PHILADELPHIA SUBURBAN CORPORATION

                       DIVIDEND REINVESTMENT AND OPTIONAL
                               STOCK PURCHASE PLAN


                  Prospectus Supplement Dated July 26, 1996 to
                        Prospectus Dated January 26, 1996



                  This Prospectus Supplement amends certain information
contained in the Prospectus dated January 26, 1996 (the "Prospectus") of
Philadelphia Suburban Corporation (the "Company") by which shares of the
Company's Common Stock, par value $.50, are offered for sale pursuant to the
Company's Dividend Reinvestment and Optional Stock Purchase Plan. Each such
amendment is a result of the 3-for-2 split of the Common Stock effected on July
10, 1996.

                  1. The sixth word of the eighth paragraph of the cover page of
the Prospectus, "456,911" is hereby replaced in its entirety with "685,366."

                  2. The thirteenth word of the first line of the first
paragraph under "DESCRIPTION OF CAPITAL STOCK -- Authorized and Outstanding
Stock" on page 13 of the Prospectus, "21,770,819", is hereby replaced in its
entirety with "41,770,819."

                  3. The second word of the second line of the first paragraph
under "DESCRIPTION OF CAPITAL STOCK -- Authorized and Outstanding Stock" on page
13 of the Prospectus, "20,000,000", is hereby replaced in its entirety with
"40,000,000."

                  4. The first six words of the first line of the second
paragraph under "DESCRIPTION OF CAPITAL STOCK -- Authorized and Outstanding
Stock" on page 13 of the Prospectus, "As of December 31, 1995, 12,188,623", are
hereby replaced in their entirety by the following: "As of June 30, 1996,
12,558,184."

                  5. The last word of the second line of the second paragraph
under "DESCRIPTION OF CAPITAL STOCK -- Authorized and Outstanding Stock" on page
13 of the Prospectus, "527,519", is hereby replaced in its entirety with
"825,525."