<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM XEROX
CORPORATION'S DECEMBER 31, 1998 FINANCIAL STATEMENTS AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
       
                             
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1998
<PERIOD-END>                               DEC-31-1998
<CASH>                                              79
<SECURITIES>                                         0
<RECEIVABLES>                                   17,527
<ALLOWANCES>                                       543
<INVENTORY>                                      3,269
<CURRENT-ASSETS>                                12,475
<PP&E>                                           5,246
<DEPRECIATION>                                   2,880
<TOTAL-ASSETS>                                  30,024
<CURRENT-LIABILITIES>                            8,507
<BONDS>                                         15,107
<PREFERRED-MANDATORY>                              638
<PREFERRED>                                        687
<COMMON>                                           660
<OTHER-SE>                                       4,197
<TOTAL-LIABILITY-AND-EQUITY>                    30,024
<SALES>                                         10,752
<TOTAL-REVENUES>                                19,449
<CGS>                                            5,724
<TOTAL-COSTS>                                   10,547
<OTHER-EXPENSES>                                 8,139
<LOSS-PROVISION>                                   301
<INTEREST-EXPENSE>                                 748
<INCOME-PRETAX>                                    763
<INCOME-TAX>                                       207
<INCOME-CONTINUING>                                585
<DISCONTINUED>                                    (190)
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                       395
<EPS-PRIMARY>                                     0.53
<EPS-DILUTED>                                     0.52