HEALTHSOUTH CORP
424B3, 1998-10-07
SPECIALTY OUTPATIENT FACILITIES, NEC
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                                Prospectus Supplement filed under Rule 424(b)(3)
                                                  S-3 Registration No. 333-52237

PROSPECTUS SUPPLEMENT
(to Prospectus dated June 3, 1998)

THIS DOCUMENTS  CONSTITUTES PART OF A PROSPECTUS  COVERING  SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.  INFORMATION  CONTAINED HEREIN
IS SUBJECT TO AMENDMENT.

                             HEALTHSOUTH Corporation

                                  $567,750,000
                         3.25% Convertible Subordinated
                               Debentures due 2003

                                       and

                       15,501,707 SHARES OF COMMON STOCK,
                            PAR VALUE $.01 PER SHARE

     The  Prospectus,  dated June 3, 1998 (the  "Prospectus"),  relating  to the
offering  for  resale  of  $567,750,000  aggregate  principal  amount  of  3.25%
Convertible  Subordinated  Debentures due 2003 and  15,501,707  shares of Common
Stock, par value $.01 per share, of HEALTHSOUTH Corporation (the "Company"),  is
hereby supplemented as set forth below.

1. BVI  ELECTICITY  is added to the table of  Securityholders  on page 14 of the
   Prospectus,  together with the following  information as of recent date prior
   to the date of this Prospectus Supplement:

   Principal Amount of Debentures Beneficially Owned That May be Sold     50,000
   Percentage of Debentures Outstanding                                        *
   Number of Conversion Shares                                              1365
   Percentage of Common Stock Outstanding                                      *


2. CARRIBEAN BANK OF EXPORTS,  LTD. is added to the table of  Securityholders on
   page 15 of the  Prospectus,  together  with the following  information  as of
   recent date prior to the date of this Prospectus Supplement:

   Principal Amount of Debentures Beneficially Owned That May be Sold    200,000


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<PAGE>



   Percentage of Debentures Outstanding                                        *
   Number of Conversion Shares                                              5460
   Percentage of Common Stock Outstanding                                      *

3. CARRIBEAN  UTILITIES COMPANY is added to the table of Securityholders on page
   15 of the  Prospectus,  together with the following  information as of recent
   date prior to the date of this Prospectus Supplement:

   Principal Amount of Debentures Beneficially Owned That May be Sold    150,000
   Percentage of Debentures Outstanding                                        *
   Number of Conversion Shares                                              4095
   Percentage of Common Stock Outstanding                                      *

4. CONFIDENTIAL  ACCOUNT #4090 is added to the table of  Securityholders on page
   15 of the  Prospectus,  together with the following  information as of recent
   date prior to the date of this Prospectus Supplement:

   Principal Amount of Debentures Beneficially Owned That May be Sold     75,000
   Percentage of Debentures Outstanding                                        *
   Number of Conversion Shares                                              2047
   Percentage of Common Stock Outstanding                                      *

5. EVANGELICAL  LUTHERAN SYNOD is added to the table of  Securityholders on page
   15 of the  Prospectus,  together with the following  information as of recent
   date prior to the date of this Prospectus Supplement:

   Principal Amount of Debentures Beneficially Owned That May be Sold    300,000
   Percentage of Debentures Outstanding                                        *
   Number of Conversion Shares                                              8191
   Percentage of Common Stock Outstanding                                      *

6. FOUNDATION  PENSION ISLA is added to the table of  Securityholders on page 15
   of the Prospectus,  together with the following information as of recent date
   prior to the date of this Prospectus Supplement:

   Principal Amount of Debentures Beneficially Owned That May be Sold    150,000
   Percentage of Debentures Outstanding                                        *
   Number of Conversion Shares                                              4095
   Percentage of Common Stock Outstanding                                      *

7. The  information  set forth  opposite the name LEHMAN  BROTHERS,  INC. in the
   table of Selling Securityholders on page 16 is amended as follows:

   Principal Amount of Debentures Beneficially Owned That May be Sold  6,125,000
   Percentage of Debentures Outstanding                                     1.07
   Number of Conversion Shares                                           167,235
   Percentage of Common Stock Outstanding                                      *


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<PAGE>



8. The  information  set forth opposite the name MERRILL LYNCH PIERCE FENNER AND
   SMITH, INC. in the table of Selling  Securityholders on page 16 is amended as
   follows:

   Principal Amount of Debentures Beneficially Owned That May be Sold 15,540,000
   Percentage of Debentures Outstanding                                     2.73
   Number of Conversion Shares                                           424,300
   Percentage of Common Stock Outstanding                                      *

9. JUAN  NOCEDA  is added  to the  table  of  Securityholders  on page 16 of the
   Prospectus,  together with the following  information as of recent date prior
   to the date of this Prospectus Supplement:

   Principal Amount of Debentures Beneficially Owned That May be Sold     25,000
   Percentage of Debentures Outstanding                                        *
   Number of Conversion Shares                                               682
   Percentage of Common Stock Outstanding                                      *


10.PRUDENTIAL  SECURITIES is added to the table of Securityholders on page 17 of
   the  Prospectus,  together with the following  information  as of recent date
   prior to the date of this Prospectus Supplement:

   Principal Amount of Debentures Beneficially Owned That May be Sold  2,000,000
   Percentage of Debentures Outstanding                                        *
   Number of Conversion Shares                                             54607
   Percentage of Common Stock Outstanding                                      *

11.SERVICIO   DI   TELECOMMUNICATION   DI  ARUBA  is  added  to  the   table  of
   Securityholders  on page 17 of the  Prospectus,  together  with the following
   information  as  of  recent  date  prior  to  the  date  of  this  Prospectus
   Supplement:

   Principal Amount of Debentures Beneficially Owned That May be Sold     25,000
   Percentage of Debentures Outstanding                                        *
   Number of Conversion Shares                                               682
   Percentage of Common Stock Outstanding                                      *

12.JOSE AND ANA TARAJANO is added to the table of  Securityholders on page 17 of
   the  Prospectus,  together with the following  information  as of recent date
   prior to the date of this Prospectus Supplement:

   Principal Amount of Debentures Beneficially Owned That May be Sold     25,000
   Percentage of Debentures Outstanding                                        *
   Number of Conversion Shares                                               682
   Percentage of Common Stock Outstanding                                      *


   The date of this Prospectus Supplement is October 7, 1998.


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