SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 11-K



 Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934
                   For the fiscal year ended December 31, 1998



                         Commission file number 33-14058



  A.  Full title of the plan and the address of the plan, if different from
      that of the issuer named below:

         Michael Baker Corporation Employee Stock Ownership Plan


  B.  Name of issuer of the securities held pursuant to the plan and the
      address of its principal executive office:

         Michael Baker Corporation
         Airport Office Park, Building 3
         420 Rouser Road
         Coraopolis, PA 15108









  MICHAEL BAKER CORPORATION
  EMPLOYEE STOCK OWNERSHIP PLAN
  FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION
  DECEMBER 31, 1998 AND 1997






  MICHAEL BAKER CORPORATION
  EMPLOYEE STOCK OWNERSHIP PLAN
  FINANCIAL STATEMENTS
  DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
                                      INDEX



Report of Independent Accountants

Financial Statements:

     Statements of Net Assets Available for Benefits with Fund Information -
      December 31, 1998 and 1997

     Statement of Changes in Net Assets Available for
       Benefits With Fund Information - Year Ended
       December 31, 1998

     Statement of Changes in Net Assets Available for
       Benefits With Fund Information - Year Ended
       December 31, 1997

Notes to Financial Statements

Additional Information:*

     Schedule of Assets Held for Investment Purposes -
       Form 5500, Item 27(a)

     Schedule of Reportable Transactions -
       Form 5500, Item 27(d)
















  * Other schedules required by Section 2520.103-10 of the Department of Labor's
    Rules and  Regulations  for  Reporting  and  Disclosure  under ERISA have
    been omitted because they are not applicable.







                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Participants and Administrator
of the Michael Baker Corporation Employee Stock
Ownership Plan

In our opinion, the accompanying statements of net assets available for benefits
and the  related  statements  of changes in net assets  available  for  benefits
present fairly, in all material respects,  the net assets available for benefits
of the Michael Baker  Corporation  Employee  Stock  Ownership Plan (the Plan) at
December 31, 1998 and 1997, and the changes in net assets available for benefits
for the years then ended,  in  conformity  with  generally  accepted  accounting
principles.  These  financial  statements are the  responsibility  of the Plan's
management;  our  responsibility  is to express  an  opinion on these  financial
statements  based on our audits.  We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements,  assessing the accounting  principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion  expressed
above.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
for  Investment  Purposes and  Reportable  Transactions  are  presented  for the
purpose  of  additional  analysis  and are  not a  required  part  of the  basic
financial   statements  but  are  supplementary   information  required  by  the
Department of Labor's Rules and Regulations  for Reporting and Disclosure  under
the Employee Retirement Income Security Act of 1974. The fund information in the
statements of net assets available for benefits and the statements of changes in
net assets  available  for  benefits is  presented  for  purposes of  additional
analysis  rather than to present the net assets  available for plan benefits and
changes in net assets  available for benefits of each fund.  These  supplemental
schedules and fund information are the  responsibility of the Plan's management.
The  supplemental  schedules  and fund  information  have been  subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion,  are fairly  stated in all material  respects in relation to the
basic financial statements taken as a whole.



/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
June 18, 1999







MICHAEL BAKER CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1998 AND 1997


- --------------------------------------------------------------------------------

                                                        DECEMBER 31,
                                                    1998            1997

          ASSETS
                                                          
Investments, at quoted market value:
  Investments in common stock of
    Michael Baker Corporation:
    Common Stock                                $  24,630,743   $  25,237,651
    Series B Common Stock                          11,928,881      11,950,477
  Temporary investments                                     9          14,368
  Investments in mutual funds managed by
   Putnam Investments, Inc.:
    Putnam Growth & Income Fund                    17,930,008      15,337,754
    George Putnam Fund of Boston                   10,458,263      10,022,348
    Putnam New Opportunities Fund                  10,584,799       6,387,797
    Putnam Money Market Fund                        3,636,459       3,074,872
    Putnam Voyager Fund                             7,599,581       4,508,376
    Putnam Income Fund                              1,617,058       1,194,617
    Putnam International Growth Fund                2,513,034       1,549,483
  Participant loans (market value approximates
  cost)                                               118,029          29,296
                                                -------------  --------------
      Total investments                            91,016,864      79,307,039
                                                -------------  --------------
Receivables:
  Contributions receivable from Michael Baker
  Corporation                                              --         310,996
  Securities sold/accrued interest                    132,790             209
                                                -------------  --------------
      Total receivables                               132,790         311,205
                                                -------------  --------------
      Total assets                                 91,149,654      79,618,244
                                                -------------  --------------

          LIABILITIES

Accrued liabilities                                   112,881          58,896
                                                -------------  --------------
      Total liabilities                               112,881          58,896
                                                -------------  --------------
Net assets available for benefits               $  91,036,773   $  79,559,348
                                                -------------  --------------
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>






Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Changes in Net Assets Available for Benefits With Fund Information
Year Ended December 31, 1998


- --------------------------------------------------------------------------------

                                             Michael       Putnam
                                              Baker        Growth &
                                          Common Stock     Income
                                              Fund         Fund
    ADDITIONS
                                                   
Contributions:
  Participants'                         $   434,752      $ 1,362,736
  Employer's                              1,939,210          389,754
Dividends/interest income                        --        1,594,321
Net appreciation (depreciation)
 in fair value of investments               (41,282)         777,601
Interfund transfers - net                  (662,944)        (207,978)
                                        ------------     ------------
  Total additions                         1,669,736        3,916,434
                                        ------------     ------------
    DEDUCTIONS

Distributions to participants             2,233,540        1,322,222
Fees                                            463            1,958
                                        ------------     ------------
   Total deductions                       2,234,003        1,324,180
                                        ------------     ------------

   Net increase (decrease)                 (564,267)       2,592,254
Net assets available for benefits:
   Beginning of year                     37,143,809       15,337,754
                                        ------------     ------------

   End of year                          $36,579,542      $17,930,008
                                        ============     ============

<FN>
The accompanying notes are an integral part of these financial statements.
</FN>









Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Changes in Net Assets Available for Benefits With Fund Information
Year Ended December 31, 1998


- --------------------------------------------------------------------------------

                                          George            Putnam
                                          Putnam             New
                                          Fund of        Opportunities
                                          Boston             Fund
    ADDITIONS
                                                   
Contributions:
  Participants'                        $   506,814       $ 2,125,259
  Employer's                               158,310           625,011
Dividends/interest income                  984,982           320,814
Net appreciation (depreciation)
 in fair value of investments               53,278         1,543,715
Interfund transfers - net                 (569,359)          116,124
                                       ------------      ------------
  Total additions                        1,134,025         4,730,923
                                       ------------      ------------
    DEDUCTIONS

Distributions to participants              696,528           532,441
Fees                                         1,582             1,480
                                       ------------      ------------
   Total deductions                        698,110           533,921
                                       ------------      ------------

   Net increase (decrease)                 435,915         4,197,002
Net assets available for benefits:
   Beginning of year                    10,022,348         6,387,797
                                       ------------      ------------

   End of year                         $10,458,263       $10,584,799
                                       ============      ============

<FN>
The accompanying notes are an integral part of these financial statements.
</FN>








Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Changes in Net Assets Available for Benefits With Fund Information
Year Ended December 31, 1998


- --------------------------------------------------------------------------------

                                             Putnam
                                             Money          Putnam
                                             Market         Voyager
                                             Fund           Fund
    ADDITIONS
                                                   
Contributions:
  Participants'                         $   282,297      $ 1,460,424
  Employer's                               (114,889)         430,528
Dividends/interest income                   169,040          499,394
Net appreciation (depreciation)
 in fair value of investments                    --          832,669
Interfund transfers - net                   987,598          261,409
                                        ------------     ------------
  Total additions                         1,324,046        3,484,424
                                        ------------     ------------
    DEDUCTIONS

Distributions to participants               761,559          392,244
Fees                                            900              975
                                        ------------     ------------
   Total deductions                         762,459          393,219
                                        ------------     ------------

   Net increase (decrease)                  561,587        3,091,205
Net assets available for benefits:
   Beginning of year                      3,074,872        4,508,376
                                        ------------     ------------

   End of year                          $ 3,636,459      $ 7,599,581
                                        ============     ============

<FN>
The accompanying notes are an integral part of these financial statements.
</FN>








Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Changes in Net Assets Available for Benefits With Fund Information
Year Ended December 31, 1998


- --------------------------------------------------------------------------------

                                                             Putnam
                                             Putnam        International
                                             Income          Growth
                                              Fund           Fund
    ADDITIONS
                                                     
Contributions:
  Participants'                          $   261,675       $   552,042
  Employer's                                  80,995           149,036
Dividends/interest income                     87,523            71,309
Net appreciation (depreciation)
 in fair value of investments                (38,699)          238,468
Interfund transfers - net                    154,807           143,415
                                         ------------      ------------
  Total additions                            546,301         1,154,270
                                         ------------      ------------
    DEDUCTIONS

Distributions to participants                123,595           190,281
Fees                                             265               438
                                         ------------      ------------
   Total deductions                          123,860           190,719
                                         ------------      ------------

   Net increase (decrease)                   422,441           963,551
Net assets available for benefits:
   Beginning of year                       1,194,617         1,549,483
                                         ------------      ------------

   End of year                           $ 1,617,058       $ 2,513,034
                                         ============      ============

<FN>
The accompanying notes are an integral part of these financial statements.
</FN>








Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Changes in Net Assets Available for Benefits With Fund Information
Year Ended December 31, 1998


- --------------------------------------------------------------------------------



                                   Participant
                                      Loans         Other        Total
    ADDITIONS
                                                     
Contributions:
  Participants'                     $    --      $      --     $  6,985,999
  Employer's                             --             --        3,657,955
Dividends/interest income             4,721             --        3,732,104
Net appreciation (depreciation)
 in fair value of investments            --             --        3,365,750
Interfund transfers - net            87,924       (310,996)              --
                                   ---------     ----------   --------------
  Total additions                    92,645       (310,996)      17,741,808
                                   ---------     ----------   --------------
    DEDUCTIONS

Distributions to participants         3,912             --        6,256,322
Fees                                     --             --            8,061
                                   ---------     ----------   --------------
   Total deductions                   3,912             --        6,264,383
                                   ---------     ----------   --------------

   Net increase (decrease)           88,733       (310,996)      11,477,425
Net assets available for benefits:
   Beginning of year                 29,296        310,996       79,559,348
                                  ----------     ----------    -------------

   End of year                    $ 118,029      $      --     $ 91,036,773
                                  ==========     ==========    =============

<FN>
The accompanying notes are an integral part of these financial statements.
</FN>









Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Changes in Net Assets Available for Benefits With Fund Information
Year Ended December 31, 1997


- --------------------------------------------------------------------------------

                                           Michael          Putnam
                                            Baker           Growth &
                                         Common Stock       Income
                                            Fund            Fund
    ADDITIONS
                                                   
Contributions:
  Participants'                          $   304,808     $ 1,109,350
  Employer's                               2,448,866         155,227
Dividends/interest income                       --         1,972,919
Net appreciation (depreciation)
 in fair value of investments             13,026,758         912,037
Interfund transfers - net                   (871,309)        517,786
                                         ------------    ------------
  Total additions                         14,909,123       4,667,319
                                         ------------    ------------
    DEDUCTIONS

Distributions to participants              2,243,478       1,119,148
Fees                                             549           1,755
                                         ------------    ------------
   Total deductions                        2,244,027       1,120,903
                                         ------------    ------------

   Net increase (decrease)                12,665,096       3,546,416
Net assets available for benefits:
   Beginning of year                      24,478,713      11,791,338
                                        -------------    ------------

   End of year                           $37,143,809     $15,337,754
                                         ============    ============

<FN>
The accompanying notes are an integral part of these financial statements.
</FN>









Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Changes in Net Assets Available for Benefits With Fund Information
Year Ended December 31, 1997


- --------------------------------------------------------------------------------

                                             George         Putnam
                                             Putnam         New
                                             Fund of      Opportunities
                                             Boston         Fund
    ADDITIONS
                                                     
Contributions:
  Participants'                          $   474,177       $ 1,827,420
  Employer's                                  69,209           246,460
Dividends/interest income                    945,804           137,414
Net appreciation (depreciation)
 in fair value of investments                855,433           835,863
Interfund transfers - net                   (345,029)          220,158
                                         ------------      ------------
  Total additions                          1,999,594         3,267,315
                                         ------------      ------------
    DEDUCTIONS

Distributions to participants                948,591           218,205
Fees                                           3,358               295
                                         ------------      ------------
   Total deductions                          951,949           218,500
                                         ------------      ------------

   Net increase (decrease)                 1,047,645         3,048,815
Net assets available for benefits:
   Beginning of year                       8,974,703         3,338,982
                                         ------------      ------------

   End of year                           $10,022,348       $ 6,387,797
                                         ============      ============

<FN>
The accompanying notes are an integral part of these financial statements.
</FN>









Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Changes in Net Assets Available for Benefits With Fund Information
Year Ended December 31, 1997


- --------------------------------------------------------------------------------

                                           Putnam
                                           Money            Putnam
                                           Market           Voyager
                                           Fund             Fund
    ADDITIONS
                                                   
Contributions:
  Participants'                          $  279,602       $ 1,280,366
  Employer's                                 33,280           164,750
Dividends/interest income                   166,782           263,856
Net appreciation (depreciation)
 in fair value of investments                    --           449,361
Interfund transfers - net                  (196,833)          427,775
                                        ------------      ------------
  Total additions                           282,831         2,586,108
                                        ------------      ------------
    DEDUCTIONS

Distributions to participants               491,564           147,004
Fees                                            523               344
                                        ------------      ------------
   Total deductions                         492,087           147,348
                                        ------------      ------------

   Net increase (decrease)                 (209,256)        2,438,760
Net assets available for benefits:
   Beginning of year                      3,284,128         2,069,616
                                        ------------      ------------

   End of year                          $ 3,074,872       $ 4,508,376
                                        ============      ============

<FN>
The accompanying notes are an integral part of these financial statements.
</FN>







Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Changes in Net Assets Available for Benefits With Fund Information
Year Ended December 31, 1997


- --------------------------------------------------------------------------------

                                                            Putnam
                                           Putnam        International
                                           Income           Growth
                                           Fund             Fund
    ADDITIONS
                                                   
Contributions:
  Participants'                         $   230,734      $   412,350
  Employer's                                 30,936           55,875
Dividends/interest income                    63,942           88,033
Net appreciation (depreciation)
 in fair value of investments                14,988           50,407
Interfund transfers - net                   169,387          397,435
                                        ------------     ------------
  Total additions                           509,987        1,004,100
                                        ------------     ------------
    DEDUCTIONS

Distributions to participants                61,879           68,805
Fees                                            126               20
                                        ------------     ------------
   Total deductions                          62,005           68,825
                                        ------------     ------------

   Net increase (decrease)                  447,982          935,275
Net assets available for benefits:
   Beginning of year                        746,635          614,208
                                        ------------     ------------

   End of year                          $ 1,194,617      $ 1,549,483
                                        ============     ============

<FN>
The accompanying notes are an integral part of these financial statements.
</FN>











Michael Baker Corporation
Employee Stock Ownership Plan
Statement of Changes in Net Assets Available for Benefits With Fund Information
Year Ended December 31, 1997


- --------------------------------------------------------------------------------


                                   Participant
                                      Loans         Other        Total
    ADDITIONS
                                                       
Contributions:
  Participants'                    $     --      $ 193,981     $  6,112,788
  Employer's                             --        117,015        3,321,618
Dividends/interest income             3,785             --        3,642,535
Net appreciation (depreciation)
 in fair value of investments            --             --       16,144,847
Interfund transfers - net           (19,271)      (300,099)              --
                                   ---------     ----------    -------------
  Total additions                   (15,486)        10,897       29,221,788
                                   ---------     ----------    -------------
    DEDUCTIONS

Distributions to participants            --             --        5,298,674
Fees                                     --             --            6,970
                                   ---------     ----------    -------------
   Total deductions                      --             --        5,305,644
                                   ---------     ----------    -------------

Net increase (decrease)             (15,486)        10,897       23,916,144
Net assets available for benefits:
   Beginning of year                 44,782        300,099       55,643,204
                                   ---------     ----------    -------------

   End of year                    $  29,296     $ 310,996     $ 79,559,348
                                  ==========    ==========    =============

<FN>
The accompanying notes are an integral part of these financial statements.
</FN>









MICHAEL BAKER CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
DECEMBER 31, 1998 AND 1997
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

1.   DESCRIPTION OF PLAN

     GENERAL
     The following  description of the Michael Baker  Employee  Stock  Ownership
     Plan  (the  ESOP,  or  the  Plan)   provides   only  general   information.
     Participants  should  refer  to the  Plan  agreement  for a  more  complete
     description of the Plan's provisions.

     The  ESOP is a  defined  contribution  plan  under  which  a  participant's
     distributions  are based on the amount  contributed  to that  participant's
     account,  including any transferred  amounts from a prior  retirement plan,
     and any gains or losses and income and  expenses  that may be  allocated to
     the  participant's  account.  The  Plan is  subject  to  provisions  of the
     Employee Retirement Income Security Act of 1974, as amended (ERISA).

     COMMON STOCK
     The ESOP enables  participating  employees to acquire an equity interest in
     Michael Baker Corporation (the Company); as such, contributions to the ESOP
     can be invested in the  Company's  common stock  (Common Stock and Series B
     Common Stock).

     The ESOP's  investment in the Company's  common stock  comprises  2,526,230
     (cost of $15,455,695) and 2,588,477 (cost of $14,709,722)  shares of Common
     Stock and 1,223,475 (cost of $7,436,097) and 1,225,689 (cost of $7,448,445)
     shares  of  Series  B  Common   Stock  at  December   31,  1998  and  1997,
     respectively.

     CONTRIBUTIONS
     Participants  contribute  to the ESOP  through  a Section  401(k)  Employee
     Salary Redirection Election,  whereby the participants may choose to have a
     percentage  of  their  salaries   (including   commissions)   withheld  and
     contributed  to the ESOP up to the  annual  limitation  established  by the
     Internal  Revenue  Service.  The maximum amount of a  participant's  salary
     which may be  eligible  for  withholding  for any Plan year  cannot  exceed
     $160,000.  Additionally,  the  percentage  may not exceed 15 percent of the
     participant's  salary. The ESOP also allows participants to roll over funds
     from a previous employer's  tax-qualified plan or tax-qualified  individual
     retirement account.

     INVESTMENT OPTIONS
     Each participant may direct Putnam Investments, Inc. (Putnam) to invest
     certain portions of his or her account in investment funds managed by
     Putnam.  Investment funds available to participants are the Michael Baker




     MICHAEL BAKER CORPORATION
     EMPLOYEE STOCK OWNERSHIP PLAN
     DECEMBER 31, 1998 AND 1997
     NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

     Common Stock Fund (invests in common stock of the Company),  the Putnam New
     Opportunities  Fund (invests in long-term  growth  stocks  within  emerging
     industries),  Putnam  International  Growth Fund  (invests  in  diversified
     corporate stocks outside of North America), Putnam Voyager Fund (invests in
     diversified  corporate  stocks),  Putnam  Growth & Income Fund  (invests in
     long-term  growth  stocks),  George  Putnam  Fund  of  Boston  (invests  in
     diversified  capital  growth and current  income stocks and bonds),  Putnam
     Income Fund  (invests in corporate  bonds) and the Putnam Money Market Fund
     (invests  in  short-term   money  market   securities).   Contributions  by
     participants  cannot be further  directed  within the Michael  Baker Common
     Stock Fund.

     COMPANY MATCHING CONTRIBUTIONS AND VESTING OF BENEFITS
     Under  the  provisions  of the  Plan,  the  Company  will  make a  matching
     contribution  to the  participants'  accounts in an amount not less than 50
     percent  of  the  first  5  percent  of  the  salary  contributed  by  each
     participant. Salary amounts over the 5 percent limit are not required to be
     matched  by the  Company.  Effective  January  1,  1999,  25 percent of the
     matching contribution is invested in the Company's Common Stock or Series B
     Common   Stock  and  75  percent  is  invested  in   accordance   with  the
     participants' investment elections for participant contributions. From July
     1, 1997 through December 31, 1998, 50 percent of the matching  contribution
     was invested in the Company's  Common Stock or Series B Common Stock and 50
     percent  was invested  in  accordance  with  the  participants'  investment
     elections for participant  contributions.  Prior to July 1, 1997,  matching
     contributions  could be  invested  only in the  Company's  Common  Stock or
     Series B Common Stock.

     During  1998,  the Company  matched  participants'  contributions  on a 100
     percent  basis  for  the  first 5  percent  of the  participants'  salaries
     contributed to the Plan plus an additional 50 percent of the  participants'
     contributions  to the Plan in  excess  of 5  percent  of the  participants'
     salaries  but not in  excess of 6 percent  of the  participants'  salaries.
     During  1997,  the Company  matched  participants'  contributions  on a 100
     percent basis for the first 5 percent of participants' salaries contributed
     to the Plan.

     The Board of  Directors  of the Company is  authorized  to make  additional
     discretionary  contributions  to the ESOP  from time to time.  However,  no
     discretionary contributions were made in 1998 or 1997.

     All amounts in the participants' ESOP accounts that are attributable to the
     transfer  of  funds  from a  previously  terminated  retirement  plan,  the
     rollover from a previous  employer's  tax-qualified  plan, and  participant
     contributions are 100 percent vested and nonforfeitable at all times.

     All Company  matching  contributions  will  become 100 percent  vested upon
     attainment  of 3 years  of  service  with  the  Company  or  earlier,  upon
     attainment of normal retirement date, disability or death. If a






MICHAEL BAKER CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
DECEMBER 31, 1998 AND 1997
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

     participant  leaves  employment with the Company before  attaining a vested
     interest  in  his  or  her  Company  contribution,  the  contributions  are
     forfeited and will reduce future Company matching contributions.

     DISTRIBUTIONS
     The Plan provides for distribution of benefits upon  retirement,  total and
     permanent  disability,  death,  or  termination of employment for any other
     reason.   The  amount  of  distribution  the  participant  or  his  or  her
     beneficiary is entitled to is based on the vesting  requirements  discussed
     above.  All  distributions  will be made in the form of a single,  lump-sum
     distribution or in substantially  equal annual  installments  over a period
     not exceeding 5 years.  Distributions  may be made in cash and/or shares of
     common stock, at the discretion of the participant.

     PARTICIPANT LOANS
     A  participant  may  borrow  money from the  portion of his or her  account
     attributable to his or her own 401(k) plan contributions. Participant loans
     may be obtained in the sole event of immediate  and heavy  financial  need,
     where the  participant  lacks other available  resources.  Loan amounts are
     limited to the lower of $50,000 or 50 percent of the employee's pre-tax and
     rollover contributions.  Effective November 1, 1998, the Plan agreement was
     amended  such that  loan  amounts  shall not  exceed  the  smallest  of the
     following:  (a) the  greater of $10,000 or 50 percent of the  participant's
     vested  interest in the  participant's  account,  (b) $50,000  adjusted for
     pre-existing  loans,  or (c) such amount as may be  determined  by the Plan
     Administrator.  All loans will be drawn against the  participant's  account
     among the respective investment options as directed, and are secured by the
     assets within the  participant's  accounts.  Interest  rates on outstanding
     notes receivable range from 8.75 percent to 12.82 percent.

     FORFEITED ACCOUNTS
     At December 31, 1998 and 1997, forfeited nonvested accounts totaled $14,508
     and $260,064,  respectively.  These  accounts will be used to reduce future
     employer contributions. Also, in 1998 and 1997, employer contributions were
     reduced by $536,795 and $96,046,  respectively,  from  forfeited  nonvested
     accounts.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     BASIS OF ACCOUNTING
     Putnam Investments,  Inc. performs the recordkeeping  function for the ESOP
     and the records are  maintained on a cash basis.  The financial  statements
     included  herein  include all material  adjustments to record the financial
     statements on the accrual basis of accounting in accordance  with generally
     accepted accounting principles.

     The investment in common stock of the Company is stated at  publicly-traded
     closing market values as of December 31, 1998 and 1997. As of






MICHAEL BAKER CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
DECEMBER 31, 1998 AND 1997
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

     December 31, 1998 and 1997, the ESOP owned  approximately 44 percent and 45
     percent,  respectively,  of the outstanding  shares of the Company's common
     stock;   therefore,   such  valuation   might  be  subject  to  significant
     fluctuation  in the event of a substantial  liquidation of such holdings by
     the  ESOP.  The  accompanying   financial  statements  should  be  read  in
     conjunction  with the  consolidated  financial  statements  of the Company,
     which are included as Exhibit 13.1 to the  Company's  Annual Report on Form
     10-K for the year ended December 31, 1998.

     INVESTMENTS
     The  difference  between the cost and current  market value of  investments
     purchased since the beginning of the period and the increase or decrease in
     such stated market value of investments held at the beginning of the period
     reported  is  included  in the  increase  (decrease)  in  net  appreciation
     (depreciation)  in fair market value of  investments  in the  Statements of
     Changes in Net Assets Available for Benefits.

     DISTRIBUTIONS
     Distributions to participants are recorded when paid.

     USE OF ESTIMATES
     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets,  liabilities,  and
     changes  therein,  and  disclosure  of contingent  assets and  liabilities.
     Actual results could differ from those estimates.

3.   PLAN ADMINISTRATION AND FEES
     The Company provides certain  administrative and accounting services to the
     ESOP at no cost.  In  addition,  the  Company  pays  the  cost of  services
     provided to the ESOP by Putnam, legal counsel and independent  accountants.
     Certain reasonable distributions and loan processing fees charged by Putnam
     are deducted from the respective participant account balances.

4.   PLAN TERMINATION
     Although it has not  expressed  an  intention to do so, the Company has the
     right under the Plan to discontinue  its  contributions  at any time and to
     terminate the Plan subject to the provisions of ERISA. In the event of Plan
     termination, participants will become 100 percent vested in their accounts.







MICHAEL BAKER CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
DECEMBER 31, 1998 AND 1997
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

5.   RECONCILIATION  OF  FINANCIAL  STATEMENTS  TO FORM 5500
     The following is a reconciliation  of net assets available for benefits per
     the financial statements to the Plan's Form 5500:


                                                     December 31,
                                                    1998        1997
                                                        
     Net assets available for benefits
      per the financial statements              $91,036,773   $79,559,348
                                                ------------  ------------
     Amounts allocated to withdrawing
      participants:
       Michael Baker Common Stock Fund              (40,552)      (77,741)
       Putnam Money Market Fund                      (1,743)       (8,751)
       Putnam New Opportunities Fund                 (9,251)      (75,815)
       George Putnam Fund of Boston                     (11)      (19,733)
       Putnam Growth & Income Fund                   (8,737)      (48,916)
       Putnam Income Fund                            (2,194)       (9,350)
       Putnam Voyager Fund                           (9,797)      (52,118)
       Putnam International Growth Fund                  --       (18,058)
                                                ------------   -----------
                                                    (72,285)     (310,482)
                                                ------------   -----------

     Net assets available for benefits
      per Form 5500                             $90,964,488   $79,248,866
                                                ============  ============

     The following is a reconciliation  of distributions to participants per the
     financial statements to the Form 5500:
                                                December 31, 1998

     Distributions to participants per the
      financial statements                          $6,256,322
      Add -- Distributions to employees
       authorized but not paid as of
        December 31, 1998                               72,285
      Less -- Distributions to employees
       authorized but not paid as of
        December 31, 1997                             (310,482)
                                                    -----------
      Distributions to employees per Form 5500      $6,018,125
                                                    ===========


6.   TAX STATUS
     The Internal  Revenue  Service has determined and informed the Company by a
     letter dated December 30, 1994, that the Plan and related trust are





MICHAEL BAKER CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
DECEMBER 31, 1998 AND 1997
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

     designed in accordance with the applicable sections of the Internal Revenue
     Code (IRC).  The Plan has been amended since  receiving  the  determination
     letter. However, the Plan Administrator and the Plan's counsel believe that
     the Plan is designed and is currently  being  operated in  compliance  with
     applicable requirements of the IRC.






Michael Baker Corporation
Employee Stock Ownership Plan
Schedule of Assets Held for Investment Purposes - Form 5500, Item 27a
December 31, 1998
Additional Information - Schedule I


- --------------------------------------------------------------------------------

                                                     Cost of      Current
 Shares          Description                         asset        value
                                                      
                *Michael Baker Corporation
2,526,230        Common Stock                     $15,455,695  $24,630,743

                *Michael Baker Corporation
1,223,475        Common Stock - Series B            7,436,097   11,928,881

      N/A       *Putnam Temporary Investments               9            9

  579,726       *George Putnam Fund of Boston       9,628,846   10,458,263

  875,061       *Putnam Growth & Income Fund       16,206,483   17,930,008

  233,679       *Putnam Income Fund                 1,634,491    1,617,058

  346,696       *Putnam Voyager Fund                6,510,872    7,599,581

  181,154       *Putnam New Opportunities Fund      8,471,070   10,584,799

  130,683       *Putnam International Growth Fund   2,233,580    2,513,034

3,636,459       *Putnam Money Market Fund           3,636,459    3,636,459

    N/A         *Participant loans:
                 8.75% to 12.82%, due March 9,
                  1999 to November 26, 2008.          118,029      118,029
                                                   ----------  -----------
                                                  $71,331,631  $91,016,864
                                                  ===========  ===========


<FN>
* Party-in-interest
</FN>









Michael Baker Corporation
Employee Stock Ownership Plan
Schedule of Reportable Transactions - Form 5500, Item 27(d)
December 31, 1998
Additional Information-Schedule II


- --------------------------------------------------------------------------------

                            Number                               Net
Party        Description      Of       Purchase    Selling       Gain
Involved     Of asset    Transactions  Price       Price         (Loss)
- --------------------------------------------------------------------------------
                                                 
Putnam       Michael Baker    232     $3,481,477  $       --    $       --
Investments, Corporation      309     $       --  $4,005,064    $1,208,728
Inc.         Common Stock


Putnam       Putnam Growth    248     $3,840,840  $       --    $       --
Investments, & Income Fund    280     $       --  $2,026,186    $  219,300
Inc.


Putnam       Putnam           259     $3,835,024  $       --    $       --
Investments, New              263     $       --  $1,181,900    $  125,120
Inc.         Opportunities
             Fund









                                 SIGNATURE


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Executive Vice President, Chief Financial Officer and Treasurer of Michael Baker
Corporation,  the plan sponsor,  has duly caused this annual report to be signed
by the undersigned thereunto duly authorized.


                                  MICHAEL BAKER CORPORATION
                                  EMPLOYEE STOCK OWNERSHIP PLAN


Date: June 30, 1999               By: /s/ J. Robert White
                                      -------------------
                                      J. Robert White
                                      Executive Vice President,
                                       Chief Financial Officer,
                                       and Treasurer of Michael
                                       Baker Corporation, the Plan Sponsor










                                                                      Exhibit 23



                       Consent of Independent Accountants

We  hereby  consent  to the  incorporation  by  reference  in  the  Registration
Statements on Form S-8 (No.  33-69306;  No.  33-62887;  No.  333-05987;  and No.
333-59941)  of Michael  Baker  Corporation  of our report  dated June 18,  1999,
relating to the financial statements, which appears in this Form 11-K.


/s/PricewaterhouseCoopers LLP
- -----------------------------
PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
June 29, 1999