Dr. Alice Waterhouse Shannon, 71, a retired Public Health Service administrator, died Friday of cardiac arrest in Johns Hopkins Hospital in Baltimore.

Dr. Shannon, who lived in Bethesda, was the wife of Dr. James A. Shannon, former director of the National Institutes of Health.

She was born in New York, N.Y., and attended Mount St. Vincent College and New York University Medical College, from which she graduated with a medical degree in 1929.

She served as an intern at Bellevue Hospital, then joined the staff of the Bellevue Department of medicine as a researcher, teacher and clinical, specializing in diabetes and cardiovascular disease.

She entered Columbia University School of Public Health, earning a master's degree in public health in 1941. In 1947, she was named chief of the Bureau of Adult Hygiene in New York City.

In 1950, Dr. Shannon was commissioned as an officer in the Public Health Service. She was stationed in the Washington area in the central office of the Bureau of State Services.

As medical adviser to the director of the Center for Health Statistics there, she worked on standardizing the health examination for a statistically valid sample of the U.S. population under the National Health Survey. The survey is designed to provide an accurate basis for assessing the nation's health.

Dr. Shannon retired in 1965. She and her husband lived in New York City from 1970 to 1975, when they returned to Bethesda.

Dr. Shannon is survived by her husband, of the home; a daughter, Dr. Alice M. Fuchs of Portland, Ore: a son, James Anthony of Rockville; a sister, Mary Dreyer of Sacramento, Calif.; a brother, Paul Waterhouse of New York City, and 10 grandchildren.