<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13G
Under the Securities Exchange Act of 1934
APPLIED ANALYTICAL INDUSTRIES, INC.
-----------------------------------
(Name of Issuer)
Common Stock, $0.001 par value per share
----------------------------------------
(Title of Class of Securities)
037939105
----------------
(CUSIP Number)
<PAGE> 2
SCHEDULE 13G
<TABLE>
<S> <C>
CUSIP NO. 037939105 PAGE 2 OF 4 PAGES
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
James L. Waters
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE ROW IF A MEMBER OF A GROUP
(a) _______________
(b) _______________
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- -------------------------------------------------------------------------------
5 SOLE VOTING POWER
2,121,570
------------------------------------------------------------
NUMBER OF 6 SHARED VOTING POWER
SHARES
BENEFICIALLY 496,133
OWNED BY ------------------------------------------------------------
EACH 7 SOLE DISPOSITIVE POWER
REPORTING
PERSON
WITH 2,121,570
------------------------------------------------------------
8 SHARED DISPOSITIVE POWER
496,133
- -------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,617,703
- -------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*
- -------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
16.1%
- -------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON*
IN
- -------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
Item 1. Name and Address of Issuer.
(a) Applied Analytical Industries, Inc.
(b) 5051 New Centre Drive
Wilmington, North Carolina 28403
Item 2. Filing Person.
(a) James L. Waters
(b) 47 New York Avenue
Framingham, Massachusetts 01701
(c) United States
(d) Common Stock, $0.001 par value per share
(e) 037939105
Item 3. Not applicable.
Item 4. Ownership.
The following information is as of September 30, 1996:
(a) 2,617,703 shares.
(b) 16.1%.
(c) (i) 2,121,570 shares.
(ii) 496,133 shares.
(iii) 2,121,570 shares.
(iv) 496,133 shares.
Item 5. Ownership of Five Percent or Less of a Class.
Not applicable.
Item 6. Ownership of More than Five Percent on Behalf of Another Person.
Not applicable.
Item 7. Identification and Classification of the Subsidiary which Acquired
the Security Being Reported on By the Parent Holding Company.
Not applicable.
</TABLE>
<PAGE> 4
Item 8. Identification and Classification of Members of the Group.
Not applicable.
Item 9. Notice of Dissolution of Group.
Not applicable.
Item 10. Certification.
Not applicable.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
September 30, 1996
-----------------------------
Date
/s/ James L. Waters
-----------------------------
Signature
James L. Waters
-----------------------------
Name
