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:  March 20, 1998


                             HEALTHSOUTH Corporation
            ---------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

            Delaware                      1-10315                63-0860407
       ------------------              ------------           ----------------
         (State or Other                (Commission           (I.R.S. Employer
  Jurisdiction of Incorporation        File Number)          Identification No.)
        or Organization)

     One HEALTHSOUTH Parkway
       Birmingham, Alabama                                          35243
---------------------------------                               -------------
      (Address of Principal                                      (Zip Code)
       Executive Offices)

 Registrant's Telephone Number,                                (205) 967-7116
      Including Area Code:


<PAGE>



Item 7.   FINANCIAL STATEMENTS AND EXHIBITS

         (c)      Exhibits

                  (4)-2  Subordinated  Indenture,  dated March 20, 1998, between
         HEALTHSOUTH  Corporation  and The Bank of Nova Scotia Trust  Company of
         New York, as Trustee,  filed as Exhibit  (4)-2 to the Company's  Annual
         Report on Form 10-K for the Fiscal Year ended  December  31,  1997,  is
         hereby incorporated by reference.

                  (4)-3 Officer's  Certificate pursuant to Sections 2.3 and 11.5
         of  the  Subordinated   Indenture,   dated  March  20,  1998,   between
         HEALTHSOUTH  Corporation  and The Bank of Nova Scotia Trust  Company of
         New York,  as Trustee,  relating  to the  Company's  3.25%  Convertible
         Subordinated  Debentures  due  2003,  filed  as  Exhibit  (4)-3  to the
         Company's Annual Report on Form 10-K for the Fiscal Year ended December
         31, 1997, is hereby incorporated by reference.

                  (4)-4  Registration  Rights  Agreement,  dated March 17, 1998,
         among  HEALTHSOUTH  Corporation and Smith Barney Inc., Bear,  Stearns &
         Co. Inc., Cowen & Company, Credit Suisse First Boston Corporation, J.P.
         Morgan Securities Inc., Morgan Stanley & Co. Incorporated,  NationsBanc
         Montgomery  Securities  LLC  and  PaineWebber  Inc.,  relating  to  the
         Company's 3.25% Convertible  Subordinated Debentures due 2003, filed as
         Exhibit  (4)-4 to the  Company's  Annual  Report  on Form  10-K for the
         Fiscal  Year  ended  December  31,  1997,  is  hereby  incorporated  by
         reference.

Item 9.  SALES OF EQUITY SECURITIES PURSUANT TO REGULATIONS

         On March 20, 1998, HEALTHSOUTH Corporation, a Delaware corporation (the
"Company"),  consummated  the  sale  in  a  private  placement  of  $500,000,000
aggregate principal amount of 3.25% Convertible Subordinated Debentures due 2003
(the "Debentures").

         The Debentures are  convertible  into Common Stock,  par value $.01 per
share, of the Company ("Common Stock") at an initial conversion price of $36.625
per share. The Debentures are redeemable,  in whole or in part, at the option of
the  Company  on or  after  April 5,  2001 at the  following  redemption  prices
(expressed as percentages of principal amount) plus accrued interest if redeemed
during the  12-month  period  beginning  on April 1 of the year (April 5, in the
case of 2001) set forth below:

                              Year                     Percentage
                              ----                     ----------
                              2001                       101.30%
                              2002                       100.65%

No sinking fund is provided for the Debentures.

         If a "Change in Control"  (as  defined in the  Indenture  covering  the
Debentures)  of the Company were to occur,  each holder of  Debentures  would be
entitled to require the Company to purchase its Debentures, in whole or in part,
at a purchase price equal to 100% of the principal amount thereof, together with
accrued but unpaid interest thereon to the date of purchase.


                                       2

<PAGE>



         The payment of the  principal of and  premium,  if any, and interest on
the Debentures  will, to the extent set forth in the Indenture,  be subordinated
in right of payment to the prior  payment in full of all  "Senior  Indebtedness"
(as  defined in the  Indenture  covering  the  Debentures)  of the  Company  and
effectively subordinated in right of payment to the prior payment in full of all
indebtedness and other liabilities of the Company's subsidiaries.  The Indenture
does not restrict the Company's ability to incur Senior Indebtedness.

         The  Debentures  were sold by the Company to Smith Barney  Inc.;  Bear,
Stearns & Co. Inc.;  Cowen & Company;  Credit  Suisse First Boston  Corporation;
J.P. Morgan  Securities  Inc.;  Morgan Stanley & Co.  Incorporated;  NationsBanc
Montgomery Securities LLC; and Paine Webber Incorporated,  as initial purchasers
(together, the "Initial Purchasers"),  in reliance on the exemption set forth in
Section 4(2) of the Securities Act of 1933, as amended (the  "Securities  Act"),
pursuant to a Purchase  Agreement between the Company and the Initial Purchasers
dated March 17,  1998.  The Company  granted to the Initial  Purchasers a 30-day
option to purchase  an  additional  $75,000,000  aggregate  principal  amount of
Debentures  to cover  over-allotments,  if any. On March 31,  1998,  the Company
consummated the sale of $67,750,000 aggregate principal amount of the Debentures
pursuant to the exercise of the Initial Purchasers'  over-allotment  option. The
consideration  received by the  Initial  Purchasers  was 1.75% of the  aggregate
offering price, or $9,935,625.

         The Company has been advised that the Initial  Purchasers  subsequently
resold the Debentures in the United States to "qualified  institutional  buyers"
in reliance on Rule 144A under the  Securities Act and outside the United States
in offshore  transactions  to  investors  in reliance on  Regulation S under the
Securities Act. Of the total amount of Debentures sold,  $559,550,000  were sold
under  Rule  144A,  $6,200,000  were  sold in  reliance  on the  exemption  from
registration  provided by Regulation S, and $2,000,000  were sold in reliance on
the exemption  from  registration  provided by Regulation D under the Securities
Act.

         The Company has agreed pursuant to a Registration  Rights  Agreement to
(i) file a Shelf  Registration  Statement with respect to the Debentures and the
Common Stock issuable upon the  conversion  thereof within 60 days following the
first date of initial  issuance of the Debentures,  (ii) use its best efforts to
cause the Shelf Registration  Statement to be declared effective within 150 days
after the first date of initial  issuance of the Debentures,  and (iii) keep the
Shelf Registration  Statement  effective after its effective date for as long as
shall be required  under Rule 144(k) under the  Securities  Act or any successor
rule or regulation thereto. Upon the failure by the Company to comply with these
obligations,  interest  payable on the Debentures  will be increased by 25 basis
points  per  annum  for the first 90 days in which a  registration  default  has
occurred and is continuing and 50 basis points per annum for any additional days
during which a registration default has occurred and is continuing.

         The  net  proceeds  of  the  private   placement  were  used  to  repay
indebtedness under the Company's existing bank credit facilities.

         The Debentures and the Common Stock  issuable upon  conversion  thereof
have not been registered under the United States  Securities Act of 1933 and may
not be offered or sold in the United States absent registration or an applicable
exemption  from  registration  requirements.  The issuance of the Debentures has
been  structured  to allow  secondary  market  trading under Rule 144A under the
Securities Act of 1933.


                                       3

<PAGE>



                                   SIGNATURES

         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 hereunto duly authorized.

Date:    April 3, 1998

                                                     HEALTHSOUTH CORPORATION

                                                     By  /s/ WILLIAM W. HORTON
                                                       -------------------------
                                                            William W. Horton
                                                          Senior Vice President
                                                          and Corporate Counsel



                                       4
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{"company-data": {"conformed-name": "HEALTHSOUTH CORP", "cik": "0000785161", "assigned-sic": "8093", "irs-number": "630860407", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-14940", "film-number": "98587521"}, "business-address": {"street1": "ONE HEALTHSOUTH PKWY", "street2": "STE 224W", "city": "BIRMINGHAM", "state": "AL", "zip": "35243", "phone": "2059677116"}, "mail-address": {"street1": "ONE HEALTHSOUTH PARKWAY", "city": "BIRMINGHAM", "state": "AL", "zip": "35243"}, "former-company": {"former-conformed-name": "HEALTHSOUTH REHABILITATION CORP", "date-changed": "19920703"}}
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:  March 20, 1998

                             HEALTHSOUTH Corporation
            ---------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

            Delaware                      1-10315                63-0860407
       ------------------              ------------           ----------------
         (State or Other                (Commission           (I.R.S. Employer
  Jurisdiction of Incorporation        File Number)          Identification No.)
        or Organization)

     One HEALTHSOUTH Parkway
       Birmingham, Alabama                                          35243
---------------------------------                               -------------
      (Address of Principal                                      (Zip Code)
       Executive Offices)

 Registrant's Telephone Number,                                (205) 967-7116
      Including Area Code:
Item 7.   FINANCIAL STATEMENTS AND EXHIBITS

         (c)      Exhibits

                  (4)-2  Subordinated  Indenture,  dated March 20, 1998, between
         HEALTHSOUTH  Corporation  and The Bank of Nova Scotia Trust  Company of
         New York, as Trustee,  filed as Exhibit  (4)-2 to the Company's  Annual
         Report on Form 10-K for the Fiscal Year ended  December  31,  1997,  is
         hereby incorporated by reference.

                  (4)-3 Officer's  Certificate pursuant to Sections 2.3 and 11.5
         of  the  Subordinated   Indenture,   dated  March  20,  1998,   between
         HEALTHSOUTH  Corporation  and The Bank of Nova Scotia Trust  Company of
         New York,  as Trustee,  relating  to the  Company's  3.25%  Convertible
         Subordinated  Debentures  due  2003,  filed  as  Exhibit  (4)-3  to the
         Company's Annual Report on Form 10-K for the Fiscal Year ended December
         31, 1997, is hereby incorporated by reference.

                  (4)-4  Registration  Rights  Agreement,  dated March 17, 1998,
         among  HEALTHSOUTH  Corporation and Smith Barney Inc., Bear,  Stearns &
         Co. Inc., Cowen & Company, Credit Suisse First Boston Corporation, J.P.
         Morgan Securities Inc., Morgan Stanley & Co. Incorporated,  NationsBanc
         Montgomery  Securities  LLC  and  PaineWebber  Inc.,  relating  to  the
         Company's 3.25% Convertible  Subordinated Debentures due 2003, filed as
         Exhibit  (4)-4 to the  Company's  Annual  Report  on Form  10-K for the
         Fiscal  Year  ended  December  31,  1997,  is  hereby  incorporated  by
         reference.

Item 9.  SALES OF EQUITY SECURITIES PURSUANT TO REGULATIONS

         On March 20, 1998, HEALTHSOUTH Corporation, a Delaware corporation (the
"Company"),  consummated  the  sale  in  a  private  placement  of  $500,000,000
aggregate principal amount of 3.25% Convertible Subordinated Debentures due 2003
(the "Debentures").

         The Debentures are  convertible  into Common Stock,  par value $.01 per
share, of the Company ("Common Stock") at an initial conversion price of $36.625
per share. The Debentures are redeemable,  in whole or in part, at the option of
the  Company  on or  after  April 5,  2001 at the  following  redemption  prices
(expressed as percentages of principal amount) plus accrued interest if redeemed
during the  12-month  period  beginning  on April 1 of the year (April 5, in the
case of 2001) set forth below:

                              Year                     Percentage
                              ----                     ----------
                              2001                       101.30%
                              2002                       100.65%

No sinking fund is provided for the Debentures.

         If a "Change in Control"  (as  defined in the  Indenture  covering  the
Debentures)  of the Company were to occur,  each holder of  Debentures  would be
entitled to require the Company to purchase its Debentures, in whole or in part,
at a purchase price equal to 100% of the principal amount thereof, together with
accrued but unpaid interest thereon to the date of purchase.

                                       2
The payment of the  principal of and  premium,  if any, and interest on
the Debentures  will, to the extent set forth in the Indenture,  be subordinated
in right of payment to the prior  payment in full of all  "Senior  Indebtedness"
(as  defined in the  Indenture  covering  the  Debentures)  of the  Company  and
effectively subordinated in right of payment to the prior payment in full of all
indebtedness and other liabilities of the Company's subsidiaries.  The Indenture
does not restrict the Company's ability to incur Senior Indebtedness.

         The  Debentures  were sold by the Company to Smith Barney  Inc.;  Bear,
Stearns & Co. Inc.;  Cowen & Company;  Credit  Suisse First Boston  Corporation;
J.P. Morgan  Securities  Inc.;  Morgan Stanley & Co.  Incorporated;  NationsBanc
Montgomery Securities LLC; and Paine Webber Incorporated,  as initial purchasers
(together, the "Initial Purchasers"),  in reliance on the exemption set forth in
Section 4(2) of the Securities Act of 1933, as amended (the  "Securities  Act"),
pursuant to a Purchase  Agreement between the Company and the Initial Purchasers
dated March 17,  1998.  The Company  granted to the Initial  Purchasers a 30-day
option to purchase  an  additional  $75,000,000  aggregate  principal  amount of
Debentures  to cover  over-allotments,  if any. On March 31,  1998,  the Company
consummated the sale of $67,750,000 aggregate principal amount of the Debentures
pursuant to the exercise of the Initial Purchasers'  over-allotment  option. The
consideration  received by the  Initial  Purchasers  was 1.75% of the  aggregate
offering price, or $9,935,625.

         The Company has been advised that the Initial  Purchasers  subsequently
resold the Debentures in the United States to "qualified  institutional  buyers"
in reliance on Rule 144A under the  Securities Act and outside the United States
in offshore  transactions  to  investors  in reliance on  Regulation S under the
Securities Act. Of the total amount of Debentures sold,  $559,550,000  were sold
under  Rule  144A,  $6,200,000  were  sold in  reliance  on the  exemption  from
registration  provided by Regulation S, and $2,000,000  were sold in reliance on
the exemption  from  registration  provided by Regulation D under the Securities
Act.

         The Company has agreed pursuant to a Registration  Rights  Agreement to
(i) file a Shelf  Registration  Statement with respect to the Debentures and the
Common Stock issuable upon the  conversion  thereof within 60 days following the
first date of initial  issuance of the Debentures,  (ii) use its best efforts to
cause the Shelf Registration  Statement to be declared effective within 150 days
after the first date of initial  issuance of the Debentures,  and (iii) keep the
Shelf Registration  Statement  effective after its effective date for as long as
shall be required  under Rule 144(k) under the  Securities  Act or any successor
rule or regulation thereto. Upon the failure by the Company to comply with these
obligations,  interest  payable on the Debentures  will be increased by 25 basis
points  per  annum  for the first 90 days in which a  registration  default  has
occurred and is continuing and 50 basis points per annum for any additional days
during which a registration default has occurred and is continuing.

         The  net  proceeds  of  the  private   placement  were  used  to  repay
indebtedness under the Company's existing bank credit facilities.

         The Debentures and the Common Stock  issuable upon  conversion  thereof
have not been registered under the United States  Securities Act of 1933 and may
not be offered or sold in the United States absent registration or an applicable
exemption  from  registration  requirements.  The issuance of the Debentures has
been  structured  to allow  secondary  market  trading under Rule 144A under the
Securities Act of 1933.

                                       3
SIGNATURES

         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 hereunto duly authorized.

Date:    April 3, 1998

                                                     HEALTHSOUTH CORPORATION

                                                     By  /s/ WILLIAM W. HORTON
                                                       -------------------------
                                                            William W. Horton
                                                          Senior Vice President
                                                          and Corporate Counsel

                                       4