<ARTICLE>                     5
<LEGEND>

     This schedule contains summary financial information extracted from the
March 31, 1998 unaudited condensed consolidated financial statements of Gray
Communications Systems, Inc. and is qualified in its entirety by reference to
such financial statements.

</LEGEND>
<MULTIPLIER>                                   1
<CURRENCY>                                     U.S. Dollars
       
                                            
<PERIOD-TYPE>                                  3-MOS
<FISCAL-YEAR-END>                              DEC-31-1998
<PERIOD-START>                                 JAN-01-1998
<PERIOD-END>                                   MAR-31-1998
<EXCHANGE-RATE>                                1
<CASH>                                         1,051,009
<SECURITIES>                                   0
<RECEIVABLES>                                  19,583,309
<ALLOWANCES>                                   1,295,000
<INVENTORY>                                    1,137,514
<CURRENT-ASSETS>                               26,341,178
<PP&E>                                         66,873,716
<DEPRECIATION>                                 24,201,474
<TOTAL-ASSETS>                                 342,334,938
<CURRENT-LIABILITIES>                          23,021,433
<BONDS>                                        220,915,482
<PREFERRED-MANDATORY>                          0
<PREFERRED>                                    20,600,000
<COMMON>                                       66,391,990
<OTHER-SE>                                     4,517,915
<TOTAL-LIABILITY-AND-EQUITY>                   342,334,938
<SALES>                                        27,981,865
<TOTAL-REVENUES>                               27,981,865
<CGS>                                          0
<TOTAL-COSTS>                                  23,113,561
<OTHER-EXPENSES>                               241,067
<LOSS-PROVISION>                               116,613
<INTEREST-EXPENSE>                             5,927,481
<INCOME-PRETAX>                                (1,300,244)
<INCOME-TAX>                                   182,563
<INCOME-CONTINUING>                            (1,482,807)
<DISCONTINUED>                                 0
<EXTRAORDINARY>                                0
<CHANGES>                                      0
<NET-INCOME>                                   (1,841,805)
<EPS-PRIMARY>                                  (0.23)
<EPS-DILUTED>                                  (0.23)