Filed Pursuant
                                                                to Rule 497(e)
                                                                File Nos.
                                                                2-28049
                                                                811-01586

                            THE KAUFMANN FUND, INC.
                       140 East 45th Street, 43rd Floor
                           New York, New York 10017
                             Tel:  (212) 922-0123
                             Fax:  (212) 661-2266

                        Supplement dated March 23, 1998
                        to Prospectus dated May 1, 1997

     In  response  to  reports  in  the  press  over  the  last  several  days
speculating on the  future ownership of Edgemont  Asset Management Corporation
("Edgemont"), the Fund's investment  advisor, today Lawrence Auriana  and Hans
P.  Utsch,  co-founders of  Edgemont  and portfolio  co-managers of  the Fund,
denied in a press release news reports that they were planning to retire.

     Mr. Auriana stated  in the press release:   "We are as  committed as ever
to  the long-term success  of the  Fund, and have absolutely  no intentions of
retiring in the foreseeable future.   We can confirm the reports that  we have
been  in discussions  to  sell or  merge  our management  company.    Any such
transaction, however, would only  take place with a firm  which would preserve
our unique investment style and culture  and be able to contribute  additional
resources to  better serve Kaufmann shareholders.   Hans and I  plan to manage
the Kaufmann Fund for at least the next five years."

     In a  supplemental letter sent to  shareholders of the  Fund, dated March
23, 1998, Messrs. Auriana and  Utsch stated further: "Over the past  few years
we  have  been approached  by  a  number  of parties  expressing  interest  in
acquiring strategic  ownership of Edgemont.   We recently  began to  engage in
discussions  with a small  number of  these parties.  The  decision to explore
such a transaction was not prompted  by thoughts of either of us retiring.  In
fact, the opposite is true.  We both  plan to remain with Edgemont and  manage
the continued growth of the Kaufmann Fund for at least the next five years.

     We  currently anticipate  that such  discussions will  continue, although
there can  be no  assurance that  a transaction  will take  place.   Any  such
transaction  would take  place  only  with a  firm  expected  to preserve  our
management  style and keep  our investment  staff and  other key  personnel in
place.   In other words, any  such firm would  not want to disturb  the Fund's
success; it would  want to see  the Fund grow.   In fact, our  discussions are
limited to firms  who would enhance  our marketing and support  activities and
allow us to remain focused  on investing while delivering improved services to
shareholders."

     Any  such  transaction  would be  subject  to the  approval  of  both the
disinterested directors and the  shareholders of the Fund of a  new investment
advisory  agreement  to be  in  effect  following  such  transaction,  and  in
connection   with  any   such  approval,   the  disinterested   directors  and
shareholders  would  be  provided  with  detailed  information  regarding  the
transaction.