<SUBMISSION>
<ACCESSION-NUMBER>0000914760-96-000248
<TYPE>4
<PUBLIC-DOCUMENT-COUNT>1
<FILING-DATE>19961112
<SROS>NONE
<SUBJECT-COMPANY>
<COMPANY-DATA>
<CONFORMED-NAME>ALLEGIANCE CORP
<CIK>0001017799
<ASSIGNED-SIC>8093
<IRS-NUMBER>364095179
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>4
<ACT>34
<FILE-NUMBER>001-11885
<FILM-NUMBER>96659368
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>ONE BARTER PARKWAY
<CITY>DEERFIELD
<STATE>IL
<ZIP>60015
<PHONE>8479483781
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>ONE BARTER PARKWAY
<CITY>DEERFIELD
<STATE>IL
<ZIP>60015
</MAIL-ADDRESS>
</SUBJECT-COMPANY>
<REPORTING-OWNER>
<COMPANY-DATA>
<CONFORMED-NAME>MCKEE PETER B
<CIK>0001023264
<ASSIGNED-SIC>
<RELATIONSHIP>OFFICER
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>4
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1450 WAUKEGAN ROAD
<STREET2>MCGAW PARK
<CITY>CHICAGO
<STATE>IL
<ZIP>60085
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1450 WAUKEGAN ROAD
<STREET2>MCGAW PARK
<CITY>CHICAGO
<STATE>IL
<ZIP>60085
</MAIL-ADDRESS>
</REPORTING-OWNER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<DESCRIPTION>FORM 4 - 10/96
<TEXT>

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 4
STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP
( ) Check this box if no longer subject to Section 16.
Form 4 or Form 5 obligations may continue. See Instructions 1(b).
1. Name and Address of Reporting Person
   McKee, Peter B.
   1430 Waukegan Road
   McGaw Park, IL  60085
   USA
2. Issuer Name and Ticker or Trading Symbol
   Allegiance Corporation
   AEH
3. IRS or Social Security Number of Reporting Person (Voluntary)
   
4. Statement for Month/Year
   10/96
5. If Amendment, Date of Original (Month/Year)
   
6. Relationship of Reporting Person(s) to Issuer (Check all applicable)
   ( ) Director ( ) 10% Owner (X) Officer (give title below) ( ) Other
   (specify below)
   Sr. Vice President and Chief Financial Officer
7. Individual or Joint/Group Filing (Check Applicable Line)
   (X) Form filed by One Reporting Person
   ( ) Form filed by More than One Reporting Person
<TABLE>
<CAPTION>
___________________________________________________________________________________________________________________________________
 Table I -- Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned                                                 |
___________________________________________________________________________________________________________________________________|
1. Title of Security       |2.    |3.    |4.Securities Acquired (A)         |5.Amount of        |6.Dir |7.Nature of Indirect       |
                           | Transaction |  or Disposed of (D)              |  Securities       |ect   |  Beneficial Ownership     |
                           |      |      |                                  |  Beneficially     |(D)or |                           |
                           |      |    | |                  | A/|           |  Owned at         |Indir |                           |
                           | Date |Code|V|    Amount        | D |    Price  |  End of Month     |ect(I)|                           |
___________________________________________________________________________________________________________________________________|
<S>                        <C>    <C>  <C><C>               <C> <C>         <C>                 <C>    <C>
Common Stock (and Series A |      |    | |                  |   |           |860*               |D     |                           |
Junior Participating Prefer|      |    | |                  |   |           |                   |      |                           |
red Stock Purchase         |      |    | |                  |   |           |                   |      |                           |
-----------------------------------------------------------------------------------------------------------------------------------|
Rights currently attached t|      |    | |                  |   |           |120*               |I     |(1)                        |
o and trading with the Comm|      |    | |                  |   |           |                   |      |                           |
on Stock)                  |      |    | |                  |   |           |                   |      |                           |
-----------------------------------------------------------------------------------------------------------------------------------|
                           |      |    | |                  |   |           |100*               |I     |(2)                        |
-----------------------------------------------------------------------------------------------------------------------------------|
___________________________________________________________________________________________________________________________________|
<CAPTION>
___________________________________________________________________________________________________________________________________
 Table II -- Derivative Securitites Acquired, Disposed of, or Beneficially Owned                                                   |
___________________________________________________________________________________________________________________________________|
1.Title of Derivative |2.Con-  |3.   |4.    |5.Number of De |6.Date Exer|7.Title and Amount  |8.Price|9.Number    |10.|11.Nature of|
  Security            |version |Transaction | rivative Secu |cisable and|  of Underlying     |of Deri|of Deriva   |Dir|Indirect    |
                      |or Exer |     |      | rities Acqui  |Expiration |  Securities        |vative |tive        |ect|Beneficial  |
                      |cise    |     |      | red(A) or Dis |Date(Month/|                    |Secu   |Securities  |(D)|Ownership   |
                      |Price of|     |      | posed of(D)   |Day/Year)  |                    |rity   |Benefi      |or |            |
                      |Deriva- |     |      |               |Date |Expir|                    |       |ficially    |Ind|            |
                      |tive    |     |      |           | A/|Exer-|ation|   Title and Number |       |Owned at    |ire|            |
                      |Secu-   |     |    | |           | D |cisa-|Date |   of Shares        |       |End of      |ct |            |
                      |rity    |Date |Code|V|  Amount   |   |ble  |     |                    |       |Month       |(I)|            |
___________________________________________________________________________________________________________________________________|
<S>                   <C>      <C>   <C>  <C><C>        <C> <C>   <C>   <C>          <C>     <C>     <C>          <C> <C>
Options (Rights to Buy|$18.38  |10/10|A   |V|164,000    |A  |(3)  |10/10|Common Stock|164,000|       |164,000     |D  |            |
)                     |        |/96  |    | |           |   |     |/06  |            |       |       |            |   |            |
-----------------------------------------------------------------------------------------------------------------------------------|
                      |        |     |    | |           |   |     |     |            |       |       |            |   |            |
___________________________________________________________________________________________________________________________________|
</TABLE>
Explanation of Responses:
*   Received October 1, 1996 pursuant to the spin-off of Allegiance Corporation 
common shares as a dividend on 
Baxter International Inc. common 
shares.
(1) Indirect ownership is as custodian for a minor 
child.
(2) Indirect ownership is as 
trustee.
(3) Date exercisable is 
1997-1999.
SIGNATURE OF REPORTING PERSON
Peter B. McKee
DATE
November 8, 1996

</TEXT>
</DOCUMENT>
</SUBMISSION>
