Registration No.  33-97522C
             As filed with the Securities and Exchange Commission 
                                            on September 26, 1997
=================================================================
                SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                            FORM S-8
                     REGISTRATION STATEMENT
                             Under
                   The Securities Act of 1933

                  CATALYST INTERNATIONAL, INC.
        (Exact Name of Registrant as Specified in Charter)

        Delaware                        39-1415889
(State of Incorporation)     (I.R.S. Employer Identification No.)

8989 North Deerwood Drive, Milwaukee, WI               53223
(Address of Principal Executive Office)             (Zip Code)

                 -------------------------------
                 1997 DIRECTOR STOCK OPTION PLAN
                 -------------------------------

                   Sean P. McGowan, President
                  Catalyst International, Inc.
                   8989 North Deerwood Drive
                      Milwaukee, WI  53223
             (Name and address of agent for service)

                        (414) 362-6800
   (Telephone Number, including area code, of agent for service)

                        with a copy to

                       Mark T. Ehrmann
                     Godfrey & Kahn, S.C.
                    780 North Water Street
                     Milwaukee, WI  53202
                        (414) 273-3500

<TABLE>
                               CALCULATION OF REGISTRATION FEE
<CAPTION>
=======================================================================================
<C>                  <C>           <C>               <C>                <C>
                                   Proposed          Proposed
Title of Securities  Amount to be  Maximum Offering  Maximum Aggregate  Amount of
to be registered     registered    price per share   offering price     registration fee
----------------------------------------------------------------------------------------
Common Stock,        250,000
$0.10 par value      shares        $6.06 (1)         $1,515,625         $522.62 (1)	
=======================================================================================
<FN>
<FN1>
(1)  Registration fee calculated pursuant to Rule 457(h)(1) under the 
Securities Act of 1933, as amended.  The registration fee is based on 
the average of the high and low price of a share of Catalyst 
International, Inc. common stock on September 25, 1997 as reported by 
The Nasdaq Stock Market, Inc. on its website on September 25, 1997.
</FN>
</TABLE>

<PAGE>

PAGE 2
                             PART II

         INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.  INCORPORATION OF DOCUMENTS BY REFERENCE

         The following documents are incorporated by reference in 
this Registration Statement:

               (a)  The Registrant's latest Annual Report on Form 
10-KSB filed March 26, 1997 pursuant to Section 13(a) or 15(d) of 
the Securities Exchange Act of 1934, as amended (the "Exchange 
Act").

               (b)  The Registrant's Form 8-K filed January 3, 
1997 pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 
Exchange Act.

               (c)  The Registrant's Amendment 2 to Form SR for 
the period ended February 15, 1997 filed February 25, 1997 
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange 
Act.

               (d)  The Registrant's Form 10-QSB for the period
ended March 31, 1997 filed May 15, 1997 pursuant to Sections 
13(a), 13(c), 14 and 15(d) of the Exchange Act.

               (e)  The Registrant's Form 10-QSB for the period 
ended June 30, 1997 filed August 15, 1997 pursuant to Sections 
13(a), 13(c), 14 and 15(d) of the Exchange Act.


<PAGE>

Page 3

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

         Under Section 145 of the General Corporation Law of 
Delaware (the "DGCL"), the Registrant is in certain circumstances 
permitted, and in other circumstances may be required, to 
indemnify its directors, officers, employees and agents against 
certain expenses (including attorneys' fees) and other amounts 
paid in connection with certain threatened, pending or completed 
civil, criminal, administrative or investigative actions, suits 
or proceedings in which such persons were or are parties, or are 
threatened to be made parties, by reason of the fact that such 
persons were or are directors, officers, employees or agents of 
the Registrant.  Such section also permits the Registrant to 
purchase and maintain insurance on behalf of its directors, 
officers, employees or agents against liability which may be 
asserted against, or incurred by, such persons in their 
capacities as directors, officers, employees or agents of the 
Registrant, or which may arise out of their status as directors, 
officers, employees or agents of the Registrant whether or not 
the Registrant would have the power to indemnify such persons 
against such liability under the provisions of the DGCL.

         Under Article VIII of the Registrant's Amended and 
Restated Bylaws, the Registrant is required to indemnify and 
reimburse the expenses of all directors, officers, employees or 
agents to the maximum extent permitted by Section 145 of the DGCL 
or any successor provision thereto.

          The Registrant's Amended and Restated Certificate of 
Incorporation limits the personal liability of directors to the 
fullest extent permitted by the DGCL.

          The Registrant's officers and directors currently are 
covered by insurance protecting them from claims brought against 
them for acts or omissions related to the conduct of their 
duties, including, in certain circumstances, claims brought under 
the Securities Act.

<PAGE>

Page 4
ITEM 8.  EXHIBITS

         4.1      Articles IV and V of the Amended and Restated
                  Certificate of Incorporation.*

         4.2      1997 Director Stock Option Plan of Catalyst
                  International, Inc.

         4.3      Form of Stock Option Agreement between the
                  Registrant and the holders of option under the
                  Registrant's 1997 Director Stock Option Plan.

         23.1     Consent of Ernst & Young LLP.
___________________
* Incorporated by reference to the Registration Statement on 
Form SB-2 (No. 33-97522C).


ITEM 9.  UNDERTAKINGS

         The Registrant hereby undertakes:

               (1)  To file, during any period in which offers or 
sales are being made, a post-effective amendment to this 
Registration Statement to include any material information with 
respect to the plan of distribution not previously disclosed in 
the Registration Statement or any material change to such 
information in the Registration Statement.

               (2)  That, for the purpose of determining any 
liability under the Securities Act of 1933 (the "Securities 
Act"), each such post-effective amendment shall be deemed to be a 
new registration statement relating to the securities offered 
therein, and the offering of such securities at that time shall 
be deemed to be the initial bona fide offering thereof.

               (3)  To remove the registration by means of a 
post-effective amendment any of the securities being registered 
which remain unsold at the termination of the offering.

               (4)  That, for the purpose of determining any 
liability under the Securities Act, each filing of the 
Registrant's annual report pursuant to Section 13(a) or Section 
15(d) of the Exchange Act that is incorporated by reference in 
the Registration Statement shall be deemed to be a new 
registration statement relating to the securities offered 
therein, and the offering of such securities at that time shall 
be deemed to be the initial bona fide offering thereof.

<PAGE>

Page 5
               (5)  Insofar as indemnification for liabilities 
arising under the Securities Act may be permitted to directors, 
officers and controlling persons of the Registrant pursuant to 
the provisions described in Item 6 of this Registration Statement 
or otherwise, the Registrant has been advised that in the opinion 
of the Securities and Exchange Commission such indemnification is 
against public policy as expressed in the Securities Act and is, 
therefore, unenforceable.  In the event that a claim for 
indemnification against such liabilities (other than the payment 
by the Registrant of expenses incurred or paid by a director, 
officer or controlling person or the Registrant in the successful 
defense of any action, suit or proceeding) is asserted by such 
director, officer or controlling person in connection with the 
securities being registered, the Registrant will, unless in the 
opinion of its counsel that matter has been settled by 
controlling precedent, submit to a court of appropriate 
jurisdiction the question whether such indemnification by it is 
against public policy as expressed in the Securities Act and will 
be governed by the final adjudication of such issue.

<PAGE>

PAGE 6
                            SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 
1933, as amended, the Registrant certifies that it has reasonable 
grounds to believe that it meets all of the requirements for 
filing on Form S-8 and has duly caused this Registration 
Statement to be signed on its behalf by the undersigned, 
thereunto duly authorized, in the City of Milwaukee, State of 
Wisconsin, on September 26, 1997.

                              Catalyst International, Inc.

                              By: /s/ Sean P. McGowan        
                                  Sean P. McGowan, President 
                                  and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, 
as amended, this Registration Statement has been signed by the 
following persons in the capacities and on the dates indicated.

Signatures                  Title                          Date

/s/ Douglas B. Coder        Chairman of the Board,         9/26/97
Douglas B. Coder            a Director

/s/ Sean P. McGowan         President, Chief	Executive     9/26/97
Sean P. McGowan             Officer and a Director
                            (Principal Executive Officer)

/s/ Thomas G. Hickinbotham  Vice President of Finance      9/26/97
Thomas G. Hickinbotham      & Administration; Chief
                            Financial Officer (Principal
                            Accounting Officer

/s/ Roy J. Carver           Director                       9/26/97
Roy J. Carver

/s/ Douglas B. Coder        Director                       9/26/97
Douglas B. Coder

/s/ James F. Goughenour     Director                       9/26/97
James F. Goughenour

/s/ Terrence L. Mealy       Director                       9/26/97
Terrence L. Mealy

/s/ Sean P. McGowan         Director                       9/26/97
Sean P. McGowan

<PAGE>

EXHIBIT 4.2

                   CATALYST INTERNATIONAL, INC.
                 1997 DIRECTOR STOCK OPTION PLAN

                         ARTICLE I

                          PURPOSE

     The purpose of the 1997 Director Stock Option Plan (the 
"Plan") is to enable Catalyst International, Inc. (the "Company") 
to attract and retain outside directors and to strengthen the 
mutuality of interests between such directors and the Company's 
stockholders.

                         ARTICLE II

                        DEFINITIONS

     For purposes of the Plan, the following terms shall have the 
following meanings:

     2.1  "Board" shall mean the Board of Directors of the 
Company.

     2.2  "Code" shall mean the Internal Revenue Code of 1986, as 
amended, and rules and regulations under the Internal Revenue 
Code of 1986, as amended.

     2.3  "Common Stock" shall mean the Common Stock, par value 
$0.10 per share of the Company.

     2.4  "Effective Date" shall mean the date on which the Plan 
is approved by the affirmative vote of the holders of a majority 
of the outstanding shares of Common Stock present, or 
represented, and entitled to vote at a duly held meeting of the 
stockholders of the Company.

     2.5  "Eligible Director" shall mean any member of the Board 
who, on the date on which Options are to be granted, is not an 
officer or employee of the Company or any of the Company's 
subsidiaries, but shall exclude any such member of the Board who 
advises the Company in writing of his or her desire not to 
participate in the Plan.

<PAGE>

     2.6  "Fair Market Value" for purposes of the Plan, unless 
otherwise required by the Code, shall mean, of any date, the 
closing price of a share of Common Stock as reported on the 
principal national securities exchange on which the Common Stock 
is listed or admitted to trading, or, if not listed or traded on 
any such exchange, on the Nasdaq Stock Market, or, if not so 
listed or traded, the fair market value as determined by the 
Board, which determination shall be conclusive.

     2.7  "Optionee" shall mean an individual to whom a Stock 
Option has been granted under the Plan.

     2.8  "Stock Option" or "Option" shall mean any option to 
purchase shares of  Common Stock granted pursuant to Article VI.

                        ARTICLE III

                      ADMINISTRATION

     3.1  Administration.  The Plan shall be administered and 
interpreted by the Board.

     3.2  Guidelines.  Subject to Article VII, the Board shall 
have the authority to adopt, alter and repeal administrative 
rules, guidelines and practices governing the Plan as it, from 
time to time, deems advisable; to interpret the terms and 
provisions of the Plan and any Option granted under the Plan (and 
any related agreements); to make discretionary grants under the 
Plan; to accelerate vesting or exercise of an option; to 
determine the terms, conditions and restrictions of an option; to 
grant waivers of Plan terms; and to otherwise supervise the 
administration of the Plan.  The Board may correct any defect, 
supply any omission, conform the Plan to any change in law or 
regulation, or reconcile any inconsistency or ambiguity in the 
Plan or in any Option in the manner and to the extent it shall 
deem necessary to carry the Plan into effect.  Notwithstanding 
the foregoing, no action of the Board under this Section 3.2 
shall impair the rights of any Option without such person's 
consent, unless otherwise required by law.

     3.3  Decisions Final.  Any decision, interpretation or other 
action made or taken in good faith by the Board in accordance 
with the Plan shall be final, binding and conclusive on the 
Company, all members of the Board and their respective heirs, 
executors, administrators, successors and assigns.

<PAGE>

     3.4  Delegation.  The Board may delegate any or all of its 
administrative responsibilities under the Plan to officers or 
employees of the Company.

                          ARTICLE IV

                       SHARE LIMITATION

     4.1  Shares.  The maximum aggregate number of shares of 
Common Stock that may be issued under the Plan shall be 250,000 
shares of Common Stock, subject to any increase or decrease 
pursuant to Section 4.2.  If any Option granted under the Plan 
shall terminate or be canceled for any reason without having  
been exercised in full, the number of unpurchased shares shall 
again be available for the purpose of the Plan.

     4.2  Changes.  In the event of any merger, reorganization, 
consolidation, recapitalization, dividend (other than a regular 
cash dividend), stock split, or other  change in the capital 
structure of the Company affecting the Common Stock, such 
substitution or adjustment shall be made in the maximum aggregate 
number of shares that may be issued under the Plan, in the number 
of shares for which Stock Options are to be granted to Eligible 
Directors pursuant to Section 6.2 and in the number of shares 
subject to, and the option price of, outstanding Options as may 
be determined to be appropriate by the Board, in its sole 
discretion, provided that the number of shares subject to any 
Option shall always be a whole number.  In the event of a change 
in the capital structure of the Company, merger, consolidation, 
combination or exchange of shares or the like, as a result of 
which Common Stock is changed into another class, or securities 
of another person, cash or other property, the consideration to 
be received upon exercise shall be adjusted as deemed equitable 
by the Board in its sole discretion.

                             ARTICLE V

                            ELIGIBILITY

     5.1  Eligible Directors.  Only Eligible Directors shall be 
granted Options under the Plan.

<PAGE>

                             ARTICLE VI

                           STOCK OPTIONS

     6.1  Options.  All Stock Options granted under the Plan 
shall be non-qualified stock options (i.e., options that do not 
qualify as incentive stock options under Section 422 of the 
Code).

     6.2  Grants.  Pursuant to the terms of the Plan contained 
herein, each Eligible Director shall be granted Stock Options on 
an ongoing basis in exchange for their agreement to serve on the 
Board and shall also be eligible to receive Stock Options in lieu 
of cash compensation for their fees for meetings of the Board, 
any committees thereof, for any other services performed by such 
Eligible Director on behalf of the Company or for any other such 
reason as determined by the Board from time to time, in its sole 
discretion.

     (a)  Initial Stock Option Grant; Anniversary Stock Option 
Grants.  On the Effective Date, each Eligible Director shall 
automatically be granted Stock Options to purchase 10,000 shares 
of Common Stock, and each Eligible Director who first becomes a 
member of the Board after the Effective Date shall automatically 
be granted Stock Options to purchase 10,000 shares of Common 
Stock on the date of his or her selection or election to the 
Board.  For as long as the Plan remains in effect, each Eligible 
Director shall also automatically be granted Stock Options to 
purchase 5,000 shares of Common Stock on each anniversary of the 
date of such initial grant (beginning on the second such 
anniversary), provided such person is an Eligible Director on 
such date.

     (b)  Additional Stock Option Grants.  Each Eligible Director 
shall also be entitled to receive options as the Board may 
determine in its sole discretion from time to time.

     (c)  Execution of Nonqualified Stock Option Agreements.  The 
Company shall effect the granting of Stock Options under the Plan 
by execution of Nonqualified Stock Option Agreements which shall 
contain, among other things, such representations, warranties and 
other terms and conditions as shall be necessary in the opinion 
of counsel of the Company to comply with all applicable Federal 
and state securities laws.

     6.3  Terms of Options.  Options granted under the Plan shall 
be subject to the following terms and conditions and shall 

<PAGE>

contain such additional terms and conditions, not inconsistent 
with the terms of the Plan, as the Board shall, in its 
discretion, determine:

     (a)  Option Price.  The option price per share of Common 
Stock purchasable upon exercise of a Stock Option shall be equal 
to the Fair Market Value of a share of Common Stock on the date 
the Stock Option is granted.

     (b)  Method of Exercise.  Stock Options may be exercised in 
whole or in part at any time during the option term by giving 
written notice of exercise to the Secretary or Assistant 
Secretary of the Company, specifying the number of shares of 
Common Stock to be purchased.  Such notice shall be accompanied 
by payment in full of the option price and, if requested, by the 
representation described in Section 9.2.  The option price may be 
paid in cash or by check payable to the Company or in such other 
form as the Board deems acceptable. The Company shall have the 
right to delay the issuance or delivery of any shares of Common 
Stock under this Plan until (a) the completion of such 
registration or qualification of such shares under any applicable 
federal or state law, ruling or regulation as the Company shall 
determine to be necessary or advisable and (b) receipt from the 
Participant of such documents and information as the  Board may 
deem necessary or appropriate in connection with such 
registration or qualification.

     (c)  Non-transferability of Option.  Unless otherwise 
determined by the Board, no Stock Option shall be transferable by 
an Optionee otherwise than by will or by the laws of descent and 
distribution, to the extent consistent with the terms of the Plan 
and the Option, and all Stock Options shall be exercisable, 
during an Optionee's lifetime, only by the Optionee.

                          ARTICLE VII

                     TERMINATION OR AMENDMENT

     7.1  Termination or Amendment of the Plan.  The Board may at 
any time amend, discontinue or terminate the Plan in whole or in 
part (including any amendment deemed necessary to ensure that the 
Company may comply with any regulatory requirement referred to in 
Article IX); provided, however, that, unless otherwise required 
by law, the rights of an Optionee with respect to Options granted 
prior to such amendment, discontinuance or termination, may not 
be impaired without the consent of such Optionee.

<PAGE>

     7.2  Amendment of Options.  The Board may amend the terms of 
the Stock Options, prospectively or retroactively, but, subject 
to Article IV, no such amendment or other action by the Board 
shall impair the rights of any Optionee without the Optionee's 
consent.

                            ARTICLE VIII

                           UNFUNDED PLAN

     8.1  Unfunded Status of Plan.  The Plan is intended to 
constitute an "unfunded" plan for incentive compensation.  With 
respect to any payment not yet made to an Optionee by the 
Company, nothing contained herein shall give any such individual 
any rights that are greater than those of a general creditor of 
the Company.

                            ARTICLE IX

                        GENERAL PROVISIONS

     9.1  Nonassignment.  Except as otherwise provided in the 
plan or as otherwise determined by the Board, Options granted 
hereunder and the rights and privileges conferred thereby shall 
not be transferred, assigned, pledged or hypothecated in any way 
(whether by operation of law or otherwise), and shall not be 
subject to execution, attachment or similar process.  Upon any 
attempt to transfer, assign, pledge, hypothecate or otherwise 
dispose of such Option, right or privilege contrary to the 
provisions hereof, or upon the levy of any attachment or similar 
process thereon, such Option and the rights and privileges 
conferred thereby shall immediately terminate and the Option 
shall immediately be forfeited to the Company.

     9.2  Legend.  The Board may require each person purchasing 
shares upon exercise of an Option to represent to the Company in 
writing that the Optionee is acquiring the shares for investment 
only and not for release or with a view to distribution and to 
make such other representations as the Board may require.  The 
stock certificates representing such shares may include any 
legend which the Board deems appropriate to reflect any 
restrictions on transfer.

<PAGE>

     All certificates representing shares of Common Stock 
delivered under the Plan shall be subject to such stock transfer 
orders and other restrictions as the Board may deem advisable 
under the rules, regulations and other requirements of the 
Securities and Exchange Commission, any stock exchange upon which 
the Common Stock is then listed or traded or the Nasdaq Stock 
Market, any applicable Federal or state securities law, and any 
applicable corporate law, and the Board may cause a legend or 
legends to be put on any such certificates to make appropriate 
reference to such restrictions.

     9.3  Other Plans.  Nothing contained in the Plan shall 
prevent the Board from adopting other or additional compensation 
arrangements and such arrangements may be either generally 
applicable or applicable only in specific cases.

     9.4  No Right to Continue Relationship.  Neither the Plan 
nor the grant of any Option under the Plan shall confer upon any 
person any right to continue as a director of the company or 
obligate the Company to nominate any director for reelection by 
the company's stockholders.

     9.5  Listing and Other Conditions.  

     (a)  The issuance of any shares of Common Stock upon 
exercise of an Option shall be conditioned upon such shares being 
listed on a national securities exchange or on the Nasdaq Stock 
Market.  The Company shall have no obligation to issue such 
shares unless and until such shares are so listed, and the right 
to exercise any Option shall be suspended until such listing has 
been effected.

     (b)  If at any time counsel to the Company shall be of the 
opinion that any sale or delivery of shares of Common Stock upon 
exercise of an Option is or may in the circumstances be unlawful 
or result in the imposition of a material amount of excise taxes 
under the statutes, rules or regulations of any applicable 
jurisdiction, the Company shall have no obligation to make such 
sale or delivery, or to make any application or to effect or to 
maintain any qualification or registration under the Securities 
Act of 1933, as amended, or otherwise with respect to shares of 
Common Stock, and the right to exercise any Option shall be 
suspended until, in the opinion of such counsel, such sale or 
delivery shall be lawful or shall not result in the imposition of 
a material amount of excise taxes.

<PAGE>

     9.6  Governing Law.  The Plan and actions taken in 
connection herewith shall be governed and construed in accordance 
with the laws of the State of Wisconsin.

     9.7  Construction.  Wherever any words are used in the Plan 
in the masculine gender they shall be construed as though they 
were also used in the feminine gender in all cases where they 
would so apply, and wherever any words are used herein the 
singular form they shall be construed as though they were also 
used in the plural form in all cases where they would so apply.

     9.8  Liability of the Board.  No member of the Board nor any 
employee of the Company or any of it subsidiaries shall be liable 
for any act or action hereunder, whether of omission or 
commission, by any other member of the Board or employee or by 
any agent to whom duties in connection with the administration of 
the Plan have been delegated or, except in circumstances 
involving bad faith, gross negligence or fraud, for anything done 
or omitted to be cone by himself.

     9.9  Costs.  The Company shall bear all expenses incurred 
in administering the Plan, including expenses of issuing Common 
Stock upon the exercise of Options.

     9.10  Fractional Shares.  No fractional shares of stock 
shall be issued upon the exercise of any option and the Company 
shall not be under any obligation to compensate any Optionee in 
any way for any such fractional share.

     9.11  Severability.  If any part of the Plan shall be 
determined to be invalid or void in any respect, such 
determination shall not affect, impair, invalidate or nullify the 
remaining provisions of the Plan which shall continue in full 
force and effect.

     9.12  Successors.  The Plan shall be binding upon and inure 
to the benefit of any successor or successors of the Company.

     9.13  Headings.  Article and section headings contained in 
the Plan are included for convenience only and are not to be used 
in construing or interpreting the Plan.

<PAGE>

                           ARTICLE X

                          TERM OF PLAN

     10.1  Effective Date.  The Plan shall be effective as of the 
Effective Date.

     10.2  Termination.  The Plan shall continue until terminated 
by the Board.  Termination of the Plan  shall not affect Options 
granted before such date, which shall continue to be exercisable, 
in accordance with the terms of the Plan, after the Plan 
terminates.


<PAGE>

EXHIBIT 4.3

               NONQUALIFIED STOCK OPTION AGREEMENT

          THIS AGREEMENT is entered into as of the ____ day of 
_________ 199__, by and between ______________________ 
("Optionee") and Catalyst International, Inc., a Delaware 
corporation (the "Company").

          WHEREAS, the Company has established the 1997 Director 
Stock Option Plan (the "Plan") and, unless otherwise defined 
herein, all capitalized terms used in this Agreement shall have 
the meaning set forth in the Plan; and 

          WHEREAS, Optionee, as an Eligible Director under the 
Plan, has been granted a nonqualified stock option by the Board 
of Directors of the Optionee Company (the "Board") to purchase 
shares of the Company's $0.10 par value common stock (the "Common 
Stock") pursuant to the Plan; and

          WHEREAS, Optionee and the Company wish to enter into 
this Agreement setting forth the terms and conditions of 
Optionee's option.

          NOW, THEREFORE, in consideration of the mutual promises 
set forth below, Optionee and the Company agree as follows:

          1.  OPTION.  Pursuant to the Plan, Optionee is hereby 
granted the option to purchase _________ shares of the Common 
Stock on the terms and conditions set forth in this Agreement 
(the "Option").  It is intended that the Option shall constitute 
a nonqualified stock option which is not subject to the 
provisions of Section 422 of the Internal Revenue Code of 1986, 
as amended, and any successor thereto (the "Code").

          2.  EXERCISE PRICE.  The per share purchase price under
the Option shall be _________________ Dollars ($.), which is the 
Fair Market Value of the shares subject to the Option.

          3.  EXERCISE PERIOD. Subject to the provisions of 
Paragraphs 4 and 6, below, the Option, or any portion thereof, 
may be exercised by Optionee (i) only while Optionee is an 
Eligible Director or for three (3) months thereafter, (ii) only 
if such exercise will not violate any federal or state securities 
laws and (iii) no later than ten (10) years from the date of the 
grant.  Unless the Board establishes otherwise, or except as 
otherwise provided herein, the Option may be exercised as 

<PAGE>

follows: all or any portion of the shares covered hereby may be 
purchased at any time commencing on the date on which the Option 
has been granted (the "Grant Date").  Notwithstanding any other 
provisions hereof, the Option shall lapse and cannot be exercised 
as to any shares after ten (10) years from the Grant Date.

          4.  TERMINATION OF DIRECTORSHIP WHILE OPTIONS EXERCISABLE

          4.1  TERMINATION.  Unless otherwise determined by the 
Board, if, during the period Optionee has a present right to 
exercise the Option, Optionee's status as an Eligible Director is 
terminated, Optionee shall have three (3) months from the date of 
such termination to exercise the Option as to all or any part of 
the shares subject to the Option, subject to the condition that 
the Option shall not be exercisable if it would result in a 
violation of federal or state securities laws or subsequent to 
ten (10) years after the date of grant.  However, if such 
termination is due to the death of Optionee, the personal 
representative, administrator, or other representative of 
Optionee's estate, or the person or persons to whom the Option 
shall pass by will or under the laws of descent and distribution, 
shall have the right, for a period of three (3) months after the 
date of the Optionee's death, to exercise the Option, subject to 
the condition that the Option shall not be exercisable if it 
would result in a violation of federal or state securities laws 
or subsequent to ten (10) years after the date of grant.  To the 
extent the Option is not exercised within the three (3) month 
period following termination of Optionee's status as an Eligible 
Director, it shall lapse.

          4.2  EXTENSION OF EXERCISE PERIOD.  Paragraph 4.1 
notwithstanding, the Board may, in its sole discretion, extend 
the period permitted for exercise of the Option if allowable 
under applicable law.

          5.  TRANSFERABILITY OF OPTION.  The Option shall be 
nontransferable and shall, except as provided in Paragraph 4.1, 
above, be exercisable only by Optionee during the lifetime of 
Optionee.  Optionee shall have the right to transfer the Option 
upon Optionee's death, either by the terms of Optionee's will or 
under the laws of descent and distribution, subsequent to the 
limitations set forth in Paragraph 4.1, above, and all such 
transferees shall be subject to the same terms and conditions of 
the Plan and the Option as would Optionee.

<PAGE>

          6.  EXERCISE OF OPTION.  Subject to the limitations 
stated elsewhere in this Agreement or in the Plan, the Option 
will be exercisable as provided in Paragraph 3, above.  In no 
event will the Option be exercisable if it would result in a 
violation of federal or state securities laws or later than ten 
(10) years from the date of grant, unless otherwise extended.  
The Option shall be exercisable by delivering to the Secretary or 
Assistant Secretary of the Company at its principal business 
office a written notice designating the number of shares for 
which it is being exercised.  Payment in full for the number of 
shares for which the Option has been exercised must accompany 
said written notice.  No person shall acquire any rights or 
privileges of a shareholder of the Company with respect to any 
shares issued pursuant to the exercise of the Option until such 
shares have been duly issued.  The Company shall have the right 
to delay the issue or delivery of any shares of Common Stock to 
be delivered or issued hereunder until (a) the completion of such 
registration or qualification of such shares under federal or 
state law, ruling or regulation as the Company shall deem 
necessary or advisable, and (b) receipt from Optionee of such 
documents and information as the Company may deem necessary or 
appropriate in connection with such registration or qualification 
or the issuance of such shares of Common Stock hereunder.

          7.  SECURITIES LAW REPRESENTATION.  Optionee hereby 
represents and warrants with respect to the shares of Common 
Stock which may be acquired upon exercise of the Option that 
Optionee is acquiring such shares for Optionee's own account for 
investment and not with a view to, or for sale in connection 
with, the resale or distribution of any such shares.  Optionee 
understands that by "investment" it is meant that Optionee is 
acquiring such shares because of Optionee's desire to acquire a 
proprietary interest in the Company and because of prospects of 
future long-term appreciation in the value of such shares.  
Optionee understands that such shares may not be registered under 
the Securities Act of 1933, as amended (the "Securities Act"), on 
the ground that the issuance of shares pursuant to the exercise 
of the Option is exempt under the Securities Act as not involving 
any public offering and that the Company's reliance on such 
exemption is in part based on the representation contained in 
this Paragraph 7; and that the statutory basis for such exemption 
would not be present if, notwithstanding such representation, the 
Optionee has in mind acquiring such shares for resale on the 
occurrence or nonoccurrence of some predetermined event.

<PAGE>

          8.  ADJUSTMENTS.  In the event there is any increase or 
decrease in the number of issued and outstanding shares of any 
class of Common Stock of the Company, or in the number of issued 
and outstanding shares of any class of Common Stock of the 
Company convertible into shares of any class of Common Stock of 
the Company, by reason of a stock dividend, stock split, reverse 
stock split, or similar adjustment or in the event of any change 
in the Company or in the issued and outstanding shares of the 
Common Stock of the Company by reason of a recapitalization, 
merger, consolidation, acquisition of stock or property, 
reorganization, liquidation, initial public offering, or other 
significant event affecting the Company or the issued and 
outstanding shares of its Common Stock, the number and kind of 
shares subject to the Option, the  exercise price applicable to 
the Option, and/or the consideration to be received upon the 
exercise of the Option shall be adjusted as deemed equitable by 
the Board.  In addition, the Option may be converted, at the sole 
discretion of the Board, into a new option to purchase such 
number or kind of shares of stock or other securities with 
appropriate adjustment of the purchase price per share as the 
Board deems appropriate to reflect such change; and the Board 
shall, in its sole discretion, have authority to provide, in 
appropriate cases for (i) waiver in whole or in part of any 
remaining restrictions or vesting requirements in connection with 
the Option and/or (ii) the conversion of the Option into cash or 
other property to be received in certain of the transactions 
specified above.  Any adjustment, waiver, conversion or the like 
carried out by the Board under this Paragraph shall be conclusive 
and binding for all purposes.

          9.  NO UNLAWFUL ISSUE OF SHARES.  If, in the opinion of 
the Company's counsel, the issue or sale of any shares of its 
stock hereunder pursuant to the Option shall not be lawful for 
any reason, including the inability of the Company to obtain, 
from any regulatory body having jurisdiction, authority deemed by 
such counsel to be necessary to such issuance or sale, the 
Company shall not be obligated to issue or sell any such shares 
pursuant to the exercise of the Option.

          10.  NO RIGHT TO CONTINUE RELATIONSHIP.  Neither the 
Plan nor the grant of any Option under the Plan shall confer upon 
any person any right to continue as a director of the Company or 
obligate the Company to nominate any director for re-election by 
the Company's stockholders.

<PAGE>

          11.  PROVISIONS OF THE PLAN CONTROL.  The Option is 
qualified in its entirety by reference to the provisions of the 
Plan under which it is granted, a copy of which may be examined 
by Optionee at the chief executive offices of the Company.  The 
Plan empowers the Board to make interpretations, rules and 
regulations thereunder, and in general provides that the 
determinations of the Board with respect to the Plan shall be 
binding upon Optionee.  The Plan is hereby incorporated herein by 
reference.

          12.  AUTHORITY OF BOARD.  As a condition of the 
granting of the Option, Optionee agrees, for himself, for the 
personal representative, administrator or other representative of 
Optionee's estate, and for the person or persons to whom the 
Option shall pass by will or by the laws of descent and 
distribution, that any dispute or disagreement which may arise 
under this Agreement shall be resolved by the Board in its sole 
discretion and that any interpretation by the Board of the terms 
of this Agreement and the Plan shall be final, binding and 
conclusive.

          13.  USE OF WORDS.  The use of words of the masculine 
gender in this Agreement is intended, wherever appropriate, the 
feminine or neuter gender and vice versa.

          14.  SUCCESSORS.  This Agreement shall be binding upon 
and inure to the benefit of any successor or successors of the 
Company.

          15.  TAXES.  The Company may require payment of or 
withhold any tax which it believes is required as a payment of 
the grant or exercise of the Option, and the Company may defer 
making delivery with respect to shares issuable hereunder until 
arrangements satisfactory to the Company have been made with 
respect to such withholding obligations.

          IN WITNESS WHEREOF, the parties hereto have executed 
this Agreement on the day, month and year first written above.

                              Catalyst International, Inc.


                              By: /s/ Douglas B. Coder 
                                  Douglas B. Coder, Chairman
                              _________________________________
                              __________________, Optionee

<PAGE>

EXHIBIT 23.1

                 CONSENT OF INDEPENDENT AUDITORS

     We consent to the incorporation by reference in the 
Registration Statement (Form S-8) pertaining to 1997 Directors 
Stock Option Plan of our report dated January 27, 1997 with 
respect to the financial statements of Catalyst International, 
Inc. included in its Annual Report (Form 10-KSB) for the year 
ended December 31, 1996,filed with the Securities and Exchange 
Commission.

                             Ernst & Young LLP

Milwaukee, Wisconsin
September 26, 1997
[{"type": "S-8", "sequence": "1", "secsgml_size_bytes": 41190}]
{"company-data": {"conformed-name": "CATALYST INTERNATIONAL INC", "cik": "0000915508", "assigned-sic": "7372", "irs-number": "391415889", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-36719", "film-number": "97688292"}, "business-address": {"street1": "8989 NORTH DEERWOOD DR", "city": "MILWAUKEE", "state": "WI", "zip": "53223", "phone": "4143626800"}, "mail-address": {"street1": "8989 NORTH DEERWOOD DRIVE", "city": "MILWAUKEE", "state": "WI", "zip": "53223"}}
Registration No.  33-97522C
             As filed with the Securities and Exchange Commission 
                                            on September 26, 1997
=================================================================
                SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                            FORM S-8
                     REGISTRATION STATEMENT
                             Under
                   The Securities Act of 1933

                  CATALYST INTERNATIONAL, INC.
        (Exact Name of Registrant as Specified in Charter)

        Delaware                        39-1415889
(State of Incorporation)     (I.R.S. Employer Identification No.)

8989 North Deerwood Drive, Milwaukee, WI               53223
(Address of Principal Executive Office)             (Zip Code)

                 -------------------------------
                 1997 DIRECTOR STOCK OPTION PLAN
                 -------------------------------

                   Sean P. McGowan, President
                  Catalyst International, Inc.
                   8989 North Deerwood Drive
                      Milwaukee, WI  53223
             (Name and address of agent for service)

                        (414) 362-6800
   (Telephone Number, including area code, of agent for service)

                        with a copy to

                       Mark T. Ehrmann
                     Godfrey & Kahn, S.C.
                    780 North Water Street
                     Milwaukee, WI  53202
                        (414) 273-3500

                               CALCULATION OF REGISTRATION FEE
=======================================================================================
Proposed          Proposed
Title of Securities  Amount to be  Maximum Offering  Maximum Aggregate  Amount of
to be registered     registered    price per share   offering price     registration fee
----------------------------------------------------------------------------------------
Common Stock,        250,000
$0.10 par value      shares        $6.06 (1)         $1,515,625         $522.62 (1)	
=======================================================================================
(1)  Registration fee calculated pursuant to Rule 457(h)(1) under the 
Securities Act of 1933, as amended.  The registration fee is based on 
the average of the high and low price of a share of Catalyst 
International, Inc. common stock on September 25, 1997 as reported by 
The Nasdaq Stock Market, Inc. on its website on September 25, 1997.
PAGE 2
                             PART II

         INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.  INCORPORATION OF DOCUMENTS BY REFERENCE

         The following documents are incorporated by reference in 
this Registration Statement:

               (a)  The Registrant's latest Annual Report on Form 
10-KSB filed March 26, 1997 pursuant to Section 13(a) or 15(d) of 
the Securities Exchange Act of 1934, as amended (the "Exchange 
Act").

               (b)  The Registrant's Form 8-K filed January 3, 
1997 pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 
Exchange Act.

               (c)  The Registrant's Amendment 2 to Form SR for 
the period ended February 15, 1997 filed February 25, 1997 
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange 
Act.

               (d)  The Registrant's Form 10-QSB for the period
ended March 31, 1997 filed May 15, 1997 pursuant to Sections 
13(a), 13(c), 14 and 15(d) of the Exchange Act.

               (e)  The Registrant's Form 10-QSB for the period 
ended June 30, 1997 filed August 15, 1997 pursuant to Sections 
13(a), 13(c), 14 and 15(d) of the Exchange Act.
Page 3

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

         Under Section 145 of the General Corporation Law of 
Delaware (the "DGCL"), the Registrant is in certain circumstances 
permitted, and in other circumstances may be required, to 
indemnify its directors, officers, employees and agents against 
certain expenses (including attorneys' fees) and other amounts 
paid in connection with certain threatened, pending or completed 
civil, criminal, administrative or investigative actions, suits 
or proceedings in which such persons were or are parties, or are 
threatened to be made parties, by reason of the fact that such 
persons were or are directors, officers, employees or agents of 
the Registrant.  Such section also permits the Registrant to 
purchase and maintain insurance on behalf of its directors, 
officers, employees or agents against liability which may be 
asserted against, or incurred by, such persons in their 
capacities as directors, officers, employees or agents of the 
Registrant, or which may arise out of their status as directors, 
officers, employees or agents of the Registrant whether or not 
the Registrant would have the power to indemnify such persons 
against such liability under the provisions of the DGCL.

         Under Article VIII of the Registrant's Amended and 
Restated Bylaws, the Registrant is required to indemnify and 
reimburse the expenses of all directors, officers, employees or 
agents to the maximum extent permitted by Section 145 of the DGCL 
or any successor provision thereto.

          The Registrant's Amended and Restated Certificate of 
Incorporation limits the personal liability of directors to the 
fullest extent permitted by the DGCL.

          The Registrant's officers and directors currently are 
covered by insurance protecting them from claims brought against 
them for acts or omissions related to the conduct of their 
duties, including, in certain circumstances, claims brought under 
the Securities Act.
Page 4
ITEM 8.  EXHIBITS

         4.1      Articles IV and V of the Amended and Restated
                  Certificate of Incorporation.*

         4.2      1997 Director Stock Option Plan of Catalyst
                  International, Inc.

         4.3      Form of Stock Option Agreement between the
                  Registrant and the holders of option under the
                  Registrant's 1997 Director Stock Option Plan.

         23.1     Consent of Ernst & Young LLP.
___________________
* Incorporated by reference to the Registration Statement on 
Form SB-2 (No. 33-97522C).

ITEM 9.  UNDERTAKINGS

         The Registrant hereby undertakes:

               (1)  To file, during any period in which offers or 
sales are being made, a post-effective amendment to this 
Registration Statement to include any material information with 
respect to the plan of distribution not previously disclosed in 
the Registration Statement or any material change to such 
information in the Registration Statement.

               (2)  That, for the purpose of determining any 
liability under the Securities Act of 1933 (the "Securities 
Act"), each such post-effective amendment shall be deemed to be a 
new registration statement relating to the securities offered 
therein, and the offering of such securities at that time shall 
be deemed to be the initial bona fide offering thereof.

               (3)  To remove the registration by means of a 
post-effective amendment any of the securities being registered 
which remain unsold at the termination of the offering.

               (4)  That, for the purpose of determining any 
liability under the Securities Act, each filing of the 
Registrant's annual report pursuant to Section 13(a) or Section 
15(d) of the Exchange Act that is incorporated by reference in 
the Registration Statement shall be deemed to be a new 
registration statement relating to the securities offered 
therein, and the offering of such securities at that time shall 
be deemed to be the initial bona fide offering thereof.
Page 5
               (5)  Insofar as indemnification for liabilities 
arising under the Securities Act may be permitted to directors, 
officers and controlling persons of the Registrant pursuant to 
the provisions described in Item 6 of this Registration Statement 
or otherwise, the Registrant has been advised that in the opinion 
of the Securities and Exchange Commission such indemnification is 
against public policy as expressed in the Securities Act and is, 
therefore, unenforceable.  In the event that a claim for 
indemnification against such liabilities (other than the payment 
by the Registrant of expenses incurred or paid by a director, 
officer or controlling person or the Registrant in the successful 
defense of any action, suit or proceeding) is asserted by such 
director, officer or controlling person in connection with the 
securities being registered, the Registrant will, unless in the 
opinion of its counsel that matter has been settled by 
controlling precedent, submit to a court of appropriate 
jurisdiction the question whether such indemnification by it is 
against public policy as expressed in the Securities Act and will 
be governed by the final adjudication of such issue.
PAGE 6
                            SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 
1933, as amended, the Registrant certifies that it has reasonable 
grounds to believe that it meets all of the requirements for 
filing on Form S-8 and has duly caused this Registration 
Statement to be signed on its behalf by the undersigned, 
thereunto duly authorized, in the City of Milwaukee, State of 
Wisconsin, on September 26, 1997.

                              Catalyst International, Inc.

                              By: /s/ Sean P. McGowan        
                                  Sean P. McGowan, President 
                                  and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, 
as amended, this Registration Statement has been signed by the 
following persons in the capacities and on the dates indicated.

Signatures                  Title                          Date

/s/ Douglas B. Coder        Chairman of the Board,         9/26/97
Douglas B. Coder            a Director

/s/ Sean P. McGowan         President, Chief	Executive     9/26/97
Sean P. McGowan             Officer and a Director
                            (Principal Executive Officer)

/s/ Thomas G. Hickinbotham  Vice President of Finance      9/26/97
Thomas G. Hickinbotham      & Administration; Chief
                            Financial Officer (Principal
                            Accounting Officer

/s/ Roy J. Carver           Director                       9/26/97
Roy J. Carver

/s/ Douglas B. Coder        Director                       9/26/97
Douglas B. Coder

/s/ James F. Goughenour     Director                       9/26/97
James F. Goughenour

/s/ Terrence L. Mealy       Director                       9/26/97
Terrence L. Mealy

/s/ Sean P. McGowan         Director                       9/26/97
Sean P. McGowan
EXHIBIT 4.2

                   CATALYST INTERNATIONAL, INC.
                 1997 DIRECTOR STOCK OPTION PLAN

                         ARTICLE I

                          PURPOSE

     The purpose of the 1997 Director Stock Option Plan (the 
"Plan") is to enable Catalyst International, Inc. (the "Company") 
to attract and retain outside directors and to strengthen the 
mutuality of interests between such directors and the Company's 
stockholders.

                         ARTICLE II

                        DEFINITIONS

     For purposes of the Plan, the following terms shall have the 
following meanings:

     2.1  "Board" shall mean the Board of Directors of the 
Company.

     2.2  "Code" shall mean the Internal Revenue Code of 1986, as 
amended, and rules and regulations under the Internal Revenue 
Code of 1986, as amended.

     2.3  "Common Stock" shall mean the Common Stock, par value 
$0.10 per share of the Company.

     2.4  "Effective Date" shall mean the date on which the Plan 
is approved by the affirmative vote of the holders of a majority 
of the outstanding shares of Common Stock present, or 
represented, and entitled to vote at a duly held meeting of the 
stockholders of the Company.

     2.5  "Eligible Director" shall mean any member of the Board 
who, on the date on which Options are to be granted, is not an 
officer or employee of the Company or any of the Company's 
subsidiaries, but shall exclude any such member of the Board who 
advises the Company in writing of his or her desire not to 
participate in the Plan.
2.6  "Fair Market Value" for purposes of the Plan, unless 
otherwise required by the Code, shall mean, of any date, the 
closing price of a share of Common Stock as reported on the 
principal national securities exchange on which the Common Stock 
is listed or admitted to trading, or, if not listed or traded on 
any such exchange, on the Nasdaq Stock Market, or, if not so 
listed or traded, the fair market value as determined by the 
Board, which determination shall be conclusive.

     2.7  "Optionee" shall mean an individual to whom a Stock 
Option has been granted under the Plan.

     2.8  "Stock Option" or "Option" shall mean any option to 
purchase shares of  Common Stock granted pursuant to Article VI.

                        ARTICLE III

                      ADMINISTRATION

     3.1  Administration.  The Plan shall be administered and 
interpreted by the Board.

     3.2  Guidelines.  Subject to Article VII, the Board shall 
have the authority to adopt, alter and repeal administrative 
rules, guidelines and practices governing the Plan as it, from 
time to time, deems advisable; to interpret the terms and 
provisions of the Plan and any Option granted under the Plan (and 
any related agreements); to make discretionary grants under the 
Plan; to accelerate vesting or exercise of an option; to 
determine the terms, conditions and restrictions of an option; to 
grant waivers of Plan terms; and to otherwise supervise the 
administration of the Plan.  The Board may correct any defect, 
supply any omission, conform the Plan to any change in law or 
regulation, or reconcile any inconsistency or ambiguity in the 
Plan or in any Option in the manner and to the extent it shall 
deem necessary to carry the Plan into effect.  Notwithstanding 
the foregoing, no action of the Board under this Section 3.2 
shall impair the rights of any Option without such person's 
consent, unless otherwise required by law.

     3.3  Decisions Final.  Any decision, interpretation or other 
action made or taken in good faith by the Board in accordance 
with the Plan shall be final, binding and conclusive on the 
Company, all members of the Board and their respective heirs, 
executors, administrators, successors and assigns.
3.4  Delegation.  The Board may delegate any or all of its 
administrative responsibilities under the Plan to officers or 
employees of the Company.

                          ARTICLE IV

                       SHARE LIMITATION

     4.1  Shares.  The maximum aggregate number of shares of 
Common Stock that may be issued under the Plan shall be 250,000 
shares of Common Stock, subject to any increase or decrease 
pursuant to Section 4.2.  If any Option granted under the Plan 
shall terminate or be canceled for any reason without having  
been exercised in full, the number of unpurchased shares shall 
again be available for the purpose of the Plan.

     4.2  Changes.  In the event of any merger, reorganization, 
consolidation, recapitalization, dividend (other than a regular 
cash dividend), stock split, or other  change in the capital 
structure of the Company affecting the Common Stock, such 
substitution or adjustment shall be made in the maximum aggregate 
number of shares that may be issued under the Plan, in the number 
of shares for which Stock Options are to be granted to Eligible 
Directors pursuant to Section 6.2 and in the number of shares 
subject to, and the option price of, outstanding Options as may 
be determined to be appropriate by the Board, in its sole 
discretion, provided that the number of shares subject to any 
Option shall always be a whole number.  In the event of a change 
in the capital structure of the Company, merger, consolidation, 
combination or exchange of shares or the like, as a result of 
which Common Stock is changed into another class, or securities 
of another person, cash or other property, the consideration to 
be received upon exercise shall be adjusted as deemed equitable 
by the Board in its sole discretion.

                             ARTICLE V

                            ELIGIBILITY

     5.1  Eligible Directors.  Only Eligible Directors shall be 
granted Options under the Plan.
ARTICLE VI

                           STOCK OPTIONS

     6.1  Options.  All Stock Options granted under the Plan 
shall be non-qualified stock options (i.e., options that do not 
qualify as incentive stock options under Section 422 of the 
Code).

     6.2  Grants.  Pursuant to the terms of the Plan contained 
herein, each Eligible Director shall be granted Stock Options on 
an ongoing basis in exchange for their agreement to serve on the 
Board and shall also be eligible to receive Stock Options in lieu 
of cash compensation for their fees for meetings of the Board, 
any committees thereof, for any other services performed by such 
Eligible Director on behalf of the Company or for any other such 
reason as determined by the Board from time to time, in its sole 
discretion.

     (a)  Initial Stock Option Grant; Anniversary Stock Option 
Grants.  On the Effective Date, each Eligible Director shall 
automatically be granted Stock Options to purchase 10,000 shares 
of Common Stock, and each Eligible Director who first becomes a 
member of the Board after the Effective Date shall automatically 
be granted Stock Options to purchase 10,000 shares of Common 
Stock on the date of his or her selection or election to the 
Board.  For as long as the Plan remains in effect, each Eligible 
Director shall also automatically be granted Stock Options to 
purchase 5,000 shares of Common Stock on each anniversary of the 
date of such initial grant (beginning on the second such 
anniversary), provided such person is an Eligible Director on 
such date.

     (b)  Additional Stock Option Grants.  Each Eligible Director 
shall also be entitled to receive options as the Board may 
determine in its sole discretion from time to time.

     (c)  Execution of Nonqualified Stock Option Agreements.  The 
Company shall effect the granting of Stock Options under the Plan 
by execution of Nonqualified Stock Option Agreements which shall 
contain, among other things, such representations, warranties and 
other terms and conditions as shall be necessary in the opinion 
of counsel of the Company to comply with all applicable Federal 
and state securities laws.

     6.3  Terms of Options.  Options granted under the Plan shall 
be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent 
with the terms of the Plan, as the Board shall, in its 
discretion, determine:

     (a)  Option Price.  The option price per share of Common 
Stock purchasable upon exercise of a Stock Option shall be equal 
to the Fair Market Value of a share of Common Stock on the date 
the Stock Option is granted.

     (b)  Method of Exercise.  Stock Options may be exercised in 
whole or in part at any time during the option term by giving 
written notice of exercise to the Secretary or Assistant 
Secretary of the Company, specifying the number of shares of 
Common Stock to be purchased.  Such notice shall be accompanied 
by payment in full of the option price and, if requested, by the 
representation described in Section 9.2.  The option price may be 
paid in cash or by check payable to the Company or in such other 
form as the Board deems acceptable. The Company shall have the 
right to delay the issuance or delivery of any shares of Common 
Stock under this Plan until (a) the completion of such 
registration or qualification of such shares under any applicable 
federal or state law, ruling or regulation as the Company shall 
determine to be necessary or advisable and (b) receipt from the 
Participant of such documents and information as the  Board may 
deem necessary or appropriate in connection with such 
registration or qualification.

     (c)  Non-transferability of Option.  Unless otherwise 
determined by the Board, no Stock Option shall be transferable by 
an Optionee otherwise than by will or by the laws of descent and 
distribution, to the extent consistent with the terms of the Plan 
and the Option, and all Stock Options shall be exercisable, 
during an Optionee's lifetime, only by the Optionee.

                          ARTICLE VII

                     TERMINATION OR AMENDMENT

     7.1  Termination or Amendment of the Plan.  The Board may at 
any time amend, discontinue or terminate the Plan in whole or in 
part (including any amendment deemed necessary to ensure that the 
Company may comply with any regulatory requirement referred to in 
Article IX); provided, however, that, unless otherwise required 
by law, the rights of an Optionee with respect to Options granted 
prior to such amendment, discontinuance or termination, may not 
be impaired without the consent of such Optionee.
7.2  Amendment of Options.  The Board may amend the terms of 
the Stock Options, prospectively or retroactively, but, subject 
to Article IV, no such amendment or other action by the Board 
shall impair the rights of any Optionee without the Optionee's 
consent.

                            ARTICLE VIII

                           UNFUNDED PLAN

     8.1  Unfunded Status of Plan.  The Plan is intended to 
constitute an "unfunded" plan for incentive compensation.  With 
respect to any payment not yet made to an Optionee by the 
Company, nothing contained herein shall give any such individual 
any rights that are greater than those of a general creditor of 
the Company.

                            ARTICLE IX

                        GENERAL PROVISIONS

     9.1  Nonassignment.  Except as otherwise provided in the 
plan or as otherwise determined by the Board, Options granted 
hereunder and the rights and privileges conferred thereby shall 
not be transferred, assigned, pledged or hypothecated in any way 
(whether by operation of law or otherwise), and shall not be 
subject to execution, attachment or similar process.  Upon any 
attempt to transfer, assign, pledge, hypothecate or otherwise 
dispose of such Option, right or privilege contrary to the 
provisions hereof, or upon the levy of any attachment or similar 
process thereon, such Option and the rights and privileges 
conferred thereby shall immediately terminate and the Option 
shall immediately be forfeited to the Company.

     9.2  Legend.  The Board may require each person purchasing 
shares upon exercise of an Option to represent to the Company in 
writing that the Optionee is acquiring the shares for investment 
only and not for release or with a view to distribution and to 
make such other representations as the Board may require.  The 
stock certificates representing such shares may include any 
legend which the Board deems appropriate to reflect any 
restrictions on transfer.
All certificates representing shares of Common Stock 
delivered under the Plan shall be subject to such stock transfer 
orders and other restrictions as the Board may deem advisable 
under the rules, regulations and other requirements of the 
Securities and Exchange Commission, any stock exchange upon which 
the Common Stock is then listed or traded or the Nasdaq Stock 
Market, any applicable Federal or state securities law, and any 
applicable corporate law, and the Board may cause a legend or 
legends to be put on any such certificates to make appropriate 
reference to such restrictions.

     9.3  Other Plans.  Nothing contained in the Plan shall 
prevent the Board from adopting other or additional compensation 
arrangements and such arrangements may be either generally 
applicable or applicable only in specific cases.

     9.4  No Right to Continue Relationship.  Neither the Plan 
nor the grant of any Option under the Plan shall confer upon any 
person any right to continue as a director of the company or 
obligate the Company to nominate any director for reelection by 
the company's stockholders.

     9.5  Listing and Other Conditions.  

     (a)  The issuance of any shares of Common Stock upon 
exercise of an Option shall be conditioned upon such shares being 
listed on a national securities exchange or on the Nasdaq Stock 
Market.  The Company shall have no obligation to issue such 
shares unless and until such shares are so listed, and the right 
to exercise any Option shall be suspended until such listing has 
been effected.

     (b)  If at any time counsel to the Company shall be of the 
opinion that any sale or delivery of shares of Common Stock upon 
exercise of an Option is or may in the circumstances be unlawful 
or result in the imposition of a material amount of excise taxes 
under the statutes, rules or regulations of any applicable 
jurisdiction, the Company shall have no obligation to make such 
sale or delivery, or to make any application or to effect or to 
maintain any qualification or registration under the Securities 
Act of 1933, as amended, or otherwise with respect to shares of 
Common Stock, and the right to exercise any Option shall be 
suspended until, in the opinion of such counsel, such sale or 
delivery shall be lawful or shall not result in the imposition of 
a material amount of excise taxes.
9.6  Governing Law.  The Plan and actions taken in 
connection herewith shall be governed and construed in accordance 
with the laws of the State of Wisconsin.

     9.7  Construction.  Wherever any words are used in the Plan 
in the masculine gender they shall be construed as though they 
were also used in the feminine gender in all cases where they 
would so apply, and wherever any words are used herein the 
singular form they shall be construed as though they were also 
used in the plural form in all cases where they would so apply.

     9.8  Liability of the Board.  No member of the Board nor any 
employee of the Company or any of it subsidiaries shall be liable 
for any act or action hereunder, whether of omission or 
commission, by any other member of the Board or employee or by 
any agent to whom duties in connection with the administration of 
the Plan have been delegated or, except in circumstances 
involving bad faith, gross negligence or fraud, for anything done 
or omitted to be cone by himself.

     9.9  Costs.  The Company shall bear all expenses incurred 
in administering the Plan, including expenses of issuing Common 
Stock upon the exercise of Options.

     9.10  Fractional Shares.  No fractional shares of stock 
shall be issued upon the exercise of any option and the Company 
shall not be under any obligation to compensate any Optionee in 
any way for any such fractional share.

     9.11  Severability.  If any part of the Plan shall be 
determined to be invalid or void in any respect, such 
determination shall not affect, impair, invalidate or nullify the 
remaining provisions of the Plan which shall continue in full 
force and effect.

     9.12  Successors.  The Plan shall be binding upon and inure 
to the benefit of any successor or successors of the Company.

     9.13  Headings.  Article and section headings contained in 
the Plan are included for convenience only and are not to be used 
in construing or interpreting the Plan.
ARTICLE X

                          TERM OF PLAN

     10.1  Effective Date.  The Plan shall be effective as of the 
Effective Date.

     10.2  Termination.  The Plan shall continue until terminated 
by the Board.  Termination of the Plan  shall not affect Options 
granted before such date, which shall continue to be exercisable, 
in accordance with the terms of the Plan, after the Plan 
terminates.
EXHIBIT 4.3

               NONQUALIFIED STOCK OPTION AGREEMENT

          THIS AGREEMENT is entered into as of the ____ day of 
_________ 199__, by and between ______________________ 
("Optionee") and Catalyst International, Inc., a Delaware 
corporation (the "Company").

          WHEREAS, the Company has established the 1997 Director 
Stock Option Plan (the "Plan") and, unless otherwise defined 
herein, all capitalized terms used in this Agreement shall have 
the meaning set forth in the Plan; and 

          WHEREAS, Optionee, as an Eligible Director under the 
Plan, has been granted a nonqualified stock option by the Board 
of Directors of the Optionee Company (the "Board") to purchase 
shares of the Company's $0.10 par value common stock (the "Common 
Stock") pursuant to the Plan; and

          WHEREAS, Optionee and the Company wish to enter into 
this Agreement setting forth the terms and conditions of 
Optionee's option.

          NOW, THEREFORE, in consideration of the mutual promises 
set forth below, Optionee and the Company agree as follows:

          1.  OPTION.  Pursuant to the Plan, Optionee is hereby 
granted the option to purchase _________ shares of the Common 
Stock on the terms and conditions set forth in this Agreement 
(the "Option").  It is intended that the Option shall constitute 
a nonqualified stock option which is not subject to the 
provisions of Section 422 of the Internal Revenue Code of 1986, 
as amended, and any successor thereto (the "Code").

          2.  EXERCISE PRICE.  The per share purchase price under
the Option shall be _________________ Dollars ($.), which is the 
Fair Market Value of the shares subject to the Option.

          3.  EXERCISE PERIOD. Subject to the provisions of 
Paragraphs 4 and 6, below, the Option, or any portion thereof, 
may be exercised by Optionee (i) only while Optionee is an 
Eligible Director or for three (3) months thereafter, (ii) only 
if such exercise will not violate any federal or state securities 
laws and (iii) no later than ten (10) years from the date of the 
grant.  Unless the Board establishes otherwise, or except as 
otherwise provided herein, the Option may be exercised as
follows: all or any portion of the shares covered hereby may be 
purchased at any time commencing on the date on which the Option 
has been granted (the "Grant Date").  Notwithstanding any other 
provisions hereof, the Option shall lapse and cannot be exercised 
as to any shares after ten (10) years from the Grant Date.

          4.  TERMINATION OF DIRECTORSHIP WHILE OPTIONS EXERCISABLE

          4.1  TERMINATION.  Unless otherwise determined by the 
Board, if, during the period Optionee has a present right to 
exercise the Option, Optionee's status as an Eligible Director is 
terminated, Optionee shall have three (3) months from the date of 
such termination to exercise the Option as to all or any part of 
the shares subject to the Option, subject to the condition that 
the Option shall not be exercisable if it would result in a 
violation of federal or state securities laws or subsequent to 
ten (10) years after the date of grant.  However, if such 
termination is due to the death of Optionee, the personal 
representative, administrator, or other representative of 
Optionee's estate, or the person or persons to whom the Option 
shall pass by will or under the laws of descent and distribution, 
shall have the right, for a period of three (3) months after the 
date of the Optionee's death, to exercise the Option, subject to 
the condition that the Option shall not be exercisable if it 
would result in a violation of federal or state securities laws 
or subsequent to ten (10) years after the date of grant.  To the 
extent the Option is not exercised within the three (3) month 
period following termination of Optionee's status as an Eligible 
Director, it shall lapse.

          4.2  EXTENSION OF EXERCISE PERIOD.  Paragraph 4.1 
notwithstanding, the Board may, in its sole discretion, extend 
the period permitted for exercise of the Option if allowable 
under applicable law.

          5.  TRANSFERABILITY OF OPTION.  The Option shall be 
nontransferable and shall, except as provided in Paragraph 4.1, 
above, be exercisable only by Optionee during the lifetime of 
Optionee.  Optionee shall have the right to transfer the Option 
upon Optionee's death, either by the terms of Optionee's will or 
under the laws of descent and distribution, subsequent to the 
limitations set forth in Paragraph 4.1, above, and all such 
transferees shall be subject to the same terms and conditions of 
the Plan and the Option as would Optionee.
6.  EXERCISE OF OPTION.  Subject to the limitations 
stated elsewhere in this Agreement or in the Plan, the Option 
will be exercisable as provided in Paragraph 3, above.  In no 
event will the Option be exercisable if it would result in a 
violation of federal or state securities laws or later than ten 
(10) years from the date of grant, unless otherwise extended.  
The Option shall be exercisable by delivering to the Secretary or 
Assistant Secretary of the Company at its principal business 
office a written notice designating the number of shares for 
which it is being exercised.  Payment in full for the number of 
shares for which the Option has been exercised must accompany 
said written notice.  No person shall acquire any rights or 
privileges of a shareholder of the Company with respect to any 
shares issued pursuant to the exercise of the Option until such 
shares have been duly issued.  The Company shall have the right 
to delay the issue or delivery of any shares of Common Stock to 
be delivered or issued hereunder until (a) the completion of such 
registration or qualification of such shares under federal or 
state law, ruling or regulation as the Company shall deem 
necessary or advisable, and (b) receipt from Optionee of such 
documents and information as the Company may deem necessary or 
appropriate in connection with such registration or qualification 
or the issuance of such shares of Common Stock hereunder.

          7.  SECURITIES LAW REPRESENTATION.  Optionee hereby 
represents and warrants with respect to the shares of Common 
Stock which may be acquired upon exercise of the Option that 
Optionee is acquiring such shares for Optionee's own account for 
investment and not with a view to, or for sale in connection 
with, the resale or distribution of any such shares.  Optionee 
understands that by "investment" it is meant that Optionee is 
acquiring such shares because of Optionee's desire to acquire a 
proprietary interest in the Company and because of prospects of 
future long-term appreciation in the value of such shares.  
Optionee understands that such shares may not be registered under 
the Securities Act of 1933, as amended (the "Securities Act"), on 
the ground that the issuance of shares pursuant to the exercise 
of the Option is exempt under the Securities Act as not involving 
any public offering and that the Company's reliance on such 
exemption is in part based on the representation contained in 
this Paragraph 7; and that the statutory basis for such exemption 
would not be present if, notwithstanding such representation, the 
Optionee has in mind acquiring such shares for resale on the 
occurrence or nonoccurrence of some predetermined event.
8.  ADJUSTMENTS.  In the event there is any increase or 
decrease in the number of issued and outstanding shares of any 
class of Common Stock of the Company, or in the number of issued 
and outstanding shares of any class of Common Stock of the 
Company convertible into shares of any class of Common Stock of 
the Company, by reason of a stock dividend, stock split, reverse 
stock split, or similar adjustment or in the event of any change 
in the Company or in the issued and outstanding shares of the 
Common Stock of the Company by reason of a recapitalization, 
merger, consolidation, acquisition of stock or property, 
reorganization, liquidation, initial public offering, or other 
significant event affecting the Company or the issued and 
outstanding shares of its Common Stock, the number and kind of 
shares subject to the Option, the  exercise price applicable to 
the Option, and/or the consideration to be received upon the 
exercise of the Option shall be adjusted as deemed equitable by 
the Board.  In addition, the Option may be converted, at the sole 
discretion of the Board, into a new option to purchase such 
number or kind of shares of stock or other securities with 
appropriate adjustment of the purchase price per share as the 
Board deems appropriate to reflect such change; and the Board 
shall, in its sole discretion, have authority to provide, in 
appropriate cases for (i) waiver in whole or in part of any 
remaining restrictions or vesting requirements in connection with 
the Option and/or (ii) the conversion of the Option into cash or 
other property to be received in certain of the transactions 
specified above.  Any adjustment, waiver, conversion or the like 
carried out by the Board under this Paragraph shall be conclusive 
and binding for all purposes.

          9.  NO UNLAWFUL ISSUE OF SHARES.  If, in the opinion of 
the Company's counsel, the issue or sale of any shares of its 
stock hereunder pursuant to the Option shall not be lawful for 
any reason, including the inability of the Company to obtain, 
from any regulatory body having jurisdiction, authority deemed by 
such counsel to be necessary to such issuance or sale, the 
Company shall not be obligated to issue or sell any such shares 
pursuant to the exercise of the Option.

          10.  NO RIGHT TO CONTINUE RELATIONSHIP.  Neither the 
Plan nor the grant of any Option under the Plan shall confer upon 
any person any right to continue as a director of the Company or 
obligate the Company to nominate any director for re-election by 
the Company's stockholders.
11.  PROVISIONS OF THE PLAN CONTROL.  The Option is 
qualified in its entirety by reference to the provisions of the 
Plan under which it is granted, a copy of which may be examined 
by Optionee at the chief executive offices of the Company.  The 
Plan empowers the Board to make interpretations, rules and 
regulations thereunder, and in general provides that the 
determinations of the Board with respect to the Plan shall be 
binding upon Optionee.  The Plan is hereby incorporated herein by 
reference.

          12.  AUTHORITY OF BOARD.  As a condition of the 
granting of the Option, Optionee agrees, for himself, for the 
personal representative, administrator or other representative of 
Optionee's estate, and for the person or persons to whom the 
Option shall pass by will or by the laws of descent and 
distribution, that any dispute or disagreement which may arise 
under this Agreement shall be resolved by the Board in its sole 
discretion and that any interpretation by the Board of the terms 
of this Agreement and the Plan shall be final, binding and 
conclusive.

          13.  USE OF WORDS.  The use of words of the masculine 
gender in this Agreement is intended, wherever appropriate, the 
feminine or neuter gender and vice versa.

          14.  SUCCESSORS.  This Agreement shall be binding upon 
and inure to the benefit of any successor or successors of the 
Company.

          15.  TAXES.  The Company may require payment of or 
withhold any tax which it believes is required as a payment of 
the grant or exercise of the Option, and the Company may defer 
making delivery with respect to shares issuable hereunder until 
arrangements satisfactory to the Company have been made with 
respect to such withholding obligations.

          IN WITNESS WHEREOF, the parties hereto have executed 
this Agreement on the day, month and year first written above.

                              Catalyst International, Inc.

                              By: /s/ Douglas B. Coder 
                                  Douglas B. Coder, Chairman
                              _________________________________
                              __________________, Optionee
EXHIBIT 23.1

                 CONSENT OF INDEPENDENT AUDITORS

     We consent to the incorporation by reference in the 
Registration Statement (Form S-8) pertaining to 1997 Directors 
Stock Option Plan of our report dated January 27, 1997 with 
respect to the financial statements of Catalyst International, 
Inc. included in its Annual Report (Form 10-KSB) for the year 
ended December 31, 1996,filed with the Securities and Exchange 
Commission.

                             Ernst & Young LLP

Milwaukee, Wisconsin
September 26, 1997