With the installation of the first SRF cavity in September of 1997, the upgrade of the CESR RF system has begun [1]. This cavity belongs to the new generation of socalled HOM damped cavities designed for high current storage rings [2]. The upgrade is proceeding by replacing one by one old copper cavities with superconducting ones during short machine shutdowns.CESR continues to demonstrate spectacular performance. It operates with 36 bunches in 9 trains of 4 bunches in each beam with total beam current up to 550 mA at the start of fills for high energy physics. In the course of last year both peak luminosity and integrated luminosity per day increased by 67% and are equal now to 8. /day. The latter number corresponds roughly to 43 thousands of B mesons per day. The first superconducting cavity has been in operation in CESR since October of 1997. The cavity operates at accelerating gradients up to 7 MV/m and delivers to the beam maximum RF power of 220 kW through the ceramic window, the record value for superconducting cavities. We found that pulsed power processing without beam is extremely helpful in improving RF window performance. The maximum HOM power extracted from the beam by one cavity is 5.7 kW.Four single-cell HOM damped cavities will eventually support a total beam current of 1 A. Because of the very low impedance of superconducting cavity module, we calculate the longitudinal instability threshold from cavity HOMs to be in excess of 1 A. The second cavity was installed in CESR during October'98 shutdown. The third cavity is already installed in CESR, and its commissioning will start immediately after this conference. The fourth cryomodule is being assembled and is schedule for installation in summer of 1999.