<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM XEROX
CORPORATION'S MARCH 31, 1998 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
       
                             
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1998
<PERIOD-END>                               MAR-31-1998
<CASH>                                              19
<SECURITIES>                                         0
<RECEIVABLES>                                   14,992
<ALLOWANCES>                                       452
<INVENTORY>                                      3,087
<CURRENT-ASSETS>                                11,116
<PP&E>                                           5,214
<DEPRECIATION>                                   2,841
<TOTAL-ASSETS>                                  27,551
<CURRENT-LIABILITIES>                            7,069
<BONDS>                                         13,557
<PREFERRED-MANDATORY>                              637
<PREFERRED>                                        705
<COMMON>                                           329
<OTHER-SE>                                       4,608
<TOTAL-LIABILITY-AND-EQUITY>                    27,551
<SALES>                                          2,216
<TOTAL-REVENUES>                                 4,304
<CGS>                                            1,242
<TOTAL-COSTS>                                    2,368
<OTHER-EXPENSES>                                 1,491
<LOSS-PROVISION>                                    45
<INTEREST-EXPENSE>                                 156
<INCOME-PRETAX>                                    445
<INCOME-TAX>                                       147
<INCOME-CONTINUING>                                301
<DISCONTINUED>                                   (190)
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                       111
<EPS-PRIMARY>                                     0.30
<EPS-DILUTED>                                     0.32