he Philadelphia Bulletin, once one of the nation's largest afternoon papers, may not be publishing after Sunday. And even if it is, its future remains bleak.

For years, The Bulletin has watched its circulation and advertising steadily decline, while it grappled with all the oft-cited problems of afternoon dailies: changing life-styles, competition from television news, rush-hour traffic that snarls delivery trucks. It has revamped itself to try to compete with a more aggressive rival in a four-paper town. But today, while reporters and editors worked to put out a Sunday edition, management and unions were working to meet a deadline of a different kind: agree to $4.9 million in contract concessions by 5 p.m. Sunday or cease publication.

"Generally speaking, progress is being made," William Gullifer, spokesman for the unions and secretary-treasurer of Teamsters Local 628, said late tonight. Federal mediator Robert L. Kyler imposed a news blackout a few minutes later, to last until after the unions meet in a joint session at 9:30 Sunday morning.

Yet even even if The Bulletin and its unions reach agreement this weekend, the end might not be far off.

Publisher N. S. Hayden, when he announced on Aug. 3 that The Bulletin's unions would have to agree to the concessions to save the paper, said The Bulletin's present daily circulation is 406,000, down more than 140,000 over the last five years. A sharp drop in The Bulletin's share of newspaper advertising has precipitated net losses of $13.4 million in 1980 and $10.3 million over the first six months of 1981.

Hayden, who was installed as publisher by Charter Oil Co., the Florida-based conglomerate that bought The Bulletin for $31 million from Philadelphia's McLean family last year, concedes that even if the unions agree to the latest round of cost-cutting, the company will lay off some nonunion workers to save $1.4 million. And then, he says, the $6.3 million total savings would amount to less than a third of the paper's current yearly losses. Despite Charter's pledge to pump in an additional $30 million over the next four years in an effort to save the paper, newspaper watchers remain skeptical on The Bulletin's chances for survival.

"We feel that we will know if the thing can be turned around within the next 18 months," said one highly placed Bulletin executive who asked that his name not be used. "Beyond that, if the numbers don't change drastically, it's futile."

Despite a redesign of the paper, the hiring of a number of new reporters and an all-out circulation war with the competing Knight-Ridder-owned Philadelphia Inquirer, Charter has not succeeded in halting The Bulletin's decline, a fact that workers on its keenly competitive morning rival note with some regret.

"A lot of us just want to see The Bulletin hang around," said Inquirer executive editor Eugene Roberts. "We like the competition. You always try to kill the other guy and get the story, but when we sit back and think about it, you never want to kill them altogether." Since January, Knight-Ridder editors and business executives have been at work on Plan Alpha, a detailed scheme for expanding operations should The Bulletin fold.

Philadelphia is now the nation's most hotly competitive newspaper market, the only large American city with four competing dailies. Besides the Inquirer, which has won six Pulitzer Prizes in the past seven years and boasts circulations of 414,932 daily and 844,165 Sundays, there is Knight-Ridder's free-swinging tabloid, the Philadelphia Daily News. At times, the local coverage on the 225,000-circulation News outshines that of its big sister paper. A second, racier tabloid, the Philadelphia Journal, also competes for the city's large blue-collar audience. The Journal, founded three years ago by plucky Canadian publisher Pierre Peladeau, has surprised Philadel-phians by capturing some 85,000 readers daily, although it continues to lose money.

All four of the city's newspapers are battling for shares of an inexorably shrinking market. The Inquirer is presently ahead only because it is losing circulation at a slower pace. Reflecting population losses for the city as a whole, the Inquirer's circulation has fallen some 55,000 in the decade since Knight-Ridder bought it and the Daily News from publisher Walter Annenberg.

Under Annenberg, the Inquirer was an uneven newspaper that often reflected the publisher's personal interests, while The Bulletin's editorial authority and circulation dominance was unquestioned. The Bulletin managed to stay ahead in the daily circulation race up until about a year ago, though the Inquirer had long since passed it in Sunday circulation.

Under Knight-Ridder, the Inquirer was aggressively -- and expensively -- upgraded. The paper's coverage became more cosmopolitan and sophisticated while The Bulletin seemed stalled with the kind of cops-and-robbers reporting that was popular in the 1950s. Bulletin publisher William McLean, whose grandfather had bought the paper in 1895, was a hardworking executive who came into the family business after graduation from Princeton in 1949. Though reluctant to see swift changes at the paper, McLean sensed the challenge from the Knights.

In 1973, he appointed as editor George R. Packard, a 41-year-old former Newsweek correspondent with a doctorate in international relations. Packard was ambitious, bright and socially prominent. After four desultory years as The Bulletin's managing editor he took on the task of transforming "The Gray Old Lady of Market Street," as The Bulletin is locally known, into a modern newspaper that could compete with the rapidly improving Inquirer. But after two years, a frustrated Packard submitted his resignation, telling friends he had been outmaneuvered in the political infighting for the publisher's ear by a group of veteran Bulletin subeditors, colorfully dubbed "The Irish Mafia" by the paper's insiders.

After Packard's departure The Bulletin drifted. Seeking to compete, it moved up its afternoon deadline and began a morning edition. It allocated precious assets to an ambitious but ultimately unsuccessful effort at producing zoned suburban coverage.

Then, last spring, The Bulletin was purchased by a short-lived company called Charter Media, which sprang from the oil profits of its parent corporation. Charter Media was subsequently dissolved and Charter, whose petroleum profits were taking a battering, became the sole proprietor of The Bulletin.

Publisher Hayden lured young Craig Ammerman from the New York Post as executive editor to continue rebuilding at The Bulletin. Sports coverage was increased; bolder typefaces and bright graphics were added. Even the editorial page, a legend for dullness in a legendarily dull city, was brightened and began taking strong stands on local issues.

And in the news pages, several recent investigative stories drew wide readership. One, a five-part series that called into question the conviction of former United Mine Workers president Anthony W. (Tony) Boyle in the 1970 slaying of union rival Joseph A. (Jock) Yablonski, will be submitted for this year's Pulitzer Prizes. "If the series gets Boyle a new trial, the people who give out the prizes are going to have trouble ignoring the Philadelphia Bulletin," Ammerman said. "If we're still around by then."