UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC  20549
                                
                           FORM 10-Q/A
                                
(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

     For the quarterly period ended March 31, 1998

                               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 0-28402
                                
                       ARADIGM CORPORATION
     (Exact name of registrant as specified in its charter)
                                
          California                         94-3133088
(State or other jurisdiction of         (I.R.S. Employer
incorporation or organization)          Identification No.)
                                
                                
           26219 Eden Landing Road, Hayward, CA  94545
   (Address of principal executive offices including zip code)
                                
                                
                         (510) 783-0100
      (Registrant's telephone number, including area code)
                                

     Indicate by check mark 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



     Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.

Common Stock, no par value                 11,764,660 shares
          (Class)                 (Outstanding at April 22, 1998)



PART II   OTHER INFORMATION
          
ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K.

          (a)  Exhibits
          
          Item      Description
               10.1*     1996 Equity Incentive Plan, as amended
               10.2*     Employee Stock Purchase Plan, as amended
               27.1**    Financial Data Schedule
               27.2**    Restated Financial Data Schedule
               
               * Filed as an exhibit to the Company's Proxy
                 Statement filed on April 16, 1998 and
                 incorporated herein by reference.

               **Previously filed.
          
          (b)  Reports on Form 8-K

               The Company did not file any reports on Form 8-K
               during the quarter ended March 31, 1998.
               
               
                            SIGNATURE
                                
                                
                                
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.

Dated:  July 6, 1998

                              ARADIGM CORPORATION
                              (Registrant)



                              /s/ Mark A. Olbert
                              Mark A. Olbert
                              Vice President, Finance and
                              Administration and Chief Financial
                              Officer
                                
                                
                                
                           FORM 10-Q/A
                        INDEX TO EXHIBITS
                                
                                

Exhibit Number      Description

10.1*               1996 Equity Incentive Plan, as amended
10.2*               Employee Stock Purchase Plan, as amended
27.1**              Financial Data Schedule
27.2**              Restated Financial Data Schedule



*    Filed as an exhibit to the Company's Proxy Statement filed
     on April 16, 1998 and incorporated herein by reference.

**   Previously filed.