direct mail, with extensive use of sweepstakes entries.  We sell
the largest percentage of subscriptions between July and December
of each year.  Subscribers to Reader's Digest may cancel their
subscriptions at any time and we will refund the unused
subscription price.

     The larger international editions of Reader's Digest offer
advertisers different regional editions, major market editions
and demographic editions.  These editions, which usually contain
the same editorial material, permit advertisers to concentrate
their advertising in specific markets or to target specific
audiences.  Reader's Digest sells international advertising
principally through an internal advertising sales force.  We sell
advertisements in multiple Reader's Digest editions worldwide,
and offer discounts for placing advertisements in more than one
edition.

  Editorial

     The international editions of Reader's Digest contain
content and follow editorial procedures similar to the U.S.
editions.  Each international edition has a local editorial staff
responsible for the editorial content of the edition.  The mix of
locally generated editorial material, material taken from the
U.S. edition and material taken from other international editions
varies greatly among editions.  In general, our larger
international editions, for example, those in Canada, France,
Germany and the United Kingdom, carry more original or locally
adapted material than do smaller editions.


  Production and Fulfillment

     We hire independent contractors to print all international
editions of Reader's Digest.  Issues relating to available
printing capacity and paper supplies are similar to those in the
United States.

     Subscription copies of international editions of Reader's
Digest are delivered through the postal service in each country
of publication.  We have also contracted in each country with a
newsstand magazine distributor for the distribution of Reader's
Digest.  For additional information about postal rates and
service, please refer to the section of this report captioned
"Direct Marketing Operations."


Direct Marketing Operations

     We sell magazine subscriptions, Select Editions, series
books, general books, music and video products, as well as
certain other products, principally through direct mail
solicitations to households on our customer lists.  Our products
and product offers are usually accompanied by sweepstakes entries
and, in some cases, premium merchandise offers.  For many years,
we have been acknowledged as a pioneer and innovator in the
direct mail industry.

     As part of our growth strategy and our strategy to decrease
our reliance on sweepstakes marketing, we have begun to pursue
increased distribution of our products through direct response
channels other than direct mail.  These other distribution
channels include direct response television, telemarketing, the
Internet, catalogs and clubs.  We are also continuing to conduct
tests of non-sweepstakes promotional mailing packages in the
United States.  The initial results of these tests have been
encouraging.


     We are adapting the editorial content and the marketing
methods of our magazines and books and home entertainment
products to new technologies.  In 1997, we launched Reader's
Digest World, a Web site (www.readersdigest.com) that links our
24 local and international Web sites, for shopping and
information about our products.  In 1999, Reader's Digest World
had over 3.5 million visitors from around the world.

     To promote the sale of our products in the United States, we
usually offer a sweepstakes in our promotional mailings.  Prizes
totaled about $9 million for the 1999 edition of the sweepstakes.
Generally, each of our international subsidiaries sponsors its
own sweepstakes.  The mechanics of the sweepstakes vary from
jurisdiction to jurisdiction, depending upon local law.

     From time to time, we are involved in legal, regulatory and
investigative proceedings concerning our sweepstakes and other
direct marketing practices.  Also from time to time,
jurisdictions in which we do business consider more restrictive
laws or regulations governing sweepstakes or direct marketing.
Although some of these proceedings may have negatively affected
our direct marketing business, we do not believe that these
proceedings and proposed laws and regulations will have a
material adverse effect on our direct marketing business.


     We are subject to postal rate increases, which affect our
product deliveries, promotional mailings and billings.  Postage
is one of the largest expenses in our promotional and billing
activities.  In the past, we have had sufficient advance notice
of most increases in postal rates so that we could factor the
higher rates into our pricing strategies and operating plans.
Higher postal rates or other delivery charges usually increase
the total cost to the customer, which may have a negative effect
on sales.  As a result, we may strategically determine the
extent, if any, to which we will pass these cost increases on to
our customers.

     We rely on postal delivery service for timely delivery of
our products and promotional mailings.  In the United States and
most international markets, delivery service is generally
satisfactory.  Some international jurisdictions, however,
experience periodic work stoppages in postal delivery service or
less than adequate postal efficiency.

     In some states in the United States and in some
international jurisdictions, some or all of our products are
subject to sales tax or value added tax.  Taxes, like delivery
costs, are generally stated separately on bills, where permitted
by applicable law.  Higher taxes increase the total cost to the
customer, which may have a negative effect on sales.  In
jurisdictions where applicable tax must be included in the
purchase price, we may be unable to fully recover from customers
the amount of any tax increase or new tax.


Information Technology and Customer List Enhancement

     The size and quality of our computerized customer list of
current and prospective customers in each country where we
operate contributes significantly to our business.  We are
constantly striving to improve our customer lists.  We believe
that our U.S. list of over 57 million households--over half the
total number of households in the country--is one of the largest
direct response lists in the United States.  Our international
lists include a total of approximately 49 million households.

     We continue to make significant investments in our database
list management and related information technology to improve our
operating efficiencies, to increase the level of service we
provide to our customer base and to facilitate globalization of
our operations.

     Some international jurisdictions, particularly in Europe,
have data protection laws or regulations prohibiting or limiting
the exchange of information of the type that we maintain.  Some
jurisdictions also prohibit the retention of information, other
than certain basic facts, about noncurrent customers.  Although
these regulations may hinder our ability to collect, retain and
use customer information, we believe that current laws and
regulations do not prevent us from engaging in activities
necessary to operate our current businesses.


Competition and Trademarks

     Although Reader's Digest is a unique and well-established
institution in the magazine publishing industry, it competes with
other magazines for subscribers and with magazines and all other
media, including television, radio and the Internet, for
advertising.  We believe that the extensive and longstanding
international operations of Reader's Digest provide us with a
significant advantage over competitors seeking to establish a
global publication.

     We own numerous trademarks that we use in our business
worldwide.  Our two most important trademarks are "Reader's
Digest" and the "Pegasus" logo.  We believe that the name
recognition, reputation and image that we have developed in each
of our markets significantly enhance customer response to our
direct marketing sales promotions.  For these reasons, trademarks
are important to our business and we aggressively defend our
trademarks.

     We believe that our company name, image and reputation, as
well as the quality of our customer lists, provide a significant
competitive advantage over many other direct marketers.  However,
our books and home entertainment business competes with companies
selling similar products at retail as well as by direct marketing
through various channels, including the Internet.  Because tests
show that consumers' responses to direct marketing promotions can
be adversely affected by the overall volume of direct marketing
promotions, we also compete with all other direct marketers,
regardless of whether their products are similar to our products.

     Each of our special interest magazines competes with other
magazines of the same genre for readers and advertising.  Nearly
all of our products compete with other products and services that
utilize leisure activity time or disposable income.


Employees

     As of June 30, 1999, we employed about 4,800 people
worldwide.  We employed about 1,900 in the United States and
about 2,900 in our international subsidiaries.  Our relationship
with our employees is generally satisfactory.


Executive Officers

     The following is some information about our executive
officers.

Name and Age                       Positions With Reader's Digest and Recent
                                   Business Experience

Thomas O. Ryder (55)               Mr. Ryder has been Chairman of the Board and
                                   Chief Executive Officer of Reader's Digest
                                   since April 1998.  Mr. Ryder was President,
                                   American Express Travel Related Services
                                   International, a division of American Express
                                   Company (travel, financial and network
                                   services), from October 1995 to April 1998.
                                   Before October 1995, he served as President,
                                   Establishment Services - Worldwide of
                                   American Express Travel Related Services.

M. John Bohane  (63)               Mr. Bohane has been a Senior Vice President
                                   of Reader's Digest and President, Global
                                   Books and Home Entertainment since July
                                   1998.  Before July 1998, he was Senior Vice
                                   President of Reader's Digest and President
                                   International Operations, a position he held
                                   since rejoining Reader's Digest in September
                                   1997.  He first joined Reader's Digest in
                                   1964 and served in a number of executive
                                   capacities, including President, Direct
                                   Marketing, until leaving Reader's Digest in
                                   July 1991.  Mr. Bohane served as President
                                   and Chief Executive Officer of Newfield
                                   Publications from April 1994 to July 1995 and
                                   as Vice President of Corporate Database
                                   Marketing of Time-Warner, Inc. from April
                                   1992 to December 1993.

Michael A. Brizel (42)             Mr. Brizel has been Vice President and
                                   General Counsel of Reader's Digest since July
                                   1998.  Before July 1998, he was Vice
                                   President, Legal U.S. and Associate General
                                   Counsel, a position he held since September
                                   1996.  Before September 1996, he was
                                   Associate General Counsel of Reader's Digest.
                                   Mr. Brizel joined Reader's Digest in July
                                   1989.

Elizabeth G. Chambers (36)         Ms. Chambers has been Vice President,
                                   Business Redesign of Reader's Digest since
                                   August 1998.  She was a partner at the
                                   management consulting firm of McKinsey &
                                   Company from June 1995 to August 1998, and
                                   was an associate there from October 1989 to
                                   June 1995.

Gregory G. Coleman (45)            Mr. Coleman has been a Senior Vice President
                                   and President, U.S. Magazine Publishing of
                                   Reader's Digest since July 1998.  Before July
                                   1998, he was Senior Vice President, Worldwide
                                   Publisher, Reader's Digest Magazine, a
                                   position he held since October 1997. Mr.
                                   Coleman also served as Vice President and
                                   General Manager, U.S. Magazines and
                                   Publisher, U.S. Reader's Digest from December
                                   1995 until October 1997, and Vice President,
                                   Publisher, U.S. Reader's Digest from November
                                   1991 until December 1995.

Clifford H.R. DuPree (49)          Mr. DuPree has been Vice President, Corporate
                                   Secretary and Associate General Counsel of
                                   Reader's Digest since July 1998.  He joined
                                   Reader's Digest in May 1992 as Associate
                                   General Counsel, became Assistant Secretary
                                   in March 1995 and Vice President in September
                                   1996.


Thomas D. Gardner (41)             Mr. Gardner has been Senior Vice President,
                                   Business Planning and Development of Reader'
                                   s Digest since July 1998.  He was Vice
                                   President, Marketing, Reader's Digest U.S.A.
                                   from November 1995 to July 1998, Vice
                                   President, Business Development from April
                                   1995 to November 1995, and a Director of
                                   Marketing before April 1995.  Mr. Gardner
                                   joined Reader's Digest in February 1992.

Robert J. Krefting (55)            Mr. Krefting has been Senior Vice President
                                   and President, International Magazine
                                   Publishing of Reader's Digest since July
                                   1998.  Before joining Reader's Digest, Mr.
                                   Krefting was sole proprietor of Holly Hill
                                   Publishing, a management services corporation
                                   serving the publishing and venture capital
                                   industries.

Robert E. Raymond (43)          Mr. Raymond was appointed Vice President,
                                Strategic Acquisitions & Alliances of Reader's
                                Digest on June 7, 1999.  Before June 1999, he
                                was Vice President and General Manager, Music,
                                Video, Special Channels, a position he held
                                since April 1998.  Mr. Raymond also served as
                                Vice President Marketing, Video/New Business
                                from December 1997 until April 1998, Director
                                of Marketing, Video/New Business from July
                                1995 until December 1997, Marketing Director,
                                New Business from August 1994 until July 1995.
                                Mr. Raymond joined Reader's Digest in 1993.

Gary S. Rich (38)                  Mr. Rich has been Senior Vice President,
                                   Human Resources of Reader's Digest since
                                   August 1998.  Before joining Reader's Digest,
                                   he was Senior Vice President, Global Human
                                   Resources for A.C. Nielsen Corporation
                                   (provider of market research, information and
                                   analysis to the consumer products and
                                   services industries), a position he held from
                                   June 1996 to July 1998.  Before June 1996,
                                   Mr. Rich was Vice President, Human Resources-
                                   -Europe, Middle East and Africa, at American
                                   Express Company (travel, financial and
                                   network services).

George S. Scimone (52)             Mr. Scimone has been Senior Vice President
                                   and Chief Financial Officer of Reader's
                                   Digest since July 1998.  Mr. Scimone served
                                   as Vice President and Chief Financial Officer
                                   from September 1997 to July 1998, as Vice
                                   President and President, Reader's Digest
                                   U.S.A. from November 1996 to September 1997
                                   and as Vice President and Corporate
                                   Controller from September 1995 to November
                                   1996.  Prior to joining Reader's Digest, Mr.
                                   Scimone was Business Chief Financial Officer,
                                   Electrical Distribution and Control of
                                   General Electric Company (appliances,
                                   aircraft engines, and other electrical
                                   products and services).

Christopher P. Willcox  (52)       Mr. Willcox has been Senior Vice President
                                   and Editor-in-Chief, Reader's Digest Magazine
                                   since March 1996.  Before March 1996, he
                                   served as Worldwide Executive Editor of
                                   Reader's Digest.  He joined Reader's Digest
                                   in 1988.


     Our By-Laws state that officers serve at the pleasure of our
board of directors. We elect our officers annually and they serve
until their successors are elected and qualified.

ITEM 2.PROPERTIES

     Our headquarters and principal operating facilities are
situated on approximately 120 acres in Westchester County, New
York.  We acquired much of this property in 1940.  The table
below shows our headquarters and other properties that we own or
lease.

Location               Area (sq. ft.)      Principal uses
Westchester County,    703,000 owned       Executive, administrative,
NY                                         editorial and operational
                                           offices; data processing; other
                                           facilities

New York, NY           153,180 leased      Books and home entertainment
                                           products editorial offices;
                                           Reader's Digest magazine
                                           advertising sales offices;
                                           special interest magazines
                                           offices

Various U.S. cities    130,706 leased      Editorial offices, advertising
                                           sales offices; other facilities

Conyers, GA            163,375 leased      QSP fulfillment facilities

International          693,724 owned       Headquarters, administrative and
                       527,914 leased      editorial offices; warehouse
                                           facilities


     We believe that our current facilities, together with
expansions and upgrades of facilities presently underway or
planned, are adequate to meet our present and reasonably
foreseeable needs.  We also believe that adequate space will be
available to replace any leased facilities whose leases expire in
the near future.


ITEM 3.LEGAL PROCEEDINGS

     We and our subsidiaries are defendants in various lawsuits
and claims arising in the regular course of business.  Based on
the opinions of management and counsel for these matters, we
believe that recoveries, if any, by plaintiffs and claimants
would not materially affect our financial position or results of
operations.


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

     No matter was submitted to a vote of our security holders
during the fourth quarter of the fiscal year ended June 30, 1999.


                             PART II


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

     The information contained under the caption "Selected
Quarterly Financial Data and Dividend and Market Information" in
our 1999 Annual Report to Stockholders is incorporated into this
Item by reference.


ITEM 6.SELECTED FINANCIAL DATA

     The information contained under the caption "Selected
Quarterly Financial Data and Dividend and Market Information" and
"Selected Financial Data" in our 1999 Annual Report to
Stockholders is incorporated into this Item by reference.


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

     The information contained under the caption "Management's
Discussion and Analysis" in our 1999 Annual Report to
Stockholders is incorporated into this Item by reference.

     This report contains or incorporates by reference "forward-
looking statements" within the meaning of the U.S. federal
securities laws.  Forward-looking statements include any
statements that address future results or occurrences.  These
forward-looking statements inherently involve risks and
uncertainties that could cause actual future results and
occurrences to differ materially from the forward-looking
statements.  Some of these risks and uncertainties include
factors relating to:

-    the effect of potentially more restrictive privacy and other
     governmental regulation relating to our  marketing methods;

-    the effect of modified and varied promotions;

-    our ability to identify customer trends;

-    our ability to continue to create a broadly appealing mix of
     new products;

-    our ability to attract and retain new and younger magazine
     subscribers and product customers in view of the maturing of an
     important portion of our U.S. customer base;

-    our ability to attract and retain subscribers and customers
     in an economically efficient manner;

-    the effect of selective adjustments in pricing;

-    our ability to expand and more effectively utilize our
     customer database;

-    our ability to expand into new international markets and to
     introduce new product lines into new and existing markets;

-    our ability to expand into new channels of distribution;

-    our ability to negotiate and implement productive
     acquisitions, strategic alliances and joint ventures;

-    our ability to integrate newly acquired and newly formed
     businesses successfully;

-    the strength of relationships of newly acquired and newly
     formed businesses with their employees, suppliers and customers;

-    the accuracy of the basis of forecasts relating to newly
     acquired and newly formed businesses;

-    our ability to contain and reduce costs, especially through
     global efficiencies;

-    the cost and effectiveness of our re-engineering of business
     processes and operations;

-    the accuracy of our management's assessment of the current
     status of our business;

-    the evolution of our organizational and structural
     capabilities;

-    our ability to respond to competitive pressures within and
     outside the direct marketing industry, including the Internet;

-    the effect of worldwide paper and postage costs;

-    the effect of postal disruptions on deliveries;

-    the effect of foreign currency fluctuations;

-    the effect of the Year 2000 issue;

-    the effect of the transition to the euro; and

-    general economic conditions.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The information contained under the caption "Management's
Discussion and Analysis" in the section entitled "Currency Risk
Management" in our 1999 Annual Report to Stockholders is
incorporated into this Item by reference.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Our Consolidated Financial Statements appearing on pages 51
through 93 of our 1999 Annual Report to Stockholders, together
with the report of KPMG LLP appearing on page 94, are
incorporated into this Item by reference.


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

None.

                            PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information with respect to our directors under the caption
"Proposal 1: Election of Directors" in the Proxy Statement for
our Annual Meeting of Stockholders to be held on November 12,
1999 is incorporated into this Item by reference.  Information
with respect to our executive officers appears under the caption
"Executive Officers" in Item 1 of Part I of this report and is
incorporated into this Item by reference.


ITEM 11. EXECUTIVE COMPENSATION

     Information with respect to executive compensation under the
captions "Executive Compensation," "Report of the Compensation
and Nominating Committee" and "Performance Graph" in the Proxy
Statement for our Annual Meeting of Stockholders to be held on
November 12, 1999 is incorporated into this Item by reference.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information with respect to security ownership of certain
beneficial owners and management under the caption "Equity
Security Ownership" in the Proxy Statement for our Annual Meeting
of Stockholders to be held on November 12, 1999 is incorporated
into this Item by reference.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

                             PART IV


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

(a)1   Financial Statements
       An index of our Consolidated Financial Statements appears
       on page 24 of this report.

   2   Financial Statement Schedules
       All schedules have been omitted since the information
       required to be submitted has been included in the
       Consolidated Financial Statements or Notes thereto or has
       been omitted as not applicable or not required.

   3   Exhibits

3.1.1     Restated Certificate of Incorporation of The Reader's
          Digest Association, Inc. filed with the State of
          Delaware on February 7, 1990 filed as Exhibit 3.1.1 to
          our Annual Report on Form 10-K for the year ended June
          30, 1993, is incorporated herein by reference.

3.1.2     Certificate of Amendment of the Certificate of
          Incorporation of The Reader's Digest Association, Inc.
          filed with the State of Delaware on February 22, 1991
          filed as Exhibit 3.1.2 to our Annual Report on Form 10-
          K for the year ended June 30, 1993, is incorporated
          herein by reference.

3.2       Amended and Restated By-Laws of The Reader's Digest
          Association, Inc., effective February 22, 1991 filed as
          Exhibit 3.2 to our Annual Report on Form 10-K for the
          year ended June 30, 1993, is incorporated herein by
          reference.

10.1      The Reader's Digest Association, Inc. Management
          Incentive Compensation Plan (Amendment and Restatement
          as of July 1, 1994) filed as Exhibit 10.1 to our Annual
          Report on Form 10-K for the year ended June 30, 1994,
          is incorporated herein by reference.*

10.2      The Reader's Digest Association, Inc. 1989 Key Employee
          Long Term Incentive Plan filed as Exhibit 10.2 to our
          Registration Statement on Form S-1 (Registration No. 33-
          32566) filed on December 19, 1989, is incorporated
          herein by reference.*

10.3      The Reader's Digest Association, Inc. Deferred
          Compensation Plan (Amendment and Restatement as of July
          8, 1994) filed as Exhibit 10.4 to our Annual Report on
          Form 10-K for the year ended June 30, 1994, is
          incorporated herein by reference.*

10.4      The Reader's Digest Association, Inc. Severance Plan
          for Senior Management (Amendment and Restatement as of
          July 8, 1994) filed as Exhibit 10.5 to our Annual
          Report on Form 10-K for the year ended June 30, 1994,
          is incorporated herein by reference.*

10.5      The Reader's Digest Association, Inc. Income
          Continuation Plan for Senior Management (amended and
          restated) filed as Exhibit 10.5 to our Annual Report on
          Form 10-K for the year ended June 30, 1993, is
          incorporated herein by reference.*

10.6      Excess Benefit Retirement Plan of The Reader's Digest
          Association, Inc. (Amendment and Restatement as of July
          1, 1994) filed as Exhibit 10.7 to our Annual Report on
          Form 10-K for the year ended June 30, 1994, is
          incorporated herein by reference.*

10.7      The Reader's Digest 1992 Executive Retirement Plan
          (Amendment and Restatement as of October 10, 1996),
          filed as Exhibit 10.12 to our Annual Report on Form 10-
          K for the year ended June 30, 1997, is incorporated
          herein by reference.*

10.8      The Reader's Digest Association, Inc. Executive
          Financial Counseling Plan, amended and restated as of
          July 1, 1998 filed as Exhibit 10.10 to our Annual
          Report on Form 10-K for the year ended June 30, 1998,
          is incorporated herein by reference.*

10.9      Amendment No. 1 to The Reader's Digest Association,
          Inc. Management Incentive Compensation Plan (effective
          as of April 11, 1996) filed as Exhibit 10.1.1 to our
          Quarterly Report on Form 10-Q for the quarter ended
          March 31, 1996, is incorporated herein by reference.*

10.10     Competitive Advance and Revolving Credit Facility
          Agreement dated as of November 12, 1996 between the
          registrant, the Borrowing Subsidiaries, The Chase
          Manhattan Bank and J.P. Morgan Securities Inc., filed
          as Exhibit 10.23 to our Quarterly Report on Form 10-Q
          for the quarter ended December 31, 1996, is
          incorporated herein by reference.

10.11     Agreement dated as of August 11, 1997 between The
          Reader's Digest Association, Inc. and George V. Grune,
          filed as Exhibit 10.28 to our Quarterly Report on Form
          10-Q for the quarter ended September 30, 1997, is
          incorporated herein by reference.*

10.12     First Amendment dated as of September 17, 1997 to the
          Competitive Advance and Revolving Credit Facility
          Agreement dated as of November 12, 1996 among The
          Reader's Digest Association, Inc., the Borrowing
          Subsidiaries, The Chase Manhattan Bank and J.P. Morgan
          Securities Inc., filed as Exhibit 10.29 to our
          Quarterly Report on Form 10-Q for the quarter ended
          September 30, 1997, is incorporated herein by
          reference.

10.13     The Reader's Digest Association, Inc. Director
          Compensation Program, filed as Exhibit 10.31 to our
          Quarterly Report on Form 10-Q for the quarter ended
          March 31, 1998, is incorporated herein by reference.*

10.14     The Reader's Digest Association, Inc. Deferred
          Compensation Plan for Directors, amended and restated
          as of March 13, 1998, filed as Exhibit 10.31 to our
          Quarterly Report on Form 10-Q for the quarter ended
          March 31, 1998, is incorporated herein by reference.*

10.15     Employment Agreement dated as of April 28, 1998 between
          The Reader's Digest Association, Inc. and Thomas O.
          Ryder, filed as Exhibit 10.33 to our Quarterly Report
          on Form 10-Q for the quarter ended March 31, 1998, is
          incorporated herein by reference.*

10.16     First Amendment Agreement dated as of April 28, 1998
          between The Reader's Digest Association, Inc. and
          George V. Grune, filed as Exhibit 10.34 to our
          Quarterly Report on Form 10-Q for the quarter ended
          March 31, 1998, is incorporated herein by reference.*

10.17     The Reader's Digest Association, Inc. 1994 Key Employee
          Long Term Incentive Plan, as amended and restated
          effective as of August 13, 1999.*

10.18     Second Amendment dated as of June 2, 1998 to the
          Competitive Advance and Revolving Credit Facility
          Agreement dated as of November 12, 1996 among The
          Reader's Digest Association, Inc., the Borrowing
          Subsidiaries, The Chase Manhattan Bank and J.P. Morgan
          Securities Inc., filed as Exhibit 10.27 to our Annual
          Report on Form 10-K for the year ended June 30, 1998,
          is incorporated herein by reference.

10.19     Third Amendment dated as of September 2, 1999 to the
          Competitive Advance and Revolving Credit Facility
          Agreement dated as of November 12, 1996 among The
          Reader's Digest Association, Inc., the Borrowing
          Subsidiaries, The Chase Manhattan Bank and J.P. Morgan
          Securities Inc.

10.20     Termination Agreement dated as of April 10, 1997
          between The Reader's Digest Association, Inc. and
          George S. Scimone, filed as Exhibit 10.28 to our Annual
          Report on Form 10-K for the year ended June 30, 1998,
          is incorporated herein by reference.*

10.21     Termination Agreement dated as of April 10, 1998
          between The Reader's Digest Association, Inc. and
          Gregory G. Coleman, filed as Exhibit 10.29 to our
          Annual Report on Form 10-K for the year ended June 30,
          1998, is incorporated herein by reference.*

10.22     Termination Agreement dated as of September 8, 1997
          between The Reader's Digest Association, Inc. and M.
          John Bohane, filed as Exhibit 10.30 to our Annual
          Report on Form 10-K for the year ended June 30, 1998,
          is incorporated herein by reference.*

10.23     Supplemental Retirement Benefit Agreement dated as of
          November 15, 1991 between The Reader's Digest
          Association, Inc. and Gregory G. Coleman, filed as
          Exhibit 10.32 to our Annual Report on Form 10-K for the
          year ended June 30, 1998, is incorporated herein by
          reference.*

10.24     Supplemental Retirement Benefit Agreement dated as of
          August 22, 1988 between The Reader's Digest
          Association, Inc. and George V. Grune filed as Exhibit
          10.7 to our Registration Statement on Form S-1
          (Registration No. 33-32566) filed on December 19, 1989,
          is incorporated herein by reference.*

10.25     Supplemental Retirement Benefit Agreement dated as of
          August 25, 1988 between The Reader's Digest
          Association, Inc. and M. John Bohane filed as Exhibit
          10.11 to our Registration Statement on Form S-1
          (Registration No. 33-32566) filed on December 19, 1989,
          is incorporated herein by reference.*

10.26     Supplemental Retirement Agreement dated as of May 15,
          1985 between The Reader's Digest Association, Inc. and
          George V. Grune filed as Exhibit 10.12 to our
          Registration Statement on Form S-1 (Registration No. 33-
          32566) filed on December 19, 1989, is incorporated
          herein by reference.*

10.27     The Reader's Digest Association, Inc. Senior Management
          Incentive Plan.*

10.28     Stock Purchase Agreement dated August 25, 1999 by and
          among The Reader's Digest Association, Inc., Books Are
          Fun, Ltd. and the other parties listed therein.

*Denotes a management contract or compensatory plan.

13   Financial information appearing at pages 51 through 93 of
     our 1999 Annual Report to Stockholders, together with the
     report thereon of KPMG LLP appearing on page 94 (furnished
     for the information of the Securities and Exchange
     Commission only and not to be deemed filed as part of this
     Annual Report on Form 10-K, except for the portions thereof
     that are specifically incorporated herein by reference).

21   Subsidiaries of The Reader's Digest Association, Inc.

23   Consent of KPMG LLP.

27   Financial Data Schedule.


(b)  Reports on Form 8-K

     During the three months ended June 30, 1999, we did not file
     any Current Reports on Form 8-K.  Subsequent to June 30,
     1999, we filed the following Current Reports on Form 8-K:

     Current Report on Form 8-K dated August 30, 1999, which
     included a copy of a press release relating to the
     acquisition of Books Are Fun, Ltd.



                           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.

                            THE READER'S DIGEST ASSOCIATION, INC.


                            By:   /s/ Thomas O. Ryder
                                  (Thomas O. Ryder)
                                  Chairman and Chief Executive Officer
Date:  September 16, 1999


     Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.

         Signature                  Title              Date

  /s/Thomas O. Ryder        Chairman and Chief    September  16, 1999
     (Thomas O. Ryder)      Executive Officer
                            and a Director


  /s/George S. Scimone      Senior Vice           September  16, 1999
     (George S. Scimone)    President and Chief
                            Financial Officer

  /s/Dorvin D. Lively       Vice President and    September  16, 1999
     (Dorvin D. Lively)     Corporate
                            Controller (chief
                            accounting officer)

  /s/Lynne V. Cheney        Director              September  16, 1999
     (Lynne V. Cheney)

  /s/M. Christine DeVita    Director              September  16, 1999
     (M. Christine DeVita)

  /s/George V. Grune        Director              September  16, 1999
     (George V. Grune)

  /s/James E. Preston       Director              September  16, 1999
     (James E. Preston)

  /s/Lawrence R. Ricciardi  Director              September  16, 1999
     (Lawrence R. Ricciardi)

  /s/C.J. Silas             Director              September  16, 1999
     (C.J. Silas)

  /s/William J. White       Director              September  16, 1999
     (William J. White)

  /s/Ed Zschau              Director              September  16, 1999
     (Ed Zschau)


              THE READER'S DIGEST ASSOCIATION, INC.

           INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                            Page



Management's Discussion and Analysis                         *

Financial Statements:

Consolidated Statements of Income--For the Years Ended June
30, 1999, 1998 and 1997                                      *

Consolidated Balance Sheets--June 30, 1999 and 1998
                                                             *
Consolidated Statements of Cash Flows--For the Years Ended
June 30, 1999, 1998 and 1997                                 *

Consolidated Statements of Changes in Stockholders' Equity--
For the Years Ended June 30, 1999, 1998 and 1997             *

Notes to Consolidated Financial Statements                   *

Independent Auditors' Report                                 *

Report of Management                                         *

Selected Financial Data                                      *

Selected Quarterly Financial Data and Dividend and  Market
Information (Unaudited)                                      *


*This financial information is incorporated by reference to
our 1999 Annual Report to Stockholders.  For additional
information, please refer to Item 8 of this report.