Sebastian J. Fama, 58, a retired Treasury Department official, died of cancer Friday at Suburban Hospital in Bethesda.

Born in New York City, he earned a bachelor's degree from the City College of New York and a master's degree from Benjamin Franklin University in Washington.

During World War II, he served with the Army in Europe.

After the war, he worked for the Post Office Department here before joining the Treasury Department in 1952. He was director of the divisions of deposits and investments, deputy commissioner of accounts and director of the division of government financial operations, before retiring in 1975.

While serving as director of the financial operations division in 1971, he received the Treasury Department's Meritorious Service Award for out-standing managerial achievement. The award was for his work in helping to modernize the government's central accounts and reports.

He was a member of the Catholic Church of the Little Flower in Bethesda.

Mr. Fama is survived by his wife, Santa Ann and two daughters, Rosemary A. and Ellen M. all of the home in Bethesda; two sons, Joseph T. of Rockville and James P. of Baltimore, his mother, Melchiorra Fama, and a sister, Mary Greco, both of New York City, and a brother, Thomas, of Baldwin, N.Y.