<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM XEROX
CORPORATION'S QUARTER ENDED SEPTEMBER 30, 1996 FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
       
                             
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-END>                               SEP-30-1996
<CASH>                                             136
<SECURITIES>                                         0
<RECEIVABLES>                                    13086
<ALLOWANCES>                                       381
<INVENTORY>                                       3099
<CURRENT-ASSETS>                                 10467
<PP&E>                                            4925
<DEPRECIATION>                                    2745
<TOTAL-ASSETS>                                   26543
<CURRENT-LIABILITIES>                             6571
<BONDS>                                          12959
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                        727
<COMMON>                                           326
<OTHER-SE>                                        3783
<TOTAL-LIABILITY-AND-EQUITY>                     26543
<SALES>                                           6289
<TOTAL-REVENUES>                                 12303
<CGS>                                             3500
<TOTAL-COSTS>                                     6553
<OTHER-EXPENSES>                                  4524
<LOSS-PROVISION>                                   164
<INTEREST-EXPENSE>                                 446
<INCOME-PRETAX>                                   1226
<INCOME-TAX>                                       441
<INCOME-CONTINUING>                                780
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                       780
<EPS-PRIMARY>                                     2.24
<EPS-DILUTED>                                     2.14