The financially-strapped Chrysler Corp. reported a staggering second-quarter loss of $207.1 million yesterday, and the Treasury Department said it is studying the No. 3 automaker's plight with a view toward some governmental relief.

Chrysler, the world's 14th largest corporation, with sales last year of $16.3 billion, is seeking $1 billion in tax relief and two-year delay in meeting toughened exhaust emission standards.

The company's April-June loss was its worst in history, more than its entire 1978 deficit and a sharp contrast to its $30.5 million profit in the second quarter of that year. It was one of the largest quarterly losses ever for an American business.

At a press conference in Detroit, Chrysler chairman John Riccardo and president Lee A. Iacocca said they believed government relief is likely. But they also acknowledge for the first time publicly that "reduced competition in the industry" is possible, apparently meaning curtailed Chrysler operations.

Riccardo said the company is seeking $500 million a year over the next two years in speeded-up tax credits, largely to pay for compliance with government regulations. The company also is seeking a two-year delay in compliance with stepped-up air-pollution standards that it estimates would save $600 million in cash through 1982.

Meanwhile, in Washington, the Treasury Department said it has "monitored Chrysler's financial situation in the past several months and is concerned about its possible impact on the overall economy and on the employes of Chrysler and its suppliers."

The department said that when its review is finished the results will be "considered by others in the administration, which will then be in a position expeditiously to address Chrysler's proposals for assistance."

Both tax and regulatory relief would require congressional action.

In addition to Chrysler's own proposals, the government has been asked by the United Auto Workers to assume a $1 billion equity owenrship interest in the company, implying a governmental voice in the company's operations in exchange for its investment.

The UAW, which has ruled out a stirke against Chrysler in its current negotiations with the Big Three automakers, also has proposed "shop-floor-to-boardroom" worker participation in >CHRYSLER, From A1> management decisions at Chrysler, similar to a plan the company offered British unions three years ago and to "codetermination" plans in many Western European countries.

Relief on the order of $1 billion for Chrysler would vastly exceed the controversial $250 million in bank loan guarantees that Congress voted for Lockheed Aircraft Corp. in 1971.

Chrysler blamed its plight on sluggish sales, a limited supply of engines for its good-selling small cars, poor demand for its big supply of trucks and recreation vehicles and, above all, the burden of government regulations.

It said it intends to spend $1 billion a year over the next two years to regain its competitive position. Plans include greater production of popular small, fuel-election front-wheel-drive cars.

Riccardo said ti costs Chrysler twice as much to meet government emission, fuel efficiency and safely regulations as it costs General Motors and Ford, and said half of Chrysler's $1 billion a year in new spending will go toward meeting government rules.

According to Riccardo and Iacocca, GM pays $340 for each of its 6 million cars a year to meet regulations, while Chrysler, operating on a smaller scale, must pay $620 on about one-fourth the volume.

Both Chrysler executives said the company will suffer a "substantial loss" in the third quarter, normally slow for all automakers, but declined to speculate how much.

For the second quarter, the dollar volume of worldwide Chrysler sales was $3.15 billion, down 16 percent from the like period last year. The number of vehicles sold was down 25 percnet.

Against a backdrop of money losses, declining market share and government-mandated redesign costs, Chrysler has burrowed heavily, is selling off assets in a number of foreign countries and recently announced closure of a 65-year-old assembly plant next year in Hamtramck, Mich. Its inventory is biggest in the industry: equal 10 98 days' sales, compared with 66 for U.S. auto manufacturers as a whole.

On the New York Stock Exchange, Chrysler stock fell one-quarter of a point to 8 1/4.Moody's investors' rating service and preferred stock from BA to B, citing increasing uncertainty about Chrysler's financial prospects. CAPTION: Picture, CHAIRMAN JOHN RICCARDO . . . $207 million lost in three months; Graphs, What's happened to Chrysler, By Robert Barkin - The Washington Post