<PAGE>
 
    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 9, 1998
                                                    REGISTRATION NO. 333-_______
================================================================================

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                          __________________________
                                   FORM S-8
                            REGISTRATION STATEMENT
                                     UNDER
                          THE SECURITIES ACT OF 1933
                          --------------------------
                                      
                            ITERATED SYSTEMS, INC.
            (Exact name of registrant as specified in its charter)
                                        
                GEORGIA                               58-1741516
    (State or other jurisdiction of                (I.R.S. Employer
     incorporation or organization)              Identification Number)
 

                              3525 PIEDMONT ROAD
                       SEVEN PIEDMONT CENTER, SUITE 600
                         ATLANTA, GEORGIA  30305-1530
                                (404) 264-8000
   (Address of registrant's principal executive offices, including zip code
                  and telephone number, including area code)

                          --------------------------

             1994 AMENDED AND RESTATED DIRECTORS STOCK OPTION PLAN
                  1994 AMENDED AND RESTATED STOCK OPTION PLAN
                           (Full title of the Plans)

 
            JOHN C. BACON                                  COPY TO:
       CHIEF EXECUTIVE OFFICER                        JOHN C. YATES, ESQ.
        ITERATED SYSTEMS, INC.                   ROSEMARIE A. THURSTON, ESQ.
    SEVEN PIEDMONT CENTER, SUITE 600           MORRIS, MANNING & MARTIN, L.L.P.
          3525 PIEDMONT ROAD                    1600 ATLANTA FINANCIAL CENTER
     ATLANTA, GEORGIA  30305-1530                 3343 PEACHTREE ROAD, N.E.
           (404) 264-8000                           ATLANTA, GEORGIA 30326
                                                        (404) 233-7000

           (Name, address, including zip code, and telephone number,
                  including area code, of agent for service)

                          --------------------------

                        CALCULATION OF REGISTRATION FEE
<TABLE> 
===================================================================================================================================
<CAPTION>
<S>                                  <C>                       <C>                <C>                 <C> 
                                                                   PROPOSED 
                                                               MAXIMUM OFFERING    PROPOSED MAXIMUM 
                                     AMOUNT TO BE REGISTERED    PRICE PER SHARE   AGGREGATE OFFERING 
TITLE OF SECURITIES TO BE REGISTERED          (1)                     (2)             PRICE (2)       AMOUNT OF REGISTRATION FEE

----------------------------------------------------------------------------------------------------------------------------------- 

Common Stock, $.01 par value per share    3,580,000 shares        $ .672             $ 2,405,760                $ 668.80
====================================================================================================================================

</TABLE>

  (1) Represents 180,000 shares of Common Stock reserved for issuance by
      Registrant under the Iterated Systems, Inc. 1994 Amended and Restated
      Directors Stock Option Plan (the "1994 Directors Plan") and 3,400,000
      shares of Common Stock reserved for issuance by Registrant under the
      Iterated Systems, Inc. 1994 Amended and Restated Stock Option Plan (the
      "1994 Plan"). (The 1994 Directors Plan and the 1994 Plan are collectively
      referred to herein as the "Plans").
  (2) Estimated solely for the purpose of calculating the registration fee
      pursuant to Rule 457(c) and (h) of the Securities Act of 1933, as amended
      on the basis of the closing selling price per share of the Common Stock on
      the Oslo Stock Exchange on December 7, 1998.

<PAGE>
 
                                    PART I
                                        

             INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS


     The documents containing the information specified in Part I will be sent
or given to employees and/or directors of Iterated Systems, Inc. (the
"Registrant") as specified by Rule 428(b)(1) of the Securities Act of 1933, as
amended (the "Securities Act"). In accordance with the instructions of Part I of
Form S-8, such documents will not be filed with the Securities and Exchange
Commission (the "Commission") either as part of this Registration Statement or
as prospectuses or prospectus supplements pursuant to Rule 424 of the Securities
Act. These documents and the documents incorporated by reference pursuant to
Item 3 of Part II of this Registration Statement, taken together, constitute the
prospectus as required by Section 10(a) of the Securities Act.

                                        
                                    PART II
                                        

              INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
                                        

ITEM 3.  INCORPORATION OF DOCUMENTS BY REFERENCE.

     The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:

     (a)  The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 10 filed with the Commission on April
24, 1998 (as amended by Form 10/A filed with the Commission on June 18, 1998,
July 24, 1998 and September 24, 1998) (File No. 0-24087);

     (b)  The Registrant's Quarterly Reports on Form 10-Q for the quarters ended
June 30, 1998 and September 30, 1998 filed with the Commission on August 13,
1998 and November 13, 1998, respectively (File No. 0-24087); and

     (c)  The Current Report on Form 8-K, filed with the Commission on August
20, 1998 (File No. 0-24087).

     All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14, and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to the filing of a post-effective amendment
indicating that all securities offered under the Plans have been sold or
deregistering all securities then remaining unsold thereunder, shall be deemed
to be incorporated herein by reference and shall be deemed to be a part hereof
from the date of filing thereof.

     Any statement contained in any document incorporated or deemed to be
incorporated by reference into the Prospectus shall be deemed to be modified or
superseded for purposes thereof to the extent that a statement contained therein
or in any other subsequently filed document that is also incorporated or deemed
to be incorporated therein by reference modifies or supersedes such statement.
Any such statement so modified or superseded shall now be deemed, accepted as so
modified or superseded, to constitute a part of this Registration Statement.

     The Company hereby undertakes to provide without charge to each person to
whom this Prospectus has been delivered, upon the written or oral request of any
such person, a copy of any and all of the foregoing documents incorporated
herein by reference (other than exhibits to such documents which are not
specifically incorporated by reference into the information that this Prospectus
incorporates). Written or telephone requests should be directed to Attn: Haines
H. Hargrett, Chief Financial Officer, Iterated Systems, Inc., 3525 Piedmont
Road, Seven Piedmont Center, Suite 600, Atlanta, Georgia 30305-1530, telephone
number: (404) 264-8000.

ITEM 4.  DESCRIPTION OF SECURITIES.

     Not applicable.

                                      -2-
<PAGE>
 
ITEM 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL.

     Legal matters in connection with the shares of Common Stock offered hereby
were passed upon by Morris, Manning & Martin, L.L.P., Atlanta, Georgia.

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     The Registrant's Amended and Restated Articles of Incorporation eliminate
the personal liability of directors to the Registrant or its shareholders for
monetary damages for breaches of such directors' duty of care or other duties as
a director, except with respect to liability for (i) any appropriation, in
violation of the director's duties, of any business opportunity of the
Registrant, (ii) acts or omissions that involve intentional misconduct or a
knowing violation of law, (iii) liability under Section 14-2-832 (or any
successor provision or redesignation thereof) of the Georgia Business
Corporation Code, or (iv) any transaction from which the director received an
improper personal benefit.

     In addition, the Registrant's Restated Bylaws provide broad indemnification
rights to (i) directors, and (ii) officers, employees, or agents of the
Registrant as directed by the directors.  The Registrant's Restated Bylaws
provide that the Registrant shall indemnify each of its directors and officers
to the extent that he or she is or was a party, or is threatened to be made a
party, to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative by reason of the fact
that such person is or was a director, officer, employee or agent of the
Registrant, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with such action, suit or proceeding;
provided, however, that no indemnification shall be made for (i) any
appropriation by a director, in violation of that director's duties, of any
business opportunity of the Registrant, (ii) acts or omissions which involve
intentional misconduct or a knowing violation of law, (iii) any liability under
Section 14-2-832 of the Georgia Business Corporation Code, which relates to
unlawful payments of dividends and unlawful stock repurchases and redemptions,
or (iv) any transaction from which he or she derived an improper personal
benefit.

     These provisions of the Amended and Restated Articles of Incorporation and
Restated Bylaws will limit the remedies available to a shareholder who is
dissatisfied with a decision of the Board of Directors that is protected by
these provisions.

ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED.

     Not applicable.

ITEM 8.  EXHIBITS.

     The following exhibits are filed with or incorporated by reference into
this Registration Statement pursuant to Item 601 of Regulation S-K:


<TABLE>
<CAPTION>

Exhibit No.                            Description
-----------                            -----------
<S>           <C>                       
   4.1        Amended and Restated Articles of Incorporation of Iterated
              Systems, Inc. (incorporated by reference to Exhibit 3.1 to the
              Registrant's Registration Statement on Form 10, File Number 0-
              24087)

   4.2        Restated Bylaws of Iterated Systems, Inc. (incorporated by
              reference to Exhibit 3.2 to the Registrant's Registration
              Statement on Form 10, File Number 0-24087)
              
   5.1        Opinion of Morris, Manning & Martin, L.L.P. as to the legality
              of the securities being registered
              
  23.2        Consent of Morris, Manning & Martin, L.L.P. (included in Exhibit
              5.1)
</TABLE>

                                      -3-
<PAGE>
 
  24.1        Power of Attorney (included on signature page)

                                      -4-
<PAGE>
 
ITEM 9.  UNDERTAKINGS.


     (a) The undersigned 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:

             (i)   To include any prospectus required by Section 10(a)(3) of the
                   Securities Act;

             (ii)  To reflect in the prospectus any facts or events arising
                   after the effective date of the Registration Statement (or
                   the most recent post-effective amendment thereof) which,
                   individually or in the aggregate, represent a fundamental
                   change in the information set forth in the Registration
                   Statement;

             (iii) 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;

     provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
     the registration statement is on Form S-3 or Form S-8, and the information
     required to be included in a post-effective amendment by those paragraphs
     is contained in periodic reports filed with or furnished to the Commission
     by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange
     Act that are incorporated by reference in the Registration Statement.

         (2) That, for the purpose of determining any liability under 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 from the registration by means of a post-effective
     amendment any of the securities being registered which remain unsold at the
     termination of the offering.

     (b) The undersigned Registrant hereby undertakes that, for purposes 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
Securities Exchange Act of 1934 (the "Exchange Act") (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to 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.

     (c) 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 foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the 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 of 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 the 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.

                                      -5-
<PAGE>
 
                                  SIGNATURES
                                  ----------

     Pursuant to the requirements of the Securities Act, the undersigned
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 Atlanta, State of Georgia, on this the 18th day of
November, 1998.

                                        ITERATED SYSTEMS, INC.


                                        By:/s/  John C. Bacon
                                           ------------------
                                           John C. Bacon
                                           President and Chief Executive Officer

                                        
                               POWER OF ATTORNEY
                               -----------------


     KNOW ALL MEN BY THESE PRESENTS, that each person whose signatures appears
below constitutes and appoints Haines H. Hargrett as his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign a Registration Statement relating to the registration of
shares of common stock on Form S-8 and to sign any and all amendments (including
post effective amendments) to the Registration Statement, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Commission, granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing required or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent, or his substitute, could lawfully do or cause
to be done by virtue hereof.

     Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.


/s/ John C. Bacon              President,                   November 11, 1998
-----------------              Chief Executive Officer 
John C. Bacon                  and Director
                               (Principal Executive Officer)             
               

/s/ Asmund R. Slogedal         Director                     November 11, 1998
----------------------                                             
Asmund R. Slogedal


/s/ Haines H. Hargrett         Chief Financial Officer      November 11, 1998
----------------------         (Principal Financial and 
Haines H. Hargrett             Accounting Officer)


/s/ John R. Festa              Director                     November 12, 1998
-----------------                                                    
John R. Festa


/s/ Michael F. Barnsley        Director                     November 18, 1998
------------------------ 
Michael F. Barnsley      
                         
/s/ Terje Mikalsen             Director                     November 11, 1998
------------------------ 
Terje Mikalsen           

                                      -6-
<PAGE>
 
/s/ Alan D. Sloan               Director                     November 18, 1998
-------------------------
Alan D. Sloan


/s/ James D. Robinson, III      Director                     November 11, 1998
--------------------------                                             
James D. Robinson, III

                                      -7-
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{"company-data": {"conformed-name": "ITERATED SYSTEMS INC", "cik": "0000924546", "assigned-sic": "7370", "irs-number": "581741516", "state-of-incorporation": "GA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-68593", "film-number": "98766475"}, "business-address": {"street1": "3525 PIEDMONT ROAD", "street2": "SEVEN PIEDMONT CENTER SUITE 600", "city": "ATLANTA", "state": "GA", "zip": "30305", "phone": "4042648000"}, "mail-address": {"street1": "3525 PIEDMONT ROAD", "street2": "SEVEN PIEDMONT CENTER SUITE 600", "city": "ATLANTA", "state": "GA", "zip": "30305"}}
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 9, 1998
                                                    REGISTRATION NO. 333-_______
================================================================================

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                          __________________________
                                   FORM S-8
                            REGISTRATION STATEMENT
                                     UNDER
                          THE SECURITIES ACT OF 1933
                          --------------------------
                                      
                            ITERATED SYSTEMS, INC.
            (Exact name of registrant as specified in its charter)
                                        
                GEORGIA                               58-1741516
    (State or other jurisdiction of                (I.R.S. Employer
     incorporation or organization)              Identification Number)
 

                              3525 PIEDMONT ROAD
                       SEVEN PIEDMONT CENTER, SUITE 600
                         ATLANTA, GEORGIA  30305-1530
                                (404) 264-8000
   (Address of registrant's principal executive offices, including zip code
                  and telephone number, including area code)

                          --------------------------

             1994 AMENDED AND RESTATED DIRECTORS STOCK OPTION PLAN
                  1994 AMENDED AND RESTATED STOCK OPTION PLAN
                           (Full title of the Plans)

 
            JOHN C. BACON                                  COPY TO:
       CHIEF EXECUTIVE OFFICER                        JOHN C. YATES, ESQ.
        ITERATED SYSTEMS, INC.                   ROSEMARIE A. THURSTON, ESQ.
    SEVEN PIEDMONT CENTER, SUITE 600           MORRIS, MANNING & MARTIN, L.L.P.
          3525 PIEDMONT ROAD                    1600 ATLANTA FINANCIAL CENTER
     ATLANTA, GEORGIA  30305-1530                 3343 PEACHTREE ROAD, N.E.
           (404) 264-8000                           ATLANTA, GEORGIA 30326
                                                        (404) 233-7000

           (Name, address, including zip code, and telephone number,
                  including area code, of agent for service)

                          --------------------------

                        CALCULATION OF REGISTRATION FEE
 
===================================================================================================================================
PROPOSED 
                                                               MAXIMUM OFFERING    PROPOSED MAXIMUM 
                                     AMOUNT TO BE REGISTERED    PRICE PER SHARE   AGGREGATE OFFERING 
TITLE OF SECURITIES TO BE REGISTERED          (1)                     (2)             PRICE (2)       AMOUNT OF REGISTRATION FEE

----------------------------------------------------------------------------------------------------------------------------------- 

Common Stock, $.01 par value per share    3,580,000 shares        $ .672             $ 2,405,760                $ 668.80
====================================================================================================================================
(1) Represents 180,000 shares of Common Stock reserved for issuance by
      Registrant under the Iterated Systems, Inc. 1994 Amended and Restated
      Directors Stock Option Plan (the "1994 Directors Plan") and 3,400,000
      shares of Common Stock reserved for issuance by Registrant under the
      Iterated Systems, Inc. 1994 Amended and Restated Stock Option Plan (the
      "1994 Plan"). (The 1994 Directors Plan and the 1994 Plan are collectively
      referred to herein as the "Plans").
  (2) Estimated solely for the purpose of calculating the registration fee
      pursuant to Rule 457(c) and (h) of the Securities Act of 1933, as amended
      on the basis of the closing selling price per share of the Common Stock on
      the Oslo Stock Exchange on December 7, 1998.
PART I
                                        

             INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

     The documents containing the information specified in Part I will be sent
or given to employees and/or directors of Iterated Systems, Inc. (the
"Registrant") as specified by Rule 428(b)(1) of the Securities Act of 1933, as
amended (the "Securities Act"). In accordance with the instructions of Part I of
Form S-8, such documents will not be filed with the Securities and Exchange
Commission (the "Commission") either as part of this Registration Statement or
as prospectuses or prospectus supplements pursuant to Rule 424 of the Securities
Act. These documents and the documents incorporated by reference pursuant to
Item 3 of Part II of this Registration Statement, taken together, constitute the
prospectus as required by Section 10(a) of the Securities Act.

                                        
                                    PART II
                                        

              INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
                                        

ITEM 3.  INCORPORATION OF DOCUMENTS BY REFERENCE.

     The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:

     (a)  The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 10 filed with the Commission on April
24, 1998 (as amended by Form 10/A filed with the Commission on June 18, 1998,
July 24, 1998 and September 24, 1998) (File No. 0-24087);

     (b)  The Registrant's Quarterly Reports on Form 10-Q for the quarters ended
June 30, 1998 and September 30, 1998 filed with the Commission on August 13,
1998 and November 13, 1998, respectively (File No. 0-24087); and

     (c)  The Current Report on Form 8-K, filed with the Commission on August
20, 1998 (File No. 0-24087).

     All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14, and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to the filing of a post-effective amendment
indicating that all securities offered under the Plans have been sold or
deregistering all securities then remaining unsold thereunder, shall be deemed
to be incorporated herein by reference and shall be deemed to be a part hereof
from the date of filing thereof.

     Any statement contained in any document incorporated or deemed to be
incorporated by reference into the Prospectus shall be deemed to be modified or
superseded for purposes thereof to the extent that a statement contained therein
or in any other subsequently filed document that is also incorporated or deemed
to be incorporated therein by reference modifies or supersedes such statement.
Any such statement so modified or superseded shall now be deemed, accepted as so
modified or superseded, to constitute a part of this Registration Statement.

     The Company hereby undertakes to provide without charge to each person to
whom this Prospectus has been delivered, upon the written or oral request of any
such person, a copy of any and all of the foregoing documents incorporated
herein by reference (other than exhibits to such documents which are not
specifically incorporated by reference into the information that this Prospectus
incorporates). Written or telephone requests should be directed to Attn: Haines
H. Hargrett, Chief Financial Officer, Iterated Systems, Inc., 3525 Piedmont
Road, Seven Piedmont Center, Suite 600, Atlanta, Georgia 30305-1530, telephone
number: (404) 264-8000.

ITEM 4.  DESCRIPTION OF SECURITIES.

     Not applicable.

                                      -2-
ITEM 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL.

     Legal matters in connection with the shares of Common Stock offered hereby
were passed upon by Morris, Manning & Martin, L.L.P., Atlanta, Georgia.

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     The Registrant's Amended and Restated Articles of Incorporation eliminate
the personal liability of directors to the Registrant or its shareholders for
monetary damages for breaches of such directors' duty of care or other duties as
a director, except with respect to liability for (i) any appropriation, in
violation of the director's duties, of any business opportunity of the
Registrant, (ii) acts or omissions that involve intentional misconduct or a
knowing violation of law, (iii) liability under Section 14-2-832 (or any
successor provision or redesignation thereof) of the Georgia Business
Corporation Code, or (iv) any transaction from which the director received an
improper personal benefit.

     In addition, the Registrant's Restated Bylaws provide broad indemnification
rights to (i) directors, and (ii) officers, employees, or agents of the
Registrant as directed by the directors.  The Registrant's Restated Bylaws
provide that the Registrant shall indemnify each of its directors and officers
to the extent that he or she is or was a party, or is threatened to be made a
party, to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative by reason of the fact
that such person is or was a director, officer, employee or agent of the
Registrant, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with such action, suit or proceeding;
provided, however, that no indemnification shall be made for (i) any
appropriation by a director, in violation of that director's duties, of any
business opportunity of the Registrant, (ii) acts or omissions which involve
intentional misconduct or a knowing violation of law, (iii) any liability under
Section 14-2-832 of the Georgia Business Corporation Code, which relates to
unlawful payments of dividends and unlawful stock repurchases and redemptions,
or (iv) any transaction from which he or she derived an improper personal
benefit.

     These provisions of the Amended and Restated Articles of Incorporation and
Restated Bylaws will limit the remedies available to a shareholder who is
dissatisfied with a decision of the Board of Directors that is protected by
these provisions.

ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED.

     Not applicable.

ITEM 8.  EXHIBITS.

     The following exhibits are filed with or incorporated by reference into
this Registration Statement pursuant to Item 601 of Regulation S-K:
Exhibit No.                            Description
-----------                            -----------
4.1        Amended and Restated Articles of Incorporation of Iterated
              Systems, Inc. (incorporated by reference to Exhibit 3.1 to the
              Registrant's Registration Statement on Form 10, File Number 0-
              24087)

   4.2        Restated Bylaws of Iterated Systems, Inc. (incorporated by
              reference to Exhibit 3.2 to the Registrant's Registration
              Statement on Form 10, File Number 0-24087)
              
   5.1        Opinion of Morris, Manning & Martin, L.L.P. as to the legality
              of the securities being registered
              
  23.2        Consent of Morris, Manning & Martin, L.L.P. (included in Exhibit
              5.1)
-3-
24.1        Power of Attorney (included on signature page)

                                      -4-
ITEM 9.  UNDERTAKINGS.

     (a) The undersigned 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:

             (i)   To include any prospectus required by Section 10(a)(3) of the
                   Securities Act;

             (ii)  To reflect in the prospectus any facts or events arising
                   after the effective date of the Registration Statement (or
                   the most recent post-effective amendment thereof) which,
                   individually or in the aggregate, represent a fundamental
                   change in the information set forth in the Registration
                   Statement;

             (iii) 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;

     provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
     the registration statement is on Form S-3 or Form S-8, and the information
     required to be included in a post-effective amendment by those paragraphs
     is contained in periodic reports filed with or furnished to the Commission
     by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange
     Act that are incorporated by reference in the Registration Statement.

         (2) That, for the purpose of determining any liability under 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 from the registration by means of a post-effective
     amendment any of the securities being registered which remain unsold at the
     termination of the offering.

     (b) The undersigned Registrant hereby undertakes that, for purposes 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
Securities Exchange Act of 1934 (the "Exchange Act") (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to 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.

     (c) 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 foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the 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 of 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 the 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.

                                      -5-
SIGNATURES
                                  ----------

     Pursuant to the requirements of the Securities Act, the undersigned
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 Atlanta, State of Georgia, on this the 18th day of
November, 1998.

                                        ITERATED SYSTEMS, INC.

                                        By:/s/  John C. Bacon
                                           ------------------
                                           John C. Bacon
                                           President and Chief Executive Officer

                                        
                               POWER OF ATTORNEY
                               -----------------

     KNOW ALL MEN BY THESE PRESENTS, that each person whose signatures appears
below constitutes and appoints Haines H. Hargrett as his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign a Registration Statement relating to the registration of
shares of common stock on Form S-8 and to sign any and all amendments (including
post effective amendments) to the Registration Statement, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Commission, granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing required or necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent, or his substitute, could lawfully do or cause
to be done by virtue hereof.

     Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.

/s/ John C. Bacon              President,                   November 11, 1998
-----------------              Chief Executive Officer 
John C. Bacon                  and Director
                               (Principal Executive Officer)             
               

/s/ Asmund R. Slogedal         Director                     November 11, 1998
----------------------                                             
Asmund R. Slogedal

/s/ Haines H. Hargrett         Chief Financial Officer      November 11, 1998
----------------------         (Principal Financial and 
Haines H. Hargrett             Accounting Officer)

/s/ John R. Festa              Director                     November 12, 1998
-----------------                                                    
John R. Festa

/s/ Michael F. Barnsley        Director                     November 18, 1998
------------------------ 
Michael F. Barnsley      
                         
/s/ Terje Mikalsen             Director                     November 11, 1998
------------------------ 
Terje Mikalsen           

                                      -6-
/s/ Alan D. Sloan               Director                     November 18, 1998
-------------------------
Alan D. Sloan

/s/ James D. Robinson, III      Director                     November 11, 1998
--------------------------                                             
James D. Robinson, III

                                      -7-