SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549

                                   Form 8-K

                                CURRENT REPORT

                      Pursuant to Section 13 or 15(d) of
                      the Securities Exchange Act of 1934


       Date of Report (Date of
       earliest event reported):          July 19, 1996
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                          Stone Container Corporation
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       (Exact name of registrant as specified in its charter)


       Delaware                    1-3439                36-2041256
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       (State or other          (Commission              (IRS Employer
       jurisdiction of          File Number)        Identification No.)
       incorporation)


       150 North Michigan Avenue, Chicago, Illinois              60601
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       (Address of principal executive offices)               (Zip code)


       Registrant's telephone number,
       including area code:  (312) 346-6600
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                                      N/A
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       (Former name or former address, if changed since last report.)



ITEM 5.  OTHER EVENTS

RESULTS OF OPERATIONS

    The  Company expects to report  a loss for the  quarter ending June 30, 
1996 within the range of industry analysts' expectations as reported by 
I/B/E/S.  The loss  reflects the decline in prices for  the majority of the 
Company's products that has occurred in the second quarter resulting 
primarily from sluggish demand and the resulting  relatively high industry  
inventory levels. In  an effort  to prevent  excessive increases  in 
inventory,  the Company  has taken  downtime at various of its mills in the 
second quarter of 1996.
 
CELGAR PULP MILL
 
    The Company's  90%  owned  subsidiary, Stone  Venepal  (Celgar)  Pulp,  
Inc. ("SVCPI"),  which  owns  a 50%  interest  in  the Celgar  pulp  mill  
located in Castlegar, British Columbia, has incurred approximately $375 
million  (Canadian) in  loans from certain bank lenders to finance a portion 
of the Celgar pulp mill expansion in 1991.  CITIC BC, the  owner of  the 
remaining 50%  interest in  the mill,  has also borrowed a like amount of 
funds to finance the remaining portion of the Celgar expansion. Each loan is 
collateralized by 100% of the Celgar mill.
 
    In June and July of 1996, CITIC BC did not make certain of its interest  
and principal  payments  to its  lenders.  CITIC BC  did  not timely  cure  
all such defaults, and as a result the lenders accelerated CITIC BC's loan. 
In  addition, in July CITIC BC did not advance cash calls for operating 
expenses when required to  be made pursuant to the joint venture agreement. 
SVCPI has the right to cure CITIC BC's defaults and maintain CITIC BC's loan 
in good standing, and currently has elected to do so by paying interest and


operating expenses,  thus continuing  SVCPI's interest  in the  mill. 
SVCPI  has received  funds from the Company to cure CITIC BC's default with 
the lenders and to fund CITIC BC's portion of the operating expenses of the 
mill.
 
    SVCPI is considering with the lenders  and CITIC BC restructuring plans  
for the  loans  as a  result of  the pulp  mill's poor  operating results  
which are reflective of the recent  weak conditions in the  pulp market, 
although at  this time no determination as to any terms of a restructuring 
has been made.
 
RECENT TRANSACTIONS
 
    On  May 30,  1996, the  Company consummated  its previously  announced 
joint venture agreement with  Four M  Corporation (Box USA)  for the  
purchase of  the paperboard mill located in Port St. Joe, Florida, from St. 
Joe Paper Company for $185  million plus  applicable working  capital. The  
Company made  a 50% equity investment in  Florida  Coast Paper  Company  LLC 
("FCPC"),  the  joint  venture limited  liability  company  organized  to  
acquire the  mill.  As  part  of the transaction, FCPC  sold,  through  a 
private  placement,  non-recourse  debt  of approximately  $165 million. The 
mill has  the capacity to produce approximately 500,000 short tons per year, 
split almost evenly between mottled white and kraft linerboard.
 
    On July 12, 1996, the Company and Gaylord Container Corporation  
consummated their  previously announced agreement to form a new joint venture 
company, to be called S&G Packaging  Company LLC,  to operate their  combined 
retail  packaging businesses.  The new  company is  a leading producer  of 
paper  grocery bags and sacks, handle sacks and variety bags, with  sales in 
excess of $300 million  and serves  supermarkets, quick service restaurants, 
paper distributors and non-food mass merchandisers throughout North America 
and the Caribbean.
 
RECENT FINANCINGS
 
    In April 1996, the Company  issued $33.3 million aggregate principal  
amount of  tax-exempt,  industrial  development  revenue  bonds.  The  
proceeds  of the issuance have been and  will be used to  acquire, construct 
and install  certain solid  waste disposal components of the Company's 
containerboard mill facilities located in Snowflake, Arizona and Port 
Wentworth, Georgia.
 


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

                                   STONE CONTAINER CORPORATION


                                   By:  /s/ Leslie T. Lederer
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                                        Leslie T. Lederer
                                        Vice President, Secretary
                                          and Counsel


Date:  July 19, 1996