INTEGRAL SYSTEMS, INC.
                                       10Q
                               FOR QUARTER ENDING
                                  JUNE 30, 1996

                        SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC   20549
                                    FORM 10-Q

  X  	Quarterly report pursuant to Section 13 or 15 (d) of 
the Securities Exchange Act of 1934

For the quarterly period ended June 30, 1996 or

_____	Transition report pursuant to Section 13 or 15 (d) of 
the Securities Exchange Act of 1934

For the transition period from  		 to  		

Commission file number	0-18603

            INTEGRAL SYSTEMS, INC.					
(Exact name of registrant as specified in its chapter)


Maryland                            52-1267968			
(State or other jurisdiction of     (I.R.S. Employer
incorporation or organization)      Identification No.)


5000 Philadelphia Way, Suite A, Lanham, MD				20706		
(Address of principal executive offices)				 	Zip Code)
	

Registrant's telephone number, including area code	(301) 731-4233		

(Former name, address and fiscal year, if changed since last 
report)

Indicate by checkmark 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 
(or for such shorter period that the registrant was required to 
file such reports), and (2) has been subject to such filing 
requirements for the past 90 days.


   Yes	 X          	No		


As of June 30, 1996 the aggregate market value of the Common 
Stock of the Registrant (based upon the average bid and ask 
prices of the Common Stock as reported by the market makers) held 
by non-affiliates of the Registrant was $20,501,168.

Registrant has 952,133 shares of common stock outstanding as of 
June 30, 1996.
 
                         INTEGRAL SYSTEMS, INC.
                           TABLE OF CONTENTS

	
                                                            	Page No.
Part I   Financial Information:

Item 1.  Financial Statements

Balance Sheets - June 30, 1996, September 30, 1995.............	1

Statements of Operations Nine Months and Three Months 
   Ended June 30, 1996 and June 30, 1995.......................	3

Statement of Cash Flow Nine Months Ended June 30, 1996
   and June 30, 1995...........................................	4

Statement of Stockholders' Equity Nine Months
   Ended June 30, 1996.........................................	5

Notes to Financial Statements..................................	6

Item 2.  Management's Discussion and Analysis
         of Financial Condition and Results of Operations......	7


Part II   Other Information:

Item 6.  Exhibits and Reports on Form 8-K.....................	11



Item 1.  Financial Statements

                           INTEGRAL SYSTEMS, INC.
                    JUNE 30, 1996 & SEPTEMBER 30, 1995


                                                            

ASSETS		
                                     	         June 30,        September 30,
                                               	 1996              1995
CURRENT ASSETS		
Cash                                            $1,395,066        $2,125,553 
 Accounts Receivable                             3,672,629         3,483,777 
 Prepaid Expenses                                   44,666            71,537 
 Income Tax Receivable                             123,685                 0 
 Deferred Income Taxes                              60,719            60,719 

TOTAL CURRENT ASSETS                             5,296,765         5,741,586 
		
FIXED ASSETS 		
        		
 Electronic Equipment                              691,726           624,708 
 Furniture & Fixtures                               53,504            41,716 
 Leasehold Improvements                             11,364            11,364 
 Software Purchases                                 45,433            37,085 

SUBTOTAL                                           802,027           714,873 
        		
 Less:  Accum. Deprec.                             391,723           426,249 
        		
TOTAL FIXED ASSETS                                 410,304           288,624 
         		
OTHER ASSETS         		
 Software Development Costs                      1,340,367         1,373,219 
 Deposits                                            7,332               150 

TOTAL OTHER ASSETS                               1,347,699         1,373,369 
         		
TOTAL ASSETS                                    $7,054,768        $7,403,579 




                            INTEGRAL SYSTEMS, INC.
                                BALANCE SHEETS
                     JUNE 30, 1996 & SEPTEMBER 30, 1995



                                                               

LIABILITIES & STOCKHOLDERS' EQUITY
                                                    	June 30,	   September 30,
                                                       1996          1995

CURRENT LIABILITIES
 Accounts Payable                                    $362,675       $351,995 
 Accrued Expenses                                     869,487        875,248 
 Billings in Excess of Cost                           160,043        561,202 
 Income Taxes Payable                                       0        108,481 

TOTAL CURRENT LIABILITIES                           1,392,205      1,896,926 

LONG TERM LIABILITIES

STOCKHOLDERS' EQUITY
 Common Stock, $.01 par value, 
 2,000,000 shares authorized, and 
 952,133 and 943,746 shares issued
 and outstanding at June 30, 1996
 and September 30, 1995, respectively                   9,521          9,437 
 Addl Paid in Capital                                 819,113        696,437 
 Retained Earnings                                  4,833,929      4,800,779 

TOTAL STOCKHOLDERS' EQUITY                          5,662,563      5,506,653 

TOTAL LIABILITIES & STOCKHOLDER'S EQUITY           $7,054,768     $7,403,579 



                          INTEGRAL SYSTEMS, INC.
                        STATEMENTS OF OPERATIONS


                                                       

                                       	Nine Months Ended	 Three Months Ended	
                                             June 30             June 30	
                                        1996        1995   1996        1995

Contract Revenue               $7,268,974  $8,093,367  $2,336,178  $2,286,601 

Cost of Revenue
 Direct Labor                   2,697,827   2,766,162     927,812     955,622
 Overhead                       1,961,834   1,846,922     631,956     600,896 
 Travel & Other Direct Costs      747,293     564,215     213,015     192,596 
 Equipment & Subcontractors       691,931   1,750,135     333,356     219,583 
 Total Cost of Revenue          6,098,885   6,927,434   2,106,139   1,968,697 

Gross Profit                    1,170,089   1,165,933     230,039     317,904 

Operating Expenses
 General & Administrative         996,365     811,990     391,424     266,523 
Total Operating Expenses          996,365     811,990     391,424     266,523 

Income (Loss) From Operations     173,724     353,943    (161,385)     51,381 

Other Income (Expense)
 Interest Income                   51,535      45,922      19,786      24,602 
 Interest Expense                     (47)     (2,129)        (16)        307 
 Other Income (Expense)          (171,262)    (12,772)   (124,558)     (1,280)
Total Other Income (Expense)     (119,774)     31,021    (104,788)     23,629 

Income (Loss) Before Income Taxes  53,950     384,964    (266,173)     75,010 

Income Taxes                       20,800     150,535    (102,800)     31,300 

Net Income (Loss)                 $33,150    $234,429   ($163,373)    $43,710 

Weighted Average Number of Common
Shares Outstanding During Period  947,072     941,921     949,033     942,979

Earnings per share                  $0.04       $0.25      ($0.17)      $0.05 



                           INTEGRAL SYSTEMS, INC.
                  CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                             

                                                   For the Nine Months Ended
                                                            June 30,	
                                                     1996             1995
Cash Flows from Operating Activities

Net Income                                           $33,150       $234,429 

Adjustments to reconcile net income to
   net cash provided by operating activities:
   Depreciation and amortization                      515,283       501,281 
   (Increase) decrease in:
     Accounts Receivable                             (188,852)       94,391 
     Prepaid Expenses                                  26,869       (87,338)
     Income Taxes Receivable                         (123,685)       (6,703)
   (Decrease) increase in:
     Accounts Payable                                  10,680        10,755 
     Accrued Expenses                                  (5,761)     (280,818)
     Billings in Excess of Cost                      (401,159)       94,842 
     Income Taxes Payable                            (108,481)      100,863 
Total Adjustments                                    (275,106)      427,273 

Net Cash provided (used) by operations               (241,956)      661,702 

Cash Flow from investing activities:
 Acquisition of fixed assets                         (262,949)     (159,820)
 Increase in software development                    (341,160)     (245,049)
 Sale of Marketable Securities                              0       403,100 
 Increase in other assets                              (7,182)            0 

Net cash provided (used) in investing activities     (611,291)       (1,769)

Cash flow from financing activities:
 Proceeds from issuance of common stock               122,760        51,805 

Net cash provided by financing activities             122,760        51,805 

Net increase (decrease) in cash                      (730,487)      711,738 

Cash - beginning of year                            2,125,553     1,802,840 

Cash - end of period                               $1,395,066    $2,514,578 





                           INTEGRAL SYSTEMS, INC.
             CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                         FOR THE NINE MONTHS ENDED
                              JUNE 30, 1996

                                                    

                            Number          Additional        
                              of    Common   Paid-in    Retained    
                            Shares   Stock   Capital    Earnings     Total
                    
Balance September 30, 1995  943,746  $9,437  $696,437  $4,800,779  $5,506,653 
                    
Exercise of Stock Options     8,387      84   122,676           -     122,760 
                    
Net income                        -       -         -      33,150      33,150 
                    
Balance June 30, 1996       952,133  $9,521  $819,113  $4,833,929  $5,662,563 
                    



                           INTEGRAL SYSTEMS, INC.
                      NOTES TO FINANCIAL STATEMENTS



1.	Basis of Presentation

The interim financial statements include the accounts of 
Integral Systems, Inc. (ISI) and its two wholly-owned 
subsidiaries, Integral Marketing, Inc. (IMI) and InterSys, 
Inc. (INTSYS).  In the opinion of management, the financial 
statements reflect all adjustments consisting only of normal 
recurring accruals necessary for a fair presentation of 
results for such periods.  The financial statements, which 
are condensed and do not include all disclosures included in 
the annual financial statements, should be read in 
conjunction with the consolidated financial statements of 
the Company for the fiscal year ended September 30, 1995.  
The results of operations for any interim period are not 
necessarily indicative of results for the full year.

2.	Accounts Receivable

Accounts receivable at June 30, 1996 and September 30, 1995 
consist of the following:

                     	    June 30,           Sept. 30,
                            1996               1995

Billed                   $2,824,625         $1,653,777
Unbilled                    968,004          1,830,000
Subtotal                  3,792,629          3,483,777
Less: Reserve              (120,000)                (0)
Total                     $3,672,629        $3,483,777

	The Company uses the direct write-off method for bad debts.

The Company's accounts receivable consist of amounts due on 
prime contracts and subcontracts with the U.S. Government 
and contracts with various private organizations.  Unbilled 
accounts receivable consist principally of amounts that are 
billed in the month following the incurrence of cost or when 
milestones are delivered under fixed price contracts.  All 
unbilled receivables are expected to be billed and collected 
within one year.

3.	Line-of-Credit

The Company has a line of credit agreement with a local bank 
for $1,200,000.  Borrowing under the line of credit bears 
interest at the bank's lending rate plus one-quarter of one 
percentage point per annum. Any accrued interest is payable 
monthly.  At June 30, 1996 and September 30, 1995 the 
Company had no outstanding balance under the line of credit.



Item 2.  
                 MANAGEMENT'S DISCUSSION AND ANALYSIS
         OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



          COMPARISON OF THE QUARTER ENDED JUNE 30, 1996
                TO THE QUARTER ENDED JUNE 30, 1995

The components of the Company's income statement as a percentage 
of revenue are depicted in the following table for the three 
months  ended June 30, 1996 and June 30, 1995:


                                           % of                 % of
                               1996      Revenue     1995       Revenue
                         (000's omitted)         (000's omitted)	
                                                     
				
Revenue                       $2,336      100.0     $2,287       100.0

Expenses				
     Cost of Revenue           2,106       90.2      1,969        86.1
     General & Admin.            391       16.7        267        11.7
     Other                       105        4.5        -24        -1.0
     Income Taxes               -103       -4.4         31         1.3
				
Total Expenses                 2,499      107.0      2,243        98.1
				
Net income                   $  -163       -7.0    $    44         1.9


General

The Company recorded its second quarterly loss in its 14 year 
history.  The loss is principally due to three factors believed 
to be non-recurring as follows:

1. Bad debt reserve of $120,000 taken on a potentially 
uncollectible account.
2. Unanticipated quarterly loss of $140,000 on a fixed price 
Government contract based on revised estimates to complete.
3. Quarterly loss of $170,000 in the Company's Commercial 
Products division due to delays in shipments of software 
licenses and increased selling expenses.


Revenue

Revenue was essentially flat between the quarters being compared.  
During the current period, the Company derived approximately 49% 
of its revenues from the sale of its commercial products and 
related services which is a considerably higher percentage than 
the 40% the Company realized during the third quarter in the 
prior fiscal year.  The percentages for both periods are 
significant, and correlate to the Company's conscious effort to 
reduce its reliance on the Federal Government, and to utilize its 
recently developed software products to gain access to 
organizations in order to sell both its products and associated 
integration and support services.



Although the Company believes that its full cadre of software 
products is important for its future growth and prosperity, to 
date the Company's largest product investment relates to the 
development of its EPOCH software, a COTS (commercial off-the-
shelf) product for satellite command and control.  The Company 
believes that it is unique in its status as the only entity with 
COTS software capable of "flying" satellites built by any 
satellite manufacturer in the world.  In fact during April, 1996 
the Company received a strategically important contract to 
provide its COTS products (and related integration services) to 
command and control a fleet of satellites composed of spacecraft 
from multiple manufacturers.  The preponderance of revenue to be 
derived from this contract is expected to be realized in fiscal 
year 1997.

During the third quarter of fiscal year 1996, the Company 
recorded approximately $950,000 of revenue for services 
associated with its EPOCH product compared to $600,000 of revenue 
during the third quarter of fiscal year 1995.  Although third 
quarter fiscal year 1996 EPOCH revenues included approximately 
$18,000 of license fees (compared to no license fees earned 
during the third quarter of fiscal year 1995), the loss incurred 
during the current year third quarter is in part attributable to 
the relatively small amount of license fees earned, especially 
compared to the first and second quarters of this fiscal year.

Because license revenues have nominal marginal costs associated 
with them, this form of revenue is highly important to the 
Company's overall profitability.  Looking forward to the 4th 
quarter of fiscal year 1996 and fiscal year 1997 (in its 
entirety), the Company is encouraged that its current contract 
backlog includes in excess of $1.0 million of unearned license 
revenues (for both its EPOCH and OASYS products) that are 
anticipated to be recognized during these periods.

The principal balance of the Company's commercial revenues 
pertain to other proprietary products as follows: OASYS (Orbital 
Analysis System); DRS (DOMSAT Receive Station); and a collection 
of software pertaining to database and information system 
applications.  During the third quarter of fiscal year 1996, the 
Company recorded approximately $80,000 of revenue related to the 
sale of products and services under these programs compared to 
approximately $260,000 of revenue recorded during the third 
quarter last fiscal year.  The decrease principally relates to 
fewer OASYS software shipments delivered in the third quarter 
this fiscal year compared to last fiscal year's third quarter.

The Company's subsidiary, Integral Marketing, Inc., (IMI) 
accounted for an additional $115,000 of commercial revenue during 
the current period.  IMI contributed approximately $40,000 of 
revenue to the Company's consolidated revenue total last fiscal 
year during the third quarter.

Expenses

Cost of revenue as a percentage of revenue for the third quarter 
of fiscal year 1996 was 90.2% compared to 86.1% for the third 
quarter in fiscal year 1995.  The higher expense level is 
primarily due to unanticipated additional direct costs against 
one of the Company's fixed price Government jobs (amounting to 
$140,000).

G&A expense increased approximately $125,000 between the periods 
being compared, principally because the Company incurred 
significant bid and proposal expenses during the current quarter 
compared to such expenditures in the third quarter last fiscal 
year.

In addition to the above, the Company recorded a bad debt 
provision of $120,000 during the third quarter of fiscal year 
1996 to reserve against a potentially uncollectible account.

Because of the Company's third quarter pretax loss amounting to 
approximately $266,000, the Company recorded an income tax 
expense credit of almost $103,000 relating to overacrruals of tax 
expense in prior quarters of fiscal year 1996.






        COMPARISON OF THE NINE MONTHS ENDED JUNE 30, 1996 
              TO THE NINE MONTHS ENDED JUNE 30, 1995

The components of the Company's income statement as a percentage 
of revenue are depicted in the following table for the nine 
months  ended June 30, 1996 and June 30, 1995:

                                       % of               %of
                               1996    Revenue    1995   Revenue
                        (000's omitted)	    (000's omitted)
                                              
				
Revenue	                       $7,269    100.0   $8,093   100.0
				
Expenses				
     Cost of Revenue            6,099     83.9    6,927    85.6
     General & Admin.             996     13.7      812    10.0
     Other                        120      1.7      -31     -.4
     Income Taxes                  21       .3      151     1.9
				
Total Expenses                  7,236     99.6    7,859    97.1
				
Net income                     $   33       .4    $ 234     2.9



General

Because of the loss incurred during the third quarter (as 
explained in the previous section of this analysis), year to date 
profitability has also suffered.  Specifically the Company has 
recognized net income of approximately $33,000 through June 30, 
1996 (year to date) compared to net income of approximately 
$234,000 through June 30th last fiscal year.

Revenue

Revenue decreased by approximately $820,000 between the nine 
months ended June 30, 1996 and the nine months ended June 30, 
1995.  The decrease is attributable to the delivery of $1.0 
million less equipment during the current period than what was 
delivered in the first nine months last fiscal year.

During the current period, the Company derived approximately 47% 
of its revenues from the sale of its commercial products and 
related services which is a somewhat higher percentage than the 
43% the Company realized during the first nine months in the 
prior fiscal year.

During the first nine months of fiscal year 1996, the Company
recorded approximately $2,700,000 of revenue for services
associated with its EPOCH product which is comparable
to the EPOCH revenue recorded during the first nine months
of fiscal yeaer 1995.  Fiscal year 1996 EPOCH revenues
included approximately $363,000 of EPOCH license fees,
while $200,000 of license fee revenues were recorded
during the first nine months of fiscal year 1995.

The principal balance of the Company's commercial revenues 
pertain to other proprietary products as follows: OASYS (Orbital 
Analysis System); DRS (DOMSAT Receive Station); and a collection 
of software pertaining to database and information system 
applications.  During the first nine months of fiscal year 1996, 
the Company recorded approximately $420,000 of revenue related to 
the sale of products and services under these programs compared 
to approximately $570,000 of revenue recorded during the first 
nine months last fiscal year.  The decrease principally relates 
to reduced database and information systems revenue, which has 
resulted from a deliberate recent phase down of this business 
area.

The Company's subsidiary, Integral Marketing, Inc., (IMI) 
accounted for an additional $350,000 of commercial revenue during 
the current period.  IMI contributed approximately $130,000 of 
revenue to the Company's consolidated revenue total last fiscal 
year through the first nine months.

Expenses

Cost of revenue as a percentage of revenue for the first nine 
months of fiscal year 1996 was 83.9% compared to 85.6% for the 
first nine months in fiscal year 1995.  The Company believes that 
there are no material differences between the two percentages and 
that these figures are typical and representative of the 
Company's current operating cost structure.

G&A expense increased approximately $180,000 between the periods 
being compared, principally because the Company incurred 
significant bid and proposal expenses during the current period 
compared to such expenditures in the comparable period last 
fiscal year.

Other expenses were $120,000 during the current period compared 
to $31,000 of other income recorded during the first nine months 
last fiscal year.  This reversal is due to a bad debt provision 
amounting to $120,000 to reserve against a potentially 
uncollectible account.


Liquidity and Capital Resources

Based on its historical profitability, the Company has been able 
to generate adequate cash flow from operations to fund its 
operating and capital expenses.  To supplement operating cash 
flows, the Company has access to a line of credit facility in the 
amount of $1.2 million which is currently unused. (See Note 3 of 
the Notes to Financial Statements).  During the first nine months 
of fiscal year 1996, the Company used approximately $242,000 for 
operating activities and used approximately $611,000 for 
investing activities, including approximately $341,000 for 
software development.

The Company has incurred and capitalized approximately $1,560,000 
of costs (inception to date) relating to its EPOCH product.  As 
of June 30, 1996, the Company's balance sheet included 
approximately $960,000 of unamortized software development costs 
related to EPOCH.  Most of the Company's remaining software 
development costs (other than costs relating to EPOCH) pertain to 
the Company's OASYS product, which can be sold as a standalone 
product or in conjunction with EPOCH.

In July, 1988 the Company raised approximately $400,000 (net) 
through the sale of 110,000 common shares in its initial public 
offering.

As a result of its current cash reserves, its unused line of 
credit, its current year to date profitability and its projected 
profitability for the balance of fiscal year 1996 and fiscal year 
1997 in its entirety, the Company believes it will have adequate 
cash resources to meet its obligations for the foreseeable 
future.

In terms of capital purchases, historically the Company has 
funded such items through operating cash flow or capital lease.  
The Company currently has no plans for major capital purchases in 
the ensuing twelve month period, although the Company plans to 
continue to invest in the further development and improvement of 
its EPOCH and OASYS software products.


Part II. Other Information

6.	Exhibits and Reports on Form 8-K

	a.    Exhibits
		None

	b.    Form 8-K
		No reports on Form 8-K have been filed during the 
quarter ended June 30, 1996.



                          SIGNATURES




Pursuant to the requirements of the Securities and Exchange Act 
of 1934, the registrant has duly caused this report to be signed 
on its behalf by the undersigned thereunto duly authorized.

                                 INTEGRAL SYSTEMS, INC.
                                     (Registrant)



Date:   August 14, 1996           By:        /s/
                                     Kimberly  A. Chamberlain
                                     Vice President &
                                     Chief Financial Officer

Date:   August 14, 1996           By:       /s/
                                     Elaine M. Parfitt
                                     Director of 
                                     Accounting/Controller
                                    (Principal Accounting 
                                     Officer)