SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C. 20549

                                    FORM 10-K

                  ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
                      OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 1995      Commission File Number 1-6351

                              ELI LILLY AND COMPANY

       An Indiana Corporation             I.R.S. Employer Number 35-0470950

          Address:   Lilly Corporate Center, Indianapolis, Indiana 46285

             Telephone number, including area code:   (317) 276-2000

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                      Name Of Each Exchange
       Title Of Each Class            On Which Registered
       -------------------            -------------------


       Common Stock                   New York and Pacific Stock Exchanges
  Preferred Stock Purchase Rights     New York and Pacific Stock Exchanges
  8-1/8% Notes Due December 1, 2001   New York Stock Exchange
  8-3/8% Notes Due December 1, 2006   New York Stock Exchange
  6.57% Notes Due January 1, 2016     New York Stock Exchange
  6.77% Notes Due January 1, 2036     New York Stock Exchange


        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:   None

 Indicate by  check  mark  whether the  Registrant  (1)  has  filed  all reports
 required to be filed by Section  13 or 15(d) of the  Securities Exchange Act of
 1934 during the preceding  12 months, and (2)  has been subject  to such filing
 requirements for the past 90 days. Yes   X   No
                                         ----    --


 Indicate by check mark if disclosure of  delinquent filers pursuant to Item 405
 of Regulation S-K is  not contained herein, and  will not be  contained, to the
 best of Registrant's knowledge, in the  definitive proxy statement incorporated
 by reference in Part III of this Form 10-K or  any amendment to this Form 10-K.
 [   ]

 Aggregate market value of voting stock of the Registrant held by non-affiliates
 as of February 9, 1996 (Common Stock):  $28,175,758,490

 Number of shares of common stock outstanding as of February 9, 1996:
 552,471,515

 Portions of the following documents have been incorporated by reference into
 this report:

            Document                       Parts Into Which Incorporated
            --------                       -----------------------------


 Registrant's Annual Report to Shareholders        Parts I, II, and IV
  for fiscal year ended December 31, 1995

 Registrant's Proxy Statement dated March 4, 1996  Part III


                                      PART I

  Item 1.   BUSINESS

     Eli Lilly and Company was incorporated in 1901 under the laws of Indiana to
  succeed to the drug manufacturing business founded in Indianapolis, Indiana,
  in 1876 by Colonel Eli Lilly.  The Company*, including its subsidiaries, is
  engaged in the discovery, development, manufacture, and sale of products and
  the provision of services in one industry segment--Life Sciences.  Products
  are manufactured or distributed through owned or leased facilities in the
  United States, Puerto Rico, and 29 other countries, in 19 of which the Company
  owns or has an interest in manufacturing facilities.  Its products are sold in
  approximately 150 countries.  Through its PCS Health Systems subsidiary, the
  Company provides health care management services in the United States.

     Most of the Company's products were discovered or developed through the
  Company's research and development activities, and the success of the
  Company's business depends to a great extent on the continued introduction of
  new products resulting from these research and development activities.
  Research efforts are primarily directed toward the discovery of products to
  diagnose and treat diseases in human beings and animals and to increase the
  efficiency of animal food production.

                               RECENT DEVELOPMENTS

  Divestiture of Medical Device and Diagnostics Businesses

     In 1995 and early 1996, the Company completed the divestiture of its
  Medical Device and Diagnostics ("MDD") businesses.  On September 25, 1995,
  the Company distributed its approximately 80% ownership interest in Guidant
  Corporation (a holding company comprising five of the MDD companies) to
  holders of Lilly common stock through a splitoff ---an exchange offer whereby
  Lilly shareholders were given the opportunity to exchange Lilly shares for
  Guidant shares.  In January 1996, the Company completed the disposition of the
  last remaining MDD company, Hybritech Incorporated, to Beckman Instruments,
  Inc.

  Acquisition of Integrated Medical Systems, Inc.

     In December 1995, the Company acquired Integrated Medical Systems, Inc.,
  which develops and operates physician-focused medical communication networks.
  For further information regarding the business of Integrated Medical Systems,
  see "Health Care Management Services" below.

                    FINANCIAL INFORMATION RELATING TO INDUSTRY
                         SEGMENTS AND CLASSES OF PRODUCTS

     Financial information relating to industry segments and classes of
  products, set forth in the Company's 1995 Annual Report at pages 26-27 under
  "Review of Operations--Segment Information" (pages 13-14 of Exhibit 13 to
  this Form 10-K), is incorporated herein by reference.

- ------
     *The terms "Company" and "Registrant" are used interchangeably herein to
      refer to Eli Lilly and Company or to Eli Lilly and Company and its
      consolidated subsidiaries, as the context requires.

                              1

     Due to several factors, including the introduction of new products by the
  Company and other manufacturers, the relative contribution of any particular
  Company product to consolidated net sales is not necessarily constant from
  year to year, and its contribution to net income is not necessarily the same
  as its contribution to consolidated net sales.

                              PRODUCTS AND SERVICES

  Pharmaceutical Products

    Pharmaceutical products include

       Central-nervous-system agents, including the antidepressant agent
  ProzacR, a selective serotonin reuptake inhibitor, indicated for the treatment
  of depression and, in many countries, for bulimia and obsessive-compulsive
  disorder; the analgesic Darvocet-NR 100, which is indicated for the relief of
  mild-to-moderate pain; and PermaxR, a treatment for Parkinson's disease;

       Anti-infectives, including the oral cephalosporin antibiotics CeclorR
  (cefaclor), KeflexR, and KeftabR, used in the treatment of a wide range of
  bacterial infections; the oral carbacephem antibiotic LorabidR, used to treat
  a variety of infections; the oral macrolide antibiotic DynabacR; the
  injectable cephalosporin antibiotics MandolR, TazidimeR, KefuroxR, and
  KefzolR, used to treat a wide range of infections in the hospital setting;
  NebcinR, an injectable aminoglycoside antibiotic used in hospitals to treat
  various infections caused by staphylococci and Gram-negative bacteria; and
  VancocinR HCl, an injectable antibiotic used primarily to treat staphylococcal
  infections;

       Endocrine products, including HumulinR, human insulin produced through
  recombinant DNA technology; IletinR, animal-source insulin in its various
  pharmaceutical forms; HumatropeR, human growth hormone produced by recombinant
  DNA technology;  and Humalog(TM), a rapid-acting injectable human insulin
  analog of recombinant DNA origin, cleared for marketing in certain overseas
  countries;

       An antiulcer agent, AxidR, an H2 antagonist, indicated for the treatment
  of active duodenal ulcer, for maintenance therapy for duodenal ulcer patients
  after healing of an active duodenal ulcer, and for reflux esophagitis;

       Oncolytic agents, including OncovinR, indicated for treatment of acute
  leukemia and, in combination with other oncolytic agents, for treatment of
  several different types of advanced cancers; VelbanR, used in a variety of
  malignant neoplastic conditions; GemzarR, cleared for marketing in several
  overseas countries for treatment of non-small cell lung cancer and pancreatic
  cancer; and EldisineR, indicated for treatment of acute childhood leukemia
  resistant to other drugs; and

       Additional pharmaceuticals, including cardiovascular therapy products,
  principally ReoPro(TM) and DobutrexR; hematinics; sedatives; and vitamins.
                    

  Animal Health Products

      Animal health products include TylanR, an antibiotic used to control
  certain diseases in cattle, swine, and poultry and to improve feed efficiency

                               2

  and growth; RumensinR, a cattle feed additive that improves feed efficiency
  and growth; CompudoseR, a controlled-release implant that improves feed
  efficiency and growth in cattle; CobanR, MontebanR and MaxibanR, anticoccidial
  agents for use in poultry; ApralanR, an antibiotic used to control enteric
  infections in calves and swine; MicotilR, an antibiotic used to treat bovine
  respiratory disease; and other products for livestock and poultry.

  Health Care Management Services

      PCS provides computer-based prescription drug claims processing, pharmacy
  benefit design, administration and management services, and disease-management
  services to health plan sponsors, including insurance companies, third-party
  administrators, self-insured employers, health maintenance organizations, and
  Blue Cross/Blue Shield organizations that underwrite or administer
  prescription benefit plans.  PCS helps these customers manage prescription
  benefit costs by providing drug utilization reviews, clinically-based
  formularies, generic substitution programs, and disease-management programs.
  RECAPR, PCS's on-line prescription claims management system, is linked with
  over 95% of retail pharmacies in the U.S.  Integrated Medical Systems operates
  physician-based on-line electronic communication networks, called IMS MEDACOMR
  networks, that deliver clinical, administrative, and financial information to
  hospitals, payers/managed-care plans, laboratories, pharmacies, and
  physicians.  Outside the United States the Company is developing pharmacy
  benefits management and disease-management programs in several countries,
  including Canada, the Netherlands, South Africa, and the United Kingdom.

                                    MARKETING

       Most of the Company's major products are marketed worldwide.  Health care
  management services are marketed primarily in the United States, although in
  1995 the Company launched pharmacy benefits management and disease-management
  initiatives in several other markets.

       In the United States, the Company's Pharmaceutical Division distributes
  pharmaceutical products principally through approximately 229 wholesale
  distributing outlets.  Marketing policy is designed to assure immediate
  availability of these products to physicians, pharmacies, hospitals, and
  appropriate health care professionals throughout the country.  Five wholesale
  distributing companies in the United States accounted for approximately 11%,
  9%, 9%, 7%, and 5% respectively, of consolidated net sales in 1995.  No other
  distributor accounted for as much as 5% of consolidated net sales.  The
  Company also makes direct sales of its pharmaceutical products to the United
  States government and to other manufacturers, but those direct sales do not
  constitute a material portion of consolidated net sales.

       The Company's pharmaceutical products are promoted in the United States
  under the Lilly and Dista trade names by one hospital and three retail sales
  forces employing salaried sales representatives.  These sales representatives,
  approximately half of whom are registered pharmacists, call upon physicians,
  wholesalers, hospitals, managed-care organizations, retail pharmacists, and
  other health care professionals.  Their efforts are supported by the Company
  through advertising in medical and drug journals, distribution of literature
  and samples of certain products to physicians, and exhibits for use at medical
  meetings.  In 1994, the Company created a new sales force dedicated to
  diabetes care.

                                3

       In the past few years, large purchasers of pharmaceuticals, such as
  managed-care groups and government and long-term care institutions, have begun
  to account for an increasing portion of total pharmaceutical purchases in the
  United States.  The Company has created special sales groups to service
  government and long-term care institutions, and expanded its managed-care
  sales organization.  In response to competitive pressures, the Company has
  entered into arrangements with a number of these organizations providing for
  discounts or rebates on one or more Company products or other cost-sharing
  arrangements.  The Company has also entered into agreements with generic
  pharmaceutical companies for the promotion, distribution and/or supply of
  generic forms of certain brand name products of both Lilly and other
  companies.

       Outside the United States, pharmaceutical products are promoted primarily
  by salaried sales representatives.  While the products marketed vary from
  country to country, anti-infectives constitute the largest single group in
  total sales.  Distribution patterns vary from country to country.  In recent
  years, the Company has significantly expanded its marketing efforts in a
  number of overseas markets, including emerging markets in Central and Eastern
  Europe, Latin America, Asia and Africa.

       Elanco Animal Health, a division of the Company, employs field
  salespeople throughout the United States to market animal health products.
  Sales are made to wholesale distributors, retailers, feed manufacturers, or
  producers in conformance with varying distribution patterns applicable to the
  various types of products.  The Company also has an extensive sales force
  outside the United States to market its animal health products.

                                  RAW MATERIALS

      Most of the principal materials used by the Company in manufacturing
  operations are chemical, plant, and animal products that are available from
  more than one source.  Certain raw materials are available or are purchased
  principally from only one source.  Unavailability of certain materials from
  present sources could cause an interruption in production pending
  establishment of new sources or, in some cases, implementation of alternative
  processes.

      Although the major portion of the Company's sales abroad are of products
  manufactured wholly or in part abroad, a principal source of active
  ingredients for these manufactured products continues to be the Company's
  facilities in the United States.

                               PATENTS AND LICENSES

       The Company owns, has applications pending for, or is licensed under, a
  substantial number of patents, both in the United States and in other
  countries, relating to products, product uses, and manufacturing processes.
  There can be no assurance that patents will result from the Company's pending
  applications.  Moreover, patents relating to particular products, uses, or
  processes do not preclude other manufacturers from employing alternative
  processes or from successfully marketing substitute products to compete with
  the patented products or uses.  Patent protection of certain products,
  processes, and uses--particularly that relating to Prozac, Axid, and Lorabid-
  is considered to be important to the operations of the Company.  The United
  States compound patent covering Prozac expires in 2001, the Axid compound
  patent expires in 2002, and the Lorabid compound patent expires in 2006.

                               4

       The Company also grants licenses under patents and know-how developed by
  the Company and manufactures and sells products and uses technology and know-
  how under licenses from others.  Royalties received by the Company in relation
  to licensed pharmaceuticals amounted to approximately $4 million in 1995, and
  royalties paid by it in relation to pharmaceuticals amounted to approximately
  $109 million in 1995.

                                   COMPETITION

      The Company's pharmaceutical products compete with products manufactured
  by numerous other companies in highly competitive markets in the United States
  and throughout the world.  The Company's animal health products compete on a
  worldwide basis with products of pharmaceutical, chemical, and other companies
  that operate animal health divisions or subsidiaries.  PCS faces strong
  competition from other pharmacy benefit management companies and claims
  processors in the United States.  For certain accounts, PCS competes with some
  retail pharmacy chains, mail order programs and organized groups of
  independent pharmacists.

      Important competitive factors include price and demonstrated cost-
  effectiveness, product characteristics and dependability, service, and
  research and development of new products and processes.  The introduction of
  new products and processes by competitors with therapeutic or cost advantages
  can result in progressive price reductions or decreased volume of sales of
  competing products, or both.  New products introduced with patent protection
  usually must compete with other products already on the market at the time of
  introduction or products developed by competitors after introduction.
  Manufacturers of generic products typically invest far less in research and
  development than research-based pharmaceutical companies and accordingly are
  able to price their products significantly lower than branded products.
  Therefore, upon patent expiration, branded products often face intense price
  competition from generic forms of the product.  In many countries patent
  protection is weak or nonexistent.  The Company believes its long-term
  competitive position is dependent upon the success of its research and
  development endeavors in discovering and developing innovative, cost-effective
  products, together with increased productivity resulting from improved
  manufacturing methods, marketing efforts, and the provision of value-added
  services to its customers.  There can be no assurance that the Company's
  research and development efforts will result in commercially successful
  products or that products manufactured or processes used by the Company will
  not become outmoded from time to time as a result of products or processes
  developed by its competitors.

                             GOVERNMENTAL REGULATION

       The Company's operations have for many years been subject to extensive
  regulation by the federal government, to some extent by state governments, and
  in varying degrees by foreign governments.  The Federal Food, Drug, and
  Cosmetic Act, other federal statutes and regulations, various state statutes
  and regulations, and laws and regulations of foreign governments govern
  testing, approval, production, labeling, distribution, post-market
  surveillance, advertising, promotion, and in some instances, pricing, of most
  of the Company's products.  The lengthy process of laboratory testing,
  clinical testing, data analysis and regulatory review necessary for required
  governmental approvals is extremely costly and can significantly delay product
  introductions in a given market.  In addition, the Company's operations are
  subject to complex federal, state, local, and foreign environmental and
  occupational safety laws and regulations.  It is anticipated that compliance
  with regulations affecting the manufacture and sale of current products and

                           5

  the introduction of new products will continue to require substantial
  scientific and technical effort, time, and expense and significant capital
  investment.

       In the United States, health care reform was not debated extensively at
  the federal level in 1995 and the Company does not expect major federal health
  care reform legislation to be adopted in the near future.  However, various
  health care reform and pharmaceutical reimbursement measures are being
  considered in a number of states.  Outside the United States, changes in
  health care delivery and pharmaceutical reimbursement are occurring to varying
  degrees which in some cases may adversely affect pharmaceutical industry
  revenues.  The Company is unable to predict the extent to which its business
  may be affected by these or other future legislative and regulatory
  developments.

                             RESEARCH AND DEVELOPMENT

       The Company's research and development activities are responsible for the
  discovery or development of most of the products offered by the Company today.
  Its commitment to research and development dates back more than 100 years.
  The Company invests heavily in research and development, which management
  believes is critical to long-term competitiveness in the pharmaceutical
  industry.  The growth in research and development expenditures and personnel
  over the past several years demonstrates both the continued vitality of the
  Company's commitment and the increasing costs and complexity of bringing new
  products to the market.  At the end of 1995, approximately 4,800 people,
  including a substantial number who are physicians or scientists holding
  graduate or postgraduate degrees or highly skilled technical personnel, were
  engaged in pharmaceutical and animal health research and development
  activities.  The Company expended  $755.0 million on these research and
  development activities in 1993, $838.7 million in 1994, and $1,042.3 million
  in 1995.

       The Company's research is concerned primarily with the effects of
  synthetic chemicals and natural products on biological systems.  The results
  of that research are applied to the development of products for use by or on
  humans and animals, and for other uses.  Major effort is devoted to
  pharmaceutical products.  The Company concentrates its pharmaceutical research
  and development efforts in five therapeutic categories:  central nervous
  system and related diseases; endocrine diseases, including diabetes and
  osteoporosis; infectious diseases; cancer; and cardiovascular diseases.  The
  Company is engaged in biotechnology research programs involving recombinant
  DNA, protein research, and genomics (the development of therapeutics through
  identification of disease-causing genes and their cellular function).

       In addition to the research activities carried on in the Company's own
  laboratories, the Company sponsors and underwrites the cost of research and
  development by independent organizations, including educational institutions
  and research-based human health care companies, and contracts with others for
  the performance of research in their facilities.  It utilizes the services of
  physicians, hospitals, medical schools, and other research organizations in
  the United States and numerous other countries to establish through clinical
  evidence the safety and effectiveness of new products.  The Company's
  business-development groups actively seek out opportunities to invest in
  external research and technologies that hold the promise to complement and
  strengthen the Company's own research efforts in the five chosen therapeutic
  categories.  Such investments can take many forms, including licensing
  arrangements, co-development and co-marketing agreements, and outright
  acquisitions.

                             6

       Extensive work is also conducted in the animal sciences, including animal
  nutrition and physiology and veterinary medicine.  Certain of the Company's
  research and development activities relating to pharmaceutical products may be
  applicable to animal health products.  An example is the search for agents
  that will cure infectious disease.

                                QUALITY ASSURANCE

       The Company's success depends in great measure upon customer confidence
  in the quality of the Company's products and in the integrity of the data that
  support their safety and effectiveness.  The quality of the Company's products
  arises from the total commitment to quality in all parts of the Company,
  including research and development, purchasing, facilities planning,
  manufacturing, and distribution.  Quality-assurance procedures have been
  developed relating to the quality and integrity of the Company's scientific
  information and production processes.

       Control of production processes involves rigid specifications for
  ingredients, equipment, facilities, manufacturing methods, packaging
  materials, and labeling.  Control tests are made at various stages of
  production processes and on the final product to assure that the product meets
  all regulatory requirements and the Company's standards.  These tests may
  involve chemical and physical chemical analyses, microbiological testing,
  testing in animals, or a combination of these tests.  Additional assurance of
  quality is provided by a corporate quality-assurance group that monitors
  existing pharmaceutical and animal health manufacturing procedures and systems
  in the parent company, subsidiaries, and affiliates.

                        EXECUTIVE OFFICERS OF THE COMPANY

       The following table sets forth certain information regarding the
  executive officers of the Company.  All but three of the executive officers
  have been employed by the Company in executive or managerial positions during
  the last five years.  Randall L. Tobias became Chairman of the Board and Chief
  Executive Officer in June 1993.  He had served as Vice Chairman of the Board
  of AT&T from 1986 until he assumed his present position.  He has been a member
  of the Board of Directors of the Company since 1986.  Charles E. Golden joined
  the Company as Executive Vice President and Chief Financial Officer and was
  elected to the Board of Directors on March 4, 1996.  He previously had held a
  number of executive positions with General Motors Corporation ("GM")
  including Vice President of GM and Chairman and Managing Director of Vauxhall
  Motors Limited, a GM subsidiary in the United Kingdom, from 1993 to 1996, Vice
  President and Treasurer from 1992 to 1993, and Treasurer from 1989 to 1992.
  Thomas Trainer joined the Company in January 1995.  Since 1991 he had served
  as Vice President and Chief Information Officer of Reebok International Ltd.
  Prior to joining Reebok, he was Senior Vice President of Operations of A.C.
  Nielson Co.

       Except as indicated in the following table, the term of office for each
  executive officer indicated herein expires on the date of the annual meeting
  of the Board of Directors, to be held on April 15, 1996, or on the date his or
  her successor is chosen and qualified.  No director or executive officer of
  the Company has a "Family relationship" with any other director or executive
  officer of the Company, as that term is defined for purposes of this
  disclosure requirement.  There is no understanding between any executive
  officer of the Company and any other person pursuant to which the executive
  officer was selected.

                               7

       NAME                AGE                 OFFICES
  ----------------------------------------------------------------------


  Randall L. Tobias        54   Chairman of the Board and Chief Executive
                                Officer (since June 1993) and a Director

  Sidney Taurel            47   President and Chief Operating Officer (since
                                February 1996) and a Director

  Charles E. Golden        49   Executive Vice President and Chief Financial
                                Officer (since March 1996) and a Director

  August M. Watanabe, M.D. 54   Executive Vice President, Science and
                                Technology (since February 1996) and
                                a Director

  Mitchell E. Daniels, Jr. 46   President, North American Pharmaceutical
                                Operations (since April 1993)1

  Michael L. Eagle         48   Vice President, Manufacturing (since January
                                1994)

  Brendan P. Fox           52   President, Elanco Animal Health Business Unit
                                (since January 1991)1

  Rebecca O. Goss          48   Vice President and General Counsel (since March
                                1995)

  Michael E. Hanson        48   President, Internal Medicine Business Unit
                                (since August 1994)1

  James A. Harper          48   President, Endocrine Business Unit (since August
                                1994)1

  Pedro P. Granadillo      48   Vice President, Human Resources (since
                                April 1993)

  Gerhard N. Mayr          49   President, European Pharmaceutical Operations
                                (European, Middle East and African Operations)
                                (since January 1993)1

  Robert N. Postlethwait   47   President, Central Nervous System Business Unit
                                (since August 1994)1

  William R. Ringo         50   President, Infectious Diseases and Generics
                                Business Unit (since September 1995)1

  Gino Santini             39   Vice President, Corporate Strategy and Business
                                Development (since September 1995)

  Thomas Trainer           49   Vice President, Information Technology, and
                                Chief Information Officer (since January 1995)1

- ------------
1 Serves in office until successor is appointed.

                             8

                                    EMPLOYEES

       At the end of 1995, the Company had approximately 26,800 employees,
  including approximately 11,500 employees outside the United States.  A
  substantial number of the Company's employees have long records of continuous
  service.

        FINANCIAL INFORMATION RELATING TO FOREIGN AND DOMESTIC OPERATIONS

       Financial information relating to foreign and domestic operations, set
  forth in the Company's 1995 Annual Report at pages 26-27 under "Review of
  Operations--Segment Information" (pages 13-14 of Exhibit 13), is incorporated
  herein by reference.

       Eli Lilly International Corporation, a subsidiary, coordinates the
  Company's manufacture and sale of products outside the United States.

       Local restrictions on the transfer of funds from branches and
  subsidiaries located abroad (including the availability of dollar exchange)
  have not to date been a significant deterrent in the Company's overall
  operations abroad.  The Company cannot predict what effect these restrictions
  or the other risks inherent in foreign operations, including possible
  nationalization, might have on its future operations or what other
  restrictions may be imposed in the future.

  Item 2.   PROPERTIES

       The Company's principal domestic and international executive offices are
  located in Indianapolis.  At December 31, 1995, the Company owned 14
  production plants and facilities in the United States and Puerto Rico.  These
  plants and facilities contain an aggregate of approximately 12.2 million
  square feet of floor area.  Most of the plants and facilities involve
  production of both pharmaceutical and animal health products.  The Company
  also leases sales offices in a number of cities located in the United States
  and abroad.  PCS owns or leases administrative facilities in Scottsdale,
  Arizona, containing an aggregate of approximately 475,000 square feet and
  leases administrative space in other cities in the United States.  Integrated
  Medical Systems leases approximately 84,000 square feet of administrative
  space in a number of locations.

       The Company has 23 production plants and facilities in 19 countries
  outside the United States, containing an aggregate of approximately 4.2
  million square feet of floor space.  Leased production and warehouse
  facilities are utilized in Puerto Rico and 17 countries outside the United
  States.

       The Company's research and development facilities in the United States
  consist of approximately 2.8 million square feet and are located primarily in
  Indianapolis and Greenfield, Indiana.  Its major research and development
  facilities abroad are located in Belgium and the United Kingdom and contain
  approximately 435,000 square feet.  The Company also owns two tracts of land,
  containing an aggregate of approximately 1,700 acres, a portion of which is
  used for field studies of products.

       The Company believes that none of its properties is subject to any
  encumbrance, easement, or other restriction that would detract materially from
  its value or impair its use in the operation of the business of the Company.
  The buildings owned by the Company are of varying ages and in good condition.

                                9

  Item 3.   LEGAL PROCEEDINGS

       Product Liability Litigation.  The Company is currently a defendant in a
  variety of product litigation matters involving primarily diethylstilbestrol
  ("DES") and Prozac.  In approximately 265 actions, including several with
  multiple claimants, plaintiffs seek to recover damages on behalf of children
  or grandchildren of women who ingested DES during pregnancy.  In March 1996 a
  suit was filed in the federal district court for the Eastern District of New
  York against the Company and several other manufacturers purporting to be a
  nationwide class action on behalf of women who were exposed to DES in utero.
  The suit does not seek compensation for personal injuries but instead seeks
  establishment of a fund for various expenses allegedly incurred as a result of
  DES exposure.  In another approximately 70 actions, plaintiffs seek to recover
  damages as a result of the ingestion of Prozac.

       Pricing Litigation.   The Company has been named, together with numerous
  other U.S. prescription pharmaceutical manufacturers and in some cases
  wholesalers or distributors, as a defendant in a large number of related
  actions brought by retail pharmacies and consumers of prescription
  pharmaceuticals in the United States alleging violations of federal or state
  antitrust laws, or both, based on the practice of providing discounts or
  rebates to managed-care organizations and certain other purchasers.  The
  federal cases have been consolidated or coordinated in the Northern District
  of Illinois as In re Brand Name Prescription Drugs Antitrust Litigation (MDL
  No. 997).

       The federal suits include a certified class action on behalf of a
  majority of retail pharmacies in the United States (the "Federal Class
  Action").  The class plaintiffs allege an industrywide agreement in violation
  of the Sherman Act to deny favorable pricing on sales of brand-name
  prescription pharmaceuticals to certain retail pharmacies in the United
  States.  The Federal Class Action is scheduled to begin trial May 7, 1996.
  The Company and eleven other manufacturers have agreed to settle the Federal
  Class Action.  The settlement amount, which is not material, was accrued by
  the Company in the fourth quarter of 1995.  The settlement is subject to
  approval of the District Court.  A hearing on the proposed settlement is
  scheduled for March 27, 1996.  The other federal suits, brought as individual
  claims by several thousand pharmacies, allege price discrimination in
  violation of the Robinson-Patman Act as well as Sherman Act claims.  The suits
  seek treble damages and injunctive relief against allegedly discriminatory
  pricing practices.  Defense motions for summary judgment on the Sherman Act
  claims in these suits are pending.  With respect to the Robinson-Patman Act
  claims, the District Court has designated certain plaintiffs and defendants
  named in the individual suits (not including the Company) to participate in an
  initial trial or trials of the claims.  No trial dates have been set.
  Robinson-Patman claims asserted in the suits against nondesignated defendants,
  including the Company, are stayed.

       In addition, there are a number of related state court cases.  The state
  court suits typically seek money damages and injunctive relief against
  allegedly discriminatory pricing practices.  Cases have been brought in
  Alabama, California, Minnesota, and Wisconsin by large numbers of retail
  pharmacies alleging violations of various state antitrust and pricing laws,
  purporting to be class actions on behalf of retail pharmacies in those states.
  The court in California has certified a class of retail pharmacies.  Cases
  have also been brought in state courts in Alabama, Arizona, California,
  Colorado, District of Columbia, Maine, Michigan, Minnesota, New York,
  Washington and Wisconsin that purport to be class actions on behalf of
  consumers of prescription pharmaceuticals, alleging violations of state
  antitrust and pricing laws.  The courts in Alabama and California have

                                10

  certified classes of consumer plaintiffs.  The Colorado and Washington cases
  have been dismissed and appeals are pending.  The Maine case has been removed
  to federal court but a motion to remand to the state court is pending.

       Other Litigation.  In June 1995, a California retail pharmacy filed an
  action in federal district court in the Northern District of California
  against the Company and PCS alleging that the Company's acquisition of PCS
  violated federal antitrust laws.  The suit seeks divestiture of PCS by the
  Company.  The Company's motion to dismiss is pending.  In October 1995,
  Pfizer, Inc. sued PCS in the New York Supreme Court for New York County
  alleging that PCS breached a 1994 rebate agreement between the companies.  The
  suit seeks injunctive relief and damages.  Pfizer's request for a preliminary
  injunction was denied and trial is scheduled to begin March 19, 1996.

       The Company is also a defendant in other litigation, including product
  liability and patent suits, of a character regarded as normal to its business.

       While it is not possible to predict or determine the outcome of the legal
  actions pending against the Company, in the opinion of the Company the costs
  associated with all such actions will not have a material adverse effect on
  its consolidated financial position or liquidity but could possibly  be
  material to the consolidated results of operations in any one accounting
  period.

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

       During the fourth quarter of 1995, no matters were submitted to a vote of
  security holders.

                                     PART II

  Item 5.   MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED
            STOCKHOLDER MATTERS

       Information relating to the principal market for the Company's common
  stock and related stockholder matters, set forth in the Company's 1995 Annual
  Report under "Review of Operations--Selected Quarterly Data (unaudited)," at
  page 28 (page 15 of Exhibit 13), and "Review of Operations--Selected
  Financial Data (unaudited)," at page 29 (page 16 of Exhibit 13), is
  incorporated herein by reference.

  Item 6.   SELECTED FINANCIAL DATA

       Selected financial data for each of the Company's five most recent fiscal
  years, set forth in the Company's 1995 Annual Report under "Review of
  Operations--Selected Financial Data (unaudited)," at page 29 (page 16 of
  Exhibit 13), are incorporated herein by reference.

                                 11

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

     The following portions of the Company's 1995 Annual Report (found at pages
  1-7 and 35-37 of Exhibit 13) constitute management's discussion and analysis
  of results of operations and financial condition and are incorporated herein
  by reference:

     "Review of Operations--Strategic Actions" (page 16)
     "Review of Operations--Stock Split" (page 16)
     "Review of Operations--Operating Results of Continuing Operations and Net
       Income--1995" (pages 16, 17, 19 and 20)
     "Review of Operations--Operating Results of Continuing Operations and Net
       Income--1994" (pages 20-21)
     "Review of Operations--Financial Condition" (pages 21 and 24)
     "Review of Operations--Environmental and Legal Matters" (page 24)

  Item 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

       The consolidated financial statements of the Company and its
  subsidiaries, listed in Item 14(a)1 and included in the Company's 1995 Annual
  Report at pages 18, 22, 23, and 25 (Consolidated Statements of Income,
  Consolidated Balance Sheets, and Consolidated Statements of Cash Flows), pages
  26 and 27 (Segment Information), and pages 30-43 (Notes to Consolidated
  Financial Statements) (together, pages 9-14 and 17-32 of Exhibit 13), and the
  Report of Independent Auditors set forth in the Company's 1995 Annual Report
  at page 45 (page 34 of Exhibit 13), are incorporated herein by reference.

       Information on quarterly results of operations, set forth in the
  Company's 1995 Annual Report under "Review of Operations--Selected Quarterly
  Data (unaudited)," at page 28 (page 15 of Exhibit 13), is incorporated herein
  by reference.

  Item 9.   DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

      None.

                                     PART III

  Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

       Information relating to the Company's directors, set forth in Section 1
  of the Company's Proxy Statement dated March 4, 1996 (the "Proxy
  Statement"), under "Nominees for Election" and "Certain Information
  Concerning Director Nominees and Directors Continuing in Office," at pages 1-
  5, is incorporated herein by reference.  Information relating to the Company's
  executive officers is set forth at pages 7-8 of this Form 10-K under
  "Executive Officers of the Company."  Information relating to certain filing
  obligations of directors and executive officers under the federal securities
  laws, set forth in the Proxy Statement under "Other Matters" at page 25, is
  also incorporated herein by reference.

                               12

  Item 11.  EXECUTIVE COMPENSATION

       Information relating to executive compensation, set forth in Section 1 of
  the Proxy Statement  under "Directors' Compensation", "Executive
  Compensation", "Compensation Committee Interlocks", "Retirement Plan" and
  "Change-in-Control Severance Pay Arrangements" at pages 7-18, is
  incorporated herein by reference, except that the Compensation and Management
  Development Committee Report and Performance Graph are not so incorporated.

  Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

       Information relating to ownership of the Company's common stock by
  persons known by the Company to be the beneficial owners of more than 5% of
  the outstanding shares of common stock and by management, set forth in Section
  1 of the Proxy Statement under "Common Stock Ownership by Directors and
  Executive Officers," at page 6, and "Principal Holders of Common Stock," at
  page 7, is incorporated herein 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

       The following consolidated financial statements of the Company and its
  subsidiaries, included in the Company's 1995 Annual Report at the pages
  indicated in parentheses, are incorporated by reference in Item 8:

       Consolidated Statements of Income--Years Ended December 31, 1995, 1994,
       and 1993 (page 18) (page 9 of Exhibit 13)

       Consolidated Balance Sheets--December 31, 1995 and 1994 (pages 22-23)
       (pages 10-11 of Exhibit 13)

       Consolidated Statements of Cash Flows--Years Ended December 31, 1995,
       1994, and 1993 (page 25) (page 12 of Exhibit 13)

       Segment Information (pages 26 and 27) (pages 13-14 of Exhibit 13)

       Notes to Consolidated Financial Statements (pages 30-43) (pages 17-32 of
       Exhibit 13)

  (a)2.     Financial Statement Schedules

       The consolidated financial statement schedules of the Company and its
  subsidiaries have been omitted because they are not required, are
  inapplicable, or are adequately explained in the financial statements.

                                13

       Financial statements of interests of 50% or less, which are accounted for
  by the equity method, have been omitted because they do not, considered in the
  aggregate as a single subsidiary, constitute a significant subsidiary.

  (a)3.     Exhibits

       3.1  Amended Articles of Incorporation

       3.2  By-laws

       4.1  Form of Indenture with respect to Contingent Payment Obligation
            Units dated March 18, 1986, between Eli Lilly and Company and Harris
            Trust and Savings Bank, as Trustee

       4.2  Rights Agreement dated as of July 18, 1988, between Eli Lilly and
            Company and Bank One, Indianapolis, NA

       4.3  Form of Indenture dated as of February 21, 1989, between Eli Lilly
            and Company and Merchants National Bank & Trust Company of
            Indianapolis, as Trustee

       4.4  Form of Eli Lilly and Company Five Year Convertible Note

       4.5  Form of Indenture with respect to Debt Securities dated as of
            February 1, 1991, between Eli Lilly and Company and Citibank, N.A.,
            as Trustee

       4.6  Form of Standard Multiple-Series Indenture Provisions dated, and
            filed with the Securities and Exchange Commission on, February 1,
            1991

       4.7  Form of Indenture dated as of September 5, 1991, among the Lilly
            Savings Plan Master Trust Fund C, as Issuer; Eli Lilly and
            Company, as Guarantor; and Chemical Bank, as Trustee1

       4.8  Form of Fiscal and Paying Agency Agreement dated July 8, 1993,
            between Eli Lilly and Company and Citibank, N.A., Fiscal and Paying
            Agent, including forms of Notes, relating to 5-1/2% Notes Due 19981

       4.9  Form of Fiscal and Paying Agency Agreement dated February 7, 1995,
            between Eli Lilly and Company and Citibank, N.A., Fiscal and Paying
            Agent, including forms of Notes, relating to 8-1/8% Notes Due
            February 7, 20001

       4.10 Form of Fiscal and Paying Agency Agreement dated February 7, 1995,
            between Eli Lilly and Company and Citibank, N.A., Fiscal and Paying
            Agent, including forms of Notes, relating to 8-3/8% Notes Due
            February 7, 20051

       10.1 1984 Lilly Stock Plan, as amended2

- ---------------
1 These exhibits are not filed with this Report.  Copies will be furnished
  to the Securities and Exchange Commission upon request.
2 Indicates management contract or compensatory plan.

                             14

       10.2 1989 Lilly Stock Plan, as amended2

       10.3 1994 Lilly Stock Plan2

       10.4 The Lilly Deferred Compensation Plan, as amended2

       10.5 The Lilly Directors' Deferral Plan, as amended2

       10.6 The Eli Lilly and Company EVA Bonus Plan, as amended2

       10.7 Eli Lilly and Company Change in Control Severance Pay Plan for
            Select Employees2

       10.8 Letter Agreement dated September 3, 1993, between the Company and
            Vaughn D. Bryson2

       11.  Computation of Earnings Per Share on Primary and Fully Diluted Bases

       12.  Computation of Ratio of Earnings to Fixed Charges

       13.  Annual Report to Shareholders for the Year Ended December 31, 1995
            (portions incorporated by reference into this Form 10-K)

       21.  List of Subsidiaries

       23.  Consent of Independent Auditors

       27.  Financial Data Schedule

       99.  Report to Holders of Eli Lilly and Company Contingent Payment
            Obligation Units

  (b)  Reports on Form 8-K

       On October 2, 1995, the Company filed a Form 8-K reporting the completion
  of its exchange offer pursuant to which holders of the Company's common stock
  exchanged 16,504,298 shares of such stock for all 57,600,000 shares of the
  common stock of Guidant Corporation owned by the Company.


- ---------------
  2 Indicates management contract or compensatory plan.

                             15


                                    SIGNATURES

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

                                ELI LILLY AND COMPANY


                                By s/Randall L. Tobias
                                   --------------------------------
                                  (Randall L. Tobias, Chairman of the Board
                                      and Chief Executive Officer)

                                                     March 18, 1996


       Pursuant to the requirements of the Securities Exchange Act of 1934, this
  report has been signed below on March 18, 1996 by the following persons on
  behalf of the Registrant and in the capacities indicated.

       SIGNATURE                              TITLE
  ------------------------------------------------------------------------

  s/Randall L. Tobias           Chairman of the Board, Chief Executive Officer,
  -------------------------     and a Director (principal executive officer)
  (RANDALL L. TOBIAS)

  s/Charles E. Golden           Executive Vice President, Chief Financial
  -------------------------     Officer, and a Director (principal 
  (CHARLES E. GOLDEN)           financial officer)

  s/Arnold C. Hanish            Chief Accounting Officer
  -------------------------     (principal accounting officer)
  (ARNOLD C. HANISH)  

  s/Steven C. Beering, M.D.        Director
  -------------------------
  (STEVEN C. BEERING, M.D.)

  s/James W. Cozad                 Director
  -------------------------
  (JAMES W. COZAD)

  s/Karen N. Horn                  Director
  -------------------------
  (KAREN N. HORN, Ph.D.)

  s/Alfred G. Gilman, M.D., Ph.D.  Director
  -------------------------------
  (ALFRED G. GILMAN, M.D., Ph.D.)

                             16


       SIGNATURE                              TITLE
  ----------------------------------------------------------------------


  s/J. Clayburn La Force, Jr., Ph.D.      Director
  ----------------------------------
  (J. CLAYBURN LA FORCE, JR., Ph.D.)

                                          Director
  -------------------------
  (KENNETH L. LAY, Ph.D.)

  s/Franklyn G. Prendergast, M.D., Ph.D.  Director
  --------------------------------------
  (FRANKLYN G. PRENDERGAST, M.D., Ph.D.)

  s/Kathi P. Seifert                      Director
  -------------------------
  (KATHI P. SEIFERT)

  s/Sidney Taurel                         Director
  -------------------------
  (SIDNEY TAUREL)

  s/August M. Watanabe, M.D.              Director
  --------------------------
  (AUGUST M. WATANABE, M.D.)

  s/Alva O. Way                           Director
  -------------------------
  (ALVA O. WAY)

                            17



                                                                      TRADEMARKS

                                            ApralanR (apramycin sulfate, Elanco)
                                                       AxidR (nizatidine, Lilly)
                                                       CeclorR (cefaclor, Lilly)
                                                CobanR (monensin sodium, Elanco)
                       CompudoseR (estradiol controlled-release implant, Elanco)
                  Darvocet-NR (propoxyphene napsylate with acetaminophen, Lilly)
                                     DobutrexR (dobutamine hydrochloride, Lilly)
                                                 DynabacR (dirithromycin, Lilly)
                                            EldisineR (vindesine sulfate, Lilly)
                                      GemzarR (gemcitabine hydrochloride, Lilly)
                                               HumalogTM (insulin lispro, Lilly)
                        HumatropeR (somatropin of recombinant DNA origin, Lilly)
                       HumulinR (human insulin of recombinant DNA origin, Lilly)
                                                        lletinR (insulin, Lilly)
                                                     KeflexR (cephalexin, Dista)
                                       KeftabR (cephalexin hydrochloride, Dista)
                                             KefuroxR (cefuroxime sodium, Lilly)
                                               KefzolR (cefazolin sodium, Lilly)
                                                    LorabidR (loracarbef, Lilly)
                                             MandolR (cefamandole nafate, Lilly)
                                      MaxibanR (narasin and nicarbazine, Elanco)
                                       IMS MEDACOMR (Integrated Medical Systems)
                                         MicotilR (tilmicosin phosphate, Elanco)
                                                     MontebanR (narasin, Elanco)
                                             NebcinR (tobramycin sulfate, Lilly)
                                           OncovinR (vincristine sulfate, Lilly)
                                             PermaxR (pergolide mesylate, Lilly)
                                       ProzacR (fluoxetine hydrochloride, Dista)
                                                                    RECAPR (PCS)
                                                    ReoProTM  (abciximab), Lilly
                                             RumensinR (monensin sodium, Elanco)
                                                  TazidimeR (ceftazidime, Lilly)
                                                        TylanR (tylosin, Elanco)
                                     VancocinR (vancomycin hydrochloride, Lilly)
                                            VelbanR (vinblastine sulfate, Lilly)