Negotiators for the Potomac Electric Power Co. and its 3,300 striking union members made their first substantial progress toward resolving the four-day-old walkout during a marathon bargaining session that was continuing early today, according to federal mediators and negotiators.

"Meaningful negotiations continue," federal mediator Charles Scott said during a late afternoon break in the negotiations at the headquarters of the Federal Mediation and Conciliation Service in Northwest Washington.

Pepco, union and federal mediation officials were still meeting at 1 a.m. today and some FMCS officials said the two sides appeared headed toward a possible settlement.

No details were available early today on what progress had been made during the talks.

Scott spent part of the session shuttling between rooms where Pepco executives and officers of Local 1900 of the International Brotherhood of Electrical Workers attempted to fashion a settlement of the disputes that prompted the first strike in Pepco's 89-year history.

After three days of picketing at more than 10 Pepco facilities, Scott convened the mediation session at 10 a.m. yesterday "to assess the situation," he said.

The strike centers on IBEW's contention that because Pepco is earning record profits -- $168 million in 1984 -- it can afford more generous pay and benefits and does not need to demand "takebacks" in the form of higher health costs for employes.

Pepco has said its contract proposal is "fair and reasonable." The proposal includes raises of 13 percent over three years and other benefit improvements, but included higher costs for health coverage, which the union is strongly resisting.

Pepco has sought to increase deductibles for medical coverage from its current $150 to $325.

Another major roadblock, negotiators said, is the company's increased use of "rotating shifts" in which employes switch each week from day to evening to midnight work schedules.

The two sides differ over the level of "premium pay" for night work and over IBEW's proposal to curb the rotations.

Pepco has offered to increase its 50-cent hourly bonus for night work to 65 cents, but the union wants $1 an hour.

Pepco said that union workers received an 8 percent pay raise last year and that their current offer is adequate.

IBEW said that workers' wages during the past two three-year contracts have lagged 7.2 percent behind inflation.

Pepco officials yesterday said they are continuing to serve 1.75 million residents with minimal trouble by using some 1,800 supervisors and clerical workers, supplemented by several hundred workers employed by private contractors.