SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549




                                    FORM 8-K

                                 CURRENT REPORT



                         PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

       DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): FEBRUARY 2, 1998



                       STEWART & STEVENSON SERVICES, INC.
             (Exact name of registrant as specified in its charter)


         Texas                         0-8493                74-1051605    
(State or other jurisdiction   (Commission File Number)   (I.R.S. Employer
     of incorporation)                                    Identification No.)


    2707 North Loop West
        Houston, Texas                                          77008
(Address of principal executive offices)                       (Zip code)


       Registrant's telephone number, including area code: (713) 868-7700


Item 2.  Disposition of Assets.

     On February 2, 1998, Stewart & Stevenson Services, Inc. (the "Company") and
General  Electric  Company ("GE")  completed the sale of the assets of Stewart &
Stevenson's  gas  turbine  division to GE for $600  million in cash,  subject to
adjustment.  The gas turbine  division  includes  the  packaging  of gas turbine
driven  equipment,  after-market  parts and service for turbine driven equipment
and the operation and  maintenance of power plants and petroleum  production and
processing facilities.  Stewart & Stevenson intends to use the proceeds from the
sale of the gas  turbine  division  to  reduce  outstanding  bank  indebtedness,
repurchase  shares of its common  stock and provide  funds for the growth of its
other lines of business.

Item 7.  Financial Statements.

     Substantially  the same  information  as that required by Item 7 (pro forma
financial  information)  has been previously  reported by Stewart & Stevenson in
its Form  10-Q  filed  with  the  Securities  and  Exchange  Commission  for the
quarterly period ended October 31, 1997.




         SIGNATURE

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.


                                             STEWART & STEVENSON SERVICES, INC.


                                              /s/ Robert L. Hargrave
Date:  February 16, 1998                     By:_______________________________
                                             Name:    Robert L. Hargrave
                                             Title:   Chief Executive Officer,
                                                      Chief Financial Officer 
                                                      and Treasurer



                                  EXHIBIT INDEX

     *2.1  Transaction  Agreement  dated  September  21,  1997  between  General
Electric  Company and Stewart & Stevenson  Services,  Inc.  (Exhibit 2.1 to 9/97
8-K). 

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

* Incorporated by reference.