U.S. Securities and Exchange Commission
Washington, D.C. 20549

FORM 12B-25
NOTIFICATION OF LATE FILING
ANNUAL REPORT ON FORM 10-K
For the fiscal year ended July 31, 1997

PART I - REGISTRANT INFORMATION
FULL NAME OF REGISTRANT: VTEL Corporation
ADDRESS OF PRINCIPAL EXECUTIVE OFFICE: 108 Wild Basin Road
CITY, STATE AND ZIP CODE: Austin, Texas 78746
PART II - RULES 12B-25(B) AND (E)

The Annual Report on Form 10-K will be filed on or before the fifteenth calendar
day following the prescribed due date.

PART III - NARRATIVE

The Annual  Report on Form 10-K for the year  ended  July 31,  1997 could not be
filed within the  prescribed  period due to issues related to the merger between
VTEL  Corporation  and  Compression  Labs,  Incorporated on May 23, 1997 and the
preparation  of an  Annual  Report on Form 10-K  that  combines  the  historical
financial statements of the two companies.

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PART IV - OTHER INFORMATION

Name and telephone number of person to contact in regard to this notification

Paul Ruiz - Corporate Controller - (512) 314-2682

All other periodic  reports required under section 13 or 15(d) of the Securities
and Exchange Act of 1934 have been filed.

It is anticipated  that a significant  change in results of operations  from the
corresponding  period for the last fiscal year will be reflected by the earnings
statement  included in the subject  report as follows (note that the Company has
already  filed all  required  information  through  April 30,  1997 in  previous
filings with the Securities and Exchange Commission):

On May 23, 1997,  shareholders of VTEL and  Compression  Labs,  Incorporated,  a
Delaware  corporation  ("CLI"),  approved the merger (the "Merger") of VTEL-Sub,
Inc., a Delaware corporation and direct wholly-owned subsidiary of VTEL ("Merger
Sub"),  with and into CLI,  pursuant  to an  Agreement  and Plan of  Merger  and
Reorganization (the "Merger Agreement"), with CLI becoming a direct wholly-owned
subsidiary of VTEL.  As a result of the Merger,  (a) the  outstanding  shares of
CLI's  common  stock,  par value  $.001 per share  ("CLI  Common  Stock"),  were
converted  into the right to receive  0.46 shares of common  stock of VTEL,  par
value  $.01 per share  ("VTEL  Common  Stock"),  per share of CLI  Common  Stock
converted (or cash in lieu of fractional shares otherwise deliverable in respect
thereof),  and (b) the outstanding  shares of CLI Series C Preferred  Stock, par
value $.001 per share ("CLI Preferred Stock"),  were converted into the right to
receive  3.15  shares of VTEL  Common  Stock per  share of CLI  Preferred  Stock
converted (or cash in lieu of fractional shares otherwise deliverable in respect
thereof).  The CLI shares were exchanged for a total of 8,424,741 shares of VTEL
Common Stock. The acquisition was accounted for as a pooling of interests.

The Company  generated  net losses from  continuing  operations of $4.8 million,
$17.3 and $44.3 million for the years ended  December 31, 1994 and 1995 and July
31, 1997 and $4.3 million and $18.5  million for the seven months ended July 31,
1995 and  1996.  The trend of  increasing  net  losses  during  the years  ended
December  31, 1994 and 1995 is the net effect of a trend of periodic  net income
generated by VTEL, on a stand-alone  basis,  during these  periods,  offset by a
trend of significant  increasing  losses incurred by the Company's  wholly-owned
subsidiary.  The periodic net income generated by VTEL, on a stand-alone  basis,
during these periods was due to improved gross margins and growth in revenues at
a higher rate than growth in  operating  expenses.  The  Company's  wholly-owned
subsidiary, CLI, experienced increasing net losses during these periods due to a
trend of  declining  revenues  without  a  proportionate  decline  in  operating
expenses and due to charges taken for  settlement of litigation  during the year
ended December 31, 1995.

The increase in net losses incurred from the seven months ended July 31, 1995 to
the seven

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months ended July 31, 1996 is the result of  independent  charges  taken by both
VTEL and its wholly-owned  subsidiary,  CLI, related to restructuring activities
and the effect of CLI's  decision  to  discontinue  operations  relating  to its
broadcast products division in November 1995.

The loss incurred during the year ended July 31, 1997 is primarily the result of
merger and other expenses of $29.4 million,  consisting of transaction  expenses
of $5.7 million and restructuring and other expenses of $23.7 million,  recorded
during the year ended July 31, 1997.

Transaction expenses include legal, accounting,  investment banking and printing
fees.   Restructuring   and  other  expenses  include  amounts  related  to  the
consolidation  of duplicate  facilities;  severance  costs relating to workforce
reductions;  impairment  charges  related to certain  intangibles,  property and
equipment, receivables and inventories; and discharge and accruals of contingent
liabilities.

VTEL Corporation has caused this  notification to be signed on its behalf by the
undersigned thereunto duly authorized.

DATE : 10/29/97          BY: /S/ RODNEY S. BOND, Chief Financial Officer
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