FILED PURSUANT TO RULE 424(B)(3)
                                            REGISTRATION STATEMENT NO. 333-41133
 
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 3, 1998
 
PROSPECTUS SUPPLEMENT NO. 1                 REGISTRATION STATEMENT NO. 333-41133
 
(TO PROSPECTUS DATED DECEMBER 4, 1997)
 
                                5,592,000 SHARES
 
                                INTERLEAF, INC.
 
                                  COMMON STOCK
 
    This Prospectus Supplement supplements information contained in a Prospectus
dated December 4, 1997 of Interleaf, Inc. (the "Company") relating to the shares
of Common Stock issuable upon conversion of the Series 6% Convertible Preferred
Stock, $.10 par value per share, held by the Selling Shareholders. This
Prospectus Supplement is not complete without, and may not be delivered or
utilized except in connection with, the Prospectus, including any amendments or
supplements thereto. Capitalized terms used herein but not defined have the
meanings assigned to such terms in the Prospectus.
 
    The following table supplements the information set forth in the Prospectus
under the caption "Selling Shareholders" with respect to the Selling Shareholder
named below and shares beneficially owned by such Selling Shareholder that may
be offered pursuant to the Prospectus:
 


                                                                                        NUMBER OF SHARES OF COMMON
NAME OF SELLING            NUMBER OF SHARES OF COMMON   NUMBER OF SHARES OF COMMON         STOCK OWNED AFTER THE
  SHAREHOLDER               STOCK BENEFICIALLY OWNED        STOCK BEING OFFERED                  OFFERING
- -------------------------  ---------------------------  ---------------------------  ---------------------------------
                                                                            
Crisostomo B. Garcia
  Trust (1)..............             150,000                      150,000                          -0-

 
- ------------------------
 
(1) The shares of Common Stock issuable upon conversion of the 6% Convertible
    Preferred Stock held by the Crisostomo B. Garcia Trust (the "Trust") were
    registered under the Company's Registration Statement on Form S-3 filed on
    November 26, 1997 (the "Registration Statement"). However, the name of the
    Trust was inadvertently not included in the Selling Shareholders list in the
    Prospectus included in the Registration Statement.
 
           THIS DATE OF THIS PROSPECTUS SUPPLEMENT IS AUGUST 3, 1998.