SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549

                                SCHEDULE 13G

                 Under the Securities Exchange Act of 1934
                          (Amendment No.       )*
                                         ------

                      GRAY COMMUNICATIONS SYSTEMS, INC.
                     ----------------------------------
                              (Name of Issuer)

                     Class B Common Stock, No Par Value
                     ----------------------------------
                       (Title of Class of Securities)

                                389190208
                     ----------------------------------
                              (CUSIP Number)

   Check the  following box if a fee is being paid with this statement / /.  (A
fee is not required only if the filing person:  (1) has a previous statement on
file reporting  beneficial  ownership of more than five percent of the class of
securities  described in Item 1;  and (2)  has  filed no  amendment  subsequent
thereto reporting  beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)

   *The remainder of  this cover  page  shall  be  filled  out  for a reporting
person's  initial  filing on this  form with  respect to the  subject  class of
securities,  and for any  subsequent  amendment  containing  information  which
would alter the disclosures provided in a prior page.

   The information  required in the  remainder of this  cover page shall not be
deemed to be "filed"  for the purpose of  Section 18 of the Securities Exchange
Act of 1934  ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other  provisions of the Act  (however, see
the Notes).


                        (Continued on following page(s))


                              Page 1 of  9  Pages
                                        --- 



CUSIP No. 389190208                   13G                 Page  2  of  9  Pages
          ---------                                            ---    --- 

- -------------------------------------------------------------------------------
 (1) Names of Reporting Persons.  S.S. or I.R.S. Identification Nos. of Above
     Persons

SAMUEL R. SHAPIRO, S.S. 259 58 4489
- -------------------------------------------------------------------------------
 (2) Check the Appropriate Box if a Member     (a)  / /
     of a Group*                               (b)  / /
- -------------------------------------------------------------------------------
 (3) SEC Use Only

- -------------------------------------------------------------------------------
 (4) Citizenship or Place of Organization

SAMUEL R. SHAPIRO IS A UNITED STATES CITIZEN
- -------------------------------------------------------------------------------
Number of Shares              (5) Sole Voting
 Beneficially                       Power              O   4000
 Owned by                    --------------------------------------------------
 Each Reporting               (6) Shared Voting
 Person With                        Power              O
                             --------------------------------------------------
                              (7) Sole Dispositive
                                    Power              O   4000
                             --------------------------------------------------
                              (8) Shared Dispositive
                                    Power              O
- -------------------------------------------------------------------------------
 (9) Aggregate Amount Beneficially Owned by Each Reporting Person
                  O   4000
- -------------------------------------------------------------------------------
(10) Check Box if the Aggregate Amount in Row (9) Excludes Certain Shares*

- -------------------------------------------------------------------------------
(11) Percent of Class Represented by Amount in Row (9)
                  O   0.1%
- -------------------------------------------------------------------------------
(12) Type of Reporting Person*
                  IN
- -------------------------------------------------------------------------------
                    *SEE INSTRUCTION BEFORE FILLING OUT!



CUSIP No. 389190208                   13G                 Page  3  of  9  Pages
          ---------                                            ---    --- 

- -------------------------------------------------------------------------------
 (1) Names of Reporting Persons.  S.S. or I.R.S. Identification Nos. of Above
     Persons

SHAPIRO CAPITAL MANAGEMENT COMPANY, INC. ID NO. 58-1830170
- -------------------------------------------------------------------------------
 (2) Check the Appropriate Box if a Member     (a)  / /
     of a Group*                               (b)  / /
- -------------------------------------------------------------------------------
 (3) SEC Use Only

- -------------------------------------------------------------------------------
 (4) Citizenship or Place of Organization

SHAPIRO CAPITAL MANAGEMENT COMPANY, INC. IS A GEORGIA CORPORATION
- -------------------------------------------------------------------------------
Number of Shares              (5) Sole Voting
 Beneficially                       Power              602,745
 Owned by                    --------------------------------------------------
 Each Reporting               (6) Shared Voting
 Person With                        Power              O
                             --------------------------------------------------
                              (7) Sole Dispositive
                                    Power              602,745
                             --------------------------------------------------
                              (8) Shared Dispositive
                                    Power              O
- -------------------------------------------------------------------------------
 (9) Aggregate Amount Beneficially Owned by Each Reporting Person
                  602,745
- -------------------------------------------------------------------------------
(10) Check Box if the Aggregate Amount in Row (9) Excludes Certain Shares*

- -------------------------------------------------------------------------------
(11) Percent of Class Represented by Amount in Row (9)
                  18.05%
- -------------------------------------------------------------------------------
(12) Type of Reporting Person*
                  IN
- -------------------------------------------------------------------------------
                    *SEE INSTRUCTION BEFORE FILLING OUT!



CUSIP No. 389190208                   13G                 Page  4  of  9  Pages
          ---------                                            ---    --- 

- -------------------------------------------------------------------------------
 (1) Names of Reporting Persons.  S.S. or I.R.S. Identification Nos. of Above
     Persons

THE KALEIDOSCOPE FUND, LP I.D. NO. 58-2126127
- -------------------------------------------------------------------------------
 (2) Check the Appropriate Box if a Member     (a)  / /
     of a Group*                               (b)  / /
- -------------------------------------------------------------------------------
 (3) SEC Use Only

- -------------------------------------------------------------------------------
 (4) Citizenship or Place of Organization

THE KALEIDOSCOPE FUND IS A GEORGIA LIMITED PARTNERSHIP
- -------------------------------------------------------------------------------
Number of Shares              (5) Sole Voting
 Beneficially                       Power            180,900
 Owned by                    --------------------------------------------------
 Each Reporting               (6) Shared Voting 
 Person With                        Power                  O
                             --------------------------------------------------
                              (7) Sole Dispositive
                                    Power            180,900
                             --------------------------------------------------
                              (8) Shared Dispositive
                                    Power                  O
- -------------------------------------------------------------------------------
 (9) Aggregate Amount Beneficially Owned by Each Reporting Person
                    180,900
- -------------------------------------------------------------------------------
(10) Check Box if the Aggregate Amount in Row (9) Excludes Certain Shares*

- -------------------------------------------------------------------------------
(11) Percent of Class Represented by Amount in Row (9)
                       5.42%
- -------------------------------------------------------------------------------
(12) Type of Reporting Person*
                  IN
- -------------------------------------------------------------------------------
                    *SEE INSTRUCTION BEFORE FILLING OUT!



                                                          Page  5  of  9  Pages
                                                               ---    --- 


ITEM 1(A).  NAME OF ISSUER
             GRAY COMMUNICATIONS SYSTEMS, INC.
- -------------------------------------------------------------------------------


ITEM 1(B).  ADDRESS OF ISSUER'S PRINCIPAL EXECUTIVE OFFICES
             126 NORTH WASHINGTON STREET - PO BOX 48, ALBANY, GA 31702-0048
- -------------------------------------------------------------------------------


ITEM 2(A).  NAME OF PERSON(S) FILING
                SAMUEL R. SHAPIRO, SHAPIRO CAPITAL MANAGEMENT COMPANY, INC.
                THE KALEIDOSCOPE FUND, L.P.
- -------------------------------------------------------------------------------


ITEM 2(B).  ADDRESS OF PRINCIPAL BUSINESS OFFICE OR, IF NONE, RESIDENCE
                3060 PEACHTREE ROAD, N.W., ATLANTA, GEORGIA 30305
- -------------------------------------------------------------------------------


ITEM 2(C).  CITIZENSHIP
                SAMUEL R. SHAPIRO - U.S. CITIZEN
                SHAPIRO CAPITAL MANAGEMENT COMPANY, INC. - GEORGIA CORPORATION
                THE KALEIDOSCOPE FUND IS A GEORGIA LIMITED PARTNERSHIP
- -------------------------------------------------------------------------------


ITEM 2(D).  TITLE OF CLASS OF SECURITIES
                CLASS B COMMON STOCK - No Par Value
- -------------------------------------------------------------------------------


ITEM 2(E).  CUSIP NUMBER
                389190128
- -------------------------------------------------------------------------------


ITEM 3.  IF THIS STATEMENT IS FILED PURSUANT TO RULES 13D-1(B), OR 13D-2(B),
  CHECK WHETHER THE PERSON FILING IS A

    (a) / / Broker or Dealer registered under Section 15 of the Act

    (b) / / Bank as defined in section 3(a)(6) of the Act

    (c) / / Insurance Company as defined in section 3(a)(19) of the Act

    (d) / / Investment Company registered under section 8 of the Investment
            Company Act

    (e) /X/ Investment Adviser registered under section 203 of the Investment
            Advisers Act of 1940

    (f) / / Employee Benefit Plan, Pension Fund which is subject to the
            provisions of the Employee Retirement Income Security Act of 1974
            or Endowment Fund; see Rule 13d-1(b)(1)(ii)(F)

    (g) / / Parent Holding Company, in accordance with Rule 13d-1(b)(ii)(G)
            (Note: See Item 7)

    (h) / / Group, in accordance with Rule 13d-1(b)(1)(ii)(H)


                                                          Page  6  of  9  Pages
                                                               ---    --- 

ITEM 4.  OWNERSHIP

    (a) Amount Beneficially Owned:
               787,645
    ---------------------------------------------------------------------------

    (b) Percent of Class:
               23.58%
    ---------------------------------------------------------------------------

    (c) Number of shares as to which such person has:

          (i) sole power to vote or to direct the vote
              787,645
              -----------------------------------------------------------------
         (ii) shared power to vote or to direct the vote
              O
              -----------------------------------------------------------------
        (iii) sole power to dispose or to direct the disposition of
              787,645
              -----------------------------------------------------------------
         (iv) shared power to dispose or to direct the disposition of
              O
              -----------------------------------------------------------------

ITEM 5.  OWNERSHIP OF FIVE PERCENT OR LESS OF A CLASS

If this statement is being filed to report the fact that as of the date hereof
the reporting person has ceased to be the beneficial owner of more than five
percent of the class of securities, check the following.  / /


ITEM 6.  OWNERSHIP OF MORE THAN FIVE PERCENT ON BEHALF OF ANOTHER PERSON
         See attached
- -------------------------------------------------------------------------------


ITEM 7.  IDENTIFICATION AND CLASSIFICATION OF THE SUBSIDIARY WHICH ACQUIRED
  THE SECURITY BEING REPORTED ON BY THE PARENT HOLDING COMPANY
         N/A
- -------------------------------------------------------------------------------


ITEM 8.  IDENTIFICATION AND CLASSIFICATION OF MEMBERS OF THE GROUP
         N/A
- -------------------------------------------------------------------------------


ITEM 9.  NOTICE OF DISSOLUTION OF GROUP
         N/A
- -------------------------------------------------------------------------------


ITEM 10. CERTIFICATION

    By signing below I certify  that,  to the best of my  knowledge and belief,
the  securities  referred to above  were  acquired in the  ordinary  course  of
business and were not acquired for the purpose of and do not have the effect of
changing or  influencing the  control of the issuer of such securities and were
not acquired in  connection with or as a participant in any  transaction having
such purposes or effect.

                                  SIGNATURE

    After  reasonable  inquiry and to the  best of my  knowledge and  belief, I
certify that the  information set forth in this statement is true, complete and
correct.

                                       ----------------------------------------
                                       (Date)

                                       ----------------------------------------
                                       (Signature)

                                       ----------------------------------------
                                       (Name/Title)



                                                          Page  7  of  9  Pages
                                                               ---    --- 

INTRODUCTORY NOTE
This schedule 13G is being filed by Shapiro Capital Management Company, Inc., 
an investment adviser under the Investment Advisers Act of 1940. One or more 
of Shapiro Capital Management Company, Inc.'s advisory clients is the legal 
owner of the securities covered by this statement. Pursuant to the investment 
advisory agreements with its clients, Shapiro Capital Management Company, 
Inc. has the authority to direct the investments of its advisory clients, and 
consequently to authorize the disposition of the Issuer's shares.

This schedule 13G is also being filed by Samuel R. Shapiro. Mr. Shapiro is 
the president, a director and majority shareholder of Shapiro Capital 
Management Company, Inc., in which capacity he exercises dispositive power 
over the securities reported herein by Shapiro Capital Management Company, 
Inc. Mr. Shapiro, therefore, may be deemed to have indirect beneficial 
ownership over such securities. Unless otherwise indicated herein, Mr. 
Shapiro has no interest in dividends or proceeds from the sale of such 
securities, owns no such securities for his own account and disclaims 
beneficial ownership of all the securities reported herein by the Shapiro 
Capital Management Company, Inc.

The aggregate number and percentage of the Issuer's securities to which this 
schedule 13G relates is 787,645 representing 23.58% of the Issuer's 
outstanding shares. The beneficial ownership reported by Samuel R. Shapiro 
and Shapiro Capital Management Company, Inc. relates to the same shares of 
the Issuer in which each such reporting person has a separate beneficial 
interest.

As of December 31, 1996, Mr. Shapiro owned no shares of the Issuer for his 
own account. He may be deemed to be the beneficial owner of 4,000 shares 
owned by his wife and 783,645 shares of the Issuer as disclosed in Item 4-c-
of the Schedule 13G.

Item 6. Samuel R. Shapiro is the president, director and majority shareholder 
of Shapiro Capital Management Company, Inc. He owns no shares of the Issuer 
for his individual account, but is deemed to have beneficial ownership of the 
shares reported on the Schedule 13G by virtue of ownership of shares by his 
wife and his affiliation with Shapiro Capital Management Company, Inc.

Shapiro Capital Management Company, Inc. is an Investment Advisor registered 
under the Investment Advisers Act of 1940 and some of its clients have the 
right to receive dividends from the securities which it manages, however, no 
such client has an interest relating to more than five percent of the class 
to which this Schedule 13G applies.

Item 10. Certification.

Date: January 9, 1997

                           SAMUEL R. SHAPIRO
                           Samuel R. Shapiro, in his
                           individual capacity and as



                                                          Page  8  of  9  Pages
                                                               ---    --- 

                           president of Shapiro Capital Management Company, Inc.

                          AGREEMENT RELATIVE TO THE
                          FILING OF SCHEDULE 13G

         THIS AGREEMENT, made as of the 9th day of January, 1997, by and 
between Shapiro Capital Management Company, Inc., a Georgia corporation (an 
investment adviser registered with under the Section 203 of the Investment 
Advisers Act of 1940) (the "Adviser"), and Samuel R. Shapiro, president, 
director and majority shareholder of the Adviser ("Affiliated Person");

                          WITNESSETH:

         WHEREAS, the Affiliated Person and the Adviser are both persons 
required, pursuant to 17 C.F.R.240.13d-1, to file a statement containing the 
information required by Schedule 13G with respect to the following Issuer:

                      GRAY COMMUNICATIONS SYSTEMS, INC.
                           CUSIP NO. 389190208; and

         WHEREAS, the Affiliated Person and the Adviser are each individually 
eligible to use Schedule 13G; and

         WHEREAS, the Affiliated Person and the Adviser are each responsible 
for the timely filing of said Schedule 13G and any amendments thereto, and 
for the completion and accuracy of the information concerning each, but not 
on the behalf of any other, unless any knows or has reason to know that the 
information concerning any other is inaccurate; and

         WHEREAS, the Schedule 13G attached hereto identifies all the persons 
and contains the required information with regard to the Affiliated Person 
and the Adviser so that it may be filed with the appropriate persons, 
agencies and exchanges on behalf of each of them; and

         WHEREAS, the Affiliated Person and the Adviser desire to file the 
Schedule 13G attached hereto on behalf of each of them.

         NOW, THEREFORE, in consideration of the mutual agreements and 
covenants set forth herein, the parties hereto agree that the Schedule 13G 
attached hereto shall be executed by the Affiliated Person, in his individual 
capacity and as president of the Adviser, and filed with the appropriate 
persons, agencies and exchanges, on behalf of both of them.

         IN WITNESS WHEREOF, the undersigned have executed this Agreement 
Relative to the Filing of Schedule 13G as of the day, month and year first 
above written.


                           SAMUEL R. SHAPIRO



                                                          Page  9  of  9  Pages
                                                               ---    --- 


                           Samuel R. Shapiro, in his
                           individual capacity and as
                           president of Shapiro Capital Management Company, Inc.